COMMON STOCK PURCHASE AGREEMENT

THIS COMMON STOCK PURCHASE AGREEMENT is entered into the _____ day of February,
2012 (the “Agreement”), by and among the Sellers listed on Schedule 1.1 (the
“Sellers”), the Purchaser listed on Schedule 1.1 (the “Purchaser”) and Clear
System Recycling, Inc., a Nevada corporation (“CLSR” or the “Company”). Certain
capitalized terms are defined in Section 9.12.

WHEREAS, the Sellers owns an aggregate of 2,000,000 shares (the “Shares”) of
common stock, par value $0.001 per share of the Company (the “Common Stock”)
representing approximately 68% of the issued and outstanding shares of Common
Stock of the Company; and

WHEREAS, the Purchaser desire to purchase from the Sellers, and the Sellers
desires to sell to the Purchaser, all the Shares (the “Purchased Shares”)
subject to the tenus and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained in this Agreement, the Purchaser and the Sellers agree as follows:

ARTICLE 1.
SALE AND/OR CANCELLATION OF THE SHARES

SECTION 1.1             SALE OF THE SHARES. SUBJECT TO THE TERMS AND CONDITIONS
SET FORTH IN THIS AGREEMENT, SELLERS AGREE TO (A) SELL, TRANSFER AND ASSIGN TO
THE PURCHASER AND THE PURCHASER AGREES TO PURCHASE FROM THE SELLERS THE
PURCHASED SHARES, FOR AN AGGREGATE PURCHASE PRICE OF ONE HUNDRED TWENTY THOUSAND
US DOLLARS ($120,000.00), (THE “PURCHASE PRICE”).

SECTION 1.2             ALLOCATION OF THE SHARES. THE PROPORTION OF THE
PURCHASED SHARES PURCHASED
AND THE PURCHASE  PRICE TO BE PAID, BY THE PURCHASER IS SET FORTH ON SCHEDULE
1.1 ATTACHED HERETO.

ARTICLE 2.
CLOSING AND DELIVERY

SECTION 2.1             CLOSING DATE. UPON THE TERMS AND SUBJECT TO THE
CONDITIONS SET FORTH HEREIN, THE CONSUMMATION OF THE PURCHASE AND SALE OF THE
PURCHASED SHARES (THE “CLOSING”) SHALL BE HELD AT SUCH DATE (THE “CLOSING DATE”)
AND TIME AS DETERMINED AT THE MUTUAL DISCRETION OF THE SELLERS AND THE
PURCHASER; PROVIDED,  HOWEVER,  THAT THE CLOSING SHALL OCCUR NO LATER THAN 30
DAYS AFTER THE CONDITIONS PRECEDENT CONTAINED IN ARTICLE 7 HEREIN HAVE BEEN
SATISFIED (WHICH THE PARTIES HERETO AGREE SHALL NOT BE LATER THAN FEBRUARY 21,
2012 UNLESS EXTENDED AS PROVIDED FOR HEREIN). THE CLOSING SHALL TAKE PLACE AT
THE OFFICES OF PURCHASER IN TORONTO, OR BY THE EXCHANGE OF DOCUMENTS AND
INSTRUMENTS BY MAIL, COURIER, TELECOPY AND WIRE TRANSFER TO THE EXTENT MUTUALLY
ACCEPTABLE TO THE PARTIES HERETO.

SECTION 2.2             DELIVERY AT CLOSING. AT THE CLOSING:

(A)                THE SELLERS SHALL DELIVER TO THE ESCROW AGENT STOCK
CERTIFICATES REPRESENTING THE SHARES, DULY ENDORSED FOR TRANSFER TO THE
PURCHASER, AND ACCOMPANIED BY: (I) IF REQUIRED BY THE COMPANY’S TRANSFER AGENT,
AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY, THE PURCHASER AND
THE COMPANY’S TRANSFER AGENT AND (II) STOCK POWERS OR OTHER INSTRUMENTS OF
TRANSFER DULY EXECUTED TO THE PURCHASER, AND WITH ALL REQUISITE DOCUMENTARY OR
TRANSFER TAX STAMPS AFFIXED; AND

(B)               THE PURCHASER SHALL TRANSFER THE AGGREGATE PURCHASE PRICE TO
THE ESCROW AGENT IN THE FORM OF CERTIFIED BANK CHECK OR WIRE TRANSFER PURSUANT
TO THE INSTRUCTIONS ON SCHEDULE 1.1.

 

                                                                               1

--------------------------------------------------------------------------------

 

 

SECTION 2.3     ESCROW.  SUBJECT TO THE TERMS AND CONDITIONS SET FORTH HEREIN,
SELLERS, PURCHASER, THE COMPANY AND CHARLES B. PEARLMAN, ESQ., PEARLMAN &
PEARLMAN LLC, COUNSEL TO QUINTAIROS, PRIETO, WOOD & BOYER, P.A., ONE EAST
BROWARD BOULEVARD, SUITE 1400, FORT LAUDERDALE, FL 33301. PHONE: 954-523-7008
X6021; FAX: 954-523-7009.  EMAIL: CPEARLMAN@GPWBLAW.COM AND JAMES B. PARSONS,
ESQ., PARSONS / BURNETT / BJORDHAL /HUME, LLP (THE “ESCROW AGENTS”) UPON
EXECUTION AND DELIVERY, SHALL ENTER INTO THAT CERTAIN ESCROW AGREEMENT,
SUBSTANTIALLY IN THE FORM OF EXHIBITS B AND C ATTACHED HERETO, PROVIDING THAT
THE FUNDS BE HELD BY PEARLMAN AND PEARLMAN AND THE SHARES AND SUPPORTING
DOCUMENTS BE HELD BY JAMES B. PARSONS, ESQ., PARSONS / BURNETT / BJORDHAL /
HUME, LLP 1850 SKYLINE TOWER, 10900 NE 4TH STREET, BELLEVUE, WA 98004. T:
425-451-8036 F: 425-451-8568, EMAIL: JPARSONS@PBLAW.BIZ EACH BEING RELEASED AS
DESCRIBED ACCORDING TO THIS AGREEMENT AS DETAILED IN THE ESCROW AGREEMENTS (THE
“ESCROW AGREEMENTS”).

ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF SELLERS AND THE COMPANY

Except as set forth under the corresponding section of the disclosure schedules
(the “Disclosure Schedules”) attached hereto as Exhibit A, Sellers and the
Company jointly and severally represent and warrant to the Purchaser that:

SECTION 3.1             EXISTENCE AND POWER. CLSR IS A CORPORATION DULY
INCORPORATED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE STATE
OF NEVADA AND HAS ALL CORPORATE POWERS AND ALL GOVERNMENTAL LICENSES,
AUTHORIZATIONS, PERMITS, CONSENTS AND APPROVALS REQUIRED TO CARRY ON ITS
BUSINESS AS NOW CONDUCTED. CLSR HAS HERETOFORE DELIVERED TO THE PURCHASER TRUE
AND COMPLETE COPIES OF THE ARTICLES OF INCORPORATION, AS AMENDED, AND BY-LAWS,
EACH AS CURRENTLY IN EFFECT.

SECTION 3.2             AUTHORIZATION; NO AGREEMENTS. THE EXECUTION, DELIVERY
AND PERFORMANCE BY SELLERS OF THIS AGREEMENT, THE PERFORMANCE OF ITS OBLIGATIONS
HEREUNDER, AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED ARE WITHIN THE
SELLERS’S POWERS. THIS AGREEMENT HAS BEEN DULY AND VALIDLY EXECUTED AND
DELIVERED BY THE SELLERS AND IS A LEGAL, VALID AND BINDING OBLIGATION OF THE
SELLERS, ENFORCEABLE AGAINST IT IN ACCORDANCE WITH ITS TERMS. THE EXECUTION,
DELIVERY AND PERFORMANCE BY THE SELLERS OF THIS AGREEMENT DOES NOT VIOLATE ANY
CONTRACTUAL RESTRICTION CONTAINED IN ANY AGREEMENT WHICH BINDS OR AFFECTS OR
PURPORTS TO BIND OR AFFECT THE SELLERS. THE SELLERS ARE NOT A PARTY TO ANY
AGREEMENT, WRITTEN OR ORAL, CREATING RIGHTS IN RESPECT OF ANY OF SUCH SHARES IN
ANY THIRD PARTY OR RELATING TO THE VOTING OF THE SHARES. SELLERS ARE THE LAWFUL
OWNER OF THE SHARES, FREE AND CLEAR OF ALL SECURITY INTERESTS, LIENS,
ENCUMBRANCES, EQUITIES AND OTHER CHARGES, SELLERS REPRESENTS THAT, FOLLOWING
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED, THEY SHALL NOT OWN SHARES OF
COMMON STOCK. SELLERS FURTHER REPRESENTS THAT THEY DO NOT BENEFICIALLY OWN ANY
OPTIONS, WARRANTS OR OTHER RIGHTS TO PURCHASE SHARES OF COMMON STOCK. THERE ARE
NO OUTSTANDING OR AUTHORIZED OPTIONS, WARRANTS, RIGHTS, CALLS, COMMITMENTS,
CONVERSION RIGHTS, RIGHTS OF EXCHANGE OR OTHER AGREEMENTS OF ANY CHARACTER,
CONTINGENT OR OTHERWISE, PROVIDING FOR THE PURCHASE, ISSUANCE OR SALE OF ANY OF
THE SHARES, OR ANY ARRANGEMENTS THAT REQUIRE OR PERMIT ANY OF THE SHARES TO BE
VOTED BY OR AT THE DISCRETION OF ANYONE OTHER THAN THE SELLERS, AND THERE ARE NO
RESTRICTIONS OF ANY KIND ON THE TRANSFER OF ANY OF THE SHARES OTHER THAN (A)
RESTRICTIONS ON TRANSFER IMPOSED BY THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”) AND (B) RESTRICTIONS ON TRANSFER IMPOSED BY APPLICABLE STATE
SECURITIES OR “BLUE SKY” LAWS. SELLERS ACQUIRED THE SHARES ON JANUARY 27, 2011.

SECTION 3.3             CAPITALIZATION. 

(A)                THE NUMBER OF SHARES AND TYPE OF ALL AUTHORIZED, ISSUED AND
OUTSTANDING CAPITAL STOCK OF THE COMPANY IS SET FORTH IN THE DISCLOSURE
SCHEDULES ATTACHED HERETO. ALL OF THE ISSUED AND OUTSTANDING SHARES OF CAPITAL
STOCK OF THE COMPANY HAVE BEEN DULY AUTHORIZED, VALIDLY ISSUED AND ARE FULLY
PAID AND NON-ASSESSABLE. ALL OF THE ISSUED AND OUTSTANDING SHARES OF CAPITAL
STOCK OF THE COMPANY HAVE BEEN

                                                                               2

--------------------------------------------------------------------------------

 

 

OFFERED, ISSUED AND SOLD BY THE COMPANY IN COMPLIANCE WITH ALL APPLICABLE
FEDERAL AND STATE SECURITIES LAWS. NO SECURITIES OF THE COMPANY ARE ENTITLED TO
PREEMPTIVE OR SIMILAR RIGHTS, AND NO PERSON HAS ANY RIGHT OF FIRST REFUSAL,
PREEMPTIVE RIGHT, RIGHT OF PARTICIPATION, OR ANY SIMILAR RIGHT TO PARTICIPATE IN
THE TRANSACTIONS CONTEMPLATED. EXCEPT AS A RESULT OF THE PURCHASE AND SALE OF
THE SHARES, THERE ARE NO OUTSTANDING OPTIONS, WARRANTS, SCRIPT RIGHTS TO
SUBSCRIBE TO, CALLS OR COMMITMENTS OF ANY CHARACTER WHATSOEVER RELATING TO, OR
SECURITIES, RIGHTS OR OBLIGATIONS CONVERTIBLE INTO OR EXCHANGEABLE FOR, OR
GIVING ANY PERSON ANY RIGHT TO SUBSCRIBE FOR OR ACQUIRE, ANY SHARES OF COMMON
STOCK, OR CONTRACTS, COMMITMENTS, UNDERSTANDINGS OR ARRANGEMENTS BY WHICH THE
COMPANY IS OR MAY BECOME BOUND TO ISSUE ADDITIONAL SHARES OF COMMON STOCK, OR
SECURITIES OR RIGHTS CONVERTIBLE OR EXCHANGEABLE INTO SHARES OF COMMON STOCK.
THE ISSUANCE AND SALE OF THE SHARES WILL NOT OBLIGATE THE COMPANY TO ISSUE
SHARES OF COMMON STOCK OR OTHER SECURITIES TO ANY PERSON (OTHER THAN THE
PURCHASER) AND SHALL NOT RESULT IN A RIGHT OF ANY HOLDER OF COMPANY SECURITIES
TO ADJUST THE EXERCISE, CONVERSION, EXCHANGE OR RESET PRICE UNDER SUCH
SECURITIES.

(B)               THERE ARE NO OUTSTANDING OBLIGATIONS, CONTINGENT OR OTHERWISE,
OF CLSR TO REDEEM, PURCHASE OR OTHERWISE ACQUIRE ANY CAPITAL STOCK OR OTHER
SECURITIES OF CLSR.

(C)                THERE ARE NO SHAREHOLDER AGREEMENTS, VOTING TRUSTS OR OTHER
AGREEMENTS OR UNDERSTANDINGS TO WHICH CLSR OR SELLERS IS A PARTY OR BY WHICH
EITHER OF THEM ARE BOUND RELATING TO THE VOTING OF ANY SHARES OF THE CAPITAL
STOCK OF CLSR.

(D)               THE SHARES SHALL BE DULY AUTHORIZED FOR ISSUANCE, WHEN
DELIVERED IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, AND SHALL BE VALIDLY
ISSUED, FULLY PAID AND NON-ASSESSABLE AND THE TRANSFER OF SAID SHARES SHALL NOT
BE SUBJECT TO ANY PREEMPTIVE OR OTHER SIMILAR RIGHT.

SECTION 3.4             SUBSIDIARIES.  CLSR HAS NO SUBSIDIARIES.

SECTION 3.5             FINANCIAL STATEMENTS. 

(A)                SEC REPORTS; FINANCIAL STATEMENTS. THE COMPANY HAS FILED ALL
REPORTS REQUIRED TO BE FILED BY IT UNDER THE SECURITIES ACT AND THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED (THE “EXCHANGE ACT”), INCLUDING PURSUANT TO
SECTION 13(A) OR 15(D) OF THE EXCHANGE ACT, SINCE ITS INCEPTION AS A PUBLIC
REPORTING COMPANY (THE FOREGOING MATERIALS BEING COLLECTIVELY REFERRED TO HEREIN
AS THE “SEC REPORTS”) ON A TIMELY BASIS OR HAS RECEIVED A VALID EXTENSION OF
SUCH TIME OF FILING AND HAS FILED ANY SUCH SEC REPORTS PRIOR TO THE EXPIRATION
OF ANY SUCH EXTENSION. THE SELLERS HAS IDENTIFIED AND MADE AVAILABLE TO THE
PURCHASER A COPY OF ALL SEC REPORTS FILED WITHIN THE 10 DAYS PRECEDING THE DATE
OF THIS AGREEMENT. AS OF THEIR RESPECTIVE DATES, THE SEC REPORTS COMPLIED IN ALL
MATERIAL RESPECTS WITH THE REQUIREMENTS OF THE SECURITIES ACT AND THE EXCHANGE
ACT, AND THE RULES AND REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PROMULGATED THEREUNDER, AND NONE OF THE SEC REPORTS, WHEN
FILED, CONTAINED ANY UNTRUE STATEMENT OF A MATERIAL FACT OR 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 SEC
REPORTS COMPLY IN ALL MATERIAL RESPECTS WITH APPLICABLE ACCOUNTING REQUIREMENTS
AND THE RULES AND REGULATIONS OF THE COMMISSION WITH RESPECT THERETO AS IN
EFFECT AT THE TIME OF FILING. SUCH FINANCIAL STATEMENTS HAVE BEEN PREPARED IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES APPLIED ON A CONSISTENT
BASIS DURING THE PERIODS INVOLVED (“GAAP”), EXCEPT AS MAY BE OTHERWISE SPECIFIED
IN SUCH FINANCIAL STATEMENTS OR THE NOTES THERETO, AND FAIRLY PRESENT IN ALL
MATERIAL RESPECTS THE FINANCIAL POSITION OF THE COMPANY AND ITS CONSOLIDATED
SUBSIDIARIES AS OF AND FOR 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, IMMATERIAL, YEAR-END AUDIT ADJUSTMENTS.

 

                                                                               3

--------------------------------------------------------------------------------

 

 

(B)               EXCEPT AS SET FORTH IN ITS FORM S-1/A FOR THE FISCAL YEAR
ENDED MARCH 31, 2011, CLSR HAS NOT BEEN ENGAGED IN ANY OTHER BUSINESS ACTIVITY
SINCE AT LEAST SEPTEMBER 30, 2011.

(C)                SINCE THE DATE OF THE FILING OF ITS QUARTERLY REPORT ON FORM
10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 2011, EXCEPT AS SPECIFICALLY DISCLOSED
IN THE SEC REPORTS: (I) THERE HAS BEEN NO EVENT, OCCURRENCE OR DEVELOPMENT THAT
HAS HAD OR THAT COULD RESULT IN A MATERIAL ADVERSE EFFECT; (II) THE COMPANY HAS
NOT INCURRED ANY LIABILITIES (CONTINGENT OR OTHERWISE) OR AMENDED OF ANY
MATERIAL TERM OF ANY OUTSTANDING SECURITY; (III) THE COMPANY HAS NOT ALTERED ITS
METHOD OF ACCOUNTING OR THE IDENTITY OF ITS AUDITORS; (IV) THE COMPANY HAS NOT
DECLARED OR MADE ANY DIVIDEND OR DISTRIBUTION OF CASH OR OTHER PROPERTY TO ITS
STOCKHOLDERS OR PURCHASED, REDEEMED OR MADE ANY AGREEMENTS TO PURCHASE OR REDEEM
ANY SHARES OF ITS CAPITAL STOCK; (V) THE COMPANY HAS NOT ISSUED ANY EQUITY
SECURITIES TO ANY OFFICER, DIRECTOR OR AFFILIATE OF THE COMPANY; (VI) THE
COMPANY HAS NOT MADE ANY LOAN, ADVANCE OR CAPITAL CONTRIBUTIONS TO OR INVESTMENT
IN ANY PERSON; (VII) THE COMPANY HAS NOT ENTERED INTO ANY TRANSACTION OR
COMMITMENT MADE, OR ANY CONTRACT OR AGREEMENT ENTERED INTO, RELATING TO ITS
BUSINESS OR ANY OF ITS ASSETS (INCLUDING THE ACQUISITION OR DISPOSITION OF, OR
CREATION OF A LIEN ON, ANY ASSETS) OR ANY RELINQUISHMENT BY CLSR OF ANY CONTRACT
OR OTHER RIGHT; (VIII) THE COMPANY HAS NOT GRANTED ANY SEVERANCE OR TERMINATION
PAY TO ANY CURRENT OR FORMER DIRECTOR, OFFICER OR EMPLOYEE OF CLSR, OR INCREASED
THE BENEFITS PAYABLE UNDER ANY EXISTING SEVERANCE OR TERMINATION PAY POLICIES OR
EMPLOYMENT AGREEMENTS OR ENTERED INTO ANY EMPLOYMENT, DEFERRED COMPENSATION OR
OTHER SIMILAR AGREEMENT (OR ANY AMENDMENT TO ANY SUCH EXISTING AGREEMENT) WITH
ANY CURRENT OR FORMER DIRECTOR, OFFICER OR EMPLOYEE OF CLSR; (IX) THE COMPANY
HAS NOT ESTABLISHED, ADOPTED OR AMENDED (EXCEPT AS REQUIRED BY APPLICABLE LAW)
ANY COLLECTIVE BARGAINING, BONUS, PROFIT SHARING, THRIFT, PENSION, RETIREMENT,
DEFERRED COMPENSATION, COMPENSATION, STOCK OPTION, RESTRICTED STOCK OR OTHER
BENEFIT PLAN OR ARRANGEMENT COVERING ANY CURRENT OR FORMER DIRECTOR, OFFICER OR
EMPLOYEE OF CLSR; (X) THE COMPANY HAS NOT INCREASED THE COMPENSATION, BONUS OR
OTHER BENEFITS PAYABLE OR OTHERWISE MADE AVAILABLE TO ANY CURRENT OR FORMER
DIRECTOR, OFFICER OR EMPLOYEE OF CLSR; (XI) THE COMPANY HAS NOT MADE ANY TAX
ELECTION OR ANY SETTLEMENT OR COMPROMISE OF ANY TAX LIABILITY, IN EITHER CASE
THAT IS MATERIAL TO CLSR OR ENTERED INTO ANY TRANSACTION BY THE COMPANY NOT IN
THE ORDINARY COURSE OF BUSINESS.

SECTION 3.6             NO LIABILITIES OR DEBTS.  AS OF THE DATE OF THIS
AGREEMENT, THERE ARE NO LIABILITIES OR DEBTS OF CLSR OF ANY KIND WHATSOEVER,
WHETHER ACCRUED, CONTINGENT, ABSOLUTE, DETERMINED, DETERMINABLE OR OTHERWISE,
AND THERE IS NO EXISTING CONDITION, SITUATION OR SET OF CIRCUMSTANCES WHICH
COULD REASONABLY BE EXPECTED TO RESULT IN SUCH A LIABILITY OR DEBT. THE COMPANY
IS NOT A GUARANTOR OF ANY INDEBTEDNESS OF ANY OTHER PERSON, FIRM OR CORPORATION.

SECTION 3.7             LITIGATION.  THERE IS NO ACTION, SUIT, INVESTIGATION,
AUDIT OR PROCEEDING PENDING AGAINST, OR TO THE BEST KNOWLEDGE OF CLSR THREATENED
AGAINST OR AFFECTING, CLSR OR ANY OF ITS ASSETS OR PROPERTIES BEFORE ANY COURT
OR ARBITRATOR OR ANY GOVERNMENTAL BODY, AGENCY OR OFFICIAL. THE COMPANY IS NOT
SUBJECT TO ANY OUTSTANDING JUDGMENT, ORDER OR DECREE. NEITHER THE COMPANY NOR
ANY OFFICER, KEY EMPLOYEE OR 5% STOCKHOLDER OF THE COMPANY IN HIS, HER OR ITS
CAPACITY AS SUCH, IS IN DEFAULT WITH RESPECT TO ANY ORDER, WRIT, INJUNCTION,
DECREE, RULING OR DECISION OF ANY COURT, COMMISSION, BOARD OR ANY OTHER
GOVERNMENT AGENCY. THE COMMISSION HAS NOT ISSUED ANY STOP ORDER OR OTHER ORDER
SUSPENDING THE EFFECTIVENESS OF ANY REGISTRATION STATEMENT FILED BY THE COMPANY
UNDER THE EXCHANGE ACT OR THE SECURITIES ACT.

SECTION 3.8             TAXES.  (A) CLSR HAS (I) DULY FILED WITH THE APPROPRIATE
TAXING AUTHORITIES ALL TAX RETURNS REQUIRED TO BE FILED BY OR WITH RESPECT TO
ITS BUSINESS, OR ARE PROPERLY ON EXTENSION AND ALL SUCH DULY FILED TAX RETURNS
ARE TRUE, CORRECT AND COMPLETE IN ALL MATERIAL RESPECTS AND (II) PAID IN FULL OR
MADE ADEQUATE PROVISIONS FOR ON ITS BALANCE SHEET (IN ACCORDANCE WITH GAAP) ALL
TAXES SHOWN TO BE DUE ON SUCH TAX RETURNS. THERE ARE NO LIENS FOR TAXES UPON THE
ASSETS OF CLSR EXCEPT FOR STATUTORY LIENS FOR CURRENT TAXES NOT YET DUE AND
PAYABLE OR WHICH MAY THEREAFTER BE PAID WITHOUT PENALTY OR ARE BEING CONTESTED
IN GOOD FAITH. CLSR HAS NOT RECEIVED ANS’ NOTICE OF AUDIT, IS NOT UNDERGOING ANY
AUDIT OF ITS TAX RETURNS, OR

                                                                               4

--------------------------------------------------------------------------------

 

 

HAS RECEIVED ANY NOTICE OF DEFICIENCY OR ASSESSMENT FROM ANY TAXING AUTHORITY
WITH RESPECT TO LIABILITY FOR TAXES WHICH HAS NOT BEEN FULLY PAID OR FINALLY
SETTLED. THERE HAVE BEEN NO WAIVERS OF STATUTES OF LIMITATIONS BY CLSR WITH
RESPECT TO ANY TAX RETURNS. CLSR HAS NOT FILED A REQUEST WITH THE INTERNAL
REVENUE SERVICE FOR CHANGES IN ACCOUNTING METHODS WITHIN THE LAST THREE YEARS
WHICH CHANGE WOULD AFFECT THE ACCOUNTING FOR TAX PURPOSES, DIRECTLY OR
INDIRECTLY, OF ITS BUSINESS. CLSR HAS NOT EXECUTED AN EXTENSION OR WAIVER OF ANY
STATUTE OF LIMITATIONS ON THE ASSESSMENT OR COLLECTION OF ANY TAXES DUE
(EXCLUDING SUCH STATUTES THAT RELATE TO YEARS CURRENTLY UNDER EXAMINATION BY THE
INTERNAL REVENUE SERVICE OR OTHER APPLICABLE TAXING AUTHORITIES) THAT IS
CURRENTLY IN EFFECT.

SECTION 3.9             INTERNAL ACCOUNTING CONTROLS SARBANES-OXLEY ACT OF 2002.
TO THE BEST OF ITS KNOWLEDGE, THE COMPANY IS IN COMPLIANCE WITH THE REQUIREMENTS
OF THE SARBANES-OXLEY ACT OF 2002 APPLICABLE TO IT AS OF THE DATE OF THIS
AGREEMENT. THE COMPANY MAINTAINS A SYSTEM OF INTERNAL ACCOUNTING CONTROLS
SUFFICIENT 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 ACTION
IS TAKEN WITH RESPECT TO ANY DIFFERENCES. THE COMPANY HAS ESTABLISHED DISCLOSURE
CONTROLS AND PROCEDURES (AS DEFINED IN EXCHANGE ACT RULES 13A-15(E) AND
15D-15(E)) FOR THE COMPANY AND DESIGNED SUCH DISCLOSURES CONTROLS AND PROCEDURES
TO ENSURE THAT MATERIAL INFORMATION RELATING TO THE COMPANY IS MADE KNOWN TO THE
CERTIFYING OFFICERS BY OTHERS WITHIN THOSE ENTITIES, PARTICULARLY DURING THE
PERIOD IN WHICH THE COMPANY’S FORM 10-K OR 10-Q, AS THE CASE MAY BE, IS BEING
PREPARED. THE COMPANY’S CERTIFYING OFFICERS HAVE EVALUATED THE EFFECTIVENESS OF
THE COMPANY’S CONTROLS AND PROCEDURES AS OF THE DATE OF ITS MOST RECENTLY FILED
PERIODIC REPORT (SUCH DATE, THE “EVALUATION DATE”). THE COMPANY PRESENTED IN ITS
MOST RECENTLY FILED PERIODIC REPORT THE CONCLUSIONS OF THE CERTIFYING OFFICERS
ABOUT THE EFFECTIVENESS OF THE DISCLOSURE CONTROLS AND PROCEDURES BASED ON THEIR
EVALUATIONS AS OF THE EVALUATION DATE. SINCE THE EVALUATION DATE, THERE HAVE
BEEN NO SIGNIFICANT CHANGES IN THE COMPANY’S INTERNAL CONTROLS (AS SUCH TERM IS
DEFINED IN ITEM 307(B) OF REGULATION S-K UNDER THE EXCHANGE ACT) OR, TO THE
COMPANY’S KNOWLEDGE, IN OTHER FACTORS THAT COULD SIGNIFICANTLY AFFECT THE
COMPANY’S INTERNAL CONTROLS. CLSR’S AUDITORS, AT  ALL RELEVANT TIMES, HAVE BEEN
DULY REGISTERED IN GOOD STANDING WITH THE PUBLIC COMPANY ACCOUNTING OVERSIGHT
BOARD.

SECTION 3.10         SOLVENCY; INDEBTEDNESS. BASED ON THE FINANCIAL CONDITION OF
THE COMPANY AS OF THE CLOSING DATE: (I) THE FAIR SALEABLE VALUE OF THE COMPANY’S
ASSETS EXCEEDS THE AMOUNT THAT WILL BE REQUIRED TO BE PAID ON OR IN RESPECT OF
THE COMPANY’S EXISTING DEBTS AND OTHER LIABILITIES (INCLUDING KNOWN CONTINGENT
LIABILITIES) AS THEY MATURE; (II) THE COMPANY’S ASSETS DO NOT CONSTITUTE
UNREASONABLY SMALL CAPITAL TO CARRY ON ITS BUSINESS FOR THE CURRENT FISCAL YEAR
AS NOW CONDUCTED AND AS PROPOSED TO BE CONDUCTED, INCLUDING ITS CAPITAL NEEDS
TAKING INTO ACCOUNT THE PARTICULAR CAPITAL REQUIREMENTS OF THE BUSINESS
CONDUCTED BY THE COMPANY AND PROJECTED CAPITAL REQUIREMENTS AND CAPITAL
AVAILABILITY THEREOF; AND (III) THE CURRENT CASH FLOW OF THE COMPANY, TOGETHER
WITH THE PROCEEDS THE COMPANY WOULD RECEIVE, WERE IT TO LIQUIDATE ALL OF ITS
ASSETS, AFTER TAKING INTO ACCOUNT ALL ANTICIPATED USES OF THE CASH, WOULD BE
SUFFICIENT TO PAY ALL AMOUNTS ON OR IN RESPECT OF ITS DEBT WHEN SUCH AMOUNTS ARE
REQUIRED TO BE PAID. THE COMPANY DOES NOT INTEND TO INCUR DEBTS BEYOND ITS
ABILITY TO PAY SUCH DEBTS AS THEY MATURE. THE COMPANY HAS NO KNOWLEDGE OF ANY
FACTS OR CIRCUMSTANCES WHICH LEAD IT TO BELIEVE THAT IT WILL FILE FOR
REORGANIZATION OR LIQUIDATION UNDER THE BANKRUPTCY OR REORGANIZATION LAWS OF ANY
JURISDICTION WITHIN ONE (1) YEAR FROM THE CLOSING DATE. THE SEC REPORTS SET
FORTH AS OF THE DATES THEREOF ALL OUTSTANDING SECURED AND UNSECURED INDEBTEDNESS
OF THE COMPANY, OR FOR WHICH THE COMPANY HAS COMMITMENTS. THE COMPANY IS NOT IN
DEFAULT WITH RESPECT TO ANY INDEBTEDNESS. AT THE CLOSING, THERE WILL BE NO
OUTSTANDING LIABILITIES, OBLIGATIONS OR INDEBTEDNESS OF THE COMPANY WHATSOEVER.

 

                                                                               5

--------------------------------------------------------------------------------

 

 

SECTION 3.11         NO BROKERAGE OR FINDER’S FEES OR COMMISSIONS ARE OR WILL BE
PAYABLE BY THE COMPANY OR SELLERS TO ANY BROKER, FINANCIAL ADVISOR OR
CONSULTANT, FINDER, PLACEMENT AGENT, INVESTMENT BANKER, BANK OR OTHER PERSON
WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AND THE COMPANY
HAS NOT TAKEN ANY ACTION THAT WOULD CAUSE ANY PURCHASER TO BE LIABLE FOR ANY
SUCH FEES OR COMMISSIONS. THE COMPANY AND SELLERS AGREE THAT THE PURCHASER SHALL
HAVE NO OBLIGATION WITH RESPECT TO ANY FEES OR WITH RESPECT TO ANY CLAIMS MADE
BY OR ON BEHALF OF ANY PERSON, INCLUDING FOR FEES OF THE TYPE CONTEMPLATED BY
THIS SECTION, AND SELLERS SHALL INDEMNIFY AND HOLD PURCHASER AND THE COMPANY
HARMLESS FROM ANY FEES, COSTS OR LIABILITIES OF ANY KIND INCURRED BY PURCHASER
IN CONNECTION THEREWITH.

SECTION 3.12         DISCLOSURE.  THE COMPANY AND SELLERS CONFIRM THAT NEITHER
IT NOR THEY, NOR ANY OTHER PERSON ACTING ON THEIR BEHALF HAS PROVIDED ANY OF THE
PURCHASER OR HER AGENTS OR COUNSEL WITH ANY INFORMATION THAT CONSTITUTES OR
MIGHT CONSTITUTE MATERIAL, NONPUBLIC INFORMATION CONCERNING THE COMPANY. THE
COMPANY AND SELLERS UNDERSTAND AND CONFIRM THAT THE PURCHASER WILL RELY ON THE
FOREGOING REPRESENTATIONS IN EFFECTING TRANSACTIONS IN SECURITIES OF THE
COMPANY. ALL DISCLOSURE PROVIDED TO THE PURCHASER REGARDING THE COMPANY, ITS
BUSINESS AND THE TRANSACTIONS CONTEMPLATED,. INCLUDING THE DISCLOSURE SCHEDULES
TO THIS AGREEMENT, FURNISHED BY OR ON BEHALF OF THE COMPANY WITH RESPECT TO THE
REPRESENTATIONS AND WARRANTIES MADE HEREIN ARE TRUE AND CORRECT WITH RESPECT TO
SUCH REPRESENTATIONS AND WARRANTIES AND DO NOT CONTAIN ANY UNTRUE STATEMENT OF A
MATERIAL FACT OR OMIT TO STATE ANY MATERIAL FACT NECESSARY IN ORDER TO MAKE THE
STATEMENTS MADE THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE
MADE, NOT MISLEADING. THE COMPANY AND SELLERS ACKNOWLEDGE AND AGREE THAT THE
PURCHASER HAS NOT MADE, NOR IS THE PURCHASER MAKING, ANY REPRESENTATIONS OR
WARRANTIES WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED OTHER THAN THOSE
SPECIFICALLY SET FORTH HEREIN.

SECTION 3.13         NO DISAGREEMENTS WITH ACCOUNTANTS AND LAWYERS. THERE ARE NO
DISAGREEMENTS OF ANY KIND PRESENTLY EXISTING, OR REASONABLY ANTICIPATED BY THE
COMPANY TO ARISE, BETWEEN THE ACCOUNTANTS AND LAWYERS FORMERLY OR PRESENTLY
EMPLOYED BY THE COMPANY AND THE COMPANY IS CURRENT WITH RESPECT TO ANY FEES OWED
TO ITS ACCOUNTANTS AND LAWYERS.

SECTION 3.14         NO CONFLICTS. THE EXECUTION, DELIVERY AND PERFORMANCE OF
THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED DO NOT AND WILL NOT: (I)
CONFLICT WITH OR VIOLATE ANY PROVISION OF THE COMPANY’S CERTIFICATE OR ARTICLES
OF INCORPORATION, BY-LAWS OR OTHER ORGANIZATIONAL OR CHARTER DOCUMENTS, OR (II)
CONFLICT WITH, OR CONSTITUTE A DEFAULT (OR AN EVENT THAT 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 (WITH OR WITHOUT NOTICE,
LAPSE OF TIME OR BOTH) OF ANY AGREEMENT, CREDIT FACILITY, DEBT OR OTHER
INSTRUMENT (EVIDENCING A COMPANY DEBT OR OTHERWISE) OR OTHER UNDERSTANDING TO
WHICH THE COMPANY IS A PARTY OR BY WHICH ANY PROPERTY OR ASSET OF THE COMPANY IS
BOUND OR AFFECTED OR (III) RESULT IN A VIOLATION OF ANY LAW, RULE, REGULATION,
ORDER, JUDGMENT, INJUNCTION, DECREE OR OTHER RESTRICTION OF ANY COURT OR
GOVERNMENTAL AUTHORITY TO WHICH THE COMPANY IS SUBJECT (INCLUDING FEDERAL AND
STATE SECURITIES LAWS AND REGULATIONS), OR BY WHICH ANY PROPERTY OR ASSET OF THE
COMPANY IS BOUND OR AFFECTED.

SECTION 3.15         FILINGS, CONSENTS AND. APPROVALS. NEITHER THE SELLERS NOR
THE COMPANY ARE REQUIRED TO OBTAIN ANY CONSENT, WAIVER, AUTHORIZATION OR ORDER
OF, GIVE ANY NOTICE TO, OR MAKE ANY FILING OR REGISTRATION WITH, ANY COURT OR
OTHER FEDERAL, STATE, LOCAL OR OTHER GOVERNMENTAL AUTHORITY OR OTHER PERSON IN
CONNECTION WITH THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT.

SECTION 3.16         COMPLIANCE.  THE COMPANY: (I) IS NOT IN DEFAULT UNDER OR IN
VIOLATION OF (AND NO EVENT HAS OCCURRED THAT HAS NOT BEEN WAIVED THAT, WITH
NOTICE OR LAPSE OF TIME OR BOTH, WOULD RESULT IN A DEFAULT BY THE COMPANY
UNDER), NOR HAS THE COMPANY RECEIVED NOTICE OF A CLAIM THAT IT IS IN DEFAULT
UNDER OR THAT IT IS IN VIOLATION OF, ANY INDENTURE, LOAN OR CREDIT AGREEMENT OR
ANY OTHER AGREEMENT OR INSTRUMENT TO WHICH IT IS A PARTY OR BY WHICH IT OR ANY
OF ITS PROPERTIES IS BOUND (WHETHER OR NOT SUCH DEFAULT OR VIOLATION

                                                                               6

--------------------------------------------------------------------------------

 

 

HAS BEEN WAIVED), (II) IS NOT IN VIOLATION OF ANY ORDER OF ANY COURT, ARBITRATOR
OR GOVERNMENTAL BODY AND (III) IS NOT AND HAS NOT BEEN IN VIOLATION OF ANY
STATUTE, RULE OR REGULATION OF ANY GOVERNMENTAL AUTHORITY.

SECTION 3.17         TRANSACTIONS WITH AFFILIATES AND EMPLOYEES. EXCEPT AS
REQUIRED TO BE SET FORTH IN THE SEC REPORTS, NONE OF THE OFFICERS OR DIRECTORS
OF THE COMPANY AND, TO THE KNOWLEDGE OF THE SELLERS, NONE OF THE AFFILIATES OR
EMPLOYEES OF THE COMPANY IS PRESENTLY A PARTY TO ANY TRANSACTION WITH THE
COMPANY (OTHER THAN FOR SERVICES AS EMPLOYEES, OFFICERS AND DIRECTORS),
INCLUDING ANY CONTRACT, AGREEMENT OR OTHER ARRANGEMENT PROVIDING FOR THE
FURNISHING OF SERVICES TO OR BY, PROVIDING FOR RENTAL OF REAL OR PERSONAL
PROPERTY TO OR FROM, OR OTHERWISE REQUIRING PAYMENTS TO OR FROM ANY OFFICER,
DIRECTOR OR SUCH EMPLOYEE OR, TO THE KNOWLEDGE OF THE COMPANY, ANY ENTITY IN
WHICH ANY OFFICER, DIRECTOR, OR ANY SUCH EMPLOYEE HAS A SUBSTANTIAL INTEREST OR
IS AN OFFICER, DIRECTOR, TRUSTEE OR PARTNER.

SECTION 3.18         ASSETS.  EXCEPT AS SET FORTH IN THE SEC REPORTS, THE
COMPANY HAS NO ASSETS, INCLUDING, WITHOUT LIMITATION, GOODWILL, ASSETS, REAL
PROPERTY, TANGIBLE PERSONAL PROPERTY, INTANGIBLE PERSONAL PROPERTY, RIGHTS AND
BENEFITS UNDER CONTRACTS AND CASH, AS TO WHICH THERE WILL BE NO DISTRIBUTION
PRIOR TO MARCH 31, 2012. ALL COMPANY LEASES FOR REAL OR PERSONAL PROPERTY ARE IN
GOOD STANDING, VALID AND EFFECTIVE IN ACCORDANCE WITH THEIR RESPECTIVE TERMS,
AND THERE IS NOT UNDER ANY OF SUCH LEASES, ANY EXISTING MATERIAL DEFAULT OR
EVENT OF DEFAULT (OR EVENT WHICH WITH NOTICE OR LAPSE OF TIME, OR BOTH, WOULD
CONSTITUTE A MATERIAL DEFAULT).

SECTION 3.19         INVESTMENT COMPANY/INVESTMENT ADVISOR. THE BUSINESS OF THE
COMPANY DOES NOT REQUIRE IT TO BE REGISTERED AS AN INVESTMENT COMPANY OR
INVESTMENT ADVISOR, AS SUCH TERMS ARE DEFINED UNDER THE INVESTMENT COMPANY ACT
AND THE INVESTMENT ADVISORS ACT OF 1940.

SECTION 3.20         ENVIRONMENTAL MATTERS. THE COMPANY HAS COMPLIED WITH ALL
APPLICABLE ENVIRONMENTAL LAWS (AS DEFINED BELOW). THERE IS NO PENDING OR
THREATENED CIVIL OR CRIMINAL LITIGATION, WRITTEN NOTICE OF VIOLATION, FORMAL
ADMINISTRATIVE PROCEEDING OR INVESTIGATION, INQUIRY OR INFORMATION REQUEST BY
ANY GOVERNMENTAL ENTITY RELATING TO ANY ENVIRONMENTAL LAW INVOLVING THE COMPANY.

SECTION 3.21         INFORMED DECISION. SELLERS ARE AWARE OF THE COMPANY’S
BUSINESS AFFAIRS AND FINANCIAL CONDITION, AND HAVE REACHED AN INFORMED AND
KNOWLEDGEABLE DECISION TO SELL THE SHARES.

SECTION 3.22         TRADING WITH THE ENEMY ACT; PATRIOT ACT. NO SALE OF THE
COMPANY’S SECURITIES OR THE COMPANY’S USE OF THE PROCEEDS FROM SUCH SALE HAS
VIOLATED THE TRADING WITH THE ENEMY ACT, AS AMENDED, OR ANY OF THE FOREIGN
ASSETS CONTROL REGULATIONS OF THE UNITED STATES TREASURY DEPARTMENT (31 CFR,
SUBTITLE B, CHAPTER V, AS AMENDED) OR ANY ENABLING LEGISLATION OR EXECUTIVE
ORDER RELATING THERETO. WITHOUT LIMITING THE FOREGOING, THE COMPANY (A) IS NOT A
PERSON WHOSE PROPERTY OR INTERESTS IN PROPERTY ARE BLOCKED PURSUANT TO SECTION 1
OF EXECUTIVE ORDER 13224 OF SEPTEMBER 23, 2001 BLOCKING PROPERTY AND PROHIBITING
TRANSACTIONS WITH PERSONS WHO COMMIT, THREATEN TO COMMIT, OR SUPPORT TERRORISM
(66 FED, REG. 49079 (2001)) AND (B) DOES NOT ENGAGE IN ANY DEALINGS OR
TRANSACTIONS, OR BE OTHERWISE ASSOCIATED, WITH ANY SUCH PERSON. THE COMPANY IS
IN COMPLIANCE WITH THE PATRIOT ACT OF 2001.

SECTION 3.23         LISTING ON THE OTCBB. THE COMMON STOCK HAS BEEN APPROVED
FOR LISTING ON THE OVER-THE-COUNTER BULLETIN BOARD (THE “OTCBB”) AND THE COMPANY
HAS AND CONTINUES TO SATISFY ALL OF THE REQUIREMENTS OF THE OTCBB FOR SUCH
LISTING AND FOR THE TRADING OF ITS COMMON STOCK THEREUNDER.

SECTION 3.24         CONSUMMATION OF THE MERGER. SELLERS ACKNOWLEDGES THAT IT IS
THE INTENTION OF THE PURCHASER, UPON COMPLETION OF THE TRANSACTIONS
CONTEMPLATED, TO CAUSE THE COMPANY TO CONSUMMATE A MERGER. SELLERS FURTHER
ACKNOWLEDGE THAT, UPON CONSUMMATION OF THE MERGER, IT IS LIKELY THAT EACH SHARE
WILL INCREASE IN VALUE, POSSIBLY SUBSTANTIALLY. SELLERS HAVE HAD SUCH
OPPORTUNITY AS IT DESIRES TO ASK PURCHASER ANY QUESTIONS AND RECEIVE INFORMATION
CONCERNING THE PROPOSED MERGER, INCLUDING THE RISKS

                                                                               7

--------------------------------------------------------------------------------

 

 

ASSOCIATED THEREWITH, AND HAVE RECEIVED SATISFACTORY ANSWERS TO SUCH QUESTIONS
AND DESIRES TO COMPLETE THE SALE OF THE PURCHASED SHARES CONTEMPLATED UNDER THIS
AGREEMENT.

ARTICLE 4.
REPRESENTATIONS OF THE PURCHASER

The Purchaser represents and warrants, solely as to herself, to the Sellers, as
follows:

SECTION 4.1             EXECUTION AND DELIVERY. THE EXECUTION, DELIVERY AND
PERFORMANCE BY THE PURCHASER OF THIS AGREEMENT IS WITHIN PURCHASER’S POWERS, AND
DOES NOT VIOLATE ANY CONTRACTUAL RESTRICTION CONTAINED IN ANY AGREEMENT WHICH
BINDS OR AFFECTS OR PURPORTS TO BIND OR AFFECT THE PURCHASER.

SECTION 4.2             BINDING EFFECT. THIS AGREEMENT, WHEN EXECUTED AND
DELIVERED BY THE PURCHASER SHALL BE IRREVOCABLE AND WILL CONSTITUTE THE LEGAL,
VALID AND BINDING OBLIGATIONS OF THE PURCHASER ENFORCEABLE AGAINST THE PURCHASER
IN ACCORDANCE WITH ITS TERMS, EXCEPT AS MAY BE LIMITED BY APPLICABLE BANKRUPTCY,
INSOLVENCY, MORATORIUM AND OTHER LAWS OF GENERAL APPLICATION AFFECTING
ENFORCEMENT OF CREDITORS’ RIGHTS GENERALLY OR GENERAL PRINCIPLES OF EQUITY
(REGARDLESS OF WHETHER SUCH ENFORCEABILITY IS CONSIDERED IN A PROCEEDING IN
EQUITY OR AT LAW).

SECTION 4.3             INVESTMENT PURPOSE. THE PURCHASER REPRESENTS THAT SHE IS
PURCHASING THE SHARES FOR HER OWN ACCOUNT, WITH THE INTENTION OF HOLDING THE
SHARES, WITH NO PRESENT INTENTION OF DIVIDING OR ALLOWING OTHERS TO PARTICIPATE
IN THIS INVESTMENT OR OF RESELLING OR OTHERWISE PARTICIPATING, DIRECTLY OR
INDIRECTLY, IN A DISTRIBUTION OF THE SHARES, AND SHALL NOT MAKE ANY SALE,
TRANSFER, OR PLEDGE THEREOF WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND
ANY APPLICABLE SECURITIES LAWS OF ANY STATE UNLESS AN EXEMPTION FROM
REGISTRATION IS AVAILABLE UNDER THOSE LAWS. THE PURCHASED SHARES DELIVERED TO
THE PURCHASER SHALL BEAR A RESTRICTIVE LEGEND INDICATING THAT THEY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND ARE “RESTRICTED SECURITIES” AS
THAT TERM IS DEFINED IN RULE 144 UNDER THE ACT.

SECTION 4.4             INVESTMENT REPRESENTATION. THE PURCHASER REPRESENTS THAT
SHE HAS ADEQUATE MEANS OF PROVIDING FOR HER CURRENT NEEDS AND HAVE NO NEED FOR
LIQUIDITY IN THIS INVESTMENT IN THE SHARES. THE PURCHASER REPRESENTS THAT SHE IS
AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(A) OF REGULATION D PROMULGATED
UNDER THE SECURITIES ACT. THE PURCHASER HAS NO REASON TO ANTICIPATE ANY MATERIAL
CHANGE IN HER FINANCIAL CONDITION FOR THE FORESEEABLE FUTURE. THE PURCHASER IS
FINANCIALLY ABLE TO BEAR THE ECONOMIC RISK OF THIS INVESTMENT, INCLUDING THE
ABILITY TO HOLD THE SHARES INDEFINITELY OR TO AFFORD A COMPLETE LOSS OF HIS, HER
OR ITS INVESTMENT IN THE SHARES.

SECTION 4.5             INVESTMENT EXPERIENCE. THE PURCHASER HAS SUCH KNOWLEDGE
AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS AS TO BE CAPABLE OF EVALUATING
THE MERITS AND RISKS OF AN INVESTMENT IN THE SHARES.

SECTION 4.6             OPPORTUNITY TO ASK QUESTIONS. THE PURCHASER HAS HAD A
FULL AND FAIR OPPORTUNITY TO MAKE INQUIRIES ABOUT THE TERMS AND CONDITIONS OF
THIS AGREEMENT, TO DISCUSS THE SAME AND ALL RELATED MATTERS WITH HER OWN
INDEPENDENT COUNSEL, HER OWN ACCOUNTANTS AND TAX ADVISERS. THE PURCHASER HAS
BEEN GIVEN THE OPPORTUNITY TO ASK QUESTIONS OF, AND RECEIVE ANSWERS FROM SELLERS
CONCERNING THE TERMS AND CONDITIONS OF THIS AGREEMENT, AND TO OBTAIN SUCH
ADDITIONAL WRITTEN INFORMATION ABOUT CLSR TO THE EXTENT SELLERS POSSESSES SUCH
INFORMATION OR CAN ACQUIRE IT WITHOUT UNREASONABLE EFFORT OR EXPENSE.
NOTWITHSTANDING THE FOREGOING, THE PURCHASER HAS HAD THE OPPORTUNITY TO CONDUCT
HER OWN INDEPENDENT INVESTIGATION.

SECTION 4.7             NEGATIVE COVENANT. THE PURCHASER COVENANTS, PRIOR TO THE
CLOSING, NOT TO VOTE IN FAVOR OF ANY ACTION, OTHER THAN THE MERGER AND ALL
ACTIONS IN CONNECTION THEREWITH (WHICH MAY OR MAY NOT

                                                                               8

--------------------------------------------------------------------------------

 

 

INCLUDE DILUTION), WHICH DILUTES THE SHARE OWNERSHIP OF SELLERS OR EFFECT ANY
ACTION WHICH MATERIALLY ADVERSELY EFFECTS SELLERS AND THE COMPANY.

ARTICLE 5.
COVENANTS OF THE COMPANY

SECTION 5.1             PUBLIC COMPANY STATUS. THE COMPANY SHALL MAKE ANY AND
ALL NECESSARY FILINGS UNDER THE EXCHANGE ACT SO THAT IT REMAINS A REPORTING
COMPANY UNDER THE EXCHANGE ACT AND ITS COMMON STOCK CONTINUES TO BE A
PUBLICLY-TRADED SECURITY.

SECTION 5.2             LISTING OF COMMON STOCK. THE COMPANY SHALL, TO THE BEST
OF ITS ABILITY, CAUSE THE COMMON STOCK OF CLSR TO CONTINUE TO BE APPROVED FOR
LISTING ON THE OTCBB.

ARTICLE 6.
COVENANTS OF THE PARTIES

The parties hereto agree that:

SECTION 6.1             PUBLIC ANNOUNCEMENTS. THE SELLERS, THE COMPANY AND THE
PURCHASER SHALL CONSULT WITH EACH OTHER BEFORE ISSUING ANY PRESS RELEASE OR
MAKING ANY PUBLIC STATEMENT WITH RESPECT TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED AND, EXCEPT AS MAY BE REQUIRED BY APPLICABLE LAW, WILL NOT ISSUE
ANY SUCH PRESS RELEASE OR MAKE ANY SUCH PUBLIC STATEMENT PRIOR TO SUCH
CONSULTATION AND WITHOUT THE CONSENT OF THE OTHER PARTIES.

SECTION 6.2             NOTICES OF CERTAIN EVENTS. IN ADDITION TO ANY OTHER
NOTICE REQUIRED TO BE GIVEN BY THE TERMS OF THIS AGREEMENT, EACH OF THE PARTIES
SHALL PROMPTLY NOTIFY THE OTHER PARTY HERETO OF:

(A)                ANY NOTICE OR OTHER COMMUNICATION FROM ANY PERSON ALLEGING
THAT THE CONSENT OF SUCH PERSON IS OR MAY BE REQUIRED IN CONNECTION WITH ANY OF
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT;

(B)               ANY NOTICE OR OTHER COMMUNICATION FROM ANY GOVERNMENTAL OR
REGULATORY AGENCY OR AUTHORITY IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT; AND

(C)                ANY ACTIONS, SUITS, CLAIMS, INVESTIGATIONS OR PROCEEDINGS
COMMENCED OR, TO ITS KNOWLEDGE THREATENED AGAINST, RELATING TO OR INVOLVING OR
OTHERWISE AFFECTING SUCH PARTY THAT, IF PENDING ON THE DATE OF THIS AGREEMENT,
WOULD HAVE BEEN REQUIRED TO HAVE BEEN DISCLOSED PURSUANT TO SECTION 3 OR SECTION
4 (AS THE CASE MAY BE) OR THAT RELATE TO THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT.

SECTION 6.3             ACCESS TO INFORMATION. FOLLOWING THE DATE OF THIS
AGREEMENT, UNTIL CONSUMMATION OF ALL TRANSACTIONS CONTEMPLATED, THE SELLERS AND
THE COMPANY SHALL GIVE TO THE PURCHASER, HER COUNSEL, FINANCIAL ADVISERS,
AUDITORS AND OTHER AUTHORIZED REPRESENTATIVES REASONABLE ACCESS TO THE OFFICES,
PROPERTIES, BOOKS AND RECORDS, FINANCIAL AND OTHER DATA AND INFORMATION AS THE
PURCHASER AND HER RESPECTIVE REPRESENTATIVES MAY REASONABLY REQUEST.

SECTION 6.4             CLSR’S BUSINESS. CLSR WILL NOT, WITHOUT THE PRIOR
WRITTEN CONSENT OF PURCHASER: (I) MAKE ANY MATERIAL CHANGE IN THE TYPE OR NATURE
OF ITS BUSINESS, OR IN THE NATURE OF ITS OPERATIONS, (II) CREATE OR SUFFER TO
EXIST ANY DEBT, OTHER THAN THAT CURRENTLY SHOWN IN THE SEC REPORTS, (III) ISSUE
ANY CAPITAL STOCK OR (IV) ENTER INTO ANY NEW AGREEMENTS OF ANY KIND (OTHER THAN
THOSE CONTEMPLATED BY THIS AGREEMENT) OR UNDERTAKE ANY NEW OBLIGATIONS OR
LIABILITIES.

 

                                                                               9

--------------------------------------------------------------------------------

 

 

ARTICLE 7.
CONDITIONS PRECEDENT

SECTION 7.1             CONDITIONS OF OBLIGATIONS OF THE PURCHASER. THE
OBLIGATIONS OF THE PURCHASER ARE SUBJECT TO THE SATISFACTION OF THE FOLLOWING
CONDITIONS, ANY OR ALL OF WHICH MAY BE WAIVED IN WHOLE OR IN PART BY THE
PURCHASER, SOLELY AS TO HERSELF:

(A)                REPRESENTATIONS AND WARRANTIES. EACH OF THE REPRESENTATIONS
AND WARRANTIES OF THE SELLERS AND THE COMPANY SET FORTH IN THIS AGREEMENT SHALL
BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS AS OF (1) THE DATE OF THIS
AGREEMENT (EXCEPT TO THE EXTENT SUCH REPRESENTATIONS AND WARRANTIES SPEAK AS OF
AN EARLIER DATE), (2) THE DATE OF THE MERGER AND (3) THE CLOSING DATE, AS THOUGH
MADE ON AND AS OF ALL OF SUCH DATES.

(B)               COMPLIANCE CERTIFICATE. THE AUTHORIZED OFFICER OF CLSR SHALL
DELIVER TO THE PURCHASER AT THE CLOSING A CERTIFICATE CERTIFYING: (I) THAT THERE
HAS BEEN NO MATERIAL ADVERSE CHANGE IN THE BUSINESS, AFFAIRS, PROSPECTS,
OPERATIONS, PROPERTIES, ASSETS OR CONDITIONS OF THE COMPANY SINCE THE DATE OF
THIS AGREEMENT; (II) THAT ATTACHED THERETO IS A TRUE AND COMPLETE COPY OF CLSR’S
ARTICLES OF INCORPORATION, AS AMENDED, AS IN EFFECT AT THE CLOSING; (III) THAT.
ATTACHED THERETO IS A TRUE AND COMPLETE COPY OF ITS BY-LAWS AS IN EFFECT AT THE
CLOSING; AND (IV) EACH OF THE REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND
THE COMPANY SET FORTH IN THIS AGREEMENT ARE TRUE AND CORRECT IN ALL MATERIAL
RESPECTS AS OF THE CLOSING DATE AS THOUGH MADE ON AND AS OF THE CLOSING DATE.

(C)                GOOD STANDING CERTIFICATE. THE COMPANY SHALL HAVE FURNISHED
THE PURCHASER WITH GOOD STANDING AND EXISTENCE CERTIFICATES FOR CLSR IN ITS
JURISDICTION OF FORMATION AND SUCH OTHER JURISDICTIONS AS THE PURCHASER
REASONABLY REQUESTS.

(D)               CERTIFIED LIST OF RECORD HOLDERS. THE PURCHASER SHALL HAVE
RECEIVED A CURRENT CERTIFIED LIST FROM THE CLSR’S TRANSFER AGENT OF THE HOLDERS
OF RECORD OF CLSR’S COMMON STOCK.

(E)                BOARD OF DIRECTORS RESOLUTIONS. THE PURCHASER SHALL HAVE
RECEIVED EXECUTED RESOLUTIONS OF THE BOARD OF DIRECTORS OF CLSR APPROVING THE
ELECTION OF HELEN MIN ZOU TO THE BOARD OF DIRECTORS.

(F)                PERFORMANCE.  THE SELLERS AND THE COMPANY SHALL HAVE
PERFORMED AND COMPLIED WITH ALL AGREEMENTS, OBLIGATIONS AND CONDITIONS CONTAINED
IN THIS AGREEMENT THAT ARE REQUIRED TO BE PERFORMED OR COMPLIED WITH BY IT ON OR
BEFORE THE CLOSING, INCLUDING, BUT NOT LIMITED TO, EXECUTION, AND COMPLIANCE
WITH ALL TERMS AND PROVISIONS, OF THE ESCROW AGREEMENTS.

SECTION 7.2             CONDITIONS OF OBLIGATIONS OF THE SELLERS. THE
OBLIGATIONS OF THE SELLERS TO EFFECT THE SALE OF THE SHARES ARE SUBJECT TO THE
FOLLOWING CONDITIONS, ANY OR ALL OF WHICH MAY BE WAIVED IN WHOLE OR IN PART BY
THE PURCHASER.

(A)                REPRESENTATIONS AND WARRANTIES. EACH OF THE REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER SET FORTH IN THIS AGREEMENT SHALL BE TRUE AND
CORRECT IN ALL MATERIAL RESPECTS AS OF THE DATE OF THIS AGREEMENT AND (EXCEPT TO
THE EXTENT SUCH REPRESENTATIONS AND WARRANTIES SPEAK AS OF AN EARLIER DATE) AS
OF THE CLOSING DATE AS THOUGH MADE ON AND AS OF THE CLOSING DATE.

(B)               COMPLIANCE CERTIFICATE.           THE PURCHASER SHALL EACH
DELIVER TO THE SELLERS AT THE CLOSING A CERTIFICATE CERTIFYING EACH OF THE
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER SET FORTH IN  THIS AGREEMENT ARE
TRUE AND CORRECT IN ALL MATERIAL RESPECTS AS OF THE CLOSING DATE AS THOUGH MADE
ON AND AS OF THE CLOSING DATE.

 

                                                                             
 10

--------------------------------------------------------------------------------

 

 

(C)                PERFORMANCE.  THE PURCHASER SHALL HAVE PERFORMED AND COMPLIED
WITH ALL AGREEMENTS, OBLIGATIONS AND CONDITIONS CONTAINED IN THIS AGREEMENT THAT
ARE REQUIRED TO BE PERFORMED OR COMPLIED WITH BY HERON OR BEFORE THE CLOSING,
INCLUDING, BUT NOT LIMITED TO, EXECUTION, AND COMPLIANCE WITH ALL TERMS AND
PROVISIONS OF THE ESCROW AGREEMENT.

ARTICLE 8.
TERMINATION

SECTION 8.1             TERMINATION.  THIS AGREEMENT MAY BE TERMINATED AND THE
PURCHASE AND SALE OF THE SHARES MAY BE ABANDONED AT ANY TIME PRIOR TO THE
CLOSING:

(A)                BY MUTUAL WRITTEN CONSENT OF THE PARTIES HERETO;

(B)               BY EITHER THE SELLERS OR THE PURCHASER IF THE CLOSING SHALL
NOT HAVE OCCURRED ON OR BEFORE FEBRUARY 15, 2012 (UNLESS THE FAILURE TO
CONSUMMATE THE TRANSACTIONS BY SUCH DATE SHALL BE DUE TO THE ACTION OR FAILURE
TO ACT OF THE PARTY SEEKING TO TERMINATE THIS AGREEMENT OR REGULATORY DELAYS);

(C)                BY THE PURCHASER IF (I) SELLERS SHALL HAVE FAILED TO COMPLY
IN ANY MATERIAL RESPECT WITH ANY OF THE COVENANTS, CONDITIONS, TERMS OR
AGREEMENTS CONTAINED IN THIS AGREEMENT TO BE COMPLIED WITH OR PERFORMED BY
SELLERS; OR (II) ANY REPRESENTATIONS AND WARRANTIES OF SELLERS OR THE COMPANY
CONTAINED IN THIS AGREEMENT SHALL NOT HAVE BEEN TRUE WHEN MADE OR ON AND AS OF
THE CLOSING DATE AS IF MADE ON AND AS OF CLOSING DATE (EXCEPT TO THE EXTENT IT
RELATES TO A PARTICULAR DATE); OR (III) SHE IS NOT SATISFIED WITH HER DUE
DILIGENCE REVIEW OF THE SELLERS AND THE COMPANY; OR

(D)               BY SELLERS IF (I) THE PURCHASER SHALL HAVE FAILED TO COMPLY IN
ANY MATERIAL RESPECT WITH ANY OF THE COVENANTS, CONDITIONS, TERMS OR AGREEMENTS
CONTAINED IN THIS AGREEMENT TO BE COMPLIED WITH OR PERFORMED BY HER; OR (II) ANY
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER CONTAINED IN THIS AGREEMENT
SHALL NOT HAVE BEEN TRUE WHEN MADE OR ON AND AS OF THE CLOSING DATE.

SECTION 8.2             EFFECT OF TERMINATION. IN THE EVENT OF THE TERMINATION
OF THIS AGREEMENT PURSUANT TO THIS ARTICLE 8, ALL FURTHER OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL FORTHWITH BE TERMINATED WITHOUT ANY FURTHER
LIABILITY OF ANY PARTY TO THE OTHER PARTIES; PROVIDED, HOWEVER, THAT NOTHING
CONTAINED IN THIS SECTION 8.2 SHALL RELIEVE ANY PARTY FROM LIABILITY FOR ANY
BREACH OF THIS AGREEMENT.

ARTICLE 9.
MISCELLANEOUS

SECTION 9.1             NOTICES.  ALL NOTICES, REQUESTS AND OTHER COMMUNICATIONS
TO ANY PARTY HEREUNDER SHALL BE IN WRITING AND EITHER DELIVERED PERSONALLY,
TELECOPIED OR SENT BY CERTIFIED OR REGISTERED MAIL, POSTAGE PREPAID.

If to the Sellers:             Dr. Brian Pollard

Dr. Cheryl Nesler

4915 Portales Way 

Anacortes, Washington 98221

 

With a copy to:             James B. Parsons, Esq.

Parsons / Burnett / Bjordhal / Hume, LLP

1850 Skyline Tower 10900 NE 4th Street Bellevue, WA 98004

                                                                             
 11

--------------------------------------------------------------------------------

 

 

T: 425-451-8036

F: 425-451-8568

Email: jparsons@pblaw.biz

 

If to Purchaser:             Helen Min Zou

1020 Dennison St. Unit 200 Markham, Ontario

Canada L3R3W5

 

With a copy to:             Charles B. Pearlman, Esq.

                                     Pearlman & Pearlman LLC Counsel to
Quintairos, Prieto, Wood & Boyer, P.A.

One East Broward Boulevard, Suite 1400

Fort Lauderdale, FL 33301 954-523-7008 x6021

954-523-7009

Email: cpearlman@qpwblaw.com

 

If to the Company:        Clear System Recycling, Inc. 4915 Portales Way
Anacortes, WA 98221

With a copy to:             James B. Parsons, Esq.

Parsons / Burnett / Bjordhal / Hume, LLP 1850 Skyline Tower

10900 NE 4th Street

Bellevue, WA 98004

T; 425-451-8036

F: 425-451-8568

Email: jparsons@pblaw.biz

or such other address or fax number as such party may hereafter specify for the
purpose by notice to the other parties hereto. All such notices, requests and
other communications shall be deemed received on the date delivered personally
or by overnight delivery service, electronically with read receipt, telecopied
or, if mailed, five (5) business days after the date of mailing if received
prior to 5 p.m. in the place of receipt and such day is a business day in the
place of receipt. Otherwise, any such notice, request or communication shall be
deemed not to have been received until the next succeeding business day in the
place of receipt.

 

SECTION 9.2             AMENDMENTS; NO WAIVERS. 

(A)                ANY PROVISION OF THIS AGREEMENT WITH RESPECT TO TRANSACTIONS
CONTEMPLATED MAY BE AMENDED OR WAIVED IF, BUT ONLY IF, SUCH AMENDMENT OR WAIVER
IS IN WRITING AND IS SIGNED, IN THE CASE OF AN AMENDMENT, BY THE SELLERS AND
PURCHASER; OR IN THE CASE OF A WAIVER, BY THE PARTY AGAINST WHOM THE WAIVER IS
TO BE EFFECTIVE.

(B)               NO FAILURE OR DELAY BY ANY PARTY IN EXERCISING ANY RIGHT,
POWER OR PRIVILEGE HEREUNDER SHALL OPERATE AS A WAIVER THEREOF NOR SHALL ANY
SINGLE OR PARTIAL EXERCISE THEREOF PRECLUDE ANY OTHER OR FURTHER EXERCISE
THEREOF OR THE EXERCISE OF ANY OTHER RIGHT, POWER OR PRIVILEGE. THE RIGHTS AND
REMEDIES HEREIN PROVIDED SHALL BE CUMULATIVE AND NOT EXCLUSIVE OF ANY RIGHTS OR
REMEDIES PROVIDED BY LAW.

 

                                                                             
 12

--------------------------------------------------------------------------------

 

 

SECTION 9.3             FEES AND EXPENSES. ALL COSTS AND EXPENSES INCURRED IN
CONNECTION WITH THIS AGREEMENT SHALL BE PAID BY THE PARTY INCURRING SUCH COST OR
EXPENSE.

SECTION 9.4             SUCCESSORS AND ASSIGNS. THE PROVISIONS OF THIS AGREEMENT
SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF THE PARTIES AND THEIR
RESPECTIVE SUCCESSORS AND ASSIGNS; PROVIDED THAT PURCHASER SHALL HAVE THE RIGHT
TO ASSIGN THIS AGREEMENT TO AN AFFILIATE OF THE PURCHASER, AND NO OTHER PARTY
MAY ASSIGN, DELEGATE OR OTHERWISE TRANSFER ANY OF ITS RIGHTS OR OBLIGATIONS
UNDER THIS AGREEMENT WITHOUT THE CONSENT OF EACH OTHER PARTY, BUT ANY SUCH
TRANSFER OR ASSIGNMENT WILL NOT RELIEVE THE APPROPRIATE PARTY OF ITS OBLIGATIONS
HEREUNDER.

SECTION 9.5             GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA, WITHOUT GIVING
EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.

SECTION 9.6             JURISDICTION.  ANY SUIT, ACTION OR PROCEEDING SEEKING TO
ENFORCE ANY PROVISION OF, OR BASED ON ANY MATTER ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED MAY BE BROUGHT IN ANY
FEDERAL OR STATE COURT LOCATED IN THE CITY OF FT. LAUDERDALE, COUNTY OF BROWARD,
STATE OF FLORIDA, AND EACH OF THE PARTIES CONSENTS TO THE JURISDICTION OF SUCH
COURTS (AND OF THE APPROPRIATE APPELLATE COURTS THEREFROM) IN ANY SUCH SUIT,
ACTION OR PROCEEDING AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE
OF ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT ANY SUCH SUIT,
ACTION OR PROCEEDING WHICH IS BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE SERVED
ON ANY PARTY ANYWHERE IN THE WORLD, WHETHER WITHIN OR WITHOUT THE JURISDICTION
OF ANY SUCH COURT. WITHOUT LIMITING THE FOREGOING, EACH PARTY AGREES THAT
SERVICE OF PROCESS ON SUCH PARTY AS PROVIDED IN SECTION 9.1. SHALL BE DEEMED
EFFECTIVE SERVICE OF PROCESS ON SUCH PARTY. EACH PARTY (INCLUDING ITS
AFFILIATES, AGENTS, OFFICERS, DIRECTORS AND EMPLOYEES)  IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED.

SECTION 9.7             COUNTERPARTS; EFFECTIVENESS. THIS AGREEMENT MAY BE
SIGNED IN ANY NUMBER OF COUNTERPARTS, EACH OF WHICH SHALL BE AN ORIGINAL, WITH
THE SAME EFFECT AS IF THE SIGNATURES WERE UPON THE SAME INSTRUMENT. THIS
AGREEMENT SHALL BECOME EFFECTIVE WHEN EACH PARTY HAS RECEIVED COUNTERPARTS
SIGNED BY ALL OF THE OTHER PARTIES. NO PROVISION OF THIS AGREEMENT IS INTENDED
TO CONFER UPON ANY PERSON OTHER THAN THE PARTIES HERETO ANY RIGHTS OR REMEDIES
UNDER THIS AGREEMENT.

SECTION 9.8             ENTIRE AGREEMENT. THIS AGREEMENT AND THE ATTACHED
EXHIBITS AND SCHEDULES CONSTITUTE THE ENTIRE AGREEMENT BETWEEN THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT AND SUPERSEDES ALL PRIOR
AGREEMENTS AND UNDERSTANDINGS, BOTH ORAL AND WRITTEN, BETWEEN THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT.

SECTION 9.9             CAPTIONS.  THE CAPTIONS ARE INCLUDED FOR CONVENIENCE OF
REFERENCE ONLY AND SHALL BE IGNORED IN THE CONSTRUCTION OR INTERPRETATION OF
THIS AGREEMENT.

SECTION 9.10         SEVERABILITY.  IF ANY TERM, PROVISION, COVENANT OR
RESTRICTION OF THIS AGREEMENT IS HELD BY A COURT OF COMPETENT JURISDICTION OR
OTHER AUTHORITY TO BE INVALID, VOID OR UNENFORCEABLE, THE REMAINDER OF THE
TERMS, PROVISIONS, COVENANTS AND RESTRICTIONS OF THIS AGREEMENT SHALL REMAIN IN
FULL FORCE AND EFFECT AND SHALL IN NO WAY BE AFFECTED, IMPAIRED OR INVALIDATED
SO LONG AS THE ECONOMIC OR LEGAL SUBSTANCE OF THE TRANSACTIONS CONTEMPLATED IS
NOT AFFECTED IN ANY MANNER MATERIALLY ADVERSE TO ANY PARTIES. UPON SUCH A
DETERMINATION, THE PARTIES SHALL NEGOTIATE IN GOOD FAITH TO MODIFY THIS
AGREEMENT SO AS TO EFFECT THE ORIGINAL INTENT OF THE PARTIES AS CLOSELY AS
POSSIBLE IN AN ACCEPTABLE MANNER IN ORDER THAT THE TRANSACTIONS CONTEMPLATED ARE
CONSUMMATED AS ORIGINALLY CONTEMPLATED TO THE FULLEST EXTENT POSSIBLE.

 

                                                                             
 13

--------------------------------------------------------------------------------

 

 

SECTION 9.11         SPECIFIC PERFORMANCE. THE PARTIES AGREE THAT IRREPARABLE
DAMAGE WOULD OCCUR IN THE EVENT ANY PROVISION OF THIS AGREEMENT WAS NOT
PERFORMED IN ACCORDANCE WITH THE ITS TERMS AND THAT THE PARTIES SHALL BE
ENTITLED TO SPECIFIC PERFORMANCE OF THE TERMS OF THIS AGREEMENT IN ADDITION TO
ANY OTHER REMEDY TO WHICH THEY ARE ENTITLED AT LAW OR IN EQUITY.

SECTION 9.12         DEFINITION AND USAGE. FOR PURPOSES OF THIS AGREEMENT:

“Affiliate” means, with respect to any Person, any other Person, or indirectly
controlling, controlled by or under common control with such Person.

 

“Environmental Law” shall mean any federal, state or local law, statute, rule or
regulation or the common law relating to the environment or occupational health
and safety, including any statute, regulation, administrative decision or order
pertaining to: (i) treatment, storage, disposal, generation and transportation
of industrial, toxic or hazardous materials or substances or solid or hazardous
waste; (ii) air, water and noise pollution; (iii) groundwater and soil
contamination; (iv) the release or threatened release into the environment of
industrial, toxic or hazardous materials or substances, or solid or hazardous
waste, including emissions, discharges, injections, spills, escapes or dumping
of pollutants, contaminants or chemicals; (v) the  protection of wild life,
marine life and wetlands, including all endangered and threatened species; (vi)
storage tanks, vessels, containers, abandoned or discarded barrels and other
closed receptacles; (vii) health and safety of employees and other persons; and
(viii) manufacturing, processing, using, distributing, treating, storing,
disposing, transporting or handling of materials regulated under any law as
pollutants, contaminants, toxic or hazardous materials or substances or oil or
petroleum products or solid or hazardous waste. As used above, the terms
“release” and “environment” shall have the meaning set forth in the federal
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended (CERCLA). 

 

“Indebtedness” shall mean (a) any liabilities for borrowed money or amounts
owed, (b) all guaranties, endorsements and other contingent obligations, whether
or not the same are or should be reflected in the Company’s balance sheet or the
notes thereto, except guaranties by endorsement of negotiable instruments for
deposit or collection in the ordinary course of business, and (c) the present
value of any lease payments under leases required to be capitalized in
accordance with GAAP.

 

“Material Adverse Effect” means any effect or change that is or would be
materially adverse to the business, operations, assets, prospects, condition
(financial or otherwise) or results of operations of the Company and any of its
subsidiaries, taken as a whole.

 

“Person” means an individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality of the
foregoing.

 

“Taxes” means any and all federal, state, local, foreign or other taxes of any
kind (together with any and all interest, penalties, additions to tax and
additional amounts imposed with respect thereto) imposed by any taxing
authority, including, without limitation, taxes or other charges on or with
respect to income, franchises, windfall or other profits, gross receipts, sales,
use, capital stock, payroll, employment, social security, workers’ compensation,
unemployment compensation, or net worth, and taxes or other charges in the
nature of excise, withholding, ad valorem or value added.

 

 

                                                                             
 14

--------------------------------------------------------------------------------

 

 

SECTION 9.13         SURVIVAL.  THE REPRESENTATIONS AND WARRANTIES CONTAINED IN
THIS AGREEMENT SHALL SURVIVE THE CLOSING AND DELIVERY OF THE SHARES ONLY AS
AGAINST SELLERS, AND NOTWITHSTANDING ANY PROVISION TO THE CONTRARY CONTAINED IN
THIS AGREEMENT, UPON AND AFTER THE CLOSING, ANY CLAIM BY PURCHASER FOR A BREACH
OF ANY REPRESENTATION OR WARRANTY OF SELLERS OR THE COMPANY CONTAINED IN THIS
AGREEMENT MAY BE MADE ONLY AGAINST SELLERS AND PURCHASER SHALL HAVE NO CLAIM
AGAINST THE COMPANY FOR ANY SUCH BREACH.

[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]

                                                                             
 15

--------------------------------------------------------------------------------

 

 

IN WITNESS WHEREOF, each of the following individuals has caused this Agreement
to be signed, and each party that is not an individual has caused this Agreement
to be duly executed under seal by its respective authorized officers, all as of
the day and year first above written.

 

SELLERS:

By: /s/ Brian Pollard_______________
Name: Brian Pollard

By: /s/ Cheryl Nesler______________
Name: Cheryl Nesler

THE COMPANY:

 

CLEAR SYSTEM RECYCLING, INC.

 

 

By: /s/ Brian Pollard_______________
Name: Brian Pollard Title: President

 

 

PURCHASER:

By: /s/ Helen Min Zou_____________
Name: Helen Min Zou

                                                                             
 16

--------------------------------------------------------------------------------

 

 

Schedule 1.1

 

Portion of Purchased Shares and Purchase Price

 

SELLERS:        Brian
Pollard                                                                       
1,000,000  50%

                         Cheryl
Nesler                                                                      
1,000,000  50%

Portion of Purchased Shares and Purchase Price

 

2,000,000  100%

PURCHASERS: Helen Min Zou

 

 

 

 

ESCROW AGENT WIRING INSTRUCTIONS For the Sellers:

 

 

BANK: Bank of America, Bellevue at Fourth Branch (Bellevue, WA) ABA: 026009593

BENEFICIARY: Parsons/Burnett/Bjordahl/Hume, LLP IOLTA ACCOUNT: 50046416

REFERENCE: Clear System Recycling, Inc.

 

--------------------------------------------------------------------------------

 

 

Schedule 1.2

The “Purchased Shares” shall mean all of Seller’s shares in Clear System
Recycling Inc..

 

--------------------------------------------------------------------------------

 

 

EXHIBIT A
Disclosure Schedules
of
Clear System Recycling., Inc.

Matters reflected in these disclosure schedules are not necessarily limited to
the matters required by the Agreement to be disclosed in the disclosure
schedules. Such additional matters are set forth for informational pup-poses and
do not necessarily include other matters of a similar nature.

 

--------------------------------------------------------------------------------

 

 

Section 3.3
Capitalization

The Company currently has 100,000,000 shares of common capital stock, $0.001 par
value authorized of which 2,940,000 shares are issued and outstanding and
15,000,000 shares of $0.001 par value Preferred Shares, none of which are issued
or outstanding.

 

 

--------------------------------------------------------------------------------

 

 

Section 3.5
Financial Statements

CLSR’s financial statements are true and correct.

The Company is a fully reporting company under Section 12(g) of the Exchange
Act.

 

--------------------------------------------------------------------------------

 

 

Section 3.10
Solvency; Indebtedness

 N/A 

 

--------------------------------------------------------------------------------

 

 

Section 3.15
Filings, Consents and Approvals

CLSR is filing an 8K with respect to the change of ownership and control.

 

--------------------------------------------------------------------------------

 

 

Section 3.17
Transactions with Affiliates and Employees 

At the effective time no contracts, agreements or other arrangements exist
between the Company (CLSR) and any officer, director or affiliate.

 

 

--------------------------------------------------------------------------------

 

 

Section 3.18
Assets

The Company has no leases and no assets other than the website which it built
for its business and which is no longer operative.

 

--------------------------------------------------------------------------------