Document:

exhibit_4-8.htm

 

 

EXHIBIT 4.8

 

[FORM OF BENEFICIAL OWNER ELECTION FORM]

 

FORM OF BENEFICIAL OWNER ELECTION

 

     The undersigned acknowledge(s) receipt of your letter and the enclosed materials referred to therein relating to the offering (the “ Rights Offering ”) to purchase Units (the “ Units ”) consisting of one share of common stock and a three-year warrant to purchase 0.5 shares of common stock at an exercise price of $4.00 per share by stockholders of record (“ Record Date Stockholders ”) as of 5:00 p.m., Eastern Daylight Time, on [     ], 2010 (the “ Record Date ”).

 

     With respect to any instructions to exercise (or not to exercise) the Rights, the undersigned acknowledges that this form must be completed and returned such that it will actually be received by you by 5:00 p.m., New York City time, on [     ] , 2010, the last business day prior to the scheduled expiration date of the Rights Offering of  [     ] , 2010 (which may be extended by the Company in its sole discretion).

 

     This will instruct you whether to exercise Rights to purchase Units distributed with respect to the shares of the Company’s common stock, $0.0001 par value, held by you for the account of the undersigned, pursuant to the terms and subject to the conditions set forth in the Prospectus and the related Subscription Rights Certificates.

 

     Box 1.  ̈ • Please DO NOT EXERCISE RIGHTS for Units.

 

     Box 2.  ̈ • Please EXERCISE RIGHTS for Units as set forth below.

 

     The number of Rights for which the undersigned gives instructions for exercise under the Basic Subscription Rights should not exceed the number of Rights that the undersigned is entitled to exercise.

	  	  	  	  	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	
Per Unit

	  	  
	  	  	
Number of Units

	  	
Subscription Price

	  	
Payment

	  	  	  	  	  	  	  	  	  	  	  	  	  
	
Basic Subscription Right

	  	  	
[          ]

	
X

	  	
$

	
[          ]

	
= 

	  	
$

	
                    

	
(Line 1) 

	
Over-Subscription Right

	  	  	
[          ]

	
X

	  	
$

	
[          ]

	
= 

	  	
$

	
                    

	
(Line 2) 

	
Total Payment Required

	  	  	  	  	  	  	  	  	  	
$

	
                    

	  
	  	  	  	  	  	  	  	  	  	  	
(Sum of Lines 1 and 2 must equal total of amounts in Boxes 3 and 4)

 

     Box 3. o • Payment in the following amount is enclosed $          .

 

     Box 4. o • Please deduct payment from the following account maintained by you as follows:

	  	  	  	  	  	  	  
	  	  	
Type of Account:

	  	  	  	  
	  	  	  	  	  	  	  
	  	  	
Account No.:

	  	  	  	  
	  	  	  	  	  	  	  
	  	  	
Amount to be deducted:          $

	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	
Signature:

	  	  	  	  
	  	  	  	  	  	  	  
	  	  	
Name:

	  	  	  	  
	  	  	  	  	  	  	  
	  	  	
Title:

	  	  	  	  
	  	  	  	  	  	  	  
	  	  	
Date:               , 2010exhibit_4-9.htm

EXHIBIT 4.9

 

PRELIMINARY SUBSCRIPTION AGREEMENT

 

GENERAL FINANCE CORPORATION

 ATTENTION: CHRISTOPHER A. WILSON

 39 EAST UNION STREET

 PASADENA, CALIFORNIA 91103

 

Ladies and Gentlemen:

 

I hereby subscribe to purchase the number of Units consisting of one share of common stock and a three-year warrant to purchase 0.5 shares of common stock at an exercise price of $4.00 per share (the “ Units ”) of General Finance Corporation, a Delaware corporation (the “Company”), indicated below.

 

I have received a copy of the Company’s prospectus, dated [     ], 2010. I understand that my purchase of the Company’s Units, and warrants and common stock included in each Unit, involves significant risk, as described under “Risk Factors” in the prospectus. I also understand that no federal or state agency has made any finding or determination regarding the fairness of the Company’s offering of the Units, the accuracy or adequacy of the prospectus, or any recommendation or endorsement concerning an investment in the Units.

 

I am not sending the purchase price for the Units I wish to buy at this time. After I receive the prospectus supplement announcing the results of the Company’s rights offering to its stockholders, if I still wish to purchase Units, I will send the Company an acknowledgment of subscription and a check in the amount of $        multiplied by the number of Units I wish to buy. My check will be made payable to “Continental Stock Transfer & Trust Co. as agent for General Finance Corporation.”

 

WHEN THE COMPANY RECEIVES MY ACKNOWLEDGMENT OF SUBSCRIPTION AND MY CHECK, THIS SUBSCRIPTION AGREEMENT WILL BECOME FINAL AND BINDING AND WILL BE IRREVOCABLE UNTIL THE OFFERING IS CLOSED.

 

NUMBER OF UNITS                     

 

TOTAL SUBSCRIPTION PRICE

 (AT $        PER UNIT):                       *

 

PLEASE PRINT OR TYPE EXACT NAME(S) IN WHICH UNDERSIGNED DESIRES UNITS TO BE REGISTERED:                                                                                  

 

 

	  	  	  
	
*

	  	
DO NOT SEND THE PURCHASE PRICE FOR YOUR SHARES AT THIS TIME.

 

SUBSTITUTE W-9

 

Under the penalty of perjury, I certify that: (1) the Social Security number or Taxpayer Identification Number given below is correct; and (2) I am not subject to backup withholding.

 

INSTRUCTION: YOU MUST CROSS OUT (2) ABOVE IF YOU HAVE BEEN NOTIFIED BY THE INTERNAL REVENUE SERVICE THAT YOU ARE SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING INTEREST OR DIVIDENDS ON YOUR TAX RETURN.

	  	  	  
	

  DATE

	  	  
	  	  	  
	  	  	

  SIGNATURE(S)*

 

 AREA CODE AND TELEPHONE NO. ____________________________________

 

  

  

  

 

 

PLEASE INDICATE FORM OF OWNERSHIP YOU DESIRE FOR THE UNITS (INDIVIDUAL, JOINT TENANTS WITH RIGHT OF SURVIVORSHIP, TENANTS IN COMMON, TRUST, CORPORATION, PARTNERSHIP, CUSTODIAN, ETC.):

 

                                                                                    

 SOCIAL SECURITY OR FEDERAL TAXPAYER

 

IDENTIFICATION NO.

 

TO BE COMPLETED BY THE COMPANY

 

Accepted as of                     , 2010, as to                           Units.

	  	  	  	  	  
	
GENERAL FINANCE CORPORATION

  

	  	  
	
By:  

	  	  	  
	  	
Name:  

	  	  	  
	  	
Title:  

	  	  	  
	  

 

 

	  	  	  
	
*

	  	
When signing as attorney, trustee, administrator, or guardian, please give your full title as such. If a corporation, please sign in full corporate name by president or other authorized officer. In case of joint tenants, each joint owner must sign.exhibit_4-10.htm

 

 

EXHIBIT 4.10

 

ACKNOWLEDGEMENT OF SUBSCRIPTION

 

GENERAL FINANCE CORPORATION

 ATTENTION: CHRISTOPHER A. WILSON

 39 EAST UNION STREET

 PASADENA, CALIFORNIA 91103

 

Dear Subscriber:

 

Please sign below to acknowledge receipt of the prospectus and to convert your preliminary subscription to a final and binding subscription. Please enclose a check payable to “Continental Stock Transfer & Trust Co. as agent for General Finance Corporation” in the amount of $___ multiplied by the number of Units you intend to subscribe for.

 

A stock certificate and warrant purchased in each Unit, which consists of one share of common stock and a three-year warrant to purchase 0.5 shares of common stock at an exercise price of $4.00, will be issued to you as soon as possible upon the Company’s acceptance of your subscription, as described in the prospectus dated ___, 2010. In the event that the offering is cancelled, your subscription funds will be returned to you as described in the prospectus.

 

Very Truly Yours,

	  	  	  	  	  
	
GENERAL FINANCE CORPORATION

  

	  	  
	
By:  

	  	  	  
	  	
Christopher A. Wilson 

	  	  
	  	
General Counsel 

	  	  
	  

 

                                                            

 Date

 

By signing below, I acknowledge the receipt of the prospectus dated ___, 2010 of General Finance Corporation and convert the preliminary subscription agreement to a final subscription agreement, which will be binding and irrevocable until the expiration date as defined in the prospectus.

 

The undersigned encloses $                     for the purchase of                      Units, at the purchase price of $           per Unit.

 

                                                            

 Signature

 

                                                            

 Print Name

 

                                                            

 Dateexhibit10a.htm

STOCK PURCHASE AGREEMENT

BETWEEN

AMERICAN NANO SILICON TECHNOLGIES, INC.

AND

INVESTORS LISTED IN SCHEDULE A

DATED

MARCH 19, 2010

  

  

  

	
STOCK PURCHASE AGREEMENT

This STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered into as of the 19 day of March, 2010 between American Nano Silicon Technology, Inc., a corporation organized and existing under the
laws of the State of California (“ANNO” or the “Company”) and the Investors in Schedule A (“Investor”).

PRELIMINARY STATEMENT:

 

WHEREAS, the Investor wishes to purchase from the Company, upon the terms and subject to the conditions of this Agreement, Two Million One Hundred Thousand (2,100,000) shares of common stock of the Company (the “Shares”)
for the Purchase Price set forth in Section 1.3.13 hereof.  In addition, the Company will issue to the Investor Common Stock Purchase Warrants (the “Warrants”) to purchase up to an additional Two Million (2,000,000) shares of common stock of the Company at exercise prices as stated in the Warrants
and will cause certain shareholders of the Company to deliver to the Investor the Shareholders Warrants and Shareholder Put Option described herein; and

 

   WHEREAS, the parties intend to memorialize the purchase and sale of such Shares and the Warrants.

   NOW, THEREFORE, in consideration of the mutual covenants and premises contained herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby conclusively acknowledged, the parties hereto, intending to be legally bound, agree as follows:

ARTICLE I

 

INCORPORATION BY REFERENCE, SUPERSEDER AND DEFINITIONS

 

1.1           Incorporation by Reference. The foregoing recitals and the Exhibits and Schedules attached hereto and referred to herein, are hereby acknowledged to be true and accurate, and are incorporated
herein by this reference.

 

1.2           Superseder. This Agreement, to the extent that it is inconsistent with any other instrument or understanding among the parties governing the affairs of the Company, shall supersede such
instrument or understanding to the fullest extent permitted by law.  A copy of this Agreement shall be filed at the Company’s principal office.

 

1.3           Certain Definitions. For purposes of this Agreement, the following capitalized terms shall have the following meanings (all capitalized terms used in this Agreement that are not defined
in this Article 1 shall have the meanings set forth elsewhere in this Agreement):

 

1.3.1           “1933 Act” means the Securities Act of 1933, as amended.

 

 

2

 

1.3.2           “1934 Act” means the Securities Exchange Act of 1934, as amended.

 

1.3.3           “Affiliate” means a Person or Persons directly or indirectly, through one or more intermediaries, controlling, controlled
by or under common control with the Person(s) in question. The term “control,” as used in the immediately preceding sentence, means, with respect to a Person that is a corporation, the right to the exercise, directly or indirectly, of more than 50 percent of the voting rights attributable to the shares of such controlled corporation and, with respect to a Person that is not a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies
of such controlled Person.

 

1.3.4           “Articles”
means the Certificate of Incorporation of the Company, as the same may be amended from time to time.

 

1.3.5           “Closing” shall mean the Closing of the transactions contemplated
by this Agreement on the Closing Date.

 

1.3.6           “Closing Date” means the date on which the payment of the Purchase Price (as defined herein) by the Investor to the company is completed pursuant to this Agreement to purchase
the Shares and Warrants, which shall occur on or before April 15, 2010.

 

1.3.7           “Common Stock” means shares of common stock of the Company, par value $0.001 per share.

 

1.3.8.  “Escrow Agreement” means the escrow agreement among the Company, certain shareholders of the Company, the Investors, and Robert Brantl, Esq. as “Escrow Agent” in the form attached hereto
as Exhibit A.

 

1.3.9           "Exempt Issuance" means the issuance of (a) shares of common stock or options to employees, officers, or directors of the Company pursuant to any stock or option plan duly adopted by
a majority of the non-employee members of the Board of Directors of the Company or a majority of the members of a committee of non-employee directors established for such purpose, (b) securities upon the exercise of or conversion of any securities issued hereunder, and (c) securities issued pursuant to acquisitions or strategic transactions, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the
Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.

 

1.3.10           "Material Adverse Effect" shall mean any adverse effect on the business, operations, properties or financial condition of the Company that is material and adverse to the Company and
its subsidiaries and affiliates, taken as a whole and/or any condition, circumstance, or situation that would prohibit or otherwise materially interfere with the ability of the Company to perform any of its material obligations under this Agreement  or to perform its obligations under any other material agreement.

 

1.3.11           “California Act” means the California General Corporation Law, as amended.

 

1.3.12           “Person” means an individual, partnership, firm, limited liability company, trust, joint venture, association, corporation,
or any other legal entity.

 

1.3.13           “Purchase Price” means the One Million Dollars ($1,000,000.00) paid by the Investor to the Company for the Shares and the Warrants.

 

1.3.14            “SEC” means the Securities and Exchange Commission.

 

1.3.15           "SEC Documents" shall mean the Company's latest Form 10-K as of the time in question, all Forms 10-Q and 8-K filed thereafter, and the Proxy Statement for its latest fiscal year as
of the time in question.

 

1.3.16           “Shareholder Put Option” means the option granted by Huakang Zhou to the Investors to sell the Shares to Mr. Zhou, in
the form attached hereto as Exhibit B.

 

1.3.17           “Shareholder Warrant” means the warrants to purchase an aggregate
of two million shares at $.80 per share given to the Investors by certain shareholders named therein, in the form attached hereto as Exhibit C.

 

1.3.18            "Shares" shall mean, collectively, the shares of Common Stock of the Company purchased hereunder and those shares of Common Stock issuable to the Investor upon exercise of the Warrants.

 

1.3.19           “Subsequent Financing” shall mean any form of financing that could result in the issuance of additional shares of common stock any time post closing or in the future that could
be dilutive to existing shareholders including but not limited to preferred stock, common stock, common stock equity lines, debt, debt that is convertible into shares of common stock, or preferred securities that are convertible into shares of common stock.

 

1.3.20            “Transaction Documents” shall mean this Agreement, all Schedules and Exhibits attached hereto and all other documents and instruments to be executed and delivered by the
parties in order to consummate the transactions contemplated hereby, including, but not limited to the documents listed in Sections 3.2 and 3.3 hereof.

 

1.3.21            “Warrants” shall mean the Common Stock Purchase Warrant “A” in the form attached hereto as Exhibit
D.

 

 

3

 

ARTICLE II

SALE AND PURCHASE OFAMERICAN NANO SILICON TECHNOLOGY, INC. COMMON STOCK AND WARRANTS; PURCHASE PRICE

2.1 Sale of Common Stock and Issuance of Warrants.

(a)           Upon the terms and subject to the conditions set forth herein, and in accordance with applicable law, the Company agrees to sell to the Investor, and the Investor agrees to purchase from the Company, on the Closing Date
Two Million One Hundred Thousand (2,100,000) shares of Common Stock and the Warrants for the price (the “Purchase Price”) of One Million Dollars ($1,000,000.00). The Purchase Price shall be paid by the Investor to the Company on the Closing Date by a wire transfer of the Purchase Price payable at the direction of Company.  The Company shall cause the Common Stock and the Warrants to be issued to the Investor
upon the payment of the Purchase Price to the Company.

 

                (b)           Upon execution and delivery of this Agreement and the Company’s receipt of the Purchase Price, the Company shall

 

	
·  
	
issue to the Investor the Warrants to purchase an aggregate of Two Million (2,000,000) shares of Common Stock at the exercise price stated in the Warrants, all pursuant to the terms and conditions of the form of Warrants attached hereto as Exhibit D;

 

	
·  
	
cause to be delivered to each of the Investors the Shareholder Put Option in the form attached hereto as Exhibit B, providing each Investor the right to sell the number of Shares acquired hereunder; and

 

	
·  
	
cause to be delivered to each of the Investors a Shareholders Warrant in the form attached hereto as Exhibit C, which will permit the Investor to purchase from the named Shareholders the same number of shares of common stock of the Company as that Investor may purchase
on exercise of the Warrants;

 

provided, however, that the Investor shall not be entitled to exercise the Warrants or the Shareholders Warrant and receive shares of Common Stock that would result in beneficial ownership by the Investor and its affiliates of more than 4.99% of the then outstanding number of shares of Common Stock on such date.  For the purposes
of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3 thereunder.

 

The Investor, upon not less than 15 days’ prior notice to the Company and/or the Shareholders, as applicable, may increase or decrease the beneficial ownership limitation provisions of this Section 2.1(a), provided that the beneficial ownership limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance or acquisition of shares of Common Stock held by the Investor and the provisions of this Section 2.1(a) shall continue to apply.  Any such increase or decrease will not be effective until the 16th day after such notice is delivered to the Company.  The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the
terms of this Section 2.1(a) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation.

 

 

4

 

2.2           Purchase Price.  The Purchase Price shall be delivered by the Investor in the form of a wire transfer made payable to the
Company in United States Dollars from the Investor to the direction of the Company on the Closing Date.

 

2.3 Additional Investment Right. The Investor shall have the right to purchase from the Company, and the Company shall issue and sell
to the Investor, in the event that the Investor exercises such right, up to Two Million One Hundred Thousand (2,100,000) Shares of Common Stock at a purchase price of One Million Dollars ($1,000,000.00) pursuant to the terms hereof (the “Investor Right”).  The Additional Investment Right shall expire four (4) months following the Closing Date, unless extended by the Company.  The Investor may exercise the Investor’s right, in whole or in part, by delivering to the Company
an Exercise Form in the form attached hereto as Exhibit E. Within five (5) days of receipt of such Exercise Form, the Company shall deliver to the Investor a certificate representing the Common Shares purchased pursuant to the Investor Right (the “Additional Investment Right Shares”).  Should the Investor exercise any or all of the Investor Right, the Company will issue to the investor, pro-rata to the percent of the Investor Right exercised by the Investor, a Warrant attached herein as
Exhibit D.

ARTICLE III

CLOSING DATE AND DELIVERIES AT CLOSING

3.1           Closing Date.                                The
closing of the transactions contemplated by this Agreement (the “Closing”), unless expressly determined herein, shall be held at the offices of the Escrow Agent, at 5:00 P.M. local time, on the Closing Date or on such other date and at such other place as may be mutually agreed by the parties, including closing by facsimile with originals to follow.

3.2           Deliveries by the Company.  In addition to and without limiting any other provision of this Agreement, the Company agrees
to deliver, or cause to be delivered, to the escrow agent under the Escrow Agreement, the following:

 

	
(a)  
	
At or prior to Closing, an executed Agreement with all exhibits and schedules attached hereto;

	
(b)  
	
At or prior to Closing, the executed Shareholder Put Option in the name of the Investor in the form attached hereto as Exhibit B;

	
(c)  
	
At or prior to Closing, the executed Shareholders Warrants in the name of the Investor in the form attached hereto as Exhibit C;

	
(d)  
	
At or prior to Closing, an executed Warrant “A” in the name of the Investor in the form attached hereto as Exhibit D;

	
(e)  
	
The executed Escrow Agreement;

	
(f)  
	
Evidence of approval of the Board of Directors of the Company of the Transaction Documents and the transactions contemplated hereby;

	
(g)  
	
An opinion from the Company’s counsel concerning the Transaction Documents and the transactions contemplated hereby in form and substance reasonably acceptable to Investor;

	
(h)  
	
Stock Certificate in the name of Investor evidencing the Shares;

	
(i)  
	
Such other documents or certificates as shall be reasonably requested by Investor or its counsel.

 

 

5

 

3.3           Deliveries by Investor.  In addition to and without limiting any other provision of this Agreement, the Investor agrees
to deliver, or cause to be delivered, to the escrow agent under the Escrow Agreement, the following:

 

	
(a)  
	
A wire transfer in the amount of the Investor Funds;

	
(b)  
	
The executed Agreement with all Exhibits and Schedules attached hereto;

	
(c)  
	
The executed Escrow Agreement;

	
(d)  
	
Such other documents or certificates as shall be reasonably requested by the Company or its counsel.

 

In the event any document provided to the other party in Paragraphs 3.2 and 3.3 herein are provided by facsimile, the party shall forward an original document to the other party within seven (7) business days.

 

3.4 Further Assurances.  The Company and the Investor shall, upon request, on or after the Closing Date, cooperate with each
other (specifically, the Company shall cooperate with the Investor, and the Investor shall cooperate with the Company) by furnishing any additional information, executing and delivering any additional documents and/or other instruments and doing any and all such things as may be reasonably required by the parties or their counsel to consummate or otherwise implement the transactions contemplated by this Agreement.

 

3.5 Waiver. The Investor may waive any of the requirements of Section 3.2 of
this Agreement, and the Company at its discretion may waive any of the provisions of Section 3.3 of this Agreement.  The Investor may also waive any of the requirements of the Company under the Escrow Agreement.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to the Investor as of the date hereof and as of Closing (which warranties and representations shall survive the Closing regardless of what examinations, inspections, audits and other investigations the Investor has heretofore made or may hereinafter make with respect to such warranties and representations)
as follows:

 

4.1           Organization and Qualification.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of California, and has the requisite
corporate power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted and is duly qualified to do business in any other jurisdiction by virtue of the nature of the businesses conducted by it or the ownership or leasing of its properties, except where the failure to be so qualified will not, when taken together with all other such failures, have a Material Adverse Effect on the business, operations, properties, assets, financial condition or results of
operation of the Company and its subsidiaries taken as a whole.

 

4.2           Articles of Incorporation and By-Laws.  The complete and correct copies of the Company’s Articles and By-Laws, as amended or restated to date which have been filed with
the Securities and Exchange Commission  are a complete and correct copy of such document as in effect on the date hereof and as of the Closing Date.

 

4.3           Capitalization.

 

4.3.1  The authorized and outstanding capital stock of the Company is set forth in the Company’s Annual Report on Form 10-K, filed on December 29, 2009 with the Securities and Exchange Commission and updated on all subsequent SEC Documents.  All shares of capital stock have been duly authorized and are validly
issued, and are fully paid and no assessable, and free of preemptive rights.

 

4.3.2           As of the date of this Agreement, the authorized capital stock of the Company consists of 200,000,000 shares of common Stock authorized ($.001 par value), of which 26,626,553 shares of common Stock are issued and outstanding.  As of Closing, following the
issuance by the Company of the Shares to the Investor, the authorized capital stock of the Company will consist of 200,000,000 shares of Common Stock ($.001 par value), of which approximately 28,726,553 share of Common Stock shall be issued and outstanding.  As of Closing, the Investor will hold Warrants to purchase an aggregate of 4,000,000 shares of Common Stock.  All outstanding shares of capital stock have been duly authorized and are validly issued, and are fully paid and nonassessable
and free of preemptive rights.  All shares of capital stock described above to be issued have been duly authorized and when issued, will be validly issued, fully paid and nonassessable and free of preemptive rights. There are no derivatives currently outstanding.  The company hereby represents that it is party to no  contracts or commitments that are potentially dilutive events, including employment agreements, acquisition, consulting agreements, debts, payments, financing or business
relationships that could be paid in equity, derivatives or resulting in additional equity issuances that could potentially occur.

 

6

 

 

4.3.3  Except pursuant to this Agreement, as of the date hereof and as of the Closing Date, there are not now outstanding options, warrants, rights to subscribe for, calls or commitments of any character whatsoever relating to, or securities or rights convertible into or exchangeable for, shares of any class of capital stock
of the Company, or agreements, understandings or arrangements to which the Company is a party, or by which the Company is or may be bound, to issue additional shares of its capital stock or options, warrants, scrip or rights to subscribe for, calls or commitment of any character whatsoever relating to, or securities or rights convertible into or exchangeable for, any shares of any class of its capital stock.  The Company agrees to inform the Investors in writing of any additional warrants granted prior
to the Closing Date.

 

4.3.4   The Company on the Closing Date (i) will have full right, power, and authority to sell, assign, transfer, and deliver, by reason of record and beneficial ownership, to the Investor, the Company Shares hereunder, free and clear of all liens, charges, claims, options, pledges, restrictions, and encumbrances whatsoever;
and (ii) upon exercise of the Warrants, the Investor will acquire good and marketable title to such Shares, free and clear of all liens, charges, claims, options, pledges, restrictions, and encumbrances whatsoever, except as otherwise provided in this Agreement as to the limitation on the voting rights of such Shares in certain circumstances.

 

4.4 Authority. The Company has all requisite corporate power and authority to execute and deliver this Agreement, the Shares, and the
Warrants, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby.  The execution and delivery of this Agreement by the Company and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action and no other corporate proceedings on the part of the Company is necessary to authorize this Agreement or to consummate the transactions contemplated hereby except as disclosed in this Agreement.  This
Agreement has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.

 

4.5 No Conflict; Required Filings and Consents. The execution and delivery of this Agreement by the Company does not, and the performance
by the Company of their respective obligations hereunder will not:  (i) conflict with or violate the Articles or By-Laws of the Company; (ii) conflict with, breach or violate any federal, state, foreign or local law, statute, ordinance, rule, regulation, order, judgment or decree (collectively, "Laws") in effect as of the date of this Agreement and applicable to the Company; or (iii) result in any breach of, constitute
a default (or an event that with notice or lapse of time or both would become a default) under, give to any other entity any right of termination, amendment, acceleration or cancellation of, require payment under, or result  in the creation of a lien or encumbrance on any of the properties or assets of the Company pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which the Company is a party or by the Company
or any of its properties or assets is bound.  Excluding from the foregoing are such violations, conflicts, breaches, defaults, terminations, accelerations, creations of liens, or incumbency that would not, in the aggregate, have a Material Adverse Effect.

 

4.6 Report and Financial Statements. The Company’s Annual Report on Form 10-K, filed on December 29, 2009 with the SEC, contains
the audited financial statements of the Company.  The Company has previously provided to the Investor the audited financial statements of the Company as of September 30, 2009 (the “Financial Statements”). Each of the balance sheets contained in or incorporated by reference into any such Financial Statements (including the related notes and schedules thereto) fairly presented the financial position of the
Company, as of its date, and each of the statements of income and changes in stockholders’ equity and cash flows or equivalent statements in such Financial Statements (including any related notes and schedules thereto) fairly presents, changes in stockholders’ equity and changes in cash flows, as the case may be, of the Company, for the periods to which they relate, in each case in accordance with United States generally accepted accounting principles (“U.S.
GAAP”) consistently applied during the periods involved, except in each case as may be noted therein, subject to normal year-end audit adjustments in the case of unaudited statements.  The books and records of the Company have been, and are being, maintained in all material respects in accordance with applicable legal and accounting requirements and reflect only actual transactions.

 

4.7 Compliance with Applicable Laws. The Company is not in violation of, or, to the knowledge of the Company is under investigation
with respect to or has been given notice or has been charged with the violation of any Law of a governmental agency, except for violations which individually or in the aggregate do not have a Material Adverse Effect.

 

4.8 Brokers. Except as set forth on Schedule 4.8, no broker, finder or investment
banker is entitled to any brokerage, finder's or other fee or Commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company.

 

 

7

 

4.9 SEC Documents. The Company acknowledges that the Company is a publicly held company and has made available to the Investor after
demand true and complete copies of any requested SEC Documents. The Company has registered its Common Stock pursuant to Section 12(d) of the 1934 Act, and the Common Stock is quoted and traded on the OTC Bulletin Board of the National Association of Securities Dealers, Inc.  The Company has received no notice, either oral or written, with respect to the continued quotation or trading of the Common Stock on the OTC Bulletin Board. The Company has not provided to the Investor any information that, according
to applicable law, rule or regulation, should have been disclosed publicly prior to the date hereof by the Company, but which has not been so disclosed. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act, and rules and regulations of the SEC promulgated thereunder and the SEC Documents did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading.

 

4.10 Litigation. To the knowledge of the Company, no litigation, claim, or other proceeding before any court or governmental agency
is pending or to the knowledge of the Company, threatened against the Company, the prosecution or outcome of which may have a Material Adverse Effect.

 

4.11 Exemption from Registration. Subject to the accuracy of the Investor’s representations in Article V, the sale of the Common
Stock and Warrants by the Company to the Investor will not require registration under the 1933 Act, but may require registration under New York state securities law if applicable to the Investor.  Upon exercise of the Warrants in accordance with their terms, the Shares underlying the Warrants will be duly and validly issued, fully paid, and non-assessable.  The Company is issuing the Shares and the Warrants in accordance with and in reliance upon the exemption from securities registration
afforded, inter alia, by Rule 506 under Regulation D as promulgated by the SEC under the 1933 Act, and/or Section 4(2) of the 1933 Act; provided, however, that certain filings and registrations may be required under state securities “blue sky” laws depending upon the residency of the Investor.

 

4.12 No General Solicitation or Advertising in Regard to this Transaction. Neither the Company nor any of its Affiliates nor, to the
knowledge of the Company, any Person acting on its or their behalf (i) has conducted or will conduct any general solicitation (as that term is used in Rule 502(c) of Regulation D as promulgated by the SEC under the 1933 Act) or general advertising with respect to the sale of the Shares or Warrants, or (ii) made any offers or sales of any security or solicited any offers to buy any security under any circumstances that would require registration of the Shares or Warrants, under the 1933 Act, except as required
herein.

 

4.13 No Material Adverse Effect. Except as set forth in Schedule 4.13 attached hereto, since December 31, 2009, no event or circumstance
resulting in a Material Adverse Effect has occurred or exists with respect to the Company. No material supplier or customer has given notice, oral or written, that it intends to cease or reduce the volume of its business with the Company from historical levels. Since June 30, 2008, no event or circumstance has occurred or exists with respect to the Company or its businesses, properties, prospects, operations or financial condition, that, under any applicable law, rule or regulation, requires public disclosure
or announcement prior to the date hereof by the Company but which has not been so publicly announced or disclosed in writing to the Investor.

 

4.14 Material Non-Public Information. The Company has not disclosed to the Investors any material non-public information that (i) if
disclosed, would reasonably be expected to have a material effect on the price of the Common Stock or (ii) according to applicable law, rule or regulation, should have been disclosed publicly by the Company prior to the date hereof but which has not been so disclosed.

 

4.15 Internal Controls And Procedures. The Company maintains books and records and internal accounting controls which provide reasonable
assurance that (i) all transactions to which the Company or any subsidiary is a party or by which its properties are bound are executed with management's authorization; (ii) the recorded accounting of the Company's consolidated assets is compared with existing assets at regular intervals; (iii) access to the Company's consolidated assets is permitted only in accordance with management's authorization; and (iv) all transactions to which the Company or any subsidiary is a party or by which its properties are bound
are recorded as necessary to permit preparation of the financial statements of the Company in accordance with U.S. generally accepted accounting principles.

 

4.16 Full Disclosure. No representation or warranty made by the Company in this Agreement and no certificate or document furnished or
to be furnished to the Investor pursuant to this Agreement contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading.

 

 

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ARTICLE V

 

REPRESENTATIONS AND WARRANTIES OF THE INVESTORS

 

The Investor represents and warrants to the Company that:

5.1 Organization and Standing of the Investor. The Investor is a limited liability
company duly formed, validly existing and in good standing under the laws of the State of Delaware. The state in which any offer to purchase shares hereunder was made or accepted by such Investor is the state shown as such Investor’s address. The Investor was not formed for the purpose of investing solely in the Shares, the Warrants or the shares of Common Stock which are the subject of this Agreement.

 

5.2 Authorization and Power. The Investor has the requisite power and authority to enter into and perform this Agreement and to purchase
the securities being sold to it hereunder. The execution, delivery and performance of this Agreement by the Investor and the consummation by the Investor of the transactions contemplated hereby have been duly authorized by all necessary limited liability company action where appropriate. This Agreement and the Escrow Agreement have been duly executed and delivered by the Investor and at the Closing shall constitute valid and binding obligations of the Investor enforceable against the Investor in accordance with
their 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, creditors' rights and remedies or by other equitable principles of general application.

 

5.3 No Conflicts. The execution, delivery and performance of this Agreement and the consummation by the Investor of the transactions
contemplated hereby or relating hereto do not and will not (i) result in a violation of such Investor's charter documents or bylaws where appropriate 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 to which the Investor is a party, 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 the Investor 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 Investor). The Investor 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 such Investor’s obligations under this Agreement or
to purchase the securities from the Company in accordance with the terms hereof, provided that for purposes of the representation made in this sentence, the Investor is assuming and relying upon the accuracy of the relevant representations and agreements of the Company herein.

 

5.4 Financial Risks. The Investor acknowledges that such Investor is able to bear the financial risks associated with an investment
in the securities being purchased by the Investor from the Company 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 as it has deemed necessary or appropriate to conduct its due diligence investigation. The Investor is capable of evaluating the risks and merits of an investment in the securities being purchased by the Investor from the Company by virtue of its experience as an investor and its knowledge, experience,
and sophistication in financial and business matters and the Investor is capable of bearing the entire loss of its investment in the securities being purchased by the Investor from the Company.

 

5.5 Accredited Investor. The Investor is (i) an “accredited investor” as that term is defined in Rule 501 of Regulation
D promulgated under the 1933 Act by reason of Rule 501(a)(3) and (6), (ii) experienced in making investments of the kind described in this Agreement and the related documents, (iii) able, by reason of the business and financial experience of its officers (if an entity) and professional advisors (who are not affiliated with or compensated in any way by the Company or any of its affiliates or selling agents), to protect its own interests in connection with the transactions described in this Agreement, and the related
documents, and (iv) able to afford the entire loss of its investment in the securities being purchased by the Investor from the Company.

 

5.6 Brokers. Except as set forth in Schedule 5.6, no broker, finder or investment banker is entitled to any brokerage, finder's or other
fee or Commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Investor.

 

5.7 Knowledge of Company; Reliance. The Investor and such Investor’s advisors,
if any, have been, upon request, furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the securities being purchased by the Investor from the Company.  The Investor and such Investor’s advisors, if any, have been afforded the opportunity to ask questions of the Company and have received complete and satisfactory answers to any such inquiries.  In
making its investment in the Shares and Warrants, the Investor is not relying on any information, representation, projection or other statement by or on behalf of the Company that is not contained in the SEC Documents.

 

 

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5.8 Risk Factors. The Investor understands that such Investor’s investment
in the securities being purchased by the Investor from the Company involves a high degree of risk.  The Investor understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the securities being purchased by the Investor from the Company. The Investor warrants that such Investor is able to bear the complete loss of such Investor’s investment in the securities being purchased by the Investor from
the Company.

 

5.9 Full Disclosure. No representation or warranty made by the Investor in this Agreement and no certificate or document furnished or
to be furnished to the Company pursuant to this Agreement contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading. Except as set forth or referred to in this Agreement, Investor does not have any agreement or understanding with any person relating to acquiring, holding, voting or disposing of any equity securities of the Company.

 

5.10 Payment of Due Diligence Expenses. At Closing the Escrow Agent shall disperse from the Purchase Price to the direction of T Squared
Investments LLC the sum of Thirty Thousand Dollars ($30,000.00) for due diligence expenses.

 

ARTICLE VI

COVENANTS OF THE COMPANY

6.1 Reservation of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times,
free of preemptive rights, shares of Common Stock for the purpose of enabling the Company to issue the shares of Common Stock underlying the Warrants.

 

6.2 Compliance with Laws. The Company hereby agrees to comply in all respects with the Company's reporting, filing and other obligations under the Laws.

 

6.3 Exchange Act Registration. For a minimum of Three (3) years post Closing, the Company (a) will continue its obligation to report to the SEC under Section
E 12(d) of the 1934 Act and will use its best efforts to comply in all respects with its reporting and filing obligations under the 1934 Act, and will not take any action or file any document (whether or not permitted by the 1934 Act or the rules thereunder) to terminate or suspend any such registration or to terminate or suspend its reporting and filing obligations under the 1934 until the Investors have disposed of all of their Shares.

 

6.4 Corporate Existence; Conflicting Agreements. The Company will take all steps necessary to preserve and continue the corporate existence of the Company.
The Company shall not enter into any agreement, the terms of which agreement would restrict or impair the right or ability of the Company to perform any of its obligations under this Agreement or any of the other agreements attached as exhibits hereto.

 

6.5 Listing, Securities Exchange Act of 1934 and Rule 144 Requirements. The Company is required to maintain its current or a listing on a higher exchange
and maintain their status as a Company regulated by Securities Exchange Act of 1934 and if the Company is current currently listed on the Pink Sheets the Company must be fully reporting per Rule 144 until such time as they are regulated by the Securities Exchange Act of 1934. If for any time post Closing the Company is no longer regulated by the Securities Exchange Act of 1934 and is not a fully reporting Company, then the Company shall pay to the Investors as liquidated damages and not as a penalty, in cash
or PIK at the option of the Investor, an amount per month equal to two percent (2%) of the lower of (a) the purchase price paid by the Investor for any securities it holds at the time of the de-registration or (b) the closing price of the securities on the trading day immediately preceding the Company’s announcement of its deregistration. Such damages shall cease at the time the Company begins complying with the standards as mentioned above in Section 6.5.

 

6.6 Preferred Stock. On or prior to the Closing Date, the Company will cause to be cancelled all
preferred stock in the Company. From the date hereof until the earlier of (a) such time as no Purchaser holds any of the Securities or (b) two years from the closing the Company will not issue any preferred stock of the Company below $1.00 per share.

 

6.7 Convertible Debt. On or prior to the Closing Date, the Company will cause to be cancelled all
convertible debt in the Company. From the date hereof until the earlier of (a) such time as no Purchaser holds any of the Securities or (b) two years from the closing the Company will not issue any convertible debt of the Company below $1.00 per share.

 

6.8 Reset Equity Deals. On or prior to the Closing Date, the Company will cause to be cancelled
any and all reset features related to any shares outstanding that could result in additional shares being issued. From the date hereof until the earlier of (a) such time as no Purchaser holds any of the Securities or (b) five years after the Closing Date the Company will not issue any security that contains a reset feature that could result in additional shares being issued.

 

6.9 Independent Directors. The Company shall have caused the appointment of the majority of the board of directors to be qualified independent directors,
as defined by the NASD, before Closing.  If for any period of 90 consecutive days occurring during the three years after Closing the board shall not be composed in the majority of qualified independent directors, the Company shall pay to the Investors, pro rata, as liquidated damages and not as a penalty, an amount for each month after said 90 day period equal to two percent (2%) of the lower of (a) the purchase price paid by the Investor for any securities it holds at the time of the non-compliance
or (b) the closing price of the securities on the trading day immediately preceding the Company’s announcement of its non-compliance, payable monthly in cash or  Common Stock at the option of the Investor.  The parties agree that the only damages payable for a violation of the terms of this Agreement with respect to which liquidated damages are expressly provided shall be such liquidated damages.  Nothing shall preclude the Investor from pursuing or obtaining specific performance
or other equitable relief with respect to this Agreement. The parties hereto agree that the liquidated damages provided for in this Section 6.9 constitute a reasonable estimate of the damages that may be incurred by the Investor by reason of the failure of the Company to appoint at least two independent directors in accordance with the provision hereof.

 

 

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6.10 Independent Directors Become Majority of Audit and Compensation Committees.  The Company will cause the appointment of a majority of outside
directors to the audit and compensation committees of the board of directors before Closing.  If for any period of 90 consecutive days occurring during the three years  after Closing such independent directors do not compose the majority of the audit and compensation committees, the Company shall pay to the Investors, pro rata, as liquidated damages and not as a penalty, an amount for each month after said 90 day period equal to two percent (2%) of the lower of (a) the purchase price paid
by the Investor for any securities it holds at the time of the non-compliance or (b) the closing price of the securities on the trading day immediately preceding the Company’s announcement of its non-compliance, payable monthly in cash or Common Stock at the option of the Investor.  The parties agree that the only damages payable for a violation of the terms of this Agreement with respect to which liquidated damages are expressly provided shall be such liquidated damages.  Nothing shall
preclude the Investor from pursuing other remedies or obtaining specific performance or other equitable relief with respect to this Agreement.

 

6.11 Use of Proceeds. The Company will use the proceeds from the sale of the Shares and the Warrants (excluding amounts paid by the Company for legal and
administrative fees in connection with the sale of such securities) for working capital and acquisitions.

 

6.12 Right of First Refusal. Each Investor shall have the right to participate in any subsequent funding completed by the Company during the twelve months
following the Closing Date on a pro rata basis at One Hundred percent (100%) of the offering price.

 

6.13 Price Adjustment. From the date hereof until the earlier of (a) such time as no Purchaser
holds any of the Securities or (b) two years after the Closing Date, if the Company closes on the sale of a note or notes, shares of Common Stock, or shares of any class of Preferred Stock (excluding, in all cases, any Exempt Issuance) at a price per share of Common Stock, or with a conversion right to acquire Common Stock at a price per share of Common Stock, that is less than the Purchase Price per Share (as adjusted to the capitalization per share as of the Closing Date, following any stock splits, stock dividends,
or the like) , the Company  shall issue to the Investors  a sufficient number of shares so that the effective price per share paid by the Investor for Shares owned by the Investor at the time of the price adjustment is reduced to being equivalent to such lower price after taking into account any prior exercises of the Warrant.

 

6.14 Price Adjustment Based on Earnings Per Share. In the event the Net Post-Tax Income of the
Company is between $4.0 million and $2.0 million  (50% Decline) as reported for the audited fiscal year ended September 30, 2010 from continuing operations before any non-cash items (and excluding charges for the embedded derivatives arising from this transaction), the Company shall issue to the Investors  a sufficient number of shares so that the effective price paid by the Investor for the Shares shall be decreased proportionately by 0% if the Net Post-Tax Income is $4.0 million and by 50%
if the Net Post-Tax Income is $2.0 million (50% decrease).  For example if the Net Post-Tax Income is $3.2 million and the Additional Investment Right described in Section 2.3 hereof was not exercised, then the Company shall issue to the Investor 525,000 shares, yielding an effective purchase price of $.38 per share (i.e. 80% of $0.48).

 

In the event the Net Post-Tax Income of the Company is between $5.0 million and $2.5 million  (50% Decline) as reported for the audited fiscal year ended September 30, 2011 from continuing operations before any non-cash items (and excluding charges for the embedded derivatives arising from this transaction), the Company shall
issue to the Investors  a sufficient number of shares so that the effective price paid by the Investor for the Shares shall be decreased proportionately by 0% if the Net Post-Tax Income is $5.0 million and by 50% if the Net Post-Tax Income is $2.5 million (50% decrease).  For example if the Net Post-Tax Income is $4.0 million and the Additional Investment Right described in Section 2.3 hereof was not exercised, then the Company shall issue to the Investor 525,000 shares, yielding an effective
purchase price of $.38 per share (i.e. 80% of $0.48).

 

6.15 Insider Selling. The earliest any “Insiders” can start selling their shares shall
be Twenty Four (24) Months from Closing. Insiders shall include all current and future officers, affiliates, consultants and directors of the Company, even if post this date such Insider is no longer deemed an Insider. The managing members of the Investor and the Investor shall not be considered “Insiders”.

 

6.16 Employment and Consulting Contracts. For three years after the Closing Company must have a
unanimous opinion from the Compensation Committee of the Board of Directors that any awards other than salary are usual, appropriate and reasonable for any officer, director, employee or consultant holding a similar position in other fully reporting public companies with independent majority boards with similar market capitalizations in the same industry with securities listed on the OTCBB, ASE, NYSE or NASDAQ.

 

6.17 Subsequent Equity Sales.  From the date hereof until the earlier of (a) such time
as no Purchaser holds any of the Securities or (b) the fourth anniversary of the Closing Date, the Company shall be prohibited from effecting or entering into an agreement to effect any Subsequent Financing involving a “Variable Rate Transaction” or an “MFN Transaction” (each as defined below).  The term “Variable
Rate Transaction” shall mean a transaction in which the Company issues or sells (i) any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional shares of Common Stock either (A) at a conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities, or (B) with a
conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock.  The term “MFN Transaction” shall mean a transaction in which the Company issues or sells any securities in a capital raising
transaction or series of related transactions which grants to an investor the right to receive additional shares based upon future transactions of the Company on terms more favorable than those granted to such investor in such offering.  Any Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages. Notwithstanding the foregoing, this Section 6.15 shall not apply in respect of an Exempt
Issuance, except that no Variable Rate Transaction or MFN Transaction shall be an Exempt Issuance.

 

 

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6.18 Stock Splits. All forward and reverse stock splits shall affect all equity and derivative holders proportionately.

 

6.19 Escrow of Shares Held by Certain Shareholders.  Pursuant to the terms of the Escrow Agreement, Huakang Zhou and other
shareholders of the Company shall place into escrow the sum of Four Million (4,000,000) common shares of the Company, Two Million of which shall be for the purpose of satisfying any exercise of the Shareholders Warrants and Two Million of which shall secure the obligation of Huakang Zhou under the Shareholder Put Option.

 

6.20 Chief Financial Officer.  Within nine months post Closing, the Company must hire an English-speaking Chief Financial
Officer with appropriate experience in United States GAAP and familiarity with being a United States public company.

 

ARTICLE VII

COVENANTS OF THE INVESTOR

7.1           Compliance with Law. The Investor's trading activities with respect to shares of the Company's Common Stock will be in compliance with all applicable state and federal securities laws,
rules and regulations and rules and regulations of any public market on which the Company's Common Stock is listed.

 

7.2 Transfer Restrictions. The Investor’s acknowledge that (1) the
Shares, Warrants and shares underlying the Warrants have not been registered under the provisions of the 1933 Act, and may not be transferred unless (A) subsequently registered thereunder or (B) the Investor shall have delivered to the Company an opinion of counsel, reasonably satisfactory in form, scope and substance to the Company, to the effect that the Shares, Warrants and shares underlying the Warrants to be sold or transferred may be sold or transferred pursuant to an exemption from such registration; and
(2) any sale of the Shares, Warrants and shares underlying the Warrants made in reliance on Rule 144 promulgated under the 1933 Act may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any resale of such securities under circumstances in which the seller, or the person through whom the sale is made, may be deemed to be an underwriter, as that term is used in the 1933 Act, may require compliance with some other exemption under the 1933 Act or the rules and regulations
of the SEC thereunder.

 

7.3 Restrictive Legend. The Investor acknowledges and agrees that the Shares,
the Warrants and the Shares underlying the Warrants, and, until such time as the Shares underlying the Warrants have been registered under the 1933 Act and sold in accordance with an effective Registration Statement, certificates and other instruments representing any of the Shares, shall bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of any such securities):

 

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SHARES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT
WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, OR (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT."

 

 

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ARTICLE VIII

 

CONDITIONS PRECEDENT TO THE COMPANY’S OBLIGATIONS

The obligation of the Company to consummate the transactions contemplated hereby shall be subject to the fulfillment, on or prior to Closing Date, of the following conditions:

8.1           No Termination. This Agreement shall not have been terminated pursuant to Article X hereof.

8.2           Representations True and Correct. The representations and warranties of the Investor contained in this Agreement shall be true and correct in all material respects on and as of the Closing
Date with the same force and effect as if made on as of the Closing Date.

8.3           Compliance with Covenants. The Investor shall have performed and complied in all material respects with all covenants, agreements, and conditions required by this Agreement to be performed
or complied by it prior to or at the Closing Date.

8.4           No Adverse Proceedings. On the Closing Date, no action or proceeding shall be pending by any public authority or individual or entity before any court or administrative body to restrain,
enjoin, or otherwise prevent the consummation of this Agreement or the transactions contemplated hereby or to recover any damages or obtain other relief as a result of the transactions proposed hereby.

ARTICLE IX

 

CONDITIONS PRECEDENT TO INVESTOR’S OBLIGATIONS

The obligation of the Investors to consummate the transactions contemplated hereby shall be subject to the fulfillment, on or prior to Closing Date unless specified otherwise, of the following conditions:

9.1           No Termination. This Agreement shall not have been terminated pursuant to Article X hereof.

 

9.2           Representations True and Correct. The representations and warranties of the Company contained in this Agreement shall be true and correct in all material respects on and as of the Closing
Date with the same force and effect as if made on as of the Closing Date.

 

9.3           Compliance with Covenants. The Company shall have performed and complied in all material respects with all covenants, agreements, and conditions required by this Agreement to be performed
or complied by it prior to or at the Closing Date.

 

9.4           No Adverse Proceedings. On the Closing Date, no action or proceeding shall be pending by any public authority or individual or entity before any court or administrative body to restrain,
enjoin, or otherwise prevent the consummation of this Agreement or the transactions contemplated hereby or to recover any damages or obtain other relief as a result of the transactions proposed hereby.

 

9.5           Escrow.  All securities and documents required to be delivered into escrow pursuant to the terms of the Escrow Agreement shall have been so delivered.

 

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ARTICLE X

TERMINATION, AMENDMENT AND WAIVER

10.1           Termination. This Agreement may be terminated at any time prior to the Closing Date

 

10.1.1           by mutual written consent of the Investor and the Company;

 

10.1.2           by the Company upon a material breach of any representation, warranty, covenant or agreement on the part of the Investor set forth in this Agreement, or the Investor upon a material breach of any representation, warranty, covenant or agreement on the part of the Company
set forth in this Agreement, or if any representation or warranty of the Company or the Investor, respectively, shall have become untrue, in either case such that any of the conditions set forth in Article VIII or Article IX hereof would not be satisfied (a "Terminating Breach"), and such breach shall, if capable of cure, not have been cured within five (5) business days after receipt by the party in breach of a notice from the non-breaching party setting
forth in detail the nature of such breach.

 

10.2           Effect of Termination. Except as otherwise provided herein, in the event of the termination of this Agreement pursuant to Section 10.1 hereof, there shall be no liability on the part of
the Company or the Investor or any of their respective officers, directors, agents or other representatives and all rights and obligations of any party hereto shall cease; provided that in the event of a Terminating Breach, the breaching party shall be liable to the non-breaching party for all costs and expenses incurred by the non-breaching party not to exceed $50,000.00.

 

10.3           Amendment. This Agreement may be amended by the parties hereto any time prior to the Closing Date by an instrument in writing signed by the parties hereto.

 

10.4           Waiver. At any time prior to the Closing Date, the Company or the Investor, as appropriate, may: (a) extend the time for the performance of any of the obligations or other acts of other
party or; (b) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto which have been made to it or them; or (c) waive compliance with any of the agreements or conditions contained herein for its or their benefit.  Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party or parties to be bound hereby.

ARTICLE XI

GENERAL PROVISIONS

11.1           Transaction Costs. Except as otherwise provided herein, each of the parties shall pay all of his or its costs and expenses (including attorney fees and other legal costs and expenses and
accountants’ fees and other accounting costs and expenses) incurred by that party in connection with this Agreement; provided, the Company shall pay Investor such due diligence expenses as described in section 5.10.

 

11.2           Indemnification. The Investor agrees to indemnify, defend and hold the Company (following the Closing Date) and its officers and directors harmless against and in respect of any and all
claims, demands, losses, costs, expenses, obligations, liabilities or damages, including interest, penalties and reasonable attorney’s fees, that it shall incur or suffer, which arise out of or result from any breach of this Agreement by such Investor or failure by such Investor to perform with respect to any of its representations, warranties or covenants contained in this Agreement or in any exhibit or other instrument furnished or to be furnished under this Agreement.  The Company agrees to
indemnify, defend and hold the Investor harmless against and in respect of any and all claims, demands, losses, costs, expenses, obligations, liabilities or damages, including interest, penalties and reasonable attorney’s fees, that it shall incur or suffer, which arise out of, result from or relate to any breach of this Agreement or failure by the Company to perform with respect to any of its representations, warranties or covenants contained in this Agreement or in any exhibit or other instrument furnished
or to be furnished under this Agreement.  In no event shall the Company or the Investors be entitled to recover consequential or punitive damages resulting from a breach or violation of this Agreement nor shall any party have any liability hereunder in the event of gross negligence or willful misconduct of the indemnified party.  In the event of a breach of this Agreement by the Company, the Investor shall be entitled to pursue a remedy of specific performance upon tender into the Court an
amount equal to the Purchase Price hereunder. The indemnification by the Investor shall be limited to Fifty Thousand Dollars ($50,000.00).

 

11.3           Headings. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

 

11.4           Entire Agreement. This Agreement (together with the Schedule, Exhibits, Warrants and documents referred to herein) constitute the entire agreement of the parties and supersede all prior
agreements and undertakings, both written and oral, between the parties, or any of them, with respect to the subject matter hereof.

 

 

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11.5           Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been given (i) on the date they are delivered if delivered in person; (ii) on the
date initially received if delivered by facsimile transmission followed by registered or certified mail confirmation; (iii) on the date initially received if via scanned email upon confirmation of receipt by receiving party; or (iv) on the date delivered by an overnight courier service; as follows:

If to the Company:

Yan Deng, Secretary c/o Warner Technology & Investment Corp.

100 Wall Street, 15th Floor

New York, NY 10005

Facsimile No.: 212-785-5867

With a copy to:

Robert Brantl, Esq.

52 Mulligan Lane

Irvington, NY 10533

Facsimile No.: 914-693-1807

If to the Investor:

See Investors in Schedule A

11.6           Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions
of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.  Upon such determination that any such term or other provision is invalid, illegal or incapable of being enforced, the parties hereto 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 to
the end that the transactions contemplated hereby are fulfilled to the extent possible.

 

11.7           Binding Effect. All the terms and provisions of this Agreement whether so expressed or not, shall be binding upon, inure to the benefit of, and be enforceable by the parties and their
respective administrators, executors, legal representatives, heirs, successors and assignees.

 

11.8           Preparation of Agreement. This Agreement shall not be construed more strongly against any party regardless of who is responsible for its preparation. The parties acknowledge each contributed
and is equally responsible for its preparation.

 

11.9           Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to applicable principles of conflicts of
law.

 

11.10 Jurisdiction. This Agreement shall be exclusively governed by and construed in accordance with the laws of the State of New York. If any action is brought among the parties with respect to this Agreement or otherwise, by way of a claim or counterclaim,
the parties agree that in any such action, and on all issues, the parties irrevocably waive their right to a trial by jury. Exclusive jurisdiction and venue for any such action shall be the Federal Courts serving the State of New York. In the event suit or action is brought by any party under this Agreement to enforce any of its terms, or in any appeal therefrom, it is agreed that the prevailing party shall be entitled to reasonable attorneys fees to be fixed by the arbitrator, trial court, and/or appellate court.

 

11.11 Preparation and Filing of Securities and Exchange Commission filings. The Investor shall reasonably assist and cooperate with the Company in the preparation of all filings with the SEC after the
Closing Date due after the Closing Date.

 

11.12           Further Assurances, Cooperation. Each party shall, upon reasonable request by the other party, execute and deliver any additional documents necessary or desirable to complete the transactions
herein pursuant to and in the manner contemplated by this Agreement.  The parties hereto agree to cooperate and use their respective best efforts to consummate the transactions contemplated by this Agreement.

 

 

15

 

11.13           Survival. The representations, warranties, covenants and agreements made herein shall survive the Closing of the transaction contemplated hereby.

 

11.14           Third Parties. Except as disclosed in this Agreement, nothing in this Agreement, whether express or implied, is intended to confer
any rights or remedies under or by reason of this Agreement on any persons other than the parties hereto and their respective administrators, executors, legal representatives, heirs, successors and assignees.  Nothing in this Agreement is intended to relieve or discharge the obligation or liability of any third persons to any party to this Agreement, nor shall any provision give any third persons any right of subrogation or action over or against any party to this Agreement.

 

11.15           Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or delay on the part of any party hereto in the exercise of any right hereunder shall impair such right or be construed
to be a waiver of, or acquiescence in, any breach of any representation, warranty, covenant or agreement herein, nor shall nay single or partial exercise of any such right preclude other or further exercise thereof or of any other right.  All rights and remedies existing under this Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

11.16           Counterparts. This Agreement may be executed in one or more counterparts,
and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. A facsimile transmission of this signed Agreement shall be legal and binding on all parties hereto.

 

 

[SIGNATURES ON FOLLOWING PAGE]

  

16  

  

IN WITNESS WHEREOF, the Investors and the Company have as of the date first written above executed this Agreement.

THE COMPANY:

 

AMERICAN NANO SILICON TECHNOLGIES, INC.

By:  /s/ Pu Fachun

        Pu Fachun, CEO

INVESTOR:

	
T Squared Investments LLC

By: T Squared Capital LLC, Managing Member

 

By: /s/ Thomas Sauve

Thomas Sauve

Managing Member

1325 Sixth Avenue, Floor 27

New York NY 10019
	
T Squared China Fund LLC

By: T Squared Capital LLC, Managing Member

 

By: /s/ Thomas Sauve

Thomas Sauve

Managing Member

1325 Sixth Avenue, Floor 27

New York NY 10019

	  	  
	
Silver Rock II, Ltd

 

By: Ezzat Jallal

       Ezzat Jallad
	
Ross Pirasteh

 

By: Ross Pirasteh

       Ross Pirasteh

  

17  

  

Schedule A

	
 

 

NAME AND ADDRESS
	 	

AMOUNT OF INVESTMENT
	 	 	

NUMBER OF SHARES

OF COMMON STOCK
	 	 	
NUMBER OF SHARES UNDERLYING WARRANTS
	 
	
T Squared Investments LLC

1325 Sixth Avenue, Floor 27

New York, New York 10019

Attn: Thomas M. Sauve
	 	$	625,000	 	 	 	1,312,500	 	 	 	1,250,000	 
	
T Squared China Fund LLC

1325 Sixth Avenue, Floor 27

New York, New York 10019

Attn: Thomas M. Sauve
	 	$	75,000	 	 	 	157,500	 	 	 	150,000	 
	
Silver Rock II, Ltd.

Sable Trust Road,

Tortola, BVI

Courier to: Villa D103

Palm Jumeirah Island

Dubai UAE

Attn: Ezzat Jallad

 
	 	$	225,000	 	 	 	472,500	 	 	 	450,000	 
	
Ross Pirasteh

130 East 65th St.

New York, NY  10021

 
	 	$	75,000	 	 	 	157,500	 	 	 	150,000	 

  

18

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