Document:

epsilon_ex101.htm

EXHIBIT 10.1

 

STOCK PURCHASE OPTION AGREEMENT

 

This Stock Purchase Option Agreement ("Agreement") is made and entered into as of July 25, 2013 ("Effective Date"), by and between Bezerius Holdings Limited, a private company limited by shares organized under the laws of the Republic of Cyprus ("Seller" or “BHL”), and Great East Energy, Inc., a Nevada corporation ("Buyer"). Seller and Buyer are sometimes together referred to in this Agreement as the "Parties" and individually as a "Party."

 

RECITALS

 

WHEREAS, on May 9, 2013, Seller entered into an Agreement of Purchase and Sale of Shares attached as Exhibit B hereto (the “Purchase Agreement”) with Carapetta Investments LTD, a corporation organized under the laws of the Republic of Cyprus ("Carapetta"), whereby Carapetta agreed to sell to BHL One Thousand (1,000) shares of Synderal Services LTD, a corporation organized under the laws of the Republic of Cyprus ("SSL"), representing all of the issued and outstanding shares in the capital of SSL (the "Shares");

 

WHEREAS, upon closing of the transactions contemplated by the Purchase Agreement, Seller will own and control the Shares;

 

WHEREAS, Seller has agreed to offer Buyer the exclusive option to purchase the Shares upon the terms and conditions and for the consideration set forth in this Agreement; and

 

WHEREAS, Buyer desires to accept such option, upon the terms and conditions and for the consideration set forth in this Agreement, for the right to purchase the Shares from Seller;

 

NOW, THEREFORE, in consideration of the covenants, premises and agreements herein contained, the sufficiency and adequacy of which is hereby acknowledged by each of the Parties, the Parties hereto agree as follows:

 

1.            Incorporation of Recitals. The Recitals set forth above are material and by this reference are incorporated herein and made a part of this Agreement.

 

2.            Definitions.

 

"Affiliate" shall have the meaning ascribed to it in the Securities Act.

 

“Corporate Records” shall have the meaning as used in Section 7(j) hereof.

 

“Encumbrances” has the meaning ascribed thereto in Section 6(c).

 

"Exercise Financial Statements" has the meaning ascribed thereto in Section 9.3.

 

  

1

  

 

“Exercise Period" shall mean the period commencing on the Option Grant Closing Date and continuing until 5:00 p.m. (New York time) on September 30, 2013 or such later date as contemplated by Section 9.3.

 

"Exercise Price" has the meaning ascribed thereto in Section 3.2.

 

“Extension of the Subsoil Use Permit” means issuance by the State Service of Geology and Subsoil of Ukraine of an extension of the Subsoil Use Permit to at least September 1, 2018.

 

“GAAP” means generally accepted accounting principles in the United States.

 

“Governmental Authority” means the United States, any state or municipality, the government of any foreign country, any subdivision of any of the foregoing, or any authority, department, commission, board, bureau, agency, court, or instrumentality of any of the foregoing.

 

“Indemnification” has the meaning ascribed thereto in Section 9.6.

 

“Indemnified Party” has the meaning ascribed thereto in Section 9.6.

 

“Knowledge” means the actual knowledge of such Person or its Affiliates.

 

"Laws" means applicable laws (including, without limitation, common law), statutes, by-laws, published rules, regulations, orders, decisions, treaties, decrees, judgments, awards or securities or commodities related policies, in each case, of any Governmental Authority.

 

“Lien” means any mortgage, lien, pledge, security interest, easement, conditional sale or other title retention agreement, or other encumbrance of any kind.

 

"Material Adverse Change" means any change or effect (or any condition, event or development involving a prospective change or effect) in the affairs, business, operations, results of operations, assets, capitalization, financial condition, licenses, permits, concessions, rights, liabilities, prospects or privileges, whether contractual or otherwise (in this definition collectively referred to as "business"), of BHL or SSL and their respective Subsidiaries including, without limitation, any regulatory restrictions, limitations on the business or any breaches of material agreements including, without limitation, this Agreement or Laws which is or could reasonably be expected to be materially adverse to the business of BHL or SSL and the Subsidiaries considered as a whole, or to the value of the Shares to Buyer other than such changes or effects that are the direct result of events outside of the control of Seller and/or any of its Affiliates provided that Seller and/or its Affiliates, as applicable, have made reasonable commercial efforts to prevent such changes or effects and, for greater certainty, shall exclude without limitation, such changes or effects resulting directly from general economic conditions or from financial, currency exchange rate and general securities or commodity market conditions (including, without limitation, commodity price fluctuations) that are outside the control of Seller and/or any of its Affiliates.

 

  

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“Material Adverse Effect” means any effect resulting from Material Adverse Change.

 

“Minute Books” shall have the meaning as used in Section 7(j) hereof.

 

"Option Exercise Closing" means the closing of the purchase and sale of the Shares upon the exercise of the Option.

 

"Option Exercise Closing Date" means the date on which the Option Exercise Closing occurs, such date being no later than September 30, 2013 unless otherwise agreed by the Parties.

 

"Option Exercise Date" means the date on which the written notice contemplated by Section 3.2 is delivered.

 

"Option Grant Closing" means the closing of the grant of the Option in accordance with this Agreement.

 

"Option Grant Closing Date” means the date on which the Option Grant Closing occurs, such date being no later than July 30, 2013 unless otherwise agreed by the Parties.

 

“Option Exercise Notice” has the meaning ascribed thereto in Section 3.2.

 

“OTC Company” means Epsilon Corp., a U.S. publicly traded company (“EPSO”) to be acquired by Buyer simultaneously with the Option Grant Closing and the issuer of securities in a private placement financing to be closed immediately prior to or simultaneously with the Option Grant Closing pursuant to a subscription agreement substantially in the form of Annex A hereto (the “Subscription Agreement”).

 

"Parties" and "Party" have the respective meanings ascribed to them in the introductory paragraph of this Agreement.

 

“PCAOB” means the Public Company Accounting Oversight Board, as regulated by the U.S. Securities and Exchange Commission (“SEC”).

 

"Person" means any individual, sole proprietorship, partnership, incorporated association, unincorporated syndicate, unincorporated organization, trust, company, corporation, Governmental Authority, and a natural person in such person's capacity as trustee, executor, administrator or other legal representative.

 

“Returns” shall have the meaning as used in Section 7(i) hereof.

 

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

 

"Subsidiary" has the meaning ascribed to it in the Securities Act, and in the case of Seller, specifically includes the Ukraine-based entities NPK-KONTAKT and LISPROMGAZ as of the Option Exercise Closing Date.

 

  

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“Subsoil Use Permit” means Special Permit No 2424 for subsoil use of subsoil plot issued by the Ministry of Environmental Protection of Ukraine on September 3, 2003 to Limited Liability Company NPK-KONTAKT, a legal entity incorporated under the laws of Ukraine and a Subsidiary of SSL (“NPK-KONTAKT”), and prolonged by the order No 454 of September 4, 2008 with an expiration date of September 8, 2013, with a further extension applied for on May 29, 2013 and attached as Exhibit E, for the purposes of geological investigation and experimental-industrial development of coal fields gas (methane) in the Lysychansko-Toshkovskaya area of Ukraine.

“Tax” or “Taxes” means any and all federal, state, local and foreign taxes, including, without limitation, gross receipts, income, profits, sales, use, occupation, value added, ad valorem, transfer, franchise, withholding, payroll, recapture, employment, excise and property taxes, assessments, governmental charges and duties together with all interest, penalties and additions imposed with respect to any such amounts and any obligations under any agreements or arrangements with any other person with respect to any such amounts and including any liability of a predecessor entity for any such amounts.

 

3.            Option.

 

3.1           Grant of Option to Purchase Shares. Subject to the terms and conditions of this Agreement, Seller hereby grants to Buyer the exclusive irrevocable right to purchase from Seller during the Exercise Period all (but not less than all) of the Shares effective as of the Option Grant Closing (the “Option”).

 

3.2           Exercise of Options; Exercise Price. In order to exercise the Option, Buyer must provide an irrevocable, written notice during the Exercise Period to Seller of Buyer's exercise of the Option (the “Option Exercise Notice”) and purchase all of the Shares for the Exercise Price as soon as practicable thereafter. As consideration for the purchase and sale of the Shares hereunder, Buyer shall pay to Seller an aggregated amount equal to $1,250,000 (the "Exercise Price") of which $412,500 (the “Advance Payment”) will be paid at the Option Grant Closing and the balance of $837,500 will be paid at the Option Exercise Closing.

 

3.3           Option Exercise Closing. Upon the valid exercise of the Option, subject to the terms and conditions contained in this Agreement, Buyer shall purchase all of the Shares from the Seller and the Seller shall sell all of the Shares to Buyer, free and clear of any and all Encumbrances and the Option Exercise Closing shall occur as soon as practicable thereafter and in no circumstance later than 10 days following the Option Exercise Date, unless:

 

(a)           otherwise agreed upon in writing by all of the Parties; or

 

(b)           the Option Exercise Closing is delayed as a result of the Seller’s failure to satisfy the closing conditions required for the Option Exercise Closing provided that:

	
  

	
(i)

	
Seller has diligently sought, and is continuing to diligently seek, satisfaction of such closing conditions; and

 

	
  

	
(ii)

	
unless otherwise agreed upon in writing by all of the Parties, under no circumstances shall the Option Exercise Closing occur later than December 31, 2013.

 

  

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4.            Option Grant Closing and Option Exercise Closing.

 

4.1           Place and Time of Closing.

 

(a)           The Parties shall proceed diligently to complete all outstanding matters to be completed prior to the Option Grant Closing, with a view to completing the Option Grant Closing as soon as is reasonably possible. The Option Grant Closing shall take place at the offices of Ofsink, LLC, 900 Third Avenue, 5th Floor, New York, New York 10022, at 10:00 a.m. (New York time) on the Option Grant Closing Date, or at such other time and place as Seller and Buyer mutually agree upon, orally or in writing.

 

(b)           The Parties shall proceed diligently to complete all outstanding matters to be completed prior to the Option Exercise Closing, with a view to completing the Option Exercise Closing as soon as is reasonably possible. The Option Exercise Closing shall take place at the offices of Ofsink, LLC, 900 Third Avenue, 5th Floor, New York, New York 10022, at 10:00 a.m. (New York time) on the Option Exercise Closing Date, or at such other time and place as Seller and Buyer mutually agreed upon, orally or in writing.

 

4.2           Deliveries at the Option Grant Closing.

 

(a)           At the Option Grant Closing, Seller shall deliver to Buyer:

 

	
  

	
(i)

	
a certificate executed on Seller’s behalf by an appropriate officer certifying that the representations and warranties of Seller contained in this Agreement are true and correct in all material respects as of the date when made and as of the Option Grant Closing Date as though made at that time (except for representations and warranties that speak as of a specific date) and that Seller have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by Seller at or prior to the Option Grant Closing Date;

 

	
  

	
(ii)

	
certificates of status of good standing or extracts from the state register of companies with the issuance date not more than forty five (45) days prior to the Option Grant Closing date, for SSL and its Subsidiaries, including without limitation the entities NPK-KONTAKT and LISPROMGAZ;

 

	
  

	
(iii)

	
a certified copy of the resolutions of the board of directors and shareholders of Seller approving the transactions contemplated hereby;

 

	
  

	
(iv)

	
the Security Agreement executed by all the shareholders of Seller as set forth in Section 9.9 hereof;

 

	
  

	
(v)

	
an opinion of AstapovLawyers International Law Group, Ukrainian counsel for Seller, dated as of the Option Grant Closing Date in the form of Exhibit A hereto; and

 

	
  

	
(vi)

	
all such other assurances, consents, agreements, documents and instruments as may be reasonably required by Buyer to complete the transactions provided for in this Agreement.

 

  

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(b)           At the Option Grant Closing, Buyer shall deliver to Seller:

 

	
  

	
(i)

	
wire transfer in the amount equal to $412,500.

 

4.3           Deliveries at the Option Exercise Closing.

 

(a)           At the Option Exercise Closing, Seller shall deliver to Buyer:

 

	
  

	
(i)

	
a certificate executed on Seller’s behalf by an appropriate officer certifying that the representations and warranties of Seller contained in this Agreement are true and correct in all material respects as of the date when made and as of the Option Exercise Closing Date as though made at that time (except for representations and warranties that speak as of a specific date) and that Seller have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by Seller at or prior to the Option Grant Closing Date;

 

	
  

	
(ii)

	
certificates of status of good standing or extracts from the state register of companies with the issuance date not more than fifteen (15) days prior to the Option Exercise Closing date,  for SSL and its Subsidiaries, including without limitation the entities NPK-KONTAKT and LISPROMGAZ;

 

	
  

	
(iii)

	
an opinion of AstapovLawyers International Law Group, Ukrainian counsel for Seller, dated as of the Option Exercise Closing Date in the form of Exhibit A hereto;

 

	
  

	
(iv)

	
stock certificate(s) representing the Shares duly endorsed for transfer to Buyer;

 

	
  

	
(v)

	
resignations of all of the directors of SSL, in a form suitable for immediate acceptance, together with a complete release and discharge in the form acceptable to Buyer;

 

	
  

	
(vi)

	
all such evidence and confirmation as may be reasonably required by Buyer confirming that SSL and its Subsidiaries has paid any and all liabilities as contemplated by Section 9.5;

 

	
  

	
(vii)

	
all such evidence and confirmation as may be reasonably required by Buyer confirming that SSL and its Subsidiaries have obtained the Extension of the Subsoil Use Permit as contemplated by Section 9.4;

 

	
  

	
(viii)

	
all such other assurances, consents, agreements, documents and instruments as may be reasonably required by Buyer to complete the transactions provided for in this Agreement.

 

  

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(b)           At the Option Exercise Closing, Buyer shall deliver to Seller:

 

	
  

	
(i)

	
wire transfer in the amount equal to $837,500.00 which can be delivered to the order of Seller pursuant to the wire instructions attached hereto as Exhibit F;

 

	
  

	
(ii)

	
all such other assurances, consents, agreements, documents and instruments as may be reasonably required by Seller to complete the transactions provided for in this Agreement.

 

5.            Conditions to Option Grant Closing and Option Exercise Closing.

 

5.1           Buyer’s Conditions to Option Grant Closing. The obligations of Buyer to consummate the transactions contemplated by this Agreement with respect to the Option Grant Closing are subject to the satisfaction of the following conditions:

 

(a)           The representations and warranties of Seller herein contained shall be true as of the Option Grant Closing;

 

(b)           All obligations, covenants and agreements of Seller contained in this Agreement to be performed prior to or at Option Grant Closing shall have been performed or complied with by Seller;

 

(c)           All of the deliveries contemplated by Section 4.1(a) shall have been delivered to Buyer;

 

(d)           No Material Adverse Change shall have occurred on or after December 31, 2012 to the Option Exercise Closing;

 

(e)           Without limitation to the foregoing, there shall be no litigation or proceedings pending against Seller, SSL or any of its Subsidiaries wherein an unfavorable result would:

 

	
  

	
(i)

	
prevent consummation of the transactions contemplated by this Agreement;

 

	
  

	
(ii)

	
cause any of the transactions contemplated by this Agreement to be rescinded following consummation;

 

	
  

	
(iii)

	
materially affect adversely the rights of SSL or the SSL Subsidiaries to own their respective assets and to operate' their respective businesses (and no injunction, judgment, artier, decree or ruling to such effect shall be in effect).

 

  

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5.2           Seller’s Conditions to Option Grant Closing. The obligations of Seller to consummate the transactions contemplated by this Agreement with respect to the Option Grant Closing are subject to the satisfaction of the following conditions:

 

(a)           The representations and warranties of Buyer herein contained shall be true as of the Option Grant Closing;

 

(b)           All obligations, covenants and agreements of Buyer contained in this Agreement to be performed prior to or at Option Grant Closing shall have been performed or complied with by Buyer.

 

5.3           Buyer’s Conditions to Option Exercise Closing. The obligations of Buyer to consummate the transactions contemplated by this Agreement with respect to the Option Exercise Closing are subject to the satisfaction of the following conditions:

 

(a)           The representations and warranties of Seller herein contained shall be true as of the Option Exercise Closing;

 

(b)           All obligations, covenants and agreements of Seller contained in this Agreement to be performed prior to or at Option Exercise Closing shall have been performed or complied with by Seller;

 

(c)           All of the deliveries contemplated by Section 4.3(a) shall have been delivered to Buyer;

 

(d)           No Material Adverse Change shall have occurred on or after December 31, 2012 to the Option Grant Closing;

 

(e)           The Extension of the Subsoil Use Permit have been delivered to Buyer in strict compliance with Section 9.4.

 

(f)           Without limitation to the foregoing, there shall be no litigation or proceedings pending against Seller, SSL or any of its Subsidiaries wherein an unfavorable result would:

 

	
  

	
(i)

	
prevent consummation of the transactions contemplated by this Agreement;

 

	
  

	
(ii)

	
cause any of the transactions contemplated by this Agreement to be rescinded following consummation;

 

	
  

	
(iii)

	
materially affect adversely the rights of SSL or the SSL Subsidiaries to own their respective assets and to operate' their respective businesses (and no injunction, judgment, artier, decree or ruling to such effect shall be in effect).

 

  

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5.4           Seller’s Conditions to Option Exercise Closing. The obligations of Seller to consummate the transactions contemplated by this Agreement with respect to the Option Exercise Closing are subject to the satisfaction of the following conditions:

 

(a)           The representations and warranties of Buyer herein contained shall be true as of the Option Grant Closing;

 

(b)           All obligations, covenants and agreements of Buyer contained in this Agreement to be performed prior to or at Option Grant Closing shall have been performed or complied with by Buyer.

 

(c)           Buyer shall have delivered to Seller the Option Exercise Notice.

 

(d)           All of the deliveries contemplated by Section 4.3(b) shall have been delivered to Buyer;

 

6.            Representations and Warranties of Seller with respect to the Shares. Seller hereby represents and warrants to Buyer that:

 

(a)           Organization and Standing.  Seller is duly incorporated and validly existing under the laws of the Republic of Cyprus, and has all requisite corporate power and authority to own or lease its properties and assets and to conduct its business as it is presently being conducted.

 

(b)           Capacity of Seller; Authorization; Execution of Agreements.  Seller has all requisite power, authority and capacity to enter into this Agreement and to perform the transactions and obligations to be performed by it hereunder.  The execution and delivery of this Agreement by Seller, and the performance by Seller of the transactions and obligations contemplated hereby, including, without limitation, the grant of the Option and sale of the Shares to Buyer hereunder, have been duly authorized by all requisite corporate action of Seller.  This Agreement constitutes a valid and legally binding agreement of Seller, enforceable in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws of the Republic of Cyprus, affecting the enforcement of creditors’ rights or remedies in general from time to time in effect and the exercise by courts of equity powers or their application of principles of public policy.

 

(c)           Title to Shares.  Seller shall be the sole record and beneficial owner of the Shares and will have sole managerial and dispositive authority with respect to the Shares as of the Option Exercise Closing Date.  Seller has not and will not grant any person a proxy with respect to the Shares that has not expired or been validly withdrawn.  The sale and delivery by Seller of the Shares to Buyer pursuant to this Agreement will vest in the Buyer legal and valid title to the Shares, free and clear of all Liens, security interests, adverse claims or other encumbrances of any character whatsoever, other than encumbrances created by Buyer and restrictions on the resale of the Shares under applicable securities laws (“Encumbrances”).

 

(d)           Brokers, Finders, and Agents.  Except for Hunter Wise Securities, LLC, and its parent Hunter Wise Financial Group, LLC, Seller is not, directly or indirectly, obligated to anyone acting as broker, finder or in any other similar capacity in connection with this Agreement or the transactions contemplated hereby.  Except for Hunter Wise Securities, LLC, and its parent Hunter Wise Financial Group, LLC, no Person has or, immediately following the consummation of the transactions contemplated by this Agreement, will have, any right, interest or valid claim against SSL, Seller or Buyer for any commission, fee or other compensation as a finder or broker in connection with the transactions contemplated by this Agreement, nor are there any brokers’ or finders’ fees or any payments or promises of payment of similar nature, however characterized, that have been paid or that are or may become payable in connection with the transactions contemplated by this Agreement, as a result of any agreement or arrangement made by the Seller.

 

  

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7.            Representations and Warranties of Seller with respect to SSL. To the best of its knowledge and in reliance on the representations and warranties made by Carapetta to Seller in the Purchase Agreement, Seller represents and warrants to Buyer, with respect to SSL, that:

 

(a)           Organization and Standing.  SSL is duly incorporated and validly existing under the laws of the Republic of Cyprus, and has all requisite corporate power and authority to own or lease its properties and assets and to conduct its business as it is presently being conducted.  Except for Synderal Services Ltd, NPK-KONTAKT and Limited Liability Company “LIZPROMGAZ” (“LIZPROMGAZ”) as of the Option Exercise Closing Date, SSL does not own any equity interest, directly or indirectly, in any other Person or business enterprise.  SSL is qualified to do business and is in good standing in each jurisdiction in which the failure to so qualify could reasonably be expected to have a Material Adverse Effect upon its assets, properties, financial condition, results of operations or business.  Except for Synderal Services Ltd, NPK-KONTAKT and LIZPROMGAZ, as of the Option Exercise Closing Date, SSL has no direct or indirect Subsidiaries.  As of the Option Exercise Closing Date SSL owns 100% of the issued and outstanding capital of Synderal Services Ltd, which owns 100% of the issued and outstanding capital of each of NPK- KONTAKT and LIZPROMGAZ. No corporate proceedings on the part of SSL or its Subsidiaries are necessary to authorize this Agreement or to consummate the transactions contemplated hereby.

 

(b)           Capitalization.  At the date of this Agreement, the authorized capital stock of SSL consists of 1,000 shares, of which 1,000 shares are issued and outstanding.  SSL has no other class or series of equity securities authorized, issued, reserved for issuance or outstanding.  There are (x) no outstanding options, offers, warrants, conversion rights, contracts or other rights to subscribe for or to purchase from SSL, or agreements obligating SSL to issue, transfer, or sell (whether formal or informal, written or oral, firm or contingent), shares of capital stock or other securities of SSL (whether debt, equity, or a combination thereof) or obligating SSL to grant, extend, or enter into any such agreement and (y) no agreements or other understandings (whether formal or informal, written or oral, firm or contingent) which require or may require SSL to repurchase any of its Common Stock.  There are no preemptive or similar rights granted by SSL with respect to SSL’s capital stock.  There are no anti-dilution or price adjustment provisions contained in any security issued by SSL.  SSL is not a party to any registration rights agreements, voting agreements, voting trusts, proxies or any other agreements, instruments or understandings with respect to the voting of any shares of the capital stock of SSL, or any agreement with respect to the transferability, purchase or redemption of any shares of the capital stock of SSL.  Neither the grant of the Option nor sale of the Shares to Buyer obligate SSL to issue any shares of capital stock or other securities to any person (other than Buyer) and will not result in a right of any holder of SSL securities, by agreement with SSL, to adjust the exercise, conversion, exchange or reset price under such securities.  The outstanding shares are all duly and validly authorized and issued, fully paid and non-assessable.  The Seller will cause SSL not to issue, or resolve or agree to issue, any securities to any party, other than Buyer, prior to the Option Exercise Closing.  The Shares represent 100% of the outstanding capital stock of SSL, on a fully-diluted basis.

 

(c)           Status of the Shares.  The Shares (i) have been duly authorized, validly issued, fully paid and are non-assessable, and will be such at the Option Exercise Closing, (ii) were issued in compliance with all applicable securities laws, and will be in compliance with such laws at the Option Exercise Closing, (iii) subject to restrictions under this Agreement, and applicable securities laws, have the rights and preferences set forth in the Memorandum and Articles of Association (“SSL Charter”), as amended, and will have such rights and preferences at the Option Exercise Closing, and (iv) are free and clear of all Encumbrances and will be free and clear of all Encumbrances at the Option Exercise Closing (other than Encumbrances created by Buyer and restrictions on the resale of the Shares under applicable securities laws).

 

(d)           Conflicts; Defaults.  The execution and delivery of this Agreement by the Seller and the performance by the Seller of the transactions and obligations contemplated hereby and thereby to be performed by it do not (i) violate, conflict with, or constitute a default under any of the terms or provisions of, the SSL Charter, as amended, or any provisions of, or result in the acceleration of any obligation under, any contract, note, debt instrument, security agreement or other instrument to which SSL is a party or by which SSL, or any of SSL’s assets, is bound; (ii) result in the creation or imposition of any Encumbrances or claims upon SSL’s assets or upon any of the shares of capital stock of SSL; (iii) constitute a violation of any law, statute, judgment, decree, order, rule, or regulation of a Governmental Authority applicable to SSL; or (iv) constitute an event which, after notice or lapse of time or both, would result in any of the foregoing.

 

  

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(e)           Absence of Litigation.  There is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or threatened in writing against or affecting SSL.

 

(f)           Brokers, Finders, and Agents.  Except for Hunter Wise Securities, LLC, and its parent Hunter Wise Financial Group, LLC, SSL is not, directly or indirectly, obligated to anyone acting as broker, finder or in any other similar capacity in connection with this Agreement or the transactions contemplated hereby.  Except for Hunter Wise Securities, LLC, and its parent Hunter Wise Financial Group, LLC, no Person has or, immediately following the consummation of the transactions contemplated by this Agreement, will have, any right, interest or valid claim against SSL, the Seller or Buyer for any commission, fee or other compensation as a finder or broker in connection with the transactions contemplated by this Agreement, nor are there any brokers’ or finders’ fees or any payments or promises of payment of similar nature, however characterized, that have been paid or that are or may become payable in connection with the transactions contemplated by this Agreement, as a result of any agreement or arrangement made by SSL.

 

(g)           Absence of Liabilities.  Neither SSL nor its Subsidiaries has any liabilities or obligations of any kind or nature, except as set forth on Schedule 7(g) hereto, as may be updated and supplemented by the Seller at any time prior to the Option Exercise Closing.

 

(h)           No Agreements.  Except as set forth on Schedule 7(h) hereto, SSL is not a party to any agreement, commitment or instrument, whether oral or written, which imposes any obligations or liabilities on SSL after the Option Exercise Closing.

 

(i)            Taxes.

 

(i)           SSL has timely filed all state, local and foreign returns, estimates, information statements and reports relating to Taxes (“Returns”) required to be filed by SSL with any Tax authority prior to the date hereof, except such Returns which are not material to SSL.  All such Returns are true, correct and complete and SSL has no basis to believe that any audit of the Returns would cause a Material Adverse Effect upon SSL or its financial condition.  SSL has paid all Taxes shown to be due on such Returns.

 

(ii)           All Taxes that SSL is required by law to withhold or collect have been duly withheld or collected, and have been timely paid over to the proper governmental authorities to the extent due and payable.

 

(iii)          SSL has no material Tax deficiency outstanding, proposed or assessed against SSL, and SSL has not executed any unexpired waiver of any statute of limitations on or extending the period for the assessment or collection of any Tax.

 

(iv)          No audit or other examination of any Returns of SSL by any Tax authority is known by SSL to be presently in progress, nor has SSL been notified of any request for such an audit or other examination.

 

  

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(v)           No adjustment relating to any Returns filed by SSL has been proposed in writing, formally or informally, by any Tax authority to SSL or any representative thereof.

 

(vi)          SSL has no liability for any Taxes for its current fiscal year, whether or not such Taxes are currently due and payable.

 

(j)            Corporate Records.  All records and documents relating to SSL known to the Seller, including, but not limited to, the books, shareholder lists, government filings, Tax Returns, consent decrees, orders, and correspondence, financial information and records (including any electronic files containing any financial information and records), and other documents used in or associated with SSL (the “Corporate Records”) are true, complete and accurate in all material respects.  The minute books of SSL known to the Seller contain true, complete and accurate records of all meetings and consents in lieu of meetings of the Board of Directors of SSL (and any committees thereof), similar governing bodies and shareholders (the “Minute Books”).  The Corporate Records and Minute Books, to the extent such documents have not been previously delivered to Buyer, will be delivered to Buyer at the Option Exercise Closing.

 

8.            Representations and Warranties of Buyer. Buyer hereby represents and warrants to Seller that:

 

(a)           Organization and Standing.  Buyer is duly incorporated and validly existing under the laws of the State of Nevada, and has all requisite corporate power and authority to own or lease its properties and assets and to conduct its business as it is presently being conducted.

 

(b)           Capacity of Buyer; Authorization; Execution of Agreements.  Buyer has all requisite power, authority and capacity to enter into this Agreement and to perform the transactions and obligations to be performed by it hereunder.  The execution and delivery of this Agreement by Buyer, and the performance by Buyer of the transactions and obligations contemplated hereby, including, without limitation, the purchase of the Shares from the Seller hereunder, have been duly authorized by all requisite corporate action of Buyer.  This Agreement constitutes a valid and legally binding agreement of Buyer, enforceable in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws of the United States (both state and federal), affecting the enforcement of creditors’ rights or remedies in general from time to time in effect and the exercise by courts of equity powers or their application of principles of public policy.

 

(c)           Purchase Entirely for Own Account. This Agreement is made with Buyer in reliance upon Buyer's representation to Seller that the Shares to be acquired by Buyer upon exercise of the Option will be acquired for investment for Buyer's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that Buyer has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, Buyer further represents that Buyer does not presently have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the Shares. Buyer represents that it has full power and authority to enter into this Agreement.

 

(d)           Restricted Securities. Buyer understands that the Shares have not been, and will not be, registered under the Securities Act or state securities laws, by reason of a specific exemption from the registration provisions of the Securities Act. Buyer understands that the Shares are characterized as "restricted securities" under the U.S. federal and state securities laws inasmuch as they are being acquired from Seller in a transaction not involving a public offering and that under such laws and applicable regulations, such Shares may be resold without registration under the Securities Act only in certain limited circumstances.

 

  

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9.            Covenants of the Parties.

9.1.          Access to Information; Notification of Certain Matters.

 

(a)           From the date hereof to the Option Exercise Closing and subject to applicable law, Seller shall (i) give to Buyer or its counsel reasonable access to the books and records of SSL and its Subsidiaries, and (ii) furnish or make available to Buyer and its counsel such financial and operating data and other information about SSL and its Subsidiaries as such Persons may reasonably request.

 

(b)           Each party hereto shall give notice to each other party hereto, as promptly as practicable after the event giving rise to the requirement of such notice, of:

 

(i)            any communication received by such party from, or given by such party to, any Governmental Authority in connection with any of the transactions contemplated hereby;

 

(ii)           any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement; and

 

(iii)          any actions, suits, claims, investigations or proceedings commenced or, to its Knowledge, threatened against, relating to or involving or otherwise affecting such party or any of its Affiliates that, if pending on the date of this Agreement, would have been required to have been disclosed, or that relate to the consummation of the transactions contemplated by this Agreement; provided, however, that the delivery of any notice pursuant to this Section 9.1(b)(iii) shall not limit or otherwise affect the remedies available hereunder to the party receiving such notice.

 

9.2           Interim Operations of SSL.  During the period from the date of this Agreement to the Option Exercise Closing, the Seller shall cause SSL and its Subsidiaries to conduct their business only in the ordinary course of business consistent with past practice, except to the extent otherwise necessary to comply with the provisions hereof and with applicable laws and regulations.  Additionally, during the period from the date of this Agreement to the Option Exercise Closing, except as required hereby in connection with this Agreement, the Seller shall not permit SSL and its Subsidiaries to do any of the following without the prior consent of the Purchaser: (i) amend or otherwise change its Charter, (ii) issue, sell or authorize for issuance or sale (including, but not limited to, by way of stock split or dividend), shares of any class of its securities or enter into any agreements or commitments of any character obligating it to issue such securities, other than in connection with the exercise of outstanding warrants or outstanding stock options granted to directors, officers or employees of SSL and its Subsidiaries prior to the date of this Agreement; (iii) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock or property) with respect to its common stock, (iv) redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, (v) enter into any material contract or agreement or material transaction or make any material capital expenditure other than those relating to the transactions contemplated by this Agreement, (vi) create, incur, assume, maintain or permit to exist any indebtedness except as otherwise incurred in the ordinary course of business, consistent with past practice, (vii) pay, discharge or satisfy claims or liabilities (absolute, accrued, contingent or otherwise) other than in the ordinary course of business consistent with past practice, (viii) cancel any material debts or waive any material claims or rights, (ix) make any loans, advances or capital contributions to, or investments in financial instruments of any Person, (x) assume, guarantee, endorse or otherwise become responsible for the liabilities or other commitments of any other Person, (xi) alter in any material way the manner of keeping the books, accounts or records of SSL and its Subsidiaries or the accounting practices therein reflected other than alterations or changes required by GAAP or applicable law, (xii) enter into any indemnification, contribution or similar contract pursuant to which SSL and its Subsidiaries may be required to indemnify any other Person or make contributions to any other Person, (xiii) amend or terminate any existing contracts in any manner that would result in any material liability to SSL and its Subsidiaries for or on account of such amendment or termination, or (xiv) or change any existing or adopt any new tax accounting principle, method of accounting or tax election except as provided herein or agreed to in writing by Buyer.

 

  

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9.3           Financial Statements. Seller shall cause SSL and its Subsidiaries to prepare and deliver to Buyer not later than five (5) business days before Option Exercise Closing, the audited consolidated financial statements of SSL’s Subsidiaries as at December 31, 2011 and 2012 audited by a PCAOB auditor chosen and mutually accepted by the Parties, and unaudited consolidated financial statements of SSL’s Subsidiaries as at June 30, 2011, 2012 and 2013 reviewed by a PCAOB auditor, prepared in accordance with GAAP (the “Exercise Financial Statements”).  Seller shall deliver such Exercise Financial Statements in a format acceptable in all respects to the U.S. Securities and Exchange Commission, as required for the filing of Form 8-K by Buyer.

9.4           Extension of Subsoil Use Permit.  Seller shall cause SSL and its Subsidiaries to obtain from the respective Governmental Authorities by September 8, 2013 the Extension of the Subsoil Use Permit.

9.5           Payment of Liabilities.  Prior to or at the Option Exercise Closing, Seller shall pay, or shall cause SSL and its Subsidiaries to pay, in full any liabilities or obligations incurred by SSL and its Subsidiaries and remaining outstanding at the Option Exercise Closing Date, excluding liabilities accrued in the ordinary course of business consistent with past practice and  including any and all liabilities or obligations incurred by SSL and its Subsidiaries in connection with the transactions contemplated by this Agreement.

9.6           Indemnification.  Seller hereby agrees to indemnify and hold harmless Buyer (the “Indemnified Party”) from and against any and all liabilities, obligations, claims, losses, expenses, damages, actions, liens and deficiencies (including reasonable attorneys’ fees) which exist, or which may be imposed on, incurred by or asserted against the Indemnified Party due to or arising out of any breach or inaccuracy of any representation, warranty, covenant, agreement or obligation of Seller hereunder or in any other certificate, instrument or document contemplated hereby or thereby (“Damages”), for a period of twelve (12) months from the Option Exercise Closing Date (the “Indemnification,” and the period herein is referred to as the “Indemnification Period”).  Seller shall not be obligated to make any payment for Indemnification in respect of any claims for Damages that are made by the Indemnified Party after the expiration of the Indemnification Period; provided, however, that the obligations of Seller under the Indemnification shall remain in full force and effect in respect of any claims for Damages which are made prior to, and remain pending at, the expiration of the Indemnification Period. The indemnification provided by this Section 9.6 shall be the sole pecuniary remedy of the Indemnified Party for any Damages; provided, however, that no remedies of the Indemnified Party for any breach by Seller of the representations and warranties contained in Section 6 shall be limited in any way by this Section 9.6.

9.7           OTC Company Shares. Buyer shall cause OTC Company to issue promptly after the Option Grant Closing to Seller (i) shares of common stock of the OTC Company representing 51% of issued and outstanding common stock of the OTC Company after giving effect to the issuance of shares of common stock of the OTC Company to the subscribers under the Subscription Agreement, and (ii) one share of Series A Convertible Preferred Stock of the OTC Company with the powers, preferences, rights, qualifications, limitations and restrictions as set forth in the certificate of designations in the form of Exhibit A to the Subscription Agreement (the “Certificate of Designations”).  These shares shall be subject to a Lock-Up Agreement in the form of Exhibit B to the Subscription Agreement (the “Lock-Up Agreement”), and a Stock Escrow Agreement in the form of Exhibit C to the Subscription Agreement (the “Stock Escrow Agreement”) to be executed by and between the OTC Company and the holders of such shares at the Option Grant Closing.

9.8           SSL Capital Structure. Buyer hereby acknowledges and agrees to the capital structure of SSL as of the Option Exercise Date as set forth on Exhibit C hereto, including designation and issuance to the Persons listed on Exhibit C of preferred stock entitling its holders to dividend distributions in the amount of 15% in the aggregate.

 

  

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9.9           Pledge and Security Agreement. The obligations of Seller to Buyer under this Agreement shall be secured pursuant to the Pledge and Security Agreement in the form of Exhibit D attached hereto to be executed by all the shareholders of Seller on or before the Option Grant Closing Date (the “Security Agreement”).  In addition to the rights and remedies given it by this Agreement, and the Security Agreement, Buyer shall have all those rights and remedies allowed by applicable laws.  The rights and remedies of Buyer are cumulative and recourse to one or more right or remedy shall not constitute a waiver of the others.

9.10         Registration of Transfer of Shares.  Seller undertakes hereby to execute and deliver such instruments, documents or other writings, and to take such actions as may be necessary or desirable to effectuate the registration of the transfer of the Shares to Buyer under the laws of the Republic of Cyprus not later than five (5) business days after the Option Exercise Closing Date.

 

10.          Survival. The warranties, representations, and covenants of each of the Parties to this Agreement shall survive the consummation of the purchase and sale of the Shares herein described for twenty four (24) months.

 

11.           Termination.

 

11.1         This Agreement may be terminated at any time prior to the Closing:

 

(a)           by mutual written agreement of Buyer and Seller;

 

(b)           by either Buyer or Seller, if

 

	
  

	
(i)

	
the transactions contemplated by this Agreement shall not have been consummated by September 30, 2013; provided, however, that the right to terminate this Agreement under this Section 11.1(b)(i) shall not be available to any party whose breach of any provision of or whose failure to perform any obligation under this Agreement has been the cause of, or has resulted in, the failure of the transactions to occur on or before September 30, 2013; or

 

	
  

	
(ii)

	
a judgment, injunction, order or decree of any Governmental Authority having competent jurisdiction enjoining either Seller or Buyer from consummating the transactions contemplated by this Agreement is entered and such judgment, injunction, judgment or order shall have become final and non-appealable and, prior to such termination, the Parties shall have used their respective commercially reasonable efforts to resist, resolve or lift, as applicable, such judgment, injunction, order or decree; provided, however, that the right to terminate this Agreement under this Section 11.1(b)(ii) shall not be available to any party whose breach of any provision of or whose failure to perform any obligation under this Agreement has been the cause of such judgment, injunction, order or decree.

 

  

15

  

 

(c)           by Buyer, if a breach of or failure to perform any representation, warranty, covenant or agreement on the part of Seller set forth in this Agreement shall have occurred which would cause the conditions set forth in Section 5.1 and 5.3 not to be satisfied, and such breach or failure to perform has not been cured within thirty (30) days after notice of such breach or failure to perform has been given by Buyer to Seller.

 

11.2         Effect of Termination.  If this Agreement is terminated pursuant to Section 11.1, except as set forth in Section 11.3 hereof, there shall be no liability or obligation on the part of Buyer or Seller, or any of their respective officers, directors, shareholders, agents or Affiliates, except that (i) Seller shall return to Buyer a full amount of the Advance Payment within three (3) business days after the effective date of the termination of this Agreement, (ii) the provisions of this Section 11.2, Section 11.3 and Section 12 of this Agreement shall remain in full force and effect and survive any termination of this Agreement and (iii) notwithstanding anything to the contrary contained in this Agreement, no parties shall be relieved of or released from any liabilities or damages arising out of its material breach of or material failure to perform its obligations under this Agreement.  The obligations of Seller to return the Advance Payment to Buyer pursuant to this Section 11.2 are secured by all the assets of SSL and its Subsidiaries pursuant to the Security Agreement in the form of Exhibit H to the Subscription Agreement.

 

11.3         Expenses.  Whether or not the transactions contemplated by this Agreement are consummated, all fees and expenses of any party hereto incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fees and expenses, provided that Buyer shall reimburse Seller’s costs and expenses not to exceed fifty thousand dollars ($50,000) in the aggregate incurred in connection with the transactions contemplated hereby including fees of the Seller’s legal counsel, financial consultants, and PCAOB auditors against the provision by Seller of relevant documents including US-GAAP audited financial statements as described in Section 9.3 above, confirming the expenditures so incurred in the form reasonably acceptable for the Buyer.

 

12.           Miscellaneous Provisions.

 

(a)           Waivers and Amendments.  This Agreement may be amended or modified in whole or in part only by a writing which makes reference to this Agreement executed by all of the parties hereto.  The obligations of any party hereunder may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the party claimed to have given the waiver; provided, however, that any waiver by any party of any violation of, breach of, or default under any provision of this Agreement or any other agreement provided for herein shall not be construed as, or constitute, a continuing waiver of such provision, or waiver of any other violation of, breach of or default under any other provision of this Agreement or any other agreement provided for herein.

 

(b)           Notices. Any notice, request or other communication required or permitted hereunder shall be in writing and be deemed to have been duly given (a) when personally delivered or sent by facsimile transmission (the receipt of which is confirmed in writing), (b) one Business Day after being sent by a nationally recognized overnight courier service or (c) five Business Days after being sent by registered or certified mail, return receipt requested, postage prepaid, and if intended for either Party shall be addressed to the address provided below each Party's name on the signature page of this Agreement. Any Party, by written notice to the other Party, may change the address for notices to be delivered.

 

(c)           Successors and Assigns.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns, except that Seller may not assign or transfer its rights hereunder without the prior written consent of Buyer, and Buyer may not assign or transfer its rights under this Agreement without the consent of Seller.

 

  

16

  

 

(d)          Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions of this Agreement shall continue in full force and effect without being impaired or invalidated in any way and shall be construed in accordance with the purposes and intent of this Agreement.

 

(e)           Entire Agreement. This Agreement contains the entire agreement of the Parties, and supersedes any prior written or oral agreements between them concerning the subject matter contained herein. There are no representations, agreements, arrangements, or understandings, oral or written, between and among the Parties, relating to the subject matter contained in this Agreement, which are not fully expressed herein.

 

(f)           Counterparts; Facsimile and Electronic Signatures.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of which together will constitute one and the same instrument.  The signature pages hereto in facsimile copy or other electronic means, including e-mail attachment, shall be deemed an original for all purposes.

 

(g)          Governing Law and Submission to Jurisdiction.  This Agreement shall in all respects be governed by and construed in accordance with the internal substantive laws of the State of New York without giving effect to the principles of conflicts of law thereof.  Each of the parties irrevocably agrees that any legal action or proceeding arising out of or relating to this Agreement brought by any other party or its successors or assigns shall be brought and determined in any New York State or federal court sitting in New York County, New York, and each of the parties hereby irrevocably submits to the exclusive jurisdiction of the aforesaid courts for itself and with respect to its property, generally and unconditionally, with regard to any such action or proceeding arising out of or relating to this Agreement and the transactions contemplated hereby.  Each of the parties agrees not to commence any action, suit or proceeding relating thereto except in the courts described above, other than actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court in the State of New York as described herein.  Each of the parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, (a) any claim that it is not personally subject to the jurisdiction of the courts in New York as described herein for any reason, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.

 

(h)          Schedules.  The schedules and exhibits attached to this Agreement are incorporated herein and shall be part of this Agreement for all purposes.

 

(i)           Public Announcements.  The parties shall consult with each other before issuing, and provide each other a reasonable opportunity to review and comment upon, any press release or public statement including necessary Company’s filings with the SEC with respect to this Agreement and the transactions contemplated hereby 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.

[Signature Page Follows]

 

  

17

  

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the Effective Date.

 

	 	
SELLER

 

BEZERIUS HOLDINGS LIMITED

	 
	 	 	 	 
	 	By:	 	 
	 	Name:	 	 
	 	Its:	 	 
	 	 	 	 
	 	Address:	 	 

 

	 	

BUYER

 

GREAT EAST ENERGY, INC.

	 
	 	 	 	 
	 	By:	 	 
	 	Name:	Johnnie Zarecor	 
	 	Its:	Chairman	 
	 	 	 	 
	 	Address:	
318 North Carson Street, Suite 208 Carson City, NV 89701 USA

	 

 

  

18

  

 

EXHIBIT A

LEGAL OPINION

 

 

 

 

 

 

  

19

  

EXHIBIT B

PURCHASE AGREEMENT

 

 

 

 

 

 

  

20

  

 

EXHIBIT C

SSL CAPITAL STRUCTURE

ORDINARY SHARES

 

	SHAREHOLDER	NUMBER OF SHARES	 
	Great East Energy, Inc. 	1,000	 

 

PREFERRED NON-VOTING SHARES WITH DIVIDEND RIGHTS

 

	SHAREHOLDER	NUMBER OF SHARES 	DIVIDEND PERCENTAGE	 
	LPC Enterprises LLC	10.5	10.5%	 
	IBTR Investments Limited 	4.5	4.5%	 

 

                                                                                                                                                                                                                                                              

 

 

 

 

 

  

21

  

 

EXHIBIT D

SECURITY AGREEMENT

 

 

 

 

 

 

  

22

  

 

EXHIBIT E

APPLICATION FOR EXTENSION OF SUBSOIL USE PERMIT

 

 

 

 

 

 

  

23

  

 

EXHIBIT F

 

WIRE INSTRUCTIONS

Pursuant to Section 4.3(b)(i) of that certain Stock Purchase Option Agreement, dated as of July __, 2013, by and between Bezerius Holdings Limited, a private company limited by shares organized under the laws of the Republic of Cyprus (“Seller”) and Great East Energy, Inc., a Nevada corporation (“Buyer”), Seller hereby instructs Buyer to make the payment of $837,500 in the manner described below:

 

	 	Form of release:	Wire	 
	 	Wire Information:	 	 

 

 

 

 

Date:______________, 2013

Bezerius Holdings Limited

 

	By:	 	 
	 	Name:	 
	 	Title:	 

 

 

 

24epsilon_ex102.htm

EXHIBIT 10.2

 

SUBSCRIPTION BOOKLET

 

EPSILON CORP.

Offering of a Minimum of 8,929 Shares of Common Stock up to a Maximum of 71,429 Shares of Common Stock (for a gross purchase price of a Minimum of $500,000 and up to a Maximum of $4,000,000) (the number of shares of Common Stock issuable hereunder is subject to adjustment for the Stock Split)

Purchase Price Per Share: $56.00 (subject to adjustment for the Stock Split)

CONTENTS

Instructions for Subscription

Subscription Agreement

Investor Questionnaire

  

1

  

 

EPSILON CORP.

 

INSTRUCTIONS FOR SUBSCRIPTION

 

The subscriber must do the following:

 

1.           Complete, sign and deliver the Subscription Agreement included in this Subscription Booklet (fill out and sign on signature page).

 

2.           Complete, sign and deliver the Investor Questionnaire included in this Subscription Booklet (fill out and sign).

 

The completed Subscription Agreement and Investor Questionnaire should be delivered to:

 

Hunter Wise Securities, LLC

2361 Campus Drive, Suite 100

Irvine, CA 92612, USA

Attention: Daniel J. McClory

dmcclory@hunterwise.com

Telephone: +1 949 732 4102

3.           Deliver payment in the aggregate amount of your subscription.

 

Delivery of the checks for subscription amounts made out to “Signature Bank, as Escrow Agent for Great East Energy, Inc.” should be delivered directly to:

 

Signature Bank

950 Third Avenue, 9th Floor

New York, NY 10022 U.S.A.

Attention: John D. Gonzalez

Telephone: +1 646 822 1535

Subscription amounts may also be sent by wire transfer of immediately available funds to:

 

Receiving Bank Name: Signature Bank

Receiving Bank ABA#: 026013576

Receiving Bank Address: 950 Third Avenue, 9th Floor, New York, NY 10022 U.S.A.

Beneficiary’s Name: Great East Energy, Inc. Signature Bank as Escrow Agent

Reference: Great East Energy, Inc.

Beneficiary’s Address: Great East Energy, Inc.

Attn: Johnnie Zarecor, Chairman

318 N. Carson St., #208

Carson City, NV 89701

Beneficiary’s Account #: 1501955252

SWIFT Code: SIGNUS33

 

THE COMPANY MAY ACCEPT OR REJECT SUBSCRIPTIONS IN ITS SOLE DISCRETION.  THE OFFERING IS AVAILABLE ONLY TO “ACCREDITED INVESTORS” AS DEFINED UNDER REGULATION D AND/OR TO NON-UNITED STATES PERSONS UNDER REGULATION S UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  In the event that a subscription offer is not accepted by the Company, the subscription funds shall be returned to the subscriber, without interest or deduction thereon.

 

  

2

  

 

SUBSCRIPTION AGREEMENT

 

THIS SUBSCRIPTION AGREEMENT (this “Agreement”), is dated as of July 25, 2013, by and between Epsilon Corp., a Delaware corporation (“Epsilon” or the “Company”), and the subscribers identified on the signature pages hereto (each a “Subscriber” and collectively, the “Subscribers”).

RECITALS:

WHEREAS, the Company and the Subscribers are executing and delivering this Agreement in reliance upon an exemption from securities registration afforded by the provisions of Section 4(2), Section 4(6), Regulation D (“Regulation D”) and/or Regulation S (“Regulation S”) as promulgated by the United States Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “1933 Act”).

WHEREAS, Hunter Wise Securities, LLC is acting as lead placement agent (“Placement Agent”), on a “best efforts” basis, in a private offering (the “Offering”) in which the Subscribers agree to purchase and the Company agrees to offer and sell up to 71,429 shares (the “Shares”) of the Company’s common stock, $0.001 par value per share (the “Common Stock”) at a per share price of $56.00, subject to adjustment for the Stock Split, for aggregate gross proceeds of a minimum of $500,000 to a maximum of $4,000,000 (the “Purchase Price”). The Shares are hereinafter referred to as the “Purchased Securities.”

 

WHEREAS, such Offering is in connection with the combination (the “Combination”) of Epsilon and Great East Energy, Inc., a Nevada corporation (“GEEI”). The closing of the Combination is conditioned upon all of the conditions of the Offering being met, including receipt of a minimum of $500,000 by the escrow agent from the Subscribers, and the Offering is conditioned upon the closing of the Combination. Pursuant to the Combination, GEEI will become a wholly-owned subsidiary of Epsilon.

 

WHEREAS, promptly after the closing of the Combination and the minimum Offering, the Company intends to effect a 56-for-1 forward stock split of its issued and outstanding shares of Common Stock (the “Stock Split”).

 

WHEREAS, in connection with the closing of the Combination, Bezerius Holdings Limited, a corporation organized under the laws of the Republic of Cyprus ("BHL") will be issued (i) shares of Common Stock representing 51% of issued and outstanding Common Stock, and (ii) one share of Series A Convertible Preferred Stock, par value $.001 per share, of the Company (“Series A”) with the powers, preferences, rights, qualifications, limitations and restrictions as set forth in the certificate of designations in the form of Exhibit A hereto (the “Certificate of Designations”).  These shares shall be subject to a Lock-Up Agreement in the form of Exhibit B hereto (the “Lock-Up Agreement”), and a Stock Escrow Agreement in the form of Exhibit C hereto (the “Stock Escrow Agreement”).

 

WHEREAS, in connection with the closings of the Offering and the Combination, GEEI will enter with shareholders of BHL into a Stock Purchase Option Agreement substantially in the form of Exhibit D hereto (the “Option Agreement”) and Pledge and Security Agreement substantially in the form of Exhibit D to  the Option Agreement (the “Security Agreement”).

 

  

3

  

 

WHEREAS, the Company desires to enter into this Agreement to issue and sell the Purchased Securities and the Subscriber desires to purchase that number of Purchased Securities set forth on the signature page hereto on the terms and conditions set forth herein.

 

WHEREAS, the aggregate proceeds of the Offering shall be held in escrow pursuant to the terms of an Escrow Deposit Agreement to be executed by the parties substantially in the form attached hereto as Exhibit E (the “Escrow Agreement”).

 

AGREEMENT:

 

NOW, THEREFORE, in consideration of the mutual covenants and other agreements contained in this Agreement, the Company and the Subscriber hereby agree as follows:

 

1.           Purchase and Sale of Shares. Subject to the satisfaction or waiver of the terms and conditions of this Agreement, on the Closing Date (as defined below), each Subscriber shall purchase and the Company shall sell to each Subscriber the Purchased Securities for the portion of the Purchase Price designated on the signature pages hereto.

2.           Closing.  The issuance and sale of the Purchased Securities shall occur on the closing date (the “Closing Date”), which shall be the date that Subscriber funds representing the net amount due to the Company from the Purchase Price of the Offering is transmitted by wire transfer or otherwise to or for the benefit of the Company. The consummation of the transactions contemplated herein (the “Closing”) shall take place at the offices of Ofsink, LLC, 900 Third Avenue, 5th Floor, New York, New York 10022 on such date and time as the Subscribers and the Company may agree upon; provided, that all of the conditions set forth in Section 11 hereof and applicable to the Closing shall have been fulfilled or waived in accordance herewith. The Subscriber and the Company acknowledge and agree that the Company may consummate the sale of additional Purchased Securities to the Subscriber, on the terms set forth in this Agreement and the other Transaction Documents as defined herein, at more than one closing, each of which shall be held no later than December 31, 2013 (each referred to herein as a “Closing”).

 

3.           Subscriber Representations, Warranties and Covenants.  The Subscriber hereby represents and warrants to and agrees with the Company that:

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

(b)           Authorization and Power.   Such Subscriber has the requisite power and authority to enter into and perform this Agreement and the other Transaction Documents (as defined in Section 4.1(c)) and to purchase the Purchased Securities being sold to it hereunder.  The execution, delivery and performance of this Agreement and the other Transaction Documents by such Subscriber and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate or partnership action, and no further consent or authorization of such Subscriber or its Board of Directors, stockholders, partners, members, as the case may be, is required.  This Agreement and the other Transaction Documents have been duly authorized, executed and delivered by such Subscriber and constitute, or shall constitute when executed and delivered, a valid and binding obligation of such Subscriber enforceable against such Subscriber in accordance with the terms thereof.

 

  

4

  

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

(d)           Acquisition for Investment. The Subscriber is acquiring the Purchased Securities solely for its own account for the purpose of investment and not with a view to or for resale in connection with a distribution.  The Subscriber does not have a present intention to sell the Purchased Securities, nor a present arrangement (whether or not legally binding) or intention to effect any distribution of the Purchased Securities to or through any person or entity; provided, however, that by making the representations herein and subject to Section 3.2(h) below, the Subscriber does not agree to hold the Purchased Securities for any minimum or other specific term and reserves the right to dispose of the Purchased Securities at any time in accordance with Federal and state securities laws applicable to such disposition.  The Subscriber acknowledges that it is able to bear the financial risks associated with an investment in the Purchased Securities and that it has been given full access to such records of the Company and the subsidiaries and to the officers of the Company and the subsidiaries and received such information as it has deemed necessary or appropriate to conduct its due diligence investigation and has sufficient knowledge and experience in investing in companies similar to the Company in terms of the Company’s stage of development so as to be able to evaluate the risks and merits of its investment in the Company.  The Subscriber further acknowledges that the Subscriber understands the risks of investing in companies which operate primarily in Ukraine and that the purchase of the Purchased Securities involves substantial risks.

(e)           Information on Company.    Such Subscriber has been furnished with or has had access to the EDGAR Website of the Commission and to the Company’s Form 10-K filed on EDGAR on March 6, 2013 for the fiscal year ended December 31, 2012, together with all other filings made with the Commission available at the EDGAR website (hereinafter referred to collectively as the “Reports”) and all correspondence from the Commission to the Company including but not limited to the Commission’s comment letters relating to the Company’s periodic filings with the Commission whether available at the EDGAR website or not.  In addition, such Subscriber has received in writing from the Company such other information concerning its operations, financial condition and other matters as such Subscriber has requested in writing, identified thereon as OTHER WRITTEN INFORMATION (such other information is collectively, the “Other Written Information”), and considered all factors such Subscriber deems material in deciding on the advisability of investing in the Purchased Securities.  Such Subscriber has relied on the Reports and Other Written Information in making its investment decision.

 

  

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(f)           Opportunities for Additional Information.  The Subscriber acknowledges that the Subscriber has had the opportunity to ask questions of and receive answers from, or obtain additional information from, the executive officers of the Company concerning the financial and other affairs of the Company.

(g)           Information on Subscriber.   If the Subscriber is a U.S. Person (as that term is defined in Section 3(o) of this Agreement), then such Subscriber represents that the Subscriber is, and will be on the Closing Date, an “accredited investor”, as such term is defined in Regulation D promulgated by the Commission under the 1933 Act, is experienced in investments and business matters, has made investments of a speculative nature and has purchased securities of United States publicly-owned companies in private placements in the past and, with its representatives, has such knowledge and experience in financial, tax and other business matters as to enable such Subscriber to utilize the information made available by the Company to evaluate the merits and risks of and to make an informed investment decision with respect to the proposed purchase, which represents a speculative investment.  Such Subscriber has the authority and is duly and legally qualified to purchase and own the Purchased Securities.  Such Subscriber is able to bear the risk of such investment for an indefinite period and to afford a complete loss thereof.  The information set forth on the signature page hereto regarding such Subscriber is accurate.

(h)           Compliance with 1933 Act.   If a U.S. Person, such Subscriber understands and agrees that the Purchased Securities have not been registered under the 1933 Act or any applicable state securities laws, by reason of their issuance in a transaction that does not require registration under the 1933 Act (based in part on the accuracy of the representations and warranties of the Subscriber contained herein), and that such Purchased Securities must be held indefinitely unless a subsequent disposition is registered under the 1933 Act or any applicable state securities laws or is exempt from such registration.  The Subscriber acknowledges that the Subscriber is familiar with Rule 144 of the rules and regulations of the Commission, as amended, promulgated pursuant to the 1933 Act (“Rule 144”), and that such person has been advised that Rule 144 permits resales only under certain circumstances. The Subscriber understands that to the extent that Rule 144 is not available, the Subscriber will be unable to sell any Purchased Securities without either registration under the 1933 Act or the existence of another exemption from such registration requirement. In any event, and subject to compliance with applicable securities laws, the Subscriber may enter into lawful hedging transactions in the course of hedging the position they assume and the Subscriber may also enter into lawful short positions or other derivative transactions relating to the Purchased Securities, and deliver the Purchased Securities, to close out their short or other positions or otherwise settle other transactions, or loan or pledge the Purchased Securities, to third parties who in turn may dispose of these Purchased Securities.

(i)           Purchased Securities Legend.  The Purchased Securities shall bear the following or similar legend:

 

  

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“THE ISSUANCE AND SALE OF THE PURCHASED SECURITIES REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR APPLICABLE STATE SECURITIES LAWS.  THE PURCHASED SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE PURCHASED SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT, OR OTHERWISE.  NOTWITHSTANDING THE FOREGOING, THE PURCHASED SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE PURCHASED SECURITIES.”

 

(j)           Communication of Offer.  The offer to sell the Purchased Securities was directly communicated to such Subscriber by the Company.  At no time was such Subscriber presented with or solicited by any leaflet, newspaper or magazine article, radio or television advertisement, or any other form of general advertising or solicited or invited to attend a promotional meeting otherwise than in connection and concurrently with such communicated offer.

(k)           Restricted Securities.   Such Subscriber understands that the Purchased Securities have not been registered under the 1933 Act and such Subscriber will not sell, offer to sell, assign, pledge, hypothecate or otherwise transfer any of the Purchased Securities unless pursuant to an effective registration statement under the 1933 Act, or unless an exemption from registration is available.  Notwithstanding anything to the contrary contained in this Agreement, such Subscriber may transfer (without restriction and without the need for an opinion of counsel) the Purchased Securities to its Affiliates (as defined below) provided that each such Affiliate is an “accredited investor” under Regulation D and such Affiliate agrees to be bound by the terms and conditions of this Agreement. For the purposes of this Agreement, an “Affiliate” of any person or entity means any other person or entity directly or indirectly controlling, controlled by or under direct or indirect common control with such person or entity.  Affiliate includes each Subsidiary of the Company.  For purposes of this definition, “control” means the power to direct the management and policies of such person or firm, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.

(l)           No Governmental Review.   Such Subscriber understands that no United States federal or state agency or any other governmental or state agency has passed on or made recommendations or endorsement of the Purchased Securities or the suitability of the investment in the Purchased Securities nor have such authorities passed upon or endorsed the merits of the offering of the Purchased Securities.

 

  

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(m)           Correctness of Representations.  Such Subscriber represents that the foregoing representations and warranties are true and correct as of the date hereof and, unless such Subscriber otherwise notifies the Company prior to the Closing Date, shall be true and correct as of the Closing Date.  The Subscriber understands that the Purchased Securities are being offered and sold in reliance on a transactional exemption from the registration requirement of Federal and state securities laws and the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the Subscriber set forth herein in order to determine the applicability of such exemptions and the suitability of the Subscriber to acquire the Purchased Securities.

(n)           Short Sales and Confidentiality. Other than the transaction contemplated hereunder, the Subscriber has not directly or indirectly, nor has any person acting on behalf of or pursuant to any understanding with the Subscriber, executed any disposition, including short sales (but not including the location and/or reservation of borrowable shares of Common Stock), in the securities of the Company during the period commencing from the time that the Subscriber first received a term sheet from the Company or any other person setting forth the material terms of the transactions contemplated hereunder until the date that the transactions contemplated by this Agreement are first publicly announced as described in Section 6(m).  The Subscriber covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company as described in Section 6(m), the Subscriber will maintain the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).

(o)           Additional Representations, Warranties and Covenants of Non-U.S. Persons.

(i)           The Subscriber understands that the investment offered hereunder has not been registered under the 1933 Act.

(ii)           If the Subscriber is not a “U.S. Person” (as defined below), the Subscriber agrees and acknowledges that it was not, a “U.S. Person” at the time the Subscriber was offered the Purchased Securities and as of the date hereof:

          

	
  

	
(A)

	 Any natural person resident in the United States;

 

	
  

	
(B)

	
Any partnership or corporation organized or incorporated under the laws of the United States;

	
  

	
(C)

	
Any estate of which any executor or administrator is a U.S. person;

 

	
  

	
(D)

	Any trust of which any trustee is a U.S. person;

 

	
  

	
(E)

	
Any agency or branch of a foreign entity located in the United States;

	
  

	
(F)

	
Any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. person;

 

  

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(G)

	
Any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident of the United States; and

	
  

	
(H)

	
Any partnership or corporation if (i) organized or incorporated under the laws of any foreign jurisdiction and (ii) formed by a U.S. person principally for the purpose of investing in securities not registered under the 1933 Act, unless it is organized or incorporated, and owned, by accredited investors (as defined in Rule 501(a) of Regulation D promulgated under the 1933 Act) who are not natural persons, estates or trusts.

“United States” or “U.S.” means the United States of America, its territories and possessions, any State of the United States, and the District of Columbia.

(iii)          The Subscriber understands that no action has been or will be taken in any jurisdiction by the Company that would permit a public offering of the Purchased Securities in any country or jurisdiction where action for that purpose is required.

(iv)          The Subscriber (i) as of the execution date of this Agreement is not located within the United States, and (ii) is not purchasing the Purchased Securities for the account or benefit of any U.S. Person, except in accordance with one or more available exemptions from the registration requirements of the 1933 Act or in a transaction not subject thereto.

(v)           The Subscriber will not resell the Purchased Securities except in accordance with the provisions of Regulation S (Rule 901 through 905 and Preliminary Notes thereto), pursuant to a registration statement under the 1933 Act, or pursuant to an available exemption from registration; and agrees not to engage in hedging transactions with regard to such securities unless in compliance with the 1933 Act.

(vi)          The Subscriber will not engage in hedging transactions with regard to shares of the Company prior to the expiration of the distribution compliance period specified in Category 2 or 3 (paragraph (b)(2) or (b)(3)) in Rule 903 of Regulation S, as applicable, unless in compliance with the 1933 Act; and as applicable, shall include statements to the effect that the securities have not been registered under the 1933 Act and may not be offered or sold in the United States or to U.S. persons (other than distributors) unless the securities are registered under the 1933 Act, or an exemption from the registration requirements of the 1933 Act is available.

(vii)         No form of “directed selling efforts” (as defined in Rule 902 of Regulation S under the 1933 Act), general solicitation or general advertising in violation of the 1933 Act has been or will be used nor will any offers by means of any directed selling efforts in the United States be made by the Subscriber or any of their representatives in connection with the offer and sale of the Purchased Securities.

 

  

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4.           Company and GEEI Representations and Warranties.

 

4.1           The Company represents and warrants to and agrees with each Subscriber that:

 

(a)           Due Incorporation.  The Company is a corporation or other entity duly incorporated or organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization and has the requisite corporate power to own its properties and to carry on its business as presently conducted.  The Company is duly qualified as a foreign corporation to do business and is in good standing in each jurisdiction where the nature of the business conducted or property owned by it makes such qualification necessary, other than those jurisdictions in which the failure to so qualify would not have a Material Adverse Effect.  For purposes of this Agreement, a “Material Adverse Effect” means any material adverse effect on the business, operations, properties, or financial condition of the Company and its Subsidiaries individually, or in the aggregate 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 obligations under this Agreement in any material respect.  For purposes of this Agreement, “Subsidiary” means, with respect to any entity at any date, any corporation, limited or general partnership, limited liability company, trust, estate, association, joint venture or other business entity of which more than 30% of (i) the outstanding capital stock having (in the absence of contingencies) ordinary voting power to elect a majority of the board of directors or other managing body of such entity, (ii) in the case of a partnership or limited liability company, the interest in the capital or profits of such partnership or limited liability company or (iii) in the case of a trust, estate, association, joint venture or other entity, the beneficial interest in such trust, estate, association or other entity business is, at the time of determination, owned or controlled directly or indirectly through one or more intermediaries, by such entity.  As of the Closing Date, all of the Company’s Subsidiaries and the Company’s ownership interest therein are set forth on Schedule 4.1(a).

 

(b)           Outstanding Stock.  All issued and outstanding shares of capital stock and equity interests in the Company have been duly authorized and validly issued and are fully paid and non-assessable.

 

(c)           Authority; Enforceability.  This Agreement, the Certificate of Designations, the Escrow Agreement, the Lock-Up Agreements, the Stock Escrow Agreement, the Security Agreement, and any other agreements delivered together with this Agreement or in connection herewith (collectively, the “Transaction Documents”) have been duly authorized, executed and delivered by the Company and are valid and binding agreements of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights generally and to general principles of equity.  The Company has full corporate power and authority necessary to enter into and deliver the Transaction Documents and to perform its obligations thereunder.

 

  

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(d)           Capitalization and Additional Issuances. The authorized and outstanding capital stock of the Company and Subsidiaries on a fully diluted basis as of the date of this Agreement and the Closing Date (not including the Purchased Securities) are set forth on Schedule 4.1(d).  Except as set forth on Schedule 4(d), there are no options, warrants, or rights to subscribe to, securities, rights, understandings or obligations convertible into or exchangeable for or giving any right to subscribe for any shares of capital stock or other equity interest of the Company or any of the Subsidiaries.  The only officer, director, employee and consultant stock option or stock incentive plan or similar plan currently in effect or contemplated by the Company is described on Schedule 4.1(d).  There are no outstanding agreements or preemptive or similar rights affecting the Company’s common stock.

 

(e)           Consents.  No consent, approval, authorization or order of any court, governmental agency or body or arbitrator having jurisdiction over the Company, or any of its Affiliates, the Over The Counter Bulletin Board (the “Bulletin Board”) or the Company’s stockholders is required for the execution by the Company of the Transaction Documents and compliance and performance by the Company of its obligations under the Transaction Documents, including, without limitation, the issuance and sale of the Purchased Securities.  The Transaction Documents and the Company’s performance of its obligations thereunder have been unanimously approved by the Company’s Board of Directors.  No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any governmental authority in the world, including without limitation, the United States, or elsewhere is required by the Company or any Affiliate of the Company in connection with the consummation of the transactions contemplated by this Agreement, except as would not otherwise have a Material Adverse Effect or the consummation of any of the other agreements, covenants or commitments of the Company or any Subsidiary contemplated by the other Transaction Documents. Any such qualifications and filings will, in the case of qualifications, be effective on the Closing and will, in the case of filings, be made within the time prescribed by law.

 

(f)           No Violation or Conflict.  Assuming the representations and warranties of the Subscriber in Section 3 are true and correct, neither the issuance nor sale of the Purchased Securities nor the performance of the Company’s obligations under this Agreement and all other Transaction Documents entered into by the Company relating thereto will:

 

(i)           violate, conflict with, result in a breach of, or constitute a default (or an event which with the giving of notice or the lapse of time or both would be reasonably likely to constitute a default) under (A) the articles or certificate of incorporation, charter or bylaws of the Company, (B) to the Company’s knowledge, any decree, judgment, order, law, treaty, rule, regulation or determination applicable to the Company of any court, governmental agency or body, or arbitrator having jurisdiction over the Company or over the properties or assets of the Company or any of its Affiliates, (C) the terms of any bond, debenture, note or any other evidence of indebtedness, or any agreement, stock option or other similar plan, indenture, lease, mortgage, deed of trust or other instrument to which the Company or any of its Affiliates is a party, by which the Company or any of its Affiliates is bound, or to which any of the properties of the Company or any of its Affiliates is subject, or (D) the terms of any “lock-up” or similar provision of any underwriting or similar agreement to which the Company, or any of its Affiliates is a party except the violation, conflict, breach, or default of which would not have a Material Adverse Effect; or

 

  

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(ii)           result in the creation or imposition of any lien, charge or encumbrance upon the Purchased Securities or any of the assets of the Company or any of its Affiliates, except in favor of Subscriber as described herein; or

 

(iii)           result in the activation of any anti-dilution rights or a reset or repricing of any debt, equity or security instrument of any creditor or equity holder of the Company, or the holder of the right to receive any debt, equity or security instrument of the Company nor result in the acceleration of the due date of any obligation of the Company; or

 

(iv)          result in the triggering of any piggy-back or other registration rights of any person or entity holding securities of the Company or having the right to receive securities of the Company.

 

(g)           The Purchased Securities.  The Purchased Securities upon issuance:

 

(i)            are, or will be, free and clear of any security interests, liens, claims or other encumbrances, subject only to restrictions upon transfer under the 1933 Act and any applicable state securities laws;

(ii)           have been, or will be, duly and validly authorized and on the date of issuance of the Purchased Securities, the Purchased Securities will be duly and validly issued, fully paid and non-assessable;

 

(iii)          will not have been issued or sold in violation of any preemptive or other similar rights of the holders of any securities of the Company or rights to acquire securities of the Company; and

 

(iv)          will not subject the holders thereof to personal liability by reason of being such holders.

 

(h)           Litigation.  Except as disclosed in the Reports, there is no pending or, to the best knowledge of the Company, threatened action, suit, proceeding or investigation before any court, governmental agency or body, or arbitrator having jurisdiction over the Company, or any of its Affiliates that would affect the execution by the Company or the complete and timely performance by the Company of its obligations under the Transaction Documents.  There is no pending or, to the best knowledge of the Company, basis for or threatened action, suit, proceeding or investigation before any court, governmental agency or body, or arbitrator having jurisdiction over the Company, or any of its Affiliates which litigation if adversely determined would have a Material Adverse Effect.

 

(i)           No Market Manipulation.  The Company and its Affiliates have not taken, and will not take, directly or indirectly, any action designed to, or that might reasonably be expected to, cause or result in stabilization or manipulation of the price of the Common Stock to facilitate the sale or resale of the Purchased Securities or affect the price at which the Purchased Securities may be issued or resold.

 

  

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(j)           Information Concerning Company.  The Reports contain all material information relating to the Company and its operations and financial condition as of their respective dates which information is required to be disclosed therein.   Since March 31, 2013 and except as modified in the Reports or in the Schedules hereto, there has been no Material Adverse Effect relating to the Company’s business, financial condition or affairs. The Reports, including the financial statements included therein do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, taken as a whole, not misleading in light of the circumstances and when made.

 

(k)           Defaults.  The Company is not in material violation of its articles of incorporation or bylaws.   The Company is (i) not in default under or in violation of any other material agreement or instrument to which it is a party or by which it or any of its properties are bound or affected, which default or violation would have a Material Adverse Effect, (ii) not in default with respect to any order of any court, arbitrator or governmental body or subject to or party to any order of any court or governmental authority arising out of any action, suit or proceeding under any statute or other law respecting antitrust, monopoly, restraint of trade, unfair competition or similar matters which default would have a Material Adverse Effect, or (iii) not in violation of any statute, rule or regulation of any governmental authority which violation would have a Material Adverse Effect.

 

(l)           No Integrated Offering.   Neither the Company, nor any of its Affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales of any security of the Company nor solicited any offers to buy any security of the Company under circumstances that would cause the offer of the Purchased Securities pursuant to this Agreement to be integrated with prior offerings by the Company for purposes of the 1933 Act or any applicable stockholder approval provisions.  No prior offering will impair the exemptions relied upon in this Offering or the Company’s ability to timely comply with its obligations hereunder.  Neither the Company nor any of its Affiliates will take any action or steps that would cause the offer or issuance of the Purchased Securities to be integrated with other offerings which would impair the exemptions relied upon in this Offering or the Company’s ability to timely comply with its obligations hereunder.  The Company will not conduct any offering other than the transactions contemplated hereby that may be integrated with the offer or issuance of the Purchased Securities that would impair the exemptions relied upon in this Offering or the Company’s ability to timely comply with its obligations hereunder.

 

(m)          No General Solicitation.  Neither the Company, nor any of its Affiliates, nor to its knowledge, any person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D/Regulation S under the 1933 Act) in connection with the offer or sale of the Purchased Securities.

 

(n)           No Undisclosed Liabilities.  Since March 31, 2013, except as disclosed in the Reports, the Company has no liabilities or obligations which are material, individually or in the aggregate, other than those incurred in the ordinary course of the Company businesses since March 31, 2013 and which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect, except as disclosed in the Reports or on Schedule 4.1(n).

 

(o)           No Undisclosed Events or Circumstances.  Since March 31, 2013, except as disclosed in the Reports, no event or circumstance has occurred or exists with respect to the Company or its businesses, properties, operations or financial condition, that, under 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 the Reports.

 

  

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(p)          Dilution.   The Company’s executive officers and directors understand the nature of the Purchased Securities being sold hereby and recognize that the issuance of the Purchased Securities will have a potential dilutive effect on the equity holdings of other holders of the Company’s equity or rights to receive equity of the Company.  The board of directors of the Company has concluded, in its good faith business judgment that the issuance of the Purchased Securities is in the best interests of the Company.  The Company specifically acknowledges that its obligation to issue the Purchased Securities is binding upon the Company and enforceable regardless of the dilution such issuance may have on the ownership interests of other shareholders of the Company or parties entitled to receive equity of the Company.

 

(q)           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 Company and the accountants and lawyers previously and presently employed by the Company, including, but not limited to, disputes or conflicts over payment owed to such accountants and lawyers, nor have there been any such disagreements during the two years prior to the Closing Date, in each case, that could cause a Material Adverse Effect.

(r)           Foreign Corrupt Practices.  Neither the Company, nor to the knowledge of the Company, any agent or other person acting on behalf of the Company, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is  in violation of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.

(s)           Reporting Company.  The Company is a publicly-held company subject to reporting obligations pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the “1934 Act”).  Pursuant to the provisions of the 1934 Act, the Company has timely filed all reports and other materials required to be filed thereunder with the Commission during the preceding twelve months.

(t)           Listing.  The Company’s common stock is quoted on the Bulletin Board currently under the symbol “EPSO.”  The Company has not received any oral or written notice that its common stock is not eligible nor will become ineligible for quotation on the Bulletin Board nor that its common stock does not meet all requirements for the continuation of such quotation.  The Company satisfies all the requirements for the continued quotation of its common stock on the Bulletin Board.

(u)           Transfer Agent.   The name, address, telephone number, fax number, contact person and email address of the Company transfer agent is set forth on Schedule 4.1(u) hereto.

 

  

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(w)          Employees. Neither the Company nor any Subsidiary has any collective bargaining arrangements or agreements covering any of its employees. Neither the Company nor any Subsidiary has any employment contract, agreement regarding proprietary information, non-competition agreement, non-solicitation agreement, confidentiality agreement, or any other similar contract or restrictive covenant, relating to the right of any officer, employee or consultant to be employed or engaged by the Company or such Subsidiary required to be disclosed with the Commission under the Securities Exchange Act of 1934, as amended (the “1934 Act”) on Form 8-K that is not so disclosed. To the knowledge of the Company, no officer, consultant or key employee of the Company or any Subsidiary whose termination, either individually or in the aggregate, would have a Material Adverse Effect, has terminated or, to the knowledge of the Company, has any present intention of terminating his or her employment or engagement with the Company or any Subsidiary.

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

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

(z)           Independent Nature of Subscribers. The Company acknowledges that the obligations of each Subscriber under the Transaction Documents are several and not joint with the obligations of any other Subscriber, and no Subscriber shall be responsible in any way for the performance of the obligations of any other Subscriber under the Transaction Documents. The Company acknowledges that the decision of each Subscriber to purchase securities pursuant to this Agreement has been made by such Subscriber independently of any other Subscriber and independently of any information, materials, statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial or otherwise) or prospects of the Company or of its Subsidiaries which may have been made or given by any other Subscriber or by any agent or employee of any other Subscriber, and no Subscriber or any of its agents or employees shall have any liability to any Subscriber (or any other person) relating to or arising from any such information, materials, statements or opinions. The Company acknowledges that nothing contained herein, or in any Transaction Documents, and no action taken by any Subscriber pursuant hereto or thereto, shall be deemed to constitute the Subscribers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Subscribers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. The Company acknowledges that each Subscriber shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Subscriber to be joined as an additional party in any proceeding for such purpose.

 

  

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(aa)         OFAC. Neither the Company nor any of its Subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee, Affiliate or person acting on behalf of any of the Company or any of its Subsidiaries, is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of the sale of the Purchased Securities, or lend, contribute or otherwise make available such proceeds to any subsidiary of the Company, joint venture partner or other person or entity, towards any sales or operations in Cuba, Iran, Syria, Sudan, Myanmar or any other country sanctioned by OFAC or for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

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

(cc)         Correctness of Representations.  The Company represents that the foregoing representations and warranties are true and correct as of the date hereof in all material respects, and, unless the Company otherwise notifies the Subscribers prior to the Closing Date, shall be true and correct in all material respects as of the Closing Date; provided, that, if such representation or warranty is made as of a different date, in which case such representation or warranty shall be true as of such date.

 

(dd)         Survival.  The foregoing representations and warranties shall survive for a period of two years after the Closing Date.

 

(ee)         No Brokers.  Neither the Company nor any Subsidiary has taken any action which would give rise to any claim by any person for brokerage commissions, finder’s fees or similar payments relating to this Agreement or the transactions contemplated hereby, except for dealings with the Placement Agents, whose commissions and fees will be paid by the Company and except as set forth on Schedule 4(ee).

 

  

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4.2           GEEI represents and warrants to and agrees with each Subscriber that:

 

(a)           Due Incorporation.  GEEI is a corporation or other entity duly incorporated or organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization and has the requisite corporate power to own its properties and to carry on its business as presently conducted.  GEEI is duly qualified as a foreign corporation to do business and is in good standing in each jurisdiction where the nature of the business conducted or property owned by it makes such qualification necessary, other than those jurisdictions in which the failure to so qualify would not have a Material Adverse Effect. As of the Closing Date, all of GEEI’s Subsidiaries and GEEI’s ownership interest therein are set forth on Schedule 4.2(a).

 

(b)           Outstanding Stock.  All issued and outstanding shares of capital stock and equity interests in GEEI have been duly authorized and validly issued and are fully paid and non-assessable.

 

(c)           Authority; Enforceability.  The Transaction Documents have been duly authorized, executed and delivered by GEEI and are valid and binding agreements of GEEI enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights generally and to general principles of equity.  GEEI has full corporate power and authority necessary to enter into and deliver the Transaction Documents and to perform its obligations thereunder.

 

 (d)          Consents.  No consent, approval, authorization or order of any court, governmental agency or body or arbitrator having jurisdiction over GEEI, or any of its Affiliates or GEEI’s shareholders is required for the execution by GEEI of the Transaction Documents and compliance and performance by GEEI of its obligations under the Transaction Documents, including, without limitation, the issuance and sale of the Purchased Securities.  The Transaction Documents and GEEI’s performance of its obligations thereunder have been unanimously approved by GEEI’s Board of Directors.  No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any governmental authority in the world, including without limitation, the United States, or elsewhere is required by GEEI or any Affiliate of GEEI in connection with the consummation of the transactions contemplated by this Agreement, except as would not otherwise have a Material Adverse Effect or the consummation of any of the other agreements, covenants or commitments of GEEI or any Subsidiary contemplated by the other Transaction Documents. Any such qualifications and filings will, in the case of qualifications, be effective on the Closing and will, in the case of filings, be made within the time prescribed by law.

 

(e)           No Violation or Conflict.  Assuming the representations and warranties of the Subscriber in Section 3 are true and correct, neither the issuance nor sale of the Purchased Securities nor the performance of GEEI’s obligations under this Agreement and all other Transaction Documents entered into by GEEI relating thereto will:

 

  

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(i)           violate, conflict with, result in a breach of, or constitute a default (or an event which with the giving of notice or the lapse of time or both would be reasonably likely to constitute a default) under (A) the articles or certificate of incorporation, charter or bylaws of GEEI, (B) to GEEI’s knowledge, any decree, judgment, order, law, treaty, rule, regulation or determination applicable to GEEI of any court, governmental agency or body, or arbitrator having jurisdiction over GEEI or over the properties or assets of GEEI or any of its Affiliates, (C) the terms of any bond, debenture, note or any other evidence of indebtedness, or any agreement, stock option or other similar plan, indenture, lease, mortgage, deed of trust or other instrument to which GEEI or any of its Affiliates is a party, by which GEEI or any of its Affiliates is bound, or to which any of the properties of GEEI or any of its Affiliates is subject, or (D) the terms of any “lock-up” or similar provision of any underwriting or similar agreement to which GEEI, or any of its Affiliates is a party except the violation, conflict, breach, or default of which would not have a Material Adverse Effect; or

 

(ii)           result in the creation or imposition of any lien, charge or encumbrance upon the Purchased Securities or any of the assets of GEEI or any of its Affiliates except in favor of Subscriber as described herein; or

 

(iii)           result in the activation of any anti-dilution rights or a reset or repricing of any debt, equity or security instrument of any creditor or equity holder of GEEI, or the holder of the right to receive any debt, equity or security instrument of GEEI nor result in the acceleration of the due date of any obligation of GEEI; or

 

(iv)          result in the triggering of any piggy-back or other registration rights of any person or entity holding securities of GEEI or having the right to receive securities of GEEI.

 

(f)            Litigation.  There is no pending or, to the best knowledge of GEEI, threatened action, suit, proceeding or investigation before any court, governmental agency or body, or arbitrator having jurisdiction over GEEI, or any of its Affiliates that would affect the execution by GEEI or the complete and timely performance by GEEI of its obligations under the Transaction Documents.  Except as disclosed in the Reports, there is no pending or, to the best knowledge of GEEI, basis for or threatened action, suit, proceeding or investigation before any court, governmental agency or body, or arbitrator having jurisdiction over GEEI, or any of its Affiliates which litigation if adversely determined would have a Material Adverse Effect.

 

(g)           No Market Manipulation.  GEEI and its Affiliates have not taken, and will not take, directly or indirectly, any action designed to, or that might reasonably be expected to, cause or result in stabilization or manipulation of the price of the common stock to facilitate the sale or resale of the Purchased Securities or affect the price at which the Purchased Securities may be issued or resold.

 

(h)           Defaults.  GEEI is not in material violation of its articles of incorporation or bylaws.   GEEI is (i) not in default under or in violation of any other material agreement or instrument to which it is a party or by which it or any of its properties are bound or affected, which default or violation would have a Material Adverse Effect, (ii) not in default with respect to any order of any court, arbitrator or governmental body or subject to or party to any order of any court or governmental authority arising out of any action, suit or proceeding under any statute or other law respecting antitrust, monopoly, restraint of trade, unfair competition or similar matters which default would have a Material Adverse Effect, or (iii) not in violation of any statute, rule or regulation of any governmental authority which violation would have a Material Adverse Effect.

 

  

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(i)           No General Solicitation.  Neither GEEI, nor any of its Affiliates, nor to its knowledge, any person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D/Regulation S under the 1933 Act) in connection with the offer or sale of the Purchased Securities.

 

(j)           No Undisclosed Liabilities.  GEEI has no liabilities or obligations which are material, individually or in the aggregate, other than those incurred in the ordinary course of GEEI businesses and which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect, except as disclosed in Schedule 4.2(j).

(k)           Foreign Corrupt Practices.  Neither GEEI, nor to the knowledge of GEEI, any agent or other person acting on behalf of GEEI, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by GEEI (or made by any person acting on its behalf of which GEEI is aware) which is  in violation of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.

(l)           Independent Nature of Subscribers. GEEI acknowledges that the obligations of each Subscriber under the Transaction Documents are several and not joint with the obligations of any other Subscriber, and no Subscriber shall be responsible in any way for the performance of the obligations of any other Subscriber under the Transaction Documents. GEEI acknowledges that the decision of each Subscriber to purchase securities pursuant to this Agreement has been made by such Subscriber independently of any other Subscriber and independently of any information, materials, statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial or otherwise) or prospects of GEEI or of its Subsidiaries which may have been made or given by any other Subscriber or by any agent or employee of any other Subscriber, and no Subscriber or any of its agents or employees shall have any liability to any Subscriber (or any other person) relating to or arising from any such information, materials, statements or opinions. GEEI acknowledges that nothing contained herein, or in any Transaction Documents, and no action taken by any Subscriber pursuant hereto or thereto, shall be deemed to constitute the Subscribers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Subscribers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. GEEI acknowledges that each Subscriber shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Subscriber to be joined as an additional party in any proceeding for such purpose.

(m)           PFIC.  Neither GEEI nor any of its Subsidiaries is or intends to become a “passive foreign investment company” within the meaning of Section 1297 of the U.S. Internal Revenue Code of 1986, as amended.

 

  

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(n)           OFAC. Neither GEEI nor any of its Subsidiaries nor, to the knowledge of GEEI, any director, officer, agent, employee, Affiliate or person acting on behalf of any of GEEI or any of its Subsidiaries, is currently subject to any U.S. sanctions administered by OFAC; and GEEI will not directly or indirectly use the proceeds of the sale of the Purchased Securities, or lend, contribute or otherwise make available such proceeds to any subsidiary of GEEI, joint venture partner or other person or entity, towards any sales or operations in Cuba, Iran, Syria, Sudan, Myanmar or any other country sanctioned by OFAC or for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

(o)           Money Laundering Laws. The operations of each of GEEI and its Subsidiaries are and have been conducted at all times in compliance with the money laundering requirements of all applicable Money Laundering Laws and no action, suit or proceeding by or before any court or governmental authority or any arbitrator involving any of GEEI or any of its Subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge of GEEI, threatened.

(p)           Correctness of Representations.  GEEI represents that the foregoing representations and warranties are true and correct as of the date hereof in all material respects, and, unless GEEI otherwise notifies the Subscribers prior to the Closing Date, shall be true and correct in all material respects as of the Closing Date; provided, that, if such representation or warranty is made as of a different date, in which case such representation or warranty shall be true as of such date.

 

(q)           No Brokers.  Neither GEEI nor any Subsidiary has taken any action which would give rise to any claim by any person for brokerage commissions, finder’s fees or similar payments relating to this Agreement or the transactions contemplated hereby, except for dealings with the Placement Agent, whose commissions and fees will be paid by GEEI.

 

5.           Regulation D/Regulation S Offering.  The offer and issuance of the Purchased Securities to the Subscribers is being made pursuant to the exemption from the registration provisions of the 1933 Act afforded by Section 4(2) or Section 4(6) of the 1933 Act or Rule 506 of Regulation D and/or Regulation S promulgated thereunder.

 

6.           Covenants of the Company.  The Company covenants and agrees with the Subscribers as follows:

 

(a)           Stop Orders.  Subject to the prior notice requirement described in Section 6(n), the Company will advise the Subscribers, within twenty-four hours after it receives notice of issuance by the Commission, any state securities commission or any other regulatory authority of any stop order or of any order preventing or suspending any offering of any securities of the Company, or of the suspension of the qualification of the common stock of the Company for offering or sale in any jurisdiction, or the initiation of any proceeding for any such purpose.  The Company will not issue any stop transfer order or other order impeding the sale, resale or delivery of any of the Purchased Securities, except as may be required by any applicable federal or state securities laws and unless contemporaneous notice of such instruction is given to the Subscribers.

 

(b)           Listing/Quotation.  The Company will maintain the quotation or listing of its common stock on the Nasdaq Capital Market, Nasdaq Global Market, Nasdaq Global Select Market, Bulletin Board, OTCQB or New York Stock Exchange (whichever of the foregoing is at the time the principal trading exchange or market for the common stock (the “Principal Market”), and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Principal Market, as applicable, as long as any Purchased Securities are outstanding.

 

  

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(c)           Market Regulations.  If required, the Company shall notify the Commission, the Principal Market and applicable state authorities, in accordance with their requirements, of the transactions contemplated by this Agreement, and shall take all other necessary action and proceedings as may be required and permitted by applicable law, rule and regulation, for the legal and valid issuance of the Purchased Securities to the Subscribers and promptly provide copies thereof to the Subscribers.

 

(d)           Filing Requirements.  From the date of this Agreement and until the last to occur of (i) two (2) years after the final Closing Date, or (ii) the date when the Purchased Securities can be resold or transferred by the Subscribers pursuant to Rule 144 (the date of such latest occurrence being the “End Date”), the Company will comply in all respects with its reporting and filing obligations under the 1934 Act.  The Company will use its best efforts not to take any action or file any document (whether or not permitted by the 1933 Act or the 1934 Act or the rules thereunder) to terminate or suspend its reporting and filing obligations under said acts until the End Date.  Until all of the Purchased Securities are sold by the Subscriber, the Company will continue the listing or quotation of the Common Stock on a Principal Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Principal Market.

 

(e)           Use of Proceeds.  The proceeds of the Offering will be employed by the Company for expenses of the Offering, for the purposes set forth on Schedule 6(e) and general working capital.  Except as described on Schedule 6(e), the Purchase Price may not and will not be used for accrued and unpaid officer and director salaries, payment of financing related debt, redemption of outstanding notes or equity instruments of the Company nor non-trade obligations outstanding on the Closing Date. Contingent upon and promptly after a Closing with respect to the sale of Shares under the Offering for at least USD$500,000, GEEI shall make a payment of USD$412,500 to BHL under the Option Agreement to be used towards payment of the outstanding obligations of BHL to Carapetta Investments LTD under an Agreement of Purchase and Sale of Shares by and between BHL and Carapetta Investments LTD attached as Exhibit B to the Option Agreement. The payment of USD412,500 by GEEI to BHL will be secured by the pledge of all the issued and outstanding shares of BHL by BHL’s stockholders pursuant to the Security Agreement. The payments by BHL to Carapetta Investments LTD under the Agreement of Purchase and Sale of Shares are secured primarily by the assets of the two indirect operating subsidiaries of Carapetta Investments LTD, Limited Liability Company NPK-KONTAKT and Limited Liability Company “LIZPROMGAZ,” pursuant to a series of mortgages of real estate properties and pledges of movable assets. The value assigned by the parties to such assets is $675,529. To the best knowledge of GEEI and the Company, such value was determined arbitrarily and is not indicative of the market value of such assets.

 

 (f)           Taxes.  The Company will promptly pay and discharge, or cause to be paid and discharged, when due and payable, all lawful taxes, assessments and governmental charges or levies imposed upon the income, profits, property or business of the Company; provided, however, that any such tax, assessment, charge or levy need not be paid if the validity thereof shall currently be contested in good faith by appropriate proceedings and if the Company shall have set aside on its books adequate reserves with respect thereto, and provided, further, that the Company will pay all such taxes, assessments, charges or levies forthwith upon the commencement of proceedings to foreclose any lien which may have attached as security therefore.

 

  

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(g)           DTC Program.  Within fifteen (15) business days of closing of the Combination, the Company shall become eligible for and apply to DTC's "FAST" program. The Company shall become a DTC FAST participant within sixty (60) days of closing of the Combination, and will, for a period of at least two (2) years from the final Closing Date, employ as the transfer agent for the Purchased Securities a participant in the Depository Trust Company Automated Securities Transfer Program that is eligible to deliver shares via the Deposit Withdrawal Agent Commission System.

 

(h)           Books and Records.  The Company will keep true records and books of account in which full, true and correct entries will be made of all dealings or transactions in relation to its business and affairs in accordance with generally accepted accounting principles applied on a consistent basis.

 

(i)            Governmental Authorities.  The Company shall duly observe and conform in all material respects to all valid requirements of governmental authorities relating to the conduct of its business or to its properties or assets.

 

(j)            Registration Statements on Form S-8.  Until twelve (12) months after the initial Closing Date, the Company will not, without the consent of the Majority Holders, file with the United States Securities and Exchange Commission (the “SEC”) any registration statements on Form S-8.

 

7.           Indemnification.

(a)           In consideration of each Investor's execution and delivery of the Transaction Documents and acquiring the Securities thereunder and in addition to all of the Company's other obligations under the Transaction Documents, the Company shall defend, protect, indemnify and hold harmless each Subscriber and each holder of any Purchased Securities and all of their stockholders, partners, members, officers, directors, employees and direct or indirect investors and any of the foregoing Persons' agents or other representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the "Indemnitees") from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys' fees and disbursements (the "Indemnified Liabilities"), incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the Company or any of its Subsidiaries in any of the Transaction Documents, (b) any breach of any covenant, agreement or obligation of the Company or any of its Subsidiaries contained in any of the Transaction Documents or (c) any cause of action, regulatory action, suit or claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company or any of its Subsidiaries or any cause of action, suit or claim filed by another shareholder, whether presently a shareholder or not, of the Company) and arising out of, resulting from, or relating to  the execution, delivery, performance, enforcement, or act or omission of any Indemnitee relating to any rights or obligations arising from or as a result of any Transaction Documents.

 

  

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(b)           The Subscribers agree to indemnify, hold harmless, and reimburse the Company, the Company's officers, directors, agents, Affiliates, members, managers, control persons, and principal shareholders, against any claim, cost, expense, liability, obligation, loss or damage (including reasonable legal fees) of any nature, incurred by or imposed upon them or any such person which results, arises out of or is based upon liability that occurs as a result of an adjudication or finding by a court of competent jurisdiction of a material misrepresentation by the Subscribers in this Agreement or in any Exhibits or Schedules attached hereto or in any Transaction Documents. Notwithstanding the forgoing, in no event shall the liability of the Subscriber or permitted successor hereunder, or under any Transaction Documents or other agreement delivered in connection herewith, exceed the Purchase Price paid by such Subscriber.

(c)           Each person entitled to indemnification under this Section 7 (for the purpose of this Section 7(c) only, an "Indemnified Party") shall give notice as promptly as reasonably practicable to each party required to provide indemnification under this Section 7 (for the purpose of this Section 7(c) only, an "Indemnifying Party") of any action commenced against or by it in respect of which indemnity may be sought hereunder, but failure to so notify an Indemnifying Party shall not release such Indemnifying Party from any liability that it may have, otherwise than on account of this indemnity agreement so long as such failure shall not have materially prejudiced the position of the Indemnifying Party. Upon such notification, the Indemnifying Party shall assume the defense of such action if it is a claim brought by a third party, and after such assumption the Indemnifying Party shall not be entitled to reimbursement of any expenses incurred by it in connection with such action except as described below. In any such action, any Indemnified Party shall have the right to retain its own counsel.   The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent (which shall not be unreasonably withheld or delayed by such Indemnifying Party), but if settled with such consent or if there be final judgment for the plaintiff, the Indemnifying Party shall indemnify the Indemnified Party from and against any loss, damage or liability by reason of such settlement or judgment.

 

8.           Anti-dilution and Purchase Rights.

(a)           Right of Participation.   For twelve months after the Closing, the Subscribers shall have the right to purchase up to 25% of the securities offered by the Company in any subsequent offering (the “Follow-On Financing”) upon the same terms as offered to all other offerees. The Subscribers shall be given not less than ten Business Days prior written notice (the “Notice of Sale”) of any proposed Follow-On Financing and shall have the right during the ten Business Days following receipt of the Notice of Sale to purchase the securities offered in the Follow-On Financing.

 

  

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(b)           Anti-Dilution Adjustment.   Other than in connection with Excepted Issuances (as such term is defined in the last sentence of this Section 8(b)), if within twelve months following the initial Closing of the sale of Shares in the Offering, the Company shall issue without the consent of the Majority Holders any Common Stock or securities convertible into or exercisable for shares of Common Stock (or modify the conversion or exercise price of any of the foregoing which may be outstanding) to any person or entity at a price per share which shall be less than 100% of the price per share of the Shares purchased by such Subscriber (including any issuances of securities in connection with the closing of a registered primary offering of any securities of the Company in any jurisdiction), subject to adjustment for stock dividends, subdivisions and combinations (the “Lower Price Issuance”), then the Company shall issue, for each such occasion, additional shares of Common Stock to the Subscriber respecting the Purchased Securities that are then still owned by the Subscriber at the time of the Lower Price Issuance so that the average per share purchase price of the Purchased Securities owned by the Subscriber on the date of the Lower Price Issuance plus such additional shares issued to Subscriber pursuant to this Section 8(b) is equal to such other lower price per share.  The delivery to Subscriber of the additional shares of Common Stock shall be not later than the 5 Business Days after the closing date of the transaction giving rise to the requirement to issue additional shares of Common Stock.  For purposes of the issuance and adjustment described in this Section 8(b), in the case of the issuance of securities convertible into or exercisable for shares of Common Stock, the price per share shall be deemed to be the quotient obtained by dividing (i) the sum of (A) the price paid for such derivative security plus (B) the aggregate amount of consideration to be paid upon conversion or exercise price of such security for the maximum number of shares for which the derivative security may be converted or exercised, by (ii) the total number of shares of common stock issuable upon conversion or exercise price of such security for the maximum number of shares for which the derivative security may be converted or exercised. The adjustment described in this Section 8(b) shall be made immediately upon the earlier of (x) the issuance of the derivative security or (y) the Company entering into an agreement to issue the derivative security, in each case at a price lower than the price per Share in the Offering (which price is subject to adjustment for stock dividends, subdivisions and combinations), but such adjustment shall not be made again upon any issuance of shares of Common Stock upon conversion of such derivative security. Any Common Stock or derivative security issued or issuable by the Company for no consideration or for consideration that cannot be determined at the time of issuance will be deemed issuable or to have been issued for $0.01 per share of Common Stock.  The rights of Subscriber set forth in this Section 8 are in addition to any other rights the Subscriber has pursuant to this Agreement, any Transaction Documents, and any other agreement referred to or entered into in connection herewith or to which Subscriber and Company are parties.  For purposes hereof, “Excepted Issuances” means the (i) Company’s issuances of securities  comprising the full or partial consideration in connection with a strategic merger, acquisition, consolidation or purchase of substantially all of the securities or assets of a corporation or other entity that has been approved by a majority of disinterested directors of the Company and in which holders of such securities or debt are not at any time granted registration rights, (ii) the Company’s issuance of securities in connection with strategic license agreements and other partnering arrangements so long as such issuances are not for the purpose of raising capital and which holders of such securities or debt are not at any time granted registration rights, (iii) the Company’s issuance of common stock or its issuances or grants of options to purchase common stock to employees, directors, and officers of the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose, and (iv) the Company’s issuances of securities upon the exercise or exchange of or conversion of any securities exercisable or exchangeable for or convertible into shares of common stock issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities.

 

  

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9.           Closing Conditions.

 

(a)           The obligation hereunder of the Subscriber to acquire and pay for the Purchased Securities is subject to the satisfaction or waiver, at or before the Closing, of each of the conditions set forth below. These conditions are for the Subscriber’s sole benefit and may be waived by the Subscriber at any time in its sole discretion.

 

(i)           The representations and warranties of the Company contained in this Agreement shall have been true and correct on the date of this Agreement and shall be true and correct on the Closing Date as if given on and as of the Closing Date (except for representations given as of a specific date, which representations shall be true and correct as of such date), and on or before the Closing Date the Company shall have performed all covenants and agreements of the Company contained herein or in any of the other Transaction Documents required to be performed by the Company on or before the Closing Date;

(ii)           The Transaction Documents have been duly executed and delivered by the Company to the Escrow Agent;

(iii)          On the Closing Date, the Subscriber shall have received an opinion of Astapov Lawyers, Ukrainian counsel for the Company, dated the Closing Date, addressed to the Subscribers, in the form attached as Exhibit F.

(b)           The obligation hereunder of the Company to issue and sell the Purchased Securities to the Subscriber is subject to the satisfaction or waiver, at or before the Closing, of each of the conditions set forth below. These conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion.

(i)           The representations and warranties of the Subscriber in this Agreement and each of the other Transaction Documents to which the Subscriber is a party shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at that time, except for representations and warranties that are expressly made as of a particular date, which shall be true and correct in all material respects as of such date;

(ii)           The Purchase Price for the Purchased Securities has been delivered to the escrow account maintained by Signature Bank (the “Escrow Agent”); and

(iii)          The Transaction Documents to which the Subscriber is a party have been duly executed and delivered by the Subscriber to the Company.

10.           Miscellaneous.

 

(a)           Notices.  All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice.  Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a Business Day during normal business hours where such notice is to be received), or the first Business Day following such delivery (if delivered other than on a Business Day during normal business hours where such notice is to be received) or (b) on the second Business Day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

 

  

25

  

 

If to the Company, to:

Epsilon Corp.

Attn: Chairman

173 Keith Street, Suite 300

Warrenton, VA 20186

Facsimile: (540) 347-2291

With a copy by fax only to (which copy shall not constitute notice):

Ofsink, LLC

900 Third Avenue, 5th Floor

New York, New York 10022

Attn: Darren L. Ofsink, Esq.

Facsimile:  (212) 224-9844

If to the Subscribers:

To each of the addresses and facsimile numbers listed on the signature pages of this Agreement

 

(b)           Entire Agreement; Amendment. This Agreement and the other Transaction Documents contain the entire understanding and agreement of the parties with respect to the matters covered hereby and, except as specifically set forth herein or in the Transaction Documents, neither the Company nor any of the Subscribers makes any representations, warranty, covenant or undertaking with respect to such matters and they supersede all prior understandings and agreements with respect to said subject matter, all of which are merged herein. No provision of this Agreement nor any of the Transaction Documents may be waived or amended other than by a written instrument signed by the Company and the holders of at least fifty one percent (51%) of the total number of Shares purchased in the Offering and then held by the holders (the “Majority Holders”), and no provision hereof may be waived other than by a written instrument signed by the Majority Holders. No such amendment shall be effective to the extent that it applies to less than all of the holders of the Shares then outstanding. No consideration shall be offered or paid to any person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration is also offered to all of the parties to the Transaction Documents or holders of Purchased Shares, as the case may be.

 

  

26

  

 

 (c)           Counterparts/Execution.  This Agreement may be executed in any number of counterparts and by the different signatories hereto on separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument.  This Agreement may be executed by facsimile transmission, PDF, electronic signature or other similar electronic means with the same force and effect as if such signature page were an original thereof.

 

(d)           Law Governing this Agreement; Arbitration.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The parties undertake to keep confidential all awards and orders in their arbitration, together with all materials in the proceedings created for the purpose of the arbitration and all other documents produced by another party in the proceedings not otherwise in the public domain – save and to the extent that disclosure may be required of a party by legal duty, including any reporting obligations of the Company under the Securities Exchange Act of 1934, as amended, to protect or pursue a legal right or to enforce or challenge an award in bona fide legal proceedings before a state court or other judicial authority.

 

(f)           Damages.  In the event the Subscriber is entitled to receive any liquidated damages pursuant to the Transaction Documents, the Subscriber may elect to receive the greater of actual damages or such liquidated damages.

 

(g)           Maximum Payments.  Nothing contained herein or in any document referred to herein or delivered in connection herewith shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law.  In the event that the rate of interest or dividends required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Company to the Subscriber and thus refunded to the Company.

 

(h)           Calendar Days and Business Days.  All references to “days” in the Transaction Documents shall mean calendar days unless otherwise stated.  The term “Business Day” shall mean days that the New York Stock Exchange is open for trading for three or more hours.  Time periods shall be determined as if the relevant action, calculation or time period were occurring in New York City.  Any deadline that falls on a non-Business Day in any of the Transaction Documents shall be automatically extended to the next Business Day and interest, if any, shall be calculated and payable through such extended period.

 

  

27

  

 

(i)           Captions: Certain Definitions.  The captions of the various sections and paragraphs of this Agreement have been inserted only for the purposes of convenience; such captions are not a part of this Agreement and shall not be deemed in any manner to modify, explain, enlarge or restrict any of the provisions of this Agreement.  As used in this Agreement the term “person” shall mean and include an individual, a partnership, a joint venture, a corporation, a limited liability company, a trust, an unincorporated organization and a government or any department or agency thereof.

 

(j)           Severability.  In the event that any term or provision of this Agreement shall be finally determined to be superseded, invalid, illegal or otherwise unenforceable pursuant to applicable law by an authority having jurisdiction and venue, that determination shall not impair or otherwise affect the validity, legality or enforceability: (i) by or before that authority of the remaining terms and provisions of this Agreement, which shall be enforced as if the unenforceable term or provision were deleted, or (ii) by or before any other authority of any of the terms and provisions of this Agreement.

 

 

 

 

[Signature Pages Follow]

 

  

28

  

 

SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT

Please acknowledge your acceptance of the foregoing Subscription Agreement with Epsilon Corp. by signing and returning a copy to the Company whereupon it shall become a binding agreement.

 

	NUMBER OF SHARES 	 	x	 $56.00 =	 	(the “Purchase Price”) 

 

 

	
___________________________________

	
_____________________________________

	
Signature

	
Signature (if purchasing jointly)

	  	  
	
___________________________________

	
_____________________________________

	
Name Typed or Printed

	
Name Typed or Printed

	  	  
	
___________________________________

	
_____________________________________

	
Entity Name

	
Entity Name

	  	  
	
___________________________________

	
_____________________________________

	
Address

	
Address

	  	  
	
___________________________________

	
_____________________________________

	
City, State and Zip Code/Country

	
City, State and Zip Code/Country

	  	  
	
___________________________________

	
_____________________________________

	
Telephone - Business

	
Telephone – Business

	  	  
	
___________________________________

	
_____________________________________

	
Telephone – Residence

	
Telephone – Residence

	  	  
	
___________________________________

	
_____________________________________

	
Facsimile – Business

	
Facsimile – Business

	  	  
	
___________________________________

	
_____________________________________

	
Facsimile – Residence

	
Facsimile – Residence

	  	  
	
___________________________________

	
_____________________________________

	
Tax ID # or Social Security #

	
Tax ID # or Social Security #

	  	  

Name in which securities should be issued:______________________________

 

Dated:           ____________________, 2013

 

  

29

  

 

This Subscription Agreement is agreed to and accepted as of July 25, 2013.

 

	 	EPSILON CORP.	 
	 	 	 	 
	
  

	
By: 

	 	 
	 	 	Name: Michael Doron	 
	 	 	Title: Chief Executive Officer	 
	 	 	 	 
	 	 	
Solely with respect to Section 4.2,

(Representations by Great East Energy, Inc.),

	 
	 	 	 	 
	 	 	 	 
	 	GREAT EAST ENERGY, INC.	 
	 	 	 	 
	 	By: 	 	 
	 	 	Name: Johnnie Zarecor	 
	 	 	Title: Chairman	 

 

  

30

  

 

LIST OF EXHIBITS AND SCHEDULES

 

	
Exhibits

	 
	 	 
	Exhibit A 	
Form of Certificate of Designations

	 	 
	Exhibit B 	
Form of Lock-Up Agreement

	 	 
	Exhibit C 	
Form of Stock Escrow Agreement

	 	 
	Exhibit D 	
Form of Option Agreement

	 	 
	Exhibit E 	
Escrow Agreement

	 	 
	Exhibit F 	
Form of Legal Opinion

	 	 
	
Schedules

	 
	 	 
	4.1(a) 	
Subsidiaries

	 	 
	4.1(d) 	
Capitalization

	 	 
	4.1(n) 	
Undisclosed Liabilities

	 	 
	4.1(u) 	
Transfer Agent

	 	 
	4.1(ee) 	
Brokers

	 	 
	4.2(a) 	
GEEI Subsidiaries

	 	 
	4.2(j) 	
Liabilities

	 	 
	6(e) 	
Use of Proceeds

 

  

31

  

 

Schedule 4.1(a)

Subsidiaries

 

	Name 	 	Jurisdiction	 	Ownership
	 	 	 	 	 
	Great East Energy, Inc.	 	Nevada 	 	100%

 

Schedule 4.1(d)

Capitalization

Epsilon Corp.

Authorized shares: 100,000,000 shares of common stock, par value $.001 per share

Outstanding shares: 3,905,892 shares of common stock

Undertaking to issue securities:

 

	
Bezerius Holdings Limited                                                                

	 	 	460,714	 
	
Hunter Wise Financial Group, LLC                                                                

	 	 	40,143	 
	
Ofsink, LLC                                                                

	 	 	7,143	 

 

Great East Energy, Inc.

Authorized shares: 1,000,000 shares of common stock, par value $.001 per share

Outstanding shares: 5,893 shares of common stock

Schedule 4.1(n)

Undisclosed Liabilities

None

Schedule 4.1(u)

Transfer Agent

Globex Transfer, LLC

780 Deltona Blvd., Suite 202

Deltona, FL 32725

Tel: 813-344-4490

Fax: 386-267-3124

  

32

  

 

Schedule 4.1(ee)

Brokers

None

Schedule 4.2(a)

GEEI Subsidiaries

None

Schedule 4.2(j)

Liabilities

Pursuant to the Option Agreement, GEEI is required to pay to BHL (i) $412,500 upon grant of the option to purchase all the issued and outstanding shares of Synderal Services LTD (“SSL”) and (ii) $837,500 upon exercise of such option.

Schedule 6(e)

Use of Proceeds

 

	
Purchase of SSL shares:                                          

	 	$	1,250,000	 
	
Working capital:                                           

	 	$	2,750,000	 

 

 33

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