Document:

Unassociated Document

    Exhibit
10.3

    EXECUTION
VERSION

     

     

    
      AGREEMENT
AND RELEASE

       

      

       

      This
AGREEMENT AND RELEASE (“Release Agreement”)
is made and entered into as of June 28, 2010, by and among ADVANCE DISPLAY
TECHNOLOGIES, INC., a Colorado corporation (“Company”) and
DEGEORGE HOLDINGS THREE, LLC, a Delaware limited liability company (“Lender”).

       

      

       

      Recitals

       

      WHEREAS,
Lender is the holder of debt (the “Debt”) owed by
Company under that certain Senior Secured Revolving Loan Agreement dated as of
November 6, 2008, as amended by that certain First Amendment to Senior Secured
Revolving Credit Agreement, dated as of June 15, 2009 (as further amended,
modified or supplemented, the “Loan
Agreement”);
capitalized terms used herein but not defined herein have the meaning ascribed
to such term in the Loan Agreement;

       

      WHEREAS,
Company, Lender and ADTI Media, LLC, a Delaware limited liability company and
wholly-owned subsidiary of Lender (“Assignee”) are
entering into an Agreement to Accept Collateral in Partial Satisfaction of
Obligations (Strict Foreclosure) (the “Foreclosure”), of
even date herewith (the “Strict Foreclosure
Agreement”), providing for Lender’s acceptance of the Transferred Assets
(as defined in the Strict Foreclosure Agreement) in partial satisfaction of the
Obligations owing to it under the Loan Documents, and the transfer of such
Transferred Assets by Company to Assignee in connection therewith;
and

       

      WHEREAS,
the Lender desires to (i) forgive the aggregate amount of interest outstanding
under the Loan Documents as of the date hereof, (ii) reduce the interest rate
currently applicable under the Loan Documents to the Applicable Federal Rate in
existence at the time that the relevant Loan Documents are amended to reflect
such change, and (iii) to undertake certain other actions in exchange for the
release provided herein.

       

      NOW
THEREFORE, in exchange for the consideration recited in this agreement the
sufficiency of which is hereby acknowledged by Company and Lender, each hereby
agree and covenant as follows:

       

      Covenants

       

      1.           Effective
Date.  This Release Agreement will be effective upon the date
first set above.

       

      2.           Consideration for the
Release.  (a) In consideration of this Release Agreement and
Company’s full and complete release of any claims or potential claims described
herein, Lender hereby agrees to:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      (A) forgive the aggregate amount of all
outstanding interest under the Loan Documents through the date hereof in the
amount of One Million Two Hundred Twenty Thousand Three Hundred Twenty Six
Dollars and Fifty Six Cents ($1,220,326.56);

      

      (B) via amendments to the applicable
Loan Documents to be entered into at a later date, (i) reduce the interest rate
applicable under such Loan Documents to match the relevant Applicable Federal
Rate at the time such amendments become effective (the “Amended Rate”), which
such Amended Rate will be applicable retroactively to June 29, 2010 and (ii)
delete all references to the Default Rate therein.

       

      (C) reimburse Company for all
reasonable costs and expenses that Company incurs in connection with Company’s
contemplated “deregistering” transaction (the “Deregistering
Transaction”), including but not limited to (i) the salary and benefits
of the Company’s sole remaining employee, Matthew W. Shankle, and (ii) the legal
fees and other administrative expenses incurred by Company in the Deregistering
Transaction; and

       

      (D) cause Assignee to pay Company for
the benefit of its stockholders a royalty payment (a “Royalty Payment”)
equal to twenty percent (20%) of the Revenues generated by Assignee from the
Transferred Assets in each of the Assignee’s 2011, 2012 and 2013 fiscal
years.

       

      (b)  The following terms
apply to the making of Royalty Payments by the Assignee:

       

      (i)  A Royalty Payment will
be made to Company within thirty (30) days after completion of the audited
financial statements of Assignee with respect to its 2011, 2012 and 2013 fiscal
years.   Any Royalty Payments made to the Company shall be used
first to pay Lender the remaining amount owed to it under the Loan Documents,
including all accrued and unpaid interest and fees thereon.

       

      (ii)  If, after making the
payment to Lender in accordance with (i) above, Company makes any distribution
of funds, property or other consideration to any stockholder after the date
hereof, whether as a dividend, the proceeds of liquidation or otherwise (a
“Distribution”)
and irrespective of whether such Distribution constitutes part of or is derived
from, directly or indirectly, a Royalty Payment hereunder, Company will require
that such stockholder, as a condition to receiving such Distribution, provide to
the Lender Parties (as defined below) a written release containing substantially
the same language set forth in Section 5 hereof.

       

      For purposes of this Release Agreement,
(1) the matters set forth in Section 2(a) above are collectively referred to as
the “Consideration” and
(2) “Revenues”
shall, for any period, be determined in accordance with GAAP, even if Assignee
uses cash basis or income tax accounting in preparing its own financial
statements.

       

      
        
          
          

        

        
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      3.           Release by Company &
Covenant Not to Sue.  In exchange for the Consideration and
Lender’s release provided herein, Company on behalf of itself and any and all of
its respective
affiliates and subsidiaries and any and all directors, general and limited
partners, members, shareholders, officers, executives, employees, principals,
representatives, trustees, agents, attorneys, advisors, executors, heirs,
successors and assigns, past and present of any and all of the foregoing,
including without limitation, each of the current and former officers and
directors, hereby does, as of the date set forth below, unconditionally, fully
and irrevocably waive, remise, release, acquit, satisfy and forever discharge
Lender and Lawrence F. DeGeorge (“DeGeorge”) and any
and all of their respective affiliates (including, but not limited to,
Assignee), subsidiaries, officers, directors, general and limited partners,
members, shareholders, executives, employees, principals, representatives,
trustees, agents, attorneys, advisors, executors, heirs, successors and assigns,
past and present of any and all of the foregoing (collectively, the “Lender Parties”),
from and against any and all manner of rights, claims, judgments, demands,
actions, causes of action, controversies, losses, obligations, contracts,
covenants, agreements, promises, damages, costs, expenses and liabilities of
every kind and nature whatsoever at law or in equity, suspected or claimed,
known or unknown and whether or not discoverable, including but not limited to,
all damages, suits of whatever kind or nature, whether asserted individually,
collectively, or in a representative capacity, directly, derivatively,
vicariously, indirectly, by operation of law or otherwise, whether suspected or
claimed, known or unknown, which Company ever may have had, currently has, or
hereafter may have against any Lender Party arising out of or in any way
relating to (i) the Lender Parties’ various equity and debt investments in
Company, including, but not limited to, the amounts loaned to Company pursuant
to the Loan Documents, (ii) Lender’s declaration of a default under the Loan
Documents and the resulting Foreclosure on certain of Company’s assets, or any
other matter related to any of the Loan Documents or the Strict Foreclosure
Agreement, and (iii) DeGeorge’s service as a member of Company’s Board of
Directors.  Without in any way limiting the generality of the
foregoing release, Company covenants not to sue any of the Lender Parties with
respect to any of the aforementioned released claims.

       

      4.           Release by Lender Parties
& Covenant Not to Sue.  In exchange for Company’s release
provided herein, each Lender Party, jointly and severally shall and hereby does,
as of the date set forth below, unconditionally, fully and irrevocably waive,
remise, release, acquit, satisfy and forever discharge Company from and against
any and all manner of rights, claims, judgments, demands, actions, causes of
action, controversies, losses, obligations, contracts, covenants, agreements,
promises, damages, costs, expenses and liabilities of every kind and nature
whatsoever at law or in equity, suspected or claimed, known or unknown and
whether or not discoverable, including but not limited to, all damages, suits of
whatever kind or nature, whether asserted individually, collectively, or in a
representative capacity, directly, derivatively, vicariously, indirectly, by
operation of law or otherwise, whether suspected or claimed, known or unknown,
which any Lender Party ever may have had, currently has, or hereafter may have
against Company, arising out of or in any way relating to (i) the Debt, (ii) the
Loan Agreement (iii) the Strict Foreclosure Agreement and (iv) the other Loan
Documents (as defined in the Loan Agreement).  Without in any way
limiting the generality of the foregoing release, each Lender Party covenants
not to sue Company with respect to any of the aforementioned released
claims.

       

      
        
          
          

        

        
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      5.           Release by Stockholders
& Covenant Not to Sue.  Any stockholder that receives a
Distribution (each a “Stockholder”) shall,
on behalf of itself and, as applicable, any and all of its respective affiliates
and subsidiaries and any and all directors, general and limited partners,
members, shareholders, officers, executives, employees, principals,
representatives, trustees, agents, attorneys, advisors, executors, heirs,
successors and assigns, past and present of any and all of the foregoing (the
“Stockholder
Parties”), be deemed to have unconditionally, fully and irrevocably
waived, remised, released, acquitted, satisfied and forever discharged each of
the Lender Parties from and against any and all manner of rights, claims,
judgments, demands, actions, causes of action, controversies, losses,
obligations, contracts, covenants, agreements, promises, damages, costs,
expenses and liabilities of every kind and nature whatsoever at law or in
equity, suspected or claimed, known or unknown and whether or not discoverable,
including but not limited to, all damages, suits of whatever kind or nature,
whether asserted individually, collectively, or in a representative capacity,
directly, derivatively, vicariously, indirectly, by operation of law or
otherwise, whether suspected or claimed, known or unknown, which any Stockholder
Party ever may have had, has at the time of receiving a Distribution or may have
after receiving such Distribution, against any Lender Party arising out of or in
any way relating to (i) the Lender Parties’ various equity and debt investments
in Company, including, but not limited to, the amounts loaned to Company
pursuant to the Loan Documents, (ii) Lender’s declaration of a default under the
Loan Documents and the resulting Foreclosure on certain of Company’s assets, or
any other matter related to any of the Loan Documents or the Strict Foreclosure
Agreement, and (iii) DeGeorge’s service as a member of Company’s Board of
Directors.  Without in any way limiting the generality of the
foregoing release, each Stockholder Party is deemed to have covenanted not to
sue any of the Lender Parties with respect to any of the aforementioned released
claims.

       

      6.           Due
Authorization.   Each signatory hereto represents and
warrants to each other signatory hereto as follows, where
applicable:

       

      (a)           it
has full power and authority to execute, deliver, and perform this Release
Agreement and the execution, delivery, and performance of this Release Agreement
has been authorized by all necessary corporate or other action on its behalf,
and this Release Agreement is a legal, valid, and binding obligation,
enforceable against it in accordance with its terms;

       

      (b)           the
execution and delivery of this Release Agreement and its obligations hereunder
will not conflict with, or result in any violation or default under, any
provision of any governing instrument applicable to it or any agreement or other
instrument to which it is a party or by which it or any of its properties are
based, or any permit, franchise, judgment, decree, statute, rule, or regulation
applicable to its business or properties;

       

      (c)           other
than as expressly provided for herein, no consent, approval, order or
authorization of, or filing with, any federal, state or local governmental
authority is required by it for the valid execution and delivery of this Release
Agreement and the performance of its obligations hereunder; and

       

      (d)           such
party is the sole owner of the claims released hereby and such party has not
sold, transferred, assigned, pledged, hypothecated, encumbered, suffered a lien
or judgment against, or granted any third party the right to acquire any of such
released claims.

       

      
        
          
          

        

        
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      7.           Miscellaneous.  (a)
Entire
Agreement.  This Release Agreement contains all of the terms
and conditions agreed upon by the parties relating to the subject matter of this
Release Agreement and supersedes all other prior agreements, negotiations,
correspondence, undertakings, and communications of the parties, oral or
written, respecting such subject matter.  (b) Severability.  If any provision
of this Release Agreement is held illegal, invalid or unenforceable, such
holding shall not affect any other provisions hereof.  In the event
that any provision is held illegal, invalid, or unenforceable, such provision
shall be limited so as to affect the intent of the parties to the fullest extent
permitted by applicable law.  (c) Governing Law; Jurisdiction.  This
Release Agreement is made in and shall be governed by and construed and
interpreted in accordance with the laws of the State of Colorado, without giving
effect to any conflict or choice of law provision that would result in the
application of another state’s law.  Each of the parties hereto hereby
submits to the non-exclusive jurisdiction of the State and Federal courts
located in the City and County of Denver and the State of Colorado with respect
to any action or proceeding relating to this Release Agreement. (d) Notices.  Notices,
requests, consents and other communications, required or permitted hereunder,
shall be in writing and shall be hand delivered or mailed by registered or
certified mail, return receipt requested, addressed as follows, or to such other
address as may be provided by the respective parties to this Release
Agreement:

       

      If to
Borrower, to:

       

      S. Lee
Terry, Jr.,

      Davis
Graham & Stubbs LLP,

      1550
Seventeenth Street, Suite 500

      Denver,
CO  80202;

       

      If to
Lender, to:

       

      DeGeorge
Holdings Three, LLC

      777 South
Flagler Drive, Suite 800

      West Palm
Beach, FL 33401.

      Attention:  Lawrence
F. DeGeorge

      

      (e) Amendments.  This
Release Agreement may be amended or modified only with the written consent of
each signatory.  (f) Tax Effect.  The
parties agree that they are solely responsible for any tax payments arising out
of this Release Agreement, and acknowledge that they bear the sole risk of and
liability for the tax effects of any payments made pursuant to this Release
Agreement, and for any other financial consequences of this Release Agreement.
(g) Counterparts.  This
Release Agreement may be signed in any number of counterparts with the same
effect as if the signatures to each counterpart were upon a single instrument,
and all such counterparts together shall be deemed an original of this Release
Agreement.

       

      

       

      (signature page
follows)

       

      
        
          
          

        

        
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      IN WITNESS WHEREOF, the parties hereby
execute this Release Agreement, as of the date set forth below:

       

      

      
         

        
          
            	 	
                    
                      
                        
                          DEGEORGE
      HOLDINGS THREE, LLC

                        

                      

                    

                  	 

          

           

        

        
          
            	 	
                    By:
      DEGEORGE HOLDINGS III LP

                  	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	/s/ Lawrence
      F. DeGeorge	 
	 	 	
                    Lawrence
      F. DeGeorge, President

                  	 
	 	 	
                  	 
	 	 	 	 
	 	
                    Date:  June
      28, 2010

                  	 

          

        

      

       

      
        
          
          

        

        
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                  ADVANCE
      DISPLAY TECHNOLOGIES, INC.

                	 
	 	 	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ James
      P. Martindale	 
	 	 	James
      P. Martindale, Executive Vice President and Chief Operating
    Officer	 
	 	 	 	 

        

         

        
          
            
            

          

          
            Page
7 of 7Unassociated Document

    EXHIBIT
10.5

    

    CHINA
SHANDONG INDUSTRIES, INC.

    

    STOCK
OPTION AGREEMENT

    

    THIS STOCK OPTION AGREEMENT
(this “Agreement”) is
made and entered into as of July 1, 2010, by and between China Shandong
Industries, Inc., a Delaware corporation (the “Company”), and Jinliang Li
(the “Employee”).

    

    The
parties hereto agree as follows:

    

    1.           Option.

    

    (a)           Option Grant. The
Company hereby grants to Employee, an option (the “Option”) to purchase up to
2,000,000 shares (the “Option
Shares”) of common stock, par value $0.0001 per share (the “Common Stock”), at an exercise
price per share equal to (i) the per share price of a share of Common Stock sold
in the proposed public offering (the “Offering”), or (ii) if the
Offering does not occur by December 31, 2010, the price determined by the
Company’s Board of Directors, which price per share shall not be less than the
market price of a share of Common Stock on the date that the Board of Directors
determined the exercise price (the “Option Price”). The Option
Price and the number of Option Shares issuable upon exercise of the Option will
be proportionately adjusted for any share split, share dividend,
reclassification or recapitalization of the Common Stock which occurs subsequent
to the date of this Agreement. The Option will expire on the close of business
on the eleventh anniversary of the date of this Agreement.

    

    (b)           Exercisability. The
Option shall not be exercisable prior to July 2, 2011.  On July 1,
2011, the Option shall become fully vested and exercisable with respect to all
of the Option Shares.

    

    (c)           Procedure for
Exercise. At any time after all or any portion of the Options granted
hereunder have become exercisable with respect to any Option Shares and prior to
the close of business on the eleventh anniversary of the date of this Agreement,
Employee may exercise all or any portion of the Option granted hereunder with
respect to Option Shares vested pursuant to Section 1(b) above by delivering
written notice of exercise to the Company (the “Exercise Notice”), which
Exercise Notice is attached hereto as Exhibit
A, together with payment in full by delivery of a cashier’s, personal or
certified check or wire transfer of immediately available funds to the Company
in the amount equal to the number of Option Shares to be acquired multiplied by
the Option Price.  In the event that, at the time of the exercise of
the Option, the Option Shares have not been registered under the Securities Act
of 1933, as amended (the “Securities Act”), the Employee
will deliver to the Company his or her Investment Representation Statement in
the form attached hereto as Exhibit
B.

    

    (e)           Securities Laws
Restrictions. Employee represents that when Employee exercises any
portion of the Option he or she will be purchasing the Option Shares represented
thereby for Employee's own account and not on behalf of others. Employee
understands and acknowledges that U.S. federal, state and foreign securities
laws govern and restrict Employee’s right to offer, sell or otherwise dispose of
any Option Shares unless Employee's offer, sale or other disposition thereof is
registered under the Securities Act and federal, state and foreign securities
laws or, in the opinion of the Company's counsel, such offer, sale or other
disposition is exempt from registration thereunder. Employee agrees that he or
she will not offer, sell or otherwise dispose of any Option Shares in any manner
which would: (i) require the Company to file any registration statement (or
similar filing under applicable securities law) with the Securities and Exchange
Commission or to amend or supplement any such filing or (ii) violate or cause
the Company to violate the Securities Act, the rules and regulations promulgated
thereunder or any other applicable U.S. or local securities law. Employee
further understands that the certificates for any Option Shares which Employee
purchases will bear the legend set forth in the Exercise Notice or such other
legends as the Company deems necessary or desirable in connection with the
Securities Act or other rules, regulations or laws.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    (f)           Limited Transferability of
the Option. The Option granted hereunder is personal to Employee and is
not transferable by Employee except pursuant to the laws of descent or
distribution. Only Employee or his or her legal guardian or representative may
exercise the Option granted hereunder.

    

    2.           Notices. Any notice or
communication given hereunder shall be in writing and shall be deemed to have
been duly given when delivered in person, or by regular mail, first class and
prepaid, to the appropriate party at the address set forth below (or such other
address as the party shall from time to time specify):

     

    
      
        	
                If
      to the Company, to:  

              	
                China
      Shandong Industries, Inc.

              
	 
      	
                No.
      2888 Qinghe Road

              
	 
      	
                Development
      Zone Cao County

              
	 
      	
                Shandong
      Province, 274400 China

              
	 
      	
                Attention:
      Chief Financial Officer

              

      

    

    

    If to the
Employee, to the address on file with the Company.

    

    3.           Third Party Beneficiaries; Successors
and Assigns. The parties hereto acknowledge and agree that, except as
otherwise provided herein, this Agreement shall bind and inure to the benefit of
and be enforceable by Employee, the Company and their respective heirs,
successors and assigns (including subsequent holders of Option
Shares).

    

    4.           Complete Agreement. This
Agreement and the other documents referred to herein embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any
way.

    

    5.           Counterparts. This Agreement
may be executed in separate counterparts, each of which may be delivered via
facsimile and is deemed to be an original, and all of which taken together
constitute one and the same agreement.

    

    6.           Severability. If all or any
part of this Agreement is declared by any court or governmental authority to be
unlawful or invalid, such unlawfulness or invalidity shall not invalidate any
portion of this Agreement not declared to be unlawful or invalid. Any section of
this Agreement (or part of such a section) so declared to be unlawful or invalid
shall, if possible, be construed in a manner that will give effect to the terms
of such section or part of a section to the fullest extent possible while
remaining lawful and valid.

    

    7.           Amendment and Waiver. The
provisions of this Agreement may be amended or waived only with the prior
written consent of the Board and Employee, and no course of conduct or failure
or delay in enforcing the provisions of this Agreement shall affect the
validity, binding effect or enforceability of this Agreement.

    

    8.           Tax Treatment. Neither party
makes any representations or warranties to the other party with respect to the
tax treatment of the transactions contemplated hereby.

    

    9.           Language. If Employee has
received this Agreement or any other document related hereto translated into a
language other than English and if the translated version is different than the
English version, the English version will control.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the date first written
above.

    

    
      
        
          
            
              
                	 
      	 
      	
                        CHINA SHANDONG INDUSTRIES,
      INC.

                      	 
	 
      	 
      	 
      	 
      	 
	 
      	 
      	
                        By:

                      	/s/
      Jinliang Li    	 
       
	 
      	 
      	
                        Name:

                      	
                        Jinliang
      Li

                      	 
	 
      	 
      	
                        Title:

                      	
                        Chairman
      and Chief Executive Officer

                      	 
	
                        EMPLOYEE:

                      	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
      	 
	/s/
      Jinliang Li     	 
      	 
      	 
      	 
	
                        Jinliang
      Li

                      	 
      	 
      	 
      	 

              

            

          

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
A

    

    CHINA
SHANDONG INDUSTRIES, INC.

    

    EXERCISE
NOTICE

    

    China
Shandong Industries, Inc.

    No. 2888
Qinghe Road

    Development
Zone Cao County

    Shandong
Province, 274400 China

    Attention:
Chief Financial Officer

    

    Effective
as of today, ______________, ___ the undersigned (the “Employee”) hereby elects to
exercise the Employee's stock option to purchase ___________ shares of common
stock (the “Shares”) of
China Shandong Industries, Inc. (the “Company”) under and pursuant
to the Stock Option Agreement For Non-U.S. Employees (the “Option Agreement”) dated July
1, 2010.

    

    Representations of the
Employee.  The Employee acknowledges that the Employee has
received, read and understood the Option Agreement; the Employee agrees to abide
by and be bound by their terms and conditions.

    

    Rights as
Stockholder.  Until the stock certificate evidencing such
Shares is issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder shall exist with
respect to the Shares, notwithstanding the exercise of the
Option.  The Company shall issue (or cause to be issued) such stock
certificate promptly after the Option is exercised.  No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the stock certificate is issued, except as provided in the Option
Agreement.

    

    Delivery of
Payment.  The Employee herewith delivers to the Company the
full Exercise Price for the Shares in the form(s) provided for in the Option
Agreement.

    

    Tax
Consultation.  The Employee understands that the Employee may
suffer adverse tax consequences as a result of the Employee's purchase or
disposition of the Shares.  The Employee represents that the Employee
has consulted with any tax consultants the Employee deems advisable in
connection with the purchase or disposition of the Shares and that the Employee
is not relying on the Company for any tax advice.

    

    Taxes.  The Employee
agrees to satisfy all applicable foreign, federal, state and local income and
employment tax withholding obligations and herewith delivers to the Company the
full amount of such obligations or has made arrangements acceptable to the
Company to satisfy such obligations.

    

    Restrictive
Legends.  The Employee understands and agrees that the Company
may cause the legends set forth below or legends substantially equivalent
thereto, to be placed upon any certificate(s) evidencing ownership of the Shares
together with any other legends that may be required by the Company or by state
or federal securities laws:

    

    THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 (THE “ACT”) AND
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER,
PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.

    

    Successors and
Assigns.  The Company may assign any of its rights under this
Exercise Notice to single or multiple assignees, and this agreement shall inure
to the benefit of the successors and assigns of the Company.  Subject
to the restrictions on transfer herein set forth, this Exercise Notice shall be
binding upon the Employee and his or her heirs, executors, administrators,
successors and assigns.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Headings.  The
captions used in this Exercise Notice are inserted for convenience only and
shall not be deemed a part of this agreement for construction or
interpretation.

    

    Notices.  Any notice
required or permitted hereunder shall be given in writing and shall be deemed
effectively given upon personal delivery or upon deposit in the mail by
certified mail, with postage and fees prepaid, addressed to the other party at
its address as shown below beneath its signature, or to such other address as
such party may designate in writing from time to time to the other
party.

    

    Further
Instruments.  The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this agreement.

    

    Entire
Agreement.  The Option Agreement is incorporated herein by
reference and together with this Exercise Notice constitutes the entire
agreement of the parties with respect to the subject matter hereof and
supersedes in their entirety all prior undertakings and agreements of the
Company and the Employee with respect to the subject matter hereof, and may not
be modified adversely to the Employee’s interest except by means of a writing
signed by the Company and the Employee.

    

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                Submitted
      by:

                              	 
      	
                                Accepted
      by:

                              	 
	 
      	 
      	 
      	 
	
                                EMPLOYEE:

                              	 
      	
                                CHINA
      SHANDONG INDUSTRIES, INC.

                              	 
	 
      	 
      	 
      	 
      	 
      	 
	
                                By:

                              	  
        	 
      	
                                By:

                              	 
        	 
       
	
                                Name:  

                              	
                                Jinliang
      Li

                              	 
      	
                                Name:

                              	 
        	 
       
	 
      	 
      	 
      	
                                Title:

                              	 
        	 
       

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
B

    

    CHINA
SHANDONG INDUSTRIES, INC.

    

    INVESTMENT
REPRESENTATION STATEMENT

    

    EMPLOYEE:

    

    COMPANY:  China
Shandong Industries, Inc.

    

    SECURITY:  Common
Stock

    

    AMOUNT:     _____________

    

    DATE:  ______________

    

    In
connection with the purchase of the above-listed securities, the undersigned
Employee represents to the Company the following:

    

    Employee
is aware of the Company's business affairs and financial condition and has
acquired sufficient information about the Company to reach an informed and
knowledgeable decision to acquire the Securities.  Employee is
acquiring these Securities for investment for Employee's own account only and
not with a view to, or for resale in connection with, any “distribution” thereof
within the meaning of the Securities Act of 1933, as amended (the “Securities Act”).

    

    Employee
acknowledges and understands that the Securities constitute “restricted
securities” under the Securities Act, have not been registered under the
Securities Act and are being issued to the Employee in reliance upon a specific
exemption therefrom, which exemption depends, upon among other things, the bona
fide nature of Employee's investment intent as expressed
herein.  Employee further understands that the Securities must be held
indefinitely unless they are subsequently registered under the Securities Act or
an exemption from such registration is available.  Employee further
acknowledges and understands that the Company is under no obligation to register
the Securities. Employee understands that the certificate evidencing the
Securities will be imprinted with a legend which prohibits the transfer of the
Securities unless they are registered or such registration is not required in
the opinion of counsel satisfactory to the Company.

    

    Employee
represents that he is a resident of _________________.

    

    
      
        
          
            
              	
                      EMPLOYEE:

                    
	 
      	 
      
	
                      By:

                    	 
        
	
                      Name:

                    	
                      Jinliang
      Li

                    
	 
      	 
      
	
                      Date:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00175-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00175-of-00352.parquet"}]]