Document:

Exhibit
10.12

 

DIRECTOR
AND OFFICER INDEMNIFICATION AGREEMENT

 

This Director and Officer
Indemnification Agreement, dated as of May 13, 2004 (this “Agreement”), is made
by and between PolyPore, Inc., a Delaware corporation, and
                                     
(“Indemnitee”).

 

RECITALS:

 

A.                                  
Section 141 of
the Delaware General Corporation Law provides that the business and affairs of
a corporation shall be managed by or under the direction of its board of
directors.

 

B.                                    
By virtue of the
managerial prerogatives vested in the directors and officers of a Delaware
corporation, directors and officers act as fiduciaries of the corporation and
its stockholders.

 

C.                                    
Thus, it is
critically important to the Company and its stockholders that the Company be
able to attract and retain the most capable persons reasonably available to
serve as directors and officers of the Company.

 

D.                                   
In recognition of the
need for corporations to be able to induce capable and responsible persons to
accept positions in corporate management, Delaware law authorizes (and in some
instances requires) corporations to indemnify their directors and officers, and
further authorizes corporations to purchase and maintain insurance for the
benefit of their directors and officers.

 

E.                                     
The Delaware courts
have recognized that indemnification by a corporation serves the dual policies
of (1) allowing corporate officials to resist unjustified lawsuits, secure
in the knowledge that, if vindicated, the corporation will bear the expense of
litigation, and (2) encouraging capable women and men to serve as corporate
directors and officers, secure in the knowledge that the corporation will
absorb the costs of defending their honesty and integrity.

 

F.                                     
The number of
lawsuits challenging the judgment and actions of directors of Delaware corporations,
the costs of defending those lawsuits and the threat to directors’ personal
assets have all materially increased over the past several years, chilling the
willingness of capable women and men to undertake the responsibilities imposed
on corporate directors and officers.

 

G.                                    
Recent federal
legislation and rules adopted by the Securities and Exchange Commission and the
national securities exchanges have exposed such directors and officers to new
and substantially broadened civil liabilities.

 

H.                                   
Under Delaware law, a
director’s or officer’s right to be reimbursed for the costs of defense of
criminal actions, whether such claims are asserted under state or federal law,
does not depend upon the merits of the claims asserted against the director or
officer and is separate and distinct from any right to indemnification the
director may be able to establish.

 

 

I.                                        
Indemnitee is, or
will be, a director and/or officer of the Company and his willingness to serve
in such capacity is predicated, in substantial part, upon the Company’s
willingness to indemnify him in accordance with the principles reflected above,
to the fullest extent permitted by the laws of the State of Delaware, and upon
the other undertakings set forth in this Agreement.

 

J.                                       
Therefore, in
recognition of the need to provide Indemnitee with substantial protection
against personal liability, in order to procure Indemnitee’s continued service
as a director and/or officer of the Company and to enhance Indemnitee’s ability
to serve the Company in an effective manner, and in order to provide such
protection pursuant to express contract rights (intended to be enforceable
irrespective of, among other things, any amendment to the Company’s certificate
of incorporation or bylaws (collectively, the “Constituent Documents”), any change in
the composition of the Company’s Board of Directors (the “Board”) or any
change-in-control or business combination transaction relating to the Company),
the Company wishes to provide in this Agreement for the indemnification of and
the advancement of Expenses to Indemnitee on the terms, and subject to the
conditions, set forth in this Agreement.

 

K.                                   
In light of the
considerations referred to in the preceding recitals, it is the Company’s
intention and desire that the provisions of this Agreement be construed
liberally, subject to their express terms, to maximize the protections to be
provided to Indemnitee hereunder.

 

AGREEMENT:

 

NOW, THEREFORE, the
parties hereby agree as follows:

 

1.             
Certain Definitions.  In addition to
terms defined elsewhere herein, the following terms have the following meanings
when used in this Agreement with initial capital letters:

 

(a)         
“Change in Control” shall have occurred
at such time, if any, as Incumbent
Directors cease for any reason to constitute a majority of Directors.  For
purposes of this Section 1(a), “Incumbent Directors” means the individuals
who, as of the date hereof, are Directors of the Company and any individual
becoming a Director subsequent to the date hereof whose election, nomination
for election by the Company’s stockholders, or appointment, was approved by a
vote of at least a majority of the then Incumbent Directors (either by a
specific vote or by approval of the proxy statement of the Company in which
such person is named as a nominee for director, without objection to such
nomination); provided, however, that an individual shall not be
an Incumbent Director if such individual’s election or appointment to the Board
occurs as a result of an actual or threatened election contest (as described in
Rule 14a-12(c) of the Securities Exchange Act of 1934, as amended) with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board.

 

 

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(b)        
“Claim” means (i) any
threatened, asserted, pending or completed claim, demand, action, suit or
proceeding, whether civil, criminal, administrative, arbitrative, investigative
or other, and whether made pursuant to federal, state or other law; and
(ii) any inquiry or investigation, whether made, instituted or conducted
by the Company or any other Person, including, without limitation, any federal,
state or other governmental entity, that Indemnitee reasonably determines might
lead to the institution of any such claim, demand, action, suit or
proceeding.  For the avoidance of doubt, the Company intends indemnity to
be provided hereunder in respect of acts or failure to act prior to, on or
after the date hereof.

 

(c)         
“Controlled Affiliate” means any
corporation, limited liability company, partnership, joint venture, trust or
other entity or enterprise, whether or not for profit, that is directly or
indirectly controlled by the Company.  For purposes of this definition, “control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of an entity or enterprise, whether
through the ownership of voting securities, through other voting rights, by
contract or otherwise; provided
that direct or indirect beneficial ownership of capital stock or other
interests in an entity or enterprise entitling the holder to cast 15% or more
of the total number of votes generally entitled to be cast in the election of
directors (or persons performing comparable functions) of such entity or
enterprise shall be deemed to constitute control for purposes of this
definition.

 

(d)        
“Disinterested Director” means a director of
the Company who is not and was not a party to the Claim in respect of which
indemnification is sought by Indemnitee.

 

(e)         
“Expenses” means attorneys’ and
experts’ fees and expenses and all other costs and expenses paid or payable in
connection with investigating, defending, being a witness in or participating
in (including on appeal), or preparing to investigate, defend, be a witness in
or participate in (including on appeal), any Claim.

 

(f)           
“Indemnifiable Claim” means any Claim
based upon, arising out of or resulting from (i) any actual, alleged or
suspected act or failure to act by Indemnitee in his or her capacity as a
director, officer, employee or agent of the Company or as a director, officer,
employee, member, manager, trustee or agent of any other corporation, limited
liability company, partnership, joint venture, trust or other entity or
enterprise, whether or not for profit, as to which Indemnitee is or was serving
at the request of the Company, (ii) any actual, alleged or suspected act
or failure to act by Indemnitee in respect of any business, transaction,
communication, filing, disclosure or other activity of the Company or any other
entity or enterprise referred to in clause (i) of this sentence, or
(iii) Indemnitee’s status as a current or former director, officer,
employee or agent of the Company or as a current or former director, officer,
employee, member, manager, trustee or agent of the Company or any other entity
or enterprise referred to in clause (i) of this sentence or any actual,
alleged or suspected act or failure to act by Indemnitee in connection with any
obligation or restriction imposed upon Indemnitee by reason of such
status.  In addition to any service at the actual request of the Company,
for purposes of this Agreement, Indemnitee shall be deemed to be serving or to
have served at the request

 

 

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of the Company as a director, officer, employee,
member, manager, trustee or agent of another entity or enterprise if Indemnitee
is or was serving as a director, officer, employee, member, manager, agent,
trustee or other fiduciary of such entity or enterprise and (i) such
entity or enterprise is or at the time of such service was a Controlled
Affiliate, (ii) such entity or enterprise is or at the time of such service
was an employee benefit plan (or related trust) sponsored or maintained by the
Company or a Controlled Affiliate, or (iii) the Company or a Controlled
Affiliate (by action of the Board, any committee thereof or the Company’s Chief
Executive Officer (“CEO”)
(other than as the CEO him or herself)) caused or authorized Indemnitee to be
nominated, elected, appointed, designated, employed, engaged or selected to
serve in such capacity.

 

(g)        
“Indemnifiable Losses” means any and all
Losses relating to, arising out of or resulting from any Indemnifiable Claim; provided, however, that Indemnifiable
Losses shall not include Losses incurred by Indemnitee in respect of any
Indemnifiable Claim (or any matter or issue therein) as to which Indemnitee
shall have been adjudged liable to the Company, unless and only to the extent
that the Delaware Court of Chancery or the court in which such Indemnifiable
Claim was brought shall have determined upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnification for such
Expenses as the court shall deem proper.

 

(h)        
“Independent Counsel” means a nationally
recognized law firm, or a member of a nationally recognized law firm, that is
experienced in matters of Delaware corporate law and neither presently is, nor
in the past five years has been, retained to represent:  (i) the
Company (or any Subsidiary) or Indemnitee in any matter material to either such
party (other than with respect to matters concerning the Indemnitee under this
Agreement, or of other indemnitees under similar indemnification agreements) or
(ii) any other named (or, as to a threatened matter, reasonably likely to
be named) party to the Indemnifiable Claim giving rise to a claim for
indemnification hereunder.  Notwithstanding the foregoing, the term
“Independent Counsel” shall not include any person who, under the applicable
standards of professional conduct then prevailing, would have a conflict of
interest in representing either the Company or Indemnitee in an action to
determine Indemnitee’s rights under this Agreement.

 

(i)            
“Losses” means any and all
Expenses, damages, losses, liabilities, judgments, fines, penalties (whether
civil, criminal or other) and amounts paid or payable in settlement, including,
without limitation, all interest, assessments and other charges paid or payable
in connection with or in respect of any of the foregoing.

 

(j)            
“Person” means any
individual, entity or group, within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended.

 

(k)         
“Standard of Conduct” means the standard
for conduct by Indemnitee that is a condition precedent to indemnification of
Indemnitee hereunder against Indemnifiable Losses relating to, arising out of
or resulting from an Indemnifiable Claim.  The Standard of Conduct is (i)
good faith and a reasonable belief by Indemnitee that his action was in or not
opposed to the best interests of the Company and, with respect to any

 

 

4

 

criminal action or proceeding, that Indemnitee had no
reasonable cause to believe that his conduct was unlawful, or (ii) any other
applicable standard of conduct that may hereafter be substituted under
Section 145(a) or (b) of the Delaware General Corporation Law or any
successor to such provision(s).

 

2.             
Indemnification
Obligation.  Subject only to Section 7 and to the proviso in this
Section, the Company shall indemnify, defend and hold harmless Indemnitee, to
the fullest extent permitted or required by the laws of the State of Delaware
in effect on the date hereof or as such laws may from time to time hereafter be
amended to increase the scope of such permitted indemnification, against any
and all Indemnifiable Claims and Indemnifiable Losses; provided, however,
that, except as provided in Sections 5, Indemnitee shall not be entitled to
indemnification pursuant to this Agreement in connection with any Claim
initiated by Indemnitee against the Company or any director or officer of the
Company unless the Company has joined in or consented to the initiation of such
Claim.  The Company acknowledges that the foregoing obligation may be broader
than that now provided by applicable law and the Company’s Constituent
Documents and intends that it be interpreted consistently with this
Section and the recitals to this Agreement.

 

3.             
Advancement of
Expenses.  Indemnitee shall have the right to advancement by the Company
prior to the final disposition of any Indemnifiable Claim of any and all actual
and reasonable Expenses relating to, arising out of or resulting from any
Indemnifiable Claim paid or incurred by Indemnitee.  Without limiting the
generality or effect of any other provision hereof, Indemnitee’s right to such
advancement is not subject to the satisfaction of any Standard of
Conduct.  Without limiting the generality or effect of the foregoing,
within five business days after any request by Indemnitee that is accompanied
by supporting documentation for specific reasonable Expenses to be reimbursed
or advanced, the Company shall, in accordance with such request (but without
duplication), (a) pay such Expenses on behalf of Indemnitee,
(b) advance to Indemnitee funds in an amount sufficient to pay such
Expenses, or (c) reimburse Indemnitee for such Expenses; provided that Indemnitee shall repay,
without interest any amounts actually advanced to Indemnitee that, at the final
disposition of the Indemnifiable Claim to which the advance related, were in
excess of amounts paid or payable by Indemnitee in respect of Expenses relating
to, arising out of or resulting from such Indemnifiable Claim.  In
connection with any such payment, advancement or reimbursement, at the request
of the Company, Indemnitee shall execute and deliver to the Company an
undertaking, which need not be secured and shall be accepted without reference
to Indemnitee’s ability to repay the Expenses, by or on behalf of the
Indemnitee, to repay any amounts paid, advanced or reimbursed by the Company in
respect of Expenses relating to, arising out of or resulting from any
Indemnifiable Claim in respect of which it shall have been determined,
following the final disposition of such Indemnifiable Claim and in accordance
with Section 7, that Indemnitee is not entitled to indemnification
hereunder.

 

4.             
Indemnification for
Additional Expenses.  Without limiting the generality or effect of the
foregoing, the Company shall indemnify and hold harmless Indemnitee against
and, if requested by Indemnitee, shall reimburse Indemnitee for, or advance to

 

 

5

 

Indemnitee, within five business days of such request
accompanied by supporting documentation for specific Expenses to be reimbursed
or advanced, any and all actual and reasonable Expenses paid or incurred by
Indemnitee in connection with any Claim made, instituted or conducted by
Indemnitee for (a) indemnification or reimbursement or advance payment of
Expenses by the Company under any provision of this Agreement, or under any
other agreement or provision of the Constituent Documents now or hereafter in
effect relating to Indemnifiable Claims, and/or (b) recovery under any
directors’ and officers’ liability insurance policies maintained by the
Company; provided, however, if it
is ultimately determined that the Indemnitee is not entitled to such
indemnification, reimbursement, advance or insurance recovery, as the case may
be, then the Indemnitee shall be obligated to repay any such Expenses to the
Company; provided further, that,
regardless in each case of whether Indemnitee ultimately is determined to be
entitled to such indemnification, reimbursement, advance or insurance recovery,
as the case may be, Indemnitee shall return, without interest, any such advance
of Expenses (or portion thereof) which remains unspent at the final disposition
of the Claim to which the advance related.

 

5.             
Partial Indemnity.  If Indemnitee
is entitled under any provision of this Agreement to indemnification by the
Company for some or a portion of any Indemnifiable Loss but not for all of the
total amount thereof, the Company shall nevertheless indemnify Indemnitee for
the portion thereof to which Indemnitee is entitled.

 

6.             
Procedure for
Notification.  To obtain indemnification under this Agreement in
respect of an Indemnifiable Claim or Indemnifiable Loss, Indemnitee shall
submit to the Company a written request therefor, including a brief description
(based upon information then available to Indemnitee) of such Indemnifiable
Claim or Indemnifiable Loss.  If, at the time of the receipt of such
request, the Company has directors’ and officers’ liability insurance in effect
under which coverage for such Indemnifiable Claim or Indemnifiable Loss is
potentially available, the Company shall give prompt written notice of such
Indemnifiable Claim or Indemnifiable Loss to the applicable insurers in
accordance with the procedures set forth in the applicable policies.  The
Company shall provide to Indemnitee a copy of such notice delivered to the
applicable insurers, substantially concurrently with the delivery thereof by
the Company.  The failure by Indemnitee to timely notify the Company of
any Indemnifiable Claim or Indemnifiable Loss shall not relieve the Company
from any liability hereunder unless, and only to the extent that, the Company
did not otherwise learn of such Indemnifiable Claim or Indemnifiable Loss and
to the extent that such failure results in forfeiture by the Company of
substantial defenses, rights or insurance coverage.

 

7.             
Determination of
Right to Indemnification.

 

(a)         
To
the extent that Indemnitee shall have been successful on the merits or
otherwise in defense of any Indemnifiable Claim or any portion thereof or in
defense of any issue or matter therein, including, without limitation,
dismissal without prejudice, Indemnitee shall be indemnified against all
Indemnifiable Losses relating to, arising out of or resulting from such
Indemnifiable Claim in accordance with Section 2 and no

 

 

6

 

Standard of Conduct Determination (as defined in
Section 7(b)) shall be required.

 

(b)        
To
the extent that the provisions of Section 7(a) are inapplicable to an
Indemnifiable Claim that shall have been finally disposed of, any determination
of whether Indemnitee has satisfied the applicable Standard of Conduct (a “Standard of Conduct
Determination”) shall be made as follows:  (i) if a Change in
Control shall not have occurred, or if a Change in Control shall have occurred
but Indemnitee shall have requested that the Standard of Conduct Determination
be made pursuant to this clause (i), (A) by a majority vote of the
Disinterested Directors, even if less than a quorum of the Board, (B) if
such Disinterested Directors so direct, by a majority vote of a committee of
Disinterested Directors designated by a majority vote of all Disinterested Directors,
or (C) if there are no such Disinterested Directors, or if a majority of
the Disinterested Directors so direct, by Independent Counsel in a written
opinion addressed to the Board, a copy of which shall be delivered to
Indemnitee; and (ii) if a Change in Control shall have occurred and
Indemnitee shall not have requested that the Standard of Conduct Determination
be made pursuant to clause (i), by Independent Counsel in a written
opinion addressed to the Board, a copy of which shall be delivered to Indemnitee.

 

(c)         
If
(i) Indemnitee shall be entitled to indemnification hereunder against any
Indemnifiable Losses pursuant to Section 7(a), (ii) no determination
of whether Indemnitee has satisfied any applicable standard of conduct under
Delaware law is a legally required condition precedent to indemnification of
Indemnitee hereunder against any Indemnifiable Losses, or (iii) Indemnitee
has been determined or deemed pursuant to Section 7(b) to have satisfied
the applicable Standard of Conduct, then the Company shall pay to Indemnitee,
within five business days after the later of (x) the Notification Date in
respect of the Indemnifiable Claim or portion thereof to which such
Indemnifiable Losses are related, out of which such Indemnifiable Losses arose
or from which such Indemnifiable Losses resulted, and (y) the earliest
date on which the applicable criterion specified in clause (i), (ii) or (iii)
above shall have been satisfied, an amount equal to the amount of such
Indemnifiable Losses.  Nothing herein is intended to mean or imply that
the Company is intending to use Section 145(f) of the Delaware General
Corporation Law to dispense with a requirement that Indemnitee meet the
applicable Standard of Conduct where it is otherwise required by such statute.

 

(d)        
If
a Standard of Conduct Determination is required to be, but has not been, made
by Independent Counsel pursuant to Section 7(b)(i), the Independent
Counsel shall be selected by the Board or a committee of the Board, and the
Company shall give written notice to Indemnitee advising him or her of the
identity of the Independent Counsel so selected.  If a Standard of Conduct
Determination is required to be, or to have been, made by Independent Counsel
pursuant to Section 7(b)(ii), the Independent Counsel shall be selected by
Indemnitee, and Indemnitee shall give written notice to the Company advising it
of the identity of the Independent Counsel so selected.  In either case,
Indemnitee or the Company, as applicable, may, within five business days after
receiving written notice of selection from the other, deliver to the other a
written objection to such selection; provided,
however, that such objection may
be asserted only on the ground that the Independent Counsel so selected does
not satisfy the criteria set forth in the definition of “Independent Counsel”
in Section 1(h), and the objection shall

 

 

7

 

set forth with particularity the factual basis of such
assertion.  Absent a proper and timely objection, the Person so selected
shall act as Independent Counsel.  If such written objection is properly
and timely made and substantiated, (i) the Independent Counsel so selected
may not serve as Independent Counsel unless and until such objection is withdrawn
or a court has determined that such objection is without merit and
(ii) the non-objecting party may, at its option, select an alternative
Independent Counsel and give written notice to the other party advising such
other party of the identity of the alternative Independent Counsel so selected,
in which case the provisions of the two immediately preceding sentences and
clause (i) of this sentence shall apply to such subsequent selection and
notice.  If applicable, the provisions of clause (ii) of the immediately
preceding sentence shall apply to successive alternative selections.  If
no Independent Counsel that is permitted under the foregoing provisions of this
Section 7(d) to make the Standard of Conduct Determination shall have been
selected within 30 calendar days after the Company gives its initial
notice pursuant to the first sentence of this Section 7(d) or Indemnitee
gives its initial notice pursuant to the second sentence of this
Section 7(d), as the case may be, either the Company or Indemnitee may
petition the Court of Chancery of the State of Delaware for resolution of any
objection which shall have been made by the Company or Indemnitee to the
other’s selection of Independent Counsel and/or for the appointment as
Independent Counsel of a person or firm selected by the Court or by such other
person as the Court shall designate, and the person or firm with respect to
whom all objections are so resolved or the person or firm so appointed will act
as Independent Counsel.  In all events, the Company shall pay all of the
actual and reasonable fees and expenses of the Independent Counsel incurred in
connection with the Independent Counsel’s determination pursuant to
Section 7(b).

 

8.             
Cooperation.  Indemnitee shall
cooperate with reasonable requests of the Company in connection with any
Indemnifiable Claim and any individual or firm making such Standard of Conduct
Determination, including providing to such Person documentation or information
which is not privileged or otherwise protected from disclosure and which is
reasonably available to Indemnitee and reasonably necessary to defend the
Indemnifiable Claim or make any Standard of Conduct Determination without
incurring any unreimbursed cost in connection therewith.  The Company shall
indemnify and hold harmless Indemnitee against and, if requested by Indemnitee,
shall reimburse Indemnitee for, or advance to Indemnitee, within five business
days of such request accompanied by supporting documentation for specific costs
and expenses to be reimbursed or advanced, any and all costs and expenses
(including attorneys’ and experts’ fees and expenses) actually and reasonably
incurred by Indemnitee in so cooperating with the Person defending the
Indemnifiable Claim or making such Standard of Conduct Determination.

 

9.             
Presumption of
Entitlement.  Notwithstanding any other provision hereof, in making
any Standard of Conduct Determination, the Person making such determination
shall presume that Indemnitee has satisfied the applicable Standard of Conduct.

 

10.       No Other Presumption.  For purposes of
this Agreement, the termination of any Claim by judgment, order, settlement
(whether with or without court approval) or conviction, or upon a plea of nolo contendere or its equivalent, will
not create a

 

 

8

 

presumption that Indemnitee did not meet any
applicable Standard of Conduct or that indemnification hereunder is otherwise
not permitted.

 

11.       Non-Exclusivity.  The rights of
Indemnitee hereunder will be in addition to any other rights Indemnitee may
have under the Constituent Documents, or the substantive laws of the Company’s
jurisdiction of incorporation, any other contract or otherwise (collectively, “Other Indemnity
Provisions”); provided,
however, that (a) to the
extent that Indemnitee otherwise would have any greater right to
indemnification under any Other Indemnity Provision, Indemnitee will without
further action be deemed to have such greater right hereunder, and (b) to the
extent that any change is made to any Other Indemnity Provision which permits
any greater right to indemnification than that provided under this Agreement as
of the date hereof, Indemnitee will be deemed to have such greater right
hereunder.  The Company may not, without the consent of Indemnitee, adopt
any amendment to any of the Constituent Documents the effect of which would be
to deny, diminish or encumber Indemnitee’s right to indemnification under this
Agreement.

 

12.       Liability Insurance and Funding.  For the
duration of Indemnitee’s service as a director and/or officer of the Company
and for a reasonable period of time thereafter, which such period shall be
determined by the Company in its sole discretion, the Company shall use
commercially reasonable efforts (taking into account the scope and amount of
coverage available relative to the cost thereof) to cause to be maintained in
effect policies of directors’ and officers’ liability insurance providing
coverage for directors and/or officers of the Company that is substantially
comparable in scope and amount to that provided by the Company’s current
policies of directors’ and officers’ liability insurance.  Upon reasonable
request, the Company shall provide Indemnitee or his or her counsel with a copy
of all directors’ and officers’ liability insurance applications, binders,
policies, declarations, endorsements and other related materials.  In all
policies of directors’ and officers’ liability insurance obtained by the
Company, Indemnitee shall be named as an insured in such a manner as to provide
Indemnitee the same rights and benefits, subject to the same limitations, as
are accorded to the Company’s directors and officers most favorably insured by
such policy.  Notwithstanding the foregoing, (i) the Company may, but
shall not be required to, create a trust fund, grant a security interest or use
other means, including, without limitation, a letter of credit, to ensure the
payment of such amounts as may be necessary to satisfy its obligations to
indemnify and advance expenses pursuant to this Agreement and (ii) in renewing
or seeking to renew any insurance hereunder, the Company will not be required
to expend more than 2.0 times the premium amount of the immediately preceding
policy period (equitably adjusted if necessary to reflect differences in policy
periods).

 

13.       Subrogation.  In the event of payment
under this Agreement, the Company shall be subrogated to the extent of such
payment to all of the related rights of recovery of Indemnitee against other
Persons (other than Indemnitee’s successors), including any entity or
enterprise referred to in clause (i) of the definition of “Indemnifiable Claim”
in Section 1(f).  Indemnitee shall execute all papers reasonably
required to evidence such rights (all of Indemnitee’s reasonable Expenses,
including attorneys’ fees and charges, related thereto to be reimbursed by or,
at the option of Indemnitee, advanced by the

 

 

9

 

Company).

 

14.       No Duplication of Payments.  The Company
shall not be liable under this Agreement to make any payment to Indemnitee in
respect of any Indemnifiable Losses to the extent Indemnitee has otherwise
already actually received payment (net of Expenses incurred in connection
therewith) under any insurance policy, the Constituent Documents and Other
Indemnity Provisions or otherwise (including from any entity or enterprise
referred to in clause (i) of the definition of “Indemnifiable Claim” in
Section 1(f)) in respect of such Indemnifiable Losses otherwise
indemnifiable hereunder.

 

15.       Defense of Claims.  Subject to the
provisions of applicable policies of directors’ and officers’ liability
insurance, if any, the Company shall be entitled to participate in the defense
of any Indemnifiable Claim or to assume or lead the defense thereof with
counsel reasonably satisfactory to the Indemnitee; provided that if Indemnitee determines, after consultation
with counsel selected by Indemnitee, that (a) the use of counsel chosen by
the Company to represent Indemnitee would present such counsel with an actual
or potential conflict, (b) the named parties in any such Indemnifiable
Claim (including any impleaded parties) include both the Company and Indemnitee
and Indemnitee shall conclude that there may be one or more legal defenses
available to him or her that are different from or in addition to those
available to the Company, (c) any such representation by such counsel
would be precluded under the applicable standards of professional conduct then
prevailing, or (d) Indemnitee has interests in the claim or underlying subject
matter that are different from or in addition to those of other Persons against
whom the Claim has been made or might reasonably be expected to be made, then
Indemnitee shall be entitled to retain separate counsel (but not more than one
law firm plus, if applicable, local counsel in respect of any particular
Indemnifiable Claim for all indemnitees in Indemnitee’s circumstances) at the
Company’s expense.  The Company shall not be liable to Indemnitee under
this Agreement for any amounts paid in settlement of any threatened or pending
Indemnifiable Claim effected without the Company’s prior written consent. 
The Company shall not, without the prior written consent of the Indemnitee,
effect any settlement of any threatened or pending Indemnifiable Claim
which the Indemnitee is or could have been a party unless such settlement
solely involves the payment of money and includes a complete and unconditional
release of the Indemnitee from all liability on any claims that are the subject
matter of such Indemnifiable Claim.  Neither the Company nor Indemnitee
shall unreasonably withhold its consent to any proposed settlement; provided that Indemnitee may withhold
consent to any settlement that does not provide a complete and unconditional
release of Indemnitee.

 

16.      
Successors and Binding Agreement.

 

(a)         
This
Agreement shall be binding upon and inure to the benefit of the Company and any
successor to the Company, including, without limitation, any Person acquiring
directly or indirectly all or substantially all of the business or assets of
the Company whether by purchase, merger, consolidation, reorganization or
otherwise (and such successor will thereafter be deemed the “Company” for purposes of this
Agreement), but shall not otherwise be assignable or delegatable by the
Company.

 

 

10

 

(b)        
This
Agreement shall inure to the benefit of and be enforceable by the Indemnitee’s
personal or legal representatives, executors, administrators, heirs,
distributees, legatees and other successors.

 

(c)         
This
Agreement is personal in nature and neither of the parties hereto shall,
without the consent of the other, assign or delegate this Agreement or any
rights or obligations hereunder except as expressly provided in
Sections 16(a) and 16(b).  Without limiting the generality or effect
of the foregoing, Indemnitee’s right to receive payments hereunder shall not be
assignable, whether by pledge, creation of a security interest or otherwise,
other than by a transfer by the Indemnitee’s will or by the laws of descent and
distribution, and, in the event of any attempted assignment or transfer
contrary to this Section 16(c), the Company shall have no liability to pay
any amount so attempted to be assigned or transferred.

 

17.       Notices.  For all purposes of this
Agreement, all communications, including without limitation notices, consents,
requests or approvals, required or permitted to be given hereunder must be in
writing and shall be deemed to have been duly given when hand delivered or
dispatched by electronic facsimile transmission (with receipt thereof orally
confirmed), or one business day after having been sent for next-day delivery by
a nationally recognized overnight courier service, addressed to the Company (to
the attention of the Secretary of the Company) and to Indemnitee at the
applicable address shown on the signature page hereto, or to such other address
as any party may have furnished to the other in writing and in accordance
herewith, except that notices of changes of address will be effective only upon
receipt.

 

18.       Governing Law.  The validity,
interpretation, construction and performance of this Agreement shall be
governed by and construed in accordance with the substantive laws of the State
of Delaware, without giving effect to the principles of conflict of laws of
such State.  The Company and Indemnitee each hereby irrevocably consent to
the jurisdiction of the Chancery Court of the State of Delaware for all
purposes in connection with any action or proceeding which arises out of or
relates to this Agreement, waive all procedural objections to suit in that
jurisdiction, including, without limitation, objections as to venue or
inconvenience, agree that service in any such action may be made by notice
given in accordance with Section 17 and also agree that any action
instituted under this Agreement shall be brought only in the Chancery Court of
the State of Delaware.

 

19.       Validity.  If any provision of this
Agreement or the application of any provision hereof to any Person or
circumstance is held invalid, unenforceable or otherwise illegal, the remainder
of this Agreement and the application of such provision to any other Person or
circumstance shall not be affected, and the provision so held to be invalid,
unenforceable or otherwise illegal shall be reformed to the extent, and only to
the extent, necessary to make it enforceable, valid or legal.  In the
event that any court or other adjudicative body shall decline to reform any
provision of this Agreement held to be invalid, unenforceable or otherwise
illegal as contemplated by the immediately preceding sentence, the parties thereto
shall take all such action as may be necessary or appropriate to replace the
provision so held to be invalid, unenforceable or otherwise illegal with one or
more alternative provisions that effectuate the purpose and intent of

 

 

11

 

the original provisions of this Agreement as fully as
possible without being invalid, unenforceable or otherwise illegal.

 

20.       Miscellaneous.  No provision of this
Agreement may be waived, modified or discharged unless such waiver,
modification or discharge is agreed to in writing signed by Indemnitee and the
Company.  No waiver by either party hereto at any time of any breach by
the other party hereto or compliance with any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.  No agreements or representations, oral or otherwise,
expressed or implied with respect to the subject matter hereof have been made
by either party that are not set forth expressly in this Agreement.

 

21.       Certain Interpretive Matters.  Unless the
context of this Agreement otherwise requires, (1) “it” or “its” or words of any
gender include each other gender, (2) words using the singular or plural number
also include the plural or singular number, respectively, (3) the terms
“hereof,” “herein,” “hereby” and derivative or similar words refer to this
entire Agreement, (4) the terms “Article,” “Section,” “Annex” or “Exhibit”
refer to the specified Article, Section, Annex or Exhibit of or to this
Agreement, (5) the terms “include,” “includes” and “including” will be deemed
to be followed by the words “without limitation” (whether or not so expressed),
and (6) the word “or” is disjunctive but not exclusive.  Whenever this
Agreement refers to a number of days, such number will refer to calendar days
unless business days are specified and whenever action must be taken (including
the giving of notice or the delivery of documents) under this Agreement during
a certain period of time or by a particular date that ends or occurs on a
non-business day, then such period or date will be extended until the
immediately following business day.  As used herein, “business day” means
any day other than Saturday, Sunday or a United States federal holiday.

 

22.       Entire Agreement.  This Agreement
constitutes the entire agreement, and supersede all prior agreements and
understandings, both written and oral, between the parties hereto with respect
to the subject matter of this Agreement.  Any prior agreements or
understandings between the parties hereto with respect to indemnification are
hereby terminated and of no further force or effect.

 

23.       Counterparts.  This Agreement may be
executed in one or more counterparts, each of which will be deemed to be an
original but all of which together shall constitute one and the same agreement.

 

 

[
SIGNATURE PAGE FOLLOWS ]

 

 

12

 

IN WITNESS WHEREOF,
Indemnitee has executed and the Company has caused its duly authorized
representative to execute this Agreement as of the date first above written.

 

	
   

  	
  POLYPORE,
  INC.

  
	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INDEMNITEE

  
	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:Ecoland International, Incorporated: Exhibit 10.1 - Filed by newsfilecorp.com

STOCK PURCHASE AGREEMENT 

AMONG 

THE BUYER EXECUTING THIS AGREEMENT 

AND 

SELLING STOCKHOLDERS OF ECOLAND INTERNATIONAL CORP. 

November 7, 2011

STOCK PURCHASE AGREEMENT 

     STOCK PURCHASE AGREEMENT dated as
of November 7, 2011 (this “Agreement”), by and among, D&R Technology,
Inc. (the “Buyer”) and the undersigned Seller(s) (the “Sellers”) who are also
referred to herein as the Controlling Shareholders (“Controlling Shareholders”).
The Buyer and the Sellers are referred to collectively herein as the
“Parties”. 

BACKGROUND 

     The Sellers own Fifty Nine
Million (59,000,000) shares of the issued and outstanding capital stock of
Ecoland International Corp., a Nevada corporation currently listed for trading
under the symbol ECIT (the “Company”). The Buyer desires to purchase from
the Sellers, and the Sellers desire to sell to the Buyer, Fifty Nine Million of
the total issued and outstanding shares of the capital stock of the Company in
return for US Two Hundred Sixty Two Thousand Dollars ($262,000), pursuant to the
terms set forth herein.

     NOW, THEREFORE, in consideration
of the premises and the mutual promises herein made, and in consideration of the
representations, warranties, and covenants herein contained, the Parties,
intending to be legally bound, hereby agree as follows.

     1. Definitions.
Capitalized terms used, but not otherwise defined, herein have the meanings
ascribed to such terms in Appendix A hereto. 

     2. Purchase and Sale of Company
Shares and Appointment of Representatives.

     (a) Basic Transaction. On
and subject to the terms and conditions of this Agreement, the Buyer shall
purchase from the Sellers, and the Sellers shall sell to the Buyer, Fifty Nine
Million (59,000,000) of the issued and outstanding shares (the “Company Shares”)
of the Company’s capital stock for the consideration specified below in this
paragraph 2.

     (b) Trust Deposit Amount.
The Buyer has deposited Fifty Thousand Dollars ($50,000.00) (the “Escrow
Amount”) into the escrow account pursuant to an Escrow Agreement. All
deposited funds shall be held for the benefit of the Buyer. The balance of the
purchase price, Two Hundred Twelve Thousand USD, ($212,000.00) shall be paid
upon completion of due diligence as defined in the Escrow Agreement if Buyer
elects to proceed. The funds shall be disbursed (as defined below) and shall be
considered a portion of the Purchase Price (as defined below);

     (c) Purchase Price. The
Buyer shall pay a total of Two Hundred Sixty Two Thousand Dollars ($262,000),
(the “Purchase Price”), for the purchase of the Company Shares. The Purchase
Price shall be disbursed in a manner specified by the Sellers. 

     (d) The Closing. The
closing of the transactions contemplated by this Agreement (the
“Closing”) shall take place before November 30, 2011 subject to the
satisfaction or waiver of all conditions to the obligations of the Parties to
consummate the transactions contemplated hereby (other than conditions with
respect to actions the respective Parties will take at the Closing itself) or
such other date as the Buyer Representative and the Sellers Representative may
mutually determine (the “Closing Dates”). 

2 

     (e) Disbursement of the Purchase
Price. The Buyer shall pay and deliver the Purchase Price per instructions delivered to the Buyer. Further, Sellers shall
provide Sellers’ attorney with instructions for disbursement of the Purchase
Price prior to Closing. Simultaneous with such delivery of the Deposit, the
Sellers shall deliver the following: (i) all of the stock certificates
representing all of the Company Shares, endorsed in blank and/or accompanied by
duly executed assignment documents and including a Medallion Guarantee or such
other assignments required by the transfer agent, including corporate
resolutions as required, (ii) a current accounts payable of the Company, working
paper files for the time from the date of the last reported financial condition
of the Company for examination and review by the Buyer’s auditors and (iii) a
certified list of shareholders issued by the Company’s transfer agent (iv) such
other items as called for in this Agreement. The Sellers will deliver to the
Buyer the Directors’ resignations to be effective as of the Closing Date
together with the appointment of Buyer’s designees for directors. 

     3. Representations and Warranties
Concerning the Transaction.

     (a) Representations and
Warranties of the Sellers. Each of the Sellers represents and warrants to
the Buyer that the statements contained in this paragraph 3(a) are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this paragraph 3(a)) with
respect to himself or itself, except as set forth in Annex I attached
hereto.

     (i)
Authorization of Transaction. Each of the Sellers has full power and
authority to execute and deliver this Agreement and to perform his, her or its
respective obligations hereunder. This Agreement constitutes the valid and
legally binding obligation of each Seller, enforceable in accordance with its
terms and conditions. No Seller need give any notice to, make any filing with,
or obtain any authorization, consent, or approval of any Governmental Authority
in order to consummate the transactions contemplated by this Agreement.

     (ii)
Non-contravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(A) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any Governmental
Authority to which any of the Sellers are subject, or (B) conflict with, result
in a breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or cancel, or
require any notice under any agreement, contract, lease, license, instrument, or
other arrangement to which any Seller is a party or by which he, she or it is
bound or to which any of his, her or its assets is subject.

     (iii)
Brokers’ Fees. No Seller has any Liability or obligation to pay any fees
or commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which any Buyer could become liable or
obligated except as indicated by Seller(s) in writing to the Escrow Agent for
disbursement.

     (iv)
Company Shares. The Sellers hold of record and own beneficially the
number of Company Shares set forth next to their respective names in Schedule I,
free and clear of any restrictions on transfer (other than any restrictions
under the Securities Act and state securities laws), Taxes, Security Interests,
options, warrants, purchase rights, contracts, commitments, equities, claims,
and demands. No Seller is a party to any option, warrant, purchase right, or
other contract or commitment that could require the Seller to sell, transfer, or
otherwise dispose of any capital stock of the Company (other than this
Agreement). No Seller is a party to any voting trust, proxy, or other agreement
or understanding with respect to the voting of any capital stock of the Company.
The Company Shares were duly and validly issued and are fully-paid and
non-assessable. Upon delivery of the Company Shares to the Buyer pursuant to
this Agreement, the Buyer will acquire valid title thereto, free and clear of
any Security Interests. 

3 

     (b) Representations and
Warranties of the Buyer. The Buyer represent and warrant to the Sellers that
the statements contained in this paragraph 3(b) are correct and complete as of
the date of this Agreement and will be correct and complete as of the Closing
Date (as though made then and as though the Closing Date were substituted for
the date of this Agreement throughout this paragraph 3(b)), except as set forth
in Annex II attached hereto.

     (i)
Authorization of Transaction. Each of the Buyer has full power and
authority to execute and deliver this Agreement and to perform his, her or its
respective obligations hereunder. This Agreement constitutes the valid and
legally binding obligation of each Buyer, enforceable in accordance with its
terms and conditions. No Buyer need give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any Governmental Authority in
order to consummate the transactions contemplated by this Agreement.

     (ii)
Non-contravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(A) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any Governmental
Authority to which any of the Buyer are subject, or (B) conflict with, result in
a breach of, constitute a default under, result in the acceleration of, create
in any party the right to accelerate, terminate, modify, or cancel, or require
any notice under any agreement, contract, lease, license, instrument, or other
arrangement to which any Buyer is a party or by which he, she or it is bound or
to which any of his, her or its assets is subject. 

     (iii)
Brokers’ Fees. No Buyer has any Liability or obligation to pay any fees
or commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which any Seller could become liable or
obligated. 

     4. Representations and
Warranties Concerning the Company. The Controlling Stockholder(s), represent
and warrant to the Buyer that the statements contained in this Section 4 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section 4,
except as set forth in the disclosure schedule attached hereto (the
“Disclosure Schedule”). The Disclosure Schedule will be arranged in
paragraphs corresponding to the lettered and numbered paragraphs contained in
this Section 4.

     (a) Reports. The Company has
previously filed or will provide evidence to the satisfaction of Buyer Agent,
prior to closing, that all reports, registration statements, definitive proxy
statements and other documents and all amendments thereto and supplements
thereof required to be filed by it with the U.S. Securities and Exchange
Commission (the “Commission”) as respectively required, (the “SEC Reports”), are
available and will comply in all material respects with the applicable
requirements of the respective agency or listing body and the rules and
regulations promulgated thereunder. As of their respective dates, the SEC
Reports complied in all material respects with the requirements and none of the
SEC Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The financial statements of the Company included in the
SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis during the periods involved (“GAAP”), except as may be
otherwise specified in such financial statements or the notes thereto, and
fairly present in all material respects the financial position of the Company
and its consolidated subsidiaries if any, as of and for the dates thereof and
the results of operations and cash flows for the periods then ended, subject, in
the case of unaudited statements, to normal, immaterial, year-end audit
adjustments. 

4 

     (b) Organization of Company; No
Subsidiaries. The Company is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Nevada. The Company is duly
authorized to conduct business and is in good standing under the laws of each
jurisdiction where such qualification is required. The Company has full
corporate power and authority and all licenses, permits, and authorizations
necessary to carry on its business. The Company has no subsidiaries and does not
control, directly or indirectly, or have any direct or indirect equity
participation in any entity. The Sellers have delivered to the Buyer true,
correct and complete copies of the Certificate of Incorporation and Bylaws of
the Company, as amended through the date hereof. 

     (c) Capitalization. No Restrictive
Agreements. The Company’s authorized capital stock, as of the date of this
Agreement, consists of 500,000,000 shares of Common Stock, .001 par value, of
which eighty eight million six hunfred and fifty (88,650,000) are issued and
outstanding. In addition the Company has 100 shares of Series A Preferred and
1,000 shares of Series B Preferred Shares, none of which are issued or
outstanding. There are no other forms of equity securities or instruments which
could convert to equity securities which are authorized, issued or outstanding.
No other form of equity is authorized, issued or outstanding. The Company has
not reserved any shares of its Common Stock or Preferred Stock for issuance upon
the exercise of options, warrants or any other securities that are exercisable
or exchangeable for, or convertible into, Common Stock. All of the issued and
outstanding shares of Common Stock are validly issued, fully paid and
non-assessable and have been issued in compliance with applicable laws,
including, without limitation, applicable federal and state securities laws.
There are no outstanding options, warrants or other rights of any kind to
acquire any additional shares of capital stock of the Company or securities
exercisable or exchangeable for, or convertible into, capital stock of the
Company, nor is the Company committed to issue any such option, warrant, right
or security. There are no agreements relating to the voting, purchase or sale of
capital stock (i) between or among the Company and any of its stockholders, (ii)
between or among the Sellers and any third party, or (iii) to the best knowledge
of the Controlling Stockholder between or among any of the Company’s
stockholders. The Company is not a party to any agreement granting any
stockholder of the Company the right to cause the Company to register shares of
the capital stock of the Company held by such stockholder under the Securities
Act. No further shares will be authorized or issued by the Company of any nature
or description prior to the closing of this transaction. There are no voting
agreements with respect to any of the issued or outstanding shares known or
believed to exist by the Sellers or any of them.

5 

     (d) Financial Statements. The
Sellers will, provide to the Buyer the audited balance sheet and statements of
income, changes in stockholders' equity and cash flows as of and for the year
ended May 31, 2011 and the reviewed information for the 1 quarter ended August
31, 2011 (collectively, the financial statements described in (i) and (ii) are
referred to as the "Financial Statements"). The Financial Statements will be
prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis, fairly present the financial
condition, results of operations and cash flows of the Company as of the
respective dates thereof and for the periods referred to therein and are
consistent with the books and records of the Company. The Company does not have
any liability (whether known or unknown, whether asserted or un-asserted,
whether absolute or contingent, whether accrued or un-accrued, whether
liquidated or un-liquidated, and whether due or to become due), including any
liability for taxes, except for liabilities expressly specified in the Financial
Statements which are approved in writing by Buyer (none of which results from,
arises out of, relates to, is in the nature of, or was caused by any breach of
contract, breach of warranty, tort, infringement, or violation of law). 

     (e) Absence of Certain Changes.
At the time of the Closing, there will not have been any event or condition of
any character which has adversely affected, or may be expected to adversely
affect, the Company’s business or prospects, including, but not limited to any
adverse change in the condition, assets, liabilities (existing or contingent) or
business of the Company from that shown in the Financial Statements. 

     (f) Legal Proceedings. As of
the date of this Agreement, there is no legal, administrative, investigatory,
regulatory or similar action, suit, claim or proceeding which is pending or, to
the Controlling Stockholder’s knowledge, threatened against the Company which,
if determined adversely to the Company, could have, individually or in the
aggregate, a material adverse effect on the business, assets, or prospects of
the Company or which in any manner challenges or seeks to prevent, enjoin, alter
or delay the transactions contemplated by this Agreement. 

     (g) Legal Compliance. The
Company has complied in all material respects with all applicable laws
(including rules, regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings, and charges thereunder) of all governmental authorities, and
no action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against the Company alleging any
failure so to comply. To the Controlling Stockholder’s knowledge, neither the
Company, nor any officer, director, employee, consultant or agent of the Company
has made, directly or indirectly, any payment or promise to pay, or gift or
promise to give or authorized such a promise or gift, of any money or anything
of value, directly or indirectly, to any governmental official, customer or
supplier for the purpose of influencing any official act or decision of such
official, customer or supplier or inducing him, her or it to use his, her or its
influence to affect any act or decision of a governmental authority or customer,
under circumstances which could subject the Company or any officers, directors,
employees or consultants of the Company to administrative or criminal penalties
or sanctions.

     (h) Tax Matters.

     (i) The
Company has filed all Tax Returns (U.S.) that it was required to file. All such
Tax Returns were correct and complete in all respects. All Taxes owed by the
Company has been paid. The Company is currently the
beneficiary of any extension of time within which to file any Tax Return. No
claim has ever been made by an authority in any jurisdiction which the Company
does not file Tax Returns that it is or may be subject to taxation by that
jurisdiction. There are no Security Interests on any of the assets of the
Company that arose in connection with any failure (or alleged failure) to pay
any Tax.

S-1

     (ii) The
Company has withheld and paid all Taxes required to have been withheld and paid
in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder, or other third party.

     (iii) The
Controlling Stockholders do not expect any authority to assess any additional
Taxes for any period for which Tax Returns have been filed. There is no dispute
or claim concerning any Liability with respect to any Taxes (a “Tax
Liability”) of the Company (A) claimed or raised by any authority in writing
or (B) as to which the Controlling Stockholder has Knowledge based upon personal
contact with any agent of such authority. No tax returns of the Company have
ever been audited or are currently the subject of an audit. The Sellers have
delivered to the Buyer correct and complete copies of all federal and state
income and other material Tax Returns, examination reports, and statements of
deficiencies assessed against or agreed to by the Company since inception. 

     (iv) The
has not waived any statute of limitations in respect of Taxes or agreed to any
extension of time with respect to a Tax assessment or deficiency.

     (v) The
Company has not filed a consent under Code Section 341(f) concerning collapsible
corporations. The Company has not made any payments, is obligated to make any
payments, or is a party to any agreement that under certain circumstances could
obligate it to make any payments that will not be deductible under Code Section
280G. The Company has not been a United States real property holding corporation
within the meaning of Code Section 897(c)(2) during the applicable period
specified in Code Section 897(c)(1)(A)(ii). The Company is not a party to any
Tax allocation or sharing agreement. The Company (A) is and has not been a
member of an Affiliated Group filing a consolidated federal income Tax Return
(other than a group the common parent of which was the Company) and (B) has any
Liability for the Taxes of any Person under Reg. Provision 1.1502 -6 (or any
similar provision of state, local, or foreign law), as a transferee or
successor, by contract, or otherwise.

     (i) Status of Company Shares under
Securities Act. There are currently issued and outstanding eighty eight
million six hundred and fifty thousand (88,650,000) common shares, of which
sixty two million (62,000,000) shares constitute “restricted stock” under the
Securities Act and the balance of the shares have been duly registered pursuant
to an S-1 or SB-2 registration statement or are otherwise exempt from
registration and such exemption has been opined upon by company counsel.

     (j) Disclosure. No
representation or warranty by the Sellers contained in this Agreement, and no
statement contained in the any document, certificate or other instrument
delivered or to be delivered by or on behalf of the Sellers pursuant to this
Agreement, contains or will contain any untrue statement of a material fact or
omit or will omit to state any material fact necessary, in light of the
circumstances under which it was or will be made, in order to make the
statements herein or therein not misleading. 

     (k) Foreign Corrupt Practices
Act. Neither the Company nor any of its Subsidiaries (nor any person
representing the Company or any of its Subsidiaries) has at any time during the
last five years (a) made any payment in violation of the Foreign Corrupt
Practices Act or similar laws of other countries where the Company engages in
business, or (b) made any payment to any foreign, federal or state governmental officer or official, or other person charged with
similar public or quasi-public duties, other than payments required or permitted
by the laws of the United States or any jurisdiction thereof.

S-2

     (l) Export Control
Laws. The Company has conducted its export transactions in accordance
in all material respects with applicable provisions of United States export
control laws and regulations, including but not limited to the Export
Administration Act and implementing Export Administration Regulations.

     (m)
Employees. Neither the Company nor any of its Subsidiaries
is a party to any collective bargaining agreement, arrangement or labor contract
with a labor union or labor organization, whether formal or otherwise, except as
set forth in Section 3(a)(vii) of the Company Disclosure Letter. The Company
Disclosure Letter, under the caption referencing this Section 3(a)(vii), lists
all employment, severance and change of control agreements (or any other
agreements that may result in the acceleration of outstanding options) of the
Company or its Subsidiaries. To the Company’s knowledge, each of the Company and
its Subsidiaries is in compliance with all applicable laws (including, without
limitation, all applicable extension orders) respecting employment and
employment practices, terms and conditions of employment, equal opportunity,
anti-discrimination laws, and wages and hours, except where such noncompliance
has not had and would not, individually or in the aggregate, reasonably be
expected to have, a Company Material Adverse Effect. There is no labor strike,
slowdown or stoppage pending (or, to the Knowledge of the Company or any of its
Subsidiaries, any unfair labor practice complaints, labor disturbances or other
controversies respecting employment which are pending or threatened which, if
they actually occurred, would reasonably be expected to have a Company Material
Adverse Effect) against the Company or any of its Subsidiaries.

     (n) Delivery of Books and Records: The
Sellers shall deliver all books, records, accounts, bank statements, tax
returns, corporate files, any correspondence with any State or Federal Regulator
for review by counsel for Buyer and shall deliver all such records to Buyer at
closing. Seller shall deliver originals of all such books, accounts and records
within 10 days of closing of this transaction. 

     (o) The Company is currently listed in
good standing on the OTC-Bulletin Board Listing System (OTC-BB) under the
trading symbol “ECIT” and Sellers will maintain or cause to be maintained the
status of the listing on the OTC-BB through the date of closing and will also
maintain the status of the Company as an operating company and not a shell as
that term is defined under current SEC rules and regulations. All filings shall
be current as of the date of Closing. 

     5. Pre-Closing Covenants.
The Parties agree as follows with respect to the period between the execution of
this Agreement and the Closing.

     (a) General. Each of the
Parties will use his or its best efforts to take all action and to do all things
necessary, proper, or advisable in order to consummate and make effective the
transactions contemplated by this Agreement (including satisfaction, but not
waiver, of the closing conditions set forth below).

     (b) Notices and Consents.
If and when applicable, the Sellers will cause the Company to give any notices
to third parties, and will cause the Company to use its best efforts to obtain
any third party consents, that the Buyer may request. Each of the Parties will
(and the Sellers will cause the Company to) give any notices to, make any
filings with, and use its best efforts to obtain any authorizations, consents,
and approvals of Governmental Authorities necessary in order to
consummate the transactions contemplated hereby. 

S-3

     (c) Operation of Business.
The Sellers will not cause or permit the Company to engage in any practice, take
any action, or enter into any transaction outside the Ordinary Course of
Business. Without limiting the generality of the foregoing, the Sellers will not
cause or permit the Company to (i) declare, set aside, or pay any dividend or
make any distribution with respect to its capital stock or redeem, purchase, or
otherwise acquire any of its capital stock except as otherwise expressly
specified herein, (ii) issue, sell, or otherwise dispose of any of its capital
stock, or grant any options, warrants, preemptive or other rights to purchase or
obtain (including upon conversion, exchange, or exercise) any of its capital
stock, (iii) make any capital expenditures, loans, or incur any other
obligations or liabilities, (iv) enter into any agreements involving
expenditures individually, or in the aggregate, of more than $1,000 (other than
agreements for professional services which will be paid in full at or prior to
the Closing) or (ii) otherwise engage in any practice, take any action, or enter
into any transaction out of the ordinary course of business.

     (d) Preservation of
Business. The Sellers will cause the Company to keep its business and
properties substantially intact, including the documents which might be
necessary for filing of all reports required to be filed with the Securities and
Exchange Commission in order to regain the Company’s status as a reporting
company or otherwise deliver to the Buyer, to its counsel’s satisfaction all
such records as are required to make such filings and cooperate with the Buyer
and its counsel in providing such information as needed to file such
reports.

     (e) Full Access. Each of the
Sellers will permit, and the Sellers will cause the Company to permit,
representatives of the Buyer to have full access at all reasonable times, to all
premises, properties, personnel, accountants, customers, suppliers, third party
lenders and other third parties whose consent is required in order to consummate
the transactions contemplated hereby, books, records (including Tax records),
contracts, and documents of or pertaining to the Company. 

     (f) Notice of
Developments. The Sellers will give prompt written notice to the Buyer of
any material adverse development causing a breach of any of the representations
and warranties in paragraph 4 above. Each Party will give prompt written notice
to the others of any material adverse development causing a breach of any of his
own representations and warranties in Section 3 above. No disclosure by any
Party pursuant to this Section 5(f), however, shall be deemed to amend or
supplement Annex I, Annex II, or the Disclosure Schedule or to prevent or cure
any misrepresentation, breach of warranty, or breach of covenant.

     (g) Exclusivity. None of the
Sellers will (and the Sellers will not cause or permit the Company to) (i)
solicit, initiate, or encourage the submission of any proposal or offer from any
Person relating to the acquisition of any capital stock or other voting
securities, or any assets (other than dispositions of inventory or other assets
in the Ordinary Course of Business) (including any acquisition structured as a
merger, consolidation, or share exchange) or (ii) participate in any discussions
or negotiations regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner any effort or attempt by any
Person to do or seek any of the foregoing. None of the Sellers will vote their
Company Shares in favor of any such acquisition structured as a merger,
consolidation, or share exchange. The Sellers will notify the Buyer immediately
if any Person makes any proposal, offer, inquiry, or contact with respect to any
of the foregoing.

S-4

6. Post-Closing Covenants. The Parties agree as follows
with respect to the period following the Closing.

     (a) General. In case at any
time after the Closing any further action is necessary or desirable to carry out
the purposes of this Agreement, each of the Parties will take such further
action (including the execution and delivery of such further instruments and
documents) as any other Party may request, all at the sole cost and expense of
the requesting Party (unless the requesting Party is entitled to indemnification
therefor under Section 7 below). The Sellers acknowledge and agree that from and
after the Closing the Buyer will be entitled to possession of all documents,
books, records (including Tax records), agreements, and financial data of any
sort relating to the Company and Sellers agree to fully cooperate in the
delivery of any and all books, accounts, records, corporate documents and all
similar such items, including delivery of accountants notes and the consent of
the accountants for a change in accounting firms at no additional cost to the
Buyer herein. 

     (b) Litigation Support. In
the event and for so long as any Party actively is contesting or defending
against any action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand in connection with (i) any transaction contemplated under this
Agreement or (ii) any fact, situation, circumstance, status, condition,
activity, practice, plan, occurrence, event, incident, action, failure to act,
or transaction on or prior to the Closing Date involving the Company, each of
the other Parties will cooperate with him or it and his or its counsel in the
contest or defense, make available their personnel, and provide such testimony
and access to their books and records as shall be necessary in connection with
the contest or defense, all at the sole cost and expense of the contesting or
defending Party (unless the contesting or defending Party is entitled to
indemnification therefore under Section 7 below).

     (c) Filings. Sellers shall
cooperate with Buyer in providing any information required for the above filings
at no cost to Buyer. 

     (d) Transition. None of
the Sellers will take any action that is designed or intended to have the effect
of impairing the Company’s legal or regulatory status pending, at or after the
closing.

     7. Remedies for Breaches of This
Agreement.

     (a) Survival of Representations and
Warranties.

     All of the representations and
warranties of the Parties, other than the representations and warranties
contained in Sections 3(a)(i), 3(a)(ii), 3(a)(iv), 4(c) and 4(h) above, shall
survive the Closing hereunder (even if the Buyer knew or had reason to know of
any misrepresentation or breach of warranty at the time of Closing) and continue
in full force and effect for a period of three years thereafter. The
representations and warranties of the Sellers contained in Sections 3(a)(i),
3(a)(ii), 3(a)(iv), 4(c) and 4(h) above shall survive the Closing (even if the
damaged Party knew or had reason to know of any misrepresentation or breach of
warranty at the time of Closing) and continue in full force and effect forever
thereafter (subject to any applicable statutes of limitations).

S-5

     (b) Indemnification Provisions for
Benefit of the Buyer.

     (i) In
the event any of the Sellers breaches (or in the event any third party alleges
facts that, if true, would mean any of the Sellers has breached) any of their
representations, warranties, and covenants contained herein, and, if there is an
applicable survival period provided that the Buyer make a written claim for
indemnification against any of the Sellers pursuant to Section 9(h) below within
such survival period, then the Controlling Stockholder shall indemnify the Buyer
from and against the entirety of any Adverse Consequences the Buyer may suffer
through and after the date of the claim for indemnification (including any
Adverse Consequences the Buyer may suffer after the end of any applicable
survival period) resulting from, arising out of, relating to, in the nature of,
or caused by the breach (or the alleged breach).

     (ii) The
Controlling Stockholders shall indemnify the Buyer from and against the entirety
of any Adverse Consequences the Buyer may suffer resulting from, arising out of,
relating to, in the nature of, or caused by any Liability of the Company
(whether or not accrued or otherwise disclosed) (x) for any Taxes of the Company
with respect to any Tax year or portion thereof ending on or before the Closing
Date (or for any Tax year beginning before and ending after the Closing Date to
the extent allocable to the portion of such period beginning before and ending
on the Closing Date) and (y) for the unpaid Taxes of any Person (other than the
Company) under Reg. Provision 1.1502 -6 (or any similar provision of state,
local, or foreign law), as a transferee or successor, by contract, or
otherwise.

     (iii) The
Controlling Stockholders shall indemnify the Buyer from and against the entirety
of any Adverse Consequences the Buyer may suffer resulting from, arising out of,
relating to, in the nature of, or caused by (A) any Liabilities arising out of
the ownership of the capital stock of, or the use or operation of the business
of the Company prior to the Closing and (B) any other business or operations
(other than of the Company) owned in whole or in part by any of the Sellers.

     (iv) The
Controlling Stockholders shall indemnify the Buyer from and against the entirety
of any Adverse Consequences the Buyer may suffer resulting from, arising out of,
relating to, in the nature of, or caused by any Indebtedness of the Company or
any Subsidiary existing as of the Closing Date.

     (v)
Notwithstanding anything herein to the contrary, Buyer shall not be responsible
for indemnification of Buyer until the amount subject to indemnification shall
exceed $10,000 in the aggregate nor shall Buyer be required to pay
indemnification for more than the Purchase Price absent willful or wanton
statements or representations or the intentional failure to disclose any matters
of a material nature.

     (c) Indemnification Provisions
for Benefit of the Sellers. In the event the Buyer breach (or in the event
any third party alleges facts that, if true, would mean the Buyer have breached)
any of its representations, warranties, and covenants contained herein, and, if
there is an applicable survival period, provided that any of the Sellers makes a
written claim for indemnification against the Buyer pursuant to Section 9(h)
below within such survival period, then the Buyer shall indemnify each of the
Sellers from and against the entirety of any Adverse Consequences the
Sellers may suffer through and after the date of the claim for indemnification
(including any Adverse Consequences the Sellers may suffer after the end of any
applicable survival period) resulting from, arising out of, relating to, in the
nature of, or caused by the breach (or the alleged breach).

S-6

     (d) Matters Involving Third
Parties.

     (i) If
any third party shall notify any Party (the “Indemnified Party”) with
respect to any matter (a “Third Party Claim”) which may give rise to a
claim for indemnification against any other Party (the “Indemnifying
Party”) under this Section 7, then the Indemnified Party shall promptly
notify each Indemnifying Party thereof in writing; provided, however,
that no delay on the part of the Indemnified Party in notifying any Indemnifying
Party shall relieve the Indemnifying Party from any obligation hereunder unless
(and then solely to the extent) the Indemnifying Party thereby is
prejudiced.

     (ii) Any
Indemnifying Party will have the right to defend the Indemnified Party against
the Third Party Claim with counsel of its choice reasonably satisfactory to the
Indemnified Party so long as (A) the Indemnifying Party notifies the Indemnified
Party in writing within 10 days after the Indemnified Party has given notice of
the Third Party Claim that the Indemnifying Party will indemnify the Indemnified
Party from and against the entirety of any Adverse Consequences the Indemnified
Party may suffer resulting from, arising out of, relating to, in the nature of,
or caused by the Third Party Claim, (B) the Indemnifying Party provides the
Indemnified Party with evidence reasonably acceptable to the Indemnified Party
that the Indemnifying Party will have the financial resources to defend against
the Third Party Claim and fulfill its indemnification obligations hereunder, (C)
the Third Party Claim involves only money damages and does not seek an
injunction or other equitable relief, (D) settlement of, or an adverse judgment
with respect to, the Third Party Claim is not, in the good faith judgment of the
Indemnified Party, likely to establish a precedent or practice adverse to the
continuing business interests of the Indemnified Party, and (E) the Indemnifying
Party conducts the defense of the Third Party Claim actively and diligently.

     (iii) So
long as the Indemnifying Party is conducting the defense of the Third Party
Claim in accordance with Section 7(d)(ii) above, (A) the Indemnified Party may
retain separate co-counsel at its sole cost and expense and participate in the
defense of the Third Party Claim, (B) the Indemnified Party will not consent to
the entry of any judgment or enter into any settlement with respect to the Third
Party Claim without the prior written consent of the Indemnifying Party (not to
be withheld unreasonably), and (C) the Indemnifying Party will not consent to
the entry of any judgment or enter into any settlement with respect to the Third
Party Claim without the prior written consent of the Indemnified Party (not to
be withheld unreasonably).

     (iv) In
the event any of the conditions in Section 7(d)(ii) above is or becomes
unsatisfied, however, (A) the Indemnified Party may defend against, and consent
to the entry of any judgment or enter into any settlement with respect to, the
Third Party Claim in any manner it reasonably may deem appropriate (and the
Indemnified Party need not consult with, or obtain any consent from, any
Indemnifying Party in connection therewith), (B) the Indemnifying Parties will
reimburse the Indemnified Party promptly and periodically for the costs of
defending against the Third Party Claim (including attorneys' fees and
expenses), and (C) the Indemnifying Parties will remain responsible for any Adverse
Consequences the Indemnified Party may suffer resulting from, arising out of,
relating to, in the nature of, or caused by the Third Party Claim to the fullest
extent provided in this Section 7.

S-7

     (e) Other Indemnification
Provisions. Each of the Sellers hereby agrees that he or it will not make
any claim for indemnification against the Company by reason of the fact that he
or it was a director, officer, employee, or agent of any such entity or was
serving at the request of any such entity as a partner, trustee, director,
officer, employee, or agent of another entity (whether such claim is for
judgments, damages, penalties, fines, costs, amounts paid in settlement, losses,
expenses, or otherwise and whether such claim is pursuant to any statute,
charter document, bylaw, agreement, or otherwise) with respect to any action,
suit, proceeding, complaint, claim, or demand brought by the Buyer against such
Seller (whether such action, suit, proceeding, complaint, claim, or demand is
pursuant to this Agreement, applicable law, or otherwise).

     8. Tax Matters. The
following provisions shall govern the allocation of responsibility as between
Buyer and Sellers for certain tax matters following the Closing Date: 

     (a) Tax Periods Ending on or
Before the Closing Date. Buyer shall prepare or cause to be prepared and
file or cause to be filed all Tax Returns for the Company for all periods ending
on or prior to the Closing Date which are filed after the Closing Date. The
Buyer shall permit the Sellers to review and comment on each such Tax Return
described in the preceding sentence prior to filing. (b) Tax Periods
Beginning Before and Ending After the Closing Date. Buyer shall prepare
or cause to be prepared and file or cause to be filed any Tax Returns of the
Company for Tax periods which begin before the Closing Date and end after the
Closing Date. Buyer shall permit the Sellers to review and comment on each such
Tax Return described in the preceding sentence prior to filing. Sellers shall
pay to Buyer within fifteen (15) days after the date on which Taxes are paid
with respect to such periods an amount equal to the portion of such Taxes which
relates to the portion of such Taxable period ending on the Closing Date. For
purposes of this Section, in the case of any Taxes that are imposed on a
periodic basis and are payable for a Taxable period that includes (but does not
end on) the Closing Date, the portion of such Tax which relates to the portion
of such Taxable period ending on the Closing Date shall (x) in the case of any
Taxes other than Taxes based upon or related to income or receipts, be deemed to
be the amount of such Tax for the entire Taxable period multiplied by a fraction
the numerator of which is the number of days in the Taxable period ending on the
Closing Date and the denominator of which is the number of days in the entire
Taxable period, and (y) in the case of any Tax based upon or related to income
or receipts, be deemed equal to the amount which would be payable if the
relevant Taxable period ended on the Closing Date. Any credits relating to a
Taxable period that begins before and ends after the Closing Date shall be taken
into account as though the relevant Taxable period ended on the Closing Date.
All determinations necessary to give effect to the foregoing allocations shall
be made in a manner consistent with prior practice of the Company.

     (c) Cooperation on Tax
Matters.

     (i) The
Buyer, the Company and Sellers shall cooperate fully, as and to the extent
reasonably requested by the other party, in connection with the filing of Tax
Returns pursuant to this Section and any audit, litigation or other proceeding
with respect to Taxes. Such cooperation shall include the retention and (upon
the other party's request) the provision of records and information which are
reasonably relevant to any such audit, litigation or other proceeding and making employees available on a
mutually convenient basis to provide additional information and explanation of
any material provided hereunder. The Company and the Sellers agree (A) to retain
all books and records with respect to Tax matters pertinent to the Company
relating to any taxable period beginning before the Closing Date until the
expiration of the statute of limitations (and, to the extent notified by Buyer
or Sellers, any extensions thereof) of the respective taxable periods, and to
abide by all record retention agreements entered into with any taxing authority,
and (B) to give the other party reasonable written notice prior to transferring,
destroying or discarding any such books and records and, if the other party so
requests, the Company or the Sellers, as the case may be, shall allow the other
party to take possession of such books and records.

S-8

     (ii) The
Buyer and Sellers further agree, upon request, to use their best efforts to
obtain any certificate or other document from any Governmental Authority or any
other Person as may be necessary to mitigate, reduce or eliminate any Tax that
could be imposed (including, but not limited to, with respect to the
transactions contemplated hereby) without the imposition of a countervailing
Tax or loss of Tax attributes on or by the Party to whom such request is
directed.

     (d) Tax Sharing
Agreements. All tax sharing agreements or similar agreements with respect to
or involving the Company shall be terminated as of the Closing Date and, after
the Closing Date, the Company shall not be bound thereby or have any liability
thereunder.

     (e) Certain Taxes. All
transfer, documentary, sales, use, stamp, registration and other such Taxes and
fees (including any penalties and interest) incurred in connection with this
Agreement shall be paid by Sellers when due, and Sellers will, at their own
expense, file all necessary Tax Returns and other documentation with respect to
all such transfer, documentary, sales, use, stamp, registration and other Taxes
and fees, and, if required by applicable law, the Buyer will, and will cause its
affiliates to, join in the execution of any such Tax Returns and other
documentation.

     9. Miscellaneous. 

     (a) Release. Each Seller
hereby acknowledges that the Indemnified Party (as defined below) are expressly
relying on this release provision in consummating the transactions contemplated
by this Agreement, and would not consummate such transactions but for this
release provision. 

     Each Seller hereby acknowledges,
confirms and agrees that such Seller (a) is the exclusive owner of the Company
Shares being sold by such Seller to the Buyer hereunder, (b) does not have any
equity interest in the Company other than the Company Shares being sold to the
Buyer hereunder, and (c) does not have any rights to any additional shares of
the capital stock or any other securities of the Company, including any options,
warrants, conversion privileges, preemptive rights or other rights or
agreements. 

     Each Seller, on behalf of such
Seller and each of such Seller’s respective Affiliates (if any), hereby releases
and forever discharges each Buyer, the Company and their respective Affiliates,
officers, directors, employees and agents (collectively, the “Indemnified
Party”) from any and all claims, demands, judgments, proceedings, causes of
action, orders, obligations, contracts, agreements, liens, accounts, costs and
expenses (including attorney’s fees and court costs), debts and liabilities
whatsoever, whether known or unknown, suspected or unsuspected, matured or
un-matured, both at law (including federal and state securities laws) and in
equity, which such Seller or any of such Seller’s respective Affiliates now
have, have ever had or may hereafter have against the Indemnified Party arising
contemporaneously with or prior to the date of this Agreement or on account of or arising
out of any matter, cause, event or omission occurring contemporaneously with or
prior to the date of this Agreement, including, but not limited to, any rights
to indemnification or reimbursement from the Company, whether pursuant to the
Company’s articles of organization, resolution, contract or otherwise and
whether or not relating to claims pending on, or asserted after, the date of
this Release; provided, however, that nothing contained herein shall
operate to release any obligations of the Buyer to the Sellers arising
exclusively as a result of this Agreement. 

S-9

     Each Seller hereby irrevocably
covenants to refrain from, directly or indirectly, asserting any claim or
demand, or commencing, instituting or causing to be commenced, any proceeding of
any kind against any Indemnified Party, based upon any matter purported to be
released hereby. 

     Without in any way limiting any
of the rights and remedies otherwise available to any Indemnified Party, each
Seller shall indemnify and hold harmless each Indemnified Party from and against
all actions, suits, proceedings, hearings, investigations, charges, complaints,
claims, demands, injunctions, judgments, orders, decrees, rulings, damages,
dues, penalties, fines, costs, amounts paid in settlement, liabilities,
obligations, security interests, taxes, liens, losses, lost value, expenses and
fees arising directly or indirectly from or in connection with (i) the assertion
by or on behalf of such Seller or such Seller’s Affiliates of any claim or other
matter purported to be released pursuant to this provision and (ii) the
assertion by any third party of any claim or demand against any Indemnified
Party which claim or demand arises directly or indirectly from, or in connection
with, any assertion by or on behalf of such Seller, or any of such Seller’s
Affiliates against any third party of any claims or other matters purported to
be released pursuant to this provision. 

     (b) Press Releases and Public
Announcements. No Party shall issue any press release or make any public
announcement relating to the subject matter of this Agreement without the prior
written approval of the Buyer Representative; provided, however, that any
Party may make any public disclosure it believes in good faith is required by
applicable law or any listing or trading agreement concerning its
publicly-traded securities (in which case the disclosing Party will use its best
efforts to advise the other Parties prior to making the disclosure).

     (c) No Third-Party
Beneficiaries. This Agreement shall not confer any rights or remedies upon
any Person other than the Parties and their respective successors and permitted
assigns.

     (d) Entire Agreement. This
Agreement (including the documents referred to herein) constitutes the entire
agreement among the Parties and supersedes any prior understandings, agreements,
or representations by or among the Parties, written or oral, to the extent they
related in any way to the subject matter hereof.

     (e) Succession and
Assignment. This Agreement shall be binding upon and inure to the benefit of
the Parties named herein and their respective successors and permitted assigns.
No Party may assign either this Agreement or any of his or its rights,
interests, or obligations hereunder without the prior written approval of the
Buyer Representative and the Seller Representative; provided, however,
that the Buyer may (i) assign any or all of its rights and interests hereunder
to one or more of its Affiliates or to any other designee, and (ii) designate
one or more of its Affiliates or any other designee to perform its obligations
hereunder (in any or all of which cases the Buyer nonetheless shall remain
responsible for the performance of all of their obligations hereunder).

S-10

     (f) Counterparts; Facsimile
Execution. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original but all of which together will constitute
one and the same instrument. Facsimile execution of this Agreement shall be
legal, valid and binding for all purposes. 

     (g) Headings. The section
headings contained in this Agreement are inserted for convenience only and shall
not affect in any way the meaning or interpretation of this Agreement.

     (h) Notices. All notices,
requests, demands, claims, and other communications hereunder will be in
writing. Any notice, request, demand, claim, or other communication hereunder
shall be deemed duly given if (and then two business days after) it is sent by
registered or certified mail, return receipt requested, postage prepaid, and
addressed to the intended recipient as set forth below: 

     If to the Sellers:

Capitalsense Ltd.
Attn:_______________
361 Summit Road Morningside, South Africa

Phone:_________________________
Fax:
___________________________
Email: _________________________

David Wallace 
20 Highgate, 
8
Sunny Road, Lakefield, 
Benoni, South Africa, 1501. 
Phone: 27-11-918-0198

Fax: 27-11-918-0198 
Email: davidwallace@telkomsa.net 

Cimarron Capital Ltd.

Phone:_________________________
Fax:
___________________________
Email: _________________________

Altimo Ltd.
Attn:___________________
# 7 New Road Belize 

Phone:_________________________
Fax:___________________________
Email:
_________________________

     And 

S-11

     If to the Buyer: D & R Technology,
Inc. 

Tax ID

Email:____________________________
Phone:
____________________________
Fax: ______________________________

Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth above
using any other means (including personal delivery, expedited courier, messenger
service, telecopy, telex, ordinary mail, or electronic mail), but no such
notice, request, demand, claim, or other communication shall be deemed to have
been duly given unless and until it actually is received by the intended
recipient. Any Party may change the address to which notices, requests, demands,
claims, and other communications hereunder are to be delivered by giving the
other Parties notice in the manner herein set forth.

     (i) Governing Law. This
Agreement shall be governed by and construed in accordance with the domestic
laws of the State of New York without giving effect to any choice or conflict of
law provision or rule (whether of the State of New York or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of New York.

     (j) Amendments and
Waivers. No amendment of any provision of this Agreement shall be valid
unless the same shall be in writing and signed by the Buyer Representative and
the Seller Representative. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.

      (k) Severability. Any
term or provision of this Agreement that is invalid or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability of
the remaining terms and provisions hereof or the validity or enforceability of
the offending term or provision in any other situation or in any other
jurisdiction.

     (l) Expenses. Each of the
Parties will bear his or its own costs and expenses (Buyer and Sellers expenses)
incurred in connection with this Agreement and the transactions contemplated
hereby. The Sellers agree that the Company has not borne or will bear any of the
Sellers' costs and expenses (including any of their legal fees and expenses) in
connection with this Agreement or any of the transactions contemplated hereby,
including, without limitation, the declaration and payment by the Company of a
dividend of the shares of capital stock of its only subsidiary.

     (m) Construction. The
Parties have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the Parties
and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state or local
statute or law shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise. The word
“including” shall mean including without limitation. The Parties intend that
each representation, warranty, and covenant contained herein shall have
independent significance. If any Party has breached any representation,
warranty, or covenant contained herein in any respect, the fact that there
exists another representation, warranty, or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which the
Party has not breached shall not detract from or mitigate the fact that the
Party is in breach of the first representation, warranty, or covenant. Nothing
in the Disclosure Schedule shall be deemed adequate to disclose an exception to
a representation or warranty made herein, however, unless the Disclosure
Schedule identifies the exception with particularity and describes the relevant
facts in detail. Without limiting the generality of the foregoing, the mere
listing (or inclusion of a copy) of a document or other item shall not be deemed
adequate to disclose an exception to a representation or warranty made herein
(unless the representation or warranty has to do with the existence of the
document or other item itself).

S-12

     (n) Incorporation of Exhibits,
Annexes, and Schedules. The Exhibits, Annexes, and Schedules identified in
this Agreement are incorporated herein by reference and made a part hereof.

     (o) Specific Performance.
Each of the Parties acknowledges and agrees that the other Parties would be
damaged irreparably in the event any of the provisions of this Agreement are not
performed in accordance with their specific terms or otherwise are breached.
Accordingly, each of the Parties agrees that the other Parties shall be entitled
to an injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in any action instituted in any court of the United States or
any state thereof having jurisdiction over the Parties and the matter (subject
to the provisions set forth in paragraph 9(p) below), in addition to any other
remedy to which they may be entitled, at law or in equity. (p) Submission to
Jurisdiction. Each of the Parties submits to the jurisdiction of any state
court sitting in the County of New York, State of New York, in any action or
proceeding arising out of or relating to this Agreement and agrees that all
claims in respect of the action or proceeding may be heard and determined in any
such court. Each of the Parties waives any defense of inconvenient forum to the
maintenance of any action or proceeding so brought and waives any bond, surety,
or other security that might be required of any other Party with respect
thereto. Any Party may make service on any other Party by sending or delivering
a copy of the process to the Party to be served at the address and in the manner
provided for the giving of notices in paragraph 9(h) above. Nothing in this
paragraph 9(p), however, shall affect the right of any Party to bring any action
or proceeding arising out of or relating to this Agreement in any other court or
to serve legal process in any other manner permitted by law or at equity. Each
Party agrees that a final judgment in any action or proceeding so brought shall
be conclusive and may be enforced by suit on the judgment or in any other manner
provided by law or at equity.

S-13

[Buyer Signature Page] 

     IN WITNESS WHEREOF, the
undersigned Buyer has executed this Agreement as of the date first above
written.

	 	D&R Technology, Inc. 
	 	(Buyer) 
	 	  
	 	  
	 	By:_________________________________ 
	 	                                             ,
      CEO 

S-14

[Seller Signature Page] 

     IN WITNESS WHEREOF, the
undersigned Seller has executed this Agreement as of the date first above
written.

	 	           
             Capitalsense Ltd 
	 	           
             A ______________Company 
	 	           
             361 Summit Road, 
	 	           
             Morning Side South Africa 
	 	  
	 	  
	 	  
	 	  
	 	By:_________________________________ 
	 	 
	 	      _________________________________
    
	 	Its (President) (Manager) 
	 	  
	 	  
	 	  
	 	           
               Altimo Ltd. 
	 	           
             # 7 New Road Belize 
	 	           
             A _______________Company 
	 	  
	 	  
	 	  
	 	  
	 	By:_________________________________ 
	 	 
	 	     
      _________________________________ 
	 	Its (President) (Manager) 
	 	  
	 	  
	 	           
             Cimarron Capital Ltd. 
	 	           
             A ________________Company 
	 	  
	 	  
	 	  
	 	  
	 	By:_________________________________ 
	 	 
	 	    
      _________________________________ 
	 	Its (President) (Manager) 
	 	  
	 	  
	 	           
             David Wallace, An Individual 
	 	20 Highgate, 8 Sunny Road, Lakefield, 
	 	Benoni, South Africa, 1501.
	 	 

A-1

APPENDIX A 

DEFINITIONS 

     As used herein, the following terms
have the respective meanings set forth below: 

     “Adverse Consequences”
means all actions, suits, proceedings, hearings, investigations, charges,
complaints, claims, demands, injunctions, judgments, orders, decrees, rulings,
damages, dues, penalties, fines, costs, amounts paid in settlement, Liabilities,
obligations, Taxes, liens, losses, lost value, expenses, and fees, including
court costs and attorneys' fees and expenses.

     “Affiliate” has the
meaning set forth in Rule 12b-2 of the regulations promulgated under the
Securities Exchange Act.

     “Affiliated Group” means
any affiliated group within the meaning of Code Section 1504(a) or any similar
group defined under a similar provision of state or local law.

     “Buyer(s)” has the meaning set
forth in the preface above.

     “Closing” has the meaning set
forth in P.2(d) above.

     “Closing Date” has the meaning
set forth in P.2(d) above.

     “Code” means the Internal
Revenue Code of 1986, as amended.

     “Company” has the meaning set
forth in the recitals above.

     “Confidential Information”
means any information concerning the businesses and affairs of the Company and
the Buyer and its Affiliates that is not already generally available to the
public and shall include any and all information relating to the price and terms
of this Agreement.

     “Controlling Stockholder” means that
stockholder or group of stockholders working in concert who own or control more
than fifty percent (50%) of the Company’s voting stock. 

     “Disclosure Schedule” has the
meaning set forth in P.4 above.

     “Financial Statements” has the
meaning set forth in P.4(d) above.

     “GAAP” means United States
generally accepted accounting principles as in effect from time to time.

     “Governmental Authority”
means any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, or any court of the United
States of America or any political subdivision thereof, or of any other country.

A-2

     “Indebtedness” of any
Person means, in each case whether or not accrued on the books of such Person,
(a) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services, (b) all obligations of such Person upon
which interest charges are customarily paid or which are evidenced by notes,
bonds, debentures, credit agreements or similar agreements or investments, (c)
all obligations of such Person under conditional sale or other title retention
agreements relating to property or assets purchased by such Person, (d) all
obligations of such Person under capitalized leases, (e) all obligations of such
Person in respect of acceptances, letters of credit or letters of guaranty
issued or created for the account of such Person, and (f) all liabilities
secured by any Security Interest on any property owned by such Person, whether
or not such Person has assumed or otherwise become liable for the payment
thereof. 

     “Indemnified Party” has the
meaning set forth in paragraph P.7(d)(i) above.

     “Indemnifying Party” has the
meaning set forth in paragraph 7(d)(i) above.

     “Liability” means any
liability (whether known or unknown, whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due), including any liability for
Taxes.

     “Ordinary Course of
Business” means the ordinary course of business consistent with past custom
and practice (including with respect to quantity and frequency).

     “Parties” has the meaning set
forth in the preface above.

     “Person” means an
individual, a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).

     “Purchase Price” has the
meaning set forth in paragraph 2(b) above.

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

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

     “Security Interest” means
any adverse claim, mortgage, pledge, lien, encumbrance, option, restriction on
transfer, easement, right of way, matter of survey, charge, or other security
interest.

     “Sellers” has the meaning set
forth in the preface above.

     “Subsidiary” means any
corporation with respect to which a specified Person (or a Subsidiary thereof)
owns a majority of the common stock or has the power to vote or direct the
voting of sufficient securities to elect a majority of the directors.

     “Tax” means any federal,
state or local income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, windfall profits, environmental
(including taxes under Code '59A), customs duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment, disability,
real property, personal property, sales, use, transfer, registration, value
added, alternative or add-on minimum, estimated, or other tax of any
kind whatsoever, including any interest, penalty, or addition thereto, whether
disputed or not.

A-3

     “Tax Liability” has the meaning
set forth in paragraph 4(h)(iii) above. 

     “Tax Return” means any
return, declaration, report, claim for refund, or information return or
statement relating to Taxes, including any schedule or attachment thereto, and
including any amendment thereof.

     “Third Party Claim” has the
meaning set forth in paragraph 7(d)(i) above. 

A-4

SCHEDULE I 

PURCHASE AND SALE OF COMPANY SHARES 
AND DISBURSEMENT OF
FUNDS 

SELLERS: 

	Name of
      Seller 	 	Address of Seller 	 	Number of Company Shares
      Sold  
	David Wallace 
	 	20 Highgate, 8 Sunny Road,
      Lakefield, 
Benoni, South Africa, 1501. 	 	32 million 

	  	 	 	 	  
	Capitalsense Ltd 
	 	361 Summit Road, 
Morning
      Side South Africa 	 	20 million 

	 	 	 	 	 
	Cimarron Capital Ltd. 	 	 	 	2 million 
	  	 	 	 	  
	Altimo Ltd. 	 	# 7
      New Road Belize 	 	5
      million 
	  	 	 	 	59,000,000 Total  

DISBURSEMENT OF PURCHASE FUNDS: Per Seller’s Counsel.

A-5

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