Document:

ex10_9.htm

EXHIBIT 10.9

 

AMENDED AND RESTATED

SHARE EXCHANGE AND ACQUISITION AGREEMENT

BY AND AMONG

ROYAL STYLE DESIGN, INC.

AND

KAZANNEFTEHIMINVEST LTD.

Dated JULY 1, 2010

 

 

 

 

 

THIS AMENDED AND RESTATED SHARE EXCHANGE AND ACQUISITION AGREEMENT, dated as of July 1, 2010 (the “Agreement”), amends and restates that SHARE EXCHANGE AND ACQUISITION AGREEMENT, made and entered into as of July 1, 2010, by and among Royal Style Design, Inc., a Florida corporation ("RSD"), and OOO PSO Kazanneftehiminvest, a limited company formed under the laws of Russia  ("KNHI”), and the owners of KNHI set forth on the signature pages to this Agreement (collectively, the "KNHI Owners" or “Owners”), with respect to the following facts:

RECITALS

A.            The KNHI Owners own 100% of the issued and outstanding ownership interests (“KNHI Interests”) in KNHI as set forth opposite their respective names on Schedule I to this Agreement.

B.             RSD desires to acquire from the KNHI Owners, and the KNHI Owners desire to sell and transfer to RSD, all of the KNHI Interests owned by them on the Closing Date in exchange for the issuance and delivery by RSD of 32,260,000 shares of Common Stock,  par value $.001 per share, of RSD ("Common Stock"), as set forth in Schedule I hereto, on the terms and conditions set forth below (the "Exchange"); and

 

C.             The Exchange shall qualify as a transaction in securities exempt from registration or qualification under the Securities Act and under the applicable securities laws of each state or jurisdiction where Owners of the Company reside.

 

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

 

ARTICLE I

EXCHANGE OF SECURITIES

Section 1.1 The Exchange.

On the terms and subject to the conditions of this Agreement, on the Closing Date, RSD shall issue and deliver to each of the KNHI Owners such number of shares of Common Stock as is set forth opposite such KNHI Owner name on Schedule I hereto, and each such KNHI Owner shall sell, transfer and deliver to RSD, the number of issued and outstanding KNHI Interests set forth opposite such KNHI Owner's name on Schedule I hereto along with a duly executed assignment endorsed in favor of RSD or the KNHI Acquisition Subsidiary, as specified by RSD.

  

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ARTICLE II

THE CLOSING

Section 2.1 Closing Date.

The closing of the Exchange and the other transactions contemplated by this Agreement (the "Closing") shall take place at the offices of KNHI at 11:00 AM on  July 1, 2010, or at such other location, date and time as RSD and KNHI may agree. The time and date upon which the Closing actually occurs being referred to herein as the "Closing Date".

Section 2.2 Transactions at Closing.

At the Closing, the following transactions shall take place and no transaction shall be deemed to have been completed or any document delivered until all such transactions have been completed and all required documents delivered:

(a) RSD shall deliver the following documents:

(i) Validly executed stock certificates corresponding to the Common Stock issued in the name of the KNHI Owners in the amounts set forth in Schedule I;

(ii) Certificate of good standing from the Secretary of State of the State of Florida, dated at or about the Closing Date, to the effect that RSD is in good standing under the laws of said state;

(iii) Certified copy of the Certificate of Incorporation of RSD, as certified by the Secretary of State of the State of Florida at or about the Closing Date;

(iv) An officer's certificate duly executed by RSD's chief executive officer to the effect that the conditions set forth in Section 7.1(a) below have been satisfied, dated as of the date of the Closing; and

(v) Such other documents and instruments as KNHI may reasonably request.

(b) KNHI shall deliver or cause to be delivered the following documents and/or shall take the following actions:

(i) KNHI shall deliver to RSD KNHI Interest certificates in the name of, or assigned to, RSD or the KNHI Acquisition Subsidiary, herein referred to as Project & Construction Group, Inc., a Nevada corporation ("PCG"), as specified by RSD, in respect of all outstanding KNHI Interests and shall register KNHI Interests in the name of RSD or the KNHI Acquisition Subsidiary ("PCG"), as the case may be, in the Owners register of KNHI;

 

(ii) Certificate of good standing from the Secretary of Russian Corporations, or other appropriate governmental authority, dated at or about the Closing Date, to the effect that KNHI is a corporation organized and in good standing under the laws of said jurisdiction;

 

(iii) Certified copy of the organization documents of KNHI, as amended to the Closing Date;

 

(iv) An officer's certificate duly executed by KNHI's chief executive officer to the effect that the conditions set forth in Section7.2(a) below have been satisfied, dated as of the date of the Closing;

 

(v) An officer's certificate duly executed by KNHI's Chief Executive Officer and Secretary certifying that the attached ownership register of KNHI is an accurate and complete ownership register of KNHI as of the Closing Date; and

(vi) Such other documents and instruments as RSD may reasonably request, including documents evidencing such resignations from and appointments to the governing body of KNHI, effective the Closing Date, as are set forth in Schedule II hereto.

(c) The KNHI Owners shall deliver the following documents:

 

(i) to RSD, duly executed assignments effecting the immediate and unconditional sale, assignment and irrevocable transfer of KNHI Interests to RSD or the KNHI Acquisition Subsidiary ("PCG"), as specified by RSD, free and clear of any liens, or any other third party rights of any kind and nature, whether voluntarily incurred or arising by operation of law; and

 

  

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(ii) to KNHI, as agent for RSD, all certificates in respect of KNHI Interests.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF RSD

 

RSD hereby makes the following representations and warranties to KNHI and each KNHI Owner:

Section 3.1 Organization and Qualification.

RSD is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, with the corporate power and authority to own and operate its business as presently conducted, except where the failure to be or have any of the foregoing would not have a Material Adverse Effect. RSD is duly qualified as a foreign corporation to do business and is in good standing in each jurisdiction where the character of its properties owned or held under lease or the nature of its activities makes such qualification necessary, except for such failures to be so qualified or in good standing as would not have a Material Adverse Effect. RSD has no subsidiaries and is not a participant in any joint venture, partnership, or similar arrangement.

Section 3.2 Authorization.

RSD has the requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the Exchange.

Section 3.3 Validity and Effect of Agreement.

This Agreement has been duly and validly executed and delivered by RSD and, assuming that it has been duly authorized, executed and delivered by the other parties hereto, constitutes a legal, valid and binding obligation of RSD in accordance with its terms except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors' rights generally.

Section 3.4 No Conflict.

Neither the execution and delivery of this Agreement by RSD nor the performance by such parties of their respective obligations hereunder, nor the consummation of the Exchange, will: (i) conflict with RSD's Certificate of Incorporation or Bylaws; (ii) violate any statute, law, ordinance, rule or regulation, applicable to RSD or any of the properties or assets of RSD; or (iii) violate, breach, be in conflict with or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or permit the termination of any provision of, or result in the termination of, the acceleration of the maturity of, or the acceleration of the performance of any obligation of RSD and/or affect any of the obligations hereunder, or result in the creation or imposition of any Lien upon any properties, assets or business of RSD under, any Contract or any order, judgment or decree to which RSD is a party or by which it or any of its assets or properties is bound or encumbered except, in the case of clauses (ii) and (iii), for such violations, breaches, conflicts, defaults or other occurrences which, individually or in the aggregate, would not have a material adverse effect on its obligation to perform its covenants under this Agreement.

Section 3.5 Required Filings and Consents.

The execution and delivery of this Agreement by RSD does not, and the performance of this Agreement by RSD will not, require any consent, approval, authorization or permit of, or filing with or notification to, Governmental Authority with respect to RSD except: (i) compliance with applicable requirements of the Securities Act, the Exchange Act and state securities laws ("Blue Sky Laws"); and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on RSD, or would not prevent or materially delay consummation of the Exchange or otherwise prevent the parties hereto from performing their respective obligations under this Agreement.

 

  

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Section 3.6 Capitalization.

The authorized capital stock of RSD consists of 100,000,000 shares of Common Stock, par value $.001 per share, of which 93,638,511 shares are issued and outstanding, and 10,000,000 shares of Preferred Stock, par value $.001 per share, of which no shares are outstanding. Except for the transactions contemplated by this Agreement, there are no other share capital, pre-emptive rights, convertible securities, outstanding warrants, options or other rights to subscribe for, purchase or acquire from RSD any shares of capital stock of RSD and there are no contracts or commitments providing for the issuance of, or the granting of rights to acquire, any shares of capital stock of RSD or under which RSD is, or may become, obligated to issue any of its securities. All shares of capital stock of RSD outstanding as of the date of this Agreement have been duly authorized and validly issued, are fully paid and non­assessable, and are free of pre-emptive rights. As of the Closing Date (as defined herein), there will be no more than 100,000,000 shares of Common Stock issued or outstanding prior to the Exchange.

Section 3.7 Status of Common Stock.

The Common Stock, when issued and allotted at the Closing in exchange for KNHI Interests, will be duly authorized, validly issued, fully paid, non-assessable, and free of any pre-emptive rights, will be issued in compliance with all applicable laws concerning the issuance of securities, and will have the rights, preferences, privileges, and restrictions set forth in RSD's charter and bylaws, and will be free and clear of any Liens of any kind and duly registered in the name of the KNHI Owners, in RSD's stockholders ledger.

Section 3.8 Litigation.

There is no Action pending or threatened against RSD that, individually or in the aggregate, directly or indirectly, would be reasonably likely to have a Material Adverse Effect, nor is there any outstanding judgment, decree or injunction, in each case against RSD, that, individually or in the aggregate, has or would be reasonably likely to have a Material Adverse Effect.

Section 3.9 Books and Records.

The books and records, financial and others, of RSD are in all material respects complete and correct and have been maintained in accordance with good business accounting practices.

Section 3.10 Insurance.

RSD has no insurable properties and RSD does not maintain any insurance covering its assets, business, equipment, properties, operations, employees, officers, or directors. To RSD's knowledge since inception there has not been any damage, destruction or loss, which could have been deemed as an "Insurance Event".

Section 3.11 Compliance.

RSD is in compliance with all foreign, federal, state and local laws and regulations of any Governmental Authority, except to the extent that failure to comply would not, individually or in the aggregate, have a Material Adverse Effect. RSD has not received any notice asserting a failure, or possible failure, to comply with any such law or regulation, the subject of which notice has not been resolved as required thereby or otherwise to the satisfaction of the party sending the notice, except for such failure as would not, individually or in the aggregate, have a Material Adverse Effect. RSD does not, and is not require to, hold any permits, licenses or franchises from Governmental Authorities.

Section 3.12 Absence of Certain Changes.

Since March 31, 2010, except as expressly permitted or required by this Agreement or with the consent of KNHI, RSD has not:

(a) sold or otherwise issued any shares of capital stock, except that on June 4, 2010, RSD has agreed to acquire Xerxis Consulting LLC for 25,215 shares of Common Stock, and on June 25, 2010 has agreed to acquire Technostroy Ltd. for 344,944 shares of Common Stock;

(b) acquired any assets or incurred any Liabilities, except that on June 4, 2010, RSD has agreed to acquire Xerxis Consulting LLC, and on June 25, 2010 has agreed to acquire Technostroy Ltd. for 344,944 shares of Common Stock;

 

  

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(c) amended its certificate of incorporation or bylaws;

(d) waived any rights of value which in the aggregate are extraordinary or material considering the business of RSD;

(e) made any material change in its method of management, operation or accounting, except that the shareholders of RSD have elected a new Board of Directors;

(f) made any accrual or arrangement for or payment of bonuses or special compensation of any kind or any severance or termination pay to any present or former officer or employee;

(g) granted or agreed to grant any options, warrants or other rights for its stocks, bonds or other corporate securities calling for the issuance thereof, which option, warrant or other right has not been cancelled as of the Closing Date;

(h) borrowed or agreed to borrow any funds or incurred or become subject to, any material obligation or liability (absolute or contingent) except liabilities incurred in the ordinary course of business;

(i) become subject to any law or regulation which materially and adversely affects, or in the future may adversely affect, the business, operations, properties, assets or condition of RSD or become subject to any change or development in, or effect on, RSD that has or could reasonably be expected to have a Material Adverse Effect; or

(j) entered into any agreement to take any action described in clauses (a) through (i) above

Section 3.13 Previous Sales of Securities.

Since inception, RSD has sold Common Stock to investors only in reliance upon applicable exemptions from the registration requirements under any applicable law including the laws of the United States and any applicable states and all such sales were made in accordance with the laws of said jurisdictions.

Section 3.14 Principals of RSD.

During the past five years, no officer or director of RSD has been:

(a) the subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

(b) the subject of any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

(c) the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

(d) found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

Section 3.15 Brokers and Finders.

Neither RSD, nor any of its respective officers, directors, employees or managers, has employed any broker, finder, advisor or consultant, or incurred any liability for any investment banking fees, brokerage fees, commissions or finders' fees, advisory fees or consulting fees in connection with the Exchange for which RSD has or could have any liability.

Section 3.16 Disclosure.

As of the Closing Date, there is no known material fact or information relating to the business, condition (financial or otherwise), affairs, operations or assets of RSD and/or its subsidiaries that has not been disclosed in writing to KNHI and/or the KNHI Owners by RSD. No representation or warranty of RSD in this Agreement or any statement or document delivered in connection herewith or therewith, contained or will contain any untrue statement of a material fact or fail to state any material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.

 

  

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF KNHI

KNHI hereby makes the following representations and warranties to RSD:

 

Section 4.1 Organization and Qualification.

 

KNHI is duly organized and validly existing under the laws of the Russian Republic, with the corporate power and authority to own and operate its business as presently conducted, except where the failure to be or have any of the foregoing would not have a Material Adverse Effect. KNHI is duly qualified as a foreign corporation to do business in each jurisdiction where the character of its properties owned or held under lease or the nature of its activities makes such qualification necessary, except for such failures to be so qualified as would not have a Material Adverse Effect.

 

Section 4.2 Authorization; Validity and Effect of Agreement.

KNHI has the requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the Exchange. This Agreement has been duly and validly executed and delivered by KNHI and, assuming that it has been duly authorized, executed and delivered by the other parties hereto, constitutes a legal, valid and binding obligation of KNHI, in accordance with its terms except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors' rights generally.

 

Section 4.3 No Conflict.

Neither the execution and delivery of this Agreement by KNHI nor the performance by KNHI of its obligations hereunder, nor the consummation of the Exchange, will: (i) conflict with KNHI's organization or governing documents; (ii) violate any statute, law, ordinance, rule or regulation, applicable to KNHI or any of its properties or assets; or (iii) violate, breach, be in conflict with or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or permit the termination of any provision of, or result in the termination of, the acceleration of the maturity of, or the acceleration of the performance of any obligation of KNHI, or result in the creation or imposition of any Lien upon any properties, assets or business of KNHI under, any Material Contract or any order, judgment or decree to which KNHI is a party or by which it or any of its assets or Properties is bound or encumbered except, in the case of clauses (ii) or (iii), for such violations, breaches, conflicts, defaults or other occurrences which, individually or in the aggregate, would not have a Material Adverse Effect on its obligation to perform its covenants under this Agreement.

Section 4.4 Required Filings and Consents.

The execution and delivery of this Agreement by KNHI do not, and the performance of this Agreement by KNHI will not require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Authority, with respect to KNHI, except: (i) compliance with applicable requirements of the Securities Act, the Exchange Act, and Blue Sky Laws; and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on KNHI, or materially delay consummation of the Exchange or otherwise prevent the parties hereto from performing their obligations under this Agreement.

 

Section 4.5 Capitalization.

All KNHI Interests outstanding as of the date of this Agreement have been duly authorized and validly issued, are fully paid and non-assessable, and are free of pre-emptive rights.

 

  

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Section 4.6 Financial Statements.

KNHI has previously furnished to RSD true and complete copies of its balance sheets as of December 31, 2009 and December 31, 2008, and its related statements of operations for the periods ended December 31, 2009, and December 31, 2008 (all of such financial statements of KNHI collectively, the “KNHI Financial Statements"). The KNHI Financial Statements (including the notes thereto) present fairly in all material respects the financial position and results of operations and cash flows of KNHI at the date or for the period set forth therein, in each case in accordance with GAAP applied on a consistent basis throughout the periods involved (except as otherwise indicated therein). The KNHI Financial Statements have been prepared from and in accordance with the books and records of KNHI and its subsidiaries, as applicable.

Section 4.7 No Undisclosed Liabilities.

Except as disclosed in the KNHI Financial Statements, KNHI has no material liabilities, indebtedness or obligations, except those that have been incurred in the ordinary course of business, whether absolute, accrued, contingent or otherwise, and whether due or to become due, and to the Knowledge of KNHI, there is no existing condition, situation or set of circumstances that could reasonably be expected to result in such a liability, indebtedness or obligation.

Section 4.8 Properties and Assets.

KNHI has good and marketable title to, valid leasehold interests in, or the legal right to use, all of the assets, properties and leasehold interests reflected in the most recent KNHI Financial Statements, except for those sold or otherwise disposed of since the date of such KNHI Financial Statements in the ordinary course of business consistent with past practice.

Section 4.9 Litigation.

There is no Action pending or threatened against KNHI that, individually or in the aggregate, directly or indirectly, would be reasonably likely to have a Material Adverse Effect, nor is there any outstanding judgment, decree or injunction, in each case against KNHI, that, individually or in the aggregate, has or would be reasonably likely to have a Material Adverse Effect.

 

Section 4.10 Taxes.

KNHI has timely filed (or has had timely filed on its behalf) with the appropriate tax authorities all tax returns required to be filed by it or on behalf of it, and each such tax return was complete and accurate in all material respects, and KNHI has timely paid (or has had paid on its behalf) all material Taxes due and owing by it, regardless of whether required to be shown or reported on a tax return, including Taxes required to be withheld by it. No deficiency for a material Tax has been asserted in writing or otherwise, to KNHI's Knowledge, against KNHI or with respect to any of its assets, except for asserted deficiencies that either (i) have been resolved and paid in full or (ii) are being contested in good faith. There are no material Liens for Taxes upon KNHI's assets.

Section 4.11 Compliance.

To KNHI's Knowledge, KNHI is in compliance with all federal, state and local laws and regulations of any Governmental Authority applicable to its operations or with respect to which compliance is a condition of engaging in the business thereof, except to the extent that failure to comply would not, individually or in the aggregate, have a Material Adverse Effect. KNHI has not received any notice asserting a failure, or possible failure, to comply with any such law or regulation, the subject of which notice has not been resolved as required thereby or otherwise to the satisfaction of the party sending the notice, except for such failure as would not, individually or in the aggregate, have a Material Adverse Effect. To KNHI's Knowledge, KNHI holds all permits, licenses and franchises from Governmental Authorities required to conduct its business as it is now being conducted, except for such failures to have such permits, licenses and franchises that would not, individually or in the aggregate, have a Material Adverse Effect.

Section 4.12 Absence of Certain Changes.

Since the date of the most recent KNHI Financial Statements,

 

  

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(a)           there has been no change or development in, or effect on, KNHI that has or could reasonably be expected to have a Material Adverse Effect,

(b)           KNHI has not sold, transferred, disposed of, or agreed to sell, transfer or dispose of, any material amount of its assets other than in the ordinary course of business,

(c)           KNHI has not paid any dividends or distributed any of its assets to any of its Owners,

(d)           KNHI has not acquired any material amount of assets except in the ordinary course of business, nor acquired or merged with any other business,

(e)           KNHI has not waived or amended any of its respective material contractual rights except in the ordinary course of business, and

(f)           KNHI has not entered into any agreement to take any action described in clauses (a) through (e) above.

Section 4.13 Principals of KNHI.

During the past five years, no officer or director of KNHI has been:

(a) the subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

(b) the subject of any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offences);

(c) the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

(d) found by a court of competent jurisdiction (in a civil action) to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF KNHI OWNERS

 

Each KNHI Owner, severally and not jointly, hereby make the following representations and warranties to KNHI and RSD:

Section 5.1 Authority and Validity.

Each KNHI Owner has all requisite power to execute and deliver, to perform its obligations under, and to consummate the transactions contemplated by, this Agreement.

 

Section 5.2 Validity.

Upon the execution and delivery of each other document to which each KNHI Owner is a party (assuming due execution and delivery by each other party thereto) each such other document will be the legal, valid and binding obligations of such KNHI Owner, enforceable against such KNHI Owner in accordance with their respective terms except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors' rights generally.

 

 

Section 5.3 No Breach or Violation.

The execution, delivery and performance by each KNHI Owner of this Agreement and each other document to which it is a party, and the consummation of the transactions contemplated hereby and thereby in accordance with the terms and conditions hereof and thereof, do not and will not conflict with (i) the certificate of incorporation or bylaws of such KNHI Owner, if applicable, or (ii) any agreement to which such KNHI Owner is a party, or by which such KNHI Owner or such KNHI Owner's Assets are bound or affected.

 

  

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Section 5.4 Consents and Approvals.

No consent, approval, authorization or order of, registration or filing with, or notice to, any Government Authority or any other Person is necessary to be obtained, made or given by each KNHI Owner in connection with the execution, delivery and performance by such KNHI Owner of this Agreement or any other document to which it is a party or for the consummation by such KNHI Owner of the transactions contemplated hereby or thereby.

 

Section 5.5 Title.

KNHI Interests to be delivered by each KNHI Owner in connection with the transactions contemplated herein are, and at the Closing will be owned, of record and beneficially, solely by such KNHI Owner, free and clear of any Lien and represent such KNHI Owner's entire ownership interest in KNHI

Section 5.6 Investor Status.

No KNHI Owner is a U.S. Person and nor is acquiring the RSD Common Stock for the account of any U.S. Person, (ii) if a corporation, it is not organized or incorporated under the laws of the United States; (iii) if a corporation, no director or executive officer is a national or citizen of the United States; and (iv) it is not otherwise deemed to be a "U.S. Person" within the meaning of Regulation S. If a resident of the United States, the KNHI Owner represents that he or she is an “accredited investor” as defined in Rule 501 promulgated under the Securities Act.  Each KNHI Owner represents and warrants that he or she has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of his or her investment in RSD.  Each KNHI Owner has the financial ability to bear the economic risks of his or her entire investment in RSD for an indefinite period, would be able to sustain a complete loss of his or her investment, and has no need for liquidity with respect to his or her investment in RSD.

 

Section 5.7 Investment Intent.

The shares of Common Stock are being acquired by each KNHI Owner for each KNHI Owner's own account for investment purposes only, not as a nominee or agent and not with a view to the resale or distribution of any part thereof, and each KNHI Owner has no present intention of selling, granting any participation in or otherwise distributing the same. Each KNHI Owner further represents that the KNHI Owner does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to such person or third person with respect to any of KNHI Interests.

 

Section 5.8 Restrictions on Transfer.

Each KNHI Owner understands that the shares of Common Stock have not been registered under the Securities Act or registered or qualified under any foreign or state securities law, and may not be, directly or indirectly, sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of without registration under the Securities Act and registration or qualification under applicable state securities laws or the availability of an exemption therefrom. In any case where such an exemption is relied upon by each KNHI Owner from the registration requirements of the Securities Act and the registration or qualification requirements of such state securities laws, each KNHI Owner shall furnish RSD with an opinion of counsel stating that the proposed sale or other disposition of such securities may be effected without registration under the Securities Act and will not result in any violation of any applicable state securities laws relating to the registration or qualification of securities for sale, such counsel and opinion to be satisfactory to RSD. Each KNHI Owner acknowledges that it is able to bear the economic risks of an investment in the Common Stock for an indefinite period of time, and that its overall commitment to investments that are not readily marketable is not disproportionate to its net worth.

Section 5.9 Informed Investment.

Each KNHI Owner has made such investigations in connection herewith as it deemed necessary or desirable so as to make an informed investment decision without relying upon KNHI for legal or tax advice related to this investment. In making its decision to acquire the Common Stock, each KNHI Owner has not relied upon any information other than information contained in this Agreement and in the other Offering Documents.

 

  

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Section 5.10 Access to Information.

Each KNHI Owner acknowledges that it has had access to and has reviewed all documents and records relating to RSD, including, but not limited to, the RSD SEC Documents, that it has deemed necessary in order to make an informed investment decision with respect to an investment in RSD; that it has had the opportunity to ask representatives of RSD certain questions and request certain additional information regarding the terms and conditions of such investment and the finances, operations, business and prospects of RSD and has had any and all such questions and requests answered to its satisfaction; and that based on the foregoing it understands the risks and other considerations relating to an investment in RSD.

Section 5.11 Reliance on Representations.

Each KNHI Owner understands that the shares of Common Stock are being offered and sold to it in reliance on specific exemptions from the registration and/or public offering requirements of the U.S. federal and state securities laws and that RSD and KNHI is relying in part upon the truth and accuracy of, and such KNHI Owner's compliance with, the representations, warranties, agreements, acknowledgments and understandings of such KNHI Owner set forth herein in order to determine the availability of such exemptions and the eligibility of such KNHI Owner to acquire the Common Stock. Each KNHI Owner represents and warrants to RSD and KNHI that any information the KNHI Owner has heretofore furnished or furnishes herewith to RSD and KNHI is complete and accurate, and further represents and warrants that it will notify and supply corrective information to RSD and KNHI immediately upon the occurrence of any change therein occurring prior to KNHI’s issuance of the Common Stock. Within five (5) days after receipt of a request from KNHI, each KNHI Owner will provide such information and such documents as may reasonably be necessary to comply with any and all laws and regulations to which KNHI is subject.

Section 5.12 No General Solicitation.

Each KNHI Owner is unaware of, and in deciding to participate in the transactions contemplated hereby is in no way relying upon, and did not become aware of the transactions contemplated hereby through or as a result of, any form of general solicitation or general advertising including, without limitation, any article, notice, advertisement or other communication published in any newspaper, magazine or similar media, or broadcast over television or radio or the internet, in connection with the transactions contemplated hereby.

Section 5.13 Representation by Counsel.

Each KNHI Owner represents that it is represented by their own counsel in this transaction and that such counsel has carefully reviewed with it the terms and legal consequences of the Exchange and, in particular, the Tax consequences of the Exchange to such KNHI Owner. KNHI and each KNHI Owner acknowledges and understands that Michael Paige PLLC, Counsel to Jackson & Campbell, P.C., Washington, D.C., acts as counsel to RSD. KNHI and each KNHI Owner also acknowledges and understands that, in connection with the Exchange contemplated by this Agreement and subsequent advice to and legal services performed for RSD, Michael Paige PLLC and Jackson & Campbell, P.C. and will not be representing KNHI or the KNHI Owners, but will be representing RSD.

ARTICLE VI

CERTAIN COVENANTS

Section 6.1 Conduct of Businesses by Parties.

 

RSD and KNHI agree that, between the date of this Agreement and the Closing Date, except as contemplated by any other provision of this Agreement, or unless the other party shall otherwise consent in writing:

(a)           the businesses of RSD and KNHI shall be conducted only in, and such parties shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and

 

  

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(b)           RSD and KNHI shall use their reasonable best efforts to preserve substantially intact their respective business organizations, to keep available the services of their current officers, employees and consultants and to preserve the current relationships of RSD and KNHI with customers, suppliers and other persons with which RSD or KNHI, as the case may be, has significant business relations.

Section 6.2 Access to Information.

At all times prior to the Closing or the earlier termination of this Agreement in accordance with the provisions of Article IX, and in each case subject to Section 6.3 below, each party hereto shall provide to the other party (and the other party's authorized representatives) reasonable access during normal business hours and upon reasonable prior notice to the premises, properties, books, records, assets, liabilities, operations, contracts, personnel, financial information and other data and information of or relating to such party (including without limitation all written proprietary and trade secret information and documents, and other written information and documents relating to intellectual property rights and matters), and will cooperate with the other party in conducting its due diligence investigation of such party, provided that the party granted such access shall not interfere unreasonably with the operation of the business conducted by the party granting access, and provided that no such access need be granted to privileged information or any agreements or documents subject to confidentiality agreements.

 

Section 6.3 Confidentiality.

Each party shall hold, and shall cause its respective Affiliates and representatives to hold, all Confidential Information made available to it in connection with the Exchange in strict confidence, shall not use such information except for the sole purpose of evaluating the Exchange and shall not disseminate or disclose any of such information other than to its directors, officers, managers, employees, shareholders, interest holders, Affiliates, agents and representatives, as applicable, who need to know such information for the sole purpose of evaluating the Exchange (each of whom shall be informed in writing by the disclosing party of the confidential nature of such information and directed by such party in writing to treat such information confidentially). The above limitations on use, dissemination and disclosure shall not apply to Confidential Information that (i) is learned by the disclosing party from a third party entitled to disclose it; (ii) becomes known publicly other than through the disclosing party or any third party who received the same from the disclosing party, provided that the disclosing party had no Knowledge that the disclosing party was subject to an obligation of confidentiality; (iii) is required by law or court order to be disclosed by the parties; or (iv) is disclosed with the express prior written consent thereto of the other party. The parties shall undertake all necessary steps to ensure that the secrecy and confidentiality of such information will be maintained. In the event a party is required by court order or subpoena to disclose information which is otherwise deemed to be confidential or subject to the confidentiality obligations hereunder, prior to such disclosure, the disclosing party shall: (i) promptly notify the non-disclosing party and, if having received a court order or subpoena, deliver a copy of the same to the non-disclosing party; (ii) cooperate with the non-disclosing party, at the expense of the non-disclosing party, in obtaining a protective or similar order with respect to such information; and (iii) provide only that amount of information as the disclosing party is advised by its counsel is necessary to strictly comply with such court order or subpoena.

Section 6.4 Further Assurances.

Each of the parties hereto agrees to use its best efforts before and after the Closing Date to take or cause to be taken all action, to do or cause to be done, and to assist and cooperate with the other party hereto in doing, all things necessary, proper or advisable under applicable laws to consummate and make effective, in the most expeditious manner practicable, the Exchange, including, but not limited to: (i) satisfying the conditions precedent to the obligations of any of the parties hereto; (ii) obtaining all waivers, consents and approvals from other parties necessary for the consummation of the Exchange, (iii) making all filings with, and obtain all consents, approvals and authorizations that are required to be obtained from, Governmental Authorities, (iv) defending of any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or the performance of the obligations hereunder; and (v) executing and delivering such instruments, and taking such other actions, as the other party hereto may reasonably require in order to carry out the intent of this Agreement.

 

  

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Section 6.5 Public Announcements.

RSD, the KNHI Owners and KNHI shall consult with each other before issuing any press release or otherwise making any public statements with respect to the Exchange or this Agreement, and shall not issue any other press release or make any other public statement without prior consent of the other parties, except as may be required by law or, with respect to RSD, by obligations pursuant to rule or regulation of the Exchange Act, the Securities Act, any rule or regulation promulgated thereunder or any rule or regulation of the National Association of Securities Dealers.

Section 6.6 Notification of Certain Matters.

Each party hereto shall promptly notify the other party in writing of any events, facts or occurrences that would result in any breach of any representation or warranty or breach of any covenant by such party contained in this Agreement.

Section 6.7 Prohibition on Trading in RSD Securities.

All parties acknowledge that information concerning the matters that are the subject matter of this Agreement may constitute material non-public information under United States federal securities laws, and that United States federal securities laws prohibit any person who has received material non-public information relating to RSD from purchasing or selling securities of RSD, or from communicating such information to any person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell securities of RSD. Accordingly, until such time as any such non-public information has been adequately disseminated to the public, the parties to this Agreement shall not purchase or sell any securities of RSD.

Section 6.8 Capital for RSD.

Immediately following the Closing Date, in conjunction with the Exchange, the KNHI Owners and KNHI will not owe any capital to RSD.

Section 6.9 KNHI Owners Right to Require “Spin-Off” by RSD of Formerly Owned Companies.

Following the Closing, Rustem Likhachev (“Likhachev”) shall have the right, on or before the fifth anniversary of the Closing Date, to require RSD to take the following actions: on thirty (30) days notice to the Board of Directors by Likhachev, RSD shall initiate the regulatory filing process for clearance by the SEC of the spin-off ("Spin-Off") to its shareholders of the shares its KNHI subsidiary as specified such former Owner, such distribution to be made being pro-rata as a dividend to the shareholders of RSD.   Upon SEC clearance, RSD shall proceed promptly with the Spin-Off, and from the date of the Spin-Off distribution, the business of the subsidiary or subsidiaries so spun off shall be operated as a separate reporting company under the Exchange Act by its management.  The management and former owner of KNHI shall provide full cooperation to RSD in the SEC clearance process.  All expenses of the Spin-Off shall be borne equally by RSD and the subsidiary or subsidiaries to be spun off.

Section 6.10 KNHI Owner’s Right to Repurchase Ownership of Formerly Owned Company.

Following the Closing Date, Likhachev shall have the right to repurchase ownership of KNHI as follows: the Interests of KNHI held by RSD may be repurchased by Likhachev at any time in the first year following the Closing Date, at the option of Likhachev and on ninety (90) days notice to RSD, by the KNHI Owner paying to RSD the value of that subsidiary, as such value is determined by the Board of Directors of RSD (RSD Common Stock may be retransfered to RSD by Likhachev as part of the consideration to repurchase KNHI, and any shares of Common Stock so retransferred shall be valued at market at the time of the repurchase).

ARTICLE VII

CONDITIONS TO CONSUMMATION OF THE EXCHANGE

 

Section 7.1 Conditions to Obligations of KNHI and KNHI Owners.

 

  

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The obligations of KNHI and KNHI Owners to consummate the Exchange shall be subject to the fulfillment, or written waiver by KNHI, at or prior to the Closing, of each of the following conditions:

 

(a) RSD shall have delivered to KNHI each of the documents required by Section 2.2(a) of this Agreement;

(b) The representations and warranties of RSD set out in this Agreement shall be true and correct in all material respects at and as of the time of the Closing as though such representations and warranties were made at and as of such time;

(c) RSD shall have performed and complied in all material respects with all covenants, conditions, obligations and agreements required by this Agreement to be performed or complied with by such parties on or prior to the Closing Date;

(d) All consents, approvals, permits, authorizations and orders required to be obtained from, and all registrations, filings and notices required to be made with or given to, any Governmental Authority or Person as provided herein shall have been obtained;

(e) KNHI shall have completed a due diligence review of the business, operations, financial condition and prospects of RSD and shall have been satisfied with the results of its due diligence review in its sole and absolute discretion;

(f) There has been no Material Adverse Effect on the business, condition or prospects of RSD until the Closing Date;

(g) RSD shall file if applicable with the SEC a Schedule 14(f)-l with respect to any change of control transactions described in this Agreement, and shall have caused the Schedule 14(f)01 to be mailed to each registered holder of its Common Stock;

(h) Holders of all of the KNHI Interests shall have become party to the Exchange; and

(i) The outstanding shares of Common Stock of RSD prior to the Closing shall not exceed 100,000,000 shares.

Section 7.2 Conditions to Obligations of RSD.

The obligations of RSD to consummate the Exchange shall be subject to the fulfillment, or written waiver by RSD, at or prior to the Closing of each of the following conditions:

(a) KNHI shall have delivered to RSD each of the documents required by Section 2.2(b) of this Agreement;

(b) The KNHI Owners shall have delivered to RSD the documents required by Section 2.2(c) of this Agreement;

(c) The representations and warranties of KNHI and the KNHI Owners set out in this Agreement shall be true and correct in all material respects at and as of the time of the Closing as though such representations and warranties were made at and as of such time, except that the Property (as defined below) shall have been acquired by KNHI subsequent to the signing of this Agreement and prior to Closing;

 

(d) KNHI shall have performed and complied in all material respects with all covenants, conditions, obligations and agreements required by this Agreement to be performed or complied with by KNHI on or prior to the Closing Date including, without limitation, the acquisition of the Property from Rustem Likhachev;

 

(e) All consents, approvals, permits, authorizations and orders required to be obtained from, and all registrations, filings and notices required to be made with or given to, any Governmental Authority or Person as provided herein shall have been obtained;

(f) RSD shall have completed a due diligence review of the business, operations, financial condition and prospects of KNHI and shall have been satisfied with the results of its due diligence review in its sole and absolute discretion;

(g) There has been no Material Adverse Effect on the business, condition or prospects of KNHI until the Closing Date;

 

  

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(h) KNHI shall have paid all of the costs and expenses of KNHI associated with the transactions contemplated herein;

(i) Holders of at least 100% of KNHI Interests shall have become party to the Exchange;

(j) prior to the Closing Date, Rustem Likhachev shall  have transferred and assigned to KNHI as a contribution to the capital of KNHI, the real estate property known as “KNHI Property” (the “Property”), the legal description of which is set forth on Schedule III to this Agreement; and

(k) RSD, at its option, shall have received the opinion or advice from KNHI’s attorney that the ownership of the Property has been transferred and assigned to KNHI and such other opinions or advice from KNHI’s attorneys and auditors as may be reasonably required by RSD and its counsel.

ARTICLE VIII

INDEMNIFICATION

 

Section 8.1 Indemnification by RSD.

(a) Notwithstanding any other indemnification provision hereunder, RSD (the "Indemnifying Party") shall indemnify and hold harmless KNHI and its officers, directors and employees and each of the KNHI Owners (each an "Indemnified Party"), from and against any and all demands, claims, actions or causes of action, judgments, assessments, losses, liabilities, damages or penalties and reasonable attorneys' fees and related disbursements (collectively, "Claims") suffered by such Indemnified Party resulting from or arising out of (i) any inaccuracy in or breach of any of the representations or warranties made by the Indemnifying Party at the time they were made, and, except for representations and warranties that speak as of a specific date or time (which need only be true and correct as of such date or time), on and as of the Closing Date, (ii) any breach or nonfulfillment of any covenants or agreements made by the Indemnifying Party, (iii) any misrepresentation made by the Indemnifying Party, in each case as made herein or in the Schedules or Exhibits annexed hereto or in any closing certificate, schedule or any ancillary certificates or other documents or instruments furnished by the Indemnifying Party pursuant hereto or in connection with the Exchange, and (v) the operations and liabilities of RSD and/or any of its subsidiaries, whether known or unknown, arising out of any action, omission and/or period of time preceding the Closing Date, including but not limited to any taxes levied with respect to same.

Section 8.2 Indemnification by KNHI.

 

(a) Notwithstanding any other indemnification provision hereunder, KNHI  and the KNHI  Owners (each, the "Indemnifying Party") shall, severally and jointly, indemnify and hold harmless RSD, its officers, directors, attorneys, accountants and employees (each an "Indemnified Party"), from and against any and all demands, claims, actions or causes of action, judgments, assessments, losses, liabilities, damages or penalties and reasonable attorneys' fees and related disbursements (collectively, "Claims") suffered by such Indemnified Party resulting from or arising out of (i) any inaccuracy in or breach of any of the representations or warranties made by the Indemnifying Party at the time they were made, and, except for representations and warranties that speak as of a specific date or time (which need only be true and correct as of such date or time), on and as of the Closing Date, (ii) any breach or nonfulfillment of any covenants or agreements made by the Indemnifying Party, or (iii) any misrepresentation made by the Indemnifying Party, in each case as made herein or in the Schedules or Exhibits annexed hereto or in any closing certificate, schedule or any ancillary certificates or other documents or instruments furnished by the Indemnifying Party pursuant hereto or in connection with the Exchange.

Section 8.3 Indemnification Procedures.

(a) Upon obtaining knowledge of any Claim by a third party which has given rise to, or is expected to give rise to, a claim for indemnification hereunder, the Indemnified Party shall give written notice ("Notice of Claim") of such claim or demand to the Indemnifying Party, specifying in reasonable detail such information as the Indemnified Party may have with respect to such indemnification claim (including copies of any summons, complaint or other pleading which may have been served on it and any written claim, demand, invoice, billing or other document evidencing or asserting the same). No failure or delay by the Indemnified Party in the performance of the foregoing shall reduce or otherwise affect the obligation of the Indemnifying Party to indemnify and hold the Indemnified Party harmless, except to the extent that such failure or delay shall have actually adversely affected the Indemnifying Party's ability to defend against, settle or satisfy any Claims for which the Indemnified Party entitled to indemnification hereunder.

 

  

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(b) If the claim or demand set forth in the Notice of Claim given by an Indemnified Party pursuant to Section 8.1 hereof is a claim or demand asserted by a third party, the Indemnifying Party shall have fifteen (15) days after the date on which Notice of Claim is given to notify Indemnified Party in writing of their election to defend such third party claim or demand on behalf of the Indemnified Party. If the Indemnifying Party elects to defend such third party claim or demand, Indemnified Party shall make available to the Indemnifying Party and its agents and representatives all records and other materials that are reasonably required in the defense of such third party claim or demand and shall otherwise cooperate with, and assist the Indemnifying Party in the defense of, such third party claim or demand. So long as the Indemnifying Party is defending such third party claim in good faith, the Indemnified Party shall not pay, settle or compromise such third party claim or demand. If the Indemnifying Party elects to defend such third party claim or demand, the Indemnified Party shall have the right to participate in the defense of such third party claim or demand, at such Indemnified Party's own expense. In the event, however, that such Indemnified Party reasonably determines that representation by counsel to the Indemnifying Party of both the Indemnifying Party and such Indemnified Party could reasonably be expected to present counsel with a conflict of interest, then the Indemnified Party may employ separate counsel to represent or defend it in any such action or proceeding and the Indemnifying Party will pay the fees and expenses of such counsel. If the Indemnifying Party does not elect to defend such third party claim or demand or does not defend such third party claim or demand in good faith, the Indemnified Party shall have the right, in addition to any other right or remedy it may have hereunder, at the Indemnifying Party's expense, to defend such third party claim or demand; provided, however, that (i) such Indemnified Party shall not have any obligation to participate in the defense of, or defend, any such third party claim or demand; (ii) such Indemnified Party's defense of or its participation in the defense of any such third party claim or demand shall not in any way diminish or lessen the obligations of the Indemnifying Party under the agreements of indemnification set forth in this Article VIII; and (iii) such Indemnified Party may not settle any claim without the consent of the Indemnifying Party, which consent shall not be unreasonably withheld or delayed.

(c) The Indemnifying Party and the other Indemnified Parties, if any, shall cooperate fully in all aspects of any investigation, defense, pre-trial in respect of which indemnity is sought pursuant to this Article VIII, including, but not limited to, by providing the other party with reasonable access to employees and officers (including as witnesses) and other information.

(d) Except for third party claims being defended in good faith, the Indemnifying Party shall satisfy its obligations under this Article VIII in respect of a valid claim for indemnification hereunder that is not contested by KNHI in good faith in cash within thirty (30) days after the date on which Notice of Claim is given.

Section 8.4 Indemnification Procedures for Non-Third Party Claims.

In the event any Indemnified Party should have an indemnification claim against the Indemnifying Party under this Agreement that does not involve a claim by a third party, the Indemnified Party shall promptly deliver notice of such claim to the Indemnifying Party in writing and in reasonable detail. The failure by any Indemnified Party to so notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability that it may have to such Indemnified Party, except to the extent that the Indemnifying Party has been actually prejudiced by such failure. If the Indemnifying Party does not notify the Indemnified Party within fifteen (15) Business Days following its receipt of such notice that the Indemnifying Party disputes such claim, such claim specified by the Indemnifying Party in such notice shall be conclusively deemed a liability of the Indemnifying Party under this Article VIII and the Indemnifying Party shall pay the amount of such liability to the Indemnified Party on demand, or in the case of any notice in which the amount of the claim is estimated, on such later date when the amount of such claim is finally determined. If the Indemnifying Party disputes its liability with respect to such claim in a timely manner, KNHI and the Indemnified Party shall proceed in good faith to negotiate a resolution of such dispute and, if not resolved through negotiations, such dispute shall be resolved pursuant to Section 10.11.

  

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Section 8.5 Limitations on Indemnification.

No claim for indemnification under this Article VIII shall be asserted by, and no liability for such indemnify shall be enforced against, the Indemnifying Party to the extent the Indemnified Party has theretofore received indemnification or otherwise been compensated for such Claim. In the event that an Indemnified Party shall later collect any such amounts recovered under insurance policies with respect to any Claim for which it has previously received payments under this Article VIII from the Indemnifying Party, such Indemnified Party shall promptly repay to the Indemnifying Party such amount recovered.

ARTICLE IX

TERMINATION

 

Section 9.1 Termination.

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

(a) by mutual consent of RSD and KNHI;

(b) by KNHI, if the Closing shall not have occurred on or before June 30, 2011, or if any of the conditions to the Closing set forth in Section 10.1 shall have become incapable of fulfillment by June 30, 2011 and shall not have been waived in writing by KNHI; provided, however, that the right to terminate this Agreement under this Section 9.1(b) shall not be available to KNHI  if its action or failure to act has been a principal cause of or resulted in the failure of the Exchange to occur on or before such date and such action or failure to act constitutes a breach of this Agreement;

(c) by RSD, if the Closing shall not have occurred on or before June 30, 2011 or if any of the conditions to the Closing set forth in Section 7.2 shall have become incapable of fulfillment by June 30, 2011 and shall not have been waived in writing by RSD; provided, however, that the right to terminate this Agreement under this Section 9.1(c) shall not be available to RSD if its action or failure to act has been a principal cause of or resulted in the failure of the Exchange to occur on or before such date and such action or failure to act constitutes a breach of this Agreement;

(d) by RSD or KNHI  if any Governmental or judicial Authority shall have issued an injunction, order, decree or ruling or taken any other action restraining, enjoining or otherwise prohibiting any material portion of the Exchange and such injunction, order, decree, ruling or other action shall have become final and nonappealable;

 

Section 9.2 Procedure and Effect of Termination.

In the event of termination of this Agreement pursuant to Section 9.1 hereof, written notice thereof shall forthwith be given by the terminating party to the other party, and, except as set forth below, this Agreement shall terminate and be void and have no effect and the Exchange shall be abandoned without any further action by the parties hereto; provided that, if such termination shall result from the failure of or agreement in this of any representation a party to perform a covenant, obligation Agreement or from the breach by RSD, or KNHI  or warranty contained herein, such party shall be fully liable for any and all damages incurred or suffered by the other party as a result of such failure or breach. The provisions of Section 9.3, Section 9.5, Section 9.2, and Article 8 hereof and Article X shall survive the termination of this Agreement for any reason whatsoever.

 

ARTICLE X

MISCELLANEOUS

 

Section 10.1 Entire Agreement.

This Agreement and the Schedules and Exhibits hereto contain the entire agreement between the parties and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof.

 

  

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Section 10.2 Amendment and Modifications.

This Agreement may not be amended, modified or supplemented except by an instrument or instruments in writing signed by the party against whom enforcement of any such amendment, modification or supplement is sought.

Section 10.3 Extensions and Waivers.

At any time prior to the Closing, the parties hereto entitled to the benefits of a term or provision may (a) extend the time for the performance of any of the obligations or other acts of the parties hereto, (b) waive any inaccuracies in the representations and warranties contained herein or in any document, certificate or writing delivered pursuant hereto, or (c) waive compliance with any obligation, covenant, agreement or condition contained herein. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument or instruments in writing signed by the party against whom enforcement of any such extension or waiver is sought. No failure or delay on the part of any party hereto in the exercise of any right hereunder shall impair such right or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty, covenant or agreement.

Section 10.4 Successors and Assigns.

This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, provided, however, that no party hereto may assign its rights or delegate its obligations under this Agreement without the express prior written consent of the other party hereto. Except as provided in Article VIII, nothing in this Agreement is intended to confer upon any person not a party hereto (and their successors and assigns) any rights, remedies, obligations or liabilities under or by reason of this Agreement.

Section 10.5 Survival of Representations, Warranties and Covenants.

 

The representations and warranties contained herein shall survive the Closing and shall thereupon terminate June 30, 2011. All covenants and agreements contained herein which by their terms contemplate actions following the Closing shall survive the Closing and remain in full force and effect in accordance with their terms.

Section 10.6 Headings; Definitions.

The Section and Article headings contained in this Agreement are inserted for convenience of reference only and will not affect the meaning or interpretation of this Agreement. All references to Sections or Articles contained herein mean Sections or Articles of this Agreement unless otherwise stated. All capitalized terms defined herein are equally applicable to both the singular and plural forms of such terms.

Section 10.7 Severability.

If any provision of this Agreement or the application thereof to any Person or circumstance is held to be invalid or unenforceable to any extent, the remainder of this Agreement shall remain in full force and effect and shall be reformed to render the Agreement valid and enforceable while reflecting to the greatest extent permissible the intent of the parties.

 

Section 10.8 Specific Performance.

The parties hereto agree that in the event that any party fails to consummate the Exchange in accordance with the terms of this Agreement, irreparable damage would occur, no adequate remedy at law would exist and damages would be difficult to determine. It is accordingly agreed that the parties shall be entitled to specific performance in such event, without the necessity of proving the inadequacy of money damages as a remedy, in addition to any other remedy at law or in equity.

 

Section 10.9 Notices.

All notices hereunder shall be sufficiently given for all purposes hereunder if in writing and delivered personally, sent by documented overnight delivery service or, to the extent receipt is confirmed, telecopy, telefax, email or other electronic transmission service to the appropriate address or number as set forth below (or any other address duly notified by a party hereto pursuant to the provisions of this Section 10.9).

 

  

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If to RSD:

Royal Style Design, Inc.

800 N. Magnolia Ave, Suite 105

Orlando, FL 32803

Attn: Chief Executive Officer

Facsimile: 407-843-2344

Phone: 407-843-3344

If to KNHI:

KNHI Ltd.

420095, Kazan city, Serov str., 19

Telephone +7 843 5422624

Fax +7 843 5422780

Director General

MSRN 1081690066171

TIN 1658103536

CRR 165801001

Settlement account No. 40702810600000011344

in CJSC Joint-Stock Mortgage Bank “Ipoteka-Invest” of Kazan city

correspondent account No. 30101810000000000805

transit account No. 40702840400005011344

BIC 049209821

 

 

Section 10.10 Governing Law.

This Agreement shall be governed by and construed in accordance with the laws of the State of Florida, without regard to the conflicts of laws principles.

Section 10.11 Consent to Jurisdiction.

The parties shall in good faith attempt to resolve all disputes arising under this Agreement or by reason of the Exchange by discussion or mediation resulting in mutual agreement as to the manner of resolution of the particular dispute. Failing such resolution, the Federal courts of competent jurisdiction in the State of Florida shall have sole jurisdiction to resolve any disputes arising under this Agreement or by reason of the Exchange.  Any action, suit or other legal proceeding which is commenced to resolve any matter arising under or relating to any provision of this Agreement shall be commenced only in a federal court of competent jurisdiction the State of Florida and the parties hereto each consents to the jurisdiction of such a court.

Section 10.12 Counterparts.

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

Section 10.13 Certain Definitions. As used herein:

 

(a) "Affiliate" shall have the meanings ascribed to such term in Rule 12b-2 of the Exchange Act;

(b) "Business Day" shall mean any day other than a Saturday, Sunday or a day on which federally chartered financial institutions are not open for business.

(c) "Confidential Information" shall mean the existence and contents of this Agreement and the Schedules and Exhibits hereto, and all proprietary technical, economic, environmental, operational, financial and/or business information or material of one party which, prior to or following the Closing Date, has been disclosed by KNHI, on the one hand, or RSD, on the other hand, in written, oral (including by recording), electronic, or visual form to, or otherwise has come into the possession of, the other;

(d) "Contract" shall mean any oral, written or implied contracts, agreements, licenses, instruments, indentures leases, powers of attorney, guaranties, surety arrangements or other commitments of any kind;

 

  

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(e) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder;

(f) "GAAP" shall mean generally accepted accounting principles in the United States as in effect on the date or for the period with respect to which such principles are applied;

(g) "Governmental Authority" shall mean any nation or government, any state, municipality or other political subdivision thereof and any entity, body, agency, commission or court, whether domestic, foreign or multinational, exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any executive official thereof;

(h) "Knowledge" shall mean (i) with respect to an individual, knowledge of a particular fact or other matter, if such individual is aware of such fact or other matter, and (ii) with respect to a Person that is not an individual, knowledge of a particular fact or other matter if any individual who is serving, or who has at any time served, as a director, officer, partner, executor, or trustee of such Person (or in any similar capacity) has, or at any time had, knowledge of such fact or other matter;

(i) "Lien" shall mean any security or other property interest or right, claim, lien, pledge, option, charge, security interest, contingent or conditional sale, or proxy, pre-emptive rights, first refusal rights, participation rights, or other title claim or retention agreement, interest or other right or claim of third parties, whether perfected or not perfected, voluntarily incurred or arising by operation of law, and including any agreement (other than this Agreement) to grant or submit to any of the foregoing in the future;

(j) "Material Adverse Effect" shall mean any adverse effect on the business, condition (financial or otherwise) or results of operation of the applicable entity;

(k) "Material Contract" shall mean any Contract, other than automotive loans and equipment and furniture leases entered into in the ordinary course of business, the liabilities or commitments associated therewith exceed, in the case of KNHI, $50,000 individually or $100,000 in the aggregate;

(1) "Person" shall mean any individual, corporation, partnership, association, trust or other entity or organization, including a governmental or political subdivision or any agency or institution thereof;

(m) “RSD SEC Documents” shall mean all reports filed by RSD with the SEC under the Exchange Act.

(n) "SEC" shall mean the Securities and Exchange Commission;

(o) "Securities Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder; and

(p) “KNHI Acquisition Subsidiary” shall mean PCG a 100% owned subsidiary corporation of RSD formed for the purpose of holding the KNHI Interests.

(q) "Taxes" shall mean all taxes (whether U.S. federal, state, local or other non-U.S.) based upon or measured by income or gains from the sale of  property and any other tax whatsoever, including, without limitation, gross receipts, profits, sales, levies, imposts, deductions, charges, rates, duties, use, occupation, value added, ad valorem, transfer, franchise, withholding, payroll and social security, employment, excise, stamp duty or property taxes, together with any interest, penalties, charges or fees imposed with respect thereto.

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IN WITNESS WHEREOF, each of the parties have caused this Agreement to be signed by their respective officers hereunto duly authorized, all as of the date first written above.

ROYAL STYLE DESIGN, INC.

	
By: /s/ Richard Lloyd

	  	  
	
 

Name: Richard Lloyd

	  	  
	
 

Title: CEO

	  	  

 

 

OOO PSO KAZANNEFTEHIMINVEST

	
By:/s/ Rustem Likhachev

	  	  
	
 

Name:  Rustem Likhachev

	  	  
	
 

Title:

	  	  

KNHI OWNERS' COUNTERPART SIGNATURE PAGE [Signature page must be executed by each KNHI OWNER]

	
/s/ Rustem Likhachev

 

	  	  
	
Rustem Likhachev

 

 

	  	  
	
 

 

 

	  	  
	
 

 

 

	 	 
	
 

 

 

	 	 

  

  

20

  

 

SCHEDULE I

 

 

	Name of KNHI Owner  	
 No. of Interests of

KNHI to be Exchanged   

	 	
No. of  Shares of RSD

Common Stock

to be Received in Exchange

	 
	 	 	 	 	 
	
Rustem Likhachev

 

	
100%

	  	
      32,260,000

	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  

SCHEDULE II

KNHI Management Changes

 

	Name  	Title   	 Action
	 	 	 
	
Rustem Likhachev

	
Director

	
Upon closing will appointed as a member of the board of Directors of RSD

 

 

SCHEDULE III

(Description of Property)

Rustem N. Likhachev, Director General of OOO PSO "Kazanneftehiminvest", is contributing land to OOO PSO "Kazanneftehiminvest", with a fair value appraisal of 5,565,247,300 Rubles (approximately $184 million).

The property is located in the Vysokogorsky Region, Republic of Tartastan.  The agricultural land plots are divided into two parcels.

The first parcel consists of a total of 11,314,700 sq.m (Cadastral No. 16:16:172800:0001).

The second parcel consists of a total of 10,857,600 sq.m (Cadastral No. 16:16:172800:8).

Both parcels are zoned agricultural and the value of the appraisal is of the land as a whole and not the appraised value should the land be subdivided.

KNHI Property location (consists of multiple lots):

#1         55* 58’ 30. 65” N            49* 18’ 58. 68” E

#2         55* 59’ 10. 17” N            49* 19’ 03. 26” E

#3         56* 01’ 11. 77” N            49* 17’ 54. 46“ E

#4         56* 01‘ 52. 30“ N            49* 17‘ 33. 26“ E

#5         56* 01‘ 32. 34“ N            49* 16‘ 25. 65“ E

#6         56* 00‘ 53. 88“ N            49* 16’ 54. 28“ E

#26       56* 00‘ 53. 87“ N            49* 20‘ 02. 14“ E

#9         56* 00‘ 58. 87“ N            49“ 18‘ 57. 94“ E

 

 

 

 

 

21ex10_7.htm

EXHIBIT 10.7

 

	
Purchase Agreement

 

between

 

Emerging Media Holding Inc., a Nevada Corporation  (“EMDH”)

 

and

 

shareholder trust represented by STIPULA FINANCIAL INC., a  BVI Company

 

Dated: August 3, 2010

 

 

PURCHASE AGREEMENT

 

 

THIS EXCHANGE AGREEMENT (hereinafter referred to as this "Agreement")

is entered into as of August 3, 2010 by and between Emerging Media Holdings Inc.., a Nevada Corporation  (hereinafter referred to as “EMDH”) and Shareholder trust represented by  STIPULA FINANCIAL INC., a  BVI Company (hereinafter referred to as "Purchaser”), (collectively the two companies are hereinafter referred to as the “Parties”) upon the following premises:

 

Premises

 

WHEREAS,

PURCHASER, is a corporation organized under the laws of British Virgin Islands;

 

 

WHEREAS,

EMDH is a open joint stock company organized under the laws of Nevada;

 

 

WHEREAS,

management of the constituent corporations have determined that it is in the best interest of the parties that PURCHASER acquire :   80% shares of SC GENESIS INTERNATIONAL SA

Calea 13  Septembrie nr 192 – Bucharest, Romania   , the Genesis Subsidiary with all its assets and liabilities respectfully in exchange for  8.413.400   shares of Emerging Media Holdings Inc..

 

 

NOW THEREFORE, on the stated premises and for and in consideration of the mutual covenants and agreements hereinafter set forth and the mutual benefits to the Parties to be derived here from, it is hereby agreed as follows:

 

  

  

  

	
Agreement

 

ARTICLE I

 

REPRESENTATIONS, COVENANTS, AND WARRANTIES OF EMDH

 

 

As an inducement to, and to obtain the reliance of PURCHASER except as set forth on the EMDH Schedules (as hereinafter defined),EMDH represents and warrants as follows:

 

Section 1.01

Organization. EMDH  is a corporation duly organized, validly existing, and in good standing under the laws of Delaware and has the corporate power and is duly authorized, qualified, franchised, and licensed under all applicable laws, regulations, ordinances, and orders of public authorities to own all of its properties and assets and to carry on its business in all material respects as it is now being conducted, including qualification to do business as a foreign corporation in the states or countries in which the character and location of the assets owned by  it or the nature of the business transacted by it requires qualification, except where failure to be so qualified would not have a material adverse effect on its business.  Included in the EMDH Schedules are complete and correct copies of the articles of incorporation, and the bylaws of EMDH as in effect on the date hereof.  The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any provision of EMDH’s articles of incorporation or bylaws. EMDH has taken all actions required by law, its articles of incorporation, or otherwise to authorize the execution and delivery of this Agreement. EMDH has full power, authority, and legal right and has taken all action required by law, its articles of incorporation, and otherwise to consummate the transactions herein contemplated.

 

 

Section 1.02

Capitalization.  The authorized capitalization of EMDH consists of 18,553,000 shares of which 17,553,000 are common stock and 1,000,000 shares of preferred stock that are currently issued and outstanding.  All issued and outstanding shares are legally issued, fully paid, and non-assessable and not issued in violation of the preemptive or other rights of any person.

 

 

 

Section 1.03

Absence of Certain Changes or Events.  Except as set forth in this Agreement or the EMDH Schedules, since March 31, 2010 there has been no material change in the business and assets of EMDH and to the best knowledge of EMDH, EMDH has not become subject to any law or regulation which materially and adversely affects, or in the future may adversely affect the business, operations, properties, assets, or condition of EMDH.

 

 

 

Section 1.04

Litigation and Proceedings.  There are no actions, suits, proceedings, or investigations pending or, to the knowledge of EMDH after reasonable investigation, threatened by or against EMDH or affecting EMDH or its properties, at law or in equity, before any court or other governmental agency or instrumentality, domestic or foreign, or before any arbitrator of any kind. EMDH does not have any knowledge of any material default on its part with respect to any judgment, order, injunction, decree, award, rule, or regulation of any court, arbitrator, or governmental agency or instrumentality or of any circumstances that, after reasonable investigation, would result in the discovery of EMDH default.

 

Section 1.05

Contracts.

(a) Except as included or described in the EMDH Schedules, there are no "material" contracts, agreements, franchises, license agreements, debt instruments or other commitments to which EMDH is a party or by which it or any of its assets, products, technology, or properties are bound other than those incurred in the ordinary course of business (as used in this Agreement, a "material" contract, agreement, franchise, license agreement, debt instrument or commitment is one which (i) will remain in effect for more than six (6) months after the date of this Agreement or (ii) involves aggregate obligations of at least twenty-five thousand dollars ($25,000));

 

(b) All contracts, agreements, franchises, license agreements, and other commitments to which EMDH is a party or by which its properties are bound and which are material to the operations of EMDH taken as a whole are valid and enforceable by EMDH in all respects, except as limited by bankruptcy and insolvency laws and by other laws affecting the rights of creditors generally;

 

(c) Except as set forth in the EMDH Schedules, EMDH is not a party to or bound by, and the properties of EMDH are not subject to any contract, agreement, other commitment or instrument; any charter or other corporate restriction; or any judgment, order, writ, injunction, decree, or award which materially and adversely affects, the business operations, properties, assets, or condition of EMDH.

 

  

  

  

	
Section 1.06

Material Contract Defaults. EMDH is not in default in any material respect under the terms of any outstanding contract, agreement, lease, or other commitment which is material to the business, operations, properties, assets or condition of EMDH and there is no event of default in any material respect under any EMDH contract, agreement, lease, or other commitment in respect of which EMDH has not taken adequate steps to prevent EMDH default from occurring.

 

Section 1.07

No Conflict With Other Instruments.  The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or provision of, constitute an event of default under, or terminate, accelerate or modify the terms of any material indenture, mortgage, deed of trust, or other material contract, agreement, or instrument to which EMDH is a party or to which any of its properties or operations are subject.

 

Section 1.08

Governmental Authorizations.  Except as set forth in the EMDH Schedules, EMDH has all licenses, franchises, permits, and other governmental authorizations that are legally required to enable it to conduct its business in all material respects as conducted on the date hereof.  Except for compliance with federal and state securities and corporation laws, as hereinafter provided, no authorization, approval, consent, or order of, or registration, declaration, or filing with, any court or other governmental body is required in connection with the execution and delivery by EMDH of this Agreement and the consummation by EMDH of the transactions contemplated hereby.

 

Section 1.09

Compliance With Laws and Regulations.  Except as set forth in the EMDH Schedules, to the best of its knowledge EMDH has complied with all applicable statutes and regulations of any federal, state, or other governmental entity or agency thereof, except to the extent that noncompliance would not materially and adversely affect the business, operations, properties, assets, or condition of EMDH, or except to the extent that noncompliance would not result in the occurrence of any material liability for EMDH.

 

Section 1.10

Approval of Agreement.  The board of directors of EMDH has authorized the execution and delivery of this Agreement by EMDH and has approved this Agreement and the transactions contemplated hereby, and will recommend to the EMDH Shareholders that the SALE of ASSETS be accepted by them.

Section 1.11

Material Transactions or Affiliations.  Set forth in the EMDH Schedules is a description of every contract, agreement, or arrangement between EMDH and any predecessor and any person who was at the time of EMDH contract, agreement, or arrangement an officer, director, or person owning of record, or known by EMDH to own beneficially, 5% or more of the issued and outstanding common stock of EMDH and which is to be performed in whole or in part after the date hereof or which was entered into not more than three years prior to the date hereof.  Except as disclosed in the EMDH Schedules or otherwise disclosed herein, no officer, director, or 5% shareholder of EMDH has, or has had since inception of EMDH, any known interest, direct or indirect, in any transaction with EMDH which was material to the business of EMDH.  There are no commitments by EMDH, whether written or oral, to lend any funds, or to borrow any money from, or enter into any other transaction with, any EMDH affiliated person.

 

Valid Obligation.  This Agreement and all agreements and other documents executed by EMDH in connection herewith constitute the valid and binding obligation of EMDH, enforceable in accordance with its or their terms, except as may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors' rights generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought by EMDH .

 

  

  

  

	
ARTICLE II

 

 

REPRESENTATIONS, COVENANTS, AND WARRANTIES OF PURCHASER

 

 

As an inducement to, and to obtain the reliance of EMDH and the EMDH Shareholders, except as set forth in the PURCHASER Schedules (as hereinafter defined), PURCHASER represents and warrants as follows:

 

Section 2.01

Organization.  PURCHASER is shareholder trust represented by a BVI Company              .

 

 

Section 2.02

Securities Filings; Financial Statements.

 

(a) PURCHASER has no liabilities with respect to the payment of any federal, state, county, local or other taxes (including any deficiencies, interest or penalties), except for taxes accrued but not yet due and payable.

 

(b) there has not been (i) any material adverse change in the business, operations, properties, assets or condition of PURCHASER or (ii) any damage, destruction or loss to PURCHASER(whether or not covered by insurance) materially and adversely affecting the business, operations, properties, assets or condition of PURCHASER;

 

Section 2.09

Litigation and Proceedings.  There are no actions, suits, proceedings or investigations pending or, to the knowledge PURCHASER after reasonable investigation, threatened by or against PURCHASER or affecting  PURCHASER or  its properties, at law or in equity, before any court or other governmental agency or instrumentality, domestic or foreign, or before any arbitrator of any kind except as disclosed in PURCHASER Schedules.  PURCHASER Limited has no knowledge of any default on its part with respect to any judgment, order, writ, injunction, decree, award, rule or regulation of any court, arbitrator, or governmental agency or instrumentality or any circumstance that after reasonable investigation would result in the discovery of EMDH default.

 

Section 2.10

No Conflict With Other Instruments.  The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or provision of, constitute a default under, or terminate, accelerate or modify the terms of, any indenture, mortgage, deed of trust, or other material agreement or instrument to which EMDH is a party or to which any of its assets or operations are subject.

 

Section 2.11

Compliance With Laws and Regulations.  To the best of its knowledge, PURCHASER has complied with all applicable statutes and regulations of any federal, state, or other applicable governmental entity or agency thereof, except to the extent that noncompliance would not materially and adversely affect the business, operations, properties, assets or condition of EMDH or except to the extent that noncompliance would not result in the occurrence of any material liability.  This compliance includes, but is not limited to, the filing of all reports to date with federal and state securities authorities.

 

Section 2.12

Material Transactions or Affiliations.  Except as disclosed herein and in the PURCHASER Schedules, there exists no contract, agreement or arrangement between PURCHASER and any predecessor and any person who was at the time of EMDH contract, agreement or arrangement an officer, director, or person owning of record or known by PURCHASER to own beneficially, 5% or more of the issued and outstanding common stock of PURCHASER and which is to be performed in whole or in part after the date hereof or was entered into not more than three years prior to the date hereof.  Neither any officer, director, nor 5% shareholder of PURCHASER has, or has had since inception of PURCHASER, any known interest, direct or indirect, in any EMDH transaction with PURCHASER which was material to the business of PURCHASER.  PURCHASER has no commitment, whether written or oral, to lend any funds to, borrow any money from, or enter into any other transaction with, any EMDH affiliated person.

 

  

  

  

	
Section 2.16

Approval of Agreement.  The  PURCHASER have authorized the execution and delivery of this Agreement and has approved this Agreement and the transactions contemplated hereby.

 

Section 2.18

Valid Obligation.  This Agreement and all agreements and other documents executed by PURCHASER in connection herewith constitute the valid and binding obligation of PURCHASER, enforceable in accordance with its or their terms, except as may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors' rights generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought by EMDH.

 

 

 

ARTICLE IV

 

SPECIAL COVENANTS

 

Section 4.01

Indemnification.

(a)           EMDH hereby agrees to indemnify PURCHASER and each of the officers, agents and directors of PURCHASER as of the date of execution of this Agreement against any loss, liability, claim, damage, or expense (including, but not limited to, any and all expense whatsoever reasonably incurred in investigating, preparing, or defending against any litigation, commenced or threatened, or any claim whatsoever), to which it or they may become subject arising out of or based on any inaccuracy appearing in or misrepresentations made under Article I of this Agreement.  The indemnification provided for in this paragraph shall survive the Closing and consummation of the transactions contemplated hereby and termination of this Agreement.

(b)PURCHASER and its officers and directors hereby agrees to indemnify EMDH and each of the officers, agents, and directors of EMDH as of the date of execution of this Agreement against any loss, liability, claim, damage, or expense (including, but not limited to, any and all expense whatsoever reasonably incurred in investigating, preparing, or defending against any litigation, commenced or threatened, or any claim whatsoever), to which it or they may become subject arising out of or based on any inaccuracy appearing in or misrepresentation made under Article II of this Agreement.  The indemnification provided for in this paragraph shall survive the Closing and consummation of the transactions contemplated hereby and termination of this Agreement.

 

 

 

ARTICLE V

 

CONDITIONS PRECEDENT TO OBLIGATIONS OFEMDH

 

The obligations of EMDH and the EMDH Shareholders under this Agreement are subject to the satisfaction, at or before the Closing, of the following conditions:

 

Section 6.01

Accuracy of Representations and Performance of Covenants.  The representations and warranties made by EMDH in this Agreement were true when made and shall be true as of the Closing (except for changes therein permitted by this Agreement) with the same force and effect as if EMDH representations and warranties were made at and as of the Closing.  Additionally, EMDH shall have performed and complied with all covenants and conditions required by this Agreement to be performed or complied shall have approved the Exchange and the related transactions described herein.. PURCHASER shall have been furnished with certificates, signed by duly authorized executive officers of EMDH and dated the Closing , to the foregoing effect.

 

Section 6.02

Officer's Certificate.  PURCHASER shall have been furnished with certificates dated the Closing Date and signed by duly authorized executive officers of EMDH, to the effect that no litigation, proceeding, investigation or inquiry is pending, or to the best knowledge of EMDH threatened, which might result in an action to enjoin or prevent the consummation of the transactions contemplated by this Agreement  or, to the extent not disclosed in the EMDH Schedules, by or against EMDH, which might result in any material adverse change in any of the assets, properties or operations of EMDH.

 

  

  

  

	
Section 6.03

No Governmental Prohibition.  No order, statute, rule, regulation, executive order, injunction, stay, decree, judgment or restraining order shall have been enacted, entered, promulgated or enforced by any court or governmental or regulatory authority or instrumentality which prohibits the consummation of the transactions contemplated hereby.

 

Section 6.04

Consents.  All consents, approvals, waivers or amendments pursuant to all contracts, licenses, permits, trademarks and other intangibles in connection with the transactions contemplated herein, or for the continued operation of each party after the Closing on the basis as presently operated shall have been obtained.

 

Section 6.05

Other Items EMDH shall have received further opinions, documents, certificates, or instruments relating to the transactions contemplated hereby as PURCHASER may reasonably request.

 

 

 

ARTICLE VII

MISCELLANEOUS

 

Section 7.01

Brokers.   The Parties agree that there were no finders or brokers involved in bringing the parties together or who were instrumental in the negotiation, execution or consummation of this Agreement.  The Parties each agree to indemnify the other against any claim by any third person other than those described above for any commission, brokerage, or finder's fee arising from the transactions contemplated hereby based on any alleged agreement or understanding between the indemnifying party and EMDH third person, whether express or implied from the actions of the indemnifying party.

Section 7.02

Governing Law.  This Agreement shall be governed by, enforced, and construed under and in accordance with the laws of the United States of America and, with respect to the matters of state law, with the laws of the State of NEVADA without giving effect to principles of conflicts of law there under.  Each of the parties (a) irrevocably consents and agrees that any legal or equitable action or proceedings arising under or in connection with this Agreement shall be brought by EMDH exclusively in the federal courts of the United States.

Section 7.03

Notices.  Any notice or other communications required or permitted hereunder shall  be in writing and shall be sufficiently given if personally delivered to it or sent by telecopy, overnight courier or registered mail or certified mail, postage prepaid, addressed as follows:

If to PURCHASER                                STIPULA FINANCIAL INC., a  BVI Company:

 c/o Ratikonstrasse 13,P.O.Box 125,Fl-9490 Vaduz, Principality of Liechtenstein

 

If to Emerging media HoldingsInc.:

 

     1809 E. BROADWAY ST., SUITE 175, OVIEDA, FLORIDA  32765 USA                                                                                                                                                                                               

 

 

With copies to:

or EMDH other addresses as shall be furnished in writing by any party in the manner for giving notices hereunder, and any EMDH notice or communication shall be deemed to have been given (i) upon receipt, if personally delivered, (ii) on the day after dispatch, if sent by overnight courier, (iii) upon dispatch, if transmitted by telecopy and receipt is confirmed by telephone and (iv) three (3) days after mailing, if sent by registered or certified mail.

 

  

  

  

	
Section 7.04

Attorney's Fees.  In the event that either party institutes any action or suit to enforce this Agreement or to secure relief from any default hereunder or breach hereof, the prevailing party shall be reimbursed by the losing party for all costs, including reasonable attorney's fees, incurred in connection therewith and in enforcing or collecting any judgment rendered therein.

Section 7.05

Confidentiality.  Each party hereto agrees with the other that, unless and until the transactions contemplated by this Agreement have been consummated, it and its representatives will hold in strict confidence all data and information obtained with respect to another party or any subsidiary thereof from any representative, officer, director or employee, or from any books or records or from personal inspection, of EMDH other party, and shall not use EMDH data or information or disclose the same to others, except (i) to the extent EMDH data or information is published, is a matter of public knowledge, or is required by law to be published; or (ii) to the extent that EMDH data or information must be used or disclosed in order to consummate the transactions contemplated by this Agreement.  In the event of the termination of this Agreement, each party shall return to the other party all documents and other materials obtained by it or on its behalf and shall destroy all copies, digests, work papers, abstracts or other materials relating thereto, and each party will continue to comply with the confidentiality provisions set forth herein.

 

Section 7.06

Public Announcements and Filings.  Unless required by applicable law or regulatory authority, none of the parties will issue any report, statement or press release to the general public, to the trade, to the general trade or trade press, or to any third party (other than its advisors and representatives in connection with the transactions contemplated hereby) or file any document, relating to this Agreement and the transactions contemplated hereby, except as may be mutually agreed by the parties.  Copies of any EMDH filings, public announcements or disclosures, including any announcements or disclosures mandated by law or regulatory authorities, shall be delivered to each party at least one (1) business day prior to the release thereof.

Section 7.07

Schedules; Knowledge.  Each party is presumed to have full knowledge of all information set forth in the other party's schedules delivered pursuant to this Agreement.

Section 7.08

Third Party Beneficiaries.  This contract is strictly between PURCHASER and EMDH, and, except as specifically provided, no director, officer, stockholder, employee, agent, independent contractor or any other person or entity shall be deemed to be a third party beneficiary of this Agreement.

Section 7.09

Expenses.  Whether or not the Exchange is consummated, each Party hereto will bear their own respective expenses, including legal, accounting and professional fees, incurred in connection with the Exchange or any of the other transactions contemplated hereby.

Section 7.10

Entire Agreement.  This Agreement represents the entire agreement between the parties relating to the subject matter thereof and supersedes all prior agreements, understandings and negotiations, written or oral, with respect to EMDH subject matter.

 

Section 7.11

Survival; Termination.  The representations, warranties, and covenants of the respective parties shall survive the Closing  and the consummation of the transactions herein contemplated for a period of two years.

 

Section 7.12    Counterparts.  This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which taken together shall be but a single instrument.

Section 7.13

Amendment or Waiver.  At any time prior to the Closing, this Agreement may by amended by a writing signed by all parties hereto, with respect to any of the terms contained herein, and any term or condition of this Agreement may be waived or the time for performance may be extended by a writing signed by the party or parties for whose benefit the provision is intended.

 

Section 7.14

Best Efforts.  Subject to the terms and conditions herein provided, each party shall use its best efforts to perform or fulfill all conditions and obligations to be performed or fulfilled by it under this Agreement so that the transactions contemplated hereby shall be consummated as soon as practicable.

 

 

  

  

  

 

	

IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement to be executed by their respective officers, hereunto duly authorized, as of the date first-above written.

ATTEST: Emerging Media Holdings Inc.

 

BY: /s/ Iurie Bordian                                      

 

 

ATTEST:  STIPULA FINANCIAL INC.

 

BY: /s/ Iacob Senseutchi

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