SHARE PURCHASE AND MERGER AGREEMENT
by
and among
Landway
Acquisition Corp.
and
Landway
Nano Bio-Tech, Inc.
Dated
as of June 1, 2007
Share
Purchase and Merger Agreement (the
“Agreement”)
dated
as of June 1, 2007 by and among itLinkz Group, Inc., a corporation formed
under
the laws of the State of Delaware (“ILKZ”), Landway Acquisition Corp., a
corporation newly formed under the laws of the State of Delaware and a wholly
owned subsidiary of ILKZ (the “Merger
Sub”),
Landway Nano Bio-Tech, Inc.,
a
corporation formed under the laws of the State of Delaware (“Landway”),
the
individuals who are identified on
the
signature pages of this Agreement as the Investors (“Investors”),
and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the “Principal
Shareholder”).
Each of
ILKZ, the Merger Sub, Landway and each of the Investors or the Principal
Shareholders is referred to herein individually as a “Party”
and
all
are referred to collectively as the “Parties.”
PREAMBLE
WHEREAS,
Landway
owns 100% of the registered capital of Shandong
Sishui Spring Pharmacy Limited Company,
a
corporation organized under the laws of The People’s Republic of China
(“Shandong
Sishui”);
WHEREAS,
ILKZ
and Landway have determined that a business combination between them is
advisable and in the best interests of their respective companies and
stockholders and presents an opportunity for their respective companies to
achieve long-term strategic and financial benefits;
WHEREAS,
the
Investors are affiliated with Landway, and wish to purchase 500 Series B
Convertible Preferred shares of ILKZ (the “Purchased
Shares,” as
further defined herein)
for
cash
(the “Share
Purchase”);
WHEREAS,
ILKZ
has proposed to acquire Landway pursuant to a merger transaction whereby,
pursuant to the terms and subject to the conditions of this Agreement, Landway
shall become a wholly owned subsidiary of ILKZ through the merger of Landway
with and into the Merger Sub (the “Merger”);
and
WHEREAS,
in the
Merger, all issued and outstanding shares of capital stock of Landway shall
be
cancelled and converted into the right to receive 500 Series B Convertible
Shares of ILKZ (the “Merger
Shares”)
which
Shares, together with the Purchased Shares, shall represent 99 % of the voting
power of ILKZ after the Merger;
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants, representations and
warranties contained herein, the Parties, intending to be legally bound,
hereby
agree as follows:
CERTAIN
DEFINITIONS
As
used
in this Agreement, the following terms shall have the meanings set forth
below:
“Applicable
Law”
means
any domestic or foreign law, statute, regulation, rule, policy, guideline
or
ordinance applicable to the businesses of the Parties, the Merger and/or
the
Parties.
“DGCL”
means
Delaware General Corporation Law.
“Knowledge”
means,
in the case of ILKZ or Landway, a particular fact or other matter of which
its
Chief Executive Officer or the Chief Financial Officer is actually aware
or
which a prudent individual serving in such capacity could be expected to
discover or otherwise become aware of in the course of conducting a reasonable
review or
investigation of
the
corporation and its business and affairs.
“Lien”
means,
with respect to any property or asset, any mortgage, lien, pledge, charge,
security interest, claim, encumbrance, royalty interest, any other adverse
claim
of any kind in respect of such property or asset, or any other restrictions
or
limitations of any nature whatsoever.
“Material
Adverse Effect”
with
respect to any entity or group of entities means any event, change or effect
that has or would have a materially adverse effect on the financial condition,
business or results of operations of such entity or group of entities, taken
as
a whole.
“Person”
means
any individual, corporation, partnership, trust or unincorporated organization
or a government or any agency or political subdivision thereof.
“Surviving
Entity”
shall
mean Landway as the surviving entity in the Merger as provided in Section
1.04.
“Tax”
(and,
with correlative meaning, “Taxes”
and
“Taxable”)
means:
(i)
any
income, alternative or add-on minimum tax, gross receipts tax, sales tax,
use
tax, ad valorem tax, transfer tax, franchise tax, profits tax, license tax,
withholding tax, payroll tax, employment tax, excise tax, severance tax,
stamp
tax, occupation tax, property tax, environmental or windfall profit tax,
custom,
duty or other tax, impost, levy, governmental fee or other like assessment
or
charge of any kind whatsoever together with any interest or any penalty,
addition to tax or additional amount imposed with respect thereto by any
governmental or Tax authority responsible for the imposition of any such
tax
(domestic or foreign), and
(ii)
any
liability for the payment of any amounts of the type described in clause
(i)
above as a result of being a member of an affiliated, consolidated, combined
or
unitary group for any Taxable period, and
(iii)
any
liability for the payment of any amounts of the type described in clauses
(i) or
(ii) above as a result of any express or implied obligation to indemnify
any
other person.
“Tax
Return”
means
any return, declaration, form, claim for refund or information return or
statement relating to Taxes, including any schedule or attachment thereto,
and
including any amendment thereof.
ARTICLE
I
THE
TRANSACTIONS
|
SECTION
1.01
|
THE
SHARE PURCHASE
|
(a) Prior
to
the Closing (defined herein), ILKZ shall file with the Secretary of State
of the
State of Delaware a Certificate of Designation of the Series B Convertible
Preferred Shares (“Series B Preferred Shares”) in the form of Schedule
1.01 (a)
hereto.
(b) On
the
Closing Date (defined herein), the Share Purchase shall be consummated, in
which
the Investors shall purchase from ILKZ an aggregate of five hundred (500)
shares
of the Series B Convertible Preferred Stock of ILKZ (“Purchased
Shares”)
for
cash consideration of Five Hundred Thirty Thousand and 00/100 Dollars
($530,000.00). The amount to be paid by and the number of Purchased Shares
to be
distributed to each Investor are set forth in Schedule
1.01(b).
(b)
The
Parties intend that the issuance of the Purchased Shares to the Investors
pursuant to the Share Purchase shall be exempt from the registration
requirements of the Securities Act of 1933 (the “Securities
Act”)
pursuant to Section 4(2) of the Securities Act and the rules and regulations
promulgated thereunder.
|
SECTION
1.02
|
THE
MERGER
|
Upon
the
terms and subject to the conditions set forth in this Agreement and in
accordance with the DGCL, at the Effective Time (as hereinafter defined),
all
Landway Shares (as hereinafter defined) shall be cancelled and converted
into
the right to receive the Merger Shares. In connection therewith, the following
terms shall apply:
(a)
Exchange
Agent.
▇▇▇▇▇▇
▇▇▇▇▇▇, Esq., counsel for ILKZ, shall act as the exchange agent (the
“Exchange
Agent”)
for
the purpose of exchanging Landway Shares for the Merger Shares. At or prior
to
the Closing, ILKZ shall deliver to the Exchange Agent the Merger
Shares.
|
(b)
|
Conversion
of Securities.
|
(i) Conversion
of Landway Securities.
At the
Effective Time, by virtue of the Merger and without any action on the part
of
ILKZ, Landway or the Merger Sub, or the holders of any of their respective
securities:
(A) Each
of
the issued and outstanding shares of common stock of Landway (the “Landway
Shares”)
immediately prior to the Effective Time shall be converted into and represent
the right to receive, and shall be exchangeable for, that number of Series
B
Preferred Shares of ILKZ as shall be determined by dividing 500 by the number
of
then issued and outstanding Landway Shares.
(B) All
Landway Shares shall no longer be outstanding and shall automatically be
canceled and retired and shall cease to exist, and each holder of a certificate
representing any such shares shall cease to have any rights with respect
thereto, except the right to receive the Merger Shares to be issued pursuant
to
this Section 1.02(b)(i) upon the surrender of such certificate in accordance
with Section 1.08, without interest. No fractional shares may be issued;
but
each fractional share that would result from the Merger will be rounded to
the
nearest number of whole shares.
(C) The
Merger Shares, together with the Purchased Shares acquired in the Share
Purchase, (i) shall represent 99%, on a fully diluted basis, of the voting
power
of all classes of issued and outstanding stock of ILKZ at the Effective Time,
after giving effect to the Merger, and (ii) shall be convertible into 809,866.23
shares of the Common Stock of ILKZ on a fully diluted basis at any time after
the consummation of the spin-off transaction described in the Operating
Subsidiary Agreement (as defined in Section 5.01 (d) hereof).
(ii) Conversion
of Merger Sub Stock.
At the
Effective Time, by virtue of the Merger and without any action on the part
of
Landway, ILKZ, the Merger Sub, or the holders of any of their respective
securities, each share of capital stock of Merger Sub outstanding immediately
prior to the Effective Time shall be converted into one share of the common
stock of the Surviving Entity and the shares of common stock of the Surviving
Entity so issued in such conversion shall constitute the only outstanding
shares
of capital stock of the Surviving Entity and the Surviving Entity shall be
a
wholly owned subsidiary of ILKZ.
(d) Exemption
from Registration.
The
Parties intend that the issuance of the Merger Shares to the Investors shall
be
exempt from the registration requirements of the Securities Act pursuant
to
Section 4(2) of the Securities Act and the rules and regulations promulgated
thereunder.
|
SECTION
1.03
|
CLOSING
|
The
closing of the Share Purchase and the Merger (the “Closing”)
will
take place at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq. within one (1) business
day
following the satisfaction or waiver of the conditions precedent set forth
in
Article V or at such other date as ILKZ and Landway shall agree (the
“Closing
Date”),
but
in any event no later than July 31, 2007 unless extended by a written agreement
of ILKZ and Landway.
|
SECTION
1.04
|
MERGER;
EFFECTIVE TIME
|
At
the
Effective Time and subject to and upon the terms and conditions of this
Agreement, Merger Sub shall, and ILKZ shall cause Merger Sub to, merge with
and
into Landway in accordance with the provisions of the DGCL, the separate
corporate existence of Merger Sub shall cease and Landway shall continue
as the
Surviving Entity. The Effective Time shall occur upon the filing with the
Secretary of State of the State of Delaware of a Certificate of Merger, executed
in accordance with the applicable provisions of the DGCL (the “Effective
Time”).
The
date on which the Effective Time occurs is referred to as the “Effective
Date.”
Provided that this Agreement has not been terminated pursuant to Article
VI, the
Parties will cause the Certificate of Merger to be filed as soon as practicable
after the Closing.
|
SECTION
1.05
|
EFFECT
OF THE MERGER
|
The
Merger shall have the effect set forth in Title 8, Section 259 of the DGCL.
Without limiting the generality of the foregoing, and subject thereto, at
the
Effective Time, all the properties, rights, privileges, powers and franchises
of
Landway and Merger Sub shall vest in the Surviving Entity, and all debts,
liabilities and duties of Landway and Merger Sub shall become the debts,
liabilities and duties of the Surviving Entity.
|
SECTION
1.06
|
CERTIFICATE
OF INCORPORATION AND BYLAWS; DIRECTORS AND OFFICERS
|
Pursuant
to the Merger:
(a) The
Certificate of Incorporation and Bylaws of Landway as in effect immediately
prior to the Effective Time shall be the Certificate of Incorporation and
Bylaws
of the Surviving Entity immediately following the Merger.
(b) The
directors and officers of the Landway immediately prior to the Merger shall
be
the directors and officers of the Surviving Entity subsequent to the Merger.
SECTION
1.07 RESTRICTIONS
ON RESALE
(a) The
Series B Preferred Shares issued pursuant to the Share Purchase and pursuant
to
the Merger will not be registered under the Securities Act, or the securities
laws of any state, and cannot be transferred, hypothecated, sold or otherwise
disposed of until: (i) a registration statement with respect to such securities
is declared effective under the Securities Act, or (ii) ILKZ receives an
opinion
of counsel for the holders of the shares proposed to be transferred, reasonably
satisfactory to counsel for ILKZ, that an exemption from the registration
requirements of the Securities Act is available.
The
certificates representing the Purchased Shares and the Merger Shares which
are
being issued hereunder shall contain a legend substantially as
follows:
“THE
SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH
RESPECT THERETO IS DECLARED EFFECTIVE UNDER SUCH ACT, OR ITLINKZ GROUP, INC.
RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER REASONABLY SATISFACTORY TO
COUNSEL
FOR ITLINKZ GROUP, INC. THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF
SUCH ACT IS AVAILABLE.”
|
SECTION
1.08
|
EXCHANGE
OF CERTIFICATES
|
(a) EXCHANGE
OF CERTIFICATES. After the Effective Time, the holders of the Landway Shares
shall be required to surrender all their Landway Shares to the Exchange Agent,
and the holders shall be entitled upon such surrender to receive in exchange
therefor certificates representing the proportionate number of Merger Shares
into which the Landway Shares theretofore represented by the stock certificates
so surrendered shall have been exchanged pursuant to this Agreement. Until
so
surrendered, each outstanding certificate which, prior to the Effective Time,
represented Landway Shares shall be deemed for all corporate purposes, subject
to the further provisions of this Article I, to evidence the ownership of
the
number of whole Merger Shares for which such Landway Shares have been so
exchanged. No dividend payable to holders of Merger Shares of record as of
any
date subsequent to the Effective Time shall be paid to the owner of any
certificate which, prior to the Effective Time, represented Landway Shares,
until such certificate or certificates representing all the relevant Landway
Shares, together with a stock transfer form, are surrendered as provided
in this
Article I or pursuant to letters of transmittal or other instructions with
respect to lost certificates provided by the Exchange Agent.
(b) FULL
SATISFACTION OF RIGHTS. All Merger Shares for which the Landway Shares shall
have been exchanged pursuant to this Article I shall be deemed to have been
issued in full satisfaction of all rights pertaining to the Landway
Shares.
(c) EXCHANGE
OF CERTIFICATES. All certificates representing Landway Shares converted into
the
right to receive Merger Shares pursuant to this Article I shall be furnished
to
ILKZ subsequent to delivery thereof to the Exchange Agent pursuant to this
Agreement.
(d) CLOSING
OF TRANSFER BOOKS. On the Effective Date, the stock transfer book of Landway
shall be deemed to be closed and no transfer of Landway Shares shall thereafter
be recorded thereon.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF ILKZ
ILKZ,
the
Principal
Shareholder and, where applicable, the Merger Sub hereby jointly and severally
represent and warrant to Landway and to the Investors, as of the date of
this
Agreement, as of the Closing Date and as of the Effective Time, as follows:
|
SECTION
2.01
|
ORGANIZATION,
STANDING AND POWER
|
ILKZ
is a
corporation duly incorporated, validly existing and in good standing under
the
laws of the State of Delaware, and has corporate power and authority to conduct
its business as presently conducted by it and to enter into and perform this
Agreement and to carry out the transactions contemplated by this Agreement.
Merger Sub is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, and has corporate power
and
authority to enter into and perform this Agreement and to carry out the
transactions contemplated by this Agreement.
|
SECTION
2.02
|
SUBSIDIARIES
|
ILKZ
owns
all of the outstanding capital stock of the Merger Sub and of itLinkz
Corporation, a Delaware corporation (“Operating
Sub”).
Other
than its ownership of the Merger Sub and the Operating Sub, ILKZ does not
have
an ownership interest in any Person.
Merger
Sub is a recently formed corporation and prior to the date hereof and through
the Effective Date, Merger Sub has not and shall not have conducted any
operating business, become a party to any agreements, or incurred any
liabilities or obligations.
|
SECTION
2.03
|
CAPITALIZATION
|
(a) There
are
105,000,045 shares of capital stock of ILKZ authorized, consisting of
100,000,000 shares of common stock, $0.001 par value per share (the
“ILKZ
Common Shares”),
5,000,000 shares of preferred stock, $0.001 par value per share (“ILKZ
Preferred Shares”) and
45
shares of Series A Cumulative Preferred Stock, $500.00 par value per share
(“Series
A Preferred Shares”).
As of
the date of this Agreement, there are 12,910,470 ILKZ Common Shares issued
and
outstanding and 45 Series A Preferred Shares outstanding.
(b) No
ILKZ
Common Shares, ILKZ Preferred Shares or Series A Preferred Shares have been
reserved for issuance to any Person. Other than an option to purchase 150,000
common shares held by a member of ILKZ’s Board of Directors, there are no
outstanding rights, warrants, options or agreements for the purchase of ILKZ
Common or Preferred Shares except as provided in this Agreement.
(c) All
outstanding ILKZ Common Shares and Series A Preferred Shares are validly
issued,
fully paid, non-assessable, not subject to pre-emptive rights and have been
issued in compliance with all state and federal securities laws or other
Applicable Law. The Purchased Shares to be purchased by the Investors and
the
Series B Preferred Shares issuable to the Landway shareholders pursuant to
the
Merger will, when issued pursuant to this Agreement, be duly and validly
authorized and issued, fully paid and non-assessable.
|
SECTION
2.04
|
AUTHORITY
FOR AGREEMENT
|
The
execution, delivery, and performance of this Agreement by each of ILKZ and
Merger Sub has been duly authorized by all necessary corporate and shareholder
action, and this Agreement, upon its execution by the Parties, will constitute
the valid and binding obligation of each of ILKZ and the Merger Sub, enforceable
against each of them in accordance with and subject to its terms, except
as
enforceability may be affected by bankruptcy, insolvency or other laws of
general application affecting the enforcement of creditors' rights. The
execution and consummation of the transactions contemplated by this Agreement
and compliance with its provisions by ILKZ and Merger Sub will not violate
any
provision of Applicable Law and will not conflict with or result in any breach
of any of the terms, conditions, or provisions of, or constitute a default
under, ILKZ's or Merger Sub’s Certificate of Incorporation, or either of their
Bylaws, in each case as amended, or, in any material respect, any indenture,
lease, loan agreement or other agreement or instrument to which ILKZ is a
party
or by which it or any of its properties is bound, or any decree, judgment,
order, statute, rule or regulation applicable to ILKZ or Merger Sub.
|
SECTION
2.05
|
FINANCIAL
CONDITION
|
The
Annual Report on Form 10-KSB filed by ILKZ for the year ended June 30, 2006
and
the Quarterly Reports on Form 10-QSB filed by ILKZ for the periods ended
September 30, 2006, December 31, 2006 and March 31, 2007 (the “SEC Filings”) are
true, correct and complete in all material respects, are not misleading and
do
not omit to state any material fact which is necessary to make the statements
contained in such public filings not misleading in any material respect.
The
financial statements included in the SEC Filings (the “Financial Statements”)
were prepared in accordance with generally accepted accounting principles
and
fairly reflect the financial condition of ILKZ as of the dates stated and
the
results of its operations for the periods presented.
|
SECTION
2.06
|
ABSENCE
OF CERTAIN CHANGES OR EVENTS
|
Since
March 31, 2007, except (1) as reported in
the
Quarterly Report filed by ILKZ
with the
Securities and Exchange Commission (“SEC”)
on
Form
10-QSB for the period ending on that date, and (2) as reported in the Current
Report on Form 8-K filed on April 4, 2007 reporting the reincorporation merger
of Medical Technology & Innovations, Inc. (a Florida corporation) into
Itlinkz Group, Inc. (a Delaware corporation) and the changes in capitalization
that were effected pursuant to that merger as reported in the referenced
Current
Report, and (3) except as contemplated by this Agreement:
(a) there
has
not been any Material Adverse Change in the business, operations, properties,
assets, or condition of ILKZ;
(b) ILKZ
has
not (i) amended its Articles of Incorporation; (ii) declared or made, or
agreed
to declare or make, any payment of dividends or distributions of any assets
of
any kind whatsoever to stockholders or purchased or redeemed, or agreed to
purchase or redeem, any outstanding capital stock; (iii) made any material
change in its method of management, operation, or accounting; (iv) entered
into
any material transaction; or (v) made any accrual or arrangement for payment
of
bonuses or special compensation of any kind or any severance or termination
pay
to any present or former officer or employee;
(c) ILKZ
has
not (i) 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; (ii) paid any material
obligation or liability (absolute or contingent) other than current liabilities
reflected in or shown on the most recent ILKZ balance sheet, and current
liabilities incurred since that date in the ordinary course of business;
(iii)
sold or transferred, or agreed to sell or transfer, any material assets,
properties, or rights, or canceled, or agreed to cancel, any material debts
or
claims; or (iv) made or permitted any material amendment or termination of
any
contract, agreement, or license to which it is a party.
|
SECTION
2.07
|
GOVERNMENTAL
AND THIRD PARTY CONSENTS
|
No
consent, waiver, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission
or
other federal, state, county, local or other foreign governmental authority,
instrumentality, agency or commission or any third party, including a party
to
any agreement with ILKZ, the Operating Sub or Merger Sub, is required by
or with
respect to ILKZ, the Operating Sub or Merger Sub in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for such consents, waivers, approvals, orders,
authorizations, registrations, declarations and filings as may be required
under
(i) applicable securities laws, or (ii) the DGCL.
|
SECTION
2.08
|
LITIGATION
|
There
is
no action, suit, investigation, audit or proceeding pending against, or to
the
Knowledge of ILKZ, threatened against or affecting, ILKZ or the Merger Sub
or
the Operating Sub or any of their respective assets or properties before
any
court or arbitrator or any governmental body, agency or official.
|
SECTION
2.09
|
INTERESTED
PARTY TRANSACTIONS
|
Except
as
disclosed in the SEC Filings and except for loans made to ILKZ by the Principal
Shareholder, ILKZ is not indebted to any officer or director of ILKZ, and
no
such person is indebted to ILKZ.
|
SECTION
2.10
|
COMPLIANCE
WITH APPLICABLE LAWS
|
To
the
Knowledge of ILKZ, the business of each of ILKZ, the Operating Sub and the
Merger Sub has not been, and is not being, conducted in violation of any
Applicable Law.
|
SECTION
2.11
|
TAX
RETURNS AND PAYMENT
|
ILKZ
has
duly and timely filed all material Tax Returns required to be filed by it
and
has duly and timely paid all Taxes shown thereon to be due. Except as disclosed
in Financial Statements filed by ILKZ with the SEC, there is no material
claim
for Taxes that is a Lien against the property of ILKZ other than Liens for
Taxes
not yet due and payable, none of which is material. ILKZ has not received
written notification of any audit of any Tax Return of ILKZ being conducted
or
pending by a Tax authority where an adverse determination could have a Material
Adverse Effect on ILKZ, no extension or waiver of the statute of limitations
on
the assessment of any Taxes has been granted by ILKZ which is currently in
effect, and ILKZ is not a party to any agreement, contract or arrangement
with
any Tax authority or otherwise, which may result in the payment of any material
amount in excess of the amount reflected on the above referenced ILKZ Financial
Statements.
|
SECTION
2.12
|
SECURITY
LISTING
|
ILKZ
is a
fully compliant reporting company under the Securities Exchange Act of 1934,
as
amended (the “Exchange
Act”),
and
all ILKZ public filings required under the Exchange Act have been made. The
common stock of ILKZ is listed for quotation on the OTC Bulletin Board. To
the
Knowledge of ILKZ, ILKZ has not been threatened or is not subject to removal
of
its common stock from the OTC Bulletin Board.
|
SECTION
2.13
|
FINDERS’
FEES
|
ILKZ
has
not incurred, nor will it incur, directly or indirectly, any liability for
brokers’ or finders’ fees or agents’ commissions or investment bankers’ fees or
any similar charges in connection with this Agreement or any transaction
contemplated hereby.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF LANDWAY
Landway
hereby represents and warrants to ILKZ and to Merger Sub, as of the date
of this
Agreement and as of the Effective Time (except as otherwise indicated), as
follows:
|
SECTION
3.01
|
ORGANIZATION,
STANDING AND POWER
|
Landway
is a privately held corporation duly incorporated, validly existing and in
good
standing under the laws of the State of Delaware, and has full corporate
power
and authority to conduct its business as presently conducted by it and to
enter
into and perform this Agreement and to carry out the transactions contemplated
by this Agreement. Landway is duly qualified to do business as a foreign
corporation in each state in which the nature of the business conducted by
it or
the character or location of the properties and assets owned or leased by
it
make such qualification necessary.
|
SECTION
3.02
|
CAPITALIZATION
|
There
are
100,000,000 shares of Landway capital stock authorized, consisting of
100,000,000 shares of common stock with $.00001 par value (the “Landway
Common Shares”).
As of
the date of this Agreement, there were 10,000 issued and outstanding Landway
Common Shares. No Landway Common Shares have been reserved for issuance to
any
Person, and there are no outstanding rights, warrants, options or agreements
for
the purchase of Landway Common Shares. No Person is entitled to any rights
with
respect to the conversion, exchange or delivery of the Landway Common Shares.
The Landway Common Shares have been issued in compliance with Applicable
Law.
|
SECTION
3.03
|
AUTHORITY
FOR AGREEMENT
|
The
execution, delivery and performance of this Agreement by Landway has been
duly
authorized by all necessary corporate action, and this Agreement constitutes
the
valid and binding obligation of Landway and each of the Investors, enforceable
against Landway and each Investor in accordance with its terms, except as
enforceability may be affected by bankruptcy, insolvency or other laws of
general application affecting the enforcement of creditors' rights. The
execution and consummation of the transactions contemplated by this Agreement
and compliance with its provisions by Landway and each of the Investors will
not
violate any provision of Applicable Law and will not conflict with or result
in
any breach of any of the terms, conditions, or provisions of, or constitute
a
default under, Landway’s Certificate of Incorporation or Bylaws, in each case as
amended, or, to the Knowledge of Landway, in any material respect, any
indenture, lease, loan agreement or other agreement instrument to which Landway
or any Investor is a party or by which it or any of them or any of its or
their
properties are bound, or any decree, judgment, order, statute, rule or
regulation applicable to Landway or any Investor.
|
SECTION
3.04
|
GOVERNMENTAL
OR THIRD PARTY CONSENT
|
No
consent, waiver, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission
or
other federal, state, county, local or other foreign governmental authority,
instrumentality, agency or commission or any third party, including a party
to
any agreement with Landway or any Investor, is required by or with respect
to
Landway or any of the Investors in connection with the execution and delivery
of
this Agreement or the consummation of the transactions contemplated hereby,
except for such consents, waivers, approvals, orders, authorizations,
registrations, declarations and filings as may be required under (i) applicable
securities laws, or (ii) the DGCL.
|
SECTION
3.05
|
BUSINESS
OPERATIONS AND LIABILITIES -
LANDWAY.
|
Landway
has conducted no business operations other than the acquisition of ownership
of
the capital stock of Shandong Sishui. Landway has no liabilities other than
liabilities incurred in the ordinary course that will not exceed $10,000
on the
Closing Date.
|
SECTION
3.06.
|
ORGANIZATION
AND STANDING - SHANDONG SISHUI.
|
Shandong
Sishui is a corporation duly organized, validly existing and in good standing
under the laws of the People’s Republic of China. Shandong Sishui has full power
and authority to carry on its business as now conducted and to own and operate
its assets, properties and business.
|
SECTION
3.07
|
OWNERSHIP
OF SHANDONG SISHUI SHARES.
|
Landway
is the owner of one hundred percent (100%) the registered capital stock of
Shandong Sishui, free and clear of all Liens, encumbrances, and restrictions
whatsoever. No Person has any right to acquire capital stock of Shandong
Sishui,
whether by tender of consideration or otherwise.
|
SECTION
3.08.
|
CORPORATE
RECORDS.
|
All
of
the books and records of each of Landway and Shandong Sishui including, without
limitation, its books of account, corporate records, minute book, stock
certificate books and other records are up-to-date, complete and reflect
accurately and fairly the conduct of its business in all material respects
since
its date of incorporation. All reports, returns and statements currently
required to be filed by either Landway or Shandong Sishui with any government
agency with respect to the business and operations of Landway or Shandong
Sishui
have been filed or valid extensions have been obtained in accordance with
normal
procedures and all governmental reporting requirements have been complied
with.
|
SECTION
3.09
|
FINANCIAL
STATEMENTS - SHANDONG
SISHUI
|
The
financial statements of Shandong Sishui for the years ended December 31,
2006
and 2005 that will be delivered to ILKZ prior to the Closing will have been
prepared in accordance with accounting principles generally accepted in the
United States and will fairly present the financial condition of Shandong
Sishui
at the date presented and the results of operations of Shandong Sishui for
those
two years.
|
SECTION
3.10
|
TAXES.
|
Each
of
Landway and Shandong Sishui has filed all Tax Returns that it is required
to
file with all governmental agencies, wherever situate, and has paid or accrued
for payment all Taxes as shown on such returns except
for Taxes being contested in good faith. There is no material claim for Taxes
that is a Lien against the property of Landway or Shandong Sishui other than
Liens for Taxes not yet due and payable. All Taxes due and owing by either
Landway or Shandong Sishui have been paid. Neither Landway or Shandong Sishui
is
the beneficiary of any extension of time within which to file any tax
return.
|
SECTION
3.11
|
PENDING
ACTIONS.
|
There
are
no material legal actions, lawsuits, proceedings or investigations, either
administrative or judicial, pending or threatened, against or affecting Landway,
Shandong Sishui, or against Shandong Sishui’s Officers or Directors that arose
out of their operation of Shandong Sishui. Neither Landway, Shandong Sishui,
nor
any of Shandong Sishui’s Officers or Directors is subject to any order, writ,
judgment, injunction, decree, determination or award of any court, arbitrator
or
administrative, governmental or regulatory authority or body which would
be
likely to have a material adverse effect on the business of Shandong Sishui
or
Landway.
|
SECTION
3.12
|
INTELLECTUAL
PROPERTY AND INTANGIBLE
ASSETS.
|
To
the
Knowledge of Landway,
Shandong Sishui has full legal right, title and interest in and to all of
the
intellectual property utilized in the operation of its business. Shandong
Sishui
has not received any written notice that the rights of any other person are
violated by the use by Shandong Sishui of the intellectual property. None
of the
intellectual property has ever been declared invalid or unenforceable, or
is the
subject of any pending or, to the Knowledge of Landway,
threatened action for opposition, cancellation, declaration, infringement,
or
invalidity, unenforceability or misappropriation or like claim, action or
proceeding.
|
SECTION
3.13.
|
COMPLIANCE
WITH LAWS.
|
Shandong
Sishui's operations have been conducted in all material respects in accordance
with all applicable statutes, laws, rules and regulations. Shandong Sishui
is
not in violation of any law, ordinance or regulation of the People’s Republic of
China or of any other jurisdiction. Shandong Sishui holds all the environmental,
health and safety and other permits, licenses, authorizations, certificates
and
approvals of governmental authorities (collectively, "Permits") necessary
or
proper for the current use, occupancy or operation of its business, and all
of
the Permits are now in full force and effect.
|
SECTION
3.14
|
FINDERS’
FEES
|
Neither
Landway nor Shandong Sishui has incurred, nor will it incur, directly or
indirectly, any liability for brokers’ or finders’ fees or agents’ commissions
or investment bankers’ fees or any similar charges in connection with this
Agreement or any transaction contemplated hereby.
ARTICLE
IV
CERTAIN
COVENANTS AND AGREEMENTS
|
SECTION
4.01
|
COVENANTS
OF LANDWAY
|
Landway
covenants and agrees that, during the period from the date of this Agreement
until the Closing Date, other than as contemplated by this Agreement or for
the
purposes of effecting the Closing pursuant to this Agreement, Landway shall
conduct and shall cause Shandong Sishui to conduct its business as presently
operated and solely in the ordinary course, and consistent with such operation,
and, in connection therewith, without the written consent of ILKZ, neither
Landway nor the Shandong Sishui shall:
|
(a)
|
amend
its Certificate of Incorporation or
Bylaws;
|
|
(b)
|
pay
or agree to pay to any employee, officer or director compensation
that is
in excess of the current compensation level of such employee, officer
or
director other than salary increases or payments made in the ordinary
course of business or as otherwise provided in any contracts or
agreements
with any such employees;
|
|
(c)
|
merge
or consolidate with any other entity or acquire or agree to acquire
any
other entity;
|
|
(d)
|
sell,
transfer, or otherwise dispose of any material assets required
for the
operations of Landway’s or Shandong Sishui’s business, except in the
ordinary course of business consistent with past
practices;
|
|
(e)
|
declare
or pay any dividends on or make any distribution of any kind with
respect
to the Landway Shares (provided that the Shandong Sishui may pay
dividends
or distributions of any kind to Landway;
and
|
| (f) |
use
commercially reasonable efforts to comply with and not be in default
or
violation under any known law, regulation, decree or order applicable
to
Landway’s or Shandong Sishui’s business, operations or assets where such
violation would have a Material Adverse Effect on Landway or Shandong
Sishui.
|
|
SECTION
4.02
|
COVENANTS
OF ILKZ
|
ILKZ
covenants and agrees that, during the period from the date of this Agreement
until the Closing Date, ILKZ shall, other than as contemplated by this Agreement
or for the purposes of effecting the Closing pursuant to this Agreement,
conduct
its business as presently operated and solely in the ordinary course, and
consistent with such operation, and, in connection therewith, without the
written consent of Landway shall not:
|
(a)
|
amend
its Articles of Incorporation or Bylaws, except to create the Series
B
Preferred Shares, as provided in Section 1.01
(a);
|
|
(b)
|
pay
or agree to pay to any employee, officer or director compensation
of any
kind or amount;
|
|
(c)
|
merge
or consolidate with any other entity or acquire or agree to acquire
any
other entity;
|
|
(d)
|
create,
incur, assume, or guarantee any material indebtedness for money
borrowed
except in the ordinary course of business, or create or suffer
to exist
any mortgage, Lien or other encumbrance on any of its material
assets;
|
|
(e)
|
make
any material capital expenditure or series of capital expenditures
except
in the ordinary course of business;
|
|
(f)
|
declare
or pay any dividends on or make any distribution of any kind with
respect
to ILKZ;
|
|
(g)
|
issue
any additional shares of ILKZ capital stock or take any action
affecting
the capitalization of ILKZ or the ILKZ Common or Preferred Shares;
and
|
| (h) |
grant
any severance or termination pay to any director, officer or any
other
employees of ILKZ.
|
|
SECTION
4.03
|
COVENANTS
OF THE PARTIES
|
(a) Tax-free
Reorganization.
The
Parties intend that the Merger qualify as a Tax-free “reorganization” under
Sections 368(a) of the Code, as amended, and the Parties will take the position
for all purposes that the Merger shall qualify as a reorganization under
such
Section. In addition, the Parties covenant and agree that they will not engage
in any action, or fail to take any action, which action or failure to take
action would reasonably be expected to cause the Merger to fail to qualify
as a
Tax-free “reorganization” under Section 368(a) of the Code, whether or not
otherwise permitted by the provisions of this Agreement;
(b) Announcement.
Neither
Landway, on the one hand, nor ILKZ on the other hand, shall issue any press
release or otherwise make any public statement with respect to this Agreement
or
the transactions contemplated hereby without the prior consent of the other
Party (which consent shall not be unreasonably withheld), except as may be
required by applicable law or securities regulation. Upon execution of this
Agreement, ILKZ shall issue a press release, which shall be approved by Landway,
and file a Current Report on Form 8-K reporting the execution of the
Agreement.
(c) Notification
of Certain Matters.
Landway
shall give prompt written notice to ILKZ, and ILKZ shall give prompt written
notice to Landway, of:
(i) The
occurrence or nonoccurrence of any event the occurrence or nonoccurrence
of
which would be reasonably likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material respect
at or prior to the Effective Time; and
(ii) Any
material failure of Landway or any of the Investors on the one hand, or ILKZ,
on
the other hand, to comply with or satisfy any covenant, condition or agreement
to be complied with or satisfied by it hereunder.
(d) Reasonable
Best Efforts.
Before
Closing, upon the terms and subject to the conditions of this Agreement,
the
Parties agree to use their respective reasonable best efforts to take, or
cause
to be taken, all actions, and to do, or cause to be done, all things necessary,
proper or advisable (subject to applicable laws) to consummate and make
effective the Share Purchase and the Merger and other transactions contemplated
by this Agreement as promptly as practicable including, but not limited to:
(i) The
preparation and filing of all forms, registrations and notices required to
be
filed to consummate the Share Purchase and the Merger, including without
limitation, any approvals, consents, orders, exemptions or waivers by any
third
party or governmental entity; and
(ii) The
satisfaction of the Party's conditions precedent to Closing.
(e) Access
to Information
(i) Inspection
by Landway.
ILKZ
will make available for inspection by Landway, during normal business hours
and
in a manner so as not to interfere with normal business operations, all of
ILKZ’s and the Operating Sub’s records (including tax records), books of
account, premises, contracts and all other documents in ILKZ’s or the Operating
Sub’s possession or control that are reasonably requested by Landway to inspect
and examine the business and affairs of ILKZ. ILKZ will cause its managerial
employees and regular independent accountants to be available upon reasonable
advance notice to answer questions of Landway concerning the business and
affairs of ILKZ. Landway will treat and hold as confidential any information
it
receives from ILKZ in the course of the reviews contemplated by this Section
4.03(e). No examination by Landway will, however, constitute a waiver or
relinquishment by Landway of its rights to rely on ILKZ’s covenants,
representations and warranties made herein or pursuant hereto.
(ii) Inspection
by ILKZ.
Landway
will, if requested, make available for inspection by ILKZ, during normal
business hours and in a manner so as not to interfere with normal business
operations, all of Landway’s and Shandong Sishui’s records (including tax
records), books of account, premises, contracts and all other documents in
Landway’s possession or control that are reasonably requested by ILKZ to inspect
and examine the business and affairs of Landway or Shandong Sishui. Landway
will
cause its managerial employees and regular independent accountants to be
available upon reasonable advance notice to answer questions of ILKZ concerning
the business and affairs of Landway and Shandong Sishui. ILKZ will treat
and
hold as confidential any information it receives from Landway in the course
of
the reviews contemplated by this Section 4.03(e). No examination by ILKZ
will,
however, constitute a waiver or relinquishment by ILKZ of its rights to rely
on
Landway’s covenants, representations and warranties made herein or pursuant
hereto.
ARTICLE
V
CONDITIONS
PRECEDENT
|
SECTION
5.01
|
CONDITIONS
PRECEDENT TO THE PARTIES' OBLIGATIONS
|
The
obligations of the Parties as provided herein shall be subject to each of
the
following conditions precedent, unless waived in writing by both ILKZ and
Landway:
(a) Consents,
Approvals.
The
Parties shall have obtained all necessary consents and approvals of their
respective boards of directors, and all consents, approvals and authorizations
required under their respective charter documents, and all material consents,
including any material consents and waivers by the Parties’ respective lenders
and other third-parties, if necessary, to the consummation of the transactions
contemplated by this Agreement.
(b) Shareholder
Approval.
This
Agreement and the transactions contemplated hereby shall have been approved
by
the shareholders of Landway in accordance with the applicable provisions
of the
DGCL and its bylaws.
(c) Absence
of Certain Litigation.
No
action or proceeding shall be threatened or pending before any governmental
entity or authority which, in the reasonable opinion of counsel for the Parties,
is likely to result in a restraint, prohibition or the obtaining of damages
or
other relief in connection with this Agreement or the consummation of the
transactions contemplated hereby.
(d) Operating
Subsidiary Agreement.
ILKZ
shall have entered into an agreement (the “Operating
Subsidiary Agreement,”
in the
form attached hereto as Schedule
5.01 (d))
with the
Operating Sub and the individual identified as the “Manager” in the Operating
Subsidiary Agreement regarding
(i) the transfer to the Operating Sub of all of the assets and liabilities
of
ILKZ, (ii) the management and operation of the Operating Sub following the
Closing, (iii) the indemnification by the Operating Sub and by the ILKZ
Principal Shareholder of ILKZ and Landway (and their respective officers,
directors and shareholders) from and against all liabilities of the Operating
Sub existing on the Closing Date or arising thereafter, and (iv) on the
thirtieth day after the Closing Date, the spinning off of the stock of the
Operating Sub to the Principal Shareholder in satisfaction of all indebtedness
of ILKZ to the Principal Shareholder existing on the Closing Date and in
exchange for the Principal Shareholder’s agreement to indemnify ILKZ and Landway
against all liabilities of ILKZ arising prior to the Closing and all liabilities
of the Operating Sub arising at any time.
(e) Share
Purchase Option.
Warner
Technology & Investment Corp. (“Warner”)
shall
have entered into an agreement with ▇▇▇▇▇ ▇▇▇▇▇▇ providing for the payment
of
the sum of $50,000 to Howson upon execution of the option agreement in
consideration of the granting by Howson to Warner of an option, exercisable
any
time after the Closing, to purchase 700,000 ILKZ Common Shares owned by Howson
for cash in the amount of $20,000.
|
SECTION
5.02
|
CONDITIONS
PRECEDENT TO THE OBLIGATIONS OF ILKZ
|
The
obligations of ILKZ on the Closing Date as provided herein shall be subject
to
the satisfaction, on or prior to the Closing Date, of the following conditions
precedent, unless waived in writing by ILKZ:
(a) Consents
and Approvals.
Landway
shall have obtained all material consents, including any material consents
and
waivers by Landway's lenders and other third parties, if necessary, to the
consummation of the transactions contemplated by this Agreement.
(b)
Representations
and Warranties.
The
representations and warranties by Landway in Article III herein shall be
true
and accurate in all material respects on and as of the Closing Date with
the
same force and effect as though such representations and warranties had been
made at and as of the Closing Date, except to the extent that any changes
therein are specifically contemplated by this Agreement.
(c) Performance.
Landway
shall have performed and complied in all material respects with all agreements
to be performed or complied with by it pursuant to this Agreement at or prior
to
the Closing.
(d) Proceedings
and Documents.
All
corporate, company and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments incident
to
such transactions shall be reasonably satisfactory in substance and form
to ILKZ
and its counsel, and ILKZ and its counsel shall have received all such
counterpart originals (or certified or other copies) of such documents as
they
may reasonably request.
(e) Certificate
of Good Standing.
Landway
shall have delivered to ILKZ a certificate as to the good standing of Landway
certified by the Secretary of State of the State of Delaware on or within
five
(5) business days prior to the Closing Date.
(f) Material
Changes.
Except
as contemplated by this Agreement, since the date hereof, neither Landway
nor
the Shandong Sishui shall have suffered a Material Adverse Effect, and, without
limiting the generality of the foregoing, there shall be no pending litigation
to which Landway or the Shandong Sishui is a party which is reasonably likely
to
have a Material Adverse Effect on Landway or the Shandong Sishui.
(g) Due
Diligence.
ILKZ
shall have completed to its own satisfaction due diligence in relation to
Landway, except that this shall cease to be a condition precedent unless
on or
prior to June 18, 2007 ILKZ shall have delivered a written notice stating
that
it is not satisfied with the results of its due diligence.
(h) SEC
Filing.
No less
than one week prior to the Closing, Landway shall have delivered to ILKZ
the
financial statements, report of Landway’s independent registered public
accountant, and other information required for inclusion in the Current Report
that ILKZ will file with the SEC within four business days after the
Closing.
|
SECTION
5.03
|
CONDITIONS
PRECEDENT TO THE OBLIGATIONS OF
LANDWAY
|
The
obligations of Landway and the Investors on the Closing Date as provided
herein
shall be subject to the satisfaction, on or prior to the Closing Date, of
the
following conditions precedent, unless waived in writing by Landway and the
Investors:
(a) Consents
and Approvals.
ILKZ,
the Operating Sub and the Merger Sub shall have obtained all material consents,
including any material consents and waivers of its respective lenders and
other
third parties, if necessary, to the consummation of the transactions
contemplated by this Agreement.
(b) Representations
and Warranties.
The
representations and warranties by ILKZ and Merger Sub in Article II herein
shall
be true and accurate in all material respects on and as of the Closing Date
with
the same force and effect as though such representations and warranties had
been
made at and as of the Closing Date, except to the extent that any changes
therein are specifically contemplated by this Agreement.
(c) Performance.
Each of
ILKZ and Merger Sub shall have performed and complied in all material respects
with all agreements to be performed or complied with by it pursuant to this
Agreement prior to or at the Closing.
(d) Proceedings
and Documents.
All
corporate, company and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments incident
to
such transactions shall be reasonably satisfactory in substance and form
to
Landway and its counsel, and Landway and its counsel shall have received
all
such counterpart originals (or certified or other copies) of such documents
as
they may reasonably request.
(e) Certificates
of Good Standing.
ILKZ
shall have delivered to Landway a certificate as to its and the Merger Sub’s
good standing in the State of Delaware, in each case certified by the Secretary
of State not more than five (5) business days prior to the Closing Date.
(f) Material
Changes.
Except
as contemplated by this Agreement, since the date hereof, neither ILKZ nor
the
Merger Sub shall have suffered a Material Adverse Effect and, without limiting
the generality of the foregoing, there shall be no pending litigation to
which
ILKZ, the Operating Sub or the Merger Sub is a party which is reasonably
likely
to have a Material Adverse Effect on ILKZ or the Merger Sub.
(g) Due
Diligence. Landway
shall have completed to its own satisfaction due diligence in relation to
ILKZ,
except that this shall cease to be a condition precedent unless on or prior
to
June 18, ▇▇▇▇ ▇▇▇▇▇▇▇ shall have delivered a written notice stating that
it is
not satisfied with the results of its due diligence;
(h) Status
of ILKZ.
As at
the Effective Time of the Merger, ILKZ (i) shall be a fully compliant reporting
public company under the Exchange Act, and shall be current in all of its
reports required to be filed under the Exchange Act, (ii) shall not have
been
threatened or subject to delisting from the OTC Bulletin Board, and (iii)
shall
have outstanding 12,910,470 ILKZ Common Shares (excluding the Purchased Shares)
and 45 Series A Preferred Shares; and there shall be no other ILKZ Preferred
Shares outstanding nor, except as provided hereunder, any options, warrants
or
rights to acquire capital stock of ILKZ whether for additional consideration
or
on conversion.
(i) Certificate
of Designation. The
Board
of Directors of ILKZ shall have filed in the Office of the Secretary of State
of
the State of Delaware a Certificate of Designation of the Series B Preferred
Shares in the form of Schedule 1.01 (a) hereto.
(j) ILKZ
Board of Directors.
At the
Effective Time of the Merger or in accordance with applicable law, all of
the
officers and members of the board of directors of ILKZ shall tender their
resignations as officers and directors of ILKZ, and the vacancies created
on the
ILKZ board of directors shall be filled by persons designated by the Board
of
Directors of Landway.
(l) Information
Statement.
No less
than ten days prior to the Closing, ILKZ shall have filed with the SEC and
mailed to its shareholders of record an information statement containing
the
information required by SEC Rule 14f-1, which shall be provided by
Landway.
ARTICLE
VI
TERMINATION
|
SECTION
6.01
|
TERMINATION
|
This
Agreement may be terminated and the Merger may be abandoned at any time prior
to
the Effective Time by:
(a) The
mutual written consent of the Boards of Directors of ILKZ and Landway;
(b) Either
ILKZ, on the one hand, or Landway, on the other hand, if any governmental
entity
or court of competent jurisdiction shall have issued an order, decree or
ruling
or taken any other action (which order, decree, ruling or other action the
Parties shall use their commercially reasonable best efforts to lift), which
restrains, enjoins or otherwise prohibits the Share Purchase or the Merger
or
the issuance of the Series B Preferred Shares as contemplated herein and
such
order, decree, ruling or other action shall have become final and
non-appealable;
(c) ILKZ,
if
Landway or any of the Investors shall have breached in any material respect
any
of its or his representations, warranties, covenants or other agreements
contained in this Agreement, and the breach cannot be or has not been cured
within thirty (30) calendar days after the giving of written notice by ILKZ
to
Landway, or by ILKZ, if it is not satisfied with the results of its due
diligence investigation and it so notifies Landway on or before June 18,
2007;
(d) Landway,
if ILKZ shall have breached in any material respect any of its representations,
warranties, covenants or other agreements contained in this Agreement, and
the
breach cannot be or has not been cured within thirty (30) calendar days after
the giving of written notice by Landway to ILKZ, or by Landway if it is not
satisfied with the results of its due diligence investigation and it so notifies
ILKZ on or before June 18, 2007; or
(e) Without
any action on the part of the Parties if required by Applicable Law or if
the
Closing shall not be consummated by July 31, 2007, unless extended by written
agreement of ILKZ and Landway.
|
SECTION
6.02
|
EFFECT
OF TERMINATION
|
If
this
Agreement is terminated as provided in Section 6.01, written notice of such
termination shall be given by the terminating Party to the other Party
specifying the provision of this Agreement pursuant to which such termination
is
made, this Agreement shall become null and void and there shall be no liability
on the part of ILKZ, Landway or the Investors, provided,
however, that (a) the provisions of Article VII hereof shall survive the
termination of this Agreement; (b) nothing in this Agreement shall relieve
any
Party from any liability or obligation with respect to any willful breach
of
this Agreement; and (c) termination shall not affect accrued rights or
liabilities of any party at the time of such termination.
ARTICLE
VII
CONFIDENTIALITY
|
SECTION
7.01
|
CONFIDENTIALITY
|
ILKZ
and
the ILKZ Principal Shareholder, on the one hand, and Landway and the Investors,
on the other hand, will keep confidential all information and documents obtained
from the other, including but not limited to any information or documents
provided pursuant to Section 4.03(e) hereof (except for any information
disclosed to the public pursuant to a press release authorized by the Parties);
and in the event the Closing does not occur or this Agreement is terminated
for
any reason, will promptly return such documents and all copies of such documents
and all notes and other evidence thereof, including material stored on a
computer, and will not use such information for its own advantage, except
to the
extent that (i) the information must be disclosed by law, (ii) the information
becomes publicly available by reason other than disclosure by the Party subject
to the confidentiality obligation, (iii) the information is independently
developed without use of or reference to the other Party’s confidential
information, (iv) the information is obtained from another source not obligated
to keep such information confidential, or (v) the information is already
publicly known or known to the receiving Party when disclosed as demonstrated
by
written documentation in the possession of such Party at such time.
ARTICLE
VIII
INDEMNIFICATION
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SECTION
8.01
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INDEMNIFICATION
BY ILKZ
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ILKZ
and
the Principal Shareholder agree, jointly and severally, to indemnify, defend
and
hold harmless each of Landway, any subsidiary or affiliate thereof and each
person who is now, or has been at any time prior to the date hereof or who
becomes prior to the Closing, a shareholder, officer, director or partner
of
Landway, any subsidiary or affiliate thereof or an employee of Landway, any
subsidiary or affiliate thereof and their respective heirs, legal
representatives, successors and assigns (the “Landway
Indemnified Parties”)
against all losses, claims, damages, costs, expenses (including reasonable
attorneys’ fees), liabilities or judgments or amounts that are paid in
settlement of or in connection with any threatened or actual third party
claim,
action, suit, proceeding or investigation based in whole or in part on or
arising in whole or in part out of (i) any material breach of this Agreement
by
ILKZ, or any subsidiary or affiliate thereof, including but not limited to
failure of any representation or warranty to be true and correct at or before
the Closing, or (ii) any willful or grossly negligent act, omission or conduct
of any officer, director or agent of ILKZ or any subsidiary or affiliate
thereof
prior to the Closing, whether asserted or claimed prior to, at or after,
the
Closing. Any Landway Indemnified Party wishing to claim indemnification under
this Section 8.01, upon learning of any such claim, action, suit, proceeding
or
investigation, shall notify ILKZ and the Principal Shareholder in writing,
but
the failure to so notify shall not relieve ILKZ or the Principal Shareholder
from any liability that it may have under this Section 8.01, except to the
extent that such failure would materially prejudice ILKZ.
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SECTION
8.02
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INDEMNIFICATION
BY LANDWAY
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Landway
shall indemnify, defend and hold harmless each of ILKZ, any subsidiary or
affiliate thereof and each person who is now, or has been at any time prior
to
the date hereof or who becomes prior to the Closing, a shareholder, officer,
director or partner of ILKZ, any subsidiary or affiliate thereof or an employee
of ILKZ, any subsidiary or affiliate thereof and their respective heirs,
legal
representatives, successors and assigns (the “ILKZ
Indemnified Parties”)
against all losses, claims, damages, costs, expenses (including reasonable
attorneys’ fees), liabilities or judgments or amounts that are paid in
settlement of or in connection with any threatened or actual third party
claim,
action, suit, proceeding or investigation based in whole or in part on or
arising in whole or in part out of (i) any material breach of this Agreement
by
Landway, any Investor or any subsidiary or affiliate thereof, including but
not
limited to failure of any representation or warranty to be true and correct
at
or before the Closing, or (ii) any willful or negligent act, omission or
conduct
of any officer, director or agent of Landway or any subsidiary or affiliate
thereof prior to the Closing, whether asserted or claimed prior to, at or
after,
the Closing. Any ILKZ Indemnified Party wishing to claim indemnification
under
this Section 8.02, upon learning of any such claim, action, suit, proceeding
or
investigation, shall notify Landway in writing, but the failure to so notify
shall not relieve Landway from any liability that it may have under this
Section
8.02, except to the extent that such failure would materially prejudice
Landway.
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SECTION
8.03
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INDEMNIFICATION
OF EXCHANGE AGENT
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ILKZ,
Landway, and Merger Sub (for the purposes of this Section 8.03, the
“Indemnitors”)
agree
to indemnify the Exchange Agent and his employees and agents (collectively,
the
“Indemnitees”)
against, and hold them harmless of and from, any and all loss, liability,
cost,
damage and expense, including without limitation, reasonable counsel fees,
which
the Indemnitees, or any of them, may suffer or incur by reason of any action,
claim or proceeding brought against the Indemnitees, or any one of them,
arising
out of or relating in any way to the Exchange Agent’s service in such capacity,
unless such action, claim or proceeding is the result of the willful misconduct
or gross negligence of any of the Indemnitees.
ARTICLE
IX
MISCELLANEOUS
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SECTION
9.01
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EXPENSES
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Except
as
contemplated by this Agreement, all costs and expenses incurred in connection
with this Agreement and the consummation of the transactions contemplated
by
this Agreement shall be paid by the Party incurring such expenses.
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SECTION
9.02
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APPLICABLE
LAW
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This
Agreement shall be governed by the laws of the State of Delaware, without
giving
effect to the principles of conflicts of laws thereof, as applied to agreements
entered into and to be performed in such state.
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SECTION
9.03
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NOTICES
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All
notices and other communications under this Agreement shall be in writing
and
shall be deemed to have been duly given or made as follows:
(a) If
sent
by reputable overnight air courier (such as Federal Express), 2 business
days
after being sent;
(b) If
sent
by facsimile transmission, with a copy mailed on the same day in the manner
provided in clause (a) above, when transmitted and receipt is confirmed by
the
fax machine; or
(c) If
otherwise actually personally delivered, when delivered.
All
notices and other communications under this Agreement shall be sent or delivered
as follows:
If
to
Landway and/or the Investors, to:
▇▇▇▇▇▇▇
▇▇▇▇
Landway
Nano Bio-Tech, Inc.
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
▇▇▇-▇▇▇-▇▇▇▇
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
with
a
copy to (which shall not constitute notice):
Telephone:
Facsimile:
If
to
ILKZ and/or the ILKZ Principal Shareholder, to:
▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Telephone:
▇▇▇-
▇▇▇-▇▇▇▇
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
with
a
copy to (which shall not constitute notice):
▇▇▇▇▇▇
▇▇▇▇▇▇, Esq.
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Telephone:
▇▇▇-▇▇▇-▇▇▇▇
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
Each
Party may change its address by written notice in accordance with this Section.
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SECTION
9.04
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ENTIRE
AGREEMENT
|
This
Agreement (including the documents and instruments referred to in this
Agreement) contains the entire understanding of the Parties with respect
to the
subject matter contained in this Agreement, and supersedes and cancels all
prior
agreements, negotiations, correspondence, undertakings and communications
of the
Parties, oral or written, respecting such subject matter including the Letter
of
Intent made by Landway and ILKZ dated May 11, 2007.
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SECTION
9.05
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ASSIGNMENT
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Neither
this Agreement nor any of the rights, interests or obligations under this
Agreement shall be assigned by any of the Parties (whether by operation of
law
or otherwise) without the prior written consent of the other Parties;
provided
that in
no event may the right to indemnification provided by Article VIII hereto
be
assigned by any of the Parties, with or without consent, except by operation
of
law. Subject to the immediately foregoing sentence of this Section 9.05,
this
Agreement will be binding upon, inure to the benefit of and be enforceable
by,
the Parties and their respective successors, assigns, heirs and
representatives.
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SECTION
9.06
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COUNTERPARTS
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This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original but all of which shall be considered one and the
same
agreement.
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SECTION
9.07
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NO
THIRD PARTY BENEFICIARIES
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Except
as
expressly provided by this Agreement, nothing herein is intended to confer
upon
any person or entity not a Party to this Agreement any rights or remedies
under
or by reason of this Agreement.
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SECTION
9.08
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RULES
OF CONSTRUCTION
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The
Parties agree that they have been represented by counsel during the negotiation
and execution of this Agreement and, therefore, waive the application of
any
law, regulation, holding or rule of construction providing that ambiguities
in
an agreement or other document will be construed against the party drafting
such
agreement or document.
IN
WITNESS WHEREOF,
the
Parties have duly executed this Agreement as of the date first above written.
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By:
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/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name:
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▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
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Title:
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Chief
Executive Officer
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LANDWAY
ACQUISITION CORP.
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By:
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/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name:
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
|
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Title:
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Chief
Executive Officer
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LANDWAY
NANO BIO-TECH, INC.
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By:
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/s/
▇▇▇▇▇▇▇ ▇▇▇▇
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Name:
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▇▇▇▇▇▇▇
▇▇▇▇
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Title:
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President
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INVESTORS
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PRINCIPAL
SHAREHOLDER
|
|
/s/
▇▇▇▇▇▇
▇▇▇▇
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/s/
▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
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|
▇▇▇▇▇▇
▇▇▇▇
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
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|
/s/
▇▇▇▇▇▇▇
▇▇▇▇
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|
▇▇▇▇▇▇▇
▇▇▇▇
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SCHEDULES:
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Schedule
1.01 (a)
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Certificate
of Designation of Series B Preferred
Shares
|
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Schedule
1.01 (b)
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Allocation
of Purchased Shares among Investors
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Schedule
5.01 (d)
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Operating
Subsidiary Agreement
|
Schedule
1.01 (b)
Allocation
of Purchased Shares among Investors
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Investor
|
Shares
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Payment
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▇▇▇▇▇▇
▇▇▇▇
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250
|
$ |
265,000
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▇▇▇▇▇▇▇
▇▇▇▇
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250
|
$ |
265,000
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