UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):  March 21, 2018

 

Aladdin International, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada

 

000-55297

 

41-1683548

(state or other jurisdiction of incorporation)

 

(Commission File Number)

 

(IRS Employer Identification Number)

 

117 E. Huntington Dr., Arcadia, CA 91006

(address of principal executive offices) (zip code)

 

Tel: +16264005727

(registrant’s telephone number, including area code)

 

Unit 907, 9/F, ICBC Tower, 3 Garden Road, Central, Hong Kong

(former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

o

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

o

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

o

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).


Emerging growth company   þ

 


If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨


 

 







 

ITEM 1.01.

ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.


Securities Purchase Agreement


On March 21, 2018 (the Closing Date ), Billion Rewards Development Limited (the Seller ), the majority shareholder of Aladdin International, Inc. (the Company”), entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Moregain Capital Group LLC (the “Purchaser”), a Nevada Limited Liability Company, pursuant to which the Seller sold to the Purchaser an aggregate of 6,270,512 shares of common stock, par value $.001 per share, of the Company (the “Shares”) for $180,000 (the “Transaction”).


As a result of the closing of the Transaction, the Purchaser now owns approximately 87.33% of the total outstanding shares of the Company’s common stock.


The Purchase Agreement contains customary terms and conditions for a transaction of this type, including representations, warranties and covenants, as well as provisions describing the consideration for the purchase and sale of majority/controlling interest, the process of exchanging the consideration and the effect of the stock purchase and sale. The foregoing description of the Purchase Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Purchase Agreement, which is attached as Exhibit 10.1 and is incorporated herein by reference.


Stock Option Plan


On March 23, 2018, Board of Directors of the Registrant approved “2018 Performance Boost Stock Option Plan” in order to retain and recruit certain selected employee, consultants, and directors. The Board acknowledged that the Company’s stock options are one major component of compensation that could help retain and motivate employees, consultants, and directors toward achieving our performance goal. The Board determined that this stock option program shall consists of options to purchase a total of 2,000,000 shares of Common Stock, and shall be granted to the employee, consultants, and directors that have the ability to contribute to the business development of the company, as rewarded per this performance boost retention program.


On March 23, 2018, stock options to purchase a total of 2,000,000 shares of Common Stock were granted to certain employees exercisable at $0.15 per share, the closing price on March 22, 2018, following a 5-year vesting schedule starting 12 months from the commencement date of March 23, 2018.


ITEM 3.02. UNREGISTERED SALES OF EQUITY SECURITIES.


Reference is made to Item 1.01 of this report.


The stock options were issued in reliance upon the exemption from securities registration afforded by the provisions of Section 4(a)(2) as promulgated by the U.S. Securities and Exchange Commission under the Securities Act of 1933, as amended ("Securities Act").


ITEM 5.01.    CHANGES IN CONTROL OF REGISTRANT.

 

On the Closing Date, pursuant to the terms of the Purchase Agreement, the Purchaser purchased the Shares, representing 87.33% of the total issued and outstanding stock of the Company, from the Seller.  In exchange for the controlling shares of the Company, Purchasers agreed to pay the purchase price, as referenced in Item 1.01 above.

 



2



ITEM 5.02.    DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.

 

In connection with Purchase Agreement, on March 23, 2018, Qinghua Chen, the Company’s Chief Executive Officer, President and Sole Director of the Company resigned from all of his positions with the Company. Mr. Chen’s decision to resign from all positions of the Company is not due to any disagreement with the Company on any matters relating to the Company’s operations, policies or practices. 


Also effective on March 23, 2018, Michael D Antonovich was appointed as the President, Secretary, Chief Executive Officer and Chairman of the Board; Sherwood Hu was appointed as Independent Director of the Board; Lianne Herrmann was appointed as Chief Financial Officer and Treasurer. Directors are elected to hold offices until the next annual meeting of shareholders and until their successors are elected or appointed and qualified. Officers are appointed by the board of directors until a successor is elected and qualified or until resignation, removal or death.


Set forth below is the new management biographical information:

 

Name

Age

Title   

Michael D Antonovich

78

President, Chief Executive Officer, Secretary and Chairman of the Board

Sherwood Hu

56 

Independent Director of the Board

Lianne Herrmann

47

Chief Financial Officer and Treasurer

 

 

 

 

Michael D Antonovich served as Assemblyman in the State of California from 1972 to 1978. During 1980 to 2016, Mike served as Los Angeles County Supervisor for 36 consecutive years (managing Los Angeles 88 cities and nearly 10.2 million people, and managing over $30 billion of government funds on behalf of Los Angeles County). During his tenure as County Supervisor, Chairman Mike has worked with U.S. Presidents (including President Reagan , Bush , Clinton, Bush, and Obama), and the United States Congress and the State of California Legislature. He also hosted Chinese President Jiang Zemin, Xi Jinping, and heads of state, presidents and prime ministers of many countries and regions of the world. In addition, Chairman Mike has also met with successful and distinguished people from all over the world. Chairman Mike’s extremely rich social resources and connections with global high-profile figures have played an important role in promoting exchanges and cooperation among governments, cultures and enterprises worldwide. Mike has also served as California State Republican Chairman, State Republican Party Whip, and was appointed to numerous presidential commissions.


Sherwood Hu is an accomplished director, producer, writer and scholar. He has over 20 years of experience in motion picture and entertainment industry. Hu is an active member of APSA.  Hu studied at The Public Theater in New York under Joseph Papp and was the first Chinese to earn a Ph.D in Directing from the University of Hawaii. After returning to China from Hollywood, he established Shanghai Theatre Academy School of Film and Television, and was Professor at the Shanghai Jiaotong University Institution of Cultural and Creative Industry.  According to Hollywood Reporter Kirt Honycutt, Hu is “One of the most exciting and dynamic directors to emerge from China”. He was the creator and chief director of 2010 World Expo Shanghai Pavilion, which was praised as “one of the most creative pavilions in the Expo 2010.” Hu has directed the English language film LANI LOA-THE PASSAGE that was presented by the Director of Godfather and Oscar winner Francis Ford Coppola. Hu is receiver of a “Golden Crane Award” for Excellent Contribution in Film at 2017 Tokyo International Film Festival. Honorable Mention Award from the Kennedy Arts Center, Best Film Award from Calabria International Film Festival in Italy, Monaco Film Festival, Chinese America Film Festival, American Shakespeare Association, and it was chosen as an archive film by Rubin Museum in New York City. “Golden Lotus Award” for the best picture in Macao International Film Festival. His latest film “Lord of Shanghai” the last film of his trilogy films Warrior Lanling , Prince of the Himalayas ) was the Closing Night Film for The 19th Shanghai International Film Festival.  Sherwood's newest theater production Farewell My Concubine was in New York Met Life and sold out completely and received raving reviews. Recently, he published his new book Notions of Directing published by Chinese Film Press.




3



Lianne Herrmann has over 20 years of experience in global financial and motion picture industry. Just like her brother Sherwood Hu, she also has superb relationship in the Hollywood and China movie industry besides her strong financial expertise. In financial arena, she has expertise in strategic planning, developing, producing, and financing commercially successful projects with an international appeal. Lianne was the Financial Controller for a wholly owned subsidiary of Motorola, Inc. With her participation in supervising accounting and finance operations, approving financial reporting and budgeting, monitoring auditing and tax planning and filing, establishing and approving policy and procedures, ensuring internal control compliance, advising and providing solutions for corporate management and financial planning matters  and contribution, the company had gone through successfully with a merger/acquisition and IPO due diligence process.  She is a member of SAG-AFTRA in the US and a prospect member of Writers Guild of America. Lianne has a Master’s of Business Administration from Pepperdine University in California, a Bachelor’s of Business Administration from Eastern Michigan University, and an Associate’s Degree in Economics from Fudan University in Shanghai. Lianne also studied at The Academy of American Conservatory Theatre in San Francisco.


ITEM 5.03.      AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN FISCAL YEAR.


The Board has approved a change of the Company’s name to Moregain Pictures Inc. On March 23, 2018. The Board approved the name change in connection with the Company’s focus in developing Motion picture, Entertainment, and Media business. Moregain Pictures mainly invests in Hollywood blockbusters, and cooperates with online streaming platforms to stream movies from Hollywood, China, Hong Kong, Taiwan, South Korea, Japan, and other countries and regions. Moregain Pictures will also produce and distribute films and forge lasting relationships with theaters. At the same time, Moregain Pictures recruits, reviews, develops, produces, shoots, distributes and invests in original screenplays; and will invest and cooperate with film media internet companies.


We plan to seek majority shareholder approval of the name change and will file an amendment to the Articles of Incorporation upon effectiveness of the Schedule 14C.


ITEM 9.01   FINANCIAL STATEMENTS AND EXHIBITS.


(d) Exhibits


Exhibit

No.

 

Description

10.1

 

Securities Purchase Agreement, dated March 21, 2018.

10.2

 

Aladdin International, Inc. 2018 Performance Boost Stock Option Plan.

 

 

 

 

 

 





4



SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. 

 

 

Date:  March 26, 2018

Aladdin International, Inc.

 

 

 

 

 

By:  

/s/ Michael D Antonovich

 

 

Name:  Michael D Antonovich

 

Title:    Chief Executive Officer

 

 

 

 

 

 





5


 


EXHIBIT 10.1

SECURITIES PURCHASE AGREEMENT


This Securities Purchase Agreement (this “Agreement”) is made and entered into as of March 21, 2018 by and among Billion Rewards Development Limited (the “Seller”), with its address at 3rd Floor, J&C Building, P.O.Box 933, Road Town, Tortola, British Virgin Islands, VG1110, and Moregain Capital Group, LLC (the “Purchaser”), with its address at 117 E. Huntington Dr., Arcadia, CA 91006.


WHEREAS , the Sellers is the sole record and beneficial owner of 6,270,512 shares (the “BR Shares”) of common stock, par value $.001 per share (the “Common Stock”), of Aladdin International, Inc., a Nevada corporation (the “Company”);


WHEREAS , the Purchaser desire to acquire from the Seller, and the Seller desires to sell to the Purchaser the BR Shares for a total of $180,000 in the manner and on the terms and conditions hereinafter set forth (the “Transaction”); and


WHEREAS , the BR Shares represent 87.33% of the 7,180,199 total outstanding shares of the Company’s issued and outstanding Common Stock, excluding 5,000,000 shares reserved for Warrants; and


WHEREAS , the Purchaser has directed its representative to deliver a deposit of $60,000 (the “Deposit”) against the Purchase Price (as defined below) to the Seller on March 21, 2018. After the Seller’s receipt of the Deposit, the Purchaser desires to deliver the remainder of the purchase price of $120,000 (the “Remainder of the Purchase Price”) to the Seller at the Closing in two payments as set forth herein; and


NOW, THEREFORE , in consideration of these premises, the mutual covenants and agreements herein contained and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto agree as follows:


SECTION I   DEFINITIONS


The following terms when used in this Agreement have the following respective meanings:


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


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


“Affiliate” means with respect to any Person, any (i) officer, director, partner or holder of more than 10% of the outstanding shares or equity interests of such Person, (ii) any relative of such Person, or (iii) any other Person which directly or indirectly controls, is controlled by, or is under common control with such Person. A Person will be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the “Controlled” Person, whether through ownership of voting securities, by contract, or otherwise.


“Acquisition Proposal” means any offer or proposal for, or indication of interest in, any acquisition of all or a portion of the Shares or any other assets or securities of the Company, whether by way of a purchase, merger, consolidation or other business combination.





Page 1 of 18




 


“Articles of Incorporation” means the Articles of Incorporation of the Company, as amended, and as on file with the Secretary of State of the State of Nevada on the date of this Agreement.


“Business Day” means a day other than Saturday, Sunday or statutory holiday in the State of California and in the event that any action to be taken hereunder falls on a day which is not a Business Day, then such action shall be taken on the next succeeding Business Day.


“Purchase Price” means One Hundred Eighty Thousand U.S. Dollars (US$180,000), which does not include any escrow or other closing fees or costs, all of which shall be borne by the Purchaser.


“Closing Date” has the meaning set forth in Section 3.1 hereof.


“Closing” has the meaning set forth in Section 3.1 hereof.


“Common Stock” has the meaning set forth in the recitals hereto.


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


“Corporate Records” shall have the meaning as used in Section 4.2(n) hereof.


“Encumbrances” shall have the meaning as used in Section 4.1(b) hereof.


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


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


“Indemnification” shall have the meaning as used in Section 5.7 hereof.


“Indebtedness” shall have the meaning as used in Section 4.2(j) hereof.


“Knowledge” means the actual knowledge of such Person or its Affiliates or things that should reasonably have been known under the circumstances.


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


“Material Adverse Effect” means a change or effect in the condition (financial or otherwise), properties, assets, liabilities, rights or business of the Company which change or effect, individually or in the aggregate, could reasonably be expected to be materially adverse to such condition, properties, assets, liabilities, rights, operations or business.


“Material Changes” shall have the meaning as used in Section 4.2(g) hereof.


“Minute Books” shall have the meaning as used in Section 4.2(n) hereof.





Page 2 of 18




 


“OTCQB” has the meaning set forth in Section 4.2(m) hereof.


“Person” means an individual, corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, or Governmental Authority.


“Returns” shall have the meaning as used in Section 4.2(l) hereof.


“SEC” means the U.S. Securities and Exchange Commission.


“SEC Filings” means the Company’s annual reports, quarterly reports and other publicly-available filings made by the Company with the SEC under Section 13 or Section 15(d) of the 1934 Act.


“Securities” shall mean the Shares.


“Shares” shall have the meaning set forth in the recitals hereto.


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


SECTION II   PURCHASE AND SALE OF COMMON STOCK


2.1             Purchase of Shares .  At the Closing, based upon the representations, warranties, covenants and agreements of the parties set forth in this Agreement, the Purchaser shall acquire from the Seller, and the Seller shall sell to the Purchaser the BR Shares for an aggregate purchase price of One Hundred Eighty Thousand U.S. Dollars (US$180,000) (the “Purchase Price”).

 

SECTION III   THE CLOSING


3.1             Closing.  


(a)  The closing of the sale of the Shares pursuant to Section 2.1 hereof and certain of the other transactions contemplated hereby (the “Closing”) shall take place no later than three (3) business days after the parties execute this Agreement, at such time and place as the parties hereto may agree, provided that the conditions set forth in Section VI hereof are satisfied or waived (the “Closing Date”).


3.2             Deliveries by the Seller.  At the Closing, the Seller shall deliver or cause to be delivered to the Purchaser the following items (in addition to any other items required to be delivered to the Purchaser pursuant to any other provision of this Agreement):


(a)  the Seller shall deliver to the Company’s stock transfer agent (the “Transfer Agent”) original certificates representing the Shares being sold by the Seller to the Purchaser pursuant to Section 2.1 hereof, together with instructions to the Transfer Agent, in substantially the form of Exhibit A attached hereto;





Page 3 of 18




 


(b)  a full and complete release by the Seller from any and all liabilities, claims and obligations, arising prior to the Closing, that the Seller may have against the Company, in substantially the form of Exhibit B attached hereto;


(c)  resignations of such of the current directors and officers from all of their positions as directors and officers of the Company as requested by the Purchaser;


(d)  duly executed resolutions from Board of Directors approving the Transaction and appointing Michael Antonovich as the Chairman of the Board of the Company (“Change of Directors”) and also as Chief Executive Officer until a permanent CEO replacement has been found; and Lianne Wu as Chief Financial Officer of the Company;


(e)  filing of Form 8-K for the Transaction;


(f)  all records and documents relating to the Company, wherever located, including, but not limited to, all books, records, government filings, Tax Returns, consent decrees, orders, and correspondence, financial information and records, electronic files containing any financial information and records, and other documents used in or associated with the Company, to the extent such records and documents have not been previously delivered to the Purchaser.


3.3             Deliveries by the Purchaser


(a)  Within three (3) business days of executing this Agreement, the Purchaser shall deliver or cause to be delivered the Remainder of the Purchase Price by wire transfer pursuant to the following wire instruction (in addition to any other items required to be delivered to the Seller pursuant to any other provision of this Agreement):


WIRING INSTRUCTIONS



Wiring instruction per Buyer and Seller separate arrangement.





SECTION IV   REPRESENTATIONS AND WARRANTIES


4.1             Representations and Warranties of the Seller with respect to the Securities . The Seller represents and warrants to the Purchaser with respect to the Securities that:


(a)            Capacity of the Seller; Authorization; Execution of Agreements . The Seller has all requisite power, authority and capacity to enter into this Agreement and to perform the transactions and obligations to be performed by it hereunder. This Agreement constitutes a valid and legally binding agreement of the Seller\, enforceable in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws of the United States (both state and federal), affecting the enforcement of creditors’ rights or remedies in general from time to time in effect and the exercise by courts of equity powers or their application of principles of public policy.




Page 4 of 18




 


(b)            Title to Securities .  The Seller is the sole record and beneficial owner of the Shares and has sole managerial and dispositive authority with respect to the number of shares as set forth in the Recitals. The Seller has not granted any person a proxy with respect to any of the Shares that has not expired or been validly withdrawn. The sale and delivery by the Seller of the Shares to the Purchaser pursuant to this Agreement will vest in the Purchaser legal and valid title to the Shares, free and clear of all liens, security interests, adverse claims or other encumbrances of any character whatsoever, other than encumbrances created by the Purchaser and restrictions on the resale of the Securities under applicable securities laws (“Encumbrances”).


(c)            Disclosure. The Seller acknowledges and agrees that the representations and warranties by the Seller in this Section 4.1 are true and complete in all material respects and do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements contained therein not misleading, under the circumstance under which they were made. The Seller acknowledges and agrees that the Purchaser does not make and has not made (i) any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 4.3, or (ii) any statement, commitment or promise to the Seller or any of their representatives which is or was an inducement to the Seller to enter into this Agreement, other than as set forth in this Agreement.


4.2             Representations and Warranties of the Seller with respect to the Company . The Seller represents and warrants to the Purchaser, with respect to the Company, that:


(a)            Organization and Standing . The Company is duly incorporated and validly existing under the laws of the State of Nevada and has all requisite corporate power and authority to own or lease its properties and assets and to conduct its business as it is presently being conducted. The Company does not own any equity interest, directly or indirectly, in any other Person or business enterprise. The Company is in good standing in the State of Nevada. The Company is qualified to do business and is in good standing in each jurisdiction in which the failure to so qualify could reasonably be expected to have a Material Adverse Effect upon its assets, properties, financial condition, results of operations or business. The Company has no subsidiaries. Except as set forth in Section 3.2(d) hereof, no corporate proceedings on the part of the Company (including the approval of the Company’s Board of Directors or shareholders) are necessary to authorize this Agreement or to consummate the transactions contemplated hereby.


(b)            Capitalization . At the date of this Agreement, the authorized capital stock of the Company consists of 780,000,000 shares of Common Stock, of which 7,180,199 shares are issued and outstanding, and 20,000 shares of preferred stock, par value $.001 per share (“Preferred Stock”), of which none is issued and outstanding. The Company has no other class or series of equity securities authorized, issued, reserved for issuance or outstanding. There are 3,000,000 shares of outstanding warrants. No other offer, conversion rights, contracts or other rights to subscribe for or to purchase from the Company, or agreements obligating the Company to issue, transfer, or sell (whether formal or informal, written or oral, firm or contingent), shares of capital stock or other securities of the Company (whether debt, equity, or a combination thereof) or obligating the Company to grant, extend, or enter into any such agreement and (y) no agreements or other understandings (whether formal or informal, written or oral, firm or contingent) which require or may require the Company to repurchase any of its Common Stock. There are no preemptive or similar rights granted by the Company with respect to the Company’s capital stock. There are no anti-dilution or price adjustment provisions contained in any security issued by the Company. The Company is not a party to, and, to the Knowledge of the Seller, without inquiry, any registration rights agreements, voting agreements, voting trusts, proxies or any other agreements, instruments or understandings with respect to the voting of any shares of the




Page 5 of 18




 


capital stock of the Company, or any agreement with respect to the transferability, purchase or redemption of any shares of the capital stock of the Company. The sale of the Shares to the Purchaser does not obligate the Company to issue any shares of capital stock or other securities to any Person (other than the Purchaser) and will not result in a right of any holder of Company securities, by agreement with the Company, to adjust the exercise, conversion, exchange or reset price under such securities. The outstanding Common Stock is all duly and validly authorized and issued, fully paid and nonassessable. The Seller will cause the Company not to issue, or resolve or agree to issue, any securities to any party, other than the Purchaser, prior to the Closing. The Shares represent 87.33% of the outstanding Common Stock of the Company, exclude stocks reserved for Warrants.


(c)            Status of Securities . The Shares (i) have been duly authorized, validly issued, fully paid and are nonassessable, and will be such at the Closing, (ii) were issued in compliance with all applicable United States federal and state securities laws, and will be in compliance with such laws at the Closing, (iii) subject to restrictions under this Agreement, and applicable United States federal and state securities laws, have the rights and preferences set forth in the Articles of Incorporation, as amended, and will have such rights and preferences at the Closing, and (iv) are free and clear of all Encumbrances and will be free and clear of all Encumbrances at the Closing (other than Encumbrances created by the Purchaser and restrictions on the resale of the Shares under applicable securities laws).


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


(e)            Securities Laws . The Company has complied in all material respects with applicable federal securities laws, rules and regulations, including the Sarbanes-Oxley Act of 2002, as amended, as such laws, rules and regulations apply to the Company and its securities. To the best knowledge the Seller, all shares of capital stock of the Company have been issued in accordance with applicable federal securities laws, rules and regulations. There are no stop orders in effect with respect to any securities of the Company that have been communicated to the Company’s transfer agent.


(f)            SEC Filings . The Company is current with respect to all of its filing obligations with the SEC pursuant to Section 13 or Section 15(d) of the 1934 Act. The SEC Filings, when filed, complied in all material respects with the requirements of Section 13 or Section 15(d) of the 1934 Act, as such sections were applicable as of the dates when filed, and did not, as of the dates when filed, contain an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The financial statements of the Company included in the SEC Filings complied in all material respects with the rules and regulations of the SEC with respect thereto as in effect at the time of filing. Such financial statements were prepared in accordance with GAAP applied on a consistent basis during the periods covered by such financial statements, except as may be otherwise specified in such financial statements or the notes thereto, and fairly present in all material respects the financial position of the Company as of and for the dates thereof and for the periods indicated, and the results of operations and cash flows for the




Page 6 of 18




 


periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. All material agreements to which the Company is a party or to which the property or assets of the Company are subject and which are required to be disclosed pursuant to the 1934 Act are included as part of or specifically identified in the SEC Filings. There are no outstanding comments from the SEC on any of the Company’s registration statements.


(g)            Material Changes . Since the date of the latest financial statements included within the SEC Filings, except as specifically disclosed in the SEC Filings, (i) there has been no event that could result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of the business consistent with past practice, and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP as required to be disclosed in filings made with the SEC, (iii) the Company has not altered its method of accounting or the identity of its auditors, except as disclosed in its SEC Filings, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, and (v) the Company has not issued any equity securities (“Material Changes”).


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


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


(j)            Absence of Businesses and Liabilities . The Company is not engaged in any business and as of the Closing Date, the Company shall have no liabilities (contingent or otherwise) or indebtedness outstanding (“Indebtedness ”). The Company is not a guarantor or indemnitor of any indebtedness of any other person, firm or corporation.


(k)          No Agreements . The Company is not a party to any agreement, commitment or instrument, whether oral or written, which imposes any obligations or liabilities on the Company after the Closing.


(l)            Taxes.


(i)          The Company has filed all federal, state, local and foreign returns, estimates, information statements and reports relating to Taxes (“Returns”) required to be filed by the Company with any Tax authority prior to the date hereof, including but not limited to the federal tax returns, the tax return with the State of Minnesota, and the tax return with the State of Wisconsin, except such Returns which are not material to the Company. All such Returns are true, correct and complete and the Company has no basis to




Page 7 of 18




 


believe that any audit of the Returns would cause a Material Adverse Effect upon the Company or its financial condition. The Company has paid all Taxes shown to be due on such Returns.


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


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


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


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


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


(m)            OTCQB. The Common Stock is currently quoted on the OTCQB Venture Market (“OTCQB”). There is no known action or known proceeding pending or threatened in writing against the Company by the Financial Industry Regulatory Authority with respect to any intention by such entities to prohibit or terminate the quotation of the Common Stock on the OTCQB.


(n)            Corporate Records . All records and documents relating to the Company known to the Seller, including, but not limited to, the books, shareholder lists, government filings, Tax Returns, consent decrees, orders, and correspondence, financial information and records (including any electronic files containing any financial information and records), and other documents used in or associated with the Company (the “Corporate Records”) are true, complete and accurate in all material respects to the best Knowledge of the Seller. The minute books of the Company known to the Seller contain true, complete and accurate records of all meetings and consents in lieu of meetings of the Board of Directors of the Company (and any committees thereof), similar governing bodies and shareholders (the “Minute Books”). Copies of such Corporate Records of the Company and the Minute Books currently in the possession of the Company, have been heretofore delivered to the Purchaser; the original Corporate Records and Minute Books, to the extent such original Corporate Records and Minute Books exist, will be delivered to the Purchaser at Closing pursuant to Section 3.2(e).


(o)            Disclosure. The Seller, to his best knowledge, acknowledges and agrees that the representations and warranties by the Seller in this Section 4.2 are true and complete in all material respects and do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements contained therein not misleading, under the circumstance under which they were made.


4.3             Representations and Warranties of the Purchaser . The Purchaser hereby represents and warrants to the Seller that:




Page 8 of 18




 



(a)            Organization and Standing . The Purchaser is duly incorporated and validly existing under the laws of the State of Neveda, and has all requisite corporate power and authority to own or lease its properties and assets and to conduct its business as it is presently being conducted. The Purchaser is qualified to do business and is in good standing in each jurisdiction in which the failure to so qualify could reasonably be expected to have a Material Adverse Effect upon its assets, properties, financial condition, results of operations or business.


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


(c)            Investment Intent . The Shares being purchased hereunder by the Purchaser are being purchased for its own account and are not being purchased with the view to, or for resale in connection with, any distribution or public offering thereof within the meaning of the 1933 Act.


(d)            Disclosure . The Purchaser acknowledges and agrees that the representations and warranties by the Purchaser in this Section 4.3 are true and complete in all material respects and do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements contained therein not misleading, under the circumstance under which they were made. The Purchaser acknowledges and agrees that the Seller does not make and have not made (i) any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Sections 4.1 and 4.2, or (ii) any statement, commitment or promise to the Purchaser or any of its representatives which is or was an inducement to the Purchaser to enter into this Agreement, other than as set forth in this Agreement.


SECTION V    COVENANTS OF THE PARTIES .


5.1             Commercially Reasonable Efforts . Subject to the terms and conditions hereof, each party shall use commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate the transactions contemplated by this Agreement as promptly as practicable after the date hereof, including (i) preparing and filing as promptly as practicable all documentation to effect all necessary SEC filings and other documents and to obtain as promptly as practicable all consents, waivers, licenses, orders, registrations, approvals, permits and authorizations necessary or advisable to be obtained from any Person and/or any Governmental Authority in order to consummate any of the transactions contemplated by this Agreement, (ii) executing and delivering such other documents, instruments and agreements as any party hereto shall reasonably request, and (iii) taking all reasonable steps as may be necessary to obtain all such material consents, waivers, licenses, orders, registrations, approvals, permits and authorizations. Notwithstanding the foregoing, in no event shall any party have any obligation, in order to consummate the transactions contemplated hereby, to: (i) take any action(s) that would




Page 9 of 18




 


result in Material Adverse Changes in the benefits to the Seller on the one hand or to the Purchaser on the other of this Agreement, or (ii) dispose of any material assets or make any material change in its business other than as contemplated by this Agreement, or (iii) expend any material amount of funds or otherwise incur any material burden other than those contemplated by this Agreement.


5.2             Certain Filings; Cooperation in Receipt of Consents .


(a)          The Seller and the Purchaser shall reasonably cooperate with one another in (i) determining whether any other action by or in respect of, or filing with, any Governmental Authority is required, or any actions, consents, approvals or waivers are required to be obtained from parties to any material contracts, in connection with the consummation of the transactions contemplated hereby, and (ii) taking or seeking any such other actions, consents, approvals or waivers or making any such filings, furnishing information required in connection therewith. Each party shall permit the other party to review any communication given by it to, and shall consult with each other in advance of any meeting or conference with, any Governmental Authority or, in connection with any proceeding by a private party, with any other Person, and to the extent permitted by the applicable Governmental Authority or other Person, give the other party the opportunity to attend and participate in such meetings and conferences, in each case in connection with the transactions contemplated hereby.


(b)          The Company shall timely file all reports required to be filed by it pursuant to Section 13 of the 1934 Act and all other documents required to be filed by it with the SEC under the 1933 Act or the 1934 Act from the date of this Agreement to the Closing.


5.3             Public Announcements . The parties shall consult with each other before issuing, and provide each other a reasonable opportunity to review and comment upon, any press release or public statement with respect to this Agreement and the transactions contemplated hereby and, except as may be required by applicable law, shall not issue any such press release or make any such public statement prior to such consultation.


5.4             Access to Information; Notification of Certain Matters.


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


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


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


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


(iii)     any actions, suits, claims, investigations or proceedings commenced or, to its Knowledge, threatened against, relating to or involving or otherwise affecting such party or any of its




Page 10 of 18




 


Affiliates that, if pending on the date of this Agreement, would have been required to have been disclosed, or that relate to the consummation of the transactions contemplated by this Agreement; provided , however , that the delivery of any notice pursuant to this Section 5.4(b) shall not limit or otherwise affect the remedies available hereunder to the party receiving such notice.


5.5             Board of Directors and Officers . The Seller shall cause the Company to appoint the designees of the Purchaser listed in Section 3.2(d) to the Board of Directors at the Closing and obtain any necessary resignations from members of the Board of Directors.


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


5.7              Indemnification . The Seller hereby agrees to indemnify and hold harmless the Purchaser and the Company (the “Indemnified Parties”) from and against any and all liabilities, obligations, claims, losses, expenses, damages, actions, liens and deficiencies (including reasonable attorneys’ fees) which exist, or which may be imposed on, incurred by or asserted against the Indemnified Parties due to or arising out of any breach or inaccuracy of any representation or warranty of the Seller under Sections 4.1 and 4.2 hereof, or any covenant, agreement or obligation of the Seller hereunder or in any other certificate, instrument or document contemplated hereby or thereby (“Damages”), for a period of eighteen (18) months from the Closing Date (the “Indemnification,” and the period herein is referred to as the “Indemnification Period”). Notwithstanding the forgoing, in no event will the Indemnified Parties be entitled to indemnification hereunder for Damages in an




Page 11 of 18




 


aggregate amount which exceeds $180,000, except to the extent to any undisclosed or unknown outstanding Indebtedness as of the Closing Date, which is in breach of Section 5.8 hereof. The Seller shall not be obligated to make any payment for Indemnification in respect of any claims for Damages that are made by the Indemnified Parties after the expiration of the Indemnification Period; provided, however, that the obligations of the Seller under the Indemnification shall remain in full force and effect in respect of any claims for Damages which are made prior to, and remain pending at, the expiration of the Indemnification Period. The indemnification provided by this Section 5.7 shall be the sole pecuniary remedy of the Indemnified Parties for any Damages; provided, however, that no other remedies of the Indemnified Parties for any breach by the Seller of the representations and warranties contained in Section 4.1 and 4.2 shall be limited in any way by this Section 5.7.


5.8             Payment of Liabilities . As of the date of the Closing, the Seller shall pay, or shall cause the Company to pay in full any of the Company outstanding Indebtedness, as well as any additional liabilities or obligations incurred by the Company, including any and all liabilities or obligations incurred by the Company in connection with the transactions contemplated by this Agreement, other than the costs incurred in connection with the preparation and mailing of the Schedule 14f-1.


5.9             Interim Actions of the Parties .


(a)          Until the earlier of the Closing Date or the termination of this Agreement pursuant to Section VII hereof, neither the Seller nor any of its respective Affiliates shall, directly or indirectly (i) take any action to solicit or initiate any Acquisition Proposal, or (ii) continue, initiate or engage in negotiations concerning any Acquisition Proposal with, or disclose any non-public information relating to the Company, or afford access to the properties, books or records of the Company to, any corporation, partnership, person or other entity (except the Purchaser and its Affiliates) that may be considering or has made an Acquisition Proposal.


(b)          Until the earlier of the Closing Date or the termination of this Agreement pursuant to Section VII hereof, neither the Seller nor any of its respective Affiliates shall engage directly or indirectly in any transaction involving any of the securities of the Company other than as contemplated by this Agreement.


SECTION VI   CONDITIONS .


6.1             Conditions to the Obligations of Each Party. The obligations of the Seller and the Purchaser to consummate the transactions contemplated by this Agreement are subject to the satisfaction of the following conditions:


(a)          No Governmental Authority of competent authority or jurisdiction shall have issued any order, injunction or decree, or taken any other action, that is in effect and restrains, enjoins or otherwise prohibits the consummation of the transactions contemplated hereby; and


(b)          The parties shall have obtained or made all consents, approvals, actions, orders, authorizations, registrations, declarations, announcements and filings contemplated by this Agreement.


6.2             Conditions to the Obligations of the Seller . The obligations of the Seller to consummate the transactions contemplated by this Agreement are subject to the satisfaction of the following further conditions:




Page 12 of 18




 



(a)          The Purchaser shall have performed in all material respects all of its obligations hereunder required to be performed by it at or prior to the Closing;


(b)          The representations and warranties of the Purchaser contained in this Agreement shall have been true and correct when made and in all material respects at and as of the time of the Closing as if made at and as of such time (except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case it shall be true and correct as of such date); and


6.3             Conditions to the Obligations of the Purchaser . The obligations of the Purchaser to consummate the transactions contemplated by this Agreement are subject to the satisfaction of the following further conditions:


(a)         The Seller shall have performed in all material respects all of its obligations hereunder required to be performed by them at or prior to the Closing;


(b)        The representations and warranties of the Seller contained in this Agreement shall have been true and correct when made and at and as of the time of the Closing as if made at and as of such time (except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case it shall be true and correct as of such date); and


(c)           The Shares being sold to the Purchaser hereunder for the Purchase Price shall represent 87.33% of the issued and outstanding shares of the Company’s Common Stock per section 4.2(b).


SECTION VII   TERMINATION .


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


(a)           by mutual written agreement of the Purchaser and the Seller;


(b)           by either the Purchaser or by the Seller, if


 (i)          the transactions contemplated by this Agreement shall not have been consummated by the Closing Date or otherwise extended by further agreement of the parties ; provided , however , that the right to terminate this Agreement under this Section 7.1(b)(i) shall not be available to any party whose breach of any provision of or whose failure to perform any obligation under this Agreement has been the cause of, or has resulted in, the failure of the transactions to occur on or before the Closing Date; or


(ii)         a judgment, injunction, order or decree of any Governmental Authority having competent jurisdiction enjoining either the Seller or the Purchaser from consummating the transactions contemplated by this Agreement is entered and such judgment, injunction, judgment or order shall have become final and nonappealable and, prior to such termination, the parties shall have used their respective commercially reasonable efforts to resist, resolve or lift, as applicable, such judgment, injunction, order or decree; provided, however, that the right to terminate this Agreement under this Section  7.1(b)(ii) shall not be available to any party whose breach of any provision of or whose failure to perform any obligation under this Agreement has been the cause of such judgment, injunction, order or decree.





Page 13 of 18




 


(c)          by the Purchaser:


(i)          if a breach of or failure to perform any representation, warranty, covenant or agreement on the part of any of the Seller set forth in this Agreement shall have occurred which would cause the conditions set forth in Section 6.3 not to be satisfied, and any such condition is incapable of being satisfied by the Closing Date or such breach or failure to perform has not been cured within ten (10) days after notice of such breach or failure to perform has been given by the Purchaser to the Seller.


7.2             Effect of Termination . If this Agreement is terminated pursuant to Section 7.1, there shall be no liability or obligation on the part of the Purchaser or the Seller, or any of their respective officers, directors, shareholders, agents or Affiliates, except that the provisions of this Section 7.2, Section 7.3 and Section VIII of this Agreement shall remain in full force and effect and survive any termination of this Agreement and except that, notwithstanding anything to the contrary contained in this Agreement, no party shall be relieved of or released from any liabilities or damages arising out of its material breach of or material failure to perform its obligations under this Agreement.


7.3             Expenses . Whether or not the transactions contemplated by this Agreement are consummated, all fees and expenses of any party hereto incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fees and expenses.


SECTION VIII   MISCELLANEOUS


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


8.2             Entire Agreement . This Agreement (together with any Schedules and/or any Exhibits hereto) by and between the Seller and the Purchaser and the other agreements and instruments expressly provided for herein, together set forth the entire understanding of the parties hereto and supersede in their entirety all prior contracts, agreements, arrangements, communications, discussions, representations, and warranties, whether oral or written with respect to the subject matter hereof.


8.3             Governing Law and Arbitration . This Agreement shall in all respects be governed by and construed in accordance with the internal substantive laws of the State of California without giving effect to the principles of conflicts of law thereof. Disputes arising from the performance of this Agreement shall be submitted to American Arbitration Association and resolved by arbitration, pursuant to the rules of the Association, which are in force at the time of the arbitration application. The arbitral award shall be final and binding on both parties.


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




Page 14 of 18




 


contemplated hereby and, except as may be required by applicable law, will not issue any such press release or make any such public statement prior to such consultation.


8.5             Notices . Any notice, request or other communication required or permitted hereunder shall be in writing and be deemed to have been duly given (a) when personally delivered or sent by facsimile transmission (the receipt of which is confirmed in writing), (b) one Business Day after being sent by a nationally recognized overnight courier service or (c) five Business Days after being sent by registered or certified mail, return receipt requested, postage prepaid, to the parties at their respective addresses set forth below.


If to the Seller:

Billion Rewards Development Limited

 

Attn: Q Chen

 

Address:

 

3 rd Floor, J&C Building

 

P.O. Box 933, Road Town

 

Tortola, British Virgin Islands

 

VG1110

if to the Purchaser:

Moregain Capital Group LLC    

 

Attn: Michael Antonovich

 

Address

 

117 E. Huntington Dr.,

 

Arcadia, CA91006.

 

USA

 

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


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


8.8             Third Parties . Nothing expressed or implied in this Agreement is intended, or shall be construed, to confer upon or give any Person other than the parties hereto and their successors and assigns any rights or remedies under or by reason of this Agreement.


8.9             Schedules . The Schedules and Exhibits attached to this Agreement are incorporated herein and shall be part of this Agreement for all purposes.


8.10           Headings. The headings in this Agreement are solely for convenience of reference and shall not be given any effect in the construction or interpretation of this Agreement.


8.11           Interpretation . Whenever the context may require, any pronoun used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa.





Page 15 of 18




 


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


THE SELLER:

Billion Rewards Development Limited

THE PURCHASER:

Moregain Capital Group LLC    

Name:

Name:

Title:

Title:

Number of Shares:

Sign:


 Sign:





Page 16 of 18




 


Exhibit A



FORM OF SELLER INSTRUCTIONS TO COMPANY’S TRANSFER AGENT

 


Corporate Stock Transfer

3200 Cherry Creek South Drive, Suite 430

Denver, Colorado 80209

 

Re: Aladdin International, Inc.

r/n/o [Seller] 6,270,512 shares

 



Ladies and Gentlemen:

 

The undersigned (“Seller”) hereby authorizes and directs you to transfer 6,270,512 shares (the “Shares”) of common stock of Aladdin International, Inc., a Nevada corporation (the “Company”), held as book entry with the Company’s stock transfer agent and registered in the name of Seller from Seller to the person(s) listed below:


Name

Address

Moregain Capital Group LLC

117 E, Huntington Dr., 

Arcadia, CA 91006 


Please send the newly-issued original certificate(s) for the Shares to Michael Antonovich at above address.

 

You are hereby authorized to process the actions stated hereinabove with respect to the Shares. The undersigned Seller agrees to indemnify you for any loss, liability or related costs that may ensue as a result of processing these actions.

 

Please deliver the share certificate in the name of the person listed on Schedule A to the following address:

 


 

Sincerely,

 

 

 

SELLER: 

 

 

 

 

 

 

 


Billion Rewards Development Limited

 

25







Page 17 of 18




 


Exhibit B






RELEASE

 

The undersigned hereby agrees that as of the date hereof (the “Effective Date”), the undersigned and his assigns, successors, affiliates, agents and representatives, forever release and discharge Aladdin International, Inc., a Nevada corporation (the “Company”) and its assigns, successors, shareholders, subsidiaries, affiliates, owners, members, predecessors, agents, representatives, officers, directors, and employees from any and all causes of action, actions, judgments, liens, damages, losses, claims, liabilities, and demands whatsoever, whether known or unknown, which each other had, now has, or hereafter can, shall, or may have, however arising, including by reason of any duty, breach, act, omission, condition or occurrence through and including the Effective Date and/or by reason of any fact, act, matter, cause or thing of any kind whatsoever.

 

Date: March 21, 2018

 

SELLER:

 

 

 

 

 

 

 

 

 

 Billion Rewards Development Limited 

27





Page 18 of 18



 


EXHIBIT 10.2







ALADDIN INTERNATIONAL, INC.,

pending name change to MOREGAIN PICTURES, INC.

a Nevada corporation







2018 PERFORMANCE BOOST

STOCK OPTION PLAN























Board Adoption:  March 23, 2018






1



 


MOREGAIN PICTURES, INC.

2018 PERFORMANCE BOOST OPTION PLAN




This 2018 PERFORMANCE BOOST OPTION PLAN (this “Plan”) was adopted by the Board of Directors of ALADDIN INTERNATIONAL, INC. and (pending name change) MOREGAIN PICTURES, INC., a Nevada corporation (the “Company”), effective as of March 23, 2018.

1.   Purposes of this Plan . The purposes of this Plan are to attract and retain the best available personnel, to provide additional incentives to Employees, Directors, and Consultants and to promote the success of the Company’s business.

2.   Definitions . As used herein, the following definitions shall apply:

" Affiliate " means a corporation or other entity that, directly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company.

" Applicable Laws " means the requirements related to or implicated by the administration of the Plan under applicable state corporate law, United States federal and state securities laws, the Code and the applicable laws of any foreign country or jurisdiction where Awards are granted under the Plan.

" Award " means any right granted under the Plan, including an Incentive Stock Option, a Non-qualified Stock Option, a Restricted Stock Award or a Restricted Stock Unit Award.

" Award Agreement " means a written agreement, contract, certificate or other instrument or document evidencing the terms and conditions of an individual Award granted under the Plan which may, in the discretion of the Company, be transmitted electronically to any Participant. Each Award Agreement shall be subject to the terms and conditions of the Plan.

" Board " means the Board of Directors of the Company, as constituted at any time.

" Cause " means, with respect to the termination by the Company or a Related Entity of the Participant’s Continuous Service, that such termination is for “Cause” as such term is expressly defined in a then-effective written agreement between the Participant and the Company or such Related Entity, or in the absence of such then-effective written agreement and definition, is based on, in the determination of the Administrator, the Participant’s:  (i) performance of any act or failure to perform any act in bad faith and to the detriment of the Company or a Related Entity; (ii) dishonesty, intentional misconduct or material breach of any agreement with the Company or a Related Entity; or (iii) commission of a crime involving dishonesty, breach of trust, or physical or emotional harm to any person.  

" Change in Control " means:

(a) The acquisition (whether by purchase, merger, consolidation, combination or other similar transaction) by any Person of beneficial ownership (within the meaning of Rule



1



 


13d-3 promulgated under the Exchange Act) of more than 50% (on a fully diluted basis) of the combined voting power of the then outstanding voting securities of the Company; or

(b) The sale, transfer or other disposition of all or substantially all of the assets of the Company to any Person other than an Affiliate.

(c) Any Person (or more than one Person acting as a group) acquires ownership of stock of the Company that, together with the stock held by such Person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company; provided, that, a Change in Control shall not occur if any Person (or more than one Person acting as a group) owns more than 50% of the total fair market value or total voting power of the Company's stock and acquires additional stock;

(d) A majority of the members of the Board is replaced during any twelve-month period by directors whose appointment or election is not endorsed by a majority of the Board before the date of appointment or election; or

" Code " means the Internal Revenue Code of 1986, as it may be amended from time to time. Any reference to a section of the Code shall be deemed to include a reference to any regulations promulgated thereunder.  

" Committee " means a committee of one or more members of the Board appointed by the Board to administer the Plan in accordance with Section 3.4 and Section 3.5.

" Common Stock " means the common stock of the Company.

" Company " means ALADDIN INTERNATIONAL, INC and pending name change MOREGAIN PICTURES, INC., a Nevada company, and any successor thereto.

" Consultant " means any individual who is engaged by the Company or any Affiliate to render consulting or advisory services, whether or not compensated for such services.

" Continuous Service " means that the Participant's service with the Company or an Affiliate, whether as an Employee, Consultant or Director, is not interrupted or terminated. The Participant's Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant's Continuous Service; provided further that if any Award is subject to Section 409A of the Code, this sentence shall only be given effect to the extent consistent with Section 409A of the Code. For example, a change in status from an Employee of the Company to a Director of an Affiliate will not constitute an interruption of Continuous Service. The Committee or its delegate, in its sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal or family leave of absence.

" Detrimental Activity " means any of the following: (i) unauthorized disclosure of any confidential or proprietary information of the Company or any of its Affiliates; (ii) any activity



2



 


that would be grounds to terminate the Participant's employment or service with the Company or any of its subsidiaries for Cause; (iii) the breach of any non-competition, non-solicitation, non-disparagement or other agreement containing restrictive covenants, with the Company or its Affiliates; (iv) fraud or conduct contributing to any financial restatements or irregularities, as determined by the Committee in its sole discretion; or (v) any other conduct or act determined to be materially injurious, detrimental or prejudicial to any interest of the Company or any of its Affiliates, as determined by the Committee in its sole discretion.

" Director " means a member of the Board.

" Disability " means that the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment; provided, however, for purposes of determining the term of an Incentive Stock Option pursuant to Section 6.9 hereof, the term Disability shall have the meaning ascribed to it under Section 22(e)(3) of the Code. The determination of whether an individual has a Disability shall be determined under procedures established by the Committee. Except in situations where the Committee is determining Disability for purposes of the term of an Incentive Stock Option pursuant to Section 6.9 hereof within the meaning of Section 22(e)(3) of the Code, the Committee may rely on any determination that a Participant is disabled for purposes of benefits under any long-term disability plan maintained by the Company or any Affiliate in which a Participant participates.

" Disqualifying Disposition " has the meaning set forth in Section 14.9.

" Effective Date " shall mean the date as of which this Plan is adopted by the Board.

" Employee " means any person, including an officer or Director, employed by the Company or an Affiliate; provided, that, for purposes of determining eligibility to receive Incentive Stock Options, an Employee shall mean an employee of the Company or a parent or subsidiary corporation within the meaning of Section 424 of the Code. Mere service as a Director or payment of a director's fee by the Company or an Affiliate shall not be sufficient to constitute "employment" by the Company or an Affiliate.

" Exchange Act " means the Securities Exchange Act of 1934, as amended, and any successor thereto.

" Fair Market Value " means, on a given date, (i) if there is a public market for the shares of Common Stock on such date, the closing price of the shares as reported on such date on the principal national securities exchange on which the shares are listed or, if no sales of shares have been reported on any national securities exchange, then the immediately preceding date on which sales of the shares have been so reported or quoted, and (ii) if there is no public market for the shares of Common Stock on such date, then the fair market value shall be determined by the Committee in good faith after taking into consideration all factors which it deems appropriate, including, without limitation, Sections 409A and 422 of the Code.

" Grant Date " means the date on which the Committee adopts a resolution, or takes other appropriate action, expressly granting an Award to a Participant that specifies the key terms and conditions of the Award or, if a later date is set forth in such resolution, then such date as is set forth in such resolution.



3



 


" Incentive Stock Option " means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code.

" Non-qualified Stock Option " means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock Option.

" Option " means an Incentive Stock Option or a Non-qualified Stock Option granted pursuant to the Plan.

" Option holder " means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.

" Option Exercise Price " means the price at which a share of Common Stock may be purchased upon the exercise of an Option.

" Participant " means an eligible person to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Award.

" Permitted Transferee " means: (a) a member of the Option holder's immediate family (child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships), any person sharing the Option holder's household (other than a tenant or employee), a trust in which these persons have more than 50% of the beneficial interest, a foundation in which these persons (or the Option holder) control the management of assets, and any other entity in which these persons (or the Option holder) own more than 50% of the voting interests; or (b) such other transferees as may be permitted by the Committee in its sole discretion.  

" Person " means any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act).

" Plan " means this 2018 Performance Boost Option, as amended and/or amended and restated from time to time.

" Restricted Period " has the meaning set forth in Section 7.

" Restricted Stock " means Common Stock, subject to certain specified restrictions (including, without limitation, a requirement that the Participant provide Continuous Service for a specified period of time) granted under Section 7 of the Plan.

" Restricted Stock Unit " means an unfunded and unsecured promise to deliver shares of Common Stock, cash, other securities or other property, subject to certain restrictions (including, without limitation, a requirement that the Participant provide Continuous Service for a specified period of time) granted under Section 7 of the Plan.

" Ten Percent Shareholder " means a person who owns (or is deemed to own pursuant to Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or of any of its Affiliates.



4



 



3.

Administration .

3.1

Authority of Committee . The Plan shall be administered by the Committee or, in the Board's sole discretion, by the Board. Subject to the terms of the Plan, the Committee's charter and Applicable Laws, and in addition to other express powers and authorization conferred by the Plan, the Committee shall have the authority:  

(a)

to construe and interpret the Plan and apply its provisions;

(b)

to promulgate, amend, and rescind rules and regulations relating to the administration of the Plan;

(c)

to authorize any person to execute, on behalf of the Company, any instrument required to carry out the purposes of the Plan;

(d)

to delegate its authority to one or more officers of the Company;

(e)

to determine when Awards are to be granted under the Plan and the applicable Grant Date;

(f)

from time to time to select, subject to the limitations set forth in this Plan, those Participants to whom Awards shall be granted;

(g)

to determine the number of shares of Common Stock to be made subject to each Award;

(h)

to determine whether each Option is to be an Incentive Stock Option or a Non-qualified Stock Option;

(i)

to prescribe the terms and conditions of each Award, including, without limitation, the exercise price and medium of payment and vesting provisions, and to specify the provisions of the Award Agreement relating to such grant;

(j)

to amend any outstanding Awards, including for the purpose of modifying the time or manner of vesting, or the term of any outstanding Award; provided, however, that if any such amendment impairs a Participant's rights or increases a Participant's obligations under his or her Award or creates or increases a Participant's federal income tax liability with respect to an Award, such amendment shall also be subject to the Participant's consent;

(k)

to determine the duration and purpose of leaves of absences which may be granted to a Participant without constituting termination of their employment for purposes of the Plan, which periods shall be no shorter than the periods generally applicable to Employees under the Company's employment policies;

(l)

to make decisions with respect to outstanding Awards that may become necessary upon a change in corporate control or an event that triggers anti-dilution adjustments;



5



 


(m)

to interpret, administer, reconcile any inconsistency in, correct any defect in and/or supply any omission in the Plan and any instrument or agreement relating to, or Award granted under, the Plan; and

(n)

to exercise discretion to make any and all other determinations which it determines to be necessary or advisable for the administration of the Plan.

3.2

Acquisitions and Other Transactions . The Committee may, from time to time, assume outstanding awards granted by another entity, whether in connection with an acquisition of such other entity or otherwise, by either (i) granting an Award under the Plan in replacement of or in substitution for the award assumed by the Company, or (ii) treating the assumed award as if it had been granted under the Plan if the terms of such assumed award could be applied to an Award granted under the Plan. Such assumed award shall be permissible if the holder of the assumed award would have been eligible to be granted an Award hereunder if the other entity had applied the rules of this Plan to such grant. The Committee may also grant Awards under the Plan in settlement of or in substitution for outstanding awards or obligations to grant future awards in connection with the Company or an Affiliate acquiring another entity, an interest in another entity, or an additional interest in an Affiliate whether by merger, stock purchase, asset purchase or other form of transaction.

3.3

Committee Decisions Final . All decisions made by the Committee pursuant to the provisions of the Plan shall be final and binding on the Company and the Participants, unless such decisions are determined by a court having jurisdiction to be arbitrary and capricious.

3.4

Delegation . The Board may delegate administration of the Plan to a committee or committees of one or more members of the Board, and the term "Committee" shall apply to any person or persons to whom such authority has been delegated. The Committee shall have the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board or the Committee shall thereafter be to the committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan. The members of the Committee shall be appointed by and serve at the pleasure of the Board. From time to time, the Board may increase or decrease the size of the Committee, add additional members to, remove members (with or without cause) from, appoint new members in substitution therefor, and fill vacancies, however caused, in the Committee. The Committee shall act pursuant to a vote of the majority of its members or, in the case of a Committee comprised of only two members, the unanimous consent of its members, whether present or not, or by the written consent of the majority of its members and minutes shall be kept of all of its meetings and copies thereof shall be provided to the Board. Subject to the limitations prescribed by the Plan and the Board, the Committee may establish and follow such rules and regulations for the conduct of its business as it may determine to be advisable.  

3.5

Committee Composition . Except as otherwise determined by the Board, the Committee shall consist solely of one or more Directors appointed to the Committee from time to time by the Board.   



6



 


3.6

Indemnification . In addition to such other rights of indemnification as they may have as Directors or members of the Committee, and to the extent allowed by Applicable Laws, the Committee shall be indemnified by the Company against the reasonable expenses, including attorney's fees, actually incurred in connection with any action, suit or proceeding or in connection with any appeal therein, to which the Committee may be party by reason of any action taken or failure to act under or in connection with the Plan or any Award granted under the Plan, and against all amounts paid by the Committee in settlement thereof (provided, however, that the settlement has been approved by the Company, which approval shall not be unreasonably withheld) or paid by the Committee in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such Committee did not act in good faith and in a manner which such person reasonably believed to be in the best interests of the Company, or in the case of a criminal proceeding, had no reason to believe that the conduct complained of was unlawful; provided, however, that within 60 days after institution of any such action, suit or proceeding, such Committee shall, in writing, offer the Company the opportunity at its own expense to handle and defend such action, suit or proceeding.   

3.7

Limitation of Liability . The Committee and each member thereof shall be entitled to, in good faith, rely or act upon any report or other information furnished to him or her by any officer or employee of the Company or an Affiliate, the Company’s legal counsel, independent auditors, consultants or any other agents assisting in the administration of this Plan. Members of the Committee and any officer or employee of the Company or an Affiliate acting at the direction or on behalf of the Committee shall not be personally liable for any action or determination taken or made in good faith with respect to this Plan, and shall, to the fullest extent permitted by law, be indemnified and held harmless by the Company with respect to any such action or determination.


4.

Shares Subject to the Plan .

4.1

Subject to adjustment in accordance with Section 11, the maximum aggregate number of Shares available for the grant of Awards under the Plan is Two Million Shares (2,000,000 shares). During the terms of the Awards, the Company shall keep available at all times the number of shares of Common Stock required to satisfy such Awards.

4.2

Shares of Common Stock available for distribution under the Plan may consist, in whole or in part, of authorized and unissued shares, treasury shares.

4.3

Any shares of Common Stock subject to an Award that is canceled, forfeited or expires prior to exercise or realization, either in full or in part, shall again become available for issuance under the Plan. Notwithstanding anything to the contrary contained herein: shares subject to an Award under the Plan shall not again be made available for issuance or delivery under the Plan if such shares are (a) shares tendered in payment of an Option or (b) shares delivered or withheld by the Company to satisfy any tax withholding obligation.



7



 


4.4

If the Committee authorizes the assumption of awards pursuant to Section 3.2 or Section 12.1 hereof, the assumption will reduce the number of shares available for issuance under the Plan in the same manner as if the assumed awards had been granted under the Plan.

5.

Eligibility .

5.1

Eligibility for Specific Awards . Incentive Stock Options may be granted to Employees only. Awards other than Incentive Stock Options may be granted to Employees, Consultants and Directors.  

5.2

Ten Percent Shareholders . A Ten Percent Shareholder shall not be granted an Incentive Stock Option unless the Option Exercise Price is at least 110% of the Fair Market Value of the Common Stock at the Grant Date and the Option is not exercisable after the expiration of five years from the Grant Date.  

6.

Option Provisions . Each Option granted under the Plan shall be evidenced by an Award Agreement. Each Option so granted shall be subject to the conditions set forth in this Section 6, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement. All Options shall be separately designated Incentive Stock Options or Non-qualified Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares of Common Stock purchased on exercise of each type of Option. Notwithstanding the foregoing, the Company shall have no liability to any Participant or any other person if an Option designated as an Incentive Stock Option fails to qualify as such at any time or if an Option is determined to constitute "nonqualified deferred compensation" within the meaning of Section 409A of the Code and the terms of such Option do not satisfy the requirements of Section 409A of the Code. The provisions of separate Options need not be identical, but each Option shall include (through incorporation of provisions hereof by reference in the Option or otherwise) the substance of each of the following provisions:

6.1

Term.  No Incentive Stock Option shall be exercisable after the expiration of 10 years from the Grant Date. The term of a Non-qualified Stock Option granted under the Plan shall be determined by the Committee; provided, however, no Non-qualified Stock Option shall be exercisable after the expiration of 10 years from the Grant Date.

6.2

Exercise Price of an Incentive Stock Option . Subject to the provisions of Section 5.2 regarding Ten Percent Shareholders, the Option Exercise Price of each Incentive Stock Option shall be not less than 100% of the Fair Market Value of the Common Stock subject to the Option on the Grant Date. Notwithstanding the foregoing, an Incentive Stock Option may be granted with an Option Exercise Price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the Code.

6.3

Exercise Price of a Non-qualified Stock Option . The Option Exercise Price of each Non-qualified Stock Option shall be not less than 100% of the Fair Market Value of the Common Stock subject to the Option on the Grant Date. Notwithstanding the foregoing, a Non-qualified Stock Option may be granted with an Option Exercise Price lower than that set forth in



8



 


the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 409A of the Code.

6.4

Method of Exercise . The Option Exercise Price shall be paid, to the extent permitted by Applicable Laws, either (a) in cash or by certified or bank check at the time the Option is exercised or (b) in the discretion of the Committee, upon such terms as the Committee shall approve: (i) by delivery to the Company of other shares of Common Stock, duly endorsed for transfer to the Company, with a Fair Market Value on the date of delivery equal to the Option Exercise Price (or portion thereof) due for the number of shares being acquired; (ii) by a "net exercise" procedure effected by withholding the minimum number of shares of Common Stock otherwise issuable in respect of an Option that are needed to pay the Option Exercise Price; (iii) by any combination of the foregoing methods; or (iv) in any other form of legal consideration that may be acceptable to the Committee. Unless otherwise specifically provided in the Option, the Option Exercise Price that is paid by delivery to the Company of other Common Stock acquired, directly or indirectly from the Company, shall be paid only by shares of Common Stock that have been held for more than six months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting purposes).  

6.5

Early Exercise.  The Award Agreement may, but need not, include a provision whereby the Grantee may elect at any time, while as an Employee, Director or Consultant, to exercise any part or all of the Award prior to full vesting of the Award.  Any unvested Shares received pursuant to such exercise may be subject to a repurchase right in favor of the Company or a Related Entity or to any other restriction the Administrator determines to be appropriate.

6.6

Transferability of an Incentive Stock Option . An Incentive Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Option holder only by the Option holder. Notwithstanding the foregoing, the Option holder may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Option holder, shall thereafter be entitled to exercise the Option.

6.7

Transferability of a Non-qualified Stock Option . A Non-qualified Stock Option may, in the sole discretion of the Committee, be transferable to a Permitted Transferee, upon written approval by the Committee to the extent provided in the Award Agreement. If the Non-qualified Stock Option does not allow transferability, then the Non-qualified Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Option holder only by the Option holder. Notwithstanding the foregoing, the Option holder may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Option holder, shall thereafter be entitled to exercise the Option.  

6.8

Vesting of Options . Each Option may, but need not, vest and therefore become exercisable in periodic installments that may, but need not, be equal. The Option may be subject to such other terms and conditions on the time or times when it may be exercised (which may be based on performance or other criteria) as the Committee may deem appropriate. The vesting provisions of individual Options may vary. No Option may be exercised for a fraction of a share of Common Stock. The Committee may, but shall not be required to, provide for an acceleration



9



 


of vesting and exercisability in the terms of any Award Agreement upon the occurrence of a specified event.

6.9

Termination of Continuous Service . Unless otherwise provided in an Award Agreement or in an employment agreement the terms of which have been approved by the Committee, in the event an Option holder's Continuous Service terminates (other than upon the Option holder's death or Disability), the Option holder may exercise his or her Option (to the extent that the Option holder was entitled to exercise such Option as of the date of termination) but only within such period of time ending on the earlier of (a) the date 90 days following the termination of the Option holder's Continuous Service or (b) the expiration of the term of the Option as set forth in the Award Agreement; provided that, if the termination of Continuous Service is by the Company for Cause, all outstanding Options (whether or not vested) shall immediately terminate and cease to be exercisable. If, after termination, the Option holder does not exercise his or her Option within the time specified in the Award Agreement, the Option shall terminate.

6.10

Disability of Option holder . Unless otherwise provided in an Award Agreement, in the event that an Option holder's Continuous Service terminates as a result of the Option holder's Disability, the Option holder may exercise his or her Option (to the extent that the Option holder was entitled to exercise such Option as of the date of termination), but only within such period of time ending on the earlier of (a) the date 12 months following such termination or (b) the expiration of the term of the Option as set forth in the Award Agreement. If, after termination, the Option holder does not exercise his or her Option within the time specified herein or in the Award Agreement, the Option shall terminate.

6.11

Death of Option holder . Unless otherwise provided in an Award Agreement, in the event an Option holder's Continuous Service terminates as a result of the Option holder's death, then the Option may be exercised (to the extent the Option holder was entitled to exercise such Option as of the date of death) by the Option holder's estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the Option upon the Option holder's death, but only within the period ending on the earlier of (a) the date 12 months following the date of death or (b) the expiration of the term of such Option as set forth in the Award Agreement. If, after the Option holder's death, the Option is not exercised within the time specified herein or in the Award Agreement, the Option shall terminate.  

6.12

Incentive Stock Option $100,000 Limitation . To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Option holder during any calendar year (under all plans of the Company and its Affiliates) exceeds $100,000, the Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as Non-qualified Stock Options.

6.13

Detrimental Activity . Unless otherwise provided in an Award Agreement, all outstanding Options (whether or not vested) shall immediately terminate and cease to be exercisable on the date on which an Option holder engages in Detrimental Activity.



10



 


7.

Restricted Awards . A Restricted Award is an Award of actual shares of Common Stock ("Restricted Stock") or an Award of hypothetical Common Stock Units ("Restricted Stock Units") having a value equal to the Fair Market Value of an identical number of shares of Common Stock. Restricted Awards may, but need not, provide that such Restricted Award may not be sold, assigned, transferred or otherwise disposed of, pledged or hypothecated as collateral for a loan or as security for the performance of any obligation or for any other purpose for such period (the "Restricted Period") as the Committee shall determine. Each Restricted Award granted under the Plan shall be evidenced by an Award Agreement. Each Restricted Award so granted shall be subject to the conditions set forth in this Section 7, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement.

7.1

Restricted Stock . Each Participant granted Restricted Stock shall execute and deliver to the Company an Award Agreement with respect to the Restricted Stock setting forth the restrictions and other terms and conditions applicable to such Restricted Stock. If the Committee determines that the Restricted Stock shall be held by the Company or in escrow rather than delivered to the Participant pending the release of the applicable restrictions, the Committee may require the Participant to additionally execute and deliver to the Company (A) an escrow agreement satisfactory to the Committee, if applicable and (B) the appropriate blank stock power with respect to the Restricted Stock covered by such agreement. If a Participant fails to execute an agreement evidencing an Award of Restricted Stock and, if applicable, an escrow agreement and stock power, the Award shall be null and void. Subject to the restrictions set forth in the Award, the Participant generally shall have the rights and privileges of a shareholder as to such Restricted Stock, including the right to vote such Restricted Stock and the right to receive dividends; provided that, any dividends with respect to the Restricted Stock shall be withheld by the Company for the Participant's account, and interest may be credited on the amount of the cash dividends withheld at a rate and subject to such terms as determined by the Committee. The dividends so withheld by the Committee and attributable to any particular share of Restricted Stock (and earnings thereon, if applicable) shall be distributed to the Participant in cash or, at the discretion of the Committee, in shares of Common Stock having a Fair Market Value equal to the amount of such dividends, if applicable, upon the release of restrictions on such share and, if such share is forfeited, the Participant shall have no right to such dividends.                              

7.2

Restricted Stock Units . The terms and conditions of a grant of Restricted Stock Units shall be reflected in an Award Agreement. No shares of Common Stock shall be issued at the time a Restricted Stock Unit is granted, and the Company will not be required to set aside funds for the payment of any such Award. A Participant shall have no voting rights with respect to any Restricted Stock Units granted hereunder. To the extent provided in an Award Agreement, the holder of Restricted Stock Units shall be entitled to be credited with dividend equivalent payments (upon the payment by the Company of dividends on shares of Common Stock) either in cash or, at the sole discretion of the Committee, in shares of Common Stock having a Fair Market Value equal to the amount of such dividends (and interest may, at the sole discretion of the Committee, be credited on the amount of cash dividend equivalents at a rate and subject to such terms as provided by the Committee), which accumulated dividend equivalents (and interest thereon, if applicable) shall be payable to the Participant upon the release of restrictions on such Restricted Stock Units, and if such Restricted Stock Units are forfeited, the Participant shall have no right to such dividend equivalent payments.  



11



 


7.3

Restrictions.  

(a)

Restrictions on Restricted Stock . Restricted Stock awarded to a Participant shall be subject to the following restrictions until the expiration of the Restricted Period, and to such other terms and conditions as may be set forth in the applicable Award Agreement: (A) if an escrow arrangement is used, the Participant shall not be entitled to delivery of the stock certificate; (B) the shares shall be subject to the restrictions on transferability set forth in the Award Agreement; (C) the shares shall be subject to forfeiture to the extent provided in the applicable Award Agreement; and (D) to the extent such shares are forfeited, the stock certificates shall be returned to the Company, and all rights of the Participant to such shares and as a shareholder with respect to such shares shall terminate without further obligation on the part of the Company.   

(b)

Restrictions on Restricted Stock Units . Restricted Stock Units awarded to a Participant shall be subject to (A) satisfaction of any applicable performance goals during such period, to the extent provided in the applicable Award Agreement, (B) to the extent such Restricted Stock Units are forfeited, all rights of the Participant to such Restricted Stock Units shall terminate without further obligation on the part of the Company, and (C) such other terms and conditions as may be set forth in the applicable Award Agreement.  

(c)

Committee Discretion to Remove Restrictions . The Committee shall have the authority to remove any or all of the restrictions on the Restricted Stock or Restricted Stock Units whenever it may determine that, by reason of changes in Applicable Laws or other changes in circumstances arising after the Grant Date, such action is appropriate.

7.4

Restricted Period . The Restricted Period shall commence on the Grant Date and end at the time or times set forth on a schedule established by the Committee in the applicable Award Agreement; provided, however, that notwithstanding any such vesting dates, the Committee may in its sole discretion accelerate the vesting of any Restricted Award at any time and for any reason. The Committee may, but shall not be required to, provide for an acceleration of vesting in the terms of any Award Agreement upon the occurrence of a specified event.

7.5

Delivery of Restricted Stock and Settlement of Restricted Stock Units . Upon the expiration of the Restricted Period with respect to any shares of Restricted Stock, the restrictions set forth in Section 7.3(a) and the applicable Award Agreement shall be of no further force or effect with respect to such shares, except as set forth in the applicable Award Agreement. If an escrow arrangement is used, upon such expiration, the Company shall deliver to the Participant, or his or her beneficiary, without charge, the stock certificate evidencing the shares of Restricted Stock which have not then been forfeited and with respect to which the Restricted Period has expired (to the nearest full share) and any dividends credited to the Participant's account with respect to such Restricted Stock and the interest thereon, if any. Upon the expiration of the Restricted Period with respect to any outstanding Restricted Stock Units, the Company shall deliver to the Participant, or his or her beneficiary, without charge, one share of Common Stock for each outstanding Restricted Stock Unit and any dividend equivalent payments credited to the Participant's account with respect to such Restricted Stock Units and the interest thereon, if any; provided, however, that if explicitly provided in the Award Agreement, the Committee may, in its sole discretion, elect to pay part cash or part cash and part Common Stock in lieu of



12



 


delivering only shares of Common Stock for vested Restricted Stock Units. If a cash payment is made in lieu of delivering shares of Common Stock, the amount of such payment shall be equal to the Fair Market Value of the Common Stock as of the date on which the Restricted Period lapsed.

No Restricted Award may be granted or settled for a fraction of a share of Common Stock.

8.

Securities Law Compliance .

8.1

Securities Registration . No Awards shall be granted under the Plan and no shares of Common Stock shall be issued and delivered upon the exercise of Options granted under the Plan unless and until the Company and/or the Participant have complied with all applicable federal and state registration, listing and/or qualification requirements and all other requirements of law or of any regulatory agencies having jurisdiction.

8.2

Representations; Legends . The Committee may, as a condition to the grant of any Award or the exercise of any Option under the Plan, require a Participant to (i) represent in writing that the shares of Common Stock received in connection with such Award are being acquired for investment and not with a view to distribution and (ii) make such other representations and warranties as are deemed appropriate by counsel to the Company. Each certificate representing shares of Common Stock acquired under the Plan shall bear a legend in such form as the Company deems appropriate.  

9.

Use of Proceeds from Stock . Proceeds from the sale of Common Stock pursuant to Awards, or upon exercise thereof, shall constitute general funds of the Company.

10.

Miscellaneous .

10.1

Acceleration of Exercisability and Vesting . The Committee shall have the power to accelerate the time at which an Award may first be exercised or the time during which an Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Award stating the time at which it may first be exercised or the time during which it will vest.

10.2

Shareholder Rights . Except as provided in the Plan or an Award Agreement, no Participant shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to an Award unless and until such Participant has satisfied all requirements for exercise or settlement of the Award pursuant to its terms (including any obligation to execute the Shareholders' Agreement) and no adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions of other rights for which the record date is prior to the date such Common Stock certificate is issued, except as provided in Section 11 hereof.

10.3

No Employment or Other Service Rights . Nothing in the Plan or any instrument executed or Award granted pursuant thereto shall confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Award was granted or shall affect the right of the Company or an Affiliate to terminate (a) the employment



13



 


of an Employee with or without notice and with or without Cause or (b) the service of a Director pursuant to the By-laws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.

10.4

Transfer; Approved Leave of Absence . For purposes of the Plan, no termination of employment by an Employee shall be deemed to result from either (a) a transfer of employment to the Company from an Affiliate or from the Company to an Affiliate, or from one Affiliate to another, or (b) an approved leave of absence for military service or sickness, or for any other purpose approved by the Company, if the Employee's right to reemployment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence was granted or if the Committee otherwise so provides in writing, in either case, except to the extent inconsistent with Section 409A of the Code if the applicable Award is subject thereto.

10.5

Withholding Obligations . To the extent provided by the terms of an Award Agreement and subject to the discretion of the Committee, the Participant may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of Common Stock under an Award by any of the following means (in addition to the Company's right to withhold from any compensation paid to the Participant by the Company) or by a combination of such means: (a) tendering a cash payment; (b) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to the Participant as a result of the exercise or acquisition of Common Stock under the Award, provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law; or (c) delivering to the Company previously owned and unencumbered shares of Common Stock of the Company.

11.

Adjustments Upon Changes in Stock . In the event of changes in the outstanding Common Stock or in the capital structure of the Company by reason of any stock or extraordinary cash dividend, stock split, reverse stock split, an extraordinary corporate transaction such as any recapitalization, reorganization, merger, consolidation, combination, exchange, or other relevant change in capitalization occurring after the Grant Date of any Award, Awards granted under the Plan and any Award Agreements, the exercise price of Options and the maximum number of shares of Common Stock subject to Awards stated in Section 4 will be equitably adjusted or substituted, as to the number, price or kind of a share of Common Stock or other consideration subject to such Awards to the extent necessary to preserve the economic intent of such Award. In the case of adjustments made pursuant to this Section 11, unless the Committee specifically determines that such adjustment is in the best interests of the Company or its Affiliates, the Committee shall, in the case of Incentive Stock Options, ensure that any adjustments under this Section 11 will not constitute a modification, extension or renewal of the Incentive Stock Options within the meaning of Section 424(h)(3) of the Code and in the case of Non-qualified Stock Options, ensure that any adjustments under this Section 11 will not constitute a modification of such Non-qualified Stock Options within the meaning of Section 409A of the Code.

12.

Effect of Change in Control .



14



 


(a)

Termination of Award to Extent Not Assumed in Corporate Transaction.  Effective upon the consummation of a Corporate Transaction, all outstanding Awards under this Plan shall terminate.  However, all such Awards shall not terminate to the extent they are assumed in connection with the Corporate Transaction.  To the extent Awards are terminated in conjunction with a Corporate Transaction, Participant will receive prior notice and an opportunity to exercise vested Awards, where relevant.  In the alternative, the Company may dispense with a Participant’s ability to exercise his or her Award, and instead provide for a cash payment in lieu of exercise, which payment equals the payment the Participant would have received if the Award had been exercised and then the resulting Shares dealt with in the Corporate Transaction, in the same manner as other Shares, less applicable withholding taxes.

(b)

Acceleration of Award Upon Corporate Transaction or Change in Control. The Administrator shall have the authority, exercisable either in advance of any actual or anticipated Corporate Transaction or Change in Control or at the time of an actual Corporate Transaction or Change in Control and exercisable at the time of the grant of an Award under this Plan or any time while an Award remains outstanding, to provide for the full or partial automatic vesting and exercisability of one or more outstanding unvested Awards under this Plan and the release from restrictions on transfer and repurchase or forfeiture rights of such Awards in connection with a Corporate Transaction or Change in Control, on such terms and conditions as the Administrator may specify.  The Administrator also shall have the authority to condition any such Award vesting and exercisability or release from such limitations upon the subsequent termination of the Continuous Service of the Participant within a specified period following the effective date of the Corporate Transaction or Change in Control.  The Administrator may provide that any Awards so vested or released from such limitations in connection with a Change in Control, shall remain fully exercisable until the expiration or sooner termination of the Award.

(c)

Effect of Acceleration on Incentive Stock Options. Any Incentive Stock Option accelerated under this Section 11 in connection with a Corporate Transaction or Change in Control shall remain exercisable as an Incentive Stock Option under the Code only to the extent the $100,000 dollar limitation of Section 422(d) of the Code is not exceeded.  To the extent such dollar limitation is exceeded, the excess Options shall be treated as Non-Qualified Stock Options.

(d)

The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to all or substantially all of the assets and business of the Company and its Affiliates, taken as a whole.

13.

Amendment of the Plan and Awards .

13.1

Amendment of the Plan . The Board at any time, and from time to time, may amend or terminate the Plan. However, except as provided in Section 11 relating to adjustments upon changes in Common Stock and Section 13.3, no amendment shall be effective unless approved by the shareholders of the Company to the extent shareholder approval is necessary to satisfy any Applicable Laws. At the time of such amendment, the Board shall determine, upon advice from counsel, whether such amendment will be contingent on shareholder approval.       



15



 


13.2

Shareholder Approval . The Board may, in its sole discretion, submit any other amendment to the Plan for shareholder approval.

13.3

Contemplated Amendments . It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide eligible Employees, Consultants and Directors with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to Incentive Stock Options or to the nonqualified deferred compensation provisions of Section 409A of the Code and/or to bring the Plan and/or Awards granted under it into compliance therewith.

13.4

No Impairment of Rights . Rights under any Award granted before amendment of the Plan shall not be impaired by any amendment of the Plan unless (a) the Company requests the consent of the Participant and (b) the Participant consents in writing.

13.5

Amendment of Awards . The Committee at any time, and from time to time, may amend the terms of any one or more Awards; provided, however, that the Committee may not affect any amendment which would otherwise constitute an impairment of the rights under any Award unless (a) the Company requests the consent of the Participant and (b) the Participant consents in writing.

14.

General Provisions .

14.1

Shareholders' Agreement . In connection with the grant, vesting and/or exercise of any Award under the Plan, the Committee may require a Participant to execute and become a party to the Shareholders' Agreement as a condition of such grant, vesting and/or exercise. The Shareholders' Agreement may contain restrictions on the transferability of shares of Common Stock acquired under the Plan (such as a right of first refusal or a prohibition on transfer) and such shares may be subject to call rights and drag-along rights of the Company and certain of its investors. The Company shall also have any repurchase rights set forth in the Shareholders' Agreement or any Award Agreement.

14.2

Sub-plans . The Committee may from time to time establish sub-plans under the Plan for purposes of satisfying blue sky, securities, tax or other laws of various jurisdictions in which the Company intends to grant Awards. Any sub-plans shall contain such limitations and other terms and conditions as the Committee determines are necessary or desirable. All sub-plans shall be deemed a part of the Plan, but each sub-plan shall apply only to the Participants in the jurisdiction for which the sub-plan was designed.

14.3

Unfunded Plan . The Plan shall be unfunded. Neither the Company, the Board nor the Committee shall be required to establish any special or separate fund or to segregate any assets to assure the performance of its obligations under the Plan.

14.4

Recapitalizations . Each Award Agreement shall contain provisions required to reflect the provisions of Section 11.

14.5

Delivery . Upon exercise of a right granted under this Plan, the Company shall issue Common Stock or pay any amounts due within a reasonable period of time thereafter.



16



 


Subject to any statutory or regulatory obligations the Company may otherwise have, for purposes of this Plan, 30 days shall be considered a reasonable period of time.

14.6

No Fractional Shares . No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan. The Committee shall determine whether cash, additional Awards or other securities or property shall be issued or paid in lieu of fractional shares of Common Stock or whether any fractional shares should be rounded, forfeited or otherwise eliminated.

14.7

Other Provisions . The Award Agreements authorized under the Plan may contain such other provisions not inconsistent with this Plan, including, without limitation, restrictions upon the exercise of the Awards, as the Committee may deem advisable.

14.8

Section 409A . The Plan is intended to comply with Section 409A of the Code to the extent subject thereto, and, accordingly, to the maximum extent permitted, the Plan shall be interpreted and administered to be in compliance therewith. Any payments described in the Plan that are due within the "short-term deferral period" as defined in Section 409A of the Code shall not be treated as deferred compensation unless Applicable Laws require otherwise. Notwithstanding anything to the contrary in the Plan, to the extent required to avoid accelerated taxation and tax penalties under Section 409A of the Code, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to the Plan during the six (6) month period immediately following the Participant's termination of Continuous Service shall instead be paid on the first payroll date after the six-month anniversary of the Participant's separation from service (or the Participant's death, if earlier). Notwithstanding the foregoing, neither the Company nor the Committee shall have any obligation to take any action to prevent the assessment of any additional tax or penalty on any Participant under Section 409A of the Code and neither the Company nor the Committee will have any liability to any Participant for such tax or penalty.

14.9

Disqualifying Dispositions . Any Participant who shall make a "disposition" (as defined in Section 424 of the Code) of all or any portion of shares of Common Stock acquired upon exercise of an Incentive Stock Option within two years from the Grant Date of such Incentive Stock Option or within one year after the issuance of the shares of Common Stock acquired upon exercise of such Incentive Stock Option (a "Disqualifying Disposition") shall be required to immediately advise the Company in writing as to the occurrence of the sale and the price realized upon the sale of such shares of Common Stock.  

14.10

Beneficiary Designation . Each Participant under the Plan may from time to time name any beneficiary or beneficiaries by whom any right under the Plan is to be exercised in case of such Participant's death. Each designation will revoke all prior designations by the same Participant, shall be in a form reasonably prescribed by the Committee and shall be effective only when filed by the Participant in writing with the Company during the Participant's lifetime.

14.11

Expenses . The costs of administering the Plan shall be paid by the Company.

14.12

Severability . If any of the provisions of the Plan or any Award Agreement is held to be invalid, illegal or unenforceable, whether in whole or in part, such provision shall be



17



 


deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability and the remaining provisions shall not be affected thereby.

14.13

Plan Headings . The headings in the Plan are for purposes of convenience only and are not intended to define or limit the construction of the provisions hereof.

14.14

Non-Uniform Treatment . The Committee's determinations under the Plan need not be uniform and may be made by it selectively among persons who are eligible to receive, or actually receive, Awards. Without limiting the generality of the foregoing, the Committee shall be entitled to make non-uniform and selective determinations, amendments and adjustments, and to enter into non-uniform and selective Award Agreements.

15.

Termination or Suspension of the Plan . The Plan shall terminate automatically on March 22, 2028. No Award shall be granted pursuant to the Plan after such date, but Awards theretofore granted may extend beyond that date. The Board may suspend or terminate the Plan at any earlier date pursuant to Section 13.1 hereof. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.

16.

Choice of Law . The law of the State of California shall govern all questions concerning the construction, validity and interpretation of this Plan, without regard to such state's conflict of law rules.



18