SHARE AND WARRANT CANCELLATION AGREEMENT

 

THIS SHARE AND WARRANT CANCELLATION AGREEMENT (this “Agreement”) is made and entered into as of this 17^th day of October 2008 by and between SRKP 17, Inc., a Delaware corporation (“SRKP 17”) and the stockholders of SRKP 17, as set forth on Schedule I attached hereto (such stockholders collectively referred to herein as the “Stockholders”). Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Exchange Agreement (as hereinafter defined).

 

 

WHEREAS, SRKP 17, Podium Technology Limited, a company organized under the laws of the British Virgin Islands (“Podium”), and the sole shareholder and the warrantholders of Podium entered into a Share and Warrant Exchange Agreement, dated as of September 22, 2008 (the “Exchange Agreement”), a copy of which is attached hereto as Exhibit A;

WHEREAS, after the Exchange, SRKP 17 agreed to offer Mr. Zhao Zifeng a thirty (30) day right to purchase up to 6,500,000 shares of our common stock at a per share purchase price of $0.415 (the “Purchase Right”);

WHEREAS, SRKP 17 agreed to enter into an agreement with the Stockholders to cancel 0.91867 shares of common stock and warrants to purchase 0.98943 shares of common stock held by each of them for one (1) share of common stock purchased by Mr. Zhao pursuant to the Purchase Right;

WHEREAS, assuming the exercise in full of the Purchase Right, the Stockholders shall cancel (i) an aggregate of 5,971,390 shares of SRKP 17 common stock held by such Stockholders (the “Shares”), as such Shares are more particularly set forth on Schedule I attached hereto, and (ii) an aggregate of 6,431,299 warrants to purchase shares of SRKP 17 common stock held by such Stockholders (the “Warrants”), as such Warrants are more particularly set forth on Schedule II attached hereto; and

WHEREAS, the Stockholders acknowledge that they would benefit from the completion of the transactions contemplated by the Exchange Agreement.

NOW, THEREFORE, for and in consideration of the execution and delivery of the Exchange Agreement, and the payment of good and valuable consideration pursuant to the Exchange Agreement, the receipt and sufficiency of which is hereby acknowledged, SRKP 17 and the Stockholders, each intending to be legally bound by this Agreement, hereby agree as follows:

1. DUTIES

 

1.1 Rights and Obligations of the Parties. The parties shall be entitled to such rights and shall perform such duties as set forth herein. In the event that the terms of this Agreement conflict in any way with the provisions of the Exchange Agreement, the Exchange Agreement shall control.

 

 

1.2 Cancellation of Shares and Warrants. Upon the exercise of the Purchase Right, for each one (1) share of common stock purchased by Mr. Zhao, 0.91867 of the Shares and 0.98943 of the Warrants shall be deemed automatically cancelled on a pro rata basis with respect to the Shares and Warrants held by each Stockholder. The Stockholders agree to execute any and all documents, including, but not limited to, stock powers for the stock certificates representing the Shares, as SRKP 17 reasonably determines necessary to effect the cancellation of the Shares and the Warrants pursuant to the terms of this Agreement.

 

2. DIVIDENDS; VOTING RIGHTS; STOCK SPLITS

 

2.1 Cash Dividends; Voting Rights. Prior to the exercise of the Purchase Right, the Stockholders shall have rights to cash or stock dividends with respect to the Shares and the Warrants, if any, and have rights to vote their respective Shares, if any such matter requiring stockholder approval shall arise.

2.2 Stock Splits; Stock Dividends. In the event of any stock split or other similar transaction with respect to SRKP 17 common stock that becomes effective prior to the exercise of the Purchase Right, the additional shares or warrants issued with respect to the Shares or the Warrants shall be similarly cancelled.

 

3. MISCELLANEOUS

 

3.1 Transferability. None of the rights and obligations of the Stockholders hereunder shall be transferable.

 

3.2 Notices. Any notices or other communications required or permitted under this Agreement shall be in writing and shall be sufficiently given if sent by (i) registered or certified mail, postage prepaid, addressed as follows, (ii) facsimile to the facsimile numbers identified below or (iii) overnight courier (such as UPS or FedEx), addressed as follows:

 

If to SRKP 17:

 

SRKP 17, Inc.

4737 North Ocean Drive, Suite 207

Lauderdale by the Sea, FL 33308

Attention: Richard Rappaport

Telecopy No.: (310) 843-9304

If to the Stockholders:

to the address set forth next to the name of each of the Stockholders in Schedule I.

or such other person or address as shall be furnished in writing by any of the parties and any such notice or communication shall be deemed to have been given as of the date so mailed.

 

 

3.3 Construction. The validity, enforcement and construction of this Agreement shall be governed by the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.

 

3.4 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legatees, assigns and transferees, as the case may be.

 

3.5 Severability. If any provision or section of this Agreement is determined to be void or otherwise unenforceable, it shall not affect the validity or enforceability of any other provisions of this Agreement which shall remain enforceable in accordance with their terms.

 

3.6 Interpretation. The headings and subheadings contained in this Agreement are for reference only and for the benefit of the parties and shall not be considered in the interpretation or construction of this Agreement. This Agreement shall be construed and interpreted without regard to any rule or presumption requiring that it be construed or interpreted against the party causing it to be drafted.

 

3.7 Execution in Counterparts. This Agreement may be executed in any number of counterparts (including facsimile counterparts), each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

 

3.8 Amendments. This Agreement may be amended from time to time but only by written agreement signed by all of the parties hereto.

 

3.9 Entire Agreement. This Agreement constitutes the entire understanding and agreement of the parties relating to the subject matter hereof and supersedes any and all prior understandings, agreements, negotiations and discussions, both written and oral, between the parties hereto with respect to the subject matter hereof.

 

[Signatures appear on following page]

 

IN WITNESS WHEREOF, the parties have executed this Share and Warrant Cancellation Agreement as of the day and year first above written.

 

SRKP 17, INC.			STOCKHOLDERS
By:	/s/ Richard Rappaport		/s/ Debbie Schwartzberg
Name:	Richard Rappaport		Debbie Schwartzberg
Title:	President
			/s/ Thomas Poletti
			Thomas Poletti
			/s/ Richard Rappaport
			WestPark Financial Services, LLC
			By: Richard Rappaport
			Its: President
			/s/ Richard Rappaport
			Richard Rappaport
			/s/ Anthony Pintsopoulos
			Anthony Pintsopoulos
			/s/ Richard Rappaport
			Amanda Rappaport Trust
			By: Richard Rappaport
			Its: Trustee
			/s/ Richard Rappaport
			Kailey Rappaport Trust
			By: Richard Rappaport
			Its: Trustee
			/s/ Kevin DePrimio
			Kevin DePrimio
			/s/ Jason Stern
			Jason Stern

 

 

			/s/ Debbie Schwartzberg
			The Julie Schwartzberg Trust dated 2/9/2000
			By: Debbie Schwartzberg
			Its: Trustee
			/s/ Debbie Schwartzberg
			The David N. Sterling Trust dated 2/3/2000
			By: Debbie Schwartzberg
			Its: Trustee

		Stockholder			Shares to be cancelled per the terms of this Agreement			Pre-Purchase Right Shares			Post-Purchase Right Shares (assuming full exercise of the Purchase Right)
1.			Debbie Schwartzberg 785 5th Avenue , Apt 10C New York, NY 10022			841,468			1,000,000			158,532
2.			The Julie Schwartzberg Trust 785 5th Avenue , Apt 10C New York, NY 10022			84,147			100,000			15,853
3.			The David N. Sterling Trust 785 5th Avenue , Apt 10C New York, NY 10022			84,147			100,000			15,853
4.			Thomas Poletti 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067			208,999			248,374			39,375
5.			WestPark Financial Services, LLC 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067			2,334,216			2,773,979			439,763
6.			Richard Rappaport 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067			955,420			1,135,420			180,000
7.			Anthony Pintsopoulos 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067			597,139			709,639			112,500
8.			Amanda Rappaport Trust 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067			268,713			319,338			50,625
9.			Kailey Rappaport Trust 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067			268,713			319,338			50,625
10.			Kevin DePrimio 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067			208,999			248,374			39,375
11.			Jason Stern 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067			119,429			141,928			22,499
						5,971,390			7,096,390			1,125,000

		Warrantholder			Warrants to be cancelled per the terms of this Agreement			Pre-Purchase Right Warrants			Post-Purchase Right Warrants (assuming full exercise of the Purchase Right)
1.			Debbie Schwartzberg 785 5th Avenue , Apt 10C New York, NY 10022			906,277			1,000,000			93,723
2.			The Julie Schwartzberg Trust 785 5th Avenue , Apt 10C New York, NY 10022			90,628			100,000			9,372
3.			The David N. Sterling Trust 785 5th Avenue , Apt 10C New York, NY 10022			90,628			100,000			9,372
4.			Thomas Poletti 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067			225,096			248,374			23,278
5.			WestPark Financial Services, LLC 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067			2,513,995			2,773,979			259,984
6.			Richard Rappaport 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067			1,029,005			1,135,420			106,415
7.			Anthony Pintsopoulos 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067			643,130			709,639			66,509
8.			Amanda Rappaport Trust 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067			289,409			319,338			29,929
9.			Kailey Rappaport Trust 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067			289,409			319,338			29,929
10.			Kevin DePrimio 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067			225,096			248,374			23,278
11.			Jason Stern 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067			128,626			141,928			13,302
						6,431,299			7,096,390			665,091