At the First Closing on February 20, 2008, we paid Syrei Limited, the selling Stockholder of Syrei, an aggregate of 75,000,000 shares of Ariel Way restricted common stock. These restricted shares of common stock were provided by the Company’s CEO on behalf of the Company, until the Company can increase its authorized number of shares and can issue shares. In addition, the Company issued to the Stockholder of Syrei a promissory note in the principal amount of $2,000,000, for a payment to take place no later than 135 days after completed audit of the financial statements of Syrei and its Subsidiary, but no later than 150 days after the First Closing. The promissory note is secured by all shares of the common stock of the acquired Syrei and will be held in escrow, pursuant to the terms and conditions of an Acquisition Pledge and Escrow Agreement. The payment of the $2,000,000 is defined as the Second Closing. In addition, the Company shall also pay to the Stockholder of Syrei an additional principal amount of $2,000,000 one year after the signing of the Merger Agreement. This additional payment shall be reduced per a formula, if the revenue and EBITDA achieved during the year prior to the payment do not meet thresholds defined in a mutually agreed to Business Plan.
