Exhibit 10.1
SHARE EXCHANGE AGREEMENT

by and among

SKY DIGITAL STORES CORP.,
a Nevada corporation

and

HONGKONG FIRST DIGITAL HOLDING LIMITED
a Hong Kong corporation
 
 
and

the Shareholders of
HONGKONG FIRST DIGITAL HOLDING LIMITED

Dated as of May 5, 2011

 
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INDEX OF SCHEDULES AND EXHIBITS
 
Exhibits:
 
A. Certain Definitions
 
Schedules:
 
1.  Shareholders of HONGKONG FIRST DIGITAL HOLDING LIMITED.
 
2.  HONGKONG FIRST DIGITAL HOLDING LIMITED Disclosure Schedule
 

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SHARE EXCHAGE AGREEMENT
 
This Share Exchange Agreement (the “Agreement”) dated as of May 5, 2011, is
entered into by and among SKY DIGITAL STORES CORP., a Nevada corporation (“SKYC”
or the “Company”), HONGKONG FIRST DIGITAL HOLDING LIMITED, a limited liability
company organized under the laws of Hong Kong (“FDH”), and the shareholders of
FDH as set forth on Schedule 1 to this Agreement (individually, a “Shareholder”
and, collectively, the “Shareholders”). Certain capitalized terms used in this
Agreement are defined on Exhibit A.
 
RECITALS
 
WHEREAS, SKYC is a publicly traded corporation on the Over-The-Counter Bulletin
Board (the “OTCBB”);

WHEREAS, FDH is a limited liability company organized under the laws of Hong
Kong with 10,000 shares of common stock issued and outstanding (the “FDH
Shares”), all of which are owned, directly or indirectly, by the Shareholders
set forth on Schedule 1. FDH owns (i) 100% of the issued and outstanding capital
stock of Shenzhen Dong Sen Mobile Communication Technology Co., Ltd (also known
and do business as Shenzhen Donxon Mobile Communication Technology Co., Ltd,
“Donxon”), a company organized under the laws of the People’s Republic of China
(“China” or the “PRC”); and (ii) 100% of the issued and outstanding capital
stock of Shenzhen Xing Tian Kong Digital Company Limited (“XTK”), a PRC company.
XTK is the holder of 100% of the issued and outstanding capital stock of
Shenzhen Da Sheng Communication Technology Company Limited (also known and do
business as Shenzhen Dasen Communication Technology Company Limited, “Dasen”), a
PRC company. Dasen is the holder of 70% of the issued and outstanding capital
stock of Foshan Da Sheng Communication Chain Service Company Limited (also known
and do business as Foshan Dasen Communication Chain Service Co. Ltd, “FDSC”), a
PRC company;
 
WHEREAS, SKYC agrees to acquire up to 100% of the issued and outstanding FDH
Shares from the Shareholders in exchange for the issuance of certain shares of
SKYC (the “Exchange”) and the Shareholders agree to exchange their FDH Shares
for shares of common stock of SKYC on the terms described herein. On the Closing
Date (as defined in Section 4.05), FDH will become a wholly-owned subsidiary of
SKYC and SKYC will own 100% of Donxon, 100% of XTK, 100% of Dasen and 70% of
FDSC indirectly through FDH;
 
WHEREAS, the boards of directors of SKYC and FDH have determined, subject to the
terms and conditions set forth in this Agreement, that the transaction
contemplated hereby is desirable and in the best interests of their
stockholders, respectively.  This Agreement is being entered into for the
purpose of setting forth the terms and conditions of the proposed acquisition.
 
AGREEMENT
 
NOW THEREFORE, on the stated premises and for and in consideration of the mutual
covenants and agreements hereinafter set forth and the mutual benefits to the
parties to be derived herefrom, and intending to be legally bound hereby, it is
hereby agreed as follows:
 
 
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ARTICLE I.
EXCHANGE OF SHARES
 
1.1 
THE EXCHANGE.

On the terms and subject to the conditions set forth in this Agreement, on the
Closing Date, each of the Shareholders who has elected to accept the exchange
offer described herein by executing this Agreement, shall assign, transfer and
deliver, free and clear of all liens, pledges, encumbrances, charges,
restrictions or known claims of any kind, nature, or description, the number of
FDH Shares set forth on the Schedule 1 attached hereto, constituting all of the
FDH Shares held by such shareholder; the objective of such Exchange being the
acquisition by SKYC of not less than 100% of the issued and outstanding FDH
Shares.  In exchange for the transfer of such securities by the Shareholders,
SKYC shall issue to the Shareholders, his affiliates or assigns, a total of
23,716,035 shares pursuant to Section 1.2 below, representing 97.56% of the
total common shares of SKYC, based on a total of 24,309,066 common shares of
SKYC outstanding immediately after the Closing, for all of the outstanding FDH
Shares held by the Shareholders (the “Exchange Shares”). At the Closing Date,
each of the Shareholders shall, on surrender of his certificate or certificates
representing his FDH shares to SKYC or its registrar or transfer agent, be
entitled to receive a certificate or certificates evidencing his proportionate
interest in the Exchange Shares.
 
1.2 
PURCHASE PRICE.

As full consideration for the sale, assignment, transfer and delivery of the
Shares by the Shareholders to SKYC, and upon the terms and subject to all of the
conditions contained herein, SKYC shall issue to the Shareholders an aggregate
of 23,716,035 shares of restricted SKYC Common Stock (the “Acquisition Shares”)
at $0.20 per share, to the Shareholders. The parties understand and acknowledge
that such exchange is based upon a valuation of FDH at $4,743,207, which is the
audited net assets value as of December 31, 2010 of FDH.
 
1.3 
MECHANICS OF EXCHANGE.

 
            (a) 
At the Closing (as defined below), each Shareholder shall be entitled to
surrender the documents, certificate or certificates that immediately prior to
the Closing represented the FDH Common Stock (the “Certificates”) to the
exchange agent designated by SKYC in exchange for the Acquisition Shares.

 
            (b) 
Promptly after the Closing, SKYC or its designated exchange agent shall make
available to each Shareholder a letter of transmittal and instructions for use
in effecting the surrender of Certificates in exchange for the Acquisition
Shares. Upon surrender of a Certificate to such exchange agent together with the
letter of transmittal, duly executed, the Shareholder shall be entitled to
receive in exchange therefore such number of Acquisition Shares as such
Shareholder has the right to receive in respect of the Certificate so
surrendered pursuant to the provisions of this Article I.

 
1.4 
NO FRACTIONAL SHARES.

No fraction of a share of SKYC Common Stock shall be issued in the Exchange. In
lieu of fractional shares, the Shareholders upon surrender of their stock
certificates shall be paid an amount in cash, without interest, rounded to the
nearest cent, determined by multiplying the fractional interest to which such
Shareholder would otherwise be entitled to by the SKYC Stock Price as of $0.20
per share agreed by all parties.
 
1.5 
CLOSING.

The closing of the transactions contemplated by this Agreement (the “Closing”)
shall take place in New York, on or before May 5, 2011, (the “Closing Date”);
provided, however, that if all of the other conditions set forth in Articles VI
and VII hereof are not satisfied or waived, unless this agreement has been
terminated under Section 9 hereof, or at such date, the Closing Date shall be
the business day following the day on which all such conditions have been
satisfied or waived, or at such other date, time and place as SKYC, FDH, and the
Shareholders shall agree.
 
 
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ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF FDH
 
Except as set forth in the Disclosure Schedule attached hereto provided by FDH
(the “FDH Disclosure Schedule”), the parts of which are numbered to correspond
to the section numbers of this Agreement, each of FDH and the Shareholders
represents and warrants jointly and severally to SKYC as follows:
 
2.1
ORGANIZATION AND QUALIFICATION.

 
                 (a) 
FDH is a company duly incorporated, validly existing, and in good standing under
the laws of Hong Kong and has the corporate power and is duly authorized under
all applicable laws, regulations, ordinances, and orders of public authorities
to carry on its business in all material respects as it is now being conducted. 
Included in the Schedule 1 are complete and correct copies of the memorandum of
association and articles of association of FDH as in effect on the date hereof. 
The execution and delivery of this Agreement does not, and the consummation of
the transactions contemplated hereby will not, violate any provision of FDH’s
memorandum of association or articles of association.  FDH has taken all actions
required by law, its memorandum of association and articles of association, or
otherwise to authorize the execution and delivery of this Agreement.  FDH has
full power, authority, and legal capacity and has taken all actions required by
law, its memorandum of association and articles of association, and otherwise to
consummate the transactions herein contemplated.

                (b) 
Each member of FDH is duly formed or organized, validly existing and in good
standing under the laws of its jurisdiction of organization and has the
requisite power and authority to own, lease and operate its assets and
properties and to carry on its business as it is now being or currently planned
by each member of FDH to be conducted.  Each member of FDH is in possession of
all approvals necessary to own, lease and operate the properties it purports to
own, operate or lease, to carry on its business as it is now being conducted, to
consummate the Transactions contemplated under this Agreement.  No member of FDH
is in violation of any of the provisions of their respective charter documents. 
The corporate records of each member of FDH contain true, complete and accurate
records of meetings and consents in lieu of meetings of its board of directors
(and any committees thereof), similar governing bodies and holders of its
registered capital, since the time of their respective organization, and such
corporate records have been heretofore delivered to SKYC.  The ownership records
of each FDH member’s registered capital are true, complete and accurate records
of such ownership as of the date of such records and contain all transfers of
such registered capital since the time of their respective organization, and
such ownership records have been heretofore delivered to SKYC.  No member of FDH
is required to be qualified to do business as a foreign corporation in any other
jurisdiction.

 
2.2
SUBSIDIARIES.

 
FDH owns (i) 100% of the issued and outstanding capital stock of Donxon, a
company organized under the laws of the PRC; and (ii) 100% of the issued and
outstanding capital stock of XTK, a company organized under the laws of the PRC.
XTK is the holder of 100% of the issued and outstanding capital stock of Dasen,
a company organized under the laws of the PRC. Dasen is the holder of 70% of
FDSC, a company organized under the laws of the PRC. For purposes hereinafter,
the term “FDH” also includes the above subsidiaries.
 
 
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2.3
MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION.

 
The copies of the Memorandum of Association and Articles of Association of FDH
(collectively, the “Organizational Documents”) that have been delivered to SKYC
prior to the execution of this Agreement are true and complete and have not been
amended or repealed. FDH are not in violation or breach of any of the provisions
of the Organizational Documents, except for such violations or breaches which,
in the aggregate, will not have a Material Adverse Effect on FDH.
 
2.4
AUTHORIZATION AND VALIDITY OF THIS AGREEMENT.

 
This Agreement and each of the Transactional Agreements constitute the legal,
valid and binding obligation of each person or entity who is a party thereto
(other than SKYC), enforceable against each such person or entity in accordance
with its terms, except as such enforcement is limited by general equitable
principles, or by bankruptcy, insolvency and other similar laws affecting the
enforcement of creditors rights generally. Each of the Shareholders and FDH has
all requisite legal capacity to execute and deliver this Agreement and the
Transactional Agreements to which he or she is a party, and to perform its, his
or her obligations hereunder and thereunder. The execution and delivery by FDH
and each Shareholder of this Agreement and the Transaction Agreements (to the
extent either is a party thereto), and the consummation of the transactions
contemplated herein and therein (the “Transactions”) have been authorized by all
necessary corporate or other action on the part of FDH and each of the
Shareholders. This Agreement and the Transaction Agreements have been duly
executed and delivered by the parties thereto (other than SKYC).
 
2.5
NO VIOLATION.

 
The execution of this Agreement and the consummation of the transactions
contemplated by this Agreement will not result in the breach of any term or
provision of, constitute a default under, or terminate, accelerate or modify the
terms of any indenture, mortgage, deed of trust, or other material agreement, or
instrument to which FDH is a party or to which any of its assets, properties or
operations are subject to.
 
2.6
CAPITALIZATION AND RELATED MATTERS.

 
                 (a) 
Capitalization. The Shareholders, as of the Closing Date, are the lawful, record
and beneficial owners of the FDH Shares set forth opposite each Shareholder’s
name on Schedule 1 attached hereto. The Shareholders have, as of the date hereof
and as of the Closing Date, valid and marketable title to their respective
ownership interest of FDH, free and clear of all Liens (including, without
limitation, any claims of spouses under applicable community property laws) and
are the lawful, record and beneficial owners of all of the FDH Shares. Except as
is issued to and held by the Shareholders, no other class of capital stock or
other security of FDH, as applicable, is authorized, issued, reserved for
issuance or outstanding. At the Closing, SKYC will be vested with good and
marketable title to the ownership or the Shares, free and clear of all Liens
(including, without limitation, any claims of spouses under applicable community
property laws). No legend or other reference to any purported Lien appears upon
any certificate representing the Shares. Each of the Shares has been duly
authorized and validly issued and is fully paid and nonassessable. None of the
outstanding capital or other securities of FDH was issued, redeemed or
repurchased in violation of the Securities Act of 1933, as amended (the
“Securities Act”), or any other securities or “blue sky” laws.

 
                 (b) 
No Redemption Requirements. There are no authorized or outstanding options,
warrants, equity securities, calls, rights, commitments or agreements of any
character by which FDH or any of its shareholders is obligated to issue, deliver
or sell, or cause to be issued, delivered or sold, any shares of capital stock
or other securities of FDH. There are no outstanding contractual obligations
(contingent or otherwise) of FDH to retire, repurchase, redeem or otherwise
acquire any outstanding shares of capital stock of, or other ownership interests
in, FDH or to provide funds to or make any investment (in the form of a loan,
capital contribution or otherwise) in any other entity.

 
 
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2.7
COMPLIANCE WITH LAWS AND OTHER INSTRUMENTS.

 
To the best of its knowledge, FDH has complied with all applicable statutes and
regulations of any federal, state, or other governmental entity or agency
thereof, except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets, or condition of
FDH or except to the extent that noncompliance would not result in the
occurrence of any material liability for FDH.  This compliance includes, but is
not limited to, the filing of all reports to date with federal and state
securities authorities.
 
2.8
CERTAIN PROCEEDINGS.

 
There are no outstanding or pending proceeding that has been commenced against
or involving FDH or any of its assets and, to the knowledge of FDH and the
Shareholders, no matters of the foregoing nature are contemplated or threatened.
None of FDH or the Shareholders have been charged with, and is not threatened
with, or under any investigation with respect to, any allegation concerning any
violation of any provision of any federal, provincial, local or foreign law,
regulation, ordinance, order or administrative ruling, and is not in default
with respect to any order, writ, injunction or decree of any Governmental Body.
 
2.9
NO BROKERS OR FINDERS.

 
None of FDH, its shareholders, officers, directors, independent contractors,
consultants, agents or employees has agreed to pay, or has taken any action that
will result in any person or entity becoming obligated to pay or entitled to
receive, any investment banking, brokerage, finder’s or similar fee or
commission in connection with this Agreement. FDH and its Shareholders shall
jointly and severally indemnify and hold SKYC harmless against any liability or
expense arising out of, or in connection with, any such claim.
 
2.10
TITLE TO AND CONDITION OF PROPERTIES.

 
FDH has good, valid and marketable title to all of its properties and assets
(whether real, personal or mixed, and whether tangible or intangible) reflected
as owned in its books and records, free and clear of all Liens. FDH owns or
holds under valid leases or other rights to use all real property, plants,
machinery, equipment and all assets necessary for the conduct of its business as
presently conducted, except where the failure to own or hold such property,
plants, machinery, equipment and assets would not have a Material Adverse Effect
on FDH. No Person other than FDH owns or has any right to the use or possession
of the assets used in FDH’s business. The material buildings, plants, machinery
and equipment necessary for the conduct of the business of FDH as presently
conducted are structurally sound, are in good operating condition and repair and
are adequate for the uses to which they are being put or would be put in the
ordinary course of business, in each case, taken as a whole, and none of such
buildings, plants, machinery or equipment is in need of maintenance or repairs,
except for ordinary, routine maintenance and repairs that are not material in
nature or cost.
 
 
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2.11
ABSENCE OF UNDISCLOSED LIABILITIES.

 
FDH has no debt, obligation or liability (whether accrued, absolute, contingent,
liquidated or otherwise, whether asserted or unasserted, whether due or to
become due, whether or not known to FDH) arising out of any transaction entered
into prior to the Closing Date or any act or omission prior to the Closing Date
which individually or taken together would constitute a Material Adverse Effect
on FDH and have no debt, obligation or liability to each other or any of the
Shareholders or their affiliates, except to the extent specifically set forth on
or reserved against on the balance sheet of FDH. The financial statements are
consistent with the books and records of FDH and fairly present in all material
respects the financial condition, assets and liabilities of FDH, as applicable,
taken as a whole, as of the dates and periods indicated, and were prepared in
accordance with GAAP (except as otherwise indicated therein or in the notes
thereto).
 
2.12
CHANGES.

 
FDH has not consummated any of the following activities since December 31, 2010:
 
(a) 
Ordinary Course of Business. Conducted its business other than in the Ordinary
Course of Business, except for this Agreement.

 
(b) 
Loans. Made any loans or advances to any Person other than travel advances and
reimbursement of expenses made to employees, officers and directors in the
Ordinary Course of Business;

 
(c) 
Compensation and Bonuses. Made any payments of any bonuses or compensation other
than regular salary payments, increase in the salaries, or payment on any of its
debts in the Ordinary Course of Business, to any of its Shareholders, directors,
officers, employees, independent contractors or consultants or entry into by it
of any employment, severance, or similar contract with any director, officer, or
employee, independent contractor or consultant; Adopted, or increased in the
payments to or benefits under, any profit sharing, bonus, deferred compensation,
savings, insurance, pension, retirement, or other employee benefit plan for or
with any of its employees;

 
(d) 
Liens. Created or permitted to exist any Lien on any of its properties or assets
other than Permitted Liens;

 
(e) 
Capital Stock. Issued, sold, disposed of or encumbered, or authorized the
issuance, sale, disposition or encumbrance of, or granted or issued any option
to acquire any shares of its capital stock or any other of its securities or any
Equity Security, or altered the term of any of its outstanding securities or
made any change in its outstanding shares of capital stock or its
capitalization, whether by reason of reclassification, recapitalization, stock
split, combination, exchange or readjustment of shares, stock dividend or
otherwise; changed its authorized or issued capital stock; granted any stock
option or right to purchase shares of its capital stock; issued any security
convertible into any of its capital stock; granted any registration rights with
respect to shares of its capital stock; purchased, redeemed, retired, or
otherwise acquired any shares of its capital stock; declared or paid any
dividend or other distribution or payment in respect of shares of capital stock
of any other entity;

 
 
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(f) 
Dividends. Declared, set aside, made or paid any dividend or other distribution
to any of its Shareholders;

 
(g) 
Material Contracts. Terminated or modified any of its Material Contract except
for termination upon expiration in accordance with the terms of such agreements,
a description of which is included in the FDH Disclosure Schedule;

 
(h) 
Claims. Released, waived or cancelled any claims or rights relating to or
affecting FDH in excess of $100,000 in the aggregate or instituted or settled
any Proceeding involving in excess of $100,000 in the aggregate;

 
(i) 
Discharged Liabilities. Paid, discharged, cancelled, waived or satisfied any
claim, obligation or liability in excess of $100,000 in the aggregate, except
for liabilities incurred prior to the date of this Agreement in the Ordinary
Course of Business;

 
(j) 
Indebtedness. Created, incurred, assumed or otherwise become liable for any
Indebtedness or commit to any endeavor involving a commitment in excess of
$100,000 in the aggregate, other than contractual obligations incurred in the
Ordinary Course of Business;

 
(k) 
Guarantees. Guaranteed or endorsed in a material amount any obligation or net
worth of any Person;

  
(l)  
Accounting. Changed its method of accounting or the accounting principles or
practices utilized in the preparation of its financial statements, other than as
required by GAAP;

 
2.13 
MATERIAL CONTRACTS.

 
             (a)  
FDH has delivered to SKYC prior to the date of this Agreement, true, correct and
complete copies of each of its Material Contracts.

 
             (b)  
The Material Contracts of FDH are valid and binding agreements of FDH, as
applicable, and are in full force and effect and are enforceable in accordance
with their terms. Except as would not have a Material Adverse Effect, FDH is not
in breach or default of any of its Material Contracts to which it is a party
and, to the knowledge of FDH, no other party to any of its Material Contracts is
in breach or default thereof. Except as would not have a Material Adverse
Effect, no event has occurred or circumstance has existed that (with or without
notice or lapse of time) would (a) contravene, conflict with or result in a
violation or breach of, or become a default or event of default under, any
provision of any of its Material Contracts or (b) permit FDH or any other person
the right to declare a default or exercise any remedy under, or to accelerate
the maturity or performance of, or to cancel, terminate or modify any of its
Material Contracts. FDH has not received any notice and has no knowledge of any
pending or threatened cancellation, revocation or termination of any of its
Material Contracts to which it is a party, and there are no renegotiations of,
or attempts to renegotiate.

 
 
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2.14
LICENSES.

 
Except as would not have a Material Adverse Effect, FDH possesses from the
appropriate Governmental Body all licenses, permits, authorizations, approvals,
franchises and rights that are necessary for it to engage in its business as
currently conducted and to permit it to own and use its properties and assets in
the manner in which it currently owns and uses such properties and assets
(collectively, “Permits”). Except as would not have a Material Adverse Effect,
FDH has not received any written notice from any Governmental Body or other
Person that FDH is lacking any license, permit, authorization, approval,
franchise or right necessary for FDH to engage in its business as currently
conducted and to permit FDH to own and use its properties and assets in the
manner in which it currently owns and uses such properties and assets. Except as
would not have a Material Adverse Effect, the Permits are valid and in full
force and effect. Except as would not have a Material Adverse Effect, no event
has occurred or circumstance exists that may (with or without notice or lapse of
time): (a) constitute or result, directly or indirectly, in a violation of or a
failure to comply with any Permit; or (b) result, directly or indirectly, in the
revocation, withdrawal, suspension, cancellation or termination of, or any
modification to, any Permit. Neither FDH nor the Shareholders has received any
written notice from any Governmental Body or any other Person regarding: (a) any
actual, alleged, possible or potential contravention of any Permit; or (b) any
actual, proposed, possible or potential revocation, withdrawal, suspension,
cancellation, termination of, or modification to, any Permit. All applications
required to have been filed for the renewal of such Permits have been duly filed
on a timely basis with the appropriate Persons, and all other filings required
to have been made with respect to such Permits have been duly made on a timely
basis with the appropriate Persons. All Permits are renewable by their terms or
in the Ordinary Course of Business without the need to comply with any special
qualification procedures or to pay any amounts other than routine fees or
similar charges, all of which have, to the extent due, been duly paid.
  
2.15
GOVERNMENTAL INQUIRIES.

 
FDH has made available to SKYC a copy of each material written inspection
report, questionnaire, inquiry, demand or request for information received by
FDH from (and the response of FDH thereto), and each material written statement,
report or other document filed by FDH with, any Governmental Body.
  
2.16
EMPLOYEE MATTERS.

 
                 (a) 
No former or current employee of FDH is a party to, or is otherwise bound by,
any agreement or arrangement (including, without limitation, any
confidentiality, non-competition or proprietary rights agreement) that in any
way adversely affected, affects, or will affect (i) the performance of his, her
or its duties to FDH, or (ii) the ability of FDH to conduct its business.

                (b) 
FDH has no employees, directors, officers, consultants, independent contractors,
representatives or agents whose contract of employment or engagement cannot be
terminated by three months’ notice.

                 (c) 
FDH is not required or obligated to pay, has not paid any moneys other than in
respect of remuneration, pension or other benefits pursuant to plans described
in the FDH Disclosure Schedule, to or for the benefit of, any director, officer,
employee, consultant, independent contractor, representative or agent of FDH.

                (d) 
FDH are in compliance with all applicable laws respecting employment and
employment practices, terms and conditions or employment and wages and hours,
and are not engaged in any unfair labor practice. There is no labor strike,
dispute, shutdown or stoppage actually pending or, to the knowledge of FDH or
the Shareholders, threatened against or affecting FDH.

  
 
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2.17
DISCLOSURE.

 
                 (a) 
Any information set forth in this Agreement, the FDH Disclosure Schedule, or the
Transaction Agreements shall be true, correct and complete in all material
respects.

 
                 (b) 
No statement, representation or warranty of FDH or the Shareholders in this
Agreement (taken with the Schedules) or the Transaction Agreements or any
exhibits or schedules thereto contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements herein or
therein, taken as a whole, in light of the circumstances in which they were
made, not misleading.

 
                (c) 
Except as set forth in the FDH Disclosure Schedule, the Shareholders and FDH
have no knowledge of any fact that has specific application to FDH (other than
general economic or industry conditions) and that adversely affects the assets
or the business, prospects, financial condition, or results of operations of
FDH.

 
                (d) 
In the event of any inconsistency between the statements in the body of this
Agreement and those in the Schedules (other than an exception expressly set
forth as such in the Schedules with respect to a specifically identified
representation or warranty), the statements in the Schedules shall control.

 
                (e) 
The books of account, minute books and stock record books of FDH, all of which
have been made available to SKYC, are complete and accurate and have been
maintained in accordance with sound business practices. Without limiting the
generality of the foregoing, the minute books of FDH contain complete and
accurate records of all meetings held, and corporate action taken, by the
shareholders, the boards of directors, and committees of the boards of directors
of FDH, as applicable, and no meeting of any such shareholders, board of
directors, or committee has been held for which minutes have not been prepared
and are not contained in such minute books.

 
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SKYC
 
As an inducement to, and to obtain the reliance of FDH and Shareholders, except
as set forth in the SKYC Schedules (as hereinafter defined), SKYC represents and
warrants, as of the date hereof and as of the Closing Date, as follows:
 
3.1
ORGANIZATION; GOOD STANDING.

 
SKYC is duly incorporated, validly existing, and in good standing under the laws
of Nevada, has all requisite authority and power (corporate and other),
governmental licenses, authorizations, consents and approvals to carry on its
business as presently conducted and as contemplated to be conducted, to own,
hold and operate its properties and assets as now owned, held and operated by
it, to enter into this Agreement, to carry out the provisions hereof except
where the failure to be in good standing or to have such governmental licenses,
authorizations, consents and approvals will not, in the aggregate, either (i)
have a Material Adverse Effect on the business, assets or financial condition of
SKYC, or (ii) impair the ability of SKYC to perform its material obligations
under this Agreement. SKYC is duly qualified, licensed or domesticated as a
foreign corporation in good standing in each jurisdiction wherein the nature of
its activities or its properties owned or leased requires such qualification,
licensing or domestication, except where the failure to be so qualified,
licensed or domesticated will not have a Material Adverse Effect.
 
 
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3.2
CAPITALIZATION.

 
As of the Closing Date, SKYC’s authorized capitalization consists of (a)
750,000,000 shares of common stock, par value $0.001 per share, of which 578,031
shares are issued and outstanding, and (b) 25,000,000 shares of preferred stock,
par value $0.001 per share, of which no preferred shares are issued. All issued
and outstanding shares are legally issued, fully paid, and non-assessable and
not issued in violation of the preemptive or other rights of any person. As of
the Closing Date, no shares of SKYC’s common stock were reserved for issuance
upon the exercise of outstanding options to purchase the common shares; (iv) no
common shares were reserved for issuance upon the exercise of outstanding
warrants to purchase SKYC common shares; (v) no shares of preferred stock were
reserved for issuance to any party; and (vi) no common shares were reserved for
issuance upon the conversion of SKYC preferred stock or any outstanding
convertible notes, debentures or securities.  All outstanding SKYC common shares
have been issued and granted in compliance with (i) all applicable securities
laws and (in all material respects) other applicable laws and regulations, and
(ii) all requirements set forth in any applicable contracts.
 
3.3
AUTHORITY; BINDING NATURE OF AGREEMENTS.

 
(a) 
The execution, delivery and performance of this Agreement, and all other
agreements and instruments contemplated to be executed and delivered by SKYC in
connection herewith have been duly authorized by all necessary corporate action
on the part of SKYC and its board of directors.

 
                (b) 
This Agreement, the Transactional Agreements, and all other agreements and
instruments contemplated to be executed and delivered by SKYC constitute the
legal, valid and binding obligation of SKYC, enforceable against SKYC in
accordance with their terms, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency, moratorium or other laws affecting
the enforcement of creditors’ rights generally and by general principles of
equity regardless of whether such enforceability is considered in a proceeding
in law or equity.

 
                 (c) 
There is no pending Proceeding, and, to SKYC’s knowledge, no Person has
threatened to commence any Proceeding that challenges, or that may have the
effect of preventing, delaying, making illegal or otherwise interfering with,
the Exchange or SKYC’s ability to comply with or perform its obligations and
covenants under the agreements, and, to the knowledge of SKYC, no event has
occurred, and no claim, dispute or other condition or circumstance exists, that
might directly or indirectly give rise to or serve as a basis for the
commencement of any such Proceeding.

 
3.4
NON-CONTRAVENTION; CONSENTS.

 
The execution and delivery of this Agreement and the other Transactional
Agreements, and the consummation of the Exchange by SKYC will not, directly or
indirectly (with or without notice or lapse of time):
 
 
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(a) 
contravene, conflict with or result in a material violation of (i) SKYC’s
Certificate of Incorporation or Bylaws, or (ii) any resolution adopted by SKYC’s
board of directors or any committee thereof or the stockholders of SKYC;

 
(b) 
to the knowledge of SKYC, contravene, conflict with or result in a material
violation of, or give any Governmental Body the right to challenge the Exchange
or to exercise any remedy or obtain any relief under, any legal requirement or
any Order to which SKYC or any material assets owned or used by it are subject
to;

 
(c) 
to the knowledge of SKYC, cause any material assets owned or used by SKYC to be
reassessed or revalued by any taxing authority or other Governmental Body;

 
(d) 
to the knowledge of SKYC, contravene, conflict with or result in a material
violation of any of the terms or requirements of, or give any Governmental Body
the right to revoke, withdraw, suspend, cancel, terminate or modify, any
Governmental Authorization that is held by SKYC or that otherwise relates to
SKYC’s business or to any of the material assets owned or used by SKYC, where
such contraventions, conflict, violation, revocation, withdrawal, suspension,
cancellation, termination or modification would have a Material Adverse Effect
on SKYC;

 
(e) 
contravene, conflict with or result in a material violation or material breach
of, or material default under, any contract to which SKYC is a party;

 
(f) 
give any Person the right to any payment by SKYC or give rise to any
acceleration or change in the award, grant, vesting or determination of options,
warrants, rights, severance payments or other contingent obligations of any
nature whatsoever of SKYC in favor of any Person, in any such case as a result
of the Exchange; or

 
(g) 
result in the imposition or creation of any material Lien upon or with respect
to any material asset owned or used by SKYC.

 
Except for Consents, filings or notices required under the state and federal
securities laws or any other laws or regulations or as otherwise contemplated in
this Agreement and the other Transactional Agreements, SKYC will not be required
to make any filing with or give any notice to, or obtain any Consent from, any
Person in connection with the execution and delivery of this Agreement and the
other Transactional Agreements or the consummation or performance of the
Exchange.
 
3.5
FINDERS AND BROKERS.

 
(a) 
Neither SKYC nor any Person acting on behalf of SKYC has engaged any finder,
broker, intermediary or any similar Person in connection with the Exchange.

 
(b) 
SKYC has not entered into a contract or other agreement that provides that a fee
shall be paid to any Person or Entity if the Exchange is consummated.

 
 
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3.6
REPORTS AND FINANCIAL STATEMENTS; ABSENCE OF CERTAIN CHANGES.

 
                 (a) 
SKYC has filed all reports required to be filed with the SEC pursuant to the
Exchange Act (all such reports, including those to be filed prior to the Closing
Date and all registration statements and prospectuses filed by SKYC with the
SEC, are collectively referred to as the “SKYC SEC Reports”). All of the SKYC
SEC Reports, as of their respective dates of filing (or if amended or superseded
by a filing prior to the date of this Agreement, then on the date of such
filing): (i) complied in all material respects as to form with the applicable
requirements of the Securities Act or Exchange Act and the rules and regulations
thereunder, as the case may be, and (ii) did not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The audited financial
statements of SKYC included in the SKYC SEC Reports comply in all material
respects with the published rules and regulations of the SEC with respect
thereto, and such audited financial statements (i) were prepared from the books
and records of SKYC, (ii) were prepared in accordance with GAAP applied on a
consistent basis (except as may be indicated therein or in the notes or
schedules thereto) and (iii) present fairly the financial position of SKYC as of
the dates thereof and the results of operations and cash flows for the periods
then ended. The unaudited financial statements included in the SKYC SEC Reports
comply in all material respects with the published rules and regulations of the
SEC with respect thereto; and such unaudited financial statements (i) were
prepared from the books and records of SKYC, (ii) were prepared in accordance
with GAAP, except as otherwise permitted under the Exchange Act and the rules
and regulations thereunder, on a consistent basis (except as may be indicated
therein or in the notes or schedules thereto) and (iii) present fairly the
financial position of SKYC as of the dates thereof and the results of operations
and cash flows (or changes in financial condition) for the periods then ended,
subject to normal year-end adjustments and any other adjustments described
therein or in the notes or schedules thereto.

 
                 (b)
Except as specifically contemplated by this Agreement or reflected in the SKYC
SEC Reports, since December 31, 2010, there has not been (i) any material
adverse change in SKYC’s business, assets, liabilities, operations, and, to the
knowledge of SKYC, no event has occurred that is likely to have a Material
Adverse Effect on SKYC’s business, assets, liabilities or operations, (ii) any
declarations setting aside or payment of any dividend or distribution with
respect to the SKYC Common Stock other than consistent with past practices,
(iii) any material change in SKYC’s accounting principles, procedures or
methods, (iv) cancellation in writing of any material customer contract or (v)
the loss of any customer relationship which would have a Material Adverse Effect
on SKYC’s business, assets, liabilities or operations.

 
3.7
COMPLIANCE WITH APPLICABLE LAW.

 
Except as disclosed in the SKYC SEC Reports filed prior to the date of this
Agreement and except to the extent that the failure or violation would not in
the aggregate have a Material Adverse Effect on the business, results of
operations or financial condition of SKYC, to SKYC’s knowledge SKYC holds all
Governmental Authorizations necessary for the lawful conduct of its business
under and pursuant to, and the business of SKYC is not being conducted in
violation of, any Governmental Authorization applicable to SKYC.
 
3.8
COMPLETE COPIES OF REQUESTED REPORTS.

 
SKYC has delivered or made available true and complete copies of each document
that has been reasonably requested by FDH or its Shareholders.
 
 
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3.9
FULL DISCLOSURE.

 
                (a) 
Neither this Agreement (including all Schedules and Exhibits hereto) nor any of
the Transactional Agreements contemplated to be executed and delivered by SKYC
in connection with this Agreement contains any untrue statement of material
fact; and none of such documents omits to state any material fact necessary to
make any of the representations, warranties or other statements or information
contained therein not misleading.

 
                (b) 
All of the information set forth in the prospectus and all other information
regarding SKYC and the business, condition, assets, liabilities, operations,
financial performance, net income and prospects of either that has been
furnished to FDH or the Shareholders by or on behalf of SKYC or any of the
SKYC’s Representatives, is accurate and complete in all material respects.

ARTICLE IV.
COVENANTS OF FDH
 
4.1
ACCESS AND INVESTIGATION.

 
FDH ensure that, at all times during the Pre-Closing Period:
 
                 (a) 
Each of FDH and its Representatives provide SKYC and its Representatives access,
at reasonable times and with twenty-four (24) hours’ notice from SKYC to FDH, to
all of the premises and assets of FDH, to all existing books, records, Tax
Returns, work papers and other documents and information relating to FDH, and to
responsible officers and employees of FDH, and FDH and its Representatives
provide SKYC and its Representatives with copies of such existing books,
records, Tax Returns, work papers and other documents and information relating
to FDH as SKYC may request in good faith;

 
                 (b) 
Each of FDH and its Representatives confer regularly with SKYC upon its request,
concerning operational matters and otherwise report regularly (not less than
semi-monthly and as SKYC may otherwise request) to SKYC and discuss with SKYC
and its Representatives concerning the status of the business, condition,
assets, liabilities, operations, and financial performance of FDH, and promptly
notify SKYC of any material change in the business, condition, assets,
liabilities, operations, and financial performance of FDH, or any event
reasonably likely to lead to any such change.

 
4.2
OPERATION OF BUSINESS.

 
FDH shall ensure that, during the Pre-Closing Period:
 
(a) 
It conducts its operations in the Ordinary Course of Business and in the same
manner as such operations have been conducted prior to the date of this
Agreement;

 
(b) 
It uses its commercially reasonable efforts to preserve intact its current
business organization, keep available and not terminate the services of its
current officers and employees and maintain its relations and goodwill with all
suppliers, customers, landlords, creditors, licensors, licensees, employees and
other Persons having business relationships with FDH;

 
(c) 
It does not declare, accrue, set aside or pay any dividend or make any other
distribution in respect of any shares of its capital stock, and does not
repurchase, redeem or otherwise reacquire any shares of its capital stock or
other securities, except with respect to the repurchase of shares of FDH upon
termination of employees at the original purchase price pursuant to agreements
existing at the date hereof;

 
 
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(d) 
It does not sell or otherwise issue (or grant any warrants, options or other
rights to purchase) any shares of capital stock or any other securities, except
the issuance of shares of FDH pursuant to option grants to employees made under
the option plan in the Ordinary Course of Business;

 
(e) 
It does not amend its Articles of Incorporation, Bylaws or other Organizational
Documents, and does not effect or become a party to any recapitalization,
reclassification of shares, stock split, reverse stock split or similar
transaction;

(f) 
It does not revalue any of its assets, including, without limitation, writing
down the value of inventory or writing off notes or accounts receivable, except
as required under GAAP and in the Ordinary Course of Business;

(g) 
It does not establish or adopt any Employee Benefit Plan, and does not pay any
bonus or make any profit sharing or similar payment to, or increase the amount
of the wages, salary, commissions, fringe benefits or other compensation or
remuneration payable to, any of its directors, officers or employees;

 
(h) 
It does not change any of its methods of accounting or accounting practices in
any respect;

 
(i) 
It does not commence or take any action or fail to take any action which would
result in the commencement of any Proceeding;

 
(j) 
It does not (i) acquire, dispose of, transfer, lease, license, mortgage, pledge
or encumber any fixed or other assets, other than in the Ordinary Course of
Business; (ii) incur, assume or prepay any indebtedness, Indebtedness or
obligation or any other liabilities or issue any debt securities, other than in
the Ordinary Course of Business; (iii) assume, guarantee, endorse for the
obligations of any other person, other than in the Ordinary Course of Business;
(iv) make any loans, advances or capital contributions to, or investments in,
any other Person, other than in the Ordinary Course of Business; or (v) fail to
maintain insurance consistent with past practices for its business and property;

 
(k) 
It pays all debts and Taxes, files all of its Tax Returns (as provided herein)
and pays or performs all other obligations, when due;

 
(l) 
It does not hire any new officer-level employee;

 
(m) 
Except as otherwise contemplated hereunder, it does not enter into any
transaction or take any other action outside the Ordinary Course of Business;
and

 
(n) 
It does not enter into any transaction or take any other action that likely
would cause or constitute a Breach of any representation or warranty made by it
in this Agreement.

 
 
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4.3
FILINGS AND CONSENTS; COOPERATION.

 
FDH shall ensure that:
 
(a) 
Each filing or notice required to be made or given (pursuant to any applicable
Law, Order or contract, or otherwise) by FDH or the Shareholders in connection
with the execution and delivery of any of the Transactional Agreements, or in
connection with the consummation or performance of the Exchange, is made or
given as soon as possible after the date of this Agreement;

 
(b) 
Each Consent required to be obtained (pursuant to any applicable Law, Order or
contract, or otherwise) by FDH or the Shareholders in connection with the
execution and delivery of any of the Transactional Agreements, or in connection
with the consummation or performance of the Exchange, is obtained as soon as
possible after the date of this Agreement and remains in full force and effect
through the Closing Date;

 
(c) 
It promptly delivers to SKYC a copy of each filing made, each notice given and
each Consent obtained by FDH during the Pre-Closing Period; and

 
(d) 
During the Pre-Closing Period, it and its Representatives cooperate with SKYC
and SKYC’s Representatives, and prepare and make available such documents and
take such other actions as SKYC may request in good faith, in connection with
any filing, notice or Consent that SKYC is required or elects to make, give or
obtain.

 
4.4
NOTIFICATION; UPDATES TO DISCLOSURE SCHEDULES.

 
(a) 
During the Pre-Closing Period, FDH shall promptly notify SKYC in writing of:

 
(i) 
the discovery by it of any event, condition, fact or circumstance that occurred
or existed on or prior to the date of this Agreement which is contrary to any
representation or warranty made by it in this Agreement or in any of the other
Transactional Agreements, or that would upon the giving of notice or lapse of
time, result in any of its representations and warranties set forth in this
agreement to become untrue or otherwise cause any of the conditions of Closing
set forth in Article VI or Article VII not to be satisfied;

 
(ii) 
any event, condition, fact or circumstance that occurs, arises or exists after
the date of this Agreement (except as a result of actions taken pursuant to the
express written consent of SKYC) and that is contrary to any representation or
warranty made by it in this Agreement, or that would upon the giving of notice
or lapse of time, result in any of its representations and warranties set forth
in this agreement to become untrue or otherwise cause any of the conditions of
Closing set forth in Article VI or Article VII not to be satisfied;

 
(b) 
If any event, condition, fact or circumstances that is required to be disclosed
pursuant to Section 4.4(a) requires any material change in the FDH Disclosure
Schedule, or if any such event, condition, fact or circumstance would require
such a change assuming the FDH Disclosure Schedule were dated as of the date of
the occurrence, existence or discovery of such event, condition, fact or
circumstances, then FDH, as applicable, shall promptly deliver to SKYC an update
to the FDH Disclosure Schedule specifying such change (a “Disclosure Schedule
Update”).

 
(c) 
It will promptly update any relevant and material information provided to SKYC
after the date hereof pursuant to the terms of this Agreement.

 
 
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4.5
Commercially Reasonable Efforts.

 
During the Pre-Closing Period, FDH shall use its commercially reasonable efforts
to cause the conditions set forth in Article VI and Article VII to be satisfied
on a timely basis and so that the Closing can take place on or before May 5,
2011, in accordance with Section 1.5, and shall not take any action or omit to
take any action, the taking or omission of which would or could reasonably be
expected to result in any of the representations and warranties of FDH set forth
in this Agreement becoming untrue, or in any of the conditions of Closing set
forth in Article VI or Article VII not being satisfied.
 
4.6
CONFIDENTIALITY; PUBLICITY.

 
FDH shall ensure that:
 
(a) 
It and its Representatives keep strictly confidential the existence and terms of
this Agreement prior to the issuance or dissemination of any mutually agreed
upon press release or other disclosure of the Exchange; and

 
(b) 
Neither it nor any of its Representatives issues or disseminates any press
release or other publicity or otherwise makes any disclosure of any nature (to
any of its suppliers, customers, landlords, creditors or employees or to any
other Person) regarding any of the Exchange; except in each case to the extent
that it is required by law to make any such disclosure regarding such
transactions or as separately agreed by the parties; provided, however, that if
it is required by law to make any such disclosure, FDH advises SKYC, at least
five business days before making such disclosure, of the nature and content of
the intended disclosure.

 
ARTICLE V.
COVENANTS OF SKYC
 
5.1
NOTIFICATION.

 
During the Pre-Closing Period, SKYC shall promptly notify FDH in writing of:
 
(a) 
the discovery by SKYC of any event, condition, fact or circumstance that
occurred or existed on or prior to the date of this Agreement which is contrary
to any representation or warranty made by SKYC in this Agreement; and

 
(b) 
any event, condition, fact or circumstance that occurs, arises or exists after
the date of this Agreement (except as a result of actions taken pursuant to the
written consent of FDH) and that is contrary to any representation or warranty
made by SKYC in this Agreement;

 
5.2
FILINGS AND CONSENTS; COOPERATION.

 
SKYC shall ensure that:
 
(a) 
Each filing or notice required to be made or given (pursuant to any applicable
Law, Order or contract, or otherwise) by SKYC in connection with the execution
and delivery of any of the Transactional Agreements, or in connection with the
consummation or performance of the Exchange, is made or given as soon as
possible after the date of this Agreement;

 
(b) 
Each Consent required to be obtained (pursuant to any applicable Law, Order or
contract, or otherwise) by SKYC in connection with the execution and delivery of
any of the Transactional Agreements, or in connection with the consummation or
performance of the Exchange, is obtained as soon as possible after the date of
this Agreement and remains in full force and effect through the Closing Date;

 
 
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(c) 
SKYC promptly delivers to FDH a copy of each filing made, each notice given and
each Consent obtained by SKYC during the Pre-Closing Period; and

 
(d) 
During the Pre-Closing Period, SKYC and its Representatives cooperate with FDH
and its Representatives, and prepare and make available such documents and take
such other actions as FDH may request in good faith, in connection with any
filing, notice or Consent that FDH is required or elects to make, give or
obtain.

 
5.3
COMMERCIALLY REASONABLE EFFORTS.

 
During the Pre-Closing Period, SKYC shall use its commercially reasonable
efforts to cause the conditions set forth in Article VI and Article VII to be
satisfied on a timely basis and so that the Closing can take place on or before
May 5, 2011 or as soon thereafter as is reasonably practical, in accordance with
Section 1.5, and shall not take any action or omit to take any action, the
taking or omission of which would or could reasonably be expected to result in
any of the representations and warranties or SKYC set forth in this Agreement
becoming untrue or in any of the conditions of closing set forth in Article VI
or Article VII not being satisfied.
 
5.4 
DISCLOSURE OF CONFIDENTIAL INFORMATION.

 
(a) 
Each of SKYC, FDH and the Shareholders acknowledges and agrees that it may
receive Confidential Information in connection with this Transaction including
without limitation, the FDH Disclosure Schedule and any information disclosed
during the due diligence process, the public disclosure of which will harm the
disclosing party’s business. The Receiving Party may use Confidential
Information only in connection with the Transaction. The results of the due
diligence review may not be used for any other purpose other than in connection
with the Transaction. Except as expressly provided in this Agreement, the
Receiving Party shall not disclose Confidential Information to anyone without
the Disclosing Party’s prior written consent. The Receiving Party shall take all
reasonable measures to avoid disclosure, dissemination or unauthorized use of
Confidential Information, including, at a minimum, those measures it takes to
protect its own confidential information of a similar nature. The Receiving
Party shall not export any Confidential Information in any manner contrary to
the export regulations of the governmental jurisdiction to which it is subject.

 
(b) 
The Receiving Party may disclose Confidential Information as required to comply
with binding orders of governmental entities that have jurisdiction over it,
provided that the Receiving Party (i) gives the Disclosing Party reasonable
notice (to the extent permitted by law) to allow the Disclosing Party to seek a
protective order or other appropriate remedy, (ii) discloses only such
information as is required by the governmental entity, and (iii) uses
commercially reasonable efforts to obtain confidential treatment for any
Confidential Information so disclosed.

 
(c) 
All Confidential Information shall remain the exclusive property of the
Disclosing Party. The Disclosing Party’s disclosure of Confidential Information
shall not constitute an express or implied grant to the Receiving Party of any
rights to or under the Disclosing Party’s patents, copyrights, trade secrets,
trademarks or other intellectual property rights.

 
 
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(d) 
The Receiving Party shall notify the Disclosing Party immediately upon discovery
of any unauthorized use or disclosure of Confidential Information or any other
breach of this Agreement by the Receiving Party. The Receiving Party shall
cooperate with the Disclosing Party in every reasonable way to help the
Disclosing Party regain possession of such Confidential Information and prevent
its further unauthorized use.

 
(e) 
The Receiving Party shall return or destroy all tangible materials embodying
Confidential Information (in any form and including, without limitation, all
summaries, copies and excerpts of Confidential Information) promptly following
the Disclosing Party’s written request; provided, however, that, subject to the
provisions of this Agreement, the Receiving Party may retain one copy of such
materials in the confidential, restricted access files of its legal department
for use only in the event a dispute arises between the parties related to the
Transaction and only in connection with that dispute. At the Disclosing Party’s
option, the Receiving Party shall provide written certification of its
compliance with this Section.

 
5.5
INDEMNIFICATION.

 
(a) 
Each of FDH and the Shareholders, jointly and severally, each shall defend,
indemnify and hold harmless SKYC, and its respective employees, officers,
directors, stockholders, controlling persons, affiliates, agents, successors and
assigns (collectively, the “SKYC Indemnified Persons”), and shall reimburse the
SKYC Indemnified Persons, for, from and against any loss, liability, claim,
damage, expense (including costs of investigation and defense and reasonable
attorneys’ fees) or diminution of value, whether or not involving a third-party
claim (collectively, “Damages”), directly or indirectly, relating to, resulting
from or arising out of:

 
(i)  
any untrue representations, misrepresentations or breach of warranty by or of
FDH or the Shareholders contained in or pursuant to this Agreement, and the FDH
Disclosure Schedule;

 
(ii) 
any breach or nonfulfillment of any covenant, agreement or other obligation by
or of FDH or the Shareholders (only to the extent made or occurring prior to or
at the Closing) contained in or pursuant to this Agreement, the Transaction
Agreements executed by FDH or any of the Shareholders in their individual
capacity, the FDH Disclosure Schedule, or any of the other agreements,
documents, schedules or exhibits to be entered into by FDH or any of the
Shareholders in their individual capacity pursuant to or in connection with this
Agreement;

 
(iii) 
all of Pre-Closing liabilities of FDH or the Shareholders; and

 
(iv) 
any liability, claim, action or proceeding of any kind whatsoever, whether
instituted or commenced prior to or after the Closing Date, which directly or
indirectly relates to, arises or results from, or occurs in connection with
facts or circumstances relating to the conduct of business of FDH, or the assets
of FDH, or events or circumstances existing on or prior to the Closing Date.

 
(b) 
SKYC shall defend, indemnify and hold harmless FDH and its respective
affiliates, agents, successors and assigns (collectively, the “FDH Indemnified
Persons”), and shall reimburse the FDH Indemnified Persons, for, from and
against any Damages, directly or indirectly, relating to, resulting from or
arising out of:

 
 
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(i) 
any untrue representation, misrepresentation or breach of warranty by or of SKYC
contained in or pursuant to this Agreement;

 
(ii) 
any breach or nonfulfillment of any covenant, agreement or other obligations by
or of SKYC contained in or pursuant to this Agreement, the Transaction
Agreements or any other agreements, documents, schedules or exhibits to be
entered into or delivered to pursuant to or in connection with this Agreement.

 
(c) 
Promptly after receipt by an indemnified party under Section 5.5 of this
Agreement of notice of a claim against it (“Claim”), such indemnified party
shall, if a claim is to be made against an indemnifying party under such
Section, give notice to the indemnifying party of such Claim, but the failure to
so notify the indemnifying party will not relieve the indemnifying party of any
liability that it may have to any indemnified party, except to the extent that
the indemnifying party demonstrates that the defense of such action is
prejudiced by the indemnified party’s failure to give such notice.

 
(d) 
A claim for indemnification for any matter not involving a third-party claim may
be asserted by notice to the Party from whom indemnification is sought.

 
ARTICLE VI.
CLOSING CONDITIONS OF SKYC
 
SKYC’s obligations to affect the Closing and consummate the Exchange are subject
to the satisfaction of each of the following conditions:
 
6.1
ACCURACY OF REPRESENTATIONS AND WARRANTIES.

 
The representations and warranties of FDH and the Shareholders in this Agreement
shall have been true and correct as of the date of this Agreement and shall be
true and correct on and as of the Closing. FDH and the Shareholders shall have
performed all obligations in this Agreement required to be performed or observed
by them on or prior to the Closing.
 
6.2
ADDITIONAL CONDITIONS TO CLOSING.

 
(a) 
All necessary approvals under federal and state securities laws and other
authorizations relating to the issuance of the Acquisition Shares and the
transfer of the Shares shall have been received.

 
(b) 
No preliminary or permanent injunction or other order by any federal, state or
foreign court of competent jurisdiction which prohibits the consummation of the
Exchange shall have been issued and remain in effect. No statute, rule,
regulation, executive order, stay, decree, or judgment shall have been enacted,
entered, issued, promulgated or enforced by any court or governmental authority
which prohibits or restricts the consummation of the Exchange. All
authorizations, consents, orders or approvals of, or declarations or filings
with, and all expirations of waiting periods imposed by, any Governmental Body
which are necessary for the consummation of the Exchange, other than those the
failure to obtain which would not materially adversely affect the consummation
of the Exchange or in the aggregate have a Material Adverse Effect on SKYC and
its subsidiaries, taken as a whole, shall have been filed, occurred or been
obtained (all such permits, approvals, filings and consents and the lapse of all
such waiting periods being referred to as the “Requisite Regulatory Approvals”)
and all such Requisite Regulatory Approvals shall be in full force and effect.

 
 
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(c) 
There shall not be any action taken, or any statute, rule, regulation or order
enacted, entered, enforced or deemed applicable to the Exchange, by any
Governmental Body which, in connection with the grant of a Requisite Regulatory
Approval, imposes any material condition or material restriction upon SKYC or
its subsidiaries or FDH, including, without limitation, requirements relating to
the disposition of assets, which in any such case would so materially adversely
impact the economic or business benefits of the Exchange as to render
inadvisable the consummation of the Exchange.

 
6.3
PERFORMANCE OF AGREEMENTS.

 
FDH or the Shareholders, as the case may be, shall have executed and delivered
each of the agreements, instruments and documents required to be executed and
delivered, and performed all actions required to be performed by FDH or any of
the Shareholders, as the case may be, pursuant to this Agreement, except as SKYC
has otherwise consented in writing.
 
6.4
CONSENTS.

 
Each of the Consents identified or required to have been identified in the FDH
Disclosure Schedule shall have been obtained and shall be in full force and
effect, other than those Consents, which have been expressly waived by SKYC.
 
6.5
NO MATERIAL ADVERSE CHANGE AND SATISFACTORY DUE DILIGENCE.

 
There is no any material adverse change in the business, condition, assets,
liabilities, operations or financial performance of FDH since the date of this
Agreement as determined by SKYC in its discretion. SKYC shall be satisfied in
all respects with the results of its due diligence review of FDH.
 
6.6
FDH CLOSING CERTIFICATES.

 
In addition to the documents required to be received under this Agreement, SKYC
shall also have received the following documents:
 
(a) 
copies of resolutions of FDH, certified by a Secretary, Assistant Secretary or
other appropriate officer of FDH, authorizing the execution, delivery and
performance of this Agreement and other Transactional Agreements;

(b) 
such other documents as SKYC may request in good faith for the purpose of (i)
evidencing the accuracy of any representation or warranty made by FDH, (ii)
evidencing the compliance by FDH, or the performance by FDH of, any covenant or
obligation set forth in this Agreement or any of the other Transactional
Agreements, (iii) evidencing the satisfaction of any condition set forth in
Article VII or this Article VI, or (iv) otherwise facilitating the consummation
or performance of the Exchange.

 
6.7
DELIVERY OF STOCK CERTIFICATES, MINUTE BOOK AND CORPORATE SEAL.

 
The Shareholders shall have delivered to SKYC the stock books, stock ledgers,
minute books and corporate seals of FDH.
 
 
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ARTICLE VII.
CLOSING CONDITIONS OF
FDH AND THE SHAREHOLDERS
 
FDH and the Shareholders’ obligations to affect the Closing and consummate the
Exchange are subject to the satisfaction of each of the following conditions:
 
7.1
ACCURACY OF REPRESENTATIONS AND WARRANTIES.

 
The representations and warranties of SKYC in this Agreement shall have been
true and correct as of the date of this Agreement and shall be true and correct
on and as of the Closing and SKYC shall have performed all obligations in this
Agreement required to be performed or observed by them on or prior to the
Closing.
 
7.2
ADDITIONAL CONDITIONS TO CLOSING.

 
(a) 
All necessary approvals under federal and state securities laws and other
authorizations relating to the issuance and transfer of the Acquisition Shares
by SKYC and the transfer of the Shares by FDH shall have been received.

 
(b) 
No preliminary or permanent injunction or other order by any federal, state or
foreign court of competent jurisdiction which prohibits the consummation of the
Exchange shall have been issued and remain in effect. No statute, rule,
regulation, executive order, stay, decree, or judgment shall have been enacted,
entered, issued, promulgated or enforced by any court or governmental authority
which prohibits or restricts the consummation of the Exchange. All Requisite
Regulatory Approvals shall have been filed, occurred or been obtained and all
such Requisite Regulatory Approvals shall be in full force and effect.

 
(c) 
There shall not be any action taken, or any statute, rule, regulation or order
enacted, entered, enforced or deemed applicable to the Exchange, by any federal
or state Governmental Body which, in connection with the grant of a Requisite
Regulatory Approval, imposes any condition or restriction upon the Surviving
Corporation or its subsidiaries (or, in the case of any disposition of assets
required in connection with such Requisite Regulatory Approval, upon SKYC, its
subsidiaries or FDH or any of their subsidiaries), including, without
limitation, requirements relating to the disposition of assets, which in any
such case would so materially adversely impact the economic or business benefits
of the Exchange as to render inadvisable the consummation of the Exchange.

 
7.3 
SKYC CLOSING CERTIFICATES.

 
The Shareholders shall have received the following documents:
 
(a) 
copies of resolutions of SKYC, certified by a Secretary, Assistant Secretary or
other appropriate officer of SKYC, authorizing the execution;

 
(b) 
good standing certificates for the State of Nevada; and

 
(c) 
such other documents as FDH may request in good faith for the purpose of (i)
evidencing the accuracy of any representation or warranty made by SKYC, (ii)
evidencing the compliance by SKYC with, or the performance by SKYC of, any
covenant or obligation set forth in this Agreement or any of the other
Transactional Agreements, (iii) evidencing the satisfaction of any condition set
forth in Article VI or this Article VII, or (iv) otherwise facilitating the
consummation or performance of the Exchange.

 
 
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7.4
NO MATERIAL ADVERSE CHANGE.

 
There shall not have been any material adverse change in SKYC’s business,
condition, assets, liabilities, operations or financial performance since the
date of this Agreement.
 
7.5
PERFORMANCE OF AGREEMENTS.

 
SKYC shall have executed and delivered each of the agreements, instruments and
documents required to be executed and delivered, and performed all actions
required by SKYC pursuant to this Agreement, except as FDH and the Shareholders
have otherwise consented in writing.
 
7.6
CONSENTS.

 
Each of the Consents identified or required to have been identified in Section
3.4 shall have been obtained and shall be in full force and effect, other than
those Consents the absence of which shall not have a Material Adverse Effect on
SKYC.
 
7.7
SKYC STOCK.

 
On the Closing Date, shares of SKYC common stock shall be eligible for quotation
on the OTC Bulletin Board.
 
ARTICLE VIII.
ADDITIONAL CLOSING CONDITIONS

As part of the Transactions, SKYC shall issue to its legal counsel, Sichenzia
Ross Friedman Ference LLP at 61 Broadway, 32nd Floor, New York, NY 10006, 15,000
shares of its common stock.

ARTICLE IX.
FURTHER ASSURANCES
 
Each of the parties hereto agrees that it will, from time to time after the date
of the Agreement, execute and deliver such other certificates, documents and
instruments and take such other action as may be reasonably requested by the
other party to carry out the actions and transactions contemplated by this
Agreement, including the closing conditions described in Articles VI and VII.
FDH and the Shareholders shall reasonably cooperate with SKYC in its maintenance
of the books and records of FDH, or in preparing any solicitation materials to
be sent to the shareholders of SKYC in connection with the approval of the
Exchange and the transactions contemplated by the Transactional Agreements.
 
 
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ARTICLE X.
TERMINATION
 
10.1
TERMINATION.

 
This Agreement may be renegotiated or terminated and the Exchange abandoned at
any time prior to the Closing Date:
 
(a)  
by mutual written consent of SKYC, FDH and the Shareholders;

 
(b) 
by SKYC if it is not satisfied with the results of its due diligence of FDH for
any reason;

(c) 
by SKYC if (i) there is a material Breach of any covenant or obligation of FDH
or the Shareholders; provided however, that if such Breach or Breaches are
capable of being cured prior to the Closing Date, such Breach or Breaches shall
not have been cured within 10 days of delivery of the written notice of such
Breach, or (ii) SKYC reasonably determines that the timely satisfaction of any
condition set forth in Article VI has become impossible or impractical (other
than as a result of any failure on the part of SKYC to comply with or perform
its covenants and obligations under this Agreement or any of the other
Transactional Agreements);

 
(d) 
by FDH if (i) there is a material Breach of any covenant or obligation of SKYC;
provided however, that if such Breach or Breaches are capable of being cured
prior to the Closing Date, such Breach or Breaches shall not have been cured
within 10 days of delivery of the written notice of such Breach, or (ii) FDH
reasonably determines that the timely satisfaction of any condition set forth in
Article VII has become impossible or impractical (other than as a result of any
failure on the part of FDH or any Shareholders to comply with or perform any
covenant or obligation set forth in this Agreement or any of the other
Transactional Agreements);

 
(e) 
by SKYC if the Closing has not taken place on or before May 5, 2011 (except if
as a result of any failure on the part of SKYC to comply with or perform its
covenants and obligations under this Agreement or in any other Transactional
Agreement);

 
(f) 
by FDH if the Closing has not taken place on or before May 5, 2011 (except if as
a result of the failure on the part of FDH or the Shareholders to comply with or
perform any covenant or obligation set forth in this Agreement or in any other
Transactional Agreement);

 
(g) 
by any of SKYC, on the one hand or FDH, on the other hand, if any court of
competent jurisdiction in the United States or other United States governmental
body shall have issued an order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the Exchange and such order,
decree, ruling or any other action shall have become final and non-appealable;
provided, however, that the party seeking to terminate this Agreement pursuant
to this clause (g) shall have used all commercially reasonable efforts to remove
such order, decree or ruling; or

 
(h) 
The parties hereby agree and acknowledge that a breach of the provisions of
Sections 4.1, 4.2, 4.3, 4.4 and 4.6 are, without limitation, material Breaches
of this Agreement.

 
10.2
TERMINATION PROCEDURES.

 
If SKYC wishes to terminate this Agreement pursuant to Section 9.1, SKYC shall
deliver to FDH a written notice stating that SKYC is terminating this Agreement
and setting forth a brief description of the basis on which SKYC is terminating
this Agreement. If FDH wishes to terminate this Agreement pursuant to Section
9.1, FDH shall deliver to SKYC a written notice stating that FDH is terminating
this Agreement and setting forth a brief description of the basis on which FDH
is terminating this Agreement.
 
 
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10.3
EFFECT OF TERMINATION.

 
In the event of termination of this Agreement as provided above, this Agreement
shall forthwith have no further effect. Except for a termination resulting from
a Breach by a party to this Agreement, there shall be no liability or obligation
on the part of any party hereto. In the event of a breach, the remedies of the
non-breaching party shall be to seek damages from the breaching party or to
obtain an order for specific performance, in addition to or in lieu of other
remedies provided herein. Upon request after termination, each party will
redeliver or, at the option of the party receiving such request, destroy all
reports, work papers and other material of any other party relating to the
Exchange, whether obtained before or after the execution hereof, to the party
furnishing same; provided, however, that FDH and the Shareholders shall, in all
events, remain bound by and continue to be subject to Section 4.6 and all
parties shall in all events remain bound by and continue to be subject to
Section 5.4 and 5.5.
 
Notwithstanding the above, both SKYC, on the one hand, and FDH and the
Shareholders, on the other hand, shall be entitled to announce the termination
of this Agreement by means of a mutually acceptable press release.
 
ARTICLE XI.
MISCELLANEOUS
 
11.1
SURVIVAL OF REPRESENTATIONS AND WARRANTIES.

 
All representations and warranties of FDH and the Shareholders in this Agreement
and the FDH Disclosure Schedule shall survive for a period of two (2) years from
the Closing Date.
 
11.2
EXPENSES.

 
Except as otherwise set forth herein, each of the parties to the Exchange shall
bear its own expenses incurred in connection with the negotiation and
consummation of the transactions contemplated by this Agreement.
 
11.3
ENTIRE AGREEMENT.

 
This Agreement and the other Transactional Agreements contain the entire
agreement of the parties hereto, and supersede any prior written or oral
agreements between them concerning the subject matter contained herein, or
therein. There are no representations, agreements, arrangements or
understandings, oral or written, between the parties to this Agreement, relating
to the subject matter contained in this Agreement and the other Transaction
Agreements, which are not fully expressed herein or therein. The schedules and
each exhibit attached to this Agreement or delivered pursuant to this Agreement
are incorporated herein by this reference and constitute a part of this
Agreement.
 
11.4
COUNTERPARTS

 
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original but all of which shall constitute one and the same
instrument.
 
11.5
DESCRIPTIVE HEADINGS.

 
The Article and Section headings in this Agreement are for convenience only and
shall not affect the meanings or construction of any provision of this
Agreement.
 
 
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11.6
NOTICES.

Any notices required or permitted to be given under this Agreement shall be in
writing and shall be deemed sufficiently given on the earlier to occur of the
date of personal delivery, the date of receipt or three (3) days after posting
by overnight courier or registered or certified mail, postage prepaid, addressed
as follows:
 
If to SKYC:
 
 
#1801 Building B, Hai Song Da Sha,Che Gong Miao, Fu Tian Qu,Shenzen, China
518041
If to FDH:
 
 
Room 3211F, Far East Consortium Building, 121 Des Voeux Road Central, Hong Kong,
China.
If to the Shareholders:
 
 
To such address or addresses as a party shall have previously designated by
notice to the sender given in accordance with this section.

 
11.7
CHOICE OF LAW.

 
This Agreement shall be construed in accordance with and governed by the laws of
the State of New York without regard to choice of law principles. The parties
hereto each consent to the jurisdiction of the courts of the state of New York,
county of New York and to the federal courts located in the county of New York,
State of New York.
 
11.8
BINDING EFFECT; BENEFITS.

 
This Agreement shall inure to the benefit of and be binding upon the parties and
their respective successors and permitted assigns. Nothing in this Agreement,
express or implied, is intended to confer on any Person other than the parties
or their respective successors and permitted assigns, the Shareholders and other
Persons expressly referred to herein, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
 
11.9
ASSIGNABILITY.

 
Neither this Agreement nor any of the parties’ rights hereunder shall be
assignable by any party without the prior written consent of the other parties
and any attempted assignment without such consent shall be void.
 
11.10
WAIVER AND AMENDMENT.

 
Any term or provision of this Agreement may be waived at any time by the party,
which is entitled to the benefits thereof. The waiver by any party of a breach
of any provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach. The parties may, by mutual agreement in writing, amend
this Agreement in any respect. FDH and the Shareholders hereby acknowledge their
intent that this Agreement includes as a party any holder of capital stock in
FDH at the time of Closing. SKYC, FDH and the Shareholders therefore agree that
this Agreement may be amended, without the further consent of any party to this
Agreement, (i) to add as a new Shareholder any existing shareholder of FDH and
(ii) to modify Schedule 1 to reflect the addition of such shareholder.
 
 
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11.11
ATTORNEYS’ FEES.

 
In the event of any action or proceeding to enforce the terms and conditions of
this Agreement, the prevailing party shall be entitled to an award of reasonable
attorneys’ and experts’ fees and costs, in addition to such other relief as may
be granted.
 
11.12
SEVERABILITY.

 
If any provision of this Agreement is held invalid or unenforceable by any court
of competent jurisdiction, the other provisions of this Agreement will remain in
full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
 
11.13
CONSTRUCTION.

 
In executing this Agreement, the parties severally acknowledge and represent
that each: (a) has fully and carefully read and considered this Agreement; (b)
has or has had the opportunity to consult independent legal counsel regarding
the legal effect and meaning of this document and all terms and conditions
hereof; (c) has been afforded the opportunity to negotiate as to any and all
terms hereof; and (d) is executing this Agreement voluntarily, free from any
influence, coercion or duress of any kind. The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent, and no rule of strict construction will be applied against any party.

 
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IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of
the day and year first above written.
 
 

  SKY DIGITAL STORES CORP.          
 
By:
/s/ Xiangfeng Lin       Name: Xiangfeng Lin       Title: CEO/ Chairman          

 
 

 
HONGKONG FIRST DIGITAL HOLDING LIMITED.
         
 
By:
/s/ Xiangfeng Lin       Name: Xiangfeng Lin       Title: Chairman/ President    
                  Shareholders:       See attached Shareholder signature pages  

 

 
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EXHIBIT A
CERTAIN DEFINITIONS
 
For purposes of the Agreement (including this Exhibit A):
 
“Agreement” shall mean the Share Exchange Agreement to which this Exhibit A is
attached (including all Disclosure Schedules and all Exhibits), as it may be
amended from time to time.

“Approved Plans” shall mean a stock option or similar plan for the benefit of
employees or others, which has been approved by the shareholders of FDH.

 “Breach” There shall be deemed to be a “Breach” of a representation, warranty,
covenant, obligation or other provision if there is or has been any inaccuracy
in or breach of, or any failure to comply with or perform, such representation,
warranty, covenant, obligation or other provision.

“Certificates” shall have the meaning specified in Section 1.3 of the Agreement.
  
“Closing” shall have the meaning specified in Section 1.5 of the Agreement.

“Closing Date” shall have the meaning specified in Section 1.5 of the Agreement.

“Code” shall have the meaning specified in the Recitals of this Agreement.

“Confidential Information” shall mean all nonpublic information disclosed by one
party or its agents (the “Disclosing Party”) to the other party or its agents
(the “Receiving Party”) that is designated as confidential or that, given the
nature of the information or the circumstances surrounding its disclosure,
reasonably should be considered as confidential. Confidential Information
includes, without limitation (i) nonpublic information relating to the
Disclosing Party’s technology, customers, vendors, suppliers, business plans,
intellectual property, promotional and marketing activities, finances,
agreements, transactions, financial information and other business affairs, and
(ii) third-party information that the Disclosing Party is obligated to keep
confidential. Confidential Information does not include any information that (i)
is or becomes publicly available without breach of this Agreement, (ii) can be
shown by documentation to have been known to the Receiving Party at the time of
its receipt from the Disclosing Party, (iii) is received from a third party who,
to the knowledge of the Receiving Party, did not acquire or disclose such
information by a wrongful or tortious act, or (iv) can be shown by documentation
to have been independently developed by the Receiving Party without reference to
any Confidential Information.
 
“Consent” shall mean any approval, consent, ratification, permission, waiver or
authorization (including any Governmental Authorization).

“Disclosure Schedule Update” shall have the meaning specified in Section 4.4 of
the Agreement.

“Entity” shall mean any corporation (including any non profit corporation),
general partnership, limited partnership, limited liability partnership, joint
venture, estate, trust, cooperative, foundation, society, political party,
union, company (including any limited liability company or joint stock company),
firm or other enterprise, association, organization or entity.

 
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“Environmental Laws” shall mean any Law or other requirement relating to the
protection of the environment, health, or safety from the release or disposal of
hazardous materials.

“Environmental Permit” means all licenses, permits, authorizations, approvals,
franchises and rights required under any applicable Environmental Law or Order.

“Equity Security” shall mean any stock or similar security, including, without
limitation, securities containing equity features and securities containing
profit participation features, or any security convertible into or exchangeable
for, with or without consideration, any stock or similar security, or any
security carrying any warrant, right or option to subscribe to or purchase any
shares of capital stock, or any such warrant or right.

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

“FDH Common Stock” shall mean the shares of common stock of HONGKONG FIRST
DIGITAL HOLDING LIMITED.

“FDH Disclosure Schedule” shall have the meaning specified in introduction to
Article II of the Agreement.
 
 
“GAAP” shall mean Generally Accepted Accounting Principles, applied on a
consistent basis.

“Governmental Authorization” shall mean any:

(a) permit, license, certificate, franchise, concession, approval, consent,
ratification, permission, clearance, confirmation, endorsement, waiver,
certification, designation, rating, registration, qualification or authorization
that is issued, granted, given or otherwise made available by or under the
authority of any Governmental Body or pursuant to any Law; or

(b) right under any contract with any Governmental Body.

“Governmental Body” shall mean any:

(a) nation, principality, state, commonwealth, province, territory, county,
municipality, district or other jurisdiction of any nature;

(b) federal, state, local, municipal, foreign or other government;

(c) governmental or quasi-governmental authority of any nature (including any
governmental division, subdivision, department, agency, bureau, branch, office,
commission, council, board, instrumentality, officer, official, representative,
organization, unit, body or Entity and any court or other tribunal); or

(d) individual, Entity or body exercising, or entitled to exercise, any
executive, legislative, judicial, administrative, regulatory, police, military
or taxing authority or power of any nature, including any court, arbitrator,
administrative agency or commissioner, or other governmental authority or
instrumentality.

“Indebtedness” shall mean any obligation, contingent or otherwise. Any
obligation secured by a Lien on, or payable out of the proceeds of, or
production from, property of the relevant party will be deemed to be
Indebtedness.

 
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“Intellectual Property” means all industrial and intellectual property,
including, without limitation, all U.S. and non-U.S. patents, patent
applications, patent rights, trademarks, trademark applications, common law
trademarks, Internet domain names, trade names, service marks, service mark
applications, common law service marks, and the goodwill associated therewith,
copyrights, in both published and unpublished works, whether registered or
unregistered, copyright applications, franchises, licenses, know-how, trade
secrets, technical data, designs, customer lists, confidential and proprietary
information, processes and formulae, all computer software programs or
applications, layouts, inventions, development tools and all documentation and
media constituting, describing or relating to the above, including manuals,
memoranda, and records, whether such intellectual property has been created,
applied for or obtained anywhere throughout the world.

“Knowledge” A corporation shall be deemed to have “knowledge” of a particular
fact or matter only if a director or officer of such corporation has, had or
should have had knowledge of such fact or matter.

“Laws” means, with respect to any Person, any U.S. or non-U.S. federal,
national, state, provincial, local, municipal, international, multinational or
other law (including common law), constitution, statute, code, ordinance, rule,
regulation or treaty applicable to such Person.

“Lien” shall mean any mortgage, pledge, security interest, encumbrance, lien or
charge, right of first refusal, encumbrance or other adverse claim or interest
of any kind, including, without limitation, any conditional sale or other title
retention agreement, any lease in the nature thereof and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction and including any lien or charge arising by Law.

“Material Adverse Effect” means any change, effect or circumstance which,
individually or in the aggregate, would reasonably be expected to (a) have a
Material Adverse Effect on the business, assets, financial condition or results
of operations of the affected party, in each case taken as a whole or (b)
materially impair the ability of the affected party to perform its obligations
under this Agreement and the Transaction Agreements, excluding any change,
effect or circumstance resulting from (i) the announcement, pendency or
consummation of the transactions contemplated by this Agreement, (ii) changes in
the United States securities markets generally, or (iii) changes in general
economic, currency exchange rate, political or regulatory conditions in
industries in which the affected party operates.

“Material Contract” means any and all agreements, contracts, arrangements,
understandings, leases, commitments or otherwise, providing for potential
payments by or to the company in excess of $10,000, and the amendments,
supplements and modifications thereto.

“Order” shall mean any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any Governmental
Body.
 
“Ordinary Course of Business” shall mean an action taken by FDH, if (i) such
action is taken in normal operation, (ii) such action is not required to be
authorized by the Shareholders, Board of Directors or any committee of the Board
of the Directors or other governing body of FDH and (iii) does not require any
separate or special authorization or consent of any nature by any Governmental
Body.  
 
 
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“Permitted Liens” shall mean (a) Liens for Taxes not yet payable or in respect
of which the validity thereof is being contested in good faith by appropriate
proceedings and for the payment of which the relevant party has made adequate
reserves; (b) Liens in respect of pledges or deposits under workmen’s
compensation laws or similar legislation, carriers, warehousemen, mechanics,
laborers and material men and similar Liens, if the obligations secured by such
Liens are not then delinquent or are being contested in good faith by
appropriate proceedings conducted and for the payment of which the relevant
party has made adequate reserves; and (c) statutory Liens incidental to the
conduct of the business of the relevant party which were not incurred in
connection with the borrowing of money or the obtaining of advances or credits
and that do not in the aggregate materially detract from the value of its
property or materially impair the use thereof in the operation of its business.

“Person” shall mean any individual, Entity or Governmental Body.

“Pre-Closing Period” shall mean the period commencing as of the date of the
Agreement and ending on the Closing Date.

“Proceeding” shall mean any action, suit, litigation, arbitration, proceeding
(including any civil, criminal, administrative, investigative or appellate
proceeding and any informal proceeding), prosecution, contest, hearing, inquiry,
inquest, audit, examination or investigation, commenced, brought, conducted or
heard by or before, or otherwise has involved, any Governmental Body or any
arbitrator or arbitration panel.
 
“Representatives” of a specified party shall mean officers, directors,
employees, attorneys, accountants, advisors and representatives of such party,
including, without limitation, all subsidiaries of such specified party, and all
such Persons with respect to such subsidiaries. The Related Persons of FDH shall
be deemed to be “Representatives” of FDH, as applicable. “SEC” shall mean the
Securities and Exchange Commission. “Securities Act” shall mean the Securities
Act of 1933, as amended. “FDH” shall have the meaning specified in the first
paragraph of the Agreement “FDH Balance Sheet” shall mean FDH’s audited balance
sheet at December 31, 2009 and December 31, 2010.

 
“Taxes” shall mean all foreign, federal, state or local taxes, charges, fees,
levies, imposts, duties and other assessments, as applicable, including, but not
limited to, any income, alternative minimum or add-on, estimated, gross income,
gross receipts, sales, use, transfer, transactions, intangibles, ad valorem,
value-added, franchise, registration, title, license, capital, paid-up capital,
profits, withholding, payroll, employment, unemployment, excise, severance,
stamp, occupation, premium, real property, recording, personal property, federal
highway use, commercial rent, environmental (including, but not limited to,
taxes under Section 59A of the Code) or windfall profit tax, custom, duty or
other tax, governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest, penalties or additions to tax with
respect to any of the foregoing; and “Tax” means any of the foregoing Taxes.
 
“Tax Group” shall mean any federal, state, local or foreign consolidated,
affiliated, combined, unitary or other similar group of which FDH is now or was
formerly a member.
 
“Tax Return” shall mean any return, declaration, report, claim for refund or
credit, information return, statement or other similar document filed with any
Governmental Body with respect to Taxes, including any schedule or attachment
thereto, and including any amendment thereof.
 
 
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“Transactions” shall have the meaning specified in Section 2.4.

“Transactional Agreements” shall mean: (a) this Agreement; (b) the Promissory
Note and (c) closing documents in connection with this Agreement.

“SKYC” shall have the meaning specified in the first paragraph of the Agreement.

“SKYC Common Stock” shall mean the shares of common stock of SKYC

“SKYC SEC Reports” shall have the meaning specified in Section 4.6 of the
Agreement.

 
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SCHEDULE 1

Shareholders
 
Name
 
Ownership Percentage of FDH
 
Number of Shares of SKYC to be issued
1) Xiangfeng Lin
    27.32 %
6,479,221 shares
2) Jianxing Lin
    9.5 %
2,253,023 shares
3) Wenbin Wu     5.86 % 1,389,760 shares 4) Zihong Lin     1.1 % 260,876 shares
5) Junyong Wang     1.1 % 260,876 shares 6) Yaping Ren     1.1 % 260,876 shares
7) Kun Chen     1.1 % 260,876 shares 8) Jinshui Lin     9 % 2,134,443 shares 9)
Xiuzi Lin     8 % 1,897,283 shares 10) Chengfeng Zhang     4.92 % 1,166,829
shares 11) Shenzhen Top Finance Guaranty Investment Inc.     9 % 2,134,443
shares 12) TF Capital Management (HK) Limited     7.5 % 1,778,703 shares 13)
Lingjuan Wang     5 % 1,185,802 shares 14) Linlin Li     5 % 1,185,802 shares
15) Hao Wang     2 % 474,321 shares 16) Xiaolan Dai     2.5 % 592,901 shares
Total     100 % 23,716,035 shares            

 
 
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SCHEDULE 2

FDH Disclosure Schedule
 
COUNTERPART SIGNATURE PAGE
of
SHARE EXCHANGE AGREEMENT
by and among
SKY DIGITAL STORES CORP. (“SKYC”),
HONGKONG FIRST DIGITAL HOLDING LIMITED (“FDH”), and
THE FDH SHAREHOLDERS NAMED THEREIN
 
A. The undersigned shareholder of FDH desires to enter into the Share Exchange
Agreement dated May 5, 2011 (the “Agreement”), among SKYC and the Shareholders
of FDH named therein, a copy of which has been delivered to the undersigned.
 
B. The undersigned hereby adopts, accepts and agrees to all of the terms and
provisions of the Agreement.
 
C. This Counterpart Signature Page has been executed by the undersigned
Shareholder. The parties to the Agreement are hereby authorized to attach this
Counterpart Signature Page to a copy of the Agreement, together with executed
Counterpart Signature Pages of the other Shareholders. The undersigned agrees
that when this Counterpart Signature Page has been appended to the Agreement,
the Agreement shall thereupon become a binding agreement between the
undersigned, SKYC, and other Shareholders who have executed similar Counterpart
Signature Pages, enforceable against the undersigned in accordance with its
terms, without further action by the undersigned.

 
36

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the undersigned has executed and delivered this Counterpart
Signature Page as of the May 5, 2011.
 
Shareholders: 
Signatures:

1) Xiangfeng Lin
/s/ Xiangfeng Lin
2) Jianxing Lin
/s/ Jianxing Lin 
3) Wenbin Wu
/s/ Wenbin Wu
4) Zihong Lin
/s/ Zihong Lin
5) Junyong Wang
/s/ Junyong Wang
6) Yaping Ren
/s/ Yaping Ren
7) Kun Chen
/s/  Kun Chen
8) Jinshui Lin
/s/ Jinshui Lin 
9) Xiuzi Lin
/s/ Xiuzi Lin
10) Chengfeng Zhang
/s/ Chengfeng Zhang
11) Lingjuan Wang
/s/ Lingjuan Wang
12) Linlin Li
/s/ Linlin Li
13) Hao Wang
/s/ Hao Wang
14) Xiaolan Dai
/s/ Xiaolan Dai
15) Shenzhen Top Finance Guaranty Investment Inc.
 
By: /s/ Rui Wang
Name: Rui Wang
Title: President
16) TF Capital Management (HK) Limited
 
 
By: /s/ Bing Xu
Name: Bing Xu
Title: President

FDH
 
By:
/s/ Xiangfeng Lin

Name:
Xiangfeng Lin

Title:
President

 
37