Share Exchange Agreement
 
This Share Exchange Agreement, dated as of September 8, 2006, is made by and
among Advanced Medical Institute Inc., a Nevada corporation (the “Acquiror
Company”), Worldwide PE Patent Holdco Pty Limited (ACN 117 157 727), a company
formed in Australia (the “Company”) and each of the Persons listed on Exhibit A
hereto (collectively, the “Shareholders”, and individually a “Shareholder”).
 
BACKGROUND
 
The Shareholders have agreed to transfer to the Acquiror Company, and the
Acquiror Company has agreed to acquire from the Shareholders, all of the Shares,
which Shares constitute 100% of the outstanding capital stock of the Company, in
exchange for the aggregate of A$3 million (approximately US$2.25 million) and
16,125,000 shares of the Acquiror Company’s Common Stock to be issued on the
Closing Date (the “Acquiror Company Shares”), which Acquiror Company Shares
shall constitute 30.14% of the issued and outstanding shares of Acquiror
Company’s Common Stock immediately after the closing of the transactions
contemplated herein, in each case, on the terms and conditions as set forth
herein.
 
SECTION I
DEFINITIONS
 
Unless the context otherwise requires, the terms defined in this Section 1 will
have the meanings herein specified for all purposes of this Agreement,
applicable to both the singular and plural forms of any of the terms herein
defined.
 
1.1 “Accredited Investor” has the meaning set forth in Regulation D under the
Securities Act and set forth on Exhibit B.
 
1.2 “Acquired Companies” means, collectively, the Company and the Company
Subsidiaries (if any).
 
1.3 “Acquiror Company Balance Sheet” means the Acquiror Company’s audited
balance sheet at June 30, 2005.
 
1.4 “Acquiror Company Board” means the Board of Directors of the Acquiror
Company.
 
1.5 “Acquiror Company Common Stock” means the Acquiror Company’s common stock,
par value US $0.001 per share.
 
1.6 “Acquiror Company Shares” means the Acquiror Company Common Stock being
issued to the Shareholders pursuant hereto.
 
1.7 “Affiliate” means any Person that directly or indirectly controls, is
controlled by or is under common control with the indicated Person.
 

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1.8 “Agreement” means this Share Exchange Agreement, including all Schedules and
Exhibits hereto, as this Share Exchange Agreement may be from time to time
amended, modified or supplemented.
 
1.9 “Closing Date” has the meaning set forth in Section 3.
 
1.10 “Code” means the Internal Revenue Code of 1986, as amended.
 
1.11 “Common Stock” means the Company’s common shares, US $0.001 nominal or par
value per share.
 
1.12 “Commission” means the Securities and Exchange Commission or any other
federal agency then administering the Securities Act.
 
1.13 “Company Board” means the Board of Directors of the Company.
 
1.14 “Company Indemnified Party” has the meaning set forth in Section 10.3.
 
1.15 “Company Subsidiaries” means all of the direct and indirect Subsidiaries of
the Company.
 
1.16 “Covered Persons” means all Persons, other than Acquiror Company, who are
parties to indemnification and employment agreements with Acquiror Company
existing on or before the Closing Date.
 
1.17 “Damages” means any costs or expenses (including attorneys’ fees),
judgments, fines, losses, claims, damages, liabilities and amounts paid in
settlement in connection with any Proceeding (x) arising out of or pertaining to
the transactions contemplated by this Agreement or (y) otherwise with respect to
any acts or omissions occurring at or prior to the Closing Date.
 
1.18 “Distributor” means any underwriter, dealer or other Person who
participates, pursuant to a contractual arrangement, in the distribution of the
securities offered or sold in reliance on Regulation S.
 
1.19 “Equity Security” means 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.
 
1.20 “Exchange” has the meaning set forth in Section 2.1.
 
1.21 “Exchange Act” means the Securities Exchange Act of 1934 or any similar
federal statute, and the rules and regulations of the Commission thereunder, all
as the same will then be in effect.
 
1.22 “Exhibits” means the several exhibits referred to and identified in this
Agreement.
 
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1.23 “GAAP” means, with respect to any Person, United States generally accepted
accounting principles applied on a consistent basis with such Person’s past
practices.
 
1.24 “Governmental Authority” means any federal or national, state or
provincial, municipal or local government, governmental authority, regulatory or
administrative agency, governmental commission, department, board, bureau,
agency or instrumentality, political subdivision, commission, court, tribunal,
official, arbitrator or arbitral body, in each case whether U.S. or non-U.S.
 
1.25 “Indebtedness” means 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.
 
1.26 “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 and includes, in the case
of the Company, those patents listed on Schedule 5.13 attached hereto.
 
1.27 “Indemnified Parties” has the meaning set forth in Section 6.1.1.
 
1.28 “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.
 
1.29 “Lien” means any mortgage, pledge, security interest, encumbrance, lien or
charge 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.
 
1.30 “Loan and Security Documents” means the loan and security documents listed
on Exhibit F.
 
1.31 “Material Acquiror Company Contract” means any and all agreements,
contracts, arrangements, leases, commitments or otherwise, of the Acquiror
Company, of the type and nature that the Acquiror Company is required to file
with the Commission.
 
1.32 “Material Adverse Effect” means, when used with respect to the Acquiror
Company or the Acquired Companies, as the case may be, 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 Acquiror Company or the
Acquired Companies, as the case may be, in each case taken as a whole or
(b) materially impair the ability of the Acquiror Company or the Company, as the
case may be, to perform their obligations under this Agreement, 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 Acquiror Company or the Acquired Companies, as the case
may be, operate.
 
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1.33 “Order” means any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any Governmental
Authority.
 
1.34 “Organizational Documents” means (a) the articles or certificate of
incorporation and the by-laws or code of regulations of a corporation; (b) the
partnership agreement and any statement of partnership of a general partnership;
(c) the limited partnership agreement and the certificate of limited partnership
of a limited partnership; (d) the articles or certificate of formation and
operating agreement of a limited liability company; (e) any other document
performing a similar function to the documents specified in clauses (a), (b),
(c) and (d) adopted or filed in connection with the creation, formation or
organization of a Person; and (f) any and all amendments to any of the
foregoing.
 
1.35 “Permitted Liens” means (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 materialmen 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; (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; and (d) Liens that
would not have a Material Adverse Effect.
 
1.36 “Person” means all natural persons, corporations, business trusts,
associations, companies, partnerships, limited liability companies, joint
ventures and other entities, governments, agencies and political subdivisions.
 
1.37 “Proceeding” means any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative or investigative)
commenced, brought, conducted, or heard by or before, or otherwise involving,
any Governmental Authority.
 
1.38 “Regulation S” means Regulation S under the Securities Act, as the same may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission.
 
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1.39 “Rule 144” means Rule 144 under the Securities Act, as the same may be
amended from time to time, or any successor statute.
 
1.40 “Schedules” means the several schedules referred to and identified herein,
setting forth certain disclosures, exceptions and other information, data and
documents referred to at various places throughout this Agreement.
 
1.41 “SEC Documents” means all reports and other documents required to be filed
by the Acquiror Company under the Exchange Act, including pursuant to Section
13(a) or 15(d) thereof, for the three (3) years preceding the date hereof (or
such shorter period as the Acquiror Company was required by law to file such
material).
 
1.42 “Section 4(2)” means Section 4(2) under the Securities Act, as the same may
be amended from time to time, or any successor statute.
 
1.43 “Securities Act” means the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same will be in effect at the time.
 
1.44 “Shares” means the 165,250,000 issued and outstanding ordinary shares of
the Company.
 
1.45 “Subsidiary” means, with respect to any Person, any corporation, limited
liability company, joint venture or partnership of which such Person (a)
beneficially owns, either directly or indirectly, more than 50% of (i) the total
combined voting power of all classes of voting securities of such entity, (ii)
the total combined equity interests, or (iii) the capital or profit interests,
in the case of a partnership; or (b) otherwise has the power to vote or to
direct the voting of sufficient securities to elect a majority of the board of
directors or similar governing body.
 
1.46 “Survival Period” has the meaning set forth in Section 10.1.
 
1.47 “Transaction Documents” means, collectively, all agreements, instruments
and other documents to be executed and delivered in connection with the
transactions contemplated by this Agreement.
 
1.48 “U.S.” means the United States of America.
 
1.49 “U.S. Dollars” or “US $” means the currency of the United States of
America.
 
1.50 “U.S. Person” has the meaning set forth in Regulation S under the
Securities Act and set forth on Exhibit C hereto.
 
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SECTION II
EXCHANGE OF SHARES AND SHARE CONSIDERATION
 
2.1 Share Exchange. At the Closing, each Shareholder shall transfer to the
Acquiror Company the number of Shares set out forth in Exhibit A, and, in
consideration therefor, subject to Section 2.2, Acquiror Company shall issue to
such Shareholder the number of shares of Acquiror Company Common Stock so set
forth on Part A of Exhibit A and A$3 million (approximately US$2.25 million) in
aggregate, to be paid by bank check or telegraphic transfer to such Shareholder
so set forth on Part B of Exhibit A (the “Exchange”). The total amount of
Acquiror Company Common Stock to be issued to the Shareholders shall be
16,125,000 shares.
 
2.2 Withholding. The Acquiror Company shall be entitled to deduct and withhold
from the Acquiror Company Shares otherwise payable pursuant to this Agreement to
the Shareholder such amounts as it is required to deduct and withhold with
respect to the making of such payment under the Code or any provision of state,
local, provincial or foreign tax Law. To the extent that amounts are so
withheld, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the Shareholder in respect of which such
deduction and withholding was made.
 
SECTION III
CLOSING DATE
 
3.1 Closing Date. The closing of the Exchange will occur upon execution of this
Agreement on September 8, 2006 or at such later date as all of the closing
conditions set forth in Sections 8 and 9 have been satisfied or waived (the
“Closing Date”).
 
SECTION IV
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
 
4.1 Generally. Each Shareholder, severally and not jointly, hereby represents
and warrants to the Acquiror Company:
 
4.1.1 Authority.
 
(a) Such Shareholder has the right, power, authority and capacity to execute and
deliver this Agreement and each of the Transaction Documents to which such
Shareholder is a party, to consummate the transactions contemplated by this
Agreement and each of the Transaction Documents to which such Shareholder is a
party, and to perform such Shareholder’s obligations under this Agreement and
each of the Transaction Documents to which such Shareholder is a party. This
Agreement has been, and each of the Transaction Documents to which such
Shareholder is a party will be, duly and validly authorized and approved,
executed and delivered by such Shareholder.
 
(b) In the event that the Shareholder is an entity and not a natural person,
such Shareholder has all requisite authority and power (corporate and other),
governmental licenses, authorizations, consents and approvals to enter into this
Agreement and each of the Transaction Documents to which such Shareholder is a
party, to consummate the transactions contemplated by this Agreement and each of
the Transaction Documents to which such Shareholder is a party and to perform
its obligations under this Agreement and each of the Transaction Documents to
which such Shareholder is a party. The execution, delivery and performance by
such Shareholder of this Agreement and each of the Transaction Documents to
which the Shareholder is a party have been duly authorized by all necessary
corporate action and do not require from the board of directors or the
stockholders of such Shareholder any consent or approval that has not been
validly and lawfully obtained. The execution, delivery and performance by such
Shareholder of this Agreement and each of the Transaction Documents to which the
Shareholder is a party requires no authorization, consent, approval, license,
exemption of or filing or registration with any Governmental Authority or other
Person other than such other customary filings with the Commission for
transactions of the type contemplated by this Agreement.
 
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4.1.2 No Conflict. Neither the execution or delivery by such Shareholder of this
Agreement or any Transaction Document to which such Shareholder is a party, nor
the consummation or performance by such Shareholder of the transactions
contemplated hereby or thereby will, directly or indirectly, (a) contravene,
conflict with, or result in a violation of any provision of the Organizational
Documents of such Shareholder (if such Shareholder is not a natural person); (b)
contravene, conflict with, constitute a default (or an event or condition which,
with notice or lapse of time or both, would constitute a default) under, or
result in the termination or acceleration of, any agreement or instrument to
which such Shareholder is a party or by which the properties or assets of such
Shareholder are bound; or (c) contravene, conflict with, or result in a
violation of, any Law or Order to which such Shareholder, or any of the
properties or assets of such Shareholder, may be subject.
 
4.1.3 Ownership of Shares. Such Shareholder owns, of record and beneficially,
and has good, valid and indefeasible title to and the right to transfer to the
Acquiror Company pursuant to this Agreement, such Shareholder’s Shares free and
clear of any and all Liens. There are no options, rights, voting trusts,
stockholder agreements or any other contracts or understandings to which such
Shareholder is a party or by which such Shareholder or such Shareholder’s Shares
are bound with respect to the issuance, sale, transfer, voting or registration
of such Shareholder’s Shares. At the Closing Date, the Acquiror Company will
acquire good, valid and marketable title to such Shareholder’s Shares free and
clear of any and all Liens.
 
4.1.4 Litigation. There is no pending Proceeding against such Shareholder that
challenges, or may have the effect of preventing, delaying or making illegal, or
otherwise interfering with, any of the transactions contemplated by this
Agreement and, to the knowledge of such Shareholder, no such Proceeding has been
threatened, and no event or circumstance exists that is reasonably likely to
give rise to or serve as a basis for the commencement of any such Proceeding.
 
4.1.5 Binding Obligations. Assuming this Agreement and the Transaction Documents
have been duly and validly authorized, executed and delivered by the parties
thereto other than the Shareholders, this Agreement and each of the Transaction
Documents to which the Shareholders are a party are duly authorized, executed
and delivered by the Shareholders and constitutes the legal, valid and binding
obligations of the Shareholders, enforceable against the Shareholders in
accordance with their respective 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.
 
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4.2 Investment Representations. Each Shareholder, severally and not jointly,
hereby represents and warrants to the Acquiror Company:
 
4.2.1 Acknowledgment. Each Shareholder understands and agrees that the Acquiror
Company Shares to be issued pursuant to this Agreement have not been registered
under the Securities Act or the securities laws of any state of the U.S. and
that the issuance of the Acquiror Company Shares is being effected in reliance
upon an exemption from registration afforded either under Section 4(2) of the
Securities Act for transactions by an issuer not involving a public offering or
Regulation S for offers and sales of securities outside the U.S.
 
4.2.2 Status. By its execution of this Agreement, each Shareholder, severally
and not jointly, represents and warrants to the Acquiror Company as indicated on
its signature page to this Agreement, either that:
 
(a) such Shareholder is an Accredited Investor; or
 
(b) such Shareholder is not a U.S. Person.
 
Each Shareholder severally understands that the Acquiror Company Shares are
being offered and sold to such Shareholder in reliance upon the truth and
accuracy of the representations, warranties, agreements, acknowledgments and
understandings of such Shareholder set forth in this Agreement, in order that
the Acquiror Company may determine the applicability and availability of the
exemptions from registration of the Acquiror Company Shares on which the
Acquiror Company is relying.
 
4.2.3 Additional Representations and Warranties of Accredited Investors. The
Shareholder indicating that such Shareholder is an Accredited Investor on its
signature page to this Agreement, severally and not jointly, further makes the
representations and warranties to the Acquiror Company set forth on Exhibit D.
 
4.2.4 Additional Representations and Warranties of Non-U.S. Persons. Each
Shareholder indicating that it is not a U.S. person on its signature page to
this Agreement, severally and not jointly, further makes the representations and
warranties to the Acquiror Company set forth on Exhibit E.
 
4.2.5 Stock Legends. Each Shareholder hereby agrees with the Acquiror Company as
follows:
 
(a) Securities Act Legend - Accredited Investors. The certificates evidencing
the Acquiror Company Shares issued to those Shareholders who are Accredited
Investors, and each certificate issued in transfer thereof, will bear the
following legend:
 
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS
AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS OR (2) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, IN
WHICH CASE THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE COMPANY AN
OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE
COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR
OTHERWISE TRANSFERRED IN THE MANNER CONTEMPLATED PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS.
 
(b) Securities Act Legend - Non-U.S. Persons. The certificates evidencing the
Acquiror Company Shares issued to those Shareholders who are not U.S. Persons,
and each certificate issued in transfer thereof, will bear the following legend:
 
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS
AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (1) IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S PROMULGATED UNDER THE SECURITIES ACT, AND BASED ON AN
OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE
COMPANY, THAT THE PROVISIONS OF REGULATION S HAVE BEEN SATISFIED (2) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS OR (3) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS, IN WHICH CASE THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
COMPANY AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY
SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED,
ASSIGNED OR OTHERWISE TRANSFERRED IN THE MANNER CONTEMPLATED PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS. HEDGING TRANSACTIONS INVOLVING THE SECURITIES
REPRESENTED BY THIS CERTIFICATE MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH
THE SECURITIES ACT.
 
(c) Other Legends. The certificates representing such Acquiror Company Shares,
and each certificate issued in transfer thereof, will also bear any other legend
required under any applicable Law, including, without limitation, any U.S. state
corporate and state securities law, or contract.
 
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(d) Opinion. No Shareholder will transfer any or all of the Acquiror Company
Shares pursuant to Regulation S or absent an effective registration statement
under the Securities Act and applicable state securities law covering the
disposition of such Shareholder’s Acquiror Company Shares, without first
providing the Acquiror Company with an opinion of counsel (which counsel and
opinion are reasonably satisfactory to the Acquiror Company) to the effect that
such transfer will be made in compliance with Regulation S or will be exempt
from the registration and the prospectus delivery requirements of the Securities
Act and the registration or qualification requirements of any applicable U.S.
state securities laws.
 
(e) Consent. Each Shareholder understands and acknowledges that the Acquiror
Company may refuse to transfer the Acquiror Company Shares, unless such
Shareholder complies with this Section 4.3.5 and any other restrictions on
transferability set forth in Exhibits D and E. Each Shareholder consents to the
Acquiror Company making a notation on its records or giving instructions to any
transfer agent of the Acquiror Company’s Common Stock in order to implement the
restrictions on transfer of the Acquiror Company Shares.
 
SECTION V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
 
The Company represents and warrants to the Acquiror Company as follows:
 
5.1 Organization and Qualification. The Company is duly incorporated and validly
existing under the laws of Australia, 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 so organized, existing and in
good standing or to have such authority or power will not, in the aggregate,
either (i) have a material adverse effect on the business, assets, financial
condition, or prospects of the Company, or (ii) materially impair the ability of
the Company and the Shareholders each to perform their material obligations
under this Agreement (any of such effects or impairments, a “Material Adverse
Effect”). The Company 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 makes such qualification, licensing
or domestication necessary, except where the failure to be so qualified,
licensed or domesticated will not have a Material Adverse Effect. Set forth on
Schedule 5.1 is a list of those jurisdictions in which the Company presently
conducts its business, owns, holds and operates its properties and assets.
 
5.2 Subsidiaries. The Company does not own directly or indirectly, any equity or
other ownership interest in any corporation, partnership, joint venture or other
entity or enterprise.
 
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5.3 Articles of Association and Governing Rules. The Company does not have any
Memorandum and Articles of Association and is governed by the replaceable rules
under the Corporations Act. The Company is not in violation or breach of any of
the provisions of the replaceable rules, except for such violations or breaches
as, in the aggregate, will not have a Material Adverse Effect.
 
5.4 Authorization and Validity of this Agreement. The recording of the transfer
of the Shares and the delivery of new certificates representing the Shares
registered in the name of Acquiror Company are within the Company’s corporate
powers, have been duly authorized by all necessary corporate action, do not
require from the Board or Shareholders of the Company any consent or approval
that has not been validly and lawfully obtained, require no authorization,
consent, approval, license, exemption of or filing or registration with any
court or governmental department, commission, board, bureau, agency or
instrumentality of government that has not been validly and lawfully obtained,
filed or registered, as the case may be, except for those that, if not obtained
or made would not have a Material Adverse Effect.
 
5.5 No Violation. None of the execution, delivery or performance by the Company
of this Agreement or any Transaction Document to which the Company is a party,
nor the consummation by the Company of the transactions contemplated hereby
violates any provision of its Organizational Documents, or violates or conflicts
with, or constitute a default (or an event or condition which, with notice or
lapse of time or both, would constitute a default) under, or result in the
termination or acceleration of, or result in the creation of imposition of any
Lien under, any agreement or instrument to which the Company is a party or by
which the Company is or will be bound or subject, or violate any laws.
 
5.6 Binding Obligations. Assuming this Agreement has been duly and validly
authorized, executed and delivered by the Acquiror Company, the Company and the
Shareholders of the Company, this Agreement is and all agreements or instruments
contemplated hereby to which the Company is a party, have been duly authorized,
executed and delivered by the Company and are the legal, valid and binding
Agreement of the Company and is enforceable against the Company 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.
 
5.7 Capitalization and Related Matters.
 
5.7.1 Capitalization. The issued capital stock of the Company consists of
161,250,000 ordinary fully paid shares. Except as set forth in Schedule 5.7.1,
there are no outstanding or authorized options, warrants, calls, subscriptions,
rights (including any preemptive rights or rights of first refusal), agreements
or commitments of any character obligating the Company to issue any ordinary
shares or any other capital stock of the Company. All issued and outstanding
shares of the Company’s capital stock are duly authorized, validly issued, fully
paid and nonassessable and have not been issued in violation of any preemptive
or similar rights.
 
5.7.2 No Redemption Requirements. Except as set forth in Schedule 5.7.2, there
are no outstanding contractual obligations (contingent or otherwise) of the
Company to retire, repurchase, redeem or otherwise acquire any outstanding
shares of capital stock of, or other ownership interests in, the Company 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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5.7.3 Duly Authorized. The exchange of the Shares has been duly authorized, and
the Shares have been validly issued and are fully paid and nonassessable.
 
5.8 Shareholders. Exhibit A contains a true and complete list of the names and
addresses of the record and beneficial holders of all of the outstanding capital
stock of the Company. Except as expressly provided in this Agreement, no holder
of Shares or any other security of the Company or any other Person is entitled
to any preemptive right, right of first refusal or similar right as a result of
the issuance of the shares or otherwise. There is no voting trust, agreement or
arrangement among any of the Shareholders of any capital stock of the Company
affecting the exercise of the voting rights of any such capital stock.
 
5.9 Compliance with Laws and Other Instruments. Except as would not have a
Material Adverse Effect, the business and operations of the Company have been
and are being conducted in accordance with all applicable foreign, federal,
state and local laws, rules and regulations and all applicable orders,
injunctions, decrees, writs, judgments, determinations and awards of all courts
and governmental agencies and instrumentalities. Except as would not have a
Material Adverse Effect, the Company is not, and is not alleged to be, in
violation of, or (with or without notice or lapse of time or both) in default
under, or in breach of, any term or provision of its Organizational Documents or
of any indenture, loan or credit agreement, note, deed of trust, mortgage,
security agreement or other material agreement, lease, license or other
instrument, commitment, obligation or arrangement to which the Company is a
party or by which any of the Company’s properties, assets or rights are bound or
affected. To the knowledge of the Company, no other party to any material
contract, agreement, lease, license, commitment, instrument or other obligation
to which the Company is a party is (with or without notice or lapse of time or
both) in default thereunder or in breach of any term thereof. The Company is not
subject to any obligation or restriction of any kind or character, nor is there,
to the knowledge of the Company, any event or circumstance relating to the
Company that materially and adversely affects in any way its business,
properties, assets or prospects or that would prevent or make burdensome its
performance of or compliance with all or any part of this Agreement or the
consummation of the transactions contemplated hereby or thereby.
 
5.10 Certain Proceedings. There is no pending Proceeding that has been commenced
against the Company and that challenges, or may have the effect of preventing,
delaying, making illegal, or otherwise interfering with, any of the transactions
contemplated in this Agreement. To the Company’s knowledge, no such Proceeding
has been threatened.
 
5.11 No Brokers or Finders. No person has, or as a result of the transactions
contemplated herein will have, any right or valid claim against the Company for
any commission, fee or other compensation as a finder or broker, or in any
similar capacity, and the Company will indemnify and hold the Acquiror Company
harmless against any liability or expense arising out of, or in connection with,
any such claim.
 
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5.12 Title to and Condition of Properties. The Company owns or holds under valid
leases or other rights to use all real property, plants, machinery and equipment
necessary for the conduct of the business of the Company as presently conducted,
except where the failure to own or hold such property, plants, machinery and
equipment would not have a Material Adverse Effect on the Company. The material
buildings, plants, machinery and equipment necessary for the conduct of the
business of the Company 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, 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. 
 
5.13 Intellectual Property. All Intellectual Property owned by the Company is
set forth on Schedule 5.13 hereto. The Company owns its Intellectual Property
free from any third party interests other than any interest which has been on
Schedule 5.13 hereto. The Intellectual Property held by the Company contains all
of the rights to utilize the underlying technologies and no other action or
filings are required to utilize the Intellectual Property in the jurisdiction in
which such Intellectual Property right is registered.
 
5.14 Liabilities. Other than holding its Intellectual Property and issuing
Shares to various parties (all of which are being exchanged pursuant to this
Agreement), the Company has not carried on business and has not incurred any
liability to any third party.
 
5.15 Board Recommendation. The Board has, by unanimous written consent,
determined that this Agreement and the transactions contemplated by this
Agreement, are advisable and in the best interests of the Shareholders.
 
SECTION VI
REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR COMPANY
 
6.1 The Acquiror Company represents and warrants to the Shareholder and the
Company as follows:
 
6.2 Organization and Qualification. The Acquiror Company is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization, has all requisite authority and power (corporate and other),
governmental licenses, authorizations, consents and approvals to carry on its
business as presently conducted and to own, hold and operate its properties and
assets as now owned, held and operated by it, except where the failure to be so
organized, existing and in good standing, or to have such authority and power,
governmental licenses, authorizations, consents or approvals would not have a
Material Adverse Effect. The Acquiror Company 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, held or operated
makes such qualification, licensing or domestication necessary, except where the
failure to be so duly qualified, licensed or domesticated and in good standing
would not have a Material Adverse Effect. The SEC Documents set forth the
Acquiror Company’s jurisdiction of organization and each other jurisdiction in
which the Acquiror Company presently conducts its business or owns, holds and
operates its properties and assets.
 
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6.3 Subsidiaries. Except as set forth in the SEC Documents, the Acquiror Company
does not own, directly or indirectly, any equity or other ownership interest in
any corporation, partnership, joint venture or other entity or enterprise.
 
6.4 Authorization. The Acquiror Company has all requisite authority and power
(corporate and other), governmental licenses, authorizations, consents and
approvals to enter into this Agreement and each of the Transaction Documents to
which the Acquiror Company is a party, to consummate the transactions
contemplated by this Agreement and each of the Transaction Documents to which
the Acquiror Company is a party and to perform its obligations under this
Agreement and each of the Transaction Documents to which the Acquiror Company is
a party. The execution, delivery and performance by the Acquiror Company of this
Agreement and each of the Transaction Documents to which the Acquiror Company is
a party have been duly authorized by all necessary corporate action and do not
require from the Acquiror Company Board or the stockholders of the Acquiror
Company any consent or approval that has not been validly and lawfully obtained.
The execution, delivery and performance by the Acquiror Company of this
Agreement and each of the Transaction Documents to which the Acquiror Company is
a party requires no authorization, consent, approval, license, exemption of or
filing or registration with any Governmental Authority or other Person other
than such other customary filings with the Commission for transactions of the
type contemplated by this Agreement.
 
6.5 No Violation. Neither the execution nor the delivery by the Acquiror Company
of this Agreement or any Transaction Document to which the Acquiror Company is a
party, nor the consummation or performance by the Acquiror Company of the
transactions contemplated hereby or thereby will, directly or indirectly, (a)
contravene, conflict with, or result in a violation of any provision of the
Organizational Documents of the Acquiror Company; (b) contravene, conflict with,
constitute a default (or an event or condition which, with notice or lapse of
time or both, would constitute a default) under, or result in the termination or
acceleration of, or result in the imposition or creation of any Lien under, any
agreement or instrument to which the Acquiror Company is a party or by which the
properties or assets of the Acquiror Company are bound; (c) contravene, conflict
with, or result in a violation of, any Law or Order to which the Acquiror
Company, or any of the properties or assets owned or used by the Acquiror
Company, may be subject; or (d) contravene, conflict with, or result in a
violation of, the terms or requirements of, or give any Governmental Authority
the right to revoke, withdraw, suspend, cancel, terminate or modify, any
licenses, permits, authorizations, approvals, franchises or other rights held by
the Acquiror Company or that otherwise relate to the business of, or any of the
properties or assets owned or used by, the Acquiror Company, except, in the case
of clause (b), (c), or (d), for any such contraventions, conflicts, violations,
or other occurrences as would not have a Material Adverse Effect.
 
6.6 Binding Obligations. Assuming this Agreement and the Transaction Documents
have been duly and validly authorized, executed and delivered by the parties
thereto other than the Acquiror Company, this Agreement and each of the
Transaction Documents to which the Acquiror Company is a party are duly
authorized, executed and delivered by the Acquiror Company and constitutes the
legal, valid and binding obligations of the Acquiror Company, enforceable
against the Acquiror Company in accordance with their respective 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.
 
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6.7 Securities Laws. Assuming the accuracy of the representations and warranties
of the Shareholders contained in Section 4 and Exhibits D and E, the issuance of
the Acquiror Company Shares pursuant to this Agreement are (a) exempt from the
registration and prospectus delivery requirements of the Securities Act, (b)
have been registered or qualified (or are exempt from registration and
qualification) under the registration permit or qualification requirements of
all applicable state securities laws, and (c) accomplished in conformity with
all other applicable federal and state securities laws.
 
6.8 Capitalization and Related Matters.
 
6.8.1 Capitalization. The authorized capital stock of the Acquiror Company
consists of 100,000,000 shares of the Acquiror Company’s Common Stock, of which
37,382,450 shares are issued and outstanding. All issued and outstanding shares
of the Acquiror Company’s Common Stock are duly authorized, validly issued,
fully paid and nonassessable, and have not been issued in violation of any
preemptive or similar rights. At the Closing Date, the Acquiror Company will
have sufficient authorized and unissued Acquiror Company’s Common Stock to
consummate the transactions contemplated hereby. There are no outstanding
stockholders’ agreements, voting trusts or arrangements, registration rights
agreements, rights of first refusal or other contracts pertaining to the capital
stock of the Acquiror Company. The issuance of all of the shares of Acquiror
Company’s Common Stock described in this Section 6.8.1 have been in compliance
with U.S. federal and state securities laws.
 
6.8.2 No Redemption Requirements. Except as set forth in the SEC Documents,
there are no outstanding contractual obligations (contingent or otherwise) of
the Acquiror Company to retire, repurchase, redeem or otherwise acquire any
outstanding shares of capital stock of, or other ownership interests in, the
Acquiror Company or to provide funds to or make any investment (in the form of a
loan, capital contribution or otherwise) in any other Person.
 
6.8.3 Duly Authorized. The issuance of the Acquiror Company Shares has been duly
authorized and, upon delivery to the Shareholders of certificates therefor in
accordance with the terms of this Agreement, the Acquiror Company Shares will
have been validly issued and fully paid, and will be nonassessable, have the
rights, preferences and privileges specified, will be free of preemptive rights
and will be free and clear of all Liens and restrictions, other than Liens
created by the Shareholders and restrictions on transfer imposed by this
Agreement and the Securities Act.
 
6.9 Compliance with Laws. Except as would not have a Material Adverse Effect,
the business and operations of the Acquiror Company have been and are being
conducted in accordance with all applicable Laws and Orders. Except as would not
have a Material Adverse Effect, the Acquiror Company has not received notice of
any violation (or any Proceeding involving an allegation of any violation) of
any applicable Law or Order by or affecting the Acquiror Company and, to the
knowledge of the Acquiror Company, no Proceeding involving an allegation of
violation of any applicable Law or Order is threatened or contemplated. Except
as would not have a Material Adverse Effect, the Acquiror Company is not subject
to any obligation or restriction of any kind or character, nor is there, to the
knowledge of the Acquiror Company, any event or circumstance relating to the
Acquiror Company that materially and adversely affects in any way its business,
properties, assets or prospects or that prohibits the Acquiror Company from
entering into this Agreement or would prevent or make burdensome its performance
of or compliance with all or any part of this Agreement or the consummation of
the transactions contemplated hereby.
 
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6.10 No Brokers or Finders. No Person has, or as a result of the transactions
contemplated herein will have, any right or valid claim against the Acquiror
Company for any commission, fee or other compensation as a finder or broker, or
in any similar capacity, and the Acquiror Company will indemnify and hold the
Company harmless against any liability or expense arising out of, or in
connection with, any such claim.
 
6.11 Absence of Undisclosed Liabilities. Except as set forth in the SEC
Documents, the Acquiror Company has no debt, obligation or liability (whether
accrued, absolute, contingent, liquidated or otherwise, whether due or to become
due, whether or not known to the Acquiror Company) arising out of any
transaction entered into at or prior to the Closing Date or any act or omission
at or prior to the Closing Date, except to the extent set forth on or reserved
against on the Acquiror Company Balance Sheet. All debts, obligations or
liabilities with respect to directors and officers of the Acquiror Company will
be cancelled prior to the Closing. The Acquiror Company has not incurred any
liabilities or obligations under agreements entered into, in the usual and
ordinary course of business since March 31, 2006.
 
6.12 Changes. Except as set forth in the SEC Documents or in Schedule 6.12, the
Acquiror Company has, since March 31, 2006:
 
6.12.1 Ordinary Course of Business. Conducted its business or entered into any
transaction other than in the usual and ordinary course of business, except for
this Agreement.
 
6.12.2 Adverse Changes. Not suffered or experienced any change in, or affecting,
its condition (financial or otherwise), properties, assets, liabilities,
business, operations, results of operations or prospects other than changes,
events or conditions in the usual and ordinary course of its business, none of
which would have a Material Adverse Effect;
 
6.12.3 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;
 
6.12.4 Dividends. Declared, set aside, made or paid any dividend or other
distribution to any of its stockholders;
 
6.12.5 Material Acquiror Company Contracts. Terminated or modified any Material
Acquiror Company Contract, except for termination upon expiration in accordance
with the terms thereof;
 
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6.12.6 Claims. Released, waived or cancelled any claims or rights relating to or
affecting the Acquiror Company in excess of US $10,000 in the aggregate or
instituted or settled any Proceeding involving in excess of US $10,000 in the
aggregate;
 
6.12.7 Discharged Liabilities. Paid, discharged or satisfied any claim,
obligation or liability in excess of US $10,000 in the aggregate, except for
liabilities incurred prior to the date of this Agreement in the ordinary course
of business;
 
6.12.8 Indebtedness. Created, incurred, assumed or otherwise become liable for
any Indebtedness in excess of US $10,000 in the aggregate, other than
professional fees;
 
6.12.9 Guarantees. Guaranteed or endorsed in a material amount any obligation or
net worth of any Person;
 
6.12.10 Acquisitions. Acquired the capital stock or other securities or any
ownership interest in, or substantially all of the assets of, any other Person;
 
6.12.11 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;
 
6.12.12 Agreements. Except as set forth in the SEC Documents, entered into any
agreement, or otherwise obligated itself, to do any of the foregoing.
 
6.13 Material Acquiror Company Contracts. Except to the extent filed with the
SEC Documents, the Acquiror Company has made available to the Company, prior to
the date of this Agreement, true, correct and complete copies of each written
Material Acquiror Company Contract, including each amendment, supplement and
modification thereto.
 
6.13.1 No Defaults. Each Material Acquiror Company Contract is a valid and
binding agreement of the Acquiror Company that is party thereto, and is in full
force and effect. Except as would not have a Material Adverse Effect, the
Acquiror Company is not in breach or default of any Material Acquiror Company
Contract to which it is a party and, to the knowledge of the Acquiror Company,
no other party to any Material Acquiror Company Contract is in breach or default
thereof. Except as would not have a Material Adverse Effect, no event has
occurred or circumstance exists 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 Material
Acquiror Company Contract or (b) permit the Acquiror Company 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 Material
Acquiror Company Contract. The Acquiror Company has not received notice of the
pending or threatened cancellation, revocation or termination of any Material
Acquiror Company Contract to which it is a party. There are no renegotiations
of, or attempts to renegotiate, or outstanding rights to renegotiate any
material terms of any Material Acquiror Company Contract.
 
 

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6.14 Employees.
 
6.14.1 The Acquiror Company has no employees, independent contractors or other
Persons providing research or other services to them. Except as would not have a
Material Adverse Effect, the Acquiror Company is in full compliance with all
Laws regarding employment, wages, hours, benefits, equal opportunity, collective
bargaining, the payment of Social Security and other taxes, occupational safety
and health and plant closing. The Acquiror Company is not liable for the payment
of any compensation, damages, taxes, fines, penalties or other amounts, however
designated, for failure to comply with any of the foregoing Laws.
 
6.14.2 No director, officer or employee of the Acquiror Company is a party to,
or is otherwise bound by, any contract (including any confidentiality,
noncompetition or proprietary rights agreement) with any other Person that in
any way adversely affects or will materially affect (a) the performance of his
or her duties as a director, officer or employee of the Acquiror Company or (b)
the ability of the Acquiror Company to conduct its business. Except as set forth
in the SEC Documents, each employee of the Acquiror Company is employed on an
at-will basis and the Acquiror Company has no contract with any of its employees
which would interfere with the Acquiror Company’s ability to discharge its
employees.
 
6.15 Material Assets. The financial statements of the Acquiror Company set forth
in the SEC Documents reflect the material properties and assets (real and
personal) owned or leased by the Acquiror Company.
 
6.16 Litigation; Orders. Except as set forth in the SEC Documents, there is no
Proceeding (whether federal, state, local or foreign) pending or, to the
knowledge of the Acquiror Company, threatened against or affecting the Acquiror
Company or the Acquiror Company’s properties, assets, business or employees. To
the knowledge of the Acquiror Company, there is no fact that might result in or
form the basis for any such Proceeding. The Acquiror Company is not subject to
any Orders.
 
6.17 Interested Party Transactions. Except as set forth in the SEC Documents, no
officer, director or stockholder of the Acquiror Company or any Affiliate or
“associate” (as such term is defined in Rule 405 of the Commission under the
Securities Act) of any such Person, has or has had, either directly or
indirectly, (1) an interest in any Person which (a) furnishes or sells services
or products which are furnished or sold or are proposed to be furnished or sold
by the Acquiror Company, or (b) purchases from or sells or furnishes to, or
proposes to purchase from, sell to or furnish any Acquiror Company any goods or
services; or (2) a beneficial interest in any contract or agreement to which the
Acquiror Company is a party or by which it may be bound or affected.
 
6.18 Governmental Inquiries. The Acquiror Company has provided to the Company a
copy of each material written inspection report, questionnaire, inquiry, demand
or request for information received by the Acquiror Company from any
Governmental Authority, and the Acquiror Company’s response thereto, and each
material written statement, report or other document filed by the Acquiror
Company with any Governmental Authority.
 
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6.19 Intellectual Property. Except as set forth in the SEC Documents, the
Acquiror Company does not own, use or license any Intellectual Property in its
business as presently conducted, except as set forth in the SEC Documents.
 
6.20 Title to and Condition of Properties. Except as would not have a Material
Adverse Effect, the Acquiror Company owns (with good and marketable title in the
case of real property) or holds under valid leases or other rights to use all
real property, plants, machinery, equipment and other personal property
necessary for the conduct of its business as presently conducted, free and clear
of all Liens, except Permitted Liens. The material buildings, plants, machinery
and equipment necessary for the conduct of the business of the Acquiror Company
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, 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.
 
6.21 SEC Documents; Financial Statements. The Acquiror Company has filed all
reports required to be filed by it under the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof, for the three (3) years preceding the date
hereof (or such shorter period as the Acquiror Company was required by law to
file such material) (the foregoing materials being collectively referred to
herein as the “SEC Documents”) and, while not having filed all such SEC
Documents prior to the expiration of any extension(s), is nevertheless current
with respect to its Exchange Act filing requirements. As of their respective
dates, the SEC Documents complied in all material respects with the requirements
of the Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Documents, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statement
therein, in light of the circumstances under which they were made, not
misleading. All material agreements to which the Acquiror Company is a party or
to which the property or assets of the Acquiror Company are subject have been
appropriately filed as exhibits to the SEC Documents as and to the extent
required under the Exchange Act. The financial statements of the Acquiror
Company included in the SEC Documents comply in all material respects with
applicable accounting requirement and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing, were
prepared in accordance with GAAP applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto, or, in the
case of unaudited statements as permitted by Form 10-QSB of the Commission), and
fairly present in all material respects (subject in the case of unaudited
statements, to normal, recurring audit adjustments) the financial position of
the Acquiror Company as at the dates thereof and the results of its operations
and cash flows for the periods then ended.
 
6.22 Money Laundering Laws. The operations of the Acquiror Company is and has
been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering statutes of
all U.S. and non-U.S. jurisdictions, the rules and regulations thereunder and
any related or similar rules, regulations or guidelines, issued, administered or
enforced by any Governmental Authority (collectively, the “Money Laundering
Laws”) and no Proceeding involving the Acquiror Company with respect to the
Money Laundering Laws is pending or, to the knowledge of the Acquiror Company,
threatened.
 
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6.23 Board Recommendation. The Acquiror Company Board, at a meeting duly called
and held, has determined that this Agreement and the transactions contemplated
by this Agreement are advisable and in the best interests of the Acquiror
Company’s stockholders and has duly authorized this Agreement and the
transactions contemplated by this Agreement.
 
SECTION VII
COVENANTS OF THE ACQUIROR COMPANY
 
7.1 Indemnification and Insurance.
 
7.1.1 The Acquiror Company shall to the fullest extent permitted under
applicable Law or its Organizational Documents, indemnify and hold harmless,
each present and former director, officer or employee of the Acquiror Company
(collectively, the “Indemnified Parties”) against any costs or expenses
(including attorneys’ fees), judgments, fines, losses, claims, damages,
liabilities and amounts paid in settlement in connection with any Proceeding (x)
arising out of or pertaining to the transactions contemplated by this Agreement
or (y) otherwise with respect to any acts or omissions occurring at or prior to
the Closing Date, to the same extent as provided in the Acquiror Company’s
Organizational Documents or any applicable contract or agreement as in effect on
the date hereof, in each case for a period of two years after the Closing Date.
In the event of any such Proceeding (whether arising before or after the Closing
Date), (i) any counsel retained by the Indemnified Parties for any period after
the Closing Date shall be reasonably satisfactory to the Acquiror Company, (ii)
after the Closing Date, the Acquiror Company shall pay the reasonable fees and
expenses of such counsel, promptly after statements therefor are received,
provided that the Indemnified Parties shall be required to reimburse the
Acquiror Company for such payments in the circumstances and to the extent
required by the Acquiror Company’s Organizational Documents, any applicable
contract or agreement or applicable Law, and (iii) the Acquiror Company will
cooperate in the defense of any such matter; provided, however, that the
Acquiror Company shall not be liable for any settlement effected without its
written consent (which consent shall not be unreasonably withheld); and
provided, further, that, in the event that any claim or claims for
indemnification are asserted or made within such two (2) year period, all rights
to indemnification in respect of any such claim or claims shall continue until
the disposition of any and all such claims. The Indemnified Parties as a group
may retain only one law firm to represent them in each applicable jurisdiction
with respect to any single action unless there is, under applicable standards of
professional conduct, a conflict on any significant issue between the positions
of any two or more Indemnified Parties, in which case each Indemnified Person
with respect to whom such a conflict exists (or group of such Indemnified
Persons who among them have no such conflict) may retain one separate law firm
in each applicable jurisdiction.
 
7.1.2 This Section 7.1 shall survive the consummation of the transactions
contemplated by this Agreement upon execution, is intended to benefit the
Indemnified Parties and the Covered Persons, shall be binding on all successors
and assigns of the Acquiror Company and shall be enforceable by the Indemnified
Parties and the Covered Persons.
 
7.2 Rule 144 Reporting. Subject to the Acquiror Company not being in material
breach of the warranties and representations in Section 6, with a view to making
available to the Acquiror Company’s stockholders the benefit of certain rules
and regulations of the Commission which may permit the sale of the Acquiror
Company Common Stock to the public without registration, from and after the
Closing Date, the Acquiror Company agrees to:
 
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7.2.1 Make and keep public information available, as those terms are understood
and defined in Rule 144; and
 
7.2.2 File with the Commission, in a timely manner, all reports and other
documents required of the Acquiror Company under the Exchange Act.
 
7.3 SEC Documents. From and after the Closing Date, in the event the Commission
notifies the Acquiror Company of its intent to review any SEC Document filed
prior to the Closing Date or the Acquiror Company receives any oral or written
comments from the Commission with respect to any SEC Document filed prior to the
Closing Date, the Acquiror Company shall promptly notify the Shareholders and
the Shareholders shall fully cooperate with the Acquiror Company.
 
7.4 Scrip for Scrip Rollover. The Acquiror Company and the Shareholders jointly
choose a scrip for scrip rollover for Australian tax purposes in accordance with
subdivision 124-M of the Income Tax Assessment Act in respect of this Agreement
and the Acquiror Company and Shareholders must execute all documents required to
effect this. This clause does not merge on Closing.
 
SECTION VIII
CONDITIONS PRECEDENT OF THE ACQUIROR COMPANY
 
The Acquiror Company’s obligation to acquire the Shares and to take the other
actions required to be taken by the Acquiror Company at the Closing Date is
subject to the satisfaction, at or prior to the Closing Date, of each of the
following conditions (any of which may be waived by the Acquiror Company, in
whole or in part):
 
8.1 Accuracy of Representations. The representations and warranties of the
Company and the Shareholders set forth in this Agreement or in any Schedule or
certificate delivered pursuant hereto that are not qualified as to materiality
shall be true and correct in all material respects as of the date of this
Agreement except to the extent a representation or warranty is expressly limited
by its terms to another date and without giving effect to any supplemental
Schedule. The representations and warranties of the Company and the Shareholders
set forth in this Agreement or in any Schedule or certificate delivered pursuant
hereto that are qualified as to materiality shall be true and correct in all
respects as of the date of this Agreement, except to the extent a representation
or warranty is expressly limited by its terms to another date and without giving
effect to any supplemental Schedule.
 
8.2 Performance by the Company and Shareholders.
 
8.2.1 All of the covenants and obligations that the Company and the Shareholders
are required to perform or to comply with pursuant to this Agreement (considered
collectively), and each of these covenants and obligations (considered
individually), must have been duly performed and complied with in all material
respects.
 
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8.2.2 Each document required to be delivered by the Company and the Shareholders
pursuant to this Agreement must have been delivered.
 
8.3 No Force Majeure Event. There shall not have been any delay, error, failure
or interruption in the conduct of the business of any Acquired Company, or any
loss, injury, delay, damage, distress, or other casualty, due to force majeure
including but not limited to (a) acts of God; (b) fire or explosion; (c) war,
acts of terrorism or other civil unrest; or (d) national emergency.
 
8.4 Certificate of Officer. The Company will have delivered to the Acquiror
Company a certificate executed by an officer of the Company, certifying the
satisfaction of the conditions specified in Sections 8.1, 8.2, and 8.3.
 
8.5 Consents.
 
8.5.1 All material consents, waivers, approvals, authorizations or orders
required to be obtained, and all filings required to be made, by the Company
and/or the Shareholders for the authorization, execution and delivery of this
Agreement and the consummation by them of the transactions contemplated by this
Agreement, shall have been obtained and made by the Company or the Shareholders,
as the case may be, except where the failure to receive such consents, waivers,
approvals, authorizations or orders or to make such filings would not have a
Material Adverse Effect on the Company or the Acquiror Company.
 
8.6 Documents. The Company and the Shareholders must deliver to the Acquiror
Company at the Closing:
 
8.6.1 (i) share certificates evidencing the number of Shares held by each
Shareholder (as set forth in Exhibit A), along with executed share transfer
forms transferring such Shares to the Acquiror Company together with a certified
copy of a board resolution of the Company approving the registration of the
transfer of such shares to Acquiror Company (subject to Closing and payment of
stamp duty);
 
8.6.2 each of the Transaction Documents to which the Company and/or the
Shareholders is a party, duly executed, and such other documents as the Acquiror
Company may reasonably request for the purpose of (A) evidencing the accuracy of
any of the representations and warranties of the Company and the Shareholders
pursuant to Section 8.1, (B) evidencing the performance of, or compliance by the
Company and the Shareholders with, any covenant or obligation required to be
performed or complied with by the Company or the Shareholders, as the case may
be, (C) evidencing the satisfaction of any condition referred to in this
Section, or (D) otherwise facilitating the consummation or performance of any of
the transactions contemplated by this Agreement.
 
8.7 No Proceedings. There must not have been commenced or threatened against the
Acquiror Company, the Company or any Shareholder, or against any Affiliate
thereof, any Proceeding (which Proceeding remains unresolved as of the Closing
Date) (a) involving any challenge to, or seeking damages or other relief in
connection with, any of the transactions contemplated by this Agreement, or (b)
that may have the effect of preventing, delaying, making illegal, or otherwise
interfering with any of the transactions contemplated by this Agreement.
 
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8.8 No Claim Regarding Stock Ownership or Consideration. There must not have
been made or threatened by any Person any claim asserting that such Person (a)
is the holder of, or has the right to acquire or to obtain beneficial ownership
of the Shares or any other stock, voting, equity, or ownership interest in, the
Company, or (b) is entitled to all or any portion of the Acquiror Company
Shares.
 
SECTION IX
CONDITIONS PRECEDENT OF THE COMPANY
AND THE SHAREHOLDERS
 
The Shareholders’ obligation to transfer the Shares and the obligations of the
Company to take the other actions required to be taken by the Company in advance
of or at the Closing Date are subject to the satisfaction, at or prior to the
Closing Date, of each of the following conditions (any of which may be waived by
the Company and the Shareholders jointly, in whole or in part):
 
9.1 Accuracy of Representations. The representations and warranties of the
Acquiror Company set forth in this Agreement or in any Schedule or certificate
delivered pursuant hereto that are not qualified as to materiality shall be true
and correct in all material respects as of the date of this Agreement except to
the extent a representation or warranty is expressly limited by its terms to
another date and without giving effect to any supplemental Schedule. The
representations and warranties of the Acquiror Company set forth in this
Agreement or in any Schedule or certificate delivered pursuant hereto that are
qualified as to materiality shall be true and correct in all respects as of the
date of this Agreement, except to the extent a representation or warranty is
expressly limited by its terms to another date and without giving effect to any
supplemental Schedule.
 
9.2 Performance by the Acquiror Company.
 
9.2.1 All of the covenants and obligations that the Acquiror Company and are
required to perform or to comply with pursuant to this Agreement (considered
collectively), and each of these covenants and obligations (considered
individually), must have been performed and complied with in all respects.
 
9.2.2 Each document required to be delivered by the Acquiror Company pursuant to
this Agreement must have been delivered.
 
9.3 No Force Majeure Event. There shall not have been any delay, error, failure
or interruption in the conduct of the business of the Acquiror Company, or any
loss, injury, delay, damage, distress, or other casualty, due to force majeure
including but not limited to (a) acts of God; (b) fire or explosion; (c) war,
acts of terrorism or other civil unrest; or (d) national emergency.
 
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9.4 Certificate of Officer. The Acquiror Company will have delivered to the
Company a certificate, dated the Closing Date, executed by an officer of the
Acquiror Company, certifying the satisfaction of the conditions specified in
Sections 9.1, 9.2, and 9.3.
 
9.5 Consents.
 
9.5.1 All material consents, waivers, approvals, authorizations or orders
required to be obtained, and all filings required to be made, by the Acquiror
Company for the authorization, execution and delivery of this Agreement and the
consummation by it of the transactions contemplated by this Agreement, shall
have been obtained and made by the Acquiror Company, except where the failure to
receive such consents, waivers, approvals, authorizations or orders or to make
such filings would not have a Material Adverse Effect on the Company or the
Acquiror Company.
 
9.6 Documents. The Acquiror Company must have caused the following documents to
be delivered to the Company and/or the Shareholders:
 
9.6.1 share certificates evidencing each Shareholder’s pro rata share of the
Closing Acquiror Company Shares (as set forth in Exhibit A);
 
9.6.2 each of the Transaction Documents to which the Acquiror Company is a
party, duly executed; and
 
9.6.3 such other documents as the Company or the Shareholders may reasonably
request for the purpose of (i) evidencing the accuracy of any representation or
warranty of the Acquiror Company pursuant to Section 9.1, (ii) evidencing the
performance by the Acquiror Company of, or the compliance by the Acquiror
Company with, any covenant or obligation required to be performed or complied
with by the Acquiror Company, (iii) evidencing the satisfaction of any condition
referred to in this Section 9, or (iv) otherwise facilitating the consummation
of any of the transactions contemplated by this Agreement.
 
9.7 No Proceedings. Since the date of this Agreement, there must not have been
commenced or threatened against the Acquiror Company, the Company or any
Shareholder, or against any Affiliate thereof, any Proceeding (which Proceeding
remains unresolved as of the date of this Agreement) (a) involving any challenge
to, or seeking damages or other relief in connection with, any of the
transactions contemplated hereby, or (b) that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with any of the transactions
contemplated hereby.
 
9.8 No Claim Regarding Stock Ownership or Consideration. There must not have
been made or threatened by any Person any claim asserting that such Person is
the holder of, or has the right to acquire or to obtain beneficial ownership of
the Acquiror Company Common Stock. 
 
9.9 Waiver of Right to be Represented by Counsel. The Shareholders acknowledge
that: (i) they have heretofore been advised by the Acquiror Company to obtain
representation by counsel in connection with the negotiation, execution and
delivery of this Agreement and the other agreements, documents and instruments
herein or therein provided and the consummation of the transactions contemplated
herein or therein; (ii) they voluntarily elect to forego representation by
counsel in such connection; and (iii) they hereby irrevocably waive any and all
rights to contest or challenge the negotiation, execution and delivery of this
Agreement and the other agreements, documents and instruments herein or therein
provided or the consummation of the transactions contemplated herein or therein
due to the lack of representation by counsel.
 
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9.10 Loan and Security Documents. The Acquiror Company must cause its wholly
owned subsidiary, AMI Australia Holdings Pty Limited, to execute and consummate
the financing contemplated by the Loan and Security Documents.
 
9.11 Cash Payment. The Acquiror Company must have paid the Shareholders, which
are listed on Part B of Exhibit A, a cash payment of A$3 million (approximately
US$2.25 million) by bank check or telegraphic transfer.
 
SECTION X
INDEMNIFICATION; REMEDIES
 
10.1 Survival. All representations, warranties, covenants, and obligations in
this Agreement shall expire on the first (1st) anniversary of the date this
Agreement is executed (the “Survival Period”). The right to indemnification,
payment of Damages or other remedy based on such representations, warranties,
covenants, and obligations will not be affected by any investigation conducted
with respect to, or any knowledge acquired (or capable of being acquired) at any
time, whether before or after the execution and delivery of this Agreement, with
respect to the accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant, or obligation. The waiver of any condition
based on the accuracy of any representation or warranty, or on the performance
of or compliance with any covenant or obligation, will not affect the right to
indemnification, payment of Damages, or other remedy based on such
representations, warranties, covenants, and obligations.
 
10.2 Limitations on Amount - the Acquiror Company. No Company Indemnified Party
shall be entitled to indemnification pursuant to Section 7.1, unless and until
the aggregate amount of Damages to all Company Indemnified Parties with respect
to such matters under Section 7.1 exceeds US$20,000, at which time, the Company
Indemnified Parties shall be entitled to indemnification for the total amount of
such Damages in excess of US$20,000.
 
10.3 Determining Damages. Materiality qualifications to the representations and
warranties of the Company and the Acquiror Company shall not be taken into
account in determining the amount of Damages occasioned by a breach of any such
representation and warranty for purposes of determining whether the baskets set
forth in Section 10.2 has been met.
 
SECTION XI
GENERAL PROVISIONS
 
11.1 Expenses. Except as otherwise expressly provided in this Agreement, each
party to this Agreement will bear its respective expenses incurred in connection
with the preparation, execution, and performance of this Agreement and the
transactions contemplated by this Agreement, including all fees and expenses of
agents, representatives, counsel, and accountants. In the event of termination
of this Agreement, the obligation of each party to pay its own expenses will be
subject to any rights of such party arising from a breach of this Agreement by
another party.
 
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11.2 Public Announcements. The Acquiror Company shall promptly, but no later
than two (2) days following the effective date of this Agreement, issue a press
release disclosing the transactions contemplated hereby. Prior to the Closing
Date, the Company and the Acquiror Company shall consult with each other in
issuing any other press releases or otherwise making public statements or
filings and other communications with the Commission or any regulatory agency or
stock market or trading facility with respect to the transactions contemplated
hereby and neither party shall issue any such press release or otherwise make
any such public statement, filings or other communications without the prior
written consent of the other, which consent shall not be unreasonably withheld
or delayed, except that no prior consent shall be required if such disclosure is
required by law, in which case the disclosing party shall provide the other
party with prior notice of such public statement, filing or other communication
and shall incorporate into such public statement, filing or other communication
the reasonable comments of the other party.
 
11.3 Confidentiality.
 
11.3.1 Subsequent to the date of this Agreement, the Acquiror Company, the
Shareholders and the Company will maintain in confidence, and will cause their
respective directors, officers, employees, agents, and advisors to maintain in
confidence, any written, oral, or other information obtained in confidence from
another party in connection with this Agreement or the transactions contemplated
by this Agreement, unless (a) such information is already known to such party or
to others not bound by a duty of confidentiality or such information becomes
publicly available through no fault of such party, (b) the use of such
information is necessary or appropriate in making any required filing with the
Commission, or obtaining any consent or approval required for the consummation
of the transactions contemplated by this Agreement, or (c) the furnishing or use
of such information is required by or necessary or appropriate in connection
with legal proceedings.
 
11.3.2 In the event that any party is required to disclose any information of
another party pursuant to clause (b) or (c) of Section 11.3.1, the party
requested or required to make the disclosure (the “disclosing party”) shall
provide the party that provided such information (the “providing party”) with
prompt notice of any such requirement so that the providing party may seek a
protective order or other appropriate remedy and/or waive compliance with the
provisions of this Section 11.3. If, in the absence of a protective order or
other remedy or the receipt of a waiver by the providing party, the disclosing
party is nonetheless, in the opinion of counsel, legally compelled to disclose
the information of the providing party, the disclosing party may, without
liability hereunder, disclose only that portion of the providing party’s
information which such counsel advises is legally required to be disclosed,
provided that the disclosing party exercises its reasonable efforts to preserve
the confidentiality of the providing party’s information, including, without
limitation, by cooperating with the providing party to obtain an appropriate
protective order or other relief assurance that confidential treatment will be
accorded the providing party’s information.
 
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11.3.3 If the transactions contemplated by this Agreement are not consummated,
each party will return or destroy as much of such written information as the
other party may reasonably request.
 
11.4 Notices. All notices, consents, waivers, and other communications under
this Agreement must be in writing and will be deemed to have been duly given
when (a) delivered by hand (with written confirmation of receipt), (b) sent by
telecopier (with written confirmation of receipt), or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by written notice to the other parties):
 
If to Acquiror Company:
Advanced Medical Institute, Inc.
c/o Advanced Medical Institute Pty Ltd.
Level 1, 204-218 Botany Road
Alexandria, NSW 2015 Australia 
Attention: Jacov Vaisman, CEO and President
Telephone No.: 61 2 9640 5200
Facsimile No.: 61 2 9640 5264
with a copy to
Loeb & Loeb LLP
345 Park Avenue
New York, New York 10154
Attention: Mitchell S. Nussbaum, Esq.
Telephone No.: 212-407-4159
Facsimile No.: 212-407-4990
   
If to the Company:
 
Worldwide PE Patent Holdco Pty Limited 
Level 1, 204, -218 Botany Road
Alexandria NSW 2015
Australia 
Attention: Igor Chalik, Director
Telephone No.: 61 2 9369 3022
Facsimile No.: 61 2 9369 3322
 
   
If to the Shareholders:
 
To the respective address set forth in Exhibit A attached hereto.
 

 
11.5 Arbitration. Any dispute or controversy under this Agreement shall be
settled exclusively by arbitration in the City of New York, County of New York
in accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitration award in any court having
jurisdiction.
 
11.6 Further Assurances. The parties agree (a) to furnish upon request to each
other such further information, (b) to execute and deliver to each other such
other documents, and (c) to do such other acts and things, all as the other
party may reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.
 
27

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11.7 Waiver. The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
 
11.8 Entire Agreement and Modification. This Agreement supersedes all prior
agreements between the parties with respect to its subject matter and
constitutes (along with the documents referred to in this Agreement) a complete
and exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended except by a
written agreement executed by the party against whom the enforcement of such
amendment is sought.
 
11.9 Assignments, Successors, and No Third-Party Rights. No party may assign any
of its rights under this Agreement without the prior consent of the other
parties. Subject to the preceding sentence, this Agreement will apply to, be
binding in all respects upon, and inure to the benefit of and be enforceable by
the respective successors and permitted assigns of the parties. Except as set
forth in Section 7.1 and Section 10.3, nothing expressed or referred to in this
Agreement will be construed to give any Person other than the parties to this
Agreement any legal or equitable right, remedy, or claim under or with respect
to this Agreement or any provision of this Agreement. This Agreement and all of
its provisions and conditions are for the sole and exclusive benefit of the
parties to this Agreement and their successors and assigns.
 
11.10 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.
 
11.11 Section Headings, Construction. The headings of Sections in this Agreement
are provided for convenience only and will not affect its construction or
interpretation. All references to “Section” or “Sections” refer to the
corresponding Section or Sections of this Agreement. All words used in this
Agreement will be construed to be of such gender or number as the circumstances
require. Unless otherwise expressly provided, the word “including” does not
limit the preceding words or terms.
 
11.12 Governing Law. This Agreement will be governed by the laws of the State of
New York without regard to conflicts of laws principles.
 
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11.13 Counterparts. This Agreement may be executed in one or more counterparts,
each of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same
agreement.
29

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COUNTERPART SIGNATURE PAGE
 
IN WITNESS WHEREOF, the parties have executed and delivered this Share Exchange
Agreement as of the date first written above.
 
Acquiror Company:
 
Advanced Medical Institute Inc.
 
 
By: /s/ Dilip Shrestha    
Name: Dilip Shrestha
Title: Chief Financial Officer
Company:
 
Worldwide PE Patent Holdco Pty Limited
 
 
By: /s/ Igor Chalik    
Name: Igor Chalik
Title: Director
 
Shareholder:
 
 
/s/ Bishnu Lxmi Chakubaji
Name: Bishnu Lxmi Chakubaji
 
Shareholder:
 
 
/s/ Hershey Kay Montelibano
Name: Hershey Kay Montelibano
 
Shareholder:
 
Avina Investments Limited
 
By: Westco Directors Limited
 
By: /s/ Marie Lim    
Name: Marie Lim
Title: Duly Authorized Officer
 
Shareholder:
 
Adendium Financial Services
 
By: Westco Directors Limited
 
By: /s/ Marie Lim    
Name: Marie Lim
Title: Duly Authorized Officer
 
Shareholder:
 
/s/ Angela Kutalyov
Name: Angela Kutalyov
 
Shareholder:
 
Geissler Holdings Ltd.
 
By: /s/ Richard Doyle    
Name: Richard Doyle
Title: Authorized Officer
 
Shareholder:
 
RRD Investments Pty Ltd.
 
By: /s/ Richard Doyle    
Name: Richard Doyle
Title: Director
 

 

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

 
COUNTERPART SIGNATURE PAGE
(FOR ISSUANCES PURSUANT TO REGULATION S)
 
IN WITNESS WHEREOF, the parties have executed and delivered this Share Exchange
Agreement as of the date first written above.
 
 

        ENTITY NAME:  
   
   
    By:   /s/   

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

Name:   Title: 

 
 

OFFSHORE DELIVERY INSTRUCTIONS:                  PRINT EXACT NAME IN WHICH YOU
WANT THE SECURITIES TO BE REGISTERED            Attn:              Address:    
                          Phone No.             Facsimile No.  
 
 

 
 

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

 
 
COUNTERPART SIGNATURE PAGE
 
(FOR ISSUANCES PURSUANT TO SECTION 4(2))
 
IN WITNESS WHEREOF, the parties have executed and delivered this Share Exchange
Agreement as of the date first written above.
 
 

        ENTITY NAME:  
   
   
    By:   /s/   

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

Name:   Title: 

 
 
Circle the category under which you are an “accredited investor” pursuant to
Exhibit B:
 
1 2 3 4 5 6 7 8
 
 

    PRINT EXACT NAME IN WHICH YOU WANT THE SECURITIES TO BE REGISTERED         
  Attn:              Address:                               Phone No.          
  Facsimile No.  
 
 

 

 

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SCHEDULES

Schedule 5.1 Company Jurisdiction    Schedule 5.7.1 Capitalization of the
Company    Schedule 5.7.2 Company Redemption Requirements    Schedule 5.13
Company Intellectual Property    Schedule 6.12 Acquiror Company Changes         

 

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

 
EXHIBIT A
SHARES AND ACQUIROR COMPANY SHARESAND PAYMENTS
 
Part A:
 

Name and Address of Shareholder
Number of Shares to be delivered by Shareholder
Number of Acquiror Company Shares to be issued to Shareholder
Avina Investments Limited
1 Raffles Place
#21-01 OUB Centre
Singapore 048616
16,000,000
1,600,000
Geissler Holdings Limited
1 Raffles Place
#21-01 OUB Centre
Singapore 048616
76,000,000
7,600,000
Hershey Kay Montelibano
c/- Level 1
204-218 Botany Road
Alexandria NSW 2015
10,000,000
1,000,000
Angela Kutalyov
Unit 15
2-8 Llanduff Street
Bondi Junction NSW 2022
4,000,000
400,000
Bishnu Laxmi Chakubaji
PO Box 335
Petersham NSW 2049
Australia
10,000,000
1,000,000
Adenium Financial Services Limited
1 Raffles Place
#21-01 OUB Centre
Singapore 048616
11,250,000
1,125,000
RRD Investments Pty Limited
65 Prospect Road
Summer Hill NSW 2130
Australia
34,000,000
3,400,000
Total
161,250,000
16,125,000

 
 

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

 
 
Part B:
 

Name and Address of Shareholder
Number of Shares to be delivered by Shareholder
Payment
Avina Investments Limited
1 Raffles Place
#21-01 OUB Centre
Singapore 048616
2,000,000
A$1,500,000
Geissler Holdings Limited
1 Raffles Place
#21-01 OUB Centre
Singapore 048616
2,000,000
A$1,500,000
Total
4,000,000
A$3,000,000

 

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EXHIBIT B
Definition of “Accredited Investor”
 
The term “accredited investor” means:
 
(1)
A bank as defined in Section 3(a)(2) of the Securities Act, or a savings and
loan association or other institution as defined in Section 3(a)(5)(A) of the
Securities Act, whether acting in its individual or fiduciary capacity; a broker
or dealer registered pursuant to Section 15 of the Securities Exchange Act of
1934; an insurance company as defined in Section 2(13) of the Securities Act; an
investment company registered under the Investment Company Act of 1940 (the
“Investment Company Act”) or a business development company as defined in
Section 2(a)(48) of the Investment Company Act; a Small Business Investment
Company licensed by the U.S. Small Business Administration under Section 301(c)
or (d) of the Small Business Investment Act of 1958; a plan established and
maintained by a state, its political subdivisions or any agency or
instrumentality of a state or its political subdivisions for the benefit of its
employees, if such plan has total assets in excess of US $5,000,000; an employee
benefit plan within the meaning of the Employee Retirement Income Security Act
of 1974 (“ERISA”), if the investment decision is made by a plan fiduciary, as
defined in Section 3(21) of ERISA, which is either a bank, savings and loan
association, insurance company, or registered investment advisor, or if the
employee benefit plan has total assets in excess of US $5,000,000 or, if a
self-directed plan, with investment decisions made solely by persons that are
accredited investors.

 
(2)
A private business development company as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940.

 
(3)
An organization described in Section 501(c)(3) of the Internal Revenue Code,
corporation, Massachusetts or similar business trust, or partnership, not formed
for the specific purpose of acquiring the securities offered, with total assets
in excess of US $5,000,000.

 
(4)
A director or executive officer of the Acquiror Company.

 
(5)
A natural person whose individual net worth, or joint net worth with that
person’s spouse, at the time of his or her purchase exceeds US $1,000,000.

 
(6)
A natural person who had an individual income in excess of US $200,000 in each
of the two most recent years or joint income with that person’s spouse in excess
of US $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year.

 

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

(7)
A trust, with total assets in excess of US $5,000,000, not formed for the
specific purpose of acquiring the securities offered, whose purchase is directed
by a sophisticated person as described in Rule 506(b)(2)(ii) (i.e., a person who
has such knowledge and experience in financial and business matters that he is
capable of evaluating the merits and risks of the prospective investment).

 
(8)
An entity in which all of the equity owners are accredited investors. (If this
alternative is checked, the Shareholder must identify each equity owner and
provide statements signed by each demonstrating how each is qualified as an
accredited investor.)

 

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

 
EXHIBIT C
Definition of “U.S. Person”
 
(1)
“U.S. person” (as defined in Regulation S) means:

 

 
(i)
Any natural person resident in the United States;

 

 
(ii)
Any partnership or corporation organized or incorporated under the laws of the
United States;

 

 
(iii)
Any estate of which any executor or administrator is a U.S. person;

 

 
(iv)
Any trust of which any trustee is a U.S. person;

 

 
(v)
Any agency or branch of a foreign entity located in the United States;

 

 
(vi)
Any non-discretionary account or similar account (other than an estate or trust)
held by a dealer or other fiduciary for the benefit or account of a U.S. person;

 

 
(vii)
Any discretionary account or similar account (other than an estate or trust)
held by a dealer or other fiduciary organized, incorporated, or (if an
individual) resident in the United States; and

 

 
(viii)
Any partnership or corporation if: (A) organized or incorporated under the laws
of any foreign jurisdiction; and (B) formed by a U.S. person principally for the
purpose of investing in securities not registered under the Securities Act,
unless it is organized or incorporated, and owned, by accredited investors (as
defined in Rule 501(a)) who are not natural persons, estates or trusts.

 
(2)
Notwithstanding paragraph (1) above, any discretionary account or similar
account (other than an estate or trust) held for the benefit or account of a
non-U.S. person by a dealer or other professional fiduciary organized,
incorporated, or (if an individual) resident in the United States shall not be
deemed a “U.S. person.”

 
(3)
Notwithstanding paragraph (1), any estate of which any professional fiduciary
acting as executor or administrator is a U.S. person shall not be deemed a U.S.
person if:

 

 
(i)
An executor or administrator of the estate who is not a U.S. person has sole or
shared investment discretion with respect to the assets of the estate; and

 

 
(ii)
The estate is governed by foreign law.

 
(4)
Notwithstanding paragraph (1), any trust of which any professional fiduciary
acting as trustee is a U.S. person shall not be deemed a U.S. person if a
trustee who is not a U.S. person has sole or shared investment discretion with
respect to the trust assets, and no beneficiary of the trust (and no settlor if
the trust is revocable) is a U.S. person.

 

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(5)
Notwithstanding paragraph (1), an employee benefit plan established and
administered in accordance with the law of a country other than the United
States and customary practices and documentation of such country shall not be
deemed a U.S. person.

 
(6)
Notwithstanding paragraph (1), any agency or branch of a U.S. person located
outside the United States shall not be deemed a “U.S. person” if:

 

 
(i)
The agency or branch operates for valid business reasons; and

 

 
(ii)
The agency or branch is engaged in the business of insurance or banking and is
subject to substantive insurance or banking regulation, respectively, in the
jurisdiction where located.

 
(7)
The International Monetary Fund, the International Bank for Reconstruction and
Development, the Inter-American Development Bank, the Asian Development Bank,
the African Development Bank, the United Nations, and their agencies, affiliates
and pension plans, and any other similar international organizations, their
agencies, affiliates and pension plans shall not be deemed “U.S. persons.”

 

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EXHIBIT D
ACCREDITED INVESTOR REPRESENTATIONS
 
Each Shareholder indicating that it is an Accredited Investor, severally and not
jointly, further represents and warrants to the Acquiror Company as follows:
 
1.
Such Shareholder qualifies as an Accredited Investor on the basis set forth on
its signature page to this Agreement.

 
2.
Such Shareholder has sufficient knowledge and experience in finance, securities,
investments and other business matters to be able to protect such Shareholder’s
interests in connection with the transactions contemplated by this Agreement.

 
3.
Such Shareholder has consulted, to the extent that it has deemed necessary, with
its tax, legal, accounting and financial advisors concerning its investment in
the Acquiror Company Shares.

 
4.
Such Shareholder understands the various risks of an investment in the Acquiror
Company Shares and can afford to bear such risks for an indefinite period of
time, including, without limitation, the risk of losing its entire investment in
the Acquiror Company Shares.

 
5.
Such Shareholder has had access to the Acquiror Company’s publicly filed reports
with the SEC.

 
6.
Such Shareholder has been furnished during the course of the transactions
contemplated by this Agreement with all other public information regarding the
Acquiror Company that such Shareholder has requested and all such public
information is sufficient for such Shareholder to evaluate the risks of
investing in the Acquiror Company Shares.

 
7.
Such Shareholder has been afforded the opportunity to ask questions of and
receive answers concerning the Acquiror Company and the terms and conditions of
the issuance of the Acquiror Company Shares.

 
8.
Such Shareholder is not relying on any representations and warranties concerning
the Acquiror Company made by the Acquiror Company or any officer, employee or
agent of the Acquiror Company, other than those contained in this Agreement.

 
9.
Such Shareholder is acquiring the Acquiror Company Shares for such Shareholder’s
own account, for investment and not for distribution or resale to others.

 
10.
Such Shareholder will not sell or otherwise transfer the Acquiror Company
Shares, unless either (a) the transfer of such securities is registered under
the Securities Act or (b) an exemption from registration of such securities is
available.

 

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11.
Such Shareholder understands and acknowledges that the Acquiror Company is under
no obligation to register the Acquiror Company Shares for sale under the
Securities Act.

 
12.
Such Shareholder consents to the placement of a legend on any certificate or
other document evidencing the Acquiror Company Shares substantially in the form
set forth in Section 4.2.5(a).

 
13.
Such Shareholder represents that the address furnished by such Shareholder on
its signature page to this Agreement and in Exhibit A is such Shareholder’s
principal residence if he is an individual or its principal business address if
it is a corporation or other entity.

 
14.
Such Shareholder understands and acknowledges that the Acquiror Company Shares
have not been recommended by any federal or state securities commission or
regulatory authority, that the foregoing authorities have not confirmed the
accuracy or determined the adequacy of any information concerning the Acquiror
Company that has been supplied to such Shareholder and that any representation
to the contrary is a criminal offense.

 
15.
Such Shareholder acknowledges that the representations, warranties and
agreements made by such Shareholder herein shall survive the execution and
delivery of this Agreement and the purchase of the Acquiror Company Shares.

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EXHIBIT E
NON U.S. PERSON REPRESENTATIONS
 
Each Shareholder indicating that it is not a U.S. person, severally and not
jointly, further represents and warrants to the Acquiror Company as follows:
 
16.
At the time of (a) the offer by the Acquiror Company and (b) the acceptance of
the offer by such Shareholder, of the Acquiror Company Shares, such Shareholder
was outside the United States.

 
17.
No offer to acquire the Acquiror Company Shares or otherwise to participate in
the transactions contemplated by this Agreement was made to such Shareholder or
its representatives inside the United States.

 
18.
Such Shareholder is not purchasing the Acquiror Company Shares for the account
or benefit of any U.S. person, or with a view towards distribution to any U.S.
person, in violation of the registration requirements of the Securities Act.

 
19.
Such Shareholder will make all subsequent offers and sales of the Acquiror
Company Shares either (x) outside of the United States in compliance with
Regulation S; (y) pursuant to a registration under the Securities Act; or (z)
pursuant to an available exemption from registration under the Securities Act.
Specifically, such Shareholder will not resell the Acquiror Company Shares to
any U.S. person or within the United States prior to the expiration of a period
commencing on the Closing Date and ending on the date that is one year
thereafter (the “Distribution Compliance Period”), except pursuant to
registration under the Securities Act or an exemption from registration under
the Securities Act.

 
20.
Such Shareholder is acquiring the Acquiror Company Shares for such Shareholder’s
own account, for investment and not for distribution or resale to others.

 
21.
Such Shareholder has no present plan or intention to sell the Acquiror Company
Shares in the United States or to a U.S. person at any predetermined time, has
made no predetermined arrangements to sell the Acquiror Company Shares and is
not acting as a Distributor of such securities.

 
22.
Neither such Shareholder, its Affiliates nor any Person acting on such
Shareholder’s behalf, has entered into, has the intention of entering into, or
will enter into any put option, short position or other similar instrument or
position in the U.S. with respect to the Acquiror Company Shares at any time
after the Closing Date through the Distribution Compliance Period except in
compliance with the Securities Act.

 
23.
Such Shareholder consents to the placement of a legend on any certificate or
other document evidencing the Acquiror Company Shares substantially in the form
set forth in Section 4.2.5(b).

 

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24.
Such Shareholder is not acquiring the Acquiror Company Shares in a transaction
(or an element of a series of transactions) that is part of any plan or scheme
to evade the registration provisions of the Securities Act.

 
25.
Such Shareholder has sufficient knowledge and experience in finance, securities,
investments and other business matters to be able to protect such Shareholder’s
interests in connection with the transactions contemplated by this Agreement.

 
26.
Such Shareholder has consulted, to the extent that it has deemed necessary, with
its tax, legal, accounting and financial advisors concerning its investment in
the Acquiror Company Shares.

 
27.
Such Shareholder understands the various risks of an investment in the Acquiror
Company Shares and can afford to bear such risks for an indefinite period of
time, including, without limitation, the risk of losing its entire investment in
the Acquiror Company Shares.

 
28.
Such Shareholder has had access to the Acquiror Company’s publicly filed reports
with the SEC.

 
29.
Such Shareholder has been furnished during the course of the transactions
contemplated by this Agreement with all other public information regarding the
Acquiror Company that such Shareholder has requested and all such public
information is sufficient for such Shareholder to evaluate the risks of
investing in the Acquiror Company Shares.

 
30.
Such Shareholder has been afforded the opportunity to ask questions of and
receive answers concerning the Acquiror Company and the terms and conditions of
the issuance of the Acquiror Company Shares.

 
31.
Such Shareholder is not relying on any representations and warranties concerning
the Acquiror Company made by the Acquiror Company or any officer, employee or
agent of the Acquiror Company, other than those contained in this Agreement.

 
32.
Such Shareholder will not sell or otherwise transfer the Acquiror Company
Shares, unless either (A) the transfer of such securities is registered under
the Securities Act or (B) an exemption from registration of such securities is
available.

 
33.
Such Shareholder understands and acknowledges that the Acquiror Company is under
no obligation to register the Acquiror Company Shares for sale under the
Securities Act.

 
34.
Such Shareholder represents that the address furnished by such Shareholder on
its signature page to this Agreement and in Exhibit B is such Shareholder’s
principal residence if he is an individual or its principal business address if
it is a corporation or other entity.

 
35.
Such Shareholder understands and acknowledges that the Acquiror Company Shares
have not been recommended by any federal or state securities commission or
regulatory authority, that the foregoing authorities have not confirmed the
accuracy or determined the adequacy of any information concerning the Acquiror
Company that has been supplied to such Shareholder and that any representation
to the contrary is a criminal offense.

 

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

36.
Such Shareholder acknowledges that the representations, warranties and
agreements made by such Shareholder herein shall survive the execution and
delivery of this Agreement and the purchase of the Acquiror Company Shares.

 

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EXHIBIT F
LOAN AND SECURITY DOCUMENTS

1. Loan Agreement between AMI Australia and ANZ Nominees Limited as Custodian
for the Professional Pension PST - Super dated September 8, 2006.
2. Loan Agreement between AMI Australia and ANZ Nominees Limited as Custodian
for the Professional Pension PST - Pension dated September 8, 2006.
3. Fixed and Floating Charge Agreement between AMI Australia and ANZ Nominees
Limited as Custodian for the Professional Pension PST - Super dated September 8,
2006.
4. Fixed and Floating Charge Agreement between AMI Australia and ANZ Nominees
Limited as Custodian for the Professional Pension PST - Pension dated September
8, 2006.

 
 
 

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SCHEDULES

Schedule 5.1
Company Jurisdiction
Schedule 5.7.1
Capitalization of the Company
Schedule 5.7.2
Company Redemption Requirements
Schedule 5.11
Company Brokers or Finders
Schedule 5.13
Company Intellectual Property
Schedule 6.12
Acquiror Company Changes

 
 

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Schedule 5.1
 
Company Jurisdiction
 
Victoria, Australia

 
 

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Schedule 5.7.1
 
Capitalization of the Company
 
None.

 
 

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Schedule 5.7.2
 
Company Redemption Requirements

 
None.

 
 

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Schedule 5.11
 
Company Brokers or Finders
 
None.

 
 

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Schedule 5.13

Company Intellectual Property

 
Application for PCT Patent No PCT/AU2004/000931 (WO 2005/004855 A1) and the
subsequent individual country applications made based on that PCT patent
application.
 
The worldwide (excluding Australia) formulation rights to the medications used
in the Acquiror Company’s premature ejaculation treatment programs

Patent Co-Operation Treaty
WO 2005/004855
Awaiting NP Entry
Patent
People's Republic of China
200480019942.9
Awaiting an Official Action
Patent
Europe
04737552.2
Awaiting Examination
Patent
India
0283/KOLNP/2006
Awaiting an Official Action
Patent
Japan
2006-519724
Awaiting Examination
Patent
New Zealand
544484
Awaiting Examination
Patent
United States of America
10/564273
Awaiting Examination
Patent

 
 

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Schedule 6.12
 
Acquiror Company Changes
 
None.