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Exhibit 10.2

 

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (this “Agreement”) is dated as of April 23,
2008, among ORGANIC REGION GROUP LTD., a company organized under the laws of
Hong Kong (together with its successors and assigns, the “Company”), and the
investors identified on the signature pages hereto (each, an “Investor” and
collectively, the “Investors”).

BACKGROUND

Subject to the terms and conditions set forth in this Agreement and pursuant to
the Securities Act (as defined below), the Company desires to issue and sell to
each Investor, and each Investor, severally and not jointly, desires to purchase
from the Company certain securities of the Company, as more fully described in
this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Investors agree
as follows:

ARTICLE 1
DEFINITIONS

1.1.

Definitions.  In addition to the terms defined elsewhere in this Agreement, for
all purposes of this Agreement, the following terms shall have the meanings
indicated in this Section 1.1:

“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person.

 “Business Day” means any day except Saturday, Sunday and any day which is a
legal holiday or a day on which banking institutions in the State of New York
are authorized or required by law or other governmental action to close.

“Closing” means the closing of the purchase and sale of the Shares pursuant to
Article 2.

 “Commission” means the Securities and Exchange Commission.

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

 “Exempt Issuance” means the issuance of (a) securities to employees, officers
or directors of the Company pursuant to any stock or option plan duly adopted by
the Board of Directors of the Company or a majority of the members of a
committee of directors established for such purpose, (b) securities upon the
exercise or exchange of or conversion of any Securities issued hereunder or to
any placement agents in connection with the transactions contemplated hereby
and/or convertible securities issued and outstanding on the date of this
Agreement, provided that such securities have not been amended since the date of
this Agreement to increase the number of such securities or to decrease the
exercise, exchange or conversion price of any such securities, and (c)
securities issued pursuant to acquisitions or strategic transactions, provided
any such issuance shall only be to a Person which is, itself or through its
subsidiaries, an operating company in a business synergistic with the business
of the Company and in which the Company receives benefits in addition to the
investment of funds, but shall not include a transaction in which the Company is
issuing securities primarily for the purpose of raising capital or to an entity
whose primary business is investing in securities.

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“Going Public Transaction” means the consummation of (i) the acquisition of a
controlling interest (more than 50% of the voting power) in the Company (through
merger, sale of stock or other transaction or series of related transactions) by
a U.S. entity whose equity securities are eligible for trading on NASDAQ's Over
the Counter Bulletin Board (OTCBB), Nasdaq Market, Amex or New York stock
exchange (the “Acquiror”), or (ii) the sale or transfer of all or substantially
all of the Company's assets or b or any Canadian, European or Asian stock
exchange usiness to an Acquiror.

“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

“Promissory Note” means the convertible promissory note issued by the Company in
the form attached hereto as Exhibit A.

 “Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

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

“Warrant” means the warrant to purchase securities of the Company in the form
attached hereto as Exhibit B.

ARTICLE 2
PURCHASE AND SALE

2.1.

Closing.  Subject to the terms and conditions set forth in this Agreement, upon
the execution hereof the Company shall issue and sell to each Investor, and each
Investor shall, severally and not jointly, purchase from the Company, a
Promissory Note in the principal amount set forth on the signature page hereof
(the “Investment Amount”), together with a Warrant.  The Closing shall take
place at the offices of Thelen Reid Brown Raysman & Steiner LLP in San
Francisco, CA on the date hereof or at such other location or time as the
parties may agree.  The Promissory Note, the Warrant and the equity securities
issuable upon conversion or exercise thereof (and the securities issuable upon
conversion of such equity securities) are collectively referred to herein as the
"Securities."

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2.2.

Closing Deliveries.

(a)

Upon the execution hereof, the Company shall deliver or cause to be delivered to
each Investor a Promissory Note and Warrant duly (together with this Agreement,
the “Transaction Documents”) executed by the Company.

(b)

Within one Business Day following the date of this Agreement, each Investor
shall cause to be delivered to the Company its Investment Amount, less the
expense reimbursement amount set forth in Section 4.4 below, in United States
dollars and in immediately available funds, by wire transfer to an account
designated in writing by the Company.

ARTICLE 3
REPRESENTATIONS AND WARRANTIES

3.1.

Representations and Warranties of the Company.  The Company hereby makes the
following representations and warranties to each Investor:

(a)

Organization and Qualification.  The Company and each of its subsidiaries is
duly incorporated or otherwise organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization (as
applicable), with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted.
 Neither the Company nor any subsidiary is in violation of any of the provisions
of its respective certificate or articles of incorporation, bylaws or other
organizational or charter documents. Each of the Company and the subsidiaries is
duly qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification necessary,
except where the failure to be so qualified or in good standing, as the case may
be, could not have or reasonably be expected to result in (i) a material adverse
effect on the legality, validity or enforceability of any Transaction Document,
(ii) a material adverse effect on the results of operations, assets, business,
prospects or condition (financial or otherwise) of the Company and the
subsidiaries, taken as a whole, or (iii) a material adverse effect on the
Company's ability to perform in any material respect on a timely basis its
obligations under any Transaction Document (any of (i), (ii) or (iii), a
“Material Adverse Effect”) and no Proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification.

(b)

Authorization; Enforcement.  The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated hereby
and to carry out its obligations hereunder.  The execution and delivery hereof
and the consummation by the Company of the transactions contemplated hereby have
been duly authorized by all necessary action on the part of the Company and no
further action is required by the Company in connection therewith.  This
Agreement, the Promissory Note and Warrant has been (or upon delivery will have
been) duly executed by the Company and, when delivered in accordance with the
terms hereof, will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application.

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(c)

Subsidiaries.  The Company owns, directly or indirectly, all of the capital
stock or other equity interests of its subsidiary free and clear of any Liens,
and all of the issued and outstanding shares of capital stock of each subsidiary
are validly issued and are fully paid, non-assessable and free of preemptive and
similar rights to subscribe for or purchase securities.

(d)

No Conflicts.  The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the other
transactions contemplated hereby and thereby do not and will not: (i) conflict
with or violate any provision of the Company's or any subsidiary's certificate
or articles of incorporation, bylaws or other organizational or charter
documents, or (ii) conflict with, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, result in the
creation of any Lien upon any of the properties or assets of the Company or any
subsidiary, or give to others any rights of termination, amendment, acceleration
or cancellation (with or without notice, lapse of time or both) of, any
agreement, credit facility, debt or other instrument (evidencing a Company or
subsidiary debt or otherwise) or other understanding to which the Company or any
subsidiary is a party or by which any property or asset of the Company or any
subsidiary is bound or affected, or (iii) conflict with or result in a violation
of any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Company or a
subsidiary is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company or a subsidiary
is bound or affected; except in the case of each of clauses (ii) and (iii), such
as could not have or reasonably be expected to result in a Material Adverse
Effect.

(e)

Filings, Consents and Approvals.  Except for required filings with the
Securities and Exchange Commission (the “SEC”) and applicable “Blue Sky” or
state securities commissions, no material consent, approval, license, permit,
order or authorization (“Consent”) of, or registration, declaration or filing
with, or permit from, any governmental entity is required to be obtained or made
by or with respect to the Company or any subsidiary in connection with the
execution, delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby.

(f)

Issuance of the Securities.  The Securities are duly authorized and, when issued
and paid for in accordance with the applicable Transaction Documents, will be
duly and validly issued, fully paid and nonassessable, free and clear of all
Liens imposed by the Company other than restrictions on transfer provided for in
the Transaction Documents.  The Underlying Shares, when issued in accordance
with the terms of the Transaction Documents, will be validly issued, fully paid
and nonassessable, free and clear of all Liens imposed by the Company other than
restrictions on transfer provided for in the Transaction Documents.  The Company
has reserved from its duly authorized capital stock a number of shares of Common
Stock for issuance of the Underlying Shares.  

(g)

Capitalization.  The capitalization of the Company is as set forth on Schedule
3.1(g).  Except as set forth on Schedule 3.1(g), no Person has any right of
first refusal, preemptive right, right of participation, or any similar right to
participate in the transactions contemplated by the Transaction Documents.  No
further approval or authorization of any stockholder, the Board of Directors of
the Company or others is required for the issuance and sale of the Securities.

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(h)

Financial Statements.  The Company has provided the Investors with its unaudited
balance sheet as of December 31, 2007, together with its statements of income,
cash flows and shareholders equity for the year ended December 31, 2007 (the
“Financial Statements”).  The Financial Statements of the Company have been
prepared in accordance with generally accepted accounting principles in the
People's Republic of China applied on a consistent basis during the periods
involved (“GAAP”), except as may be otherwise specified in such Financial
Statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all
material respects the financial position of the Company, as of and for the dates
thereof and the results of operations and cash flows for the periods then ended,
subject to normal, immaterial, year-end audit adjustments.

(i)

Material Changes.  Since December 31, 2007, (i) there has been no event,
occurrence or development that has had or that could reasonably be expected to
result in a Material Adverse Effect, (ii) the Company has not incurred any
liabilities (contingent or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business consistent with past
practice and (B) liabilities not required to be reflected in the Company's
Financial Statements pursuant to GAAP, (iii) the Company has not altered its
method of accounting, (iv) the Company has not declared or made any dividend or
distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock and (v) the Company has not issued any equity securities to any officer,
director or Affiliate, except pursuant to existing Company stock option plans.

(j)

Litigation.  There is no action, suit, inquiry, notice of violation, proceeding
or investigation pending or, to the knowledge of the Company, threatened against
or affecting the Company, any subsidiary or any of their respective properties
before or by any court, arbitrator, governmental or administrative agency or
regulatory authority (federal, state, county, local or foreign) (collectively,
an “Action”) which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Securities or (ii)
could, if there were an unfavorable decision, have or reasonably be expected to
result in a Material Adverse Effect.  Neither the Company nor any subsidiary,
nor any director or officer thereof, is or has been the subject of any Action
involving a claim of violation of or liability under federal or state securities
laws or a claim of breach of fiduciary duty.  There has not been, and to the
knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or any current or former
director or officer of the Company.   

(k)

Compliance.  Neither the Company nor any subsidiary (i) is in default under or
in violation of (and no event has occurred that has not been waived that, with
notice or lapse of time or both, would result in a default by the Company or any
subsidiary under), nor has the Company or any subsidiary received notice of a
claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a
party or by which it or any of its properties is bound (whether or not such
default or violation has been waived), (ii) is in violation of any order of any
court, arbitrator or governmental body, or (iii) is or has been in violation of
any statute, rule or regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws applicable to its business
and all such laws that affect the environment, except in each case as could not
have or reasonably be expected to result in a Material Adverse Effect.

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(l)

Regulatory Permits.  The Company and the subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state, local or
foreign regulatory authorities necessary to conduct their respective businesses,
except where the failure to possess such permits could not reasonably be
expected to result in a Material Adverse Effect (“Material Permits”), and
neither the Company nor any subsidiary has received any notice of proceedings
relating to the revocation or modification of any Material Permit. The Company
and its subsidiaries have paid all fees for permits and licenses required to be
paid by them in the PRC in connection with the operation of their respective
businesses.

(m)

Certain Fees.  Other than fees payable to Hickey Freihofner Capital, no
brokerage or finder's fees or commissions are or will be payable by the Company
to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by the Transaction Documents.  The Purchasers shall have no
obligation with respect to any fees or with respect to any claims made by or on
behalf of other Persons for fees of a type contemplated in this Section that may
be due in connection with the transactions contemplated by the Transaction
Documents.  

(n)

Private Placement.  Assuming the accuracy of the Purchasers' representations and
warranties set forth in Section 3.2, no registration under the Securities Act is
required for the offer and sale of the Securities by the Company to the
Purchasers as contemplated hereby.

(o)

Investment Company. The Company is not, and is not an Affiliate of, and
immediately after receipt of payment for the Securities, will not be or be an
Affiliate of, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.  The Company shall conduct its business in a
manner so that it will not become subject to the Investment Company Act of 1940,
as amended.

(p)

No Integrated Offering. Assuming the accuracy of the Purchasers' representations
and warranties set forth in Section 3.2, neither the Company, nor any of its
Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would cause this offering of the
Securities to be integrated with prior offerings by the Company for purposes of
the Securities Act which would require the registration of any such securities
under the Securities Act.

(q)

No General Solicitation. Neither the Company nor any of its Affiliates, or any
person acting on its or their behalf, directly or indirectly, (i) has conducted
or will conduct any general solicitation (as that term is used in Rule 502(c) of
Regulation D as promulgated by the Commission under the Securities Act) or
general advertising with respect to the sale of the Common Stock or Warrants, or
(ii) made any offers or sales of any security or solicited any offers to buy any
security under any circumstances that would require registration of the Common
Stock or Warrants, under the Securities Act, except as required herein.

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(r)

Acknowledgment Regarding Purchasers' Purchase of Securities.  The Company
acknowledges that no Purchaser is acting as a financial advisor or fiduciary of
the Company (or in any similar capacity) with respect to the Transaction
Documents and the transactions contemplated thereby and any advice given by any
Purchaser or any of their respective representatives or agents in connection
with the Transaction Documents and the transactions contemplated thereby is
merely incidental to the Purchasers' purchase of the Securities.  The Company
further represents to each Purchaser that the Company's decision to enter into
this Agreement and the other Transaction Documents has been based solely on the
independent evaluation of the transactions contemplated hereby by the Company
and its representatives.

(s)

Sovereign Immunity.  Under the laws of their respective jurisdiction of
incorporation and the PRC, neither the Company nor any subsidiary, is, nor are
any of their respective properties, assets or revenues, entitled to any right of
immunity on the grounds of sovereignty from any legal action, suit or
proceeding, from set-off or counterclaim, from the jurisdiction of any court,
from service of process, from attachment prior to or in aid of execution of
judgment, or from other legal process or proceeding for the giving of any relief
or for the enforcement of any judgment.

3.2.

Representations and Warranties of the Investors. Each Investor hereby, for
itself and for no other Investor, represents and warrants to the Company as
follows:

(a)

Organization; Authority.  If such Investor is a business entity, such Investor
is an entity duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization with the requisite corporate or
partnership power and authority to enter into and to consummate the transactions
contemplated hereby and to carry out its obligations hereunder.  The execution,
delivery and performance by such Investor of the transactions contemplated by
this Agreement has been duly authorized by all necessary action on the part of
such Investor.  This Agreement has been duly executed by such Investor, and when
delivered by such Investor in accordance with the terms hereof, will constitute
the valid and legally binding obligation of such Investor, enforceable against
it in accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of, creditors'
rights and remedies or by other equitable principles of general application.

(b)

Investment Intent.  Such Investor is acquiring the Securities for its own
account for investment purposes only and not with a view towards, or resale in
connection with, a public sale or distribution of such Securities or any part
thereof, without prejudice, however, to such Investor's right at all times to
sell or otherwise dispose of all or any part of such Securities in compliance
with applicable federal and state securities laws.  Subject to the immediately
preceding sentence and the terms of the Promissory Note and Warrant, nothing
contained herein shall be deemed a representation or warranty by such Investor
to hold the Securities for any period of time.  Such Investor is acquiring such
securities hereunder in the ordinary course of its business.  Such Investor does
not have any agreement or understanding, directly or indirectly, with any Person
to distribute any of such Securities.

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(c)

Investor Status.  The Investor is an “accredited investor” as defined in Rule
501(a) under the Securities Act.  Such Investor is not a registered broker
dealer under Section 15 of the Exchange Act.

(d)

General Solicitation.  Such Investor is not purchasing the Securities as a
result of any advertisement, article, notice or other communication regarding
the Securities published in any newspaper, magazine or similar media or
broadcast over television or radio.

(e)

Access to Information.  Such Investor acknowledges that it has been afforded (i)
the opportunity to ask such questions as it has deemed necessary of, and to
receive answers from, representatives of the Company concerning the terms and
conditions of the offering of the Securities and the merits and risks of
investing in the Securities; (ii) access to information about the Company and
its financial condition, results of operations, business, properties, management
and prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information that the Company possesses or
can acquire without unreasonable effort or expense that is necessary to make an
informed investment decision with respect to the investment.  

(f)

Independent Investment Decision.  Such Investor has independently evaluated the
merits of its decision to purchase Securities and such Investor confirms that it
has not relied on the advice of any other Investor's business and/or legal
counsel in making such decision.  Such Investor confirms that none of such
Persons has made any representations or warranties to such Investor in
connection with the transactions contemplated hereby.

The Company acknowledges and agrees that no Investor has made or makes any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 3.2.

ARTICLE 4
OTHER AGREEMENTS OF THE PARTIES

4.1.

Compliance with Securities Laws.

(a)

The Securities may only be disposed of in compliance with state and federal
securities laws.  In connection with any transfer of the Securities, other than
pursuant to an effective registration statement, Regulation S, pursuant to Rule
144, or to the Company or an Affiliate of an Investor, the Company may require
the transferor thereof to provide to the Company an opinion of counsel selected
by the transferor, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require
registration of such transferred Securities under the Securities Act.
 Notwithstanding the foregoing, the Company hereby consents to and agrees to
register on the books of the Company and with its transfer agent, without any
such legal opinion, any transfer of Securities by an Investor to an Affiliate of
such Investor, provided that the transferee certifies to the Company that it is
an “accredited investor” as defined in Rule 501(a) under the Securities Act and
provided that such Affiliate does not request any removal of any existing
legends on any certificate evidencing the Securities.

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(b)

Certificates evidencing the Securities will contain the following legend, until
such time as they are not required under Section 4.1(c):

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.  THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

4.2.

Registration Obligation.

(a)

If the Company or any stockholder of the Company proposes to register any of its
common stock or any securities convertible into common stock under the
Securities Act (other than pursuant to an offering of securities on Form S-8 in
connection with an employee benefit, share dividend, share ownership or dividend
reinvestment plan or registration of securities on Form S-4 in connection with a
business combination transaction), the Company shall give prompt written notice
to the Investors of its intention to effect such a registration and shall, if
commercially practicable, include in such registration statement all securities
issued or issuable upon conversion or exercise of the Promissory Note and
Warrant (the “Registrable Securities”) (subject to required cut-backs or
limitations pursuant to the Commission's interpretations of Rule 415 promulgated
under the Securities Act) with respect to which the Company has received written
request from the Investors for inclusion therein within ten (10) business days
after the date of sending of such written notices to the Investors to the
Investors.  

(b)

All registrations made by the Investors will be made solely at the Company's
expense, other than (i) if an underwritten offering is consented to by the
Company, the underwriters', broker-dealers' and placement agents' selling
discounts, commissions and fees relating to the sale of the Investors'
securities, (ii) any costs and expenses of counsel, accountants or other
advisors retained by the Investors and (iii) all transfer, franchise, capital
stock and other taxes, if any, applicable to the Investors' securities which
shall be paid by the Investors.

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(c)

In the event of any registration of any Registrable Securities under the
Securities Act pursuant to this Agreement, the Company shall indemnify and hold
harmless each Investor holding such Registrable Securities, such Investor's
directors and officers, and each other person (including each underwriter) who
participated in the offering of such Registrable Securities and each other
person, if any, who controls such Investor or such participating person within
the meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which such Investor or any such director or
officer or participating person or controlling person may become subject under
the Securities Act or any other statute or at common law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (i) any untrue statement or any alleged untrue statement of
any material fact contained, on the effective date thereof, in any registration
statement under which such securities were registered under the Securities Act,
any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereto, (ii) any omission or any alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or (iii) any other violation of any
applicable securities laws, and in each of the foregoing circumstances shall
reimburse such Investor or such director, officer or participating person or
controlling person for any legal or any other expenses reasonably incurred by
such Investor or such director, officer or participating person or controlling
person in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any actual or alleged untrue statement
or actual or alleged omission made in such registration statement, preliminary
prospectus, prospectus or amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such Investor
specifically for use therein.  

(d)

In the event of any registration of any Registrable Securities under the
Securities Act pursuant to this Agreement, each Investor holding Registrable
Securities agrees to indemnify and hold harmless the Company, its directors and
officers and each other person, if any, who controls the Company within the
meaning of the Securities Act and any other Investor against any losses, claims,
damages or liabilities, joint or several, to which the Company or any such
director or officer or any such person may become subject under the Securities
Act or any other statute or at common law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any untrue statement or any alleged untrue statement of any material
fact contained, on the effective date thereof, in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereto, or (ii) any omission or any alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, but in either case only to the extent that
such untrue statement or omission is (A) made in reliance on and in conformity
with any information furnished in writing by such Investor to the Company
concerning such Investor specifically for inclusion in the offering documents
relating to such offering, and (B) is not corrected by such Investor and
distributed to the Investors within a reasonable period of time.
 Notwithstanding the provisions of this Section 4.2(d), no Investor shall be
required to indemnify any person pursuant to Section 4.2(d) or to contribute
pursuant to Section 4.2(e) below in an amount in excess of the amount of the
aggregate net proceeds received by such Investor in connection with any such
registration under the Securities Act.

(e)

If the indemnification provided for above from the indemnifying party is
unavailable to an indemnified party hereunder in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then the indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and indemnified parties in
connection with the actions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.

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 The relative fault of such indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact, has been made by, or relates to
information supplied by, such indemnifying party or indemnified parties, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action.  The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or proceeding.  The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 4.2(e) were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to above.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

(f)

All rights of the Investors under this Section 4.2 are unique to and limited to
the Investors and may not be transferred or inure to the benefit of the
Investors' successors and assigns or any other transferee who obtains
Registrable Securities.

4.3.

Publicity.  The Company may issue press releases disclosing the transactions
contemplated hereby and may make all disclosures to the extent required by the
Exchange Act.  

4.4.

Use of Proceeds; Expense Reimbursement.  The Company will use the net proceeds
from the sale of the securities hereunder for working capital purposes,
acquisitions and/or capital expenditures; provided, however, that the Company
shall use a portion of the proceeds to retain U.S. auditors and U.S. legal
counsel reasonably satisfactory to the Investors within fifteen (15) days of the
date of this Agreement; provided further, that the Investors agree that Thelen
Reid Brown Raysman & Steiner LLP shall be acceptable as U.S. legal counsel and
Kabani & Co. shall be acceptable as U.S. Auditors.  The parties hereto agree
that the Company shall  reimburse the Investors an aggregate of $22,000 from the
proceeds of the sale of the Securities for the Investors' expenses related to
pre-audit investigations (including by Thornhill Capital), due diligence and
investment documentation (including legal expenses).

4.5.

Right of First Refusal.  

(a)

From the date hereof until the one year anniversary of the date hereof (the
"Trigger Date"), the Company will not, directly or indirectly, offer, sell,
grant any option to purchase, or otherwise dispose of (or announce any offer,
sale, grant or any option to purchase or other disposition of) any of its equity
or equity equivalent securities, including without limitation any debt,
preferred stock or other instrument or security that is, at any time during its
life and under any circumstances, convertible into or exchangeable or
exercisable for shares of common stock or common stock equivalents (any such
offer, sale, grant, disposition or announcement being referred to as a
"Subsequent Placement") unless the Company shall have first complied with this
Section 4.5.

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(b)

The Company shall deliver to each Investor hereunder a written notice
(the "Offer Notice") of any proposed or intended issuance or sale or exchange
(the "Offer") of the securities being offered (the "Offered Securities") in a
Subsequent Placement, which Offer Notice shall (w) identify and describe the
Offered Securities, (x) describe the price and other terms upon which they are
to be issued, sold or exchanged, and the number or amount of the Offered
Securities to be issued, sold or exchanged, (y) identify the persons or entities
(if known) to which or with which the Offered Securities are to be offered,
issued, sold or exchanged and (z) offer to issue and sell to or exchange with
such Investors all of the Offered Securities, allocated among such Investors (a)
based on such Investor's pro rata portion of the total Investment Amount
hereunder (the "Basic Amount"), and (b) with respect to each Investor that
elects to purchase its Basic Amount, any additional portion of the Offered
Securities attributable to the Basic Amounts of other Investors as such Investor
shall indicate it will purchase or acquire should the other Investors subscribe
for less than their Basic Amounts (the "Undersubscription Amount"), which
process shall be repeated until the Investors shall have an opportunity to
subscribe for any remaining Undersubscription Amount.

(c)

To accept an Offer, in whole or in part, such Investor must deliver a written
notice to the Company prior to the end of the fifth (5th) Business Day after
such Investor's receipt of the Offer Notice related to an unsolicited offer or
the 10th Business Day after such Investor's receipt of the Offer Notice related
to a Company negotiated offer (the "Offer Period"), setting forth the portion of
such Investor's Basic Amount that such Investor elects to purchase and, if such
Investor shall elect to purchase all of its Basic Amount, the Undersubscription
Amount, if any, that such Investor elects to purchase (in either case, the
"Notice of Acceptance").  If the Basic Amounts subscribed for by all Investors
are less than the total of all of the Basic Amounts, then each Investor who has
set forth an Undersubscription Amount in its Notice of Acceptance shall be
entitled to purchase, in addition to the Basic Amounts subscribed for, the
Undersubscription Amount it has subscribed for; provided, however, that if the
Undersubscription Amounts subscribed for exceed the difference between the total
of all the Basic Amounts and the Basic Amounts subscribed for (the "Available
Undersubscription Amount"), each Investor who has subscribed for any
Undersubscription Amount shall be entitled to purchase only that portion of the
Available Undersubscription Amount as the Basic Amount of such Investor bears to
the total Basic Amounts of all Investors that have subscribed for
Undersubscription Amounts, subject to rounding by the Company to the extent its
deems reasonably necessary.

(d)

The Company shall have forty-five (45) Business Days from the expiration of the
Offer Period above to (i) offer, issue, sell or exchange all or any part of such
Offered Securities as to which a Notice of Acceptance has not been given by the
Investors (the "Refused Securities"), but only to the offerees described in the
Offer Notice (if so described therein) and only upon terms and conditions
(including, without limitation, unit prices and interest rates) that are not
more favorable to the acquiring person or persons or less favorable to the
Company than those set forth in the Offer Notice and (ii) to publicly announce
(a) the execution of such Subsequent Placement Agreement (as defined below), and
(b) either (x) the consummation of the transactions contemplated by such
Subsequent Placement Agreement or (y) the termination of such Subsequent
Placement Agreement.  

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(e)

In the event the Company shall propose to sell less than all the Refused
Securities (any such sale to be in the manner and on the terms specified in this
Section 4.5), then each Investor may, at its sole option and in its sole
discretion, reduce the number or amount of the Offered Securities specified in
its Notice of Acceptance to an amount that shall be not less than the number or
amount of the Offered Securities that such Investor elected to purchase pursuant
to Section 4.5(c) above multiplied by a fraction, (i) the numerator of which
shall be the number or amount of Offered Securities the Company actually
proposes to issue, sell or exchange (including Offered Securities to be issued
or sold to Investors pursuant to Section 4.5(c) above prior to such reduction)
and (ii) the denominator of which shall be the original amount of the Offered
Securities.  In the event that any Investor so elects to reduce the number or
amount of Offered Securities specified in its Notice of Acceptance, the Company
may not issue, sell or exchange more than the reduced number or amount of the
Offered Securities unless and until such securities have again been offered to
the Investors in accordance with Section 4.5(b) above.

(f)

Upon the closing of the issuance, sale or exchange of all or less than all of
the Refused Securities, the Investors shall acquire from the Company, and the
Company shall issue to the Investors, the number or amount of Offered Securities
specified in the Notices of Acceptance, as reduced pursuant to Section 4.5(e)
above if the Investors have so elected, upon the terms and conditions specified
in the Offer.  The purchase by the Investors of any Offered Securities is
subject in all cases to the preparation, execution and delivery by the Company
and the Investors of a purchase agreement relating to such Offered Securities
reasonably satisfactory in form and substance to the Investors and their
respective counsel (such agreement, the “Subsequent Placement Agreement”).

(g)

Any Offered Securities not acquired by the Investors or other persons in
accordance with Section 4.5(f) above may not be issued, sold or exchanged until
they are again offered to the Investors under the procedures specified in this
Agreement.

(h)

In exchange for the Company's willingness to agree to these procedures, each
Investor hereby irrevocably agrees that it will hold in strict confidence any
and all Offer Notices, the information contained therein, and the fact that the
Company is contemplating a Subsequent Placement, until such time as the Company
is obligated to make the disclosures required by Section 4.5(d), or unless it
notifies the Company in writing that it no longer desires to receive Offer
Notices.

(i)

Notwithstanding the foregoing, this Section 4.14 shall not apply in respect of
an Exempt Issuance.

4.6.

Assignment In Going Public Transaction.  The Company shall cause the Acquiror in
any Going Public Transaction to assume the obligations of the Company set forth
in Section 4.2, 4.3 and 4.5 of this Agreement (and the Holders agree that the
Company shall be released of such obligations upon such assumption).

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4.7.

Indmenification.  The Company will indemnify and hold each Purchaser and its
directors, officers, shareholders, members, partners, employees and agents ,
each Person who controls such Purchaser (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act), and the directors, officers,
shareholders, agents, members, partners or employees (and any other Persons with
a functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling person (each, a
“Purchaser Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys' fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in
the other Transaction Documents or (b) any action instituted against a Purchaser
in any capacity, or any of them or their respective Affiliates, by any
stockholder of the Company who is not an Affiliate of such Purchaser, with
respect to any of the transactions contemplated by the Transaction Documents
(unless such action is based upon a breach of such Purchaser's representations,
warranties or covenants under the Transaction Documents or any agreements or
understandings such Purchaser may have with any such stockholder or any
violations by the Purchaser of state or federal securities laws or any conduct
by such Purchaser which constitutes fraud, gross negligence, willful misconduct
or malfeasance).  If any action shall be brought against any Purchaser Party in
respect of which indemnity may be sought pursuant to this Agreement, such
Purchaser Party shall promptly notify the Company in writing, and the Company
shall have the right to assume the defense thereof with counsel of its own
choosing reasonably acceptable to the Purchaser Party.  Any Purchaser Party
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Purchaser Party except to the extent that (i)
the employment thereof has been specifically authorized by the Company in
writing, (ii) the Company has failed after a reasonable period of time to assume
such defense and to employ counsel or (iii) in such action there is, in the
reasonable opinion of such separate counsel, a material conflict on any material
issue between the position of the Company and the position of such Purchaser
Party, in which case the Company shall be responsible for the reasonable fees
and expenses of no more than one such separate counsel.  The Company will not be
liable to any Purchaser Party under this Agreement (i) for any settlement by a
Purchaser Party effected without the Company's prior written consent, which
shall not be unreasonably withheld or delayed; or (ii) to the extent, but only
to the extent that a loss, claim, damage or liability is attributable to any
Purchaser Party's breach of any of the representations, warranties, covenants or
agreements made by such Purchaser Party in this Agreement or in the other
Transaction Documents.

4.8.

Reservation of Securities.  

(a)

The Company shall maintain a reserve from its duly authorized shares of Common
Stock for issuance pursuant to the Transaction Documents in such amount as may
be required to fulfill its obligations in full under the Transaction Documents.

(b)

If, on any date, the number of authorized but unissued (and otherwise
unreserved) shares of Common Stock is less than the required minimum on such
date, then the Board of Directors of the Company shall use commercially
reasonable efforts to amend the Company's certificate or articles of
incorporation to increase the number of authorized but unissued shares of Common
Stock, as soon as possible and in any event not later than the 75th day after
such date.

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ARTICLE 5
MISCELLANEOUS

5.1.

Fees and Expenses.  Except as set forth in Section 4.4 above, each party shall
pay the fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance hereof.  

5.2.

Entire Agreement.  This Agreement, together with the Promissory Notes and
Warrants, contain the entire understanding of the parties with respect to the
subject matter hereof and supersede all prior agreements, understandings,
discussions and representations, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents.

5.3.

Notices.  Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be deemed given
and effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile (provided the sender receives a
machine-generated confirmation of successful transmission) at the facsimile
number specified in this Section prior to 5:30 p.m. (New York City time) on a
Business Day, (b) the next Business Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number
specified in this Section on a day that is not a Business Day or later than 5:30
p.m. (New York City time) on any Business Day, (c) the Business Day following
the date of mailing, if sent by U.S. nationally recognized overnight courier
service, or (d) upon actual receipt by the party to whom such notice is required
to be given.  The address for such notices and communications shall be as
follows:

If to the Company:

Organic Region Group Ltd.

6F No. 947 Qiao Xing Road
Shi Qiao Town Pan Yu District

Guangzhou, China 511400
Attention:  C M Leung

Facsimile:

With a copy to:

Thelen Reid Brown Raysman & Steiner LLP

101 Second Street, Suite 1800

San Francisco, CA  94105-3606

Attention:  Scott C. Kline, Esq.

Facsimile: 415.369.8774

 

If to an Investor:

To the address set forth under such Investor's name on the signature pages
hereof;

With respect to Investor Ancora Greater China Fund, L.P., with a copy to (which
shall not constitute notice):

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Crone Rozynko LLP

101 Montgomery Street

Suite 1950

San Francisco, CA 94105

Fax: (415) 955-8910

 

or such other address as may be designated in writing hereafter, in the same
manner, by such Person.

5.4.

Amendments; Waivers; No Additional Consideration.  No provision of this
Agreement may be waived or amended except in a written instrument signed by the
Company and the Investors holding at least a majority in interest of the
outstanding aggregate principal amount of the Promissory Notes.  No waiver of
any default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of either party to exercise
any right hereunder in any manner impair the exercise of any such right.  

5.5.

Successors and Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted assigns.  

5.6.

No Third-Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective successors and permitted assigns and is not
for the benefit of, nor may any provision hereof be enforced by, any other
Person.

5.7.

Governing Law.  This Agreement shall be governed by and be construed in
accordance with the laws of the State of New York without regard to the
conflicts of law rules of such state.  Each of the Company and the Investors
hereby irrevocably and unconditionally submits, for itself and its property, to
the jurisdiction of the Supreme Court of the State of New York sitting in New
York County and of the United States District Court for the Southern District of
New York, and any appellate court from any thereof, in respect of actions
brought against it as a defendant, in any action, suit or proceeding arising out
of or relating to this Agreement, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action, suit or proceeding may be
heard and determined in such courts.  Each of the parties hereto agrees that a
final judgment in any such action, suit or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. The Company and the Investors hereto irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any action, suit or proceeding arising out of or relating to this Agreement, or
in any court referred to above.  Each of the parties hereby irrevocably waives,
to the fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action, suit proceeding in any such court and waives any
other right to which it may be entitled on account of its place of residence or
domicile.

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5.8.

Execution.  This Agreement may be executed in two or more counterparts, all of
which when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart.  In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.

5.9.

Severability.  If any provision of this Agreement is held to be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Agreement shall not in any way be affected or
impaired thereby and the parties will attempt to agree upon a valid and
enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

5.10.

Independent Nature of Investors' Obligations and Rights.  The obligations of
each Investor hereunder are several and not joint with the obligations of any
other Investor, and no Investor shall be responsible in any way for the
performance of the obligations of any other Investor hereunder.  The decision of
each Investor to purchase Securities pursuant hereto has been made by such
Investor independently of any other Investor.  

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

ORGANIC REGION GROUP LTD.

 

 

By: ________________________________

Name:  C M Leung

Title: CEO

 

[Remainder of Page Intentionally Left Blank; Signature Page for Investors
Follows]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

NAME OF INVESTOR

_____________________________________________________ 　
By:__________________________________________________ Name: Title: Investment
Amount: $____________________________________ 　 Tax ID
No.:____________________________________________ 　 ADDRESS FOR NOTICE
c/o:__________________________________________________
Street:________________________________________________
City/State/Zip:__________________________________________
Attention:_____________________________________________
Tel:__________________________________________________
Fax:__________________________________________________ 　 DELIVERY INSTRUCTIONS
(if different from above) c/o:__________________________________________________
Street:________________________________________________
City/State/Zip:__________________________________________
Attention:_____________________________________________
Tel:__________________________________________________

 

 

 

 

 

 

 

 

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