Exhibit 10.1
 
 
SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated January 5, 2010, is
between Link Resources Inc., a Nevada corporation (the “Company”), and each
purchaser identified on Schedule A hereto (each, including their respective
successors and assigns, an “Investor” and collectively, the “Investors”) and,
with respect to certain sections hereof, Euro Pacific Capital, Inc. (the “Lead
Placement Agent”).
 
WHEREAS, this Agreement has been entered into pursuant to the terms of the
Company’s Confidential Private Placement Memorandum, dated December 10, 2009
(together with any and all amendments and/or supplements thereto, the
“Memorandum”);

WHEREAS, the Lead Placement Agent is acting in such capacity in connection with
the Company’s offering of Units as described in the Memorandum;

WHEREAS, as described in the Memorandum, immediately prior to the Closing (as
defined herein), the shareholders of Chance High International Limited, a
British Virgin Islands company (“Chance High”) and an Affiliate of Yantai Bohai
Pharmaceuticals Group Co., Ltd., a company organized under the laws of the PRC
(“Bohai”), shall have consummated a share exchange transaction with the Company
pursuant to a Share Exchange Agreement, in the form attached to the Memorandum
(the “Share Exchange Agreement”), with the result being that Chance High will
become a wholly-owned subsidiary of the Company;

WHEREAS, upon the consummation of the transactions contemplated by the Share
Exchange Agreement, Bohai shall become a controlled variable interest entity of
the Company’s subsidiary, Yantai Shencaojishi Pharmaceuticals Co., Ltd., a
company organized under the laws of the PRC (“WFOE”), which, in turn, will be a
wholly-owned subsidiary of Chance High;

WHEREAS, in light of the Company’s transaction with Bohai, the Investors wish to
purchase from the Company, and the Company wishes to sell and issue to the
Investors, upon the terms and conditions stated in this Agreement, a minimum of
4,650,000 units (the “Minimum Amount”) and a maximum of 6,000,000 units (the
“Maximum Amount”) at a purchase price of $2.00 per unit (each, a “Unit”);
 
WHEREAS, each Unit shall consist consisting of: (i) an eight (8%) percent
convertible promissory note (each a “Note,” and, collectively, the “Notes”) of
the Company in the aggregate principal amount of $2.00, which Note shall
be convertible into shares (the “Conversion Shares”) of the Company’s common
stock, par value $0.001 per share (together with any securities into which such
shares may be reclassified, the “Common Stock”) at $2.00 per Conversion Share
(subject to adjustment as set forth in the Note), which Notes shall be in the
form annexed hereto as Exhibit A hereto and (ii) a common stock purchase warrant
(each a “Warrant,” and, collectively, the “Warrants”) to purchase one (1) share
(collectively, the “Warrant Shares”) of Common Stock at an exercise price of
$2.40 per share (subject to adjustment as set forth in the Warrants), which
Warrants shall be in the form attached hereto as Exhibit B , upon the terms and
conditions set forth in this Agreement;
 
 
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WHEREAS, at the Closing, the parties hereto will execute and deliver a
Registration Rights Agreement, substantially in the form attached hereto as
Exhibit C (the “Registration Rights Agreement”), pursuant to which the Company
will agree to provide certain registration rights with respect to the Warrant
Shares under the Securities Act and the rules and regulations promulgated
thereunder, and applicable state securities laws;
 
WHEREAS, in order to provide security upon an event of default under the Notes,
Glory Period Limited, a British Virgin Islands company and an Affiliate of Bohai
(the “Principal Stockholder”), shall deposit one million (1,000,000) shares of
Common Stock received by it in connection with the Share Exchange Agreement with
Escrow, LLC, as securities escrow agent (the “Securities Escrow Agent”),
pursuant to that certain Securities Escrow Agreement by and among the Company,
the Lead Placement Agent, the Principal Stockholder and the Securities Escrow
Agent, dated as of the date hereof and substantially in the form of Exhibit D
hereto (the “Securities Escrow Agreement”); and
 
WHEREAS, the Company and the Investors are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the rules and regulations as promulgated by the Commission under the
Securities Act.

NOW, THEREFORE, in consideration of the mutual terms, conditions and other
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the parties hereto hereby agree to the sale and purchase
of the Units as set forth herein.

1.           DEFINITIONS.  In addition to the terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms have the
meanings indicated in this Section 1.

“Affiliate” means, with respect to any specified Person: (i) if such Person is
an individual, the spouse of that Person and, if deceased or disabled, his
heirs, executors, or legal representatives, if applicable, or any trusts for the
benefit of such individual or such individual’s spouse and/or lineal
descendants, or (ii) otherwise, another Person that directly, or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with, the Person specified. As used in this definition, “control”
shall mean the possession, directly or indirectly, of the power to cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities or by contract or other written instrument.

“Business Day” means any day on which banks located in New York City are not
required or authorized by law to remain closed.

“Closing Escrow Agreement” means the Closing Escrow Agreement, dated December
10, 2009, by and among the Company, the Lead Placement Agent and the Escrow
Agent.

“Company’s knowledge” means the information and/or other items that the
executives of the Company have actual knowledge of after due inquiry.

“Escrow Account” means the escrow account established by the Escrow Agent
pursuant to the Closing Escrow Agreement where funds representing the Investors’
aggregate Purchase Price shall be held pending the First Closing.
 
 
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“Escrow Agent” means Escrow, LLC.

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

“Governmental Body” shall mean any: (a) nation, state, commonwealth, province,
territory, county, municipality, district or other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign or other government; or (c)
governmental or quasi-governmental authority of any nature (including any
governmental or administrative division, department, agency, commission,
instrumentality, official, organization, unit, body or entity) and any court or
other tribunal.

“Intellectual Property” means the Company’s patents, patent applications,
provisional patents, trademarks, service marks, trade names, trademark
registrations, service mark registrations, copyrights, licenses, formulae, mask
works, customer lists, internet domain names, know-how and other intellectual
property, including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems, procedures or registrations or
applications relating to the same.

“Indebtedness” of any Person means all obligations of such Person: (i) for
borrowed money, (ii) evidenced by notes, bonds, debentures or similar
instruments, (iii) for the deferred purchase price of goods or services (other
than trade payables or accruals incurred in the ordinary course of business),
(iv) under capital leases, and (v) in the nature of guarantees of the
obligations described in clauses (i) through (iv) above of any other Person.

“Investor” means any person who purchases Units in the Offering pursuant to this
Agreement.

“Legal Requirement” shall mean any federal state, local, municipal, foreign or
other law, statute, constitution, principle of common law, resolution,
ordinance, code, edict, decree, rule, regulation, ruling or requirement issued,
enacted, adopted, promulgated, implemented or otherwise put into effect by or
under the authority of any Governmental Body (or under the authority of any
national securities exchange upon which the Common Stock is then listed or
traded).  Reference to any Legal Requirement means such Legal Requirement as
amended, modified, codified, replaced or reenacted, in whole or in part, and in
effect from time to time, and reference to any section or other provision of any
Legal Requirement means that provision of such Legal Requirement from time to
time in effect and constituting the substantive amendment, modification,
codification, replacement or reenactment of such section or other provision.
 
“Lien(s)” means any interest in Property securing an obligation owed to a Person
whether such interest is based on the common law, statute or contract, and
including but not limited to a security interest arising from a mortgage, lien,
title claim, assignment, encumbrance, adverse claim, contract of sale, pledge,
conditional sale or trust receipt or a lease, consignment or bailment for
security purposes.  The term “Lien” includes but is not limited to mechanics’,
materialmens’, warehousemens’ and carriers’ liens and other similar
encumbrances. For the purposes hereof, a Person shall be deemed to be the owner
of Property which it has acquired or holds subject to a conditional sale
agreement or other arrangement pursuant to which title to the Property has been
retained by or vested in some other Person for security purposes.
 
 
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“Material Adverse Effect” means a material adverse effect on, and a “Material
Adverse Change ” means a material adverse change in: (i) the assets,
liabilities, results of operations, condition (financial or otherwise) or
business of the Company taken as a whole; or (ii) the ability of the Company to
perform its obligations under the Transaction Documents, but, to the extent
applicable, shall exclude any circumstance, change or effect to the extent
resulting or arising from: (w) any change in general economic conditions in the
industries or markets in which the Company and its Subsidiaries operates so long
as the Company and its Subsidiaries are not disproportionately (in a material
manner) affected by such changes; (x) national or international political
conditions, including any engagement in hostilities, whether or not pursuant to
the declaration of a national emergency or war, or the occurrence of any
military or terrorist attack so long as the Company and its Subsidiaries are not
disproportionately (in a material manner) affected by such changes; (y) changes
in United States generally accepted accounting principles, or the interpretation
thereof; or (z) the entry into or announcement of this Agreement, actions
contemplated by this Agreement, or the consummation of the transactions
contemplated hereby.

“OTCBB” shall mean the Over-the-Counter Bulletin Board system.

“Offering” shall mean the offering and sale of the Units pursuant to this
Agreement and the Memorandum.

“Person” shall mean an individual, entity, corporation, partnership,
association, limited liability company, limited liability partnership,
joint-stock company, trust or unincorporated organization.

“PRC” means, for the purpose of this Agreement, the People’s Republic of China,
not including Taiwan, Hong Kong and Macau.

“Property” means any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible.

“Purchase Price” shall mean an amount equal to $2.00 per Unit multiplied by the
number of Units being purchased.

“SEC” means the United States Securities and Exchange Commission.

“Securities” means the Units, the Notes, the Conversion Shares, the Warrants and
the Warrant Shares.

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

“Subsidiaries” shall mean any corporation or other entity or organization,
whether incorporated or unincorporated, in which the Company owns, directly or
indirectly, any controlling equity or other controlling ownership interest or
otherwise controls through contract or otherwise, including, without limitation,
any variable interest entity of the Company.
 
 
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“Trading Day” means: (i) a day on which the Common Stock is traded on a Trading
Market (other than the OTC Bulletin Board), or (ii) if the Common Stock is not
listed on a Trading Market (other than the OTC Bulletin Board), a day on which
the Common Stock is traded in the over the counter market, as reported by the
OTC Bulletin Board, or (iii) if the Common Stock is not quoted on any Trading
Market, a day on which the Common Stock is quoted in the over the counter market
as reported by the Pink Sheets LLC (or any similar organization or agency
succeeding to its functions of reporting prices); provided, that in the event
that the Common Stock is not listed or quoted as set forth in (i), (ii) and
(iii) hereof, then Trading Day shall mean a Business Day.

“Trading Market” means whichever of the New York Stock Exchange, the NYSE AMEX,
the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital
Market or OTC Bulletin Board on which the Common Stock is listed or quoted for
trading on the date in question.

“Transaction Documents” shall mean this Agreement, the Memorandum, the Notes,
the Warrants, the Registration Rights Agreement, the Share Exchange Agreement,
the Closing Escrow Agreement and the Securities Escrow Agreement.

“Transfer” shall mean any sale, transfer, assignment, conveyance, charge,
pledge, mortgage, encumbrance, hypothecation, security interest or other
disposition, or to make or effect any of the above.

2.           SALE AND PURCHASE OF UNITS.

2.1.         Subscription for Units by Investors.  Subject to the terms and
conditions of this Agreement, on the Closing Date, each of the Investors shall
severally, and not jointly, purchase, and the Company shall sell and issue to
each Investor, the number of Units specified by it on its respective signature
page attached hereto in exchange for the Purchase Price.

2.2.         Closings.

(a)           First Closing.  Subject to the terms and conditions set forth in
this Agreement, the Company shall issue and sell to each Investor listed
on Schedule A-1, and each such Investor shall, severally and not jointly,
purchase from the Company on the First Closing Date, such number of Units set
forth on the respective signature pages attached hereto, which will be reflected
opposite such Investor’s name on Schedule A-1 (the “First Closing”).  The date
of the First Closing is hereinafter referred to as the “First Closing Date”.
 Units equal to at least the Minimum Amount are required to be sold at the First
Closing within the time period set forth in the Memorandum.
 
 
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(b)           Subsequent Closing(s).  In the event that the Maximum Amount is
not raised at the First Closing, the Company and the Lead Placement Agent may
mutually agree to have one or more subsequent closings of the Offering (each, a
“Subsequent Closing”) until the Maximum Amount is raised.  At each Subsequent
Closing, the Company agrees to issue and sell to each Investor who executes a
signature page hereto, and each such Investor agrees, severally and not jointly,
to purchase from the Company such number of Units set forth on such Investor’s
signature pages attached hereto.  There may be more than one Subsequent Closing;
provided, however, that the final Subsequent Closing shall take place within the
time periods set forth in the Memorandum.  The date of any Subsequent Closing is
hereinafter referred to as a “Subsequent Closing Date”).

(c)           Closing.  The First Closing and any applicable Subsequent Closings
are each referred to in this Agreement as a “Closing”.  The First Closing Date
and any Subsequent Closing Dates are sometimes referred to herein as a “Closing
Date”.  All Closings shall occur within the time periods set forth in the
Memorandum at the offices of Ellenoff Grossman & Schole LLP at 150 East 42nd
Street, 11th Floor, New York, NY 10017 or remotely via the exchange of documents
and signatures. 

2.3.         Closing Deliveries. At each Closing, the Company shall deliver to
the Investors purchasing Units at such Closing, against delivery by the Investor
of the Purchase Price (as provided below), the Notes and the Warrants.  At each
Closing, each Investor purchasing Units at such Closing shall deliver or cause
to be delivered to the Company the Purchase Price set forth in its counterpart
signature page annexed hereto by paying United States dollars via bank,
certified or personal check which has cleared prior to the applicable Closing or
in immediately available funds, by wire transfer to the Escrow Account pursuant
to the Closing Escrow Agreement.

2.4.         The Notes.  The Notes shall have the terms and conditions and be in
the form attached hereto as Exhibit A.  Upon an Event of Default (as defined in
the Note), the Investors shall have, in addition to any rights provided
hereunder, the rights provided them under the Transaction Documents.

2.5.         The Warrants.  The Warrants shall have the terms and conditions and
be in the form attached hereto as Exhibit B. 

2.6.         The Registration Rights Agreement.  The Registration Rights
Agreement shall contain the terms and conditions and be in the form attached
hereto as Exhibit C.

2.7.         Use of Proceeds.  The Company hereby covenants and agrees that the
proceeds from the sale of Units shall be used as provided for in the Memorandum.
 
 
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2.8.         Investor Representative.  Each Investor, severally and not jointly,
hereby appoints the Lead Placement Agent (together with its permitted
successors, and in this context, the “Investor Representative”), as its true and
lawful agent and attorney-in-fact to: (a) enter into any agreement in connection
with the transactions contemplated by this Agreement and any transactions
contemplated by the Transaction Documents, (b) exercise all or any of the
powers, authority and discretion conferred on such Investor under this Agreement
or any of the Transaction Documents, (c) waive any terms and conditions of this
Agreement or any of the Transaction Documents, (d) give and receive notices on
such Investor’s behalf and to be such Investor’s exclusive representative with
respect to any matter, suit, claim, action or proceeding arising with respect to
any transaction contemplated by this Agreement or any Transaction Document, and
the Investor Representative agrees to act as, and to undertake the duties and
responsibilities of, such agent and attorney-in-fact.  This power of attorney is
coupled with an interest and irrevocable.  The Investor Representative shall not
be liable for any action taken or not taken by it in connection with its
obligations under this Agreement: (i) with the consent of Investors who, as of
the date of this Agreement have subscribed for (or, if a Closing has occurred,
as of the date of the latest Closing own) more than fifty percent (50%) in
principal amount of the outstanding Notes or (ii) in the absence of its own
gross negligence or willful misconduct.  If the Investor Representative shall be
unable or unwilling to serve in such capacity, its successor shall be named by
those persons holding more than fifty percent (50%) in principal amount of the
Notes who shall serve and exercise the powers of Investor Representative
hereunder.

3.           ACKNOWLEDGEMENTS OF THE INVESTORS.

Each Investor, severally and not jointly, acknowledges that:

3.1.         Resale Restrictions.  None of the Securities have been registered
under the Securities Act, or under any state securities or “blue sky” laws of
any state of the United States, and, unless so registered, none of the
Securities may be offered or sold by the Investor except pursuant to an
effective registration statement under the Securities Act, or pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act and in each case only in accordance with
applicable state securities laws.

3.2.         Agreements.  Such Investor has received, carefully read and
acknowledges the terms of the Transaction Documents and Memorandum, including
the Risk Factors set forth in the Memorandum.

3.3.         Books and Records. The books and records of the Company and Bohai
were available upon reasonable notice for inspection, subject to certain
confidentiality restrictions, by the Investor during reasonable business hours
at its principal place of business, that all documents, records and books in
connection with the sale of the Securities hereunder have been made available
for inspection by it and its attorney and/or advisor(s) and that the Investor
and/or its advisor has reviewed all such documents, records and books to its
full satisfaction and all questions it and/or its advisor may have had been
answered to their respective full satisfaction.

3.4.         Independent Advice.  The Investor has been advised to consult the
Investor’s own legal, tax and other advisors with respect to the merits and
risks of an investment in the Securities and with respect to applicable resale
restrictions, and it is solely responsible (and neither the Company nor the Lead
Placement Agent is in any way, directly and/or indirectly, responsible) for
compliance with:

(a)           any applicable laws of the jurisdiction in which the Investor is
resident in connection with the distribution of the Securities hereunder, and

(b)           applicable resale restrictions.
 
 
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3.5.         No Governmental Review or Insurance.  Neither the SEC nor any other
securities commission, securities regulator or similar regulatory authority has
reviewed or passed on the merits of the Securities or on any of the documents
reviewed or executed by the Investor in connection with the sale of the
Securities, and there is no government or other insurance covering any of the
Securities.

4.           REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENTS OF THE INVESTORS.

Each Investor, severally and not jointly, represents and warrants to the Company
solely as to such Investor that:

4.1.         Capacity.  The Investor: (i) if a natural person, represents that
the Investor has reached the age of 21 and has full authority, legal capacity
and competence to enter into, execute and deliver this Agreement and the
Transaction Documents to which the Investor is a party and all other related
agreements or certificates and to take all actions required pursuant hereto and
thereto and to carry out the provisions hereof and thereof and, (ii) if a
corporation, partnership, or limited liability company or partnership, or
association, joint stock company, trust, unincorporated organization or other
entity, represents that such entity was not formed for the specific purpose of
acquiring the Units, such entity is duly organized, validly existing and in good
standing under the laws of the state of its organization, such entity has full
power and authority to execute and deliver this Agreement, the Transaction
Documents to which it is a party and all other related agreements or
certificates and to take all actions required pursuant hereto and thereto and to
carry out the provisions hereof and thereof and to purchase and hold the Units,
the execution and delivery of this Agreement and the Transaction Documents to
which it is a Party have been duly authorized by all necessary action; or (iii)
if executing this Agreement in a representative or fiduciary capacity,
represents that it has full power and authority to execute and deliver this
Agreement and the Transaction Documents to which it is a Party in such capacity
and on behalf of the subscribing individual, ward, partnership, trust, estate,
corporation, or limited liability company or partnership, or other entity for
whom the Investor is executing this Agreement and the Transaction Documents, and
such individual, partnership, ward, trust, estate, corporation, or limited
liability company or partnership, or other entity has full right and power to
perform pursuant to this Agreement and the Transaction Documents to which it is
a Party and make an investment in the Company.

4.2.         No Violation of Corporate Governance Documents. If the Investor is
a corporation or other entity, the entering into of this Agreement and the other
Transaction Documents to which it is a party and the transactions contemplated
hereby and thereby do not and will not result in the violation of any of the
terms and provisions of any law applicable to, or the charter or other
organizational documents, bylaws or other governing documents of, the Investor
or of any agreement, written or oral, to which the Investor may be a party or by
which the Investor is or may be bound.

4.3.         Binding Agreement. The Investor has duly executed and delivered
this Agreement and the other Transaction Documents to which it is a party, and
this Agreement and the other Transaction Documents to which it is a party
constitute a valid and binding agreement of the Investor enforceable against
the Investor in accordance with their respective terms, except as such
enforceability may be limited by general principals of equity, or to applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation and other
similar laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies.
 
 
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4.4.         Purchase Entirely for Own Account.  The Securities are being
acquired for such Investor’s own account, not as nominee or agent, for
investment purposes only and not with a view to the resale or distribution of
any part thereof in violation of the Securities Act, and such Investor has no
present intention of selling, granting any participation in, or otherwise
distributing the same in violation of the Securities Act, 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.

4.5.         Not a Broker-Dealer. Such Investor is neither a registered
representative under the Financial Industry Regulatory Authority (“FINRA”), a
member of FINRA or associated or Affiliated with any member of FINRA, nor a
broker-dealer registered with the SEC under the Exchange Act or engaged in a
business that would require it to be so registered, nor is it an Affiliate of a
such a broker-dealer or any Person engaged in a business that would require it
to be registered as a broker-dealer.  In the event such Investor is a member of
FINRA, or associated or Affiliated with a member of FINRA, such Investor agrees,
if requested by FINRA, to sign a lock-up, the form of which shall be
satisfactory to FINRA with respect to the Securities.

4.6.         Not an Underwriter.  Such Investor is not an underwriter of the
Common Stock, nor is it an Affiliate of an underwriter of the Common Stock.

4.7.         Investment Experience. Such Investor acknowledges that the purchase
of the Securities is a highly speculative investment and that it can bear the
economic risk and complete loss of its investment in the Securities and has such
knowledge and experience in financial and/or business matters that it is capable
of evaluating the merits and risks of the investment contemplated hereby.

4.8.         Disclosure of Information.  Such Investor has had an opportunity to
receive, and fully and carefully review, all information related to the Company,
Bohai and the Securities requested by it and to ask questions of and receive
answers from the Company regarding the Company, Bohai and their respective
businesses and the terms and conditions of the offering of the Securities.
 Neither such inquiries nor any other due diligence investigation conducted by
such Investor shall modify, amend or affect such Investor’s right to rely on the
Company’s representations and warranties contained in this Agreement.  Such
Investor acknowledges that it has received, and fully and carefully reviewed and
understands all of the Transaction Documents, including, but not limited to, the
Memorandum describing, among other items, the Company, Bohai, their respective
businesses and risks, the Securities and the offering of the Securities.
 Investor acknowledges that it has received, and fully and carefully reviewed
and understands, copies of the SEC Documents, either in hard copy or
electronically through the SEC’s EDGAR system.  Such Investor understands that
its investment in the Securities involves a high degree of risk.  Such
Investor’s decision to enter into this Agreement and the Registration Rights
Agreement has been made based solely on the independent evaluation of the
Investor and its representatives.  Such Investor has received such accounting,
tax and legal advice from Persons (other than the Company) as it has considered
necessary to make an informed investment decision with respect to the
acquisition of the Securities.
 
 
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4.9.         Restricted Securities.  Such Investor understands that, except as
provided in the Registration Rights Agreement, the sale or re-sale of the
Securities has not been and is not being registered under the Securities Act or
any applicable state securities laws, and the Securities, as applicable, may not
be transferred unless:

(a)           they are sold pursuant to an effective registration statement
under the Securities Act; or

(b)           they are being sold pursuant to a valid exemption from the
registration requirements of the Securities Act; or

(c)           they are sold or transferred to an “affiliate” (as defined in Rule
144, promulgated under the Securities Act (or a successor rule (“Rule 144”)) of
such Investor who agrees to sell or otherwise transfer the Securities only in
accordance with this Section 4.9 and who is an accredited investor, or

(d)           they are validly sold pursuant to Rule 144.

Such Investor shall provide the Company with no less than three (3) Trading Days
notice of its intention to dispose of any Securities and agrees that such
Investor shall only dispose of any Securities in accordance with all applicable
Legal Requirements.  Such Investors further understands that any sale of the
Securities made in reliance on Rule 144 may be made only in accordance with the
terms of Rule 144 and other than as provided in the Transaction Documents,
neither the Company nor any other Person is under any obligation to register the
Securities under the Securities Act or any state securities laws.
 Notwithstanding the foregoing or anything else contained herein to the
contrary, the Securities may be pledged as collateral in connection with a bona
fide margin account or other lending arrangement.

4.10.      Accredited Investor. Such Investor is an “accredited investor” as
defined in Rule 501(a) of Regulation D, as amended, under the Securities Act
(“Regulation D”).

4.11.      No General Solicitation.  Such Investor did not learn of the
investment in the Securities as a result of any public advertising or general
solicitation, and is not aware of any public advertisement or general
solicitation in respect of the Company or its securities.

4.12.      Brokers and Finders.  No Investor will have, as a result of the
transactions contemplated by the Transaction Documents, any valid right,
interest or claim against or upon the Company, any Subsidiary or any other
Investor for any commission, fee or other compensation pursuant to any
agreement, arrangement or understanding entered into by or on behalf of such
Investor.
 
 
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4.13.      Prohibited Transactions.  Other than with respect to the transactions
contemplated herein, since the earlier to occur of: (i) the time that such
Investor was first contacted by the Company, or any other Person regarding an
investment in the Company and (ii) the thirtieth (30th) day prior to the date
hereof, neither the Investor nor any Affiliate of the Investor which (x) had
knowledge of the transactions contemplated hereby, (y) has or shares discretion
relating to the Investor’s investments or trading or information concerning such
Investor’s investments, including in respect of the Securities, or (z) is
subject to the Investor’s review or input concerning such Affiliate’s
investments or trading decisions (collectively, “Trading Affiliates”) has,
directly or indirectly, nor has any Person acting on behalf of, or pursuant to,
any understanding with such Investor or Trading Affiliate effected or agreed to
effect any transactions in the securities of the Company or involving the
Company’s securities (a “Prohibited Transaction”).

4.14.      Residency.  Such Investor is a resident of the jurisdiction set forth
in on such Investors signature page hereto.

4.15.      Reliance on Exemptions.  The Investor understands that the Securities
are being offered and sold to it in reliance upon specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying upon the truth and accuracy of, and the Investor’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Investor set forth herein in order to determine the
availability of such exemptions and the eligibility of the Investor to acquire
the Securities. All of the information which the Investor has provided to the
Company is true, correct and complete as of the date this Agreement is signed,
and if there should be any change in such information prior to the Closing, the
Investor will immediately provide the Company with such information.

5.           REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

Except as set forth in: (i) the SEC Reports, (ii) the Memorandum or (ii) the
corresponding section of the Disclosure Schedules delivered to the Investor
Representative concurrently herewith, the Company (which, for the avoidance of
doubt, means the Company after giving effect to the transactions contemplated by
the Share Exchange Agreement) hereby makes the following representations and
warranties as of the date hereof and as of the Closing Date to each Investor:

5.1.        Subsidiaries.  A true and correct structure chart of the Company and
its wholly-owned and consolidated Subsidiaries after giving effect to the
transactions contemplated by the Share Exchange Agreement is included as
Schedule 5.1 to the Disclosure Schedules.  Except as disclosed on Schedule 5.1
to the Disclosure Schedules or in the Memorandum, the Company owns, directly or
indirectly, all of the capital stock of each Subsidiary free and clear of any
Liens, and all 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.

5.2.        Organization and Qualification.  Each of the Company and the
Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, 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, would 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 or financial condition of the Company and the
Subsidiaries, taken as a whole, or (iii) adversely impair 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”).

 
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5.3.        Authorization; Enforcement.  The Company has the requisite corporate
power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry out its
obligations thereunder.  The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated thereby 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.  Each Transaction Document 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: (i)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.

5.4.        No Conflicts.  The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated 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, 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) 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 would not have or reasonably be expected to
result in a Material Adverse Effect.
 
 
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5.5.        Filings, Consents and Approvals.  Neither Company nor any Subsidiary
is required to obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court or other foreign,
federal, state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the Company of the
Transaction Documents, other than (a) the filing with the Commission of the
Registration Statement, the application(s) to each Trading Market for the
listing of the Shares and Warrant Shares for trading thereon in the time and
manner required thereby, and applicable Blue Sky filings, (b) such as have
already been obtained or such exemptive filings as are required to be made under
applicable securities laws, (c) such other filings that have been made pursuant
to applicable state securities laws and post-sale filings pursuant to applicable
state and federal securities laws which the Company undertakes to file within
the applicable time periods.  Subject to the accuracy of the representations and
warranties of each Investor set forth in Section 4 hereof, the Company has taken
all action necessary to exempt: (i) the issuance and sale of the Securities,
(ii) the issuance of the Warrant Shares upon due exercise of the Warrants, and
(iii) the other transactions contemplated by the Transaction Documents from the
provisions of any stockholder rights plan or other “poison pill” arrangement,
any anti-takeover, business combination or control share law or statute binding
on the Company or to which the Company or any of its assets and properties may
be subject and any provision of the Company’s Articles of Incorporation or
Bylaws that is or could reasonably be expected to become applicable to the
Investors as a result of the transactions contemplated hereby, including without
limitation, the issuance of the Securities and the ownership, disposition or
voting of the Securities by the Investors or the exercise of any right granted
to the Investors pursuant to this Agreement or the other Transaction Documents.

5.6.        Issuance of the Securities.  The Notes are duly authorized and, when
issued and paid for in accordance with the Transaction Documents, will be duly
and validly issued, fully paid and nonassessable, free and clear of all
Liens.  The Warrants have been duly and validly authorized.  Upon the due
conversion of the Notes, the Conversion Shares will be validly issued, fully
paid and non-assessable free and clear of all Liens.   Upon the due exercise of
the Warrants, the Warrant Shares will be validly issued, fully paid and
non-assessable free and clear of all Liens.  The Company has reserved from its
duly authorized capital stock the maximum number of shares of Common Stock
issuable pursuant to this Agreement, the Notes and the Warrants.

5.7.        Capitalization.  Schedule 5.7 to the Disclosure Schedules sets forth
as of the date hereof (a) the authorized capital stock of the Company; (b) the
number of shares of capital stock issued and outstanding; (c) the number of
shares of capital stock issuable pursuant to the Company’s stock plans; and (d)
the number of shares of capital stock issuable and reserved for issuance
pursuant to securities (other than the Notes and the Warrants) exercisable for,
or convertible into or exchangeable for any shares of capital stock of the
Company.  All of the issued and outstanding shares of the Company’s capital
stock have been duly authorized and validly issued and are fully paid,
nonassessable and free of pre-emptive rights and were issued in full compliance
with applicable state and federal securities law and any rights of third
parties.  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.  Except as described on Schedule 5.7
to the Disclosure Schedules, there are no outstanding options, warrants, script
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into or
exchangeable for, or giving any Person any right to subscribe for or acquire,
any shares of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may become bound to
issue additional shares of Common Stock, or securities or rights convertible or
exchangeable into shares of Common Stock, other than in connection with the
Share Exchange Agreement and the Company’s stock option plans.  The issue and
sale of the Securities will not obligate the Company to issue shares of Common
Stock or other securities to any Person (other than the Investors) and will not
result in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under such securities.  Except as described
on Schedule 5.7 to the Disclosure Schedules and except for the Registration
Rights Agreement, there are no voting agreements, buy-sell agreements, option or
right of first purchase agreements or other agreements of any kind among the
Company and any of the securityholders of the Company relating to the securities
of the Company held by them.  Except as described on Schedule 5.7 to the
Disclosure Schedules, and except as provided in the Registration Rights
Agreement, no Person has the right to require the Company to register any
securities of the Company under the Securities Act, whether on a demand basis or
in connection with the registration of securities of the Company for its own
account or for the account of any other Person.
 
 
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5.8.        SEC Reports; Financial Statements.  The Company has filed all
reports and registration statements required to be filed by it under the
Securities Act and the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the two years preceding the date hereof (or such shorter
period as the Company was required by law to file such material) (the foregoing
materials, including the exhibits thereto, being collectively referred to herein
as the “SEC Reports” and, together with the Disclosure Schedules to this
Agreement and the Memorandum, the “Disclosure Materials”) on a timely basis or
has received a valid extension of such time of filing and has filed any such SEC
Reports prior to the expiration of any such extension.  As of their respective
dates, the SEC Reports 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 Reports, 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 statements
therein, in light of the circumstances under which they were made, not
misleading.  The financial statements of the Company included in the SEC Reports
comply in all material respects with applicable accounting requirements and the
rules and regulations of the Commission with respect thereto as in effect at the
time of filing.  Such financial statements have been prepared in accordance with
generally accepted accounting principles 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 and its consolidated
subsidiaries as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial, year-end audit adjustments.  The financial
statements of Chance High included in the Memorandum have been prepared in
accordance with 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 Chance High and its consolidated
subsidiaries as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial, year-end audit adjustments.

5.9.        Material Changes.  Except with respect to the transactions
contemplated by the Share Exchange Agreement or as otherwise disclosed in the
Memorandum (including the , since the date of the latest audited financial
statements included within the SEC Reports, except as disclosed in the SEC
Reports, the Company and its Subsidiaries have not:

(a)           suffered any Material Adverse Change;
 
 
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(b)           suffered any damage, destruction or loss, whether or not covered
by insurance, in an amount in excess of $100,000;
 
(c)           granted or agreed to make any increase in the compensation payable
or to become payable by the Company or any of its Subsidiaries to any officer or
employee, except for normal raises for nonexecutive personnel made in the
ordinary course of business that are usual and normal in amount;
 
(d)           declared, set aside or paid any dividend or made any other
distribution on or in respect of the shares of capital stock of the Company or
any of its Subsidiaries, or declared or agreed to any direct or indirect
redemption, retirement, purchase or other acquisition by the Company or any of
its Subsidiaries of such shares;
 
(e)            issued any shares of capital stock of the Company or any of its
Subsidiaries, or any warrants, rights or options thereof, or entered into any
commitment relating to the shares of capital stock of the Company or any of its
Subsidiaries;
 
(f)            adopted or proposed the adoption of any change in the Company’s
Certificate of Incorporation or Bylaws;
 
(g)           made any change in the accounting methods or practices they
follow, whether for general financial or tax purposes, or any change in
depreciation or amortization policies or rates adopted therein, or any tax
election;
 
(h)           sold, leased, abandoned or otherwise disposed of any real property
or any machinery, equipment or other operating property other than in the
ordinary course of their business;
 
(i)            sold, assigned, transferred, licensed or otherwise disposed of
any of the Company’s Intellectual Property or interest thereunder or other
intangible asset except in the ordinary course of their business;
 
(j)            been involved in any dispute involving any employee which would
reasonably be expected to result in a Material Adverse Change;
 
(k)           entered into, terminated or modified any employment, severance,
termination or similar agreement or arrangement with, or granted any bonuses (or
bonus opportunity) to, or otherwise increased the compensation of any executive
officer;
 
(l)            entered into any material commitment or transaction (including
without limitation any borrowing or capital expenditure);
 
(m)           amended or modified, or waived any default under, any Material
Contract;
 
(n)           to the Knowledge of the Company, incurred any material
liabilities, contingent or otherwise, either matured or unmatured (whether or
not required to be reflected in financial statements in accordance with GAAP,
and whether due or to become due), except for accounts payable or accrued
salaries that have been incurred by the Company since the date of the latest
audited financial statements included within the SEC Reports, in the ordinary
course of its business and consistent with the Company’s past practices;
 
 
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(o)           permitted or allowed any of their material property or assets to
be subjected to any Lien;
 
(p)           settled any claim, litigation or action, whether now pending or
hereafter made or brought;
 
(q)           made any capital expenditure or commitment for additions to
property, plant or equipment individually in excess of $100,000, or in the
aggregate, in excess of $250,000;
 
(r)            paid, loaned or advanced any amount to, or sold, transferred or
leased any properties or assets to, or entered into any agreement or arrangement
with any of their Affiliates, officers, directors or stockholders or, to the
Company's knowledge, any Affiliate or associate of any of the foregoing;
 
(s)           made any amendment to, or terminated any agreement that, if not so
amended or terminated, would be material to the business, assets, liabilities,
operations or financial performance of the Company or any of its Subsidiaries;
 
(t)            compromised or settled any claims relating to taxes, any tax
audit or other tax proceeding, or filed any amended tax returns;
 
(u)           merged or consolidated with any other Person, or acquired a
material amount of assets of any other Person;
 
(v)           entered into any agreement in contemplation of the transactions
specified herein other than this Agreement and the other Transaction Documents;
or
 
(w)           agreed to take any action described in this Section 5.9 or which
would reasonably be expected to otherwise constitute a breach of any of the
representations or warranties contained in this Agreement or any other
Transaction Documents.
 
5.10.      Litigation.  Except as described on Schedule 5.10 to the Disclosure
Schedules, 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.  The Commission has not issued any stop
order or other order suspending the effectiveness of any registration statement
filed by the Company or any Subsidiary under the Exchange Act or the Securities
Act.
 
 
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5.11.      Labor Relations.  Except as set forth on Schedule 5.11 to the
Disclosure Schedules, neither the Company nor any Subsidiary is a party to or
bound by any collective bargaining agreements or other agreements with labor
organizations.  Neither the Company nor any Subsidiary has violated in any
material respect any laws, regulations, orders or contract terms, affecting the
collective bargaining rights of employees, labor organizations or any laws,
regulations or orders affecting employment discrimination, equal opportunity
employment, or employees’ health, safety, welfare, wages and hours.  No material
labor dispute exists or, to the knowledge of the Company, is imminent with
respect to any of the employees of the Company which could reasonably be
expected to result in a Material Adverse Effect.

5.12.      Compliance.  Except as set forth on Schedule 5.12 to the Disclosure
Schedules, 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, except in the case of clauses (i), (ii) and (iii) as would not have or
reasonably be expected to result in a Material Adverse Effect.

5.13.      Regulatory Permits.  Except as disclosed in the SEC Reports, the
Memorandum or Schedule 5.13 to the Disclosure Schedules, 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 as described in the SEC Reports and the
Memorandum, except where the failure to possess such permits would not have or
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.

5.14.      Title to Assets.  Except as set forth on Schedule 5.14 to the
Disclosure Schedules, the Company and the Subsidiaries have good and marketable
title in fee simple or the right under PRC law, as the case may be, to all real
property owned by them that is material to the business of the Company and the
Subsidiaries and good and marketable title in all personal property owned by
them that is material to the business of the Company and the Subsidiaries, in
each case free and clear of all Liens, except for Liens as do not materially
affect the value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company and the
Subsidiaries and Liens for the payment of federal, state or other taxes, the
payment of which is neither delinquent nor subject to penalties.  Any real
property and facilities held under lease by the Company and the Subsidiaries are
held by them under valid, subsisting and enforceable leases of which the Company
and the Subsidiaries are in compliance.
 
 
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5.15.      Contracts.

(a)           Except as set forth in the SEC Reports or the Memorandum, neither
the Company nor any of its Subsidiaries is party or subject to, or bound by:
 
(i)           any agreements, contracts or commitments that call for prospective
fixed and/or contingent payments or expenditures by or to the Company or any of
its Subsidiaries of more than $100,000, or which is otherwise material and not
entered into in the ordinary course of business;
 
(ii)           any contract, lease or agreement involving payments in excess of
$100,000, which is not cancelable by the Company or any of its Subsidiaries, as
applicable, without penalty on not less than 60 days notice;
 
(iii)           any contract, including any distribution agreements, containing
covenants directly or explicitly limiting the freedom of the Company or any of
its Subsidiaries to compete in any line of business or with any Person or to
offer any of its products or services;
 
(iv)           any indenture, mortgage, promissory note, loan agreement,
guaranty or other agreement or commitment for the borrowing of money or pledging
or granting a security interest in any assets;
 
(v)           any employment contracts, non-competition agreements, invention
assignments, severance or other agreements with officers, directors, employees,
stockholders or consultants of the Company or any of its Subsidiaries or Persons
related to or affiliated with such Persons;
 
(vi)           any stock redemption or purchase agreements or other agreements
affecting or relating to the capital stock of the Company or any of its
Subsidiaries, including, without limitation, any agreement with any stockholder
of the Company or any of its Subsidiaries which includes, without limitation,
antidilution rights, voting arrangements or operating covenants;
 
(vii)           any pension, profit sharing, retirement, stock option or stock
ownership plans;
 
(viii)         any royalty, dividend or similar arrangement based on the
revenues or profits of the Company or any of its Subsidiaries or based on the
revenues or profits derived from any material contract;
 
(ix)           any acquisition, merger, asset purchase or other similar
agreement;
 
(x)           any sales agreement which entitles any customer to a right of
set-off, or right to a refund after acceptance thereof;
 
(xi)           any agreement with any supplier or licensor containing any
provision permitting such supplier or licensor to change the price or other
terms upon a breach or failure by the Company or any of its Subsidiaries, as
applicable, to meet its obligations under such agreement; or
 
(xii)           any agreement under which the Company or any of its Subsidiaries
has granted any Person registration rights for securities.
 
 
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(b)           Schedule 5.15(b) to the Disclosure Schedules contains a listing or
description of all agreements, contracts or instruments, including all
amendments thereto, to which the Company or its Subsidiaries are bound which
meet the criteria set forth in Section 5.15(a) (such agreements, contracts or
instruments, collectively, the “Material Contracts”).  The Company has made
available to the Investor Representative copies of the Material
Contracts.  Neither the Company nor any of its Subsidiaries has entered into any
oral contracts which, if written, would qualify as a Material Contract.  Each of
the Material Contracts is valid and in full force and effect, is enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or similar laws affecting
creditors’ rights generally and general principles of equity, and will continue
to be so immediately following the Closing Date.  

(c)           Actions with Respect to Material Contracts.
 
(i)           Neither the Company nor any of its Subsidiaries has violated or
breached, or committed any default under, any Material Contract in any material
respect, and, to the Company’s knowledge, no other Person has violated or
breached, or committed any default under any Material Contract, except for
violations, breaches of defaults which would not have a Material Adverse Effect;
and
 
(ii)           To the Company's knowledge, no event has occurred, and no
circumstance or condition exists, that (with or without notice or lapse of time)
will, or would reasonably be expected to: (A) result in a material violation or
breach of any of the provisions of any Material Contract, (B) give any Person
the right to declare a default or exercise any remedy under any Material
Contract, (C) give any Person the right to accelerate the maturity or
performance of any Material Contract or (D) give any Person the right to cancel,
terminate or modify any Material Contract, except, in each case, as would not
have a Material Adverse Effect.

5.16.      Taxes.

(a)           The Company and its Subsidiaries have timely and properly filed
all tax returns required to be filed by them for all years and periods (and
portions thereof) for which any such tax returns were due, except where the
failure to so file would not have a Material Adverse Effect.  All such filed tax
returns are accurate in all material respects.  The Company has timely paid all
taxes due and payable (whether or not shown on filed tax returns), except where
the failure to so pay would not have a Material Adverse Effect.  There are no
pending assessments, asserted deficiencies or claims for additional taxes that
have not been paid.  The reserves for taxes, if any, reflected in the SEC
Reports or the in the Memorandum are adequate, and there are no Liens for taxes
on any property or assets of the Company and any of its Subsidiaries (other than
Liens for taxes not yet due and payable).  There have been no audits or
examinations of any tax returns by any Governmental Body, and the Company or its
Subsidiaries have not received any notice that such audit or examination is
pending or contemplated.  No claim has been made by any Governmental Body in a
jurisdiction where the Company or any of its Subsidiaries does not file tax
returns that it is or may be subject to taxation by that jurisdiction.  To the
knowledge of the Company, no state of facts exists or has existed which would
constitute grounds for the assessment of any penalty or any further tax
liability beyond that shown on the respective tax returns.  There are no
outstanding agreements or waivers extending the statutory period of limitation
for the assessment or collection of any tax.
 
 
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(b)           Neither the Company nor any of its Subsidiaries is a party to any
tax-sharing agreement or similar arrangement with any other Person.

(c)           The Company has made all necessary disclosures required by
Treasury Regulation Section 1.6011-4.  The Company has not been a participant in
a “reportable transaction” within the meaning of Treasury Regulation Section
1.6011-4(b).

(d)           No payment or benefit paid or provided, or to be paid or provided,
to current or former employees, directors or other service providers of the
Company will fail to be deductible for federal income tax purposes under Section
280G of the Internal Revenue Code of 1986, as amended (the “Code”).

5.17.      Employees.

(a)           The Company and its Subsidiaries are not party to any collective
bargaining agreements and, to the Company’s knowledge, there are no attempts to
organize the employees of the Company or any of its Subsidiaries.
 
(b)           Except as set forth on Schedule 5.17 to the Disclosure Schedules,
the Company and its Subsidiaries have no policy, practice, plan or program of
paying severance pay or any form of severance compensation in connection with
the termination of employment services.
 
(c)           Each Person who performs services for the Company or any of its
Subsidiaries has been, and is, properly classified by the Company or its
Subsidiaries as an employee or an independent contractor (or its PRC
equivalent).
 
(d)           To the Company's knowledge, no employee or advisor of the Company
or any of its Subsidiaries is or is alleged to be in violation of any term of
any employment contract, disclosure agreement, proprietary information and
inventions agreement or any other contract or agreement or any restrictive
covenant or any other common law obligation to a former employer relating to the
right of any such employee to be employed by the Company or any of its
Subsidiaries because of the nature of the business conducted or to be conducted
by the Company or any of its Subsidiaries or to the use of trade secrets or
proprietary information of others, and the employment of the employees of the
Company and its Subsidiaries does not subject the Company or the Company's
stockholders to any liability.  There is neither pending nor, to the Company's
knowledge, threatened any actions, suits, proceedings or claims, or, to the
Company’s knowledge, any basis therefor or threat thereof with respect to any
contract, agreement, covenant or obligation referred to in the preceding
sentence.
 
 
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5.18.      Employee Benefit Plans.  No liability to the Pension Benefit Guaranty
Corporation has been incurred with respect to any Plan (as defined below) by the
Company or any of its Subsidiaries which is or would be materially adverse to
the Company and its Subsidiaries.  The execution and delivery of this Agreement
and the issuance and sale of the Securities will not involve any transaction
which is subject to the prohibitions of Section 406 of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), or in connection with which a
tax could be imposed pursuant to Section 4975 of the Code, provided that, if any
of the Investors, or any person or entity that owns a beneficial interest in any
of the Investors, is an “employee pension benefit plan” (within the meaning of
Section 3(2) of ERISA) with respect to which the Company is a “party in
interest” (within the meaning of Section 3(14) of ERISA), the requirements of
Sections 407(d)(5) and 408(e) of ERISA, if applicable, are met.  As used in this
Section 2.1(ac), the term “Plan” shall mean an “employee pension benefit plan”
(as defined in Section 3 of ERISA) which is or has been established or
maintained, or to which contributions are or have been made, by the Company or
any subsidiary or by any trade or business, whether or not incorporated, which,
together with the Company or any subsidiary, is under common control, as
described in Section 414(b) or (c) of the Code.

5.19.      Patents and Trademarks.  Except as set forth on Schedule 5.19 to the
Disclosure Schedules, to the knowledge of the Company and each Subsidiary, the
Company and the Subsidiaries have, or have rights to use, all patents, patent
applications, trademarks, trademark applications, service marks, trade names,
copyrights, licenses and other similar rights that are necessary or material for
use in connection with their respective businesses as described in the SEC
Reports and the Memorandum and which the failure to so have could have or
reasonably be expected to result in a Material Adverse Effect (collectively, the
“Intellectual Property Rights”).  Neither the Company nor any Subsidiary has
received a written notice that the Intellectual Property Rights used by the
Company or any Subsidiary violates or infringes upon the rights of any
Person.  To the knowledge of the Company, all such Intellectual Property Rights
are enforceable.  The Company and its Subsidiaries have taken reasonable steps
to protect the Company’s and its Subsidiaries’ rights in their Intellectual
Property Rights and confidential information (the “Confidential
Information”).  Each employee, consultant and contractor who has had access to
Confidential Information which is necessary for the conduct of Company’s and
each of its Subsidiaries’ respective businesses as currently conducted or as
currently proposed to be conducted has executed an agreement to maintain the
confidentiality of such Confidential Information and has executed appropriate
agreements that are substantially consistent with the Company’s standard forms
thereof.  Except under confidentiality obligations, there has been no material
disclosure of any of the Company’s or its Subsidiaries’ Confidential Information
to any third party.

5.20.      Environmental Matters.  Neither the Company nor any Subsidiary is in
violation of any statute, rule, regulation, decision or order of any
Governmental Body relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the environment or
human exposure to hazardous or toxic substances (collectively, “Environmental
Laws”), owns or operates any real property contaminated with any substance that
is subject to any Environmental Laws, is liable for any off-site disposal or
contamination pursuant to any Environmental Laws, or is subject to any claim
relating to any Environmental Laws, which violation, contamination, liability or
claim has had or could reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate; and there is no pending or, to the Company’s
knowledge, threatened investigation that might lead to such a claim.
 
 
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5.21.      Insurance.  The Company and the Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the Company and
the Subsidiaries are engaged as described in the Memorandum.  Neither the
Company nor any Subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business without a significant increase in cost.

5.22.      Transactions With Affiliates and Employees.  Except as set forth on
Schedule 5.22 to the Disclosure Schedules, except as disclosed in the Memorandum
or as contemplated by the Share Exchange Agreement, none of the officers or
directors of the Company and, to the knowledge of the Company, none of the
employees of the Company is presently a party to any transaction with the
Company or any Subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner, in each case in excess of $120,000
other than (a) for payment of salary or consulting fees for services rendered,
(b) reimbursement for expenses incurred on behalf of the Company and (c) for
other employee benefits, including stock option agreements under any stock
option plan of the Company.

5.23.      Private Placement. Assuming the accuracy of the Investors
representations and warranties set forth in Section 4, no registration under the
Securities Act is required for the offer and sale of the Securities by the
Company to the Investors as contemplated hereby.

5.24.      No Integrated Offering.  Other than in connection with the Share
Exchange Agreement, 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 or any applicable shareholder approval provisions, including, without
limitation, under the rules and regulations of any exchange or automated
quotation system on which any of the securities of the Company are listed or
designated.

5.25.      Brokers and Finders.  Other than as described in the Memorandum, no
Person will have, as a result of the transactions contemplated by the
Transaction Documents, any valid right, interest or claim against or upon the
Company, any Subsidiary or an Investor for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered
into by or on behalf of the Company.

5.26.      No Directed Selling Efforts or General Solicitation.  Neither the
Company nor any Person acting on its behalf has conducted any general
solicitation or general advertising (as those terms are used in Regulation D) in
connection with the offer or sale of any of the Securities.
 
 
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5.27.      Questionable Payments. Neither the Company nor any of its
Subsidiaries nor, to the Company’s knowledge, any of their respective current or
former stockholders, directors, officers, employees, agents or other Persons
acting on behalf of the Company or any Subsidiary, has on behalf of the Company
or any Subsidiary or in connection with their respective businesses: (a) used
any corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; (b) made any direct or
indirect unlawful payments to any governmental officials or employees from
corporate funds; (c) established or maintained any unlawful or unrecorded fund
of corporate monies or other assets; (d) made any false or fictitious entries on
the books and records of the Company or any Subsidiary; or (e) made any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment of
any nature.

5.28.      Disclosures.  Neither the Company nor any Person acting on its behalf
has provided the Investors or their agents or counsel with any information that
constitutes or might constitute material, non-public information, other than the
terms of the transactions contemplated hereby.  The written materials delivered
to the Investors in connection with the transactions contemplated by the
Transaction Documents do not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
contained therein, in light of the circumstances under which they were made, not
misleading

5.29.      Solvency.  The Company has not (a) made a general assignment for the
benefit of creditors; (b) filed any voluntary petition in bankruptcy or suffered
the filing of any involuntary petition by its creditors; (c) suffered the
appointment of a receiver to take possession of all, or substantially all, of
its assets; (d) suffered the attachment or other judicial seizure of all, or
substantially all, of its assets; (e) admitted in writing its inability to pay
its debts as they come due; or (f) made an offer of settlement, extension or
composition to its creditors generally.

5.30.      Related Party Transactions.  Except as set forth in the SEC Reports,
the Memorandum or Schedule 5.30 to the Disclosure Schedules: (a) none of the
Company or any of its Affiliates, officers, directors, stockholders or
employees, or any Affiliate of any of such Person, has any material interest in
any property, real or personal, tangible or intangible, including the Company’s
Intellectual Property used in or pertaining to the business of the Company,
except for the normal rights of a stockholder, or, to the knowledge of the
Company, any supplier, distributor or customer of the Company, (b) there are no
agreements, understandings or proposed transactions between the Company and any
of its officers, directors, employees, Affiliates, or, to the Company's
knowledge, any Affiliate thereof, (c) to the Company’s knowledge, no employee,
officer or director of the Company or any of its Subsidiaries has any direct or
indirect ownership interest in any firm or corporation with which the Company is
affiliated or with which the Company has a business relationship, or any firm or
corporation that competes with the Company; (d) to the Company’s knowledge, no
member of the immediate family of any officer or director of the Company is
directly or indirectly interested in any Material Contract or (e) there are no
amounts owed (cash and stock) to officers, directors and consultants (salary,
bonuses or other forms of compensation).
 
 
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5.31.      Foreign Corrupt Practices Act.  None of the Company or any of its
Subsidiaries, nor to the knowledge of the Company, any agent or other person
acting on behalf of the Company or any of its Subsidiaries, has, directly or
indirectly: (a) used any funds, or will use any proceeds from the sale of the
Units, for unlawful contributions, gifts, entertainment or other unlawful
expenses related to foreign or domestic political activity, (b) made any
unlawful payment to foreign or domestic government officials or employees or to
any foreign or domestic political parties or campaigns from corporate funds, (c)
failed to disclose fully any contribution made by the Company or any of its
Subsidiaries (or made by any Person acting on their behalf of which the Company
is aware) or any members of their respective management which is in violation of
any Legal Requirement, or (d) has violated in any material respect any provision
of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder which was applicable to the Company or any of its
Subsidiaries.

5.32.      PFIC.  None of the Company or any of its Subsidiaries is or intends
to become a “passive foreign investment company” within the meaning of Section
1297 of the Code of 1986.

5.33.      OFAC. None of the Company or any of its Subsidiaries nor, to the
knowledge of the Company, any director, officer, agent, employee, Affiliate or
Person acting on behalf of the Company or any of its Subsidiaries, is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”); and the Company will not
directly or indirectly use the proceeds of the sale of the Units, or lend,
contribute or otherwise make available such proceeds to any of the Company’s
Subsidiaries, joint venture partner or other Person or entity, towards any sales
or operations in Cuba, Iran, Syria, Sudan, Myanmar or any other country
sanctioned by OFAC or for the purpose of financing the activities of any Person
currently subject to any U.S. sanctions administered by OFAC.

5.34.      Money Laundering Laws.  The operations of each of the Company or any
of its Subsidiaries are and have been conducted at all times in compliance with
the money laundering Legal Requirements of all applicable Governmental Bodies of
the PRC and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any PRC Governmental Body (collectively, the “Money
Laundering Laws”) and no action, suit or proceeding by or before any PRC court
or PRC Governmental Body or any arbitrator involving the Company or any of its
Subsidiaries with respect to the Money Laundering Laws is pending or, to the
best knowledge of the Company, threatened.

5.35.      Other Representations and Warranties Relating to WFOE.

(a)           All material consents, approvals, authorizations or licenses
requisite under PRC Legal Requirements for the due and proper establishment and
operation of WFOE have been duly obtained from the relevant PRC Governmental
Bodies and are in full force and effect.

(b)           All filings and registrations with the PRC Governmental Bodies
required in respect of WFOE and its capital structure and operations including,
without limitation, the registration with the PRC Ministry of Commerce or its
local counterpart, the PRC the State Administration of Industry and Commerce or
its local counterpart, the PRC State Administration of Foreign Exchange and
applicable PRC tax bureau and customs authorities have been duly completed in
accordance with the relevant PRC Legal Requirements, except where, the failure
to complete such filings and registrations does not, and would not, individually
or in the aggregate, have a Material Adverse Effect.
 
 
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(c)           WFOE has complied with all relevant PRC Legal Requirements
regarding the contribution and payment of its registered share capital, the
payment schedule of which has been approved by the relevant PRC Governmental
Bodies.  There are no outstanding commitments made by the Company or any
Subsidiary (or any of their shareholders) to sell any equity interest in WFOE.

(d)           WFOE has not received any letter or notice from any relevant PRC
Governmental Body notifying it of revocation of any licenses or qualifications
issued to it or any subsidy granted to it by any PRC Governmental Body for
non-compliance with the terms thereof or with applicable PRC Legal Requirements,
or the lack of compliance or remedial actions in respect of the activities
carried out by WFOE, except such revocation as does not, and would not,
individually or in the aggregate, have a Material Adverse Effect.

(e)           WFOE has conducted its business activities within the permitted
scope of business or has otherwise operated its business in compliance with all
relevant Legal Requirements and with all requisite licenses and approvals
granted by competent PRC Governmental Bodies other than such non-compliance that
do not, and would not, individually or in the aggregate, have a Material Adverse
Effect.  As to licenses, approvals and government grants and concessions
requisite or material for the conduct of any material part of WFOE’s business
which is subject to periodic renewal, the Company has no knowledge of any
reasons related to the WFOE for which such requisite renewals will not be
granted by the relevant PRC Governmental Bodies.

(f)           With regard to employment and staff or labor, WFOE has complied
with all applicable PRC Legal Requirements in all material respects, including
without limitation, those pertaining to welfare funds, social benefits, medical
benefits, insurance, retirement benefits, pensions or the like, other than such
non-compliance that do not, and would not, individually or in the aggregate,
have a Material Adverse Effect.

6.           CONDITIONS TO EACH CLOSING OF THE INVESTORS.

The obligation of the Investors to purchase the Units at any Closing is subject
to the fulfillment to, the satisfaction of the Lead Placement Agent, on or prior
to such applicable Closing Date, of the following conditions, any of which may
be waived by the Lead Placement Agent:

6.1.        Representations and Warranties. The representations and warranties
made by the Company in Section 5 hereof qualified as to materiality shall be
true and correct at all times prior to and on the applicable Closing Date,
except to the extent any such representation or warranty expressly speaks as of
an earlier date, in which case such representation or warranty shall be true and
correct as of such earlier date, and, the representations and warranties made by
the Company in Section 5 hereof not qualified as to materiality shall be true
and correct in all material respects at all times prior to and on the applicable
Closing Date, except to the extent any such representation or warranty expressly
speaks as of an earlier date, in which case such representation or warranty
shall be true and correct in all material respects as of such earlier date.
 
 
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6.2.        Performance of Agreements.  The Company shall have performed in all
material respects all obligations and covenants herein required to be performed
by it on or prior to the applicable Closing Date.

6.3.        Approvals. The Company shall have obtained any and all consents,
permits, approvals, registrations and waivers necessary or appropriate for
consummation of the purchase and sale of the Securities and the consummation of
the other transactions contemplated by the Transaction Documents, all of which
shall be in full force and effect. 

6.4.        Judgments, etc. No judgment, writ, order, injunction, award or
decree of or by any court, or judge, justice or magistrate, including any
bankruptcy court or judge, or any order of or by any governmental authority,
shall have been issued, and no action or proceeding shall have been instituted
by any governmental authority, enjoining or preventing the consummation of the
transactions contemplated hereby or in the other Transaction Documents.

6.5.        Stop Orders.  No stop order or suspension of trading shall have been
imposed by the SEC or any other governmental or regulatory body having
jurisdiction over the Company or the market(s) where the Common Stock is listed
or quoted, with respect to public trading in the Common Stock.

6.6.        Adverse Changes.  Since the date of execution of this Agreement, no
event or series of events shall have occurred that reasonably could have or
result in a Material Adverse Effect or a material adverse change with respect to
the Company or any of its Subsidiaries;

6.7.        Company Officer Certificate. The Company shall have delivered a
Certificate, executed on behalf of the Company by its Chief Executive Officer or
its Chief Financial Officer, dated as of the applicable Closing Date, certifying
to the fulfillment of the conditions specified in this Section 6.

6.8.        Company Secretary Certificate. The Company shall have delivered a
Certificate, executed on behalf of the Company by its Secretary, dated as of the
First Closing Date, certifying the resolutions adopted by the Board of Directors
of the Company approving the transactions contemplated by this Agreement and the
other Transaction Documents and the issuance of the Securities, certifying the
current versions of the Articles of Incorporation and Bylaws of the Company and
certifying as to the signatures and authority of persons signing the Transaction
Documents and related documents on behalf of the Company.  The foregoing
certificate shall only be required to be delivered on the First Closing Date,
unless any material information contained in the certificate has changed.

6.9.        Financial Statements.  The Company shall have delivered audited
consolidated financial statements of Chance High and the other consolidated
subsidiaries of the Company for the fiscal years ended December 31, 2008 and
2007 and unaudited financial statements for the interim period through September
30, 2009 that will be included in the current report on Form 8-K described in
Section 6.10 below
 
 
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6.10.      Exchange Agreement Form 8-K.  Immediately prior to the Closing, the
Company shall have acquired all of the outstanding capital stock of Chance High
pursuant to the Share Exchange Agreement, and the Company shall provide the
Investors with the Current Report on Form 8-K to be filed no later than the
fourth Trading Day following the Closing Date under the Share Exchange
Agreement, containing the audited financial statements of Bohai described in
Section 6.9 hereof and other required disclosure with respect to Bohai and its
Affiliates.

6.11.      Opinions of Counsel.

(a)           The Investors and the Lead Placement Agent shall have received an
opinion from Synergen Law Group, APC, dated as of each Closing Date, in such
form and substance as agreed to by the Company and the Lead Placement Agent (it
being agreed that such counsel shall not be required to deliver a “10b-5” or
negative assurances letter or opinion).

(b)           The Investors and the Lead Placement Agent shall have received an
opinion from AllBright Law Offices, the Company’s PRC legal counsel, dated as of
each Closing Date, in such form and substance as agreed to by the Company and
the Lead Placement Agent (it being agreed that such counsel shall not be
required to deliver a “10b-5” or negative assurances letter or opinion).

6.12.      Note and Warrants.  The Company shall have delivered the Notes and
Warrants being sold at the applicable Closing.

6.13.      Registration Rights Agreement.  The Company shall have executed and
delivered the Registration Rights Agreement.

6.14.      Securities Escrow Agreement.  The Securities Escrow Agreement shall
have been executed by the parties thereto and the Escrow Shares (as defined in
the Securities Escrow Agreement) shall have been deposited into the escrow
account pursuant to the terms of the Securities Escrow Agreement.

6.15.      Law and Accounting Firms.  The Company shall have entered into
retention agreements with: (i) a U.S. securities law firm that is reasonably
satisfactory to the Lead Placement Agent (it being agreed that Ellenoff Grossman
& Schole LLP is satisfactory to the Lead Placement Agent); and (ii) a PCAOB
auditing firm that is reasonably satisfactory to the Lead Placement Agent (it
being agreed that Parker Randall CF H.K. CPA Ltd. is satisfactory to the Lead
Placement Agent).

6.16.      Lock Up Agreements.  The Company’s officers and directors (after
giving effect to the Share Exchange Agreement) shall have delivered to the Lead
Placement Agent a customary “lock-up” agreement in favor of the Lead Placement
Agent with respect to the securities of the Company owned by them, which
agreement shall have a term of 18 months from the Initial Closing.

 
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7.           CONDITIONS TO EACH CLOSING OF THE COMPANY.

The obligations of the Company to effect the transactions contemplated by this
Agreement are subject to the fulfillment at or prior to the applicable Closing
Date of the conditions listed below.

7.1.        Representations and Warranties. The representations and warranties
made by the Investors in Section 4 shall be true and correct in all material
respects at the time of Closing as if made on and as of such date.

7.2.        Corporate Proceedings. All corporate and other proceedings required
to be undertaken by the Investor in connection with the transactions
contemplated hereby shall have occurred and all documents and instruments
incident to such proceedings shall be reasonably satisfactory in substance and
form to the Company.

7.3.        Agreements.  Such Investor shall have completed and executed this
Agreement, the Registration Rights Agreement and the investor questionnaire, and
delivered the same to the Company.

7.4.        Purchase Price.  The Investors shall have delivered or caused to be
delivered the Purchase Price to the Escrow Account.

7.5.        Minimum Amount.  The Minimum Amount shall have been raised.

8.           OTHER AGREEMENTS

8.1.        Board Designee.  For so long as the Investors continue to hold at
least a majority in principal amount of the outstanding Notes, the Lead
Placement Agent shall be entitled to nominate one member of the Company’s Board
of Directors (the “Designee”).  The Designee shall: (i) have experience serving
on the board of directors of a public company or have comparable experience,
(ii) be qualified to serve on the audit committee of the Company’s Board of
Directors, (iii) be able, consistent with his or her other business activities,
to dedicate reasonably sufficient time to the fulfillment of his or her duties
to the Company and (iv) shall be an “independent” director as defined under
Nasdaq Marketplace Rules.  The Lead Placement Agent will have the right to
remove the Designee and to fill any vacancy resulting from a Designee ceasing to
be a member of the Company’s Board of Directors for any reason.

8.2.        Furnishing of Information.  As long as any Investor owns the
Securities, the Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the
Exchange Act.  As long as any Investor owns Securities, if the Company is not
required to file reports pursuant to such laws, it will prepare and furnish to
the Investors and make publicly available in accordance with Rule 144(c) such
information as is required for the Investors to sell the Securities under Rule
144.  The Company further covenants that it will take such further action as any
holder of Securities may reasonably request, all to the extent required from
time to time to enable such Person to sell the Securities without registration
under the Securities Act within the limitation of the exemptions provided by
Rule 144.
 
 
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8.3.        Integration.  The Company shall not, and shall use its best efforts
to ensure that no Affiliate of the Company shall, sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Securities in a manner that would require the registration
under the Securities Act of the sale of the Securities to the Investors, or that
would be integrated with the offer or sale of the Securities for purposes of the
rules and regulations of any Trading Market in a manner that would require
stockholder approval of the sale of the Securities to the Investors.

8.4.        Subsequent Registrations.  Other than pursuant to the registration
statement being filed pursuant to the Registration Rights Agreement (the
“Registration Statement”),  prior to the effective date of the Registration
Statement, the Company may not file any registration statement (other than on
Form S-8) with the Commission with respect to any securities of the Company.

8.5.        Securities Laws Disclosure; Publicity.  By 9:00 a.m. (New York time)
on the Trading Day following the Initial Closing Date and each Subsequent
Closing Date, the Company shall issue a press release disclosing the
transactions contemplated hereby and the Closing.  By no later than the fourth
Trading Day following the Closing Date (and on each Subsequent Closing Date if
required by applicable law) the Company will file a Current Report on Form 8-K
disclosing the material terms of this Agreement and the other Transaction
Documents (and attach as exhibits thereto the Transaction Documents) and the
Closing.  In addition, the Company will make such other filings and notices in
the manner and time required by the SEC and the Trading Market on which the
Common Stock is listed.  Notwithstanding the foregoing, the Company shall not
publicly disclose the name of any Investor, or include the name of any Investor
in any filing with the SEC (other than the Registration Statement and any
exhibits to filings made in respect of this transaction in accordance with
periodic filing requirements under the Exchange Act) or any regulatory agency or
Trading Market, without the prior written consent of the Investor
Representative, except to the extent such disclosure is required by law or
Trading Market regulations.

8.6.        Limitation on Issuance of Future Priced Securities.  During the six
months following the Closing Date, the Company shall not issue any “Future
Priced Securities” as such term is described by the rules and regulations of
FINRA.

8.7.        Listing of Securities.  The Company agrees that: (i) if the Company
applies to have the Common Stock traded on any other Trading Market, it will
include in such application the Securities, and will take such other action as
is necessary or desirable to cause the Securities to be listed on such other
Trading Market as promptly as possible, and (ii) it will take all action
reasonably necessary to continue the listing and trading of its Common Stock on
a Trading Market and will comply in all material respects with the Company’s
reporting, filing and other obligations under the bylaws or rules of the Trading
Market.

8.8.        Listing.  The Company covenants to use its commercially reasonable
best efforts to have the Common Stock listed or quoted for trading on any of the
NYSE AMEX, the NASDAQ Global Market or the NASDAQ Capital Market as soon as is
reasonably practicable following the date that the Company meets the
requirements of any such Trading Market.
 
 
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8.9.        Controls and Procedures.  Following the Closing, the Company agrees
that it will utilize commercially reasonable efforts to establish and maintain,
to the extent required by law, rule or regulation, a system of internal
accounting controls sufficient to provide reasonable assurance that: (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.

8.10.      Board of Directors.  Within six (6) months of the First Closing,
Bohai or its Affiliates shall cause to be appointed to the Board of Directors of
the Company individuals constituting a majority of “independent” directors (as
defined under the Nasdaq Marketplace rules) of such Board of Directors and one
director designated by the Lead Placement Agent (who may qualify as one such
independent director, with at least two of such directors being fluent in
English.

8.11.      CFO.  Within six (6) months of the First Closing, the Company shall
enter into a 24 month agreement with a new Chief Financial Officer of the
Company who is reasonably satisfactory to the Lead Placement Agent and who is
proficient in: (i) GAAP accounting; (ii) transactions similar to the ones
contemplated by this Agreement; and (iii) U.S. public company listings and the
related filing and compliance requirements.

8.12.      IR Firm.  Within three (3) months of the First Closing, the Company
shall enter into a 12 month agreement with an investor and public relations firm
that is reasonably satisfactory to the Lead Placement Agent.

8.13.      Reservation of Shares.  The Company shall maintain a reserve from its
duly authorized shares of Common Stock to comply with its obligations to issue
the Conversion Shares and the Warrant Shares upon conversion of the Note and
exercise of the Warrant, respectively.

8.14.      Further Assurances.  The Company will, and will cause all of its
Subsidiaries to, and their management to, use their best efforts to satisfy all
of the closing conditions under Section 7, and will not take any action which
could frustrate or delay the satisfaction of such conditions.  In addition,
either prior to or following the Closing, the Company will, and will cause each
of its Subsidiaries to, and its and their management to, perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
any other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
 
 
30

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8.15.       Closing Escrow Holdback.  The Company and Investors agree that, from
the aggregate gross proceeds that will be delivered to the Escrow Agent pursuant
to the Closing Escrow Agreement, at the Closing $186,000 (if the Minimum Amount
is raised) or up to $240,000 (if the Maximum Amount is raised) (the “Total
Holdback Amount”), constituting an amount sufficient to satisfy the payment to
the Investors of one quarterly interest payment due on the aggregate principal
amount of all Notes issued in the Offering, shall be retained by the Escrow
Agent and paid to the Investors and otherwise administered in accordance with
the Closing Escrow Agreement.  At such time as 75% of the Conversion Shares have
been issued upon conversion of the Notes, if the Company is not in breach of any
of the Transaction Documents, all remaining funds of the Total Holdback Amount,
if any, shall be released to the Company in accordance with the Closing Escrow
Agreement.

9.           MISCELLANEOUS.

9.1.         Compensation of Lead Placement Agent, Brokers, etc. Each Investor
acknowledges that it is fully aware that the Lead Placement Agent will receive
from the Company, in consideration of its services as placement agent in respect
of the offer and sale of the Units contemplated hereby:

(a)           a commission of ten (10%) percent of the aggregate Purchase Price
of the Units sold at each Closing, payable in cash; and

(b)           a warrant to purchase a number of shares of Common Stock derived
by dividing an amount equal to 10% of the gross proceeds of raised at each
Closing by $2.00.

It is acknowledged that the Lead Placement Agent may share such fees and
compensation with other placement agents or brokers participating in the
transactions contemplated hereby.  In addition, each Investor acknowledges that
it is aware that the Lead Placement Agent will receive from the Company payment
of all of its accountable fees and expenses including, but not limited to, all
legal fees and expenses incurred in connection with the Offering, up to $80,000
in the aggregate.

9.2.         Notices. All notices, requests, demands and other communications
provided in connection with this Agreement shall be in writing and shall be
deemed to have been duly given at the time when hand delivered, delivered by
express courier, or sent by facsimile (with receipt confirmed by the sender’s
transmitting device) in accordance with the contact information provided below
or such other contact information as the parties may have duly provided by
notice.

(a)
  The Company:

  c/o Yantai Bohai Pharmaceuticals Group Co. Ltd.
  No. 9 Daxin Road, Zhifu District
  Yantai, Shandong Province, China
  Attention: Hongwei Qu
  Fax Number: +86-0535-6763559

 
31

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  With a copy to:

  Ellenoff Grossman & Schole LLP
  150 East 42nd Street, 11th Floor
  New York, NY 10017
  Attention: Barry I. Grossman, Esq.
  Fax Number: (212) 370-7889
 
(b)
  The Investors:

 
  As per the contact information provided on the signature page hereof.
 
(c)
  The Lead Placement Agent/Investor Representative:

 
  Euro Pacific Capital, Inc.
  88 Post Road West, 3rd Floor
  Westport, CT 06880
  Attention: Mr. Thomas Tan
  Fax Number: (203) 662-9771

  With a copy to:

  Pillsbury Winthrop Shaw Pittman LLP
  2300 N Street, N.W.
  Washington, DC 20037-1122
  Attention: Louis A. Bevilacqua, Esq.
  Fax Number: (202) 663-8007

9.3.         Amendments; Waivers.  No provision of this Agreement may be waived
or amended except in a written instrument signed, in the case of an amendment,
by the Company and the Investor Representative or, in the case of a waiver, by
the party against whom enforcement of any such waiver is sought (and if such
party is the Investors, then by the Investor Representative).  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.

9.4.         Construction.  The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.  The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.

9.5.         Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted
assigns.  The Company may not assign this Agreement or any rights or obligations
hereunder without the prior written consent of the Investor Representative.  Any
Investor may assign any or all of its rights under this Agreement to any Person
to whom such Investor assigns or transfers any Securities, provided such
transferee agrees in writing to be bound, with respect to the transferred
Securities, by the provisions hereof that apply to the “Investors”.

 
32

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9.6.         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.

9.7.         Governing Law, Consent to Jurisdiction, etc.  All questions
concerning the construction, validity, enforcement and interpretation of the
Transaction Documents shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of law thereof.  Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement and any other Transaction Documents
(whether brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced exclusively in
the state and federal courts sitting in the City of New York.  Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York, New York for the adjudication of
any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the
enforcement of the any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper.  Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof.  Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by law.  EACH
PARTY HERETO (INCLUDING ITS AFFILIATES, AGENTS, OFFICERS, DIRECTORS AND
EMPLOYEES) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

9.8.         Survival.  The representations, warranties, agreements and
covenants contained herein shall survive for two (2) years after the Closing of
the transactions contemplated by this Agreement.

9.9.         Indemnification.

(a)           The Company agrees to indemnify and hold harmless each Investor
and its Affiliates and their respective directors, officers, employees and
agents from and against any and all losses, claims, damages, liabilities and
expenses (including without limitation reasonable attorney fees and
disbursements and other expenses incurred in connection with investigating,
preparing or defending any action, claim or proceeding, pending or threatened
and the costs of enforcement thereof) (collectively, “Losses”) to which such
Person may become subject as a result of any breach of representation, warranty,
covenant or agreement made by or to be performed on the part of the Company
under the Transaction Documents, and will reimburse any such Person for all such
amounts as they are incurred by such Person.

 
33

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(b)          Promptly after receipt by any Person (the “Indemnified Person”) of
notice of any demand, claim or circumstances which would or might give rise to a
claim or the commencement of any action, proceeding or investigation in respect
of which indemnity may be sought pursuant to this Section 9.9, such Indemnified
Person shall promptly notify the Company in writing and the Company shall assume
the defense thereof, including the employment of counsel reasonably satisfactory
to such Indemnified Person, and shall assume the payment of all fees and
expenses; provided, however, that the failure of any Indemnified Person so to
notify the Company shall not relieve the Company of its obligations hereunder
except to the extent that the Company is materially prejudiced by such failure
to notify.  In any such proceeding, any Indemnified Person shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Person unless: (i) the Company and the
Indemnified Person shall have mutually agreed to the retention of such counsel;
or (ii) in the reasonable judgment of counsel to such Indemnified Person
representation of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them.  The Company shall not be
liable for any settlement of any proceeding effected without its written
consent, which consent shall not be unreasonably withheld, but if settled with
such consent, or if there be a final judgment for the plaintiff, the Company
shall indemnify and hold harmless such Indemnified Person from and against any
loss or liability (to the extent stated above) by reason of such settlement or
judgment.  Without the prior written consent of the Indemnified Person, which
consent shall not be unreasonably withheld, the Company shall not effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Person from all liability arising out
of such proceeding.

9.10.       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 or other electronic 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 or other electronic signature page were an original thereof.

9.11.       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.

 
34

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9.12.       Replacement of Securities.  If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon
cancellation thereof, or in lieu of and substitution therefor, a new certificate
or instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested.  The applicants for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs
associated with the issuance of such replacement Securities.

9.13.       Remedies.  In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Investors and the Company will be entitled to specific performance under the
Transaction Documents.  The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.

9.14.       Payment Set Aside.  To the extent that the Company makes a payment
or payments to any Investor pursuant to any Transaction Document or a Investor
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

9.15.       Independent Nature of Investors’ Obligations and Rights.  The
obligations of each Investor under any Transaction Document 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 under any Transaction Document.  Nothing contained herein or in any
Transaction Document, and no action taken by any Investor pursuant thereto,
shall be deemed to constitute the Investors as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Document.  Each
Investor shall be entitled to independently protect and enforce its rights,
including without limitation, the rights arising out of this Agreement or out of
the other Transaction Documents, and it shall not be necessary for any other
Investor to be joined as an additional party in any proceeding for such
purpose.  Each Investor has been represented by its own separate legal counsel
in their review and negotiation of the Transaction Documents.  The Company has
elected to provide all Investors with the same terms and Transaction Documents
for the convenience of the Company and not because it was required or requested
to do so by the Investors.

9.16.       Irrevocable Offer.  Each Investor agrees that this Agreement
constitutes an irrevocable offer to purchase the Securities of the Company and
that Investor cannot cancel, terminate or revoke this Agreement or any agreement
of Investor made hereunder.  This Agreement shall survive the death or legal
disability of Investor and shall be binding upon Investor’s heirs, executors,
administrators and successors.

 
35

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

 

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.

COMPANY:
 
LINK RESOURCES INC.
   
By:
    /s/ Hongwei Qu
 
Name: Hongwei QU
 
Title:   President, CEO and Chairman
   
INVESTORS:
 
The Investors executing the Signature Page in the form attached hereto as Annex
A and delivering the same to the Company or its agents shall be deemed to have
executed this Agreement and agreed to the terms hereof.
 
Solely with respect to Sections 2.2(b), 2.8 all of Section 6 and 8.1 hereof:
 
EURO PACIFIC CAPITAL INC.
   
By:
  /s/ Gordon McBean
 
Name: Gordon McBean
 
Title:   Head of Capital Markets

 
36

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

 

Annex A

Securities Purchase Agreement
Investor Counterpart Signature Page

The undersigned, desiring to: (i) enter into this Securities Purchase Agreement,
dated as of _________________, 2010 (the “Agreement”), between the undersigned,
Link Resources Inc., a Nevada corporation (the “Company”), and the other parties
thereto, in or substantially in the form furnished to the undersigned and (ii)
purchase the securities of the Company appearing below, hereby agrees to
purchase such securities from the Company as of the Closing and further agrees
to join the Agreement as a party thereto, with all the rights and privileges
appertaining thereto, and to be bound in all respects by the terms and
conditions thereof.

IN WITNESS WHEREOF, the undersigned has executed the Agreement as of
_____________________, 2010.

Name and Address, Fax No. and Social Security No./EIN of Investor:
 
________________________________________________
 
________________________________________________
 
________________________________________________
 
Fax No.: _________________________________________
 
Soc. Sec. No./EIN: _________________________________
 
If a partnership, corporation, trust or other business entity:
 
By: _________________________________
       Name:
       Title:
 
If an individual:
  ____________________________________
Signature
 
Purchase Price: _________________________
 
Note Amount: ___________________________
 
Number of Warrants: ______________________

 
 

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

 

Schedule A

SCHEDULE OF INVESTORS

No.
 
Investor Name
 
Amount of Notes
   
No. of Shares
Subject to
Warrant
 
1.
 
IRA FBO ROBERT STEPHEN ADAMS PERSHING LLC AS CUSTODIAN
    100,000.00       50,000  
2.
 
SELWYN ADELSON
    60,000.00       30,000  
3.
 
SYED HASNAT AHMED & MIRIAN F AHMED JT TEN
    110,000.00       55,000  
4.
 
AM-PER ENTERPRISES INC.
    100,000.00       50,000  
5.
 
DAVID ARITA TOD DTD 05/10/2009
    50,000.00       25,000  
6.
 
WILLIAM C ARTHUR BY PASS TRUST DATED 10/18/1990 UAD 10/18/90
    43,200.00       21,600  
7.
 
JAMES V. BACON TRUST DTD 09/14/1995 UAD 03/26/09
    250,000.00       125,000  
8.
 
IRA FBO JEFFREY P BAKER PERSHING LLC AS CUSTODIAN
    50,000.00       25,000  
9.
 
MICHAEL BALDWIN
    50,000.00       25,000  
10.
 
BALFOUR HOLLOW LLC
    50,000.00       25,000  
11.
 
THE SARAH J. BASLER LIVING TRUST UAD 07/02/98
    50,000.00       25,000  
12.
 
RICHARD E BENAMY
    50,000.00       25,000  
13.
 
MIDDLESEX ORTHO SURGEONS 401K FBO LAWRENCE BERSON
    50,000.00       25,000  
14.
 
JEFF BLACKBURN
    50,000.00       25,000  
15.
 
RONALD BOVASSO & LINDA BOVASSO JT TEN
    50,000.00       25,000  
16.
 
BRADLEY ANESTHESIOLOGY PC PROFT SHARING PLAN & TST
    100,000.00       50,000  
17.
 
TEN BRINK TRUST DATED 10/02/1986 UAD 10/02/86
    100,000.00       50,000  
18.
 
WHITE PINE PRODUCTIONS DEFINED BENEFIT PENSION PLN
    50,000.00       25,000  
19.
 
SEP FBO JAMES BROWN
    90,000.00       45,000  
20.
 
IRA FBO PAT BROWNE PERSHING LLC AS CUSTODIAN
    50,000.00       25,000  
21.
 
SCOTT BURNS
    50,000.00       25,000  
22.
 
ROBERT CARLSON & MICHELLE CARLSON JT TEN
    50,000.00       25,000  
23.
 
BRAD K CARR & ROXANE CARR JT TEN
    50,000.00       25,000  
24.
 
LOWELL CERISE
    75,000.00       37,500  
25.
 
SRC CORPORATION DEFINED BENEFIT PENSION PLAN
    50,000.00       25,000  
26.
 
DONALD T CLEMETSON
    50,000.00       25,000  
27.
 
ROLAND CRAM TOD DTD 06/03/2009
    50,000.00       25,000  
28.
 
INTEGRITY FUNDS LP
    50,000.00       25,000  
29.
 
THE 2000 JORGE &ELENA ECHEVERRIA FAMILY TRUST UAD 11/09/00
    50,000.00       25,000  
30.
 
IRA FBO HY ECHT PERSHING LLC AS CUSTODIAN
    60,000.00       30,000  
31.
 
IRA FBO RALPH DALE EDSON PERSHING LLC AS CUSTODIAN
    100,000.00       50,000  
32.
 
JONATHAN EDWARDS & VIRGINIA C ADAMS JT TEN
    50,000.00       25,000  
33.
 
THE ARTHUR EKLUND & JANET EKLUND 1998 INTER VIVOS TRUST
    50,000.00       25,000  

 
 

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

 

34.
 
STEVEN JAY EPSTEIN
    50,000.00       25,000  
35.
 
IRA FBO DONALD FAGEN PERSHING LLC AS CUSTODIAN
    250,000.00       125,000  
36.
 
SEP FBO VIC FERRER PERSHING LLC AS CUSTODIAN
    50,000.00       25,000  
37.
 
WALTER FRIESEN
    150,000.00       75,000  
38.
 
THE ALEXANDER GALUZ AND YANA GALUZ JT LIVING TST UAD 08/24/05
    50,000.00       25,000  
39.
 
ANDREW GARNOCK
    100,000.00       50,000  
40.
 
RICHARD GLASER MDDBPP AND TRUST
    50,000.00       25,000  
41.
 
THE GOLDSCHLAGER FAMILY TRUST UAD 06/24/04
    50,000.00       25,000  
42.
 
RICHARD GRIFF & JACKIE GRIFF JT TEN
    100,000.00       50,000  
43.
 
RICHARD D HELPPIE JR TRUST UAD 04/02/92
    50,000.00       25,000  
44.
 
HOWARD J HICKINGBOTHAM JR & SANDRA B HICKINGBOTHAM JT TEN
    50,000.00       25,000  
45.
 
THE ROBERT K HEIMANN LIVING TRUST UAD 07/24/01
    50,000.00       25,000  
46.
 
HOKE LIVING TRUST UAD 04/19/02
    50,000.00       25,000  
47.
 
ULRICH HONIGHAUSEN & AMANDA HONIGHAUSEN JT TEN
    50,000.00       25,000  
48.
 
HERSCHEL HUNTER TRUST UAD 11/30/88
    50,000.00       25,000  
49.
 
BERT HUNTSINGER
    199,000.00       99,500  
50.
 
INGRAM LIVING TRUST DATED 11/02/2005 UAD 11/02/05
    50,000.00       25,000  
51.
 
AJAY KALRA
    80,000.00       40,000  
52.
 
KARGES REVOCABLE INTERVIVOS TRUST UAD 04/29/85
    50,000.00       25,000  
53.
 
IRA FBO JON MURRAY KARKOW PERSHING LLC AS CUSTODIAN
    50,000.00       25,000  
54.
 
PATRICK KIRK & GLORIA KIRK JTWROS
    50,000.00       25,000  
55.
 
DARREL LEE KLOECKNER
    50,000.00       25,000  
56.
 
NORMAN S KRAMER & LINDA L KRAMER JT TEN
    100,000.00       50,000  
57.
 
IRA FBO THOMAS A LADNER PERSHING LLC AS CUSTODIAN
    100,000.00       50,000  
58.
 
SCOTT AND LORI LANGMACK FAMILY TRUST UAD 06/22/02
    100,000.00       50,000  
59.
 
SEP FBO CARTER LAREN PERSHING LLC AS CUSTODIAN
    100,000.00       50,000  
60.
 
DAVID W LARSON & JENNIFER L LARSON JT TEN
    50,000.00       25,000  
61.
 
SCOTT R. LENNES IRA LLC
    100,000.00       50,000  
62.
 
IRA FBO GREGG LINHOFF PERSHING LLC AS CUSTODIAN
    110,000.00       55,000  
63.
 
SEP FBO GEORGE MADARAZ PERSHING LLC AS CUSTODIAN
    70,000.00       35,000  
64.
 
SEP FBO GERALD E MANWILL PERSHING LLC AS CUSTODIAN
    75,000.00       37,500  
65.
 
DAVID MARBLE
    50,000.00       25,000  
66.
 
NORTHERN STAR GROWTH TRUST DTD 10/20/1998 UAD 10/20/98
    50,000.00       25,000  
67.
 
MITCHELL MARTIN & DEBORAH MARTIN JT TEN
    50,000.00       25,000  
68.
 
F BRENT MAY PS PLAN FBO JONI MAY
    100,000.00       50,000  
69.
 
STEPHEN P MCCARRON PSP-PERSHING LLC AS CUSTODIAN
    100,000.00       50,000  

 
 

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

 

70.
 
IRA FBO JOSEPH MCCARTHY PERSHING LLC AS CUSTODIAN
    50,000.00       25,000  
71.
 
ROD MCINTYRE TRUST U A DATED 5/1/01
    50,000.00       25,000  
72.
 
IRA FBO JERRY MCWILLIAMS PERSHING LLC AS CUSTODIAN
    50,000.00       25,000  
73.
 
THE MEISTER NON-EXEMPT MARITAL TRUST UAD 11/17/83
    100,000.00       50,000  
74.
 
CARLOS ALFONSO MERINO REV LIVING TRUST UAD 12/04/96
    50,000.00       25,000  
75.
 
IRA FBO MARK MITCHELL PERSHING LLC AS CUSTODIAN
    50,000.00       25,000  
76.
 
MARK R MITCHELL M.D. A MEDICAL CORPORATION
    50,000.00       25,000  
77.
 
MMH GROUP, LLC
    95,800.00       47,900  
78.
 
IRA FBO GERALD MONA PERSHING LLC AS CUSTODIAN
    50,000.00       25,000  
79.
 
KEVIN MOORE
    75,000.00       37,500  
80.
 
DEEPAK MUNJAL
    50,000.00       25,000  
81.
 
KENNETH H & MAUREEN K NASS CHARI REMAINDER UNITRUST UAD 06/07/05
    100,000.00       50,000  
82.
 
IRA FBO TIM NASS PERSHING LLC AS CUSTODIAN
    62,000.00       31,000  
83.
 
MARY NEIBERG
    100,000.00       50,000  
84.
 
KEVIN P O'NEILL & SUZANNE ODELL ONEILL JT TEN
    50,000.00       25,000  
85.
 
JOSEPH A & PAMELA M PANELLA LIVING TRUST 1 UAD 05/11/04
    50,000.00       25,000  
86.
 
BRENT PAULGER & SHARISSA PAULGER JT TEN
    50,000.00       25,000  
87.
 
TINA C PETERSON & HENDRIKUS M SCHRAVEN JT TEN
    200,000.00       100,000  
88.
 
E.A. PICKERING PAINTING INC.
    60,000.00       30,000  
89.
 
POM INVESTMENTS LLC
    100,000.00       50,000  
90.
 
BRUCE WALKER RAVENEL III
    250,000.00       125,000  
91.
 
M. CARL RICE SELF EMPLOYED RETIREMENT PLAN #1
    250,000.00       125,000  
92.
 
JOHN RUSSELL RIEDMUELLER & NICOLE CAMERON RIEDMUELLER TEN COM
    50,000.00       25,000  
93.
 
JOHN A RUPP TRUST UAD 03/25/94
    50,000.00       25,000  
94.
 
STEVEN V SANN TOD DTD 10/16/2009
    50,000.00       25,000  
95.
 
ROBERT C SAYSON & ALICE K SAYSON JT TEN
    100,000.00       50,000  
96.
 
PETER SCHORTMANN & SUSAN SCHORTMANN JT TEN
    50,000.00       25,000  
97.
 
KIMBERLY S SCHWENKE
    50,000.00       25,000  
98.
 
CHRISTIANNA SEIDEL SEPARATE PROPERTY TRUST UAD 11/05/99
    50,000.00       25,000  
99.
 
JAMES A SHEAHAN & MELODY K SHEAHAN JT TEN
    100,000.00       50,000  
100.
 
IRA FBO   DONALD FRANCIS SHOFF PERSHING LLC AS CUSTODIAN
    50,000.00       25,000  
101.
 
JOHN D SMEAD
    75,000.00       37,500  
102.
 
MICHAEL J SPLITTGERBER & RENEE J SPLITTGERBER JT TEN
    50,000.00       25,000  
103.
 
IRA FBO DIANE SPOLUM PERSHING LLC AS CUSTODIAN
    250,000.00       125,000  
104.
 
SPONGBOB VENTURES II LLC
    50,000.00       25,000  
105.
 
AMY J STEFANIK REVOCABLE TRUST UAD 02/06/01
    100,000.00       50,000  
106.
 
IRA FBO LYNN ROLLINS STULL PERSHING LLC AS CUSTODIAN
    50,000.00       25,000  

 
 

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107.
 
IRA FBO CHARLES SULLIVAN PERSHING LLC AS CUSTODIAN
    50,000.00       25,000  
108.
 
IRA FBO GERARD SURERUS PERSHING LLC AS CUSTODIAN
    50,000.00       25,000  
109.
 
IRA FBO JAMES A TAMBORELLO PERSHING LLC AS CUSTODIAN
    100,000.00       50,000  
110.
 
ABDOLHOSAYN TASLIMI & SHIDAN TASLIMI JT TEN
    100,000.00       50,000  
111.
 
MEHRAN M TASLIMI
    500,000.00       250,000  
112.
 
RUHA TASLIMI & SHIDAN TASLIMI JT TEN
    100,000.00       50,000  
113.
 
SHIDAN TASLIMI
    500,000.00       250,000  
114.
 
SUSANNE A TASLIMI
    100,000.00       50,000  
115.
 
TRILLION GROWTH CHINA LP
    250,000.00       125,000  
116.
 
ROBERT VECCHIONE
    50,000.00       25,000  
117.
 
IRA FBO MATTHEW A WALTON PERSHING LLC AS CUSTODIAN
    110,000.00       55,000  
118.
 
TIMOTHY M WEAVER
    250,000.00       125,000  
119.
 
GRAMERCY 87 LLC
    50,000.00       25,000  
120.
 
DIPAOLO WORTHINGTON FAMILY TRUST DTD 1/31/2008 UAD 01/31/08
    100,000.00       50,000  
121.
 
LAMBERT WU & LIYING CHU JT TEN
    50,000.00       25,000  
122.
 
WYMOND INVESTMENTS, LLC
    500,000.00       250,000  
123.
 
LAYNE YOSHIDA
    50,000.00       25,000  
124.
 
IRA FBO PAUL HARPER ZINK PERSHING LLC AS CUSTODIAN
    50,000.00       25,000  
125.
 
JAYHAWK PRIVATE EQUITY II, L.P.
    500,000.00       250,000  
126.
 
NORTH MILITARY LTD
    200,000.00       100,000  
127.
 
CHADDS FORD LTD
    50,000.00       25,000  
128.
 
CHARDAN SPAC ASSET MANAGEMENT
    150,000.00       75,000          
TOTAL:
                  $ 12,000,000          

 
 

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Exhibit A

Form of Note

 
 

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Exhibit B

Form of Warrant

 
 

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Exhibit C

Form Registration Rights Agreement

 
 

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Exhibit D

Form Securities Escrow Agreement

 
 

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