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Exhibit 10.1
 
SERIES B CONVERTIBLE PREFERRED STOCK AND WARRANT
PURCHASE AGREEMENT
 
This SERIES B CONVERTIBLE PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT (the
"Agreement") is made and entered into as of the 11th day of June, 2010 between
China Swine Genetics, Inc., a corporation organized and existing under the laws
of the State of Delaware (the “Company”) and the investors whose names are set
forth on Schedule A attached hereto (the “Investors”).
 
RECITALS
 
WHEREAS, the Investors desire to purchase from the Company and the Company
desires to issue and sell to the Investors, upon the terms and subject to the
conditions of this Agreement, the number of shares of Convertible Preferred
Stock of the Company (the “Preferred Stock”), par value $0.001 per share,
convertible into shares of the Company’s common stock, par value $0.001 per
share (the “Common Stock”) set forth on Schedule A at a purchase price of Two
Dollars and Ten Cents ($2.10) per Preferred Share, for an aggregate purchase
price of Two Million Four Hundred and Twenty Thousand Dollars ($2,420,000.00)
(the “Purchase Price”).  The designation, rights, preferences and other terms
and provisions of the Preferred Stock are set forth in the Certificate of
Designation, Rights and Preferences of the Convertible Preferred Stock attached
hereto as Exhibit A (the “Certificate of Designation”).
 
WHEREAS, the Company desires to issue to the Investors, upon the terms and
subject to the conditions of this Agreement, Series A Warrants, in substantially
the form attached hereto as Exhibit B and Series B Warrants, in substantially
the form attached hereto as Exhibit C (collectively, the “Warrants”), to
purchase an aggregate of Two Million Sixteen Thousand Six Hundred and Sixty-Six
(2,016,666) shares of Common Stock based on a full subscription of the Purchase
Price distributed pro-rata between the Investors in Schedule A based on their
respective subscription percentages.
 
NOW, THEREFORE, in consideration of the mutual covenants and premises contained
herein, and for other good and valuable consideration, the receipt and adequacy
of which are hereby conclusively acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
 
 
ARTICLE I

INCORPORATION BY REFERENCE, SUPERSEDER AND DEFINITIONS
 
1.1           Incorporation by Reference. The foregoing recitals and the
Exhibits and Schedules attached hereto and referred to herein, are hereby
acknowledged to be true and accurate in all material respects, and are
incorporated herein by this reference.
 
1.2           Superseder. This Agreement, to the extent that it is inconsistent
with any other document, instrument or understanding among the parties, shall
supersede such document, instrument or understanding to the fullest extent
permitted by law.  A copy of this Agreement shall be filed at the Company’s
principal office.
 

PREFERRED STOCK PURCHASE AGREEMENT BETWEEN
THE COMPANY AND THE INVESTORS IN SCHEDULE A
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1.3           Certain Definitions. For purposes of this Agreement, the following
capitalized terms shall have the following meanings (all capitalized terms used
in this Agreement that are not defined in this Article 1 shall have the meanings
set forth elsewhere in this Agreement):
 
1.3.1           “1933 Act” means the Securities Act of 1933, as amended.
 
1.3.2           “1934 Act” means the Securities Exchange Act of 1934, as
amended.
 
1.3.3           “Affiliate” means a Person or Persons directly or indirectly,
through one or more intermediaries, controlling, controlled by or under common
control with the Person(s) in question. The term “control,” as used in the
immediately preceding sentence, means, with respect to a Person that is a
corporation, the right to the exercise, directly or indirectly, of more than 50
percent of the voting rights attributable to the shares of such controlled
corporation and, with respect to a Person that is not a corporation, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such controlled Person.
 
1.3.4           “Articles” means the Certificate of Incorporation of the
Company, as the same may be amended from time to time.
 
1.3.5           “Closing” shall mean the closing of the transactions
contemplated by this Agreement on the Closing Date.
 
1.3.6           “Closing Date” means the date on which the payment of the
Purchase Price by the Investors to the Company is completed pursuant to this
Agreement to purchase the Preferred Stock and Warrants, which shall occur on or
before June 11, 2010.
 
1.3.7           “Common Stock” means shares of common stock of the Company, par
value $0.001 per share.
 
1.3.8           "Exempt Issuance" means the issuance of (a) shares of Common
Stock or options to employees, officers, or directors of the Company pursuant to
any stock or option plan duly adopted by a majority of the non-employee members
of the Board of Directors of the Company or a majority of the members of a
committee of non-employee directors established for such purpose, (b) securities
upon the exercise of or conversion of any securities issued hereunder or
pursuant to the Certificate of Designation or the Warrants, and (c) securities
issued pursuant to acquisitions or strategic transactions, provided any such
issuance shall only be to a Person which is, itself or through its subsidiaries,
an operating company in a business which, in the sole reasonable discretion of
the Company, is synergistic with the business of the Company and in which the
Company receives benefits in addition to the investment of funds, but shall not
include a transaction in which the Company is issuing securities primarily for
the purpose of raising capital or to an entity whose primary business is
investing in securities.
 
1.3.9           "Material Adverse Effect" shall mean any adverse effect on the
business, operations, properties or financial condition of the Company that is
material and adverse to the Company and its subsidiaries and affiliates, taken
as a whole or any condition, circumstance, or situation that would prohibit or
otherwise materially interfere with the ability of the Company to perform any of
its material obligations under this Agreement or to perform its material
obligations under any other material agreement.
 
1.3.10          “Delaware Act” means the Delaware General Corporation Law, as
amended.

PREFERRED STOCK PURCHASE AGREEMENT BETWEEN
THE COMPANY AND THE INVESTORS IN SCHEDULE A
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1.3.11          “Person” means an individual, partnership, firm, limited
liability company, trust, joint venture, association, corporation, or any other
legal entity.
 
1.3.12          “Purchase Price” means the Two Million Four Hundred and Twenty
Thousand Dollars ($2,420,000.00) paid by the Investors to the Company for the
Preferred Stock and the Warrants.
 
1.3.13          “SEC” means the Securities and Exchange Commission.
 
1.3.14          "SEC Documents" shall mean the Company's latest Form 10-K or
10-KSB as of the time in question, all Forms 10-Q or 10-QSB and 8-K filed
thereafter, and the Proxy Statement for its latest fiscal year as of the time in
question.
 
1.3.15         "Shares" shall mean, collectively, the shares of Common Stock
issued upon conversion of the Preferred Stock subscribed for hereunder and those
shares of Common Stock issuable to the Investors upon exercise of the Warrants.
 
1.3.16         “Subsequent Financing” shall mean any form of financing that
could result in the issuance of additional shares of Common Stock any time
following the Closing that could be dilutive to existing shareholders, including
but not limited to preferred stock, common stock, common stock equity lines,
debt, debt that is convertible into shares of Common Stock, or preferred
securities that are convertible into shares of Common Stock.
 
1.3.17         “Transaction Documents” shall mean this Agreement, all Schedules
and Exhibits attached hereto and all other documents and instruments to be
executed, filed or delivered by the parties in order to consummate the
transactions contemplated hereby, including, but not limited to the documents
listed in Sections 3.2 and 3.3 hereof.
 
1.3.18          “Warrants” shall mean the Common Stock Purchase Warrants in the
form attached hereto Exhibit B and C.
ARTICLE II
 
SALE AND PURCHASE OF THE COMPANY
PREFERRED STOCK AND WARRANTS PURCHASE PRICE
 
2.1           Sale of Preferred Stock and Issuance of Warrants.
 
(a)           Upon the terms and subject to the conditions set forth herein, and
in accordance with applicable law, the Company agrees to sell to the Investors,
and the Investors agree to purchase from the Company, on the Closing Date an
aggregate of 11,523,809 shares of Preferred Stock and the Warrants for the
Purchase Price. The Purchase Price shall be paid by the Investors to the Company
on the Closing Date by a wire transfer or check of the Purchase Price and the
Company shall cause the Preferred Stock and the Warrants to be issued to the
Investors.
 
(b)           Each share of Preferred Stock shall initially be convertible by
the Investors into One (1) share of Common Stock (“Conversion Ratio”); provided,
however, that the Investors shall not be entitled to convert the Preferred Stock
into shares of Common Stock if such conversion would result in beneficial
ownership by such Investor and its affiliates of more than 4.99% of the then
outstanding number of shares of Common Stock on such date.  For the purposes of
the immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulation 13d-3 thereunder. The rights, preferences and privileges
of the Preferred Stock shall be set forth in the Certificate of Designation,
which shall be filed on the Closing Date.

PREFERRED STOCK PURCHASE AGREEMENT BETWEEN
THE COMPANY AND THE INVESTORS IN SCHEDULE A
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(c)           Upon execution and delivery of this Agreement and the Company’s
receipt of the Purchase Price, the Company shall issue to the Investors the
Warrants to purchase an aggregate of Two Million Sixteen Thousand Six Hundred
and Sixty-Six (2,016,666) shares of Common Stock at exercise prices as stated in
the Warrants, all pursuant to the terms and conditions of the form of Warrants
attached hereto as Exhibit B and C; provided, however, that the Investors shall
not be entitled to exercise the Warrants and receive shares of Common Stock if
such conversion would result in beneficial ownership by the Investor and its
affiliates of more than 4.99% of the then outstanding number of shares of Common
Stock on such date.  For the purposes of the immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and Regulation 13d-3 thereunder.
 
2.2           Purchase Price. The Purchase Price shall be delivered by the
Investors in the form of a wire transfer payable to the Company in United States
Dollars from the Investors on the Closing Date.
 
 
2.3     Additional Investment Right.  The Investors shall have the option to
purchase from the Company, and the Company shall issue and sell to the
Investors, in the event that the Investors exercise such option, up to Three
Million Dollars ($3,000,000.00) of additional Preferred Stock pursuant to the
terms of this Agreement (the “Investor Option”).  The Investor Option shall
expire six (6) months following the Closing Date, unless extended by the
Company.  The Investors may exercise the Investor Option, proportional to the
Investor’s respective subscription percentages, by delivering to the Company an
Exercise Form in the form attached hereto as Exhibit D.  Within five (5) days of
receipt of such Exercise Form, the Company shall deliver to the Investor a
certificate representing the Preferred Stock purchased pursuant to the Investor
Option (the “Option Shares”). Should an Investor elect to not exercise the
Investor Option, that Investor’s proportion of the Investor Option shall be
available for the other Investors.
ARTICLE III

CLOSING DATE AND DELIVERIES AT CLOSING

3.1           Closing Date. The closing of the transactions contemplated by this
Agreement (the “Closing”), unless expressly determined herein, shall be held at
the offices of the Company, at 5:00 P.M. local time, on the Closing Date or on
such other date and at such other place as may be mutually agreed by the
parties, including closing by facsimile with originals to follow.

PREFERRED STOCK PURCHASE AGREEMENT BETWEEN
THE COMPANY AND THE INVESTORS IN SCHEDULE A
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3.2           Deliveries by the Company.  In addition to and without limiting
any other provision of this Agreement, on the Closing Date the Company agrees to
deliver, or cause to be delivered, the following:
 
 
(a)
At or prior to Closing, an executed Agreement with all exhibits and schedules
attached hereto;

 
(b)
At or prior to Closing, an executed Warrant in the name of the Investor in the
form attached hereto as Exhibit C;

 
(c)
Certifications in form and substance reasonably acceptable to the Company and
the Investors from any and all brokers or agents involved in the transactions
contemplated hereby as to the amount of commission or compensation payable to
such broker or agent as a result of the consummation of the transactions
contemplated hereby;

 
(d)
Evidence of approval of the Board of Directors of the Company of the Transaction
Documents and the transactions contemplated hereby;

 
(e)
Certificate of the President and the Secretary of the Company that the
Certificate of Designation has been adopted and filed;

 
(f)
Good Standing Certificate of the Company issued by the Secretary of State for
Delaware;

 
(g)
An opinion from the Company’s counsel concerning the Transaction Documents and
the transactions contemplated hereby in form and substance reasonably acceptable
to Investors;

 
(h)
Stock Certificate in the name of each Investor evidencing the Preferred Stock;

 
(i)
Such other documents or certificates as shall be reasonably requested by
Investor or its counsel.

 
3.3           Deliveries by Investor.  In addition to and without limiting any
other provision of this Agreement, the Investors agree to deliver, or cause to
be delivered, the following:
 
 
(a)
Their proportionate share of the Purchase Price;

 
(b)
The executed Agreement with all Exhibits and Schedules attached hereto; and

 
(c)
Such other documents or certificates as shall be reasonably requested by the
Company or its counsel.

 
In the event any document provided to the other party in Paragraphs 3.2 and 3.3
herein are provided by facsimile, the party shall forward an original document
to the other party within seven (7) business days.
 
3.4           Further Assurances.  The Company and the Investors shall, upon
request, on or after the Closing Date, cooperate with each other (specifically,
the Company shall cooperate with the Investors, and the Investors shall
cooperate with the Company) by furnishing any additional information, executing
and delivering any additional documents and/or other instruments and doing any
and all such things as may be reasonably required by the parties or their
counsel to consummate or otherwise implement the transactions contemplated by
this Agreement.
 

PREFERRED STOCK PURCHASE AGREEMENT BETWEEN
THE COMPANY AND THE INVESTORS IN SCHEDULE A
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3.5           Waiver.  The Investors may waive any of the requirements of
Section 3.2 of this Agreement, and the Company at its discretion may waive any
of the provisions of Section 3.3 of this Agreement.
 
ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except as set forth in the disclosure schedules, which such schedules shall be
arranged corresponding to the numbered and lettered sections contained in this
Article IV (and the disclosure in any such section shall qualify the other
sections of this Article IV to the extent it is clear from a reading of the
disclosure that such disclosure is applicable to such other sections), the
Company represents and warrants to the Investors as of the date hereof as
follows:
 
4.1           Organization and Qualification.  The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has the requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as it is now being conducted
and is duly qualified to do business in any other jurisdiction by virtue of the
nature of the businesses conducted by it or the ownership or leasing of its
properties, except where the failure to be so qualified will not, when taken
together with all other such failures, have a Material Adverse Effect on the
business, operations, properties, assets, financial condition or results of
operation of the Company and its subsidiaries taken as a whole.
 
4.2           Articles of Incorporation and By-Laws. The complete and correct
copies of the Company’s Articles and By-Laws, as amended or restated to date
which have been filed with the SEC,  are a complete and correct copy of such
document as in effect on the date hereof and as of the Closing Date.
 
4.3           Capitalization.
 
4.3.1  The authorized and outstanding capital stock of the Company is set forth
in the Company’s Annual Report on Form 10-K, filed on October 13, 2009 with the
SEC.  All shares of capital stock have been duly authorized and are validly
issued, and are fully paid and non-assessable, and free of preemptive rights.
 
4.3.2           As of the date of this Agreement, the authorized capital stock
of the Company consists of 300,000,000 shares of Common Stock ($.001 par value)
and 10,000,000 shares of preferred stock ($.001 par value), of which
approximately 21,215,112 shares of Common Stock are issued and outstanding and 0
shares of preferred shares are issued and outstanding.  As of Closing, following
the issuance by the Company of the Preferred Stock to the Investors, the
authorized capital stock of the Company will consist of 300,000,000 shares of
Common Stock ($.001 par value) and 10,000,000 shares of preferred stock ($.001
par value), of which approximately 21,215,112 shares of Common Stock and
11,523,809 shares of preferred stock shall be issued and outstanding.  As of
Closing, holders will hold options to purchase an aggregate of 0 shares of
Common Stock.  All outstanding shares of capital stock have been duly authorized
and are validly issued, and are fully paid and nonassessable and free of
preemptive rights.  All shares of capital stock described above to be issued
have been duly authorized and when issued, will be validly issued, fully paid
and nonassessable and free of preemptive rights. Schedule 4.3.2 hereby contains
all shares and derivatives currently and potentially outstanding.  The Company
hereby represents that any and all shares and current potentially dilutive
events have been included in the SEC Documents, including employment agreements,
acquisition, consulting agreements, debts, payments, financing or business
relationships that could be paid in equity, derivatives or resulting in
additional equity issuances that could potentially occur.

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4.3.3  Except pursuant to this Agreement, and as set forth in the SEC Documents,
as of the date hereof and as of the Closing Date, there are not now outstanding
options, warrants, rights to subscribe for, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into or
exchangeable for, shares of any class of capital stock of the Company, or
agreements, understandings or arrangements to which the Company is a party, or
by which the Company is or may be bound, to issue additional shares of its
capital stock or options, warrants, scrip or rights to subscribe for, calls or
commitment of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, any shares of any class of its capital
stock.  The Company agrees to inform the Investors in writing of any additional
warrants granted prior to the Closing Date.
 
4.3.4   The Company on the Closing Date (i) will have full right, power, and
authority to sell, assign, transfer, and deliver, by reason of record and
beneficial ownership, to the Investors, the Preferred Stock and Warrants, free
and clear of all liens, charges, claims, options, pledges, restrictions, and
encumbrances whatsoever; and (ii) upon conversion of the Preferred Stock or
exercise of the Warrants (and payment of the purchase price therefor), the
Investors will acquire good and marketable title to the Shares, free and clear
of all liens, charges, claims, options, pledges, restrictions, and encumbrances
whatsoever, except as otherwise provided in this Agreement as to the limitation
on the voting rights of such Shares in certain circumstances.
 
4.4           Authority. The Company has all requisite corporate power and
authority to execute and deliver this Agreement, the Preferred Stock, and the
Warrants, to perform its obligations hereunder and thereunder and to consummate
the transactions contemplated hereby and thereby.  The execution and delivery of
this Agreement by the Company and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
and no other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby,
except as disclosed in this Agreement.  This Agreement has been duly executed
and delivered by the Company and constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.
 
4.5           No Conflict; Required Filings and Consents. The execution and
delivery of this Agreement by the Company does not, and the performance by the
Company of its obligations hereunder will not:  (i) conflict with or violate the
Articles or By-Laws of the Company; (ii) conflict with, breach or violate any
federal, state, foreign or local law, statute, ordinance, rule, regulation,
order, judgment or decree (collectively, "Laws") in effect as of the date of
this Agreement and applicable to the Company; or (iii) result in any breach of,
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, give to any other entity any right of
termination, amendment, acceleration or cancellation of, require payment under,
or result in the creation of a lien or encumbrance on any of the properties or
assets of the Company pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which the Company is a party or by the Company or any of its
properties or assets is bound.  Excluding from the foregoing are such
violations, conflicts, breaches, defaults, terminations, accelerations,
creations of liens, or incumbency that would not, in the aggregate, have a
Material Adverse Effect.

PREFERRED STOCK PURCHASE AGREEMENT BETWEEN
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4.6           Report and Financial Statements. The Company’s Current Report on
Form 10-Q, filed on February 12, 2010 with the SEC contains the most recent
financial statements of the Company, and the Company has previously filed the
audited financial statements of the Company with the SEC on Form 10-K on October
13, 2009 (collectively, the “Financial Statements”). Each of the balance sheets
contained in or incorporated by reference into any such Financial Statements
(including the related notes and schedules thereto) fairly presented the
financial position of the Company, as of such date, and each of the statements
of income and changes in stockholders’ equity and cash flows or equivalent
statements in such Financial Statements (including any related notes and
schedules thereto) fairly presents, changes in stockholders’ equity and changes
in cash flows, as the case may be, of the Company, for the periods to which they
relate, in each case in accordance with United States generally accepted
accounting principles (“U.S. GAAP”) consistently applied during the periods
involved, except in each case as may be noted therein, subject to normal
year-end audit adjustments in the case of unaudited statements.  The books and
records of the Company have been, and are being, maintained in all material
respects in accordance with U.S. GAAP and any other applicable legal and
accounting requirements and reflect only actual transaction.
 
4.7           Compliance with Applicable Laws. The Company is not in violation
of, or, to the knowledge of the Company is under investigation with respect to
or has been given notice or has been charged with the violation of any Law of a
governmental agency, except for violations which individually or in the
aggregate do not have a Material Adverse Effect.
 
4.8           Brokers.  Except as set forth on Schedule 4.8, no broker, finder
or investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company.
 
4.9           SEC Documents. The Company acknowledges that the Company is a
publicly held company and has made available to the Investors after demand true
and complete copies of any requested SEC Documents. The Company has registered
its Common Stock pursuant to Section 12(d) of the 1934 Act, and the Common Stock
is quoted and traded on the OTC Bulletin Board of the Financial Industry
Regulatory Authority, Inc.  The Company has received no notice, either oral or
written, with respect to the continued quotation or trading of the Common Stock
on the OTC Bulletin Board. As of their respective dates, the SEC Documents
complied in all material respects with the requirements of the 1934 Act, and
rules and regulations of the SEC promulgated thereunder and the SEC Documents
did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

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4.10           Litigation. There is no action, suit, inquiry, notice of
violation, proceeding or investigation pending or, to the knowledge of the
Company, threatened against or affecting the Company, any Subsidiary or any of
their respective properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or
foreign) (collectively, an “Action”) which (i) adversely affects or challenges
the legality, validity or enforceability of any of the Transaction Documents or
the securities to be issued hereunder 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 SEC
involving the Company or any current or former director or officer of the
Company for actions taken or omitted in such capacity.  The SEC 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.
 
4.11           No General Solicitation or Advertising in Regard to this
Transaction. Neither the Company nor any of its Affiliates nor, to the knowledge
of the Company, any Person acting on its or their behalf (i) has conducted or
will conduct any general solicitation (as that term is used in Rule 502(c) of
Regulation D as promulgated by the SEC under the 1933 Act) or general
advertising with respect to the sale of the Preferred Stock or Warrants, or (ii)
made any offers or sales of any security or solicited any offers to buy any
security under any circumstances that would require registration of the
Preferred Stock or Warrants, under the 1933 Act, except as required herein.
 
4.12           No Material Adverse Effect. Except as set forth in Schedule 4.13
attached hereto, since February 12th, 2010, no event or circumstance resulting
in a Material Adverse Effect has occurred or exists with respect to the Company.
No material supplier or customer has given notice, oral or written, that it
intends to cease or reduce the volume of its business with the Company from
historical levels. Since January 30, 2010, no event or circumstance has occurred
or exists with respect to the Company or its businesses, properties, prospects,
operations or financial condition, that, under any applicable law, rule or
regulation, requires public disclosure or announcement prior to the date hereof
by the Company but which has not been so publicly announced or disclosed in
writing to the Investor.
    

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4.13           Material Non-Public Information. The Company has not disclosed to
the Investors any material non-public information that (i) if disclosed, would
reasonably be expected to have a material effect on the price of the Common
Stock or (ii) according to applicable law, rule or regulation, should have been
disclosed publicly by the Company prior to the date hereof but which has not
been so disclosed.
 
4.14           Internal Controls And Procedures. The Company maintains books and
records and internal accounting controls which provide reasonable assurance that
(i) all transactions to which the Company or any subsidiary is a party or by
which its properties are bound are executed with management's authorization;
(ii) the recorded accounting of the Company's consolidated assets is compared
with existing assets at regular intervals; (iii) access to the Company's
consolidated assets is permitted only in accordance with management's
authorization; and (iv) all transactions to which the Company or any subsidiary
is a party or by which its properties are bound are recorded as necessary to
permit preparation of the financial statements of the Company in accordance with
U.S. generally accepted accounting principles.
 
4.15           Full Disclosure. No representation or warranty made by the
Company in this Agreement and no certificate or document furnished or to be
furnished to the Investors pursuant to this Agreement contains or will contain
any untrue statement of a material fact, or omits or will omit to state a
material fact necessary to make the statements contained herein or therein not
misleading.
 
4.16           Transactions with Affiliates and Employees. Except as set forth
in publicly filed reports with the SEC, none of the officers, consultants,
insiders 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 $50,000 other than for: (i) payment of salary or consulting fees for services
rendered, (ii) reimbursement for expenses incurred on behalf of the Company and
(iii) other employee benefits, including stock option agreements under any stock
option plan of the Company.
 
4.17           Compliance. Neither the Company nor any subsidiary: (i) is in
default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by
the Company or any subsidiary under), nor has the Company or any subsidiary
received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or
instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in
violation of any order of any court, arbitrator or governmental body or (iii) is
or has been in violation of any statute, rule or regulation of any governmental
authority, including without limitation all foreign, federal, state and local
laws applicable to its business and all such laws that affect the environment,
except in each case as could not have or reasonably be expected to result in a
Material Adverse Effect.
 

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4.18           Labor Relations.  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.  None of the Company’s or its subsidiaries’ employees is a member of a
union that relates to such employee’s relationship with the Company or such
subsidiary, and neither the Company nor any of its subsidiaries is a party to a
collective bargaining agreement, and the Company and its subsidiaries believe
that their relationships with their employees are good.  No executive officer,
to the knowledge of the Company, is, or is now expected to be, in violation of
any material term of any employment contract, confidentiality, disclosure or
proprietary information agreement or non-competition agreement, or any other
restrictive covenant in favor of any third party, and the continued employment
of each such executive officer does not subject the Company or any of its
Subsidiaries to any liability with respect to any of the foregoing matters.  The
Company and its subsidiaries are in compliance with all U.S. federal, state,
local and foreign laws and regulations relating to employment and employment
practices, terms and conditions of employment and wages and hours, except where
the failure to be in compliance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
 
Each Investor represents and warrants to the Company that:

5.1           Organization and Standing of the Investor. Each Investor is either
a 1) corporation, partnership or limited liability company that is a Qualified
Institutional Buyer (QIB), acting for its own account or for the account of
other QIBs, that in the aggregate owns and invests on a discretionary basis at
least $100 Million in securities of issuers that are not its affiliates or 2) an
"accredited investor" as that term is defined in Rule 501 promulgated under the
Securities Act of 1933. The state in which any offer to purchase shares
hereunder was made or accepted by such Investor is the state shown as such
Investor’s address.  Each Investor is an entity duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization.
 
5.2           Authorization and Power. Each Investor has the requisite power and
authority to enter into and perform this Agreement, to purchase the securities
being sold to it hereunder, to consummate the transactions contemplated by the
Transaction Documents and otherwise to carry out its obligations hereunder and
thereunder.  The execution, delivery and performance of this Agreement by each
Investor and the consummation by such Investor of the transactions contemplated
hereby have been duly authorized by all necessary limited liability company
action where appropriate. This Agreement has been duly executed and delivered by
such Investor and at the Closing shall constitute valid and binding obligations
of the Investor enforceable against such Investor in accordance with their
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation, conservatorship,
receivership or similar laws relating to, or affecting generally the enforcement
of, creditors' rights and remedies or by other equitable principles of general
application.  Each Transaction Document to which each Investor is a party has
been duly executed by such Investor, and when delivered by such Investor in
accordance with the terms hereof, will constitute the valid and legally binding
obligation of such Investor, enforceable against it in accordance with its
terms.

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5.3           No Conflicts. The execution, delivery and performance of this
Agreement and the consummation by the Investor of the transactions contemplated
hereby or relating hereto do not and will not (i) result in a violation of such
Investor's charter documents or bylaws where appropriate or (ii) conflict with,
or constitute a default (or an event which 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 of any agreement, indenture or
instrument to which the Investor is a party, or result in a violation of any
law, rule, or regulation, or any order, judgment or decree of any court or
governmental agency applicable to the Investor or its properties (except for
such conflicts, defaults and violations as would not, individually or in the
aggregate, have a Material Adverse Effect on such Investor). The Investor is not
required to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to execute,
deliver or perform any of such Investor’s obligations under this Agreement or to
purchase the securities from the Company in accordance with the terms hereof,
provided that for purposes of the representation made in this sentence, the
Investor is assuming and relying upon the accuracy of the relevant
representations and agreements of the Company herein.
 
5.4           Financial Risks. The Investor acknowledges that such Investor is
able to bear the financial risks associated with an investment in the securities
being purchased by the Investor from the Company, including a complete loss of
such investment, and that it has been given full access to such records of the
Company and the subsidiaries and to the officers of the Company and the
subsidiaries as it has deemed necessary or appropriate to conduct its due
diligence investigation. The Investor is capable of evaluating the risks and
merits of an investment in the securities being purchased by the Investor from
the Company by virtue of its experience as an investor and its knowledge,
experience, and sophistication in financial and business matters and the
Investor is capable of bearing the entire loss of its investment in the
securities being purchased by the Investor from the Company.
 
5.5           Accredited Investor. Each Investor (a) is purchasing the Preferred
Stock and Warrants solely for its own account, for investment and not with a
view to resale in connection with a distribution thereof, (b) has no present
intention of distributing any of such securities in violation of the 1933 Act or
any applicable state securities law and (c) has no direct or indirect
arrangement or understandings with any other persons to distribute or regarding
the distribution of such securities in violation of the 1933 Act or any
applicable state securities law (this representation and warranty not limiting
such Investor’s right to sell any such securities pursuant to a registration
statement or otherwise in compliance with applicable federal and state
securities laws).  Each Investor is acquiring the securities hereunder in the
ordinary course of its business.

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5.6           Material Non-Public Information. Each Investor agrees that it
shall not sell any Preferred Stock, Warrants, or Shares while such investor is
in possession of any material nonpublic information of the Company.
 
5.7           Brokers. Except as set forth in Schedule 4.8, no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Investor.
 
5.8           Knowledge of Company. The Investor and such Investor’s advisors,
if any, have been, upon request, furnished with all materials relating to the
business, finances and operations of the Company and materials relating to the
offer and sale of the securities being purchased by the Investor from the
Company.  The Investor and such Investor’s advisors, if any, have been afforded
the opportunity to ask questions of the Company and have received complete and
satisfactory answers to any such inquiries.
 
5.9           Risk Factors. The Investor understands that such Investor’s
investment in the securities being purchased from the Company involves a high
degree of risk.  The Investor understands that no United States federal or state
agency or any other government or governmental agency has passed on or made any
recommendation or endorsement of the securities being purchased by the Investor
from the Company. The Investor warrants that such Investor is able to bear the
complete loss of such Investor’s investment in the securities being purchased by
the Investor from the Company.
 
5.9           Full Disclosure. No representation or warranty made by the
Investor in this Agreement and no certificate or document furnished or to be
furnished to the Company pursuant to this Agreement contains or will contain any
untrue statement of a material fact, or omits or will omit to state a material
fact necessary to make the statements contained herein or therein not
misleading. Except as set forth or referred to in this Agreement, Investor does
not have any agreement or understanding with any person relating to acquiring,
holding, voting or disposing of any equity securities of the Company.
 
5.10         Payment of Due Diligence Expenses. At the Closing, the Company
shall disperse from the Purchase Price to the direction of T Squared Investments
LLC the sum of Twenty-Two Thousand Dollars ($22,000) to a party that will be
named by T Squared Investments LLC for due diligence expenses..
 
5.11         General Solicitation.  Investors are not purchasing the Preferred
Stock and Warrants as a result of any advertisement, article, notice or other
communication regarding such securities published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar
or any other general solicitation or general advertisement.
 
5.12         Certain Transactions and Confidentiality.  Other than consummating
the transactions contemplated hereunder, the Investors have not directly or
indirectly, nor has any Person acting on behalf of or pursuant to any
understanding with such Investor, executed any purchases or sales, including
short sales, of the securities of the Company during the period commencing as of
the time that such Investor first drafted a term sheet (written or oral) for the
Company setting forth the material terms of the transactions contemplated
hereunder.  Other than to other Persons party to this Agreement, the Investors
have maintained the confidentiality of all disclosures made to them in
connection with this transaction (including the existence and terms of this
transaction).

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5.13           Reliance on Exemptions.  Each Investor understands that the
Preferred Stock and Warrants (including the Shares) are being offered and sold
to it in reliance on specific exemptions from the registration requirements of
the United States federal and state securities laws and that the Company is
relying upon the truth and accuracy of, and each Investors’ compliance with,
representations, warranties, agreements, acknowledgements and understandings of
each Investor set forth herein in order to determine the availability of such
exemptions and the eligibility of each Investor to acquire such securities.
 
5.14           No Regulatory Approval of Offering.  The Investors understand
that no United States federal or state agency or any other government or
governmental agency has passed on or made any recommendation or endorsement of
the Preferred Stock, Warrants or Shares or the fairness or suitability of an
investment in such securities nor have such authorities passed upon or endorsed
the merits of the offering of such securities pursuant to this Agreement.
 
5.15           Own Decision.  Each Investor has made its own assessment and is
satisfied concerning the relevant tax, legal and other economic considerations
relevant to such Investor’s investment in the Preferred Stock and Warrants and
has independently evaluated the merits of its decision to purchase such
securities pursuant to this Agreement.
 
5.16           Independence of Investors.  Each Investor acknowledges that its
decision to purchase securities pursuant to this Agreement has been made by such
Investor independently of each other Investor.  No Investor is in any way acting
in concert with or as a group with any other Investor with respect to (i) the
purchase or ownership of the Preferred Stock, Warrants and Warrant Shares or
(ii) any other transactions contemplated by the Transaction Documents.  Nothing
contained herein, and no action taken by any Investor pursuant thereto, shall be
deemed to constitute the Investors as a group, partnership, an association, a
joint venture or any other kind of entity.  Each Investor acknowledges that no
other Investor has acted as agent for such Investor in connection with making
its investment hereunder and that no Investor will be acting as agent of such
Investor in connection with monitoring its investment in the securities
purchased hereunder or enforcing its rights under the Transaction Documents.
 
5.17           Patriot Act.  Each Investor represents and warrants to, and
covenants with, the Company that (i) such Investor is in compliance with
Executive Order 13224 and the regulations administered by the U.S. Department of
the Treasury (“Treasury”) Office of Foreign Assets Control, (ii) such Investor,
its parents, subsidiaries, affiliated companies, officers, directors and
partners, and to such Investor’s knowledge, its shareholders, owners, employees,
and agents, are not on the List of Specially Designated Nationals and Blocked
Persons (“SDN List”) maintained by Treasury and have not been designated by
Treasury as a financial institution of primary money laundering concern, (iii)
to such Investor’s knowledge, all of the funds to be used to acquire the
securities pursuant hereto are derived from legitimate sources and are not the
product of illegal activities, and (iv) such Investor is in compliance with all
other applicable U.S. anti-money laundering laws and regulations and has
implemented, if applicable, an anti-money laundering compliance program in
accordance with the requirements of the Bank Secrecy Act, as amended by the USA
PATRIOT Act, Pub. L. 107-56.

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ARTICLE VI

COVENANTS OF THE COMPANY

6.1          Right To Include (“Piggy-Back”) Registrable Securities. Provided
that the Common Stock underlying the Warrants have not been registered, if at
any time after the date hereof the Company proposes to register any of its
securities under the 1933 Act (other than by a registration in connection with
an acquisition in a manner which would not permit registration of the securities
for sale to the public, or a registration on Form S-8, or any successor form
thereto, or a registration on Form S-4, or any successor form thereto) then the
Company will at such time give prompt written notice to the Investors of its
intention to do so. Upon the written request or request via electronic mail of
the Investors, made within ten (10) days after the receipt of such notice,
choose to include any of the Common Stock underlying the Warrants, the Company
will, subject to the terms of this Agreement, use its commercially reasonable
best efforts to effect the registration under the 1933 Act of the Common Stock
underlying the Warrants.  If at any time post Closing, the Company closes on any
other financing that grants to such investors “demand” registration rights, the
Investors shall be entitled to the same “demand” rights granted to such
investors.
 
6.2           Reservation of Common Stock. As of the date hereof, the Company
has reserved and the Company shall continue to reserve and keep available at all
times, free of preemptive rights, shares of Common Stock for the purpose of
enabling the Company to issue the Shares.
 
6.3           Compliance with Laws. The Company hereby agrees to comply in all
respects with the Company's reporting, filing and other obligations under the
Laws.
 
6.4           Exchange Act Registration. The Company will continue its
obligation to report to the SEC under Section 12(d) of the 1934 Act and
thereafter shall continue to be registered thereunder and will use its best
efforts to comply in all respects with its reporting and filing obligations
under the 1934 Act.
 
6.5           Corporate Existence; Conflicting Agreements. The Company will take
all steps necessary to preserve and continue the corporate existence of the
Company. The Company shall not enter into any agreement, the terms of which
would restrict or impair the right or ability of the Company to perform any of
its obligations under this Agreement or any of the other agreements attached as
exhibits hereto.

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6.6           Listing, Securities Exchange Act of 1934 and Rule 144
Requirements. The Company is required to maintain its current or a listing on a
higher exchange and maintain their status as a Company regulated by the 1934 Act
for a minimum of three (3) years from the Closing. If for any time post Closing
the Company is no longer regulated by the 1934 Act, fails to maintain its
current listing, or is not a fully reporting Company, then the Company shall pay
to the Investors as liquidated damages and not as a penalty, two percent (2%) a
month in cash or additional Share of Preferred Stock at the option of the
Investors.  Such damages shall cease at the time the Company begins complying
with the standards as mentioned above in Section 6.6.
 
6.7           Preferred Stock. On or prior to the Closing Date, the Company will
cause to be cancelled all preferred stock in the Company with the exceptions of
Preferred Stock issued to the Investors.
 
6.8           Convertible Debt. On or prior to the Closing Date, the Company
will cause to be cancelled or converted all convertible debt in the Company,
with exception of the Convertible Note outstanding and filed in an 8K with the
SEC on February 22, 2010.
 
6.9           Independent Directors. The Company shall have caused the
appointment of the majority of the board of directors to be qualified
independent directors, as defined by the NASD, on or prior to the Sixtieth (60)
day following the Closing Date.  If after such time the board shall not be
composed in the majority of qualified independent directors, the Company shall
pay to the Investors, pro rata, as liquidated damages and not as a penalty, an
amount equal to one percent (1%) of the Purchase Price per month, payable
monthly in cash or Preferred Stock at the option of the Investor.  The parties
agree that the only damages payable for a violation of the terms of this
Agreement with respect to which liquidated damages are expressly provided shall
be such liquidated damages.  Nothing shall preclude the Investors from pursuing
or obtaining specific performance or other equitable relief with respect to this
Agreement. The parties hereto agree that the liquidated damages provided for in
this Section 6.9 constitute a reasonable estimate of the damages that may be
incurred by the Investors by reason of the failure of the Company to appoint at
least two independent directors in accordance with the provision hereof.
 
6.10         Use of Proceeds. The Company will use the proceeds from the sale of
the Preferred Stock and the Warrants (excluding amounts paid by the Company for
legal and administrative and broker fees in connection with the sale of such
securities) for expansion, working capital and acquisitions.
 
6.11          Insider Selling. The earliest any “Insiders” can start selling
their shares shall be twelve (12) months after the Investors initial
registration statement is declared effective or the shares of Common Stock
underlying the Preferred Stock are available for sale under Rule 144. Insiders
shall include Mr. Shang Liang and all other current and future officers of the
Company. The managing members of the Investor and the Investor shall not be
considered “Insiders” unless they meet the definition of “affiliate” under the
1934 Act.
 
6.12          Subsequent Equity Sales.  From the date hereof until such time as
no Purchaser holds any of the Preferred Stock, the Company shall be prohibited
from effecting or entering into an agreement to effect any Subsequent Financing
involving a “Variable Rate Transaction” or an “MFN Transaction” (each as defined
below), other than pursuant hereto.  The term “Variable Rate Transaction” shall
mean a transaction in which the Company issues or sells (i) any debt or equity
securities that are convertible into, exchangeable or exercisable for, or
include the right to receive additional shares of Common Stock either (A) at a
conversion, exercise or exchange rate or other price that is based upon and/or
varies with the trading prices of or quotations for the shares of Common Stock
at any time after the initial issuance of such debt or equity securities, or (B)
with a conversion, exercise or exchange price that is subject to being reset at
some future date after the initial issuance of such debt or equity security or
upon the occurrence of specified or contingent events directly or indirectly
related to the business of the Company or the market for the Common Stock,
excluding customary anti-dilution adjustments similar to those contained in
Section 7(d) of the Certificate of Designations or Section 7(e) of the
Warrants.  The term “MFN Transaction” shall mean a transaction in which the
Company issues or sells any securities in a capital raising transaction or
series of related transactions which grants to an investor the right to receive
additional shares based upon future transactions of the Company on terms more
favorable than those granted to such investor in such offering.  Any Investor
shall be entitled to obtain injunctive relief against the Company to preclude
any such issuance, which remedy shall be in addition to any right to collect
damages. Notwithstanding the foregoing, this Section 6.12 shall not apply in
respect of an Exempt Issuance, except that no Variable Rate Transaction or MFN
Transaction shall be an Exempt Issuance.

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6.13         Stock Splits. All forward and reverse stock splits shall effect all
equity and derivative holders proportionately.
ARTICLE VII

COVENANTS OF THE INVESTOR

7.1           Compliance with Law. The Investor's trading activities with
respect to shares of the  Common Stock will be in compliance with all applicable
state and federal securities laws, rules and regulations and rules and
regulations of any public market on which the Common Stock is listed.
 
7.2           Transfer Restrictions. The Investors acknowledge that (1) the
Preferred Stock, Warrants and Shares have not been registered under the
provisions of the 1933 Act, and may not be transferred unless (A) subsequently
registered thereunder or (B) the Investor shall have delivered to the Company an
opinion of counsel, reasonably satisfactory in form, scope and substance to the
Company, to the effect that the Preferred Stock, Warrants or Shares to be sold
or transferred may be sold or transferred pursuant to an exemption from such
registration; and (2) any sale of the Preferred Stock, Warrants or Shares made
in reliance on Rule 144 promulgated under the 1933 Act may be made only in
accordance with the terms of said Rule and further, if said Rule is not
applicable, any resale of such securities under circumstances in which the
seller, or the person through whom the sale is made, may be deemed to be an
underwriter, as that term is used in the 1933 Act, may require compliance with
some other exemption under the 1933 Act or the rules and regulations of the SEC
thereunder.

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7.3           Restrictive Legend. The Investors acknowledge and agree that the
Preferred Stock, the Warrants and the Shares, and, until such time as the Shares
have been registered under the 1933 Act and sold in accordance with an effective
Registration Statement, certificates and other instruments representing any of
the Shares, shall bear a restrictive legend in substantially the following form
(and a stop-transfer order may be placed against transfer of any such
securities):
 

 
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS AND NEITHER SUCH SHARES NOR ANY INTEREST THEREIN MAY BE OFFERED,
SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION
STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS, OR (2) IN ACCORDANCE WITH THE PROVISIONS OF
REGULATION S, OR (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT.
 

ARTICLE VIII
 
CONDITIONS PRECEDENT TO THE COMPANY’S OBLIGATIONS

The obligation of the Company to consummate the transactions contemplated hereby
shall be subject to the fulfillment, on or prior to Closing Date, of the
following conditions:

8.1           No Termination. This Agreement shall not have been terminated
pursuant to Article X hereof.

8.2           Representations True and Correct. The representations and
warranties of the Investor contained in this Agreement shall be true and correct
in all material respects on and as of the Closing Date with the same force and
effect as if made on the Closing Date.

8.3           Compliance with Covenants. The Investors shall have performed and
complied in all material respects with all covenants, agreements, and conditions
required by this Agreement to be performed or complied with by them prior to or
at the Closing Date.

8.4           No Adverse Proceedings. On the Closing Date, no action or
proceeding shall be pending by any public authority or individual or entity
before any court or administrative body to restrain, enjoin, or otherwise
prevent the consummation of this Agreement or the transactions contemplated
hereby or to recover any damages or obtain other relief as a result of the
transactions proposed hereby.

 

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ARTICLE IX

CONDITIONS PRECEDENT TO INVESTOR’S OBLIGATIONS

The obligation of the Investors to consummate the transactions contemplated
hereby shall be subject to the fulfillment, on or prior to Closing Date unless
specified otherwise, of the following conditions:

9.1           No Termination. This Agreement shall not have been terminated
pursuant to Article X hereof.
 
9.2           Representations True and Correct. The representations and
warranties of the Company contained in this Agreement shall be true and correct
in all material respects on and as of the Closing Date with the same force and
effect as if made on the Closing Date, except for such representations and
warranties that speak of a particular date, which shall only speak as of such
date and which the Company shall have no duty to update.
 
9.3           Compliance with Covenants . The Company shall have performed and
complied in all material respects with all covenants, agreements, and conditions
required by this Agreement to be performed or complied by it prior to or at the
Closing Date.
 
9.4           No Adverse Proceedings. On the Closing Date, no action or
proceeding shall be pending by any public authority or individual or entity
before any court or administrative body to restrain, enjoin, or otherwise
prevent the consummation of this Agreement or the transactions contemplated
hereby or to recover any damages or obtain other relief as a result of the
transactions proposed hereby.

ARTICLE X

TERMINATION, AMENDMENT AND WAIVER

10.1         Termination. This Agreement may be terminated at any time prior to
the Closing Date
 
10.1.1 by mutual written consent of the Investors and the Company;
 
10.1.2 by the Company upon a material breach of any representation, warranty,
covenant or agreement on the part of the Investors set forth in this Agreement,
or the Investors upon a material breach of any representation, warranty,
covenant or agreement on the part of the Company set forth in this Agreement, or
if any representation or warranty of the Company or the Investors, respectively,
shall have become untrue, in either case such that any of the conditions set
forth in Article VIII or Article IX hereof would not be satisfied (a
"Terminating Breach"), and such breach shall, if capable of cure, not have been
cured within five (5) business days after receipt by the party in breach of a
notice from the non-breaching party setting forth in detail the nature of such
breach.

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10.2           Effect of Termination. Except as otherwise provided herein, in
the event of the termination of this Agreement pursuant to Section 10.1 hereof,
there shall be no liability on the part of the Company or the Investors or any
of their respective officers, directors, agents or other representatives and all
rights and obligations of any party hereto shall cease.
 
10.3           Amendment. This Agreement may be amended by the parties hereto
any time prior to the Closing Date by an instrument in writing signed by the
parties hereto.
 
10.4           Waiver. At any time prior to the Closing Date, the Company or the
Investors, as appropriate, may: (a) extend the time for the performance of any
of the obligations or other acts of other party or; (b) waive any inaccuracies
in the representations and warranties contained herein or in any document
delivered pursuant hereto which have been made to it or them; or (c) waive
compliance with any of the agreements or conditions contained herein for its or
their benefit.  Any such extension or waiver shall be valid only if set forth in
an instrument in writing signed by the party or parties to be bound hereby.

ARTICLE XI

GENERAL PROVISIONS

11.1           Transaction Costs. Except as otherwise provided herein, each of
the parties shall pay all of its costs and expenses (including attorney fees and
other legal costs and expenses and accountants’ fees and other accounting costs
and expenses) incurred by that party in connection with this Agreement;
provided, the Company shall pay Investors due diligence expenses as described in
Section 5.10.
 
11.2           Indemnification. The Investors each agree to indemnify, defend
and hold the Company (following the Closing Date) and its officers and directors
harmless against and in respect of any and all claims, demands, losses, costs,
expenses, obligations, liabilities or damages, including interest, penalties and
reasonable attorney’s fees, that it shall incur or suffer, which arise out of or
result from any breach of this Agreement by such Investor or failure by such
Investor to perform with respect to any of its representations, warranties or
covenants contained in this Agreement or in any exhibit or other instrument
furnished or to be furnished under this Agreement.  The Company agrees to
indemnify, defend and hold the Investors harmless against and in respect of any
and all claims, demands, losses, costs, expenses, obligations, liabilities or
damages, including interest, penalties and reasonable attorney’s fees, that it
shall incur or suffer, which arise out of, result from or relate to any breach
of this Agreement or failure by the Company to perform with respect to any of
its representations, warranties or covenants contained in this Agreement or in
any exhibit or other instrument furnished or to be furnished under this
Agreement.  In no event shall the Company or the Investors be entitled to
recover consequential or punitive damages resulting from a breach or violation
of this Agreement nor shall any party have any liability hereunder in the event
of gross negligence or willful misconduct of the indemnified party.  In the
event of a breach of this Agreement by the Company, the Investor shall be
entitled to pursue a remedy of specific performance upon tender into the court
of an amount equal to the Purchase Price hereunder. The indemnification by each
Investor shall be limited to $50,000.00.
 

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THE COMPANY AND THE INVESTORS IN SCHEDULE A
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11.3           Headings. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
 
11.4           Entire Agreement. This Agreement (together with the Schedule,
Exhibits, Warrants and documents referred to herein) constitutes the entire
agreement of the parties and supersedes all prior agreements and undertakings,
both written and oral, between the parties, or any of them, with respect to the
subject matter hereof.
 
11.5           Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been given (i) on the date they are
delivered if delivered in person; (ii) on the date initially received if
delivered by facsimile transmission followed by registered or certified mail
confirmation; (iii) three days following delivery of electronic mail of the
scanned document notice; (iv) on the date delivered by an overnight courier
service; or (vi) on the third business day after it is mailed by registered or
certified mail, return receipt requested with postage and other fees prepaid as
follows:

If to the Company:

1077 Ala Napunani Street
Honolulu, HI 96818
Attention: Ligang Shang

With a copy to:

Ellenoff Grossman & Schole LLP
150 East 42nd Street
11th Floor
New York, NY 10017
Facsimile No.: (212) 370-7889
Attn:  Barry I. Grossman, Esq.

If to the Investor:

T Squared Investments LLC / T Squared China Fund LLC
c/o T Squared Capital LLC
1325 Sixth Avenue, Floor 27
New York, New York 10019
Attn: Thomas M. Sauve

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THE COMPANY AND THE INVESTORS IN SCHEDULE A
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11.6           Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party.  Upon such determination that any such term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the extent
possible.
 
11.7           Binding Effect. All the terms and provisions of this Agreement
whether so expressed or not, shall be binding upon, inure to the benefit of, and
be enforceable by the parties and their respective administrators, executors,
legal representatives, heirs, successors and assignees.
 
11.8           Preparation of Agreement. This Agreement shall not be construed
more strongly against any party regardless of who is responsible for its
preparation.  The parties acknowledge each contributed and is equally
responsible for its preparation.
 
11.9           Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, without giving effect to
applicable principles of conflicts of law.
 
11.10        Jurisdiction. This Agreement shall be exclusively governed by and
construed in accordance with the laws of the State of New York. If any action is
brought among the parties with respect to this Agreement or otherwise, by way of
a claim or counterclaim, the parties agree that in any such action, and on all
issues, the parties irrevocably waive their right to a trial by jury. Exclusive
jurisdiction and venue for any such action shall be the Federal courts serving
the State of New York and located in New York county. In the event suit or
action is brought by any party under this Agreement to enforce any of its terms,
or in any appeal therefrom, it is agreed that the prevailing party shall be
entitled to reasonable attorneys fees to be fixed by the arbitrator, trial
court, and/or appellate court.
 
11.11         Preparation and Filing of SEC filings. The Investors shall
reasonably assist and cooperate with the Company in the preparation of all
filings with the SEC after the Closing Date.
 
11.12         Further Assurances, Cooperation. Each party shall, upon reasonable
request by the other party, execute and deliver any additional documents
necessary or desirable to complete the transactions herein pursuant to and in
the manner contemplated by this Agreement.  The parties hereto agree to
cooperate and use their respective best efforts to consummate the transactions
contemplated by this Agreement.
 

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THE COMPANY AND THE INVESTORS IN SCHEDULE A
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11.13           Survival. The representations, warranties, covenants and
agreements made herein shall survive the Closing of the transaction contemplated
hereby.
 
11.14           Third Parties. Except as disclosed in this Agreement, nothing in
this Agreement, whether express or implied, is intended to confer any rights or
remedies under or by reason of this Agreement on any persons other than the
parties hereto and their respective administrators, executors, legal
representatives, heirs, successors and assignees.  Nothing in this Agreement is
intended to relieve or discharge the obligation or liability of any third
persons to any party to this Agreement, nor shall any provision give any third
persons any right of subrogation or action over or against any party to this
Agreement.
 
11.15           Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty, covenant or
agreement herein, nor shall nay single or partial exercise of any such right
preclude other or further exercise thereof or of any other right.  All rights
and remedies existing under this Agreement are cumulative to, and not exclusive
of, any rights or remedies otherwise available.
 
11.16           Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original, but all of which taken
together shall constitute one and the same agreement. A facsimile transmission
of this signed Agreement shall be legal and binding on all parties hereto.

[SIGNATURES ON FOLLOWING PAGE]
 
 

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THE COMPANY AND THE INVESTORS IN SCHEDULE A
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IN WITNESS WHEREOF, the Investors and the Company have as of the date first
written above executed this Agreement.

THE COMPANY:
China Swine Genetics, Inc.

/s/                                                                         

By:  Zhenyu Shang
Title: Chairman and Chief Executive Officer

INVESTOR:

T Squared Investments LLC
By: T Squared Capital LLC, Managing Member
 
By:                                             
Thomas Sauve
Managing Member
1325 Sixth Avenue, Floor 27
New York NY 10019
 
T Squared China Fund LLC
By: T Squared Capital LLC, Managing Member
 
By:                                              
Thomas Sauve
Managing Member
1325 Sixth Avenue, Floor 27
New York NY 10019
 
Ross Pirasteh
 
By:                                             
 
130 East 65th St.
New York, NY 10021
 
Chestnut Ridge Partners LP
 
By:                                              
 
10 Forest Ave
Paramus, NJ 07652
 

 

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THE COMPANY AND THE INVESTORS IN SCHEDULE A
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Schedule A
    
NAME AND ADDRESS
 
 
AMOUNT OF INVESTMENT
NUMBER OF SHARES
OF COMMON STOCK
INTO WHICH PREFERRED
STOCK IS CONVERTIBLE
 
NUMBER OF SHARES
UNDERLYING
WARRANT A AND B
 
T Squared Investments LLC
1325 Sixth Avenue, Floor 27
New York, New York 10019
Attn: Thomas M. Sauve
 
 
 
 
$1,825,000
 
 
 
    869,047
 
 
 
1,520,834
T Squared China Fund LLC
1325 Sixth Avenue, Floor 27
New York, New York 10019
Attn: Thomas M. Sauve
 
 
 
    $75,000
 
 
      35,714
 
 
    62,500
Ross Pirasteh                                        
130 East 65th St.
New York, NY 10021
 
 
 
  $100,000
 
 
      47,619
 
 
    83,334
Chestnut Ridge Partners LP
10 Forest Ave
Paramus, NJ 07652
 
 
 
  $420,000
 
 
    200,000
 
 
  350,000
Total
$2,420,000
11,523,809
2,016,668

PREFERRED STOCK PURCHASE AGREEMENT BETWEEN
THE COMPANY AND THE INVESTORS IN SCHEDULE A
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Exhibit A

Form of Certificate of Designation of Preferences, Rights and Limitations
 
 

 
PREFERRED STOCK PURCHASE AGREEMENT BETWEEN
THE COMPANY AND THE INVESTORS IN SCHEDULE A
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Exhibit B

Warrant A

 

 

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THE COMPANY AND THE INVESTORS IN SCHEDULE A
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Exhibit C

Warrant B
 
 

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THE COMPANY AND THE INVESTORS IN SCHEDULE A
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Exhibit D

Investor Option Exercise Notice

To:  China Swine Genetics, Inc.
 
The undersigned hereby exercises the Investor Option to purchase ______ shares
of Series B Convertible Preferred Shares of China Swine Genetics, Inc., stated
value of $2.10 per share, pursuant to and subject to the terms of that certain
Series B Convertible Preferred Stock and Warrant Purchase Agreement by and among
the Company and the Investors dated as of June 11, 2010, the terms of which are
incorporated herein by reference.

The undersigned is paying the option exercise price as follows:
_______________________________

Dated: _________________
Signature
_____________________
       
Address
_____________________
   
_____________________

 
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THE COMPANY AND THE INVESTORS IN SCHEDULE A
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