SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT (the “Agreement”) is dated as of June 19,
2013 by and among China Health Resource, Inc., a Delaware corporation (the
“Company”), and Xingguo Deng, the purchasers identified on the signature pages
hereto and such purchasers’ respective successors and assigns (individually, a
“Purchaser” and collectively, the “Purchasers”).

 

The parties hereto agree as follows:

 

ARTICLE I.

 

PURCHASE AND SALE OF COMMON STOCK

 

Section 1.01 Purchase and Sale of Stock. Upon the following terms and
conditions, the Company shall issue and sell to Purchaser, and Purchaser shall
purchase from the Company, that total number of 50,000,000 shares of the
Company’s common stock, (the “Common Stock”), as is set forth on each such
Purchaser’s signature page hereto (collectively, the “Shares”), at a price per
share equal to $0.007 (the “Per Share Purchase Price,” and such amounts in the
aggregate, the “Purchase Price”). The Company and the Purchasers are executing
and delivering this Agreement in accordance with and in reliance that the
undersigned understands that the Shares are being issued pursuant to the
exemption from the registration requirements of the United States Securities Act
of 1933, as amended (the "Securities Act"), provided by Section 4(2), Regulation
D Rule 506 and Regulation S of such Securities Act. As such, the Shares are only
being offered and sold to investors who qualify as “accredited investors," and a
limited number of sophisticated investors and the Company is relying on the
representations made by the undersigned in this Agreement that the undersigned
qualifies as such an accredited or sophisticated investor. The offer and sale of
the securities must be made in an offshore transaction with no directed selling
efforts in, or into, the United States of the securities offered. The shares of
common stock are "restricted securities" for purposes of the United States
securities laws and cannot be transferred except as permitted under these laws.

 

Section 1.02 Closing.

 

(a) Subject to the terms and conditions hereinafter set forth, the Purchaser
hereby subscribes for and agrees to purchase from the Company, and the Company
subject to its rights to accept or reject this subscription, agrees to sell to
such Purchaser, such number of Shares for the Purchase Price as is set forth on
such Purchaser’s signature page hereto. The Purchaser shall deliver to the
Company, via wire transfer or a certified check of immediately available funds
equal to its subscription amount as is set forth on such Purchaser’s signature
page hereto and the Company shall deliver to each Purchaser its respective
Shares as determined pursuant to Section 1.02 (b), and the Company and each
Purchaser shall deliver the other items set forth in Section 1.02 deliverable at
the Closing. Upon satisfaction of the covenants and conditions set forth in
Sections 2.01 and 2.02, the Closing shall occur at the offices of the Company or
such other location as the parties shall mutually agree.

 

(b) Deliveries.

 

 

(i) On or prior to the July 19, 2013 (the “Closing Date”), the Company shall
deliver or cause to be delivered to each Purchaser the following:

 

(aa) this Agreement duly executed by the Company;

 

(bb) a copy of the irrevocable instructions to the Company’s transfer agent
instructing the transfer agent to deliver via the Depository Trust Company
Deposit Withdrawal Agent Commission System (“DWAC”) Shares equal to such
Purchaser’s Subscription Amount divided by the Per Share Purchase Price,
registered in the name of such Purchaser;

 

(ii) Prior to no less than three (3) days on which the principal Trading Market
as defined in Section 3.04 is open for trading before Closing Date, the
Purchaser shall deliver or cause to be delivered to the Company the following:

 

(aa) this Agreement duly executed by such Purchaser; and

 

(bb) such Purchaser’s Subscription Amount by wire transfer to the account as
specified in writing by the Company.

 

ARTICLE II.

 

REPRESENTATIONS AND WARRANTIES

 

Section 2.01 Representations and Warranties of the Company. The Company hereby
represents and warrants to the Purchasers, as of the date hereof, as follows:

 

(a) Organization, Good Standing 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 full corporate power and authority to own and use its
properties and its assets and conduct its business as currently conducted. Each
of the Company’s subsidiaries identified in Company’s SEC Reports (the
“Subsidiaries”) is an entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation with the
requisite corporate power and authority to own and use its properties and assets
and to conduct its business as currently conducted. Neither the Company, nor any
of its Subsidiaries is in violation of any of the provisions of their respective
articles of incorporation, by-laws or other organizational or charter documents,
including, but not limited to the Charter Documents (as defined below). Each of
the Company and its Subsidiaries is duly qualified to conduct business and is in
good standing as a foreign corporation 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 result in a direct and/or indirect (i) material
adverse effect on the legality, validity or enforceability of any of the
Securities and/or this Agreement, (ii) material adverse effect on the results of
operations, assets, business, condition (financial and other) or prospects of
the Company and its Subsidiaries, taken as a whole, or (iii) material adverse
effect on the Company’s ability to perform in any material respect on a timely
basis its obligations under the Transaction Documents (any of (i), (ii) or
(iii), a “Material Adverse Effect”).

 

 

 

(b) Capitalization and Voting Rights. The authorized, issued and outstanding
capital stock of the Company is as set forth in Company’s SEC Reports and all
issued and outstanding shares of capital stock of the Company are validly
issued, fully paid and nonassessable. Except as set forth in Company’s SEC
Reports, (i) there are no outstanding securities of the Company or any of its
Subsidiaries which contain any preemptive, redemption or similar provisions, nor
is any holder of securities of the Company or any Subsidiary entitled to
preemptive or similar rights arising out of any agreement or understanding with
the Company or any Subsidiary by virtue of any of the Transaction Documents, and
there are no contracts, commitments, understandings or arrangements by which the
Company or any of its Subsidiaries is or may become bound to redeem a security
of the Company or any of its Subsidiaries; (ii) neither the Company nor any
Subsidiary has any stock appreciation rights or "phantom stock" plans or
agreements or any similar plan or agreement; and (iii) except as set forth in
Company’s SEC Reports, there are no outstanding options, warrants, agreements,
convertible securities, preemptive rights or other rights to subscribe for or to
purchase or acquire, any shares of capital stock of the Company or any
Subsidiary or contracts, commitments, understandings, or arrangements by which
the Company or any Subsidiary is or may become bound to issue any shares of
capital stock of the Company or any Subsidiary, or securities or rights
convertible or exchangeable into shares of capital stock of the Company or any
Subsidiary. Except as set forth in Company’s SEC Reports, and as otherwise
required by law, there are no restrictions upon the voting or transfer of any of
the shares of capital stock of the Company pursuant to the Company’s Charter
Documents or other governing documents or any agreement or other instruments to
which the Company is a party or by which the Company is bound. All of the issued
and outstanding shares of capital stock of the Subsidiaries are validly issued,
fully paid and nonassessable and are owned by the Company, free and clear of any
mortgages, pledges, liens, claims, charges, encumbrances or other restrictions
(collectively, “Encumbrances”). All of such outstanding capital stock has been
issued in compliance in all material respects with applicable federal and state
securities laws. The issuance and sale of the Securities and, upon issuance, the
Shares, as contemplated hereby will not obligate the Company to issue shares of
Common Stock or other securities to any other person (other than the Purchasers)
and except as set forth in Company’s SEC Reports will not result in the
adjustment of the exercise, conversion, exchange or reset price of any
outstanding security. The Company does not have outstanding shareholder purchase
rights or “poison pill” or any similar arrangement in effect giving any person
the right to purchase any equity interest in the Company upon the occurrence of
certain events.

 

(c) Authorization; Enforceability. The Company has the requisite corporate
right, power and authority to enter into, execute and deliver this Agreement and
each other agreement, document, instrument and certificate to be executed by the
Company in connection with the consummation of the transactions contemplated
hereby (collectively referred to as the “Transaction Documents”), and to perform
fully its obligations hereunder and thereunder. All necessary corporate action
on the part of the Company, its directors and shareholders necessary for the (a)
authorization execution, delivery and performance of this Agreement and the
other Transaction Documents by the Company; and (b) authorization, sale,
issuance and delivery of the Securities and upon issuance, the Shares
contemplated hereby and the performance of the Company’s obligations under this
Agreement and the other Transaction Documents has been taken. This Agreement and
the other Transaction Documents have been duly executed and delivered by the
Company and each constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its respective
terms, subject to laws of general application relating to bankruptcy, insolvency
and the relief of debtors and rules of law governing specific performance,
injunctive relief or other equitable remedies, and to limitations of public
policy. The Securities are duly authorized and, when issued and paid for in
accordance with the applicable Transaction Documents, will be duly and validly
issued, fully paid and nonassessable, free and clear of all Encumbrances imposed
by the Company other than restrictions on transfer pursuant to applicable law or
otherwise provided for in the Transaction Documents.

 

(d) No Conflict; Governmental Consents.

 

(i) The execution and delivery by the Company of this Agreement and the other
Transaction Documents, the issuance and sale of the Securities and the
consummation of the other transactions contemplated hereby or thereby do not and
will not (i) result in the violation of any law, statute, rule, regulation,
order, writ, injunction, judgment or decree of any court or governmental
authority to or by which the Company is bound 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, (ii) conflict
with or violate any provision of the Company’s Amended and Restated Articles of
Incorporation, as amended (the “Articles”) or the Amended and Revised Bylaws,
(and collectively with the Articles, the “Charter Documents”) of the Company, or
(iii) conflict with, or result in a breach or violation of, any of the terms or
provisions of, or constitute (with or without due notice or lapse of time or
both) a default or give to others any rights of termination, amendment,
acceleration or cancellation (with or without due notice, lapse of time or both)
under any agreement, credit facility, lease, loan agreement, mortgage, security
agreement, trust indenture or other agreement or instrument to which the Company
or any Subsidiary is a party or by which any of them is bound or to which any of
their respective properties or assets is subject, nor result in the creation or
imposition of any Encumbrances upon any of the properties or assets of the
Company or any Subsidiary, except in the case of each of clauses (i) and (iii),
such as could not have or reasonably be expected to result in a Material Adverse
Effect.

 

(ii) No vote, approval or consent of any holder of capital stock of the Company
or any other third parties is required to be obtained by the Company in
connection with the authorization, execution, delivery and performance of this
Agreement and the other Transaction Documents or in connection with the
authorization, issue and sale of the Securities, except as has been previously
obtained.

 

(iii) No consent, approval, authorization or other order of any governmental
authority or any other person is required to be obtained by the Company in
connection with the authorization, execution, delivery and performance of this
Agreement and the other Transaction Documents or in connection with the
authorization, issue and sale of the Securities, except such post-sale filings
as may be required to be made with the SEC, FINRA and with any state or foreign
blue sky or securities regulatory authority, all of which shall be made when
required.

 

 

 

(e) SEC Reports; Financial Statements. The Company has filed all reports
required to be filed by it under the Securities Act and Securities Exchange Act
of 1934, as amended (the “Exchange Act”), including pursuant to Section 13(a) or
15(d) thereof, for the twenty-four (24) months preceding the date hereof (or
such shorter period as the Company was required by law to file such reports)
(the foregoing materials being collectively referred to herein as the "SEC
Reports" and, together with the exhibits to this Agreement (if any), the
"Disclosure Materials") on a timely basis or has timely filed 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 SEC 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 SEC with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with United States
generally accepted accounting principles (“GAAP”) applied on a consistent basis
during the periods involved, except as may be otherwise specified in such
financial statements or the footnotes thereto, 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.

 

(f) Reserved.

 

(g) Litigation. Except as set forth in the SEC Reports, the Company knows of no
pending or threatened legal or governmental proceedings against the Company or
any Subsidiary which could reasonably be expected to have a Material Adverse
Effect and thereunder. Neither the Company nor any Subsidiary is a party or
subject to the provisions of any order, writ, injunction, judgment or decree of
any court or government agency or instrumentality which could reasonably be
expected to have a Material Adverse Effect. There is no action, suit, proceeding
or investigation by the Company or any Subsidiary currently pending in any court
or before any arbitrator or that the Company or any Subsidiary intends to
initiate. Neither the Company nor any Subsidiary, nor any director or officer
thereof, is or since the Company’s most recently filed Annual Report on Form
10-K has been the subject of any action involving (i) a claim of violation of or
liability under federal or state securities laws or (ii) a claim of breach of
fiduciary duty. During the past ten years there has not been, and to the
Company’s knowledge, 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 purposes of this Agreement, the term “knowledge” when used with
respect to the Company will mean the present, conscious awareness of a
particular fact or matter by the Company’s chief executive officer or chief
financial officer.

 

 

 

(h) Compliance. Except as set forth in the SEC Reports 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 judgment, decree or order of any court,
arbitrator or other governmental authority or (iii) is or has been in violation
of any statute, rule, ordinance or regulation of any governmental authority,
including without limitation all foreign, federal, state and local laws relating
to taxes, environmental protection, occupational health and safety, product
quality and safety and employment and labor matters, except in each case as
could not have or reasonably be expected to result in a Material Adverse Effect.

 

(i) Regulatory Permits. The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses, except where the failure to possess such permits could
not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any Material Permit.

 

(j) Investment Company. The Company is not an “investment company” within the
meaning of such term under the Investment Company Act of 1940, as amended, and
the rules and regulations of the SEC thereunder.

 

(k) Brokers. There is no Placement Agents in this transaction and neither the
Company nor any of the Company's officers, directors, employees or shareholders
has employed or engaged any broker or finder in connection with the transactions
contemplated by this Agreement and no fee or other compensation is or will be
due and owing to any broker, finder, underwriter, placement agent or similar
person other than the Placement Agents in connection with the transactions
contemplated by this Agreement. The Company is not party to any agreement,
arrangement or understanding whereby any person other than the Placement Agents
has any right to raise funds and/or place or purchase any debt or equity
securities for or on behalf of the Company.

 

(l) Intellectual Property; Employees.

 

(i) The Company owns or possesses sufficient legal rights to all patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
information and other proprietary rights and processes necessary for its
business as now conducted and as presently proposed to be conducted, without any
known infringement of the rights of others as described in the SEC Reports and
which the failure to so have could have a Material Adverse Effect (collectively,
the “Intellectual Property Rights”). Except as disclosed the company’s SEC
Reports, there are no material outstanding options, licenses or agreements of
any kind relating to the Intellectual Property Rights, nor is the Company bound
by or a party to any material options, licenses or agreements of any kind with
respect to the patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses, information and other proprietary rights and processes
of any other person or entity other than such licenses or agreements arising
from the purchase of “off the shelf” or standard products. The Company has not
received any written communications alleging that the Company has violated or,
by conducting its business as presently proposed to be conducted, would violate
any Intellectual Property Rights of any other person or entity. The Company and
its Subsidiaries have taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their intellectual properties, except where
failure to do so could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect

 

 

 

(ii) Except as disclosed in the SEC Reports, the Company is not aware that any
of its employees is obligated under any contract (including licenses, covenants
or commitments of any nature) or other agreement, or subject to any judgment,
decree or order of any court or administrative agency, that would interfere with
their duties to the Company or that would conflict with the Company’s business
as presently conducted.

 

(iii) Reserved.

 

(iv) To the Company’s knowledge, no employee of the Company, nor any consultant
with whom the Company has contracted, is in violation of any term of any
employment contract, proprietary information agreement or any other agreement
relating to the right of any such individual to be employed by, or to contract
with, the Company because of the nature of the business conducted by the
Company, which violation would reasonably be expected to result in a Material
Adverse Effect; and to the Company’s knowledge the continued employment by the
Company of its present employees, and the performance of the Company’s contracts
with its independent contractors, will not result in any such violation. The
Company has not received any written notice alleging that any such violation has
occurred. Except as described in SEC Reports, no employee of the Company has
been granted the right to continued employment by the Company or to any
compensation following termination of employment with the Company except for any
of the same which would not have a Material Adverse Effect. The Company is not
aware that any officer or key employee intends to terminate his, her or their
employment with the Company, nor does the Company have a present intention to
terminate the employment of any officer or key employee.

  

(m) Title to Properties and Assets; Liens, Etc. Except as described in the SEC
Reports, the Company has good and marketable title to its properties and assets,
including the properties and assets reflected in the most recent balance sheet
included in the Company’s financial statements, and good title to its leasehold
estates, in each case subject to no Encumbrances, other than (a) those resulting
from taxes which have not yet become delinquent; and (b) Encumbrances which do
not materially detract from the value of the property subject thereto or
materially impair the operations of the Company; and (c) those that have
otherwise arisen in the ordinary course of business, none of which are material.
Except as set forth the Company’s SEC reports, the Company is in compliance with
all terms of each lease to which it is a party or is otherwise bound, except to
the extent such non-compliance would not reasonably be expected to result in a
Material Adverse Effect.

 

 

(n) Obligations to Related Parties. Except as described in the SEC Reports,
there are no obligations of the Company to officers, directors, shareholders who
are known to the Company to beneficially own more than 5% of the Company’s
Common Stock, or employees of the Company other than (a) for payment of salary
or other compensation for services rendered, (b) reimbursement for reasonable
expenses incurred on behalf of the Company and (c) for other standard employee
benefits made generally available to all employees (including stock option
agreements outstanding under any stock option plan approved by the Board of
Directors of the Company). Except as disclosed in the SEC Reports, none of the
officers or directors of the Company and, to the Company’s knowledge, none of
the employees of the Company is presently a party to any transaction with the
Company or any Subsidiary (other than as holders of stock options and/or
warrants, and 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 Company’s knowledge, any entity in which any officer,
director, or any such employee has a substantial interest or is an officer,
director, trustee or partner. 

 

(o) Material Changes. Except as set forth on the SEC Reports, since the date of
the latest audited financial statements included within the SEC Reports, except
as specifically disclosed in the subsequent SEC Reports, (i) there has been no
event, occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect, (ii) the Company has not
incurred any liabilities (contingent or otherwise) other than (A) trade
payables, accrued expenses and other liabilities incurred in the ordinary course
of business consistent with past practice and (B) liabilities not required to be
reflected in the Company's financial statements pursuant to GAAP or required to
be disclosed in filings made with the SEC, (iii) the Company has not altered its
method of accounting or the identity of its auditors, (iv) the Company has not
declared or made any dividend or distribution of cash or other property to its
shareholders or purchased, redeemed or made any agreements to purchase or redeem
any shares of its capital stock, and (v) the Company has not issued any equity
securities to any officer, director or affiliate, except pursuant to existing
Company stock option plans. The Company does not have pending before the SEC any
request for confidential treatment of information.

 

(p) Sarbanes-Oxley. The Company is in compliance with all effective requirements
of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations
thereunder, that are applicable to it, except where such noncompliance could not
reasonably be expected to result in a Material Adverse Effect.

 

(q) No General Solicitation. None of the Company, its Subsidiaries, any of their
affiliates, and any person acting on the Company’s behalf and its direction, has
engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D under the Securities Act) in connection with the offer
or sale of the Securities.

 

(r) No Integrated Offering. Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 2.02, none of the Company,
its Subsidiaries, any of their affiliates, and any person acting on 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 (i) the Securities Act which would require the
registration of any such securities under the Securities Act, or (ii) any
applicable shareholder approval provisions of any Trading Market on which any of
the securities of the Company are listed or designated.

 

 

 

(s) Application of Takeover Protections. The Company execution and delivery of
the Transaction Documents and the consummation of the transactions contemplated
hereby and thereby will not impose any restriction on any Purchaser, or create
in any party (including any current shareholder of the Company) any rights,
under any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement), or other similar
anti--takeover provisions under the Company’s Charter Documents or the laws of
its state of incorporation.

 

(t) Taxes. Each of the Company and its Subsidiaries has filed all U.S. federal,
state, local and foreign tax returns which are required to be filed by each of
them and all such returns are true and correct in all material respects, except
for such failures to file which could not reasonably be expected to have a
Material Adverse Effect. The Company and each Subsidiary has paid all taxes
pursuant to such returns or pursuant to any assessments received by any of them
or by which any of them are obligated to withhold from amounts owing to any
employee, creditor or third party. The Company and each Subsidiary has properly
accrued all taxes required to be accrued and/or paid, except where the failure
to accrue would not have a Material Adverse Effect. To the knowledge of the
Company, the tax returns of the Company and its Subsidiaries are not currently
being audited by any state, local or federal authorities. Neither the Company
nor any Subsidiary has waived any statute of limitations with respect to taxes
or agreed to any extension of time with respect to any tax assessment or
deficiency. The Company has set aside on its books adequate provision for the
payment of any unpaid taxes.

 

(u) Registration Rights. Except as set forth on the SEC Reports, no person has
any right to cause the Company to effect the registration under the Securities
Act of any securities of the Company.

 

(v) Listing and Maintenance Requirements. The Common Stock is registered
pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has
taken no action designed to, or which to its knowledge is likely to have the
effect of, terminating the registration of the Common Stock under the Exchange
Act nor has the Company received any notification that the SEC is contemplating
terminating such registration. The Company has not, in the 12 months preceding
the date hereof, received notice from any trading market on which the Common
Stock is or has been listed or quoted to the effect that the Company is not in
compliance with the listing or maintenance requirements of such trading market.
The Company is, and has no reason to believe that it will not in the foreseeable
future continue to be, in material compliance with all such listing and
maintenance requirements

 

(w) Disclosure. All disclosure furnished by or on behalf of the Company to the
Purchaser in the Transaction Documents regarding the Company, its business and
the transactions contemplated hereby, including the exhibits to this Agreement,
is true and correct and does not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
made therein, in light of the circumstances under which they were made, not
misleading.

 

 

 

(x) Private Placement. Assuming the accuracy of the Purchasers’ representations
and warranties set forth in Section 2.02, no registration under the Securities
Act is required for the offer and sale of the Securities by the Company to the
Purchaser as contemplated hereby.

 

Section 2.02 Representations and Warranties of the Purchasers. Each of the
Purchasers hereby makes the following representations and warranties to the
Company with respect solely to itself and not with respect to any other
Purchaser:

 

(a) Organization and Standing of the Purchasers. If the Purchaser is an entity,
such Purchaser is a corporation, limited liability company or partnership duly
incorporated or organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization.

 

(b) Authorization and Power. Each Purchaser has the requisite power and
authority to enter into and perform this Agreement and to purchase the
Securities being sold to such Purchaser hereunder. This Agreement has been duly
authorized, executed and delivered by such Purchaser and constitutes, or shall
constitute when executed and delivered, a valid and binding obligation of such
Purchaser enforceable against such Purchaser in accordance with the terms
thereof, 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, creditor’s rights and remedies or by other equitable principles of general
application.

 

(c) Purchase For Own Account. Each Purchaser is acquiring the Securities solely
for its own account and not with a view to or for sale in connection with
distribution. Each Purchaser does not have a present intention to sell the
Securities, nor a present arrangement (whether or not legally binding) or
intention to effect any distribution of the Securities to or through any person
or entity; provided, however, that by making the representations herein and
subject to Section 2.02(h) below, such Purchaser does not agree to hold the
Securities for any minimum or other specific term and reserves the right to
dispose of the Securities at any time in accordance with federal and state
securities laws applicable to such disposition. Each Purchaser acknowledges that
it is able to bear the financial risks associated with an investment in the
Securities and that it has been given full access to such records of the Company
and its subsidiaries and to the officers of the Company and its subsidiaries and
received such information as it has deemed necessary or appropriate to conduct
its due diligence investigation and has sufficient knowledge and experience in
investing in companies similar to the Company in terms of the Company’s stage of
development so as to be able to evaluate the risks and merits of its investment
in the Company.

 

(d) Status of Purchasers. Each Purchaser is an "Accredited Investor" as that
term is defined in Rule 501 (a) of Regulation D promulgated under the Securities
Act, as specifically indicated in Exhibit A attached to this Agreement and
Purchaser Questionnaire for Individuals and that the Purchaser is able to bear
the economic risk of an investment in the Company’s Securities. Each Purchaser
has such knowledge and experience in finance, securities, taxation, investments
and other business matters so as to be able to protect the interests of the
undersigned in connection with this transaction, and the undersigned's
investment in the Company hereunder is not material when compared to the
undersigned's total financial capacity. Such Purchaser is not required to be
registered as a broker-dealer under Section 15 of the Exchange Act and such
Purchaser is not a broker-dealer.

 

 

 

If a natural person, each Purchaser is: a bona fide resident of the state or
non-United States jurisdiction contained in the address set forth on the
Signature Page of this Agreement as the undersigned's home address; at least 21
years of age; and legally competent to execute this Agreement. If an entity,
each Purchaser has its principal offices or principal place of business in the
state or non-United States jurisdiction contained in the address set forth on
the Signature Page of this Agreement, the individual signing on behalf of the
undersigned is duly authorized to execute this Agreement and this Agreement
constitutes the legal, valid and binding obligation of the undersigned
enforceable against the undersigned in accordance with its terms.

 

For any Regulation S offering Purchaser, each Purchaser is not a "US Person"
which is defined below:

 

nAny natural person resident in the United States;

 

nAny partnership or corporation organized or incorporated under the laws of the
United States;

 

nAny estate of which any executor or administrator is a US person;

 

nAny trust of which any trustee is a US person;

 

nAny agency or branch of a foreign entity located in the United States;

 

nAny non-discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary for the benefit or account of a US
person;

 

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

 

nAny partnership or corporation if (i) organized or incorporated under the laws
of any foreign jurisdiction and (ii) formed by a US person principally for the
purpose of investing in securities not registered under the Securities Act,
unless it is organized or incorporated, and owned, by accredited investors (as
defined in Rule 501(a) of Regulation D promulgated under the Securities Act) who
are not natural persons, estates or trusts.

 

"United States" means the United States of America, its territories and
possessions, any State of the United States, and the District of Columbia.

 

 

 

(e) Opportunities for Additional Information. Each Purchaser hereby acknowledges
receipt and careful review of this Agreement, the other Transaction Documents,
has had access to the Company’s Annual Report on Form 10-K and the exhibits
thereto for the fiscal year ended December 31, 2012, the Company’s Quarterly
Report on Form 10-Q and the exhibits thereto for the quarterly periods ended
March 31, 2013, respectively, and all subsequent periodic and current reports
filed with the United States Securities and Exchange Commission (the “SEC”) as
publicly filed with and available at the website of the SEC which can be
accessed at www.sec.gov. In addition, each Purchaser acknowledges that such
Purchaser has had the opportunity to ask questions of and receive answers from,
or obtain additional information from, the executive officers of the Company
concerning the financial and other affairs of the Company, and to the extent
deemed necessary in light of such Purchaser’s personal knowledge of the
Company’s affairs, such Purchaser has asked such questions and received answers
to the full satisfaction of such Purchaser, and such Purchaser desires to invest
in the Company. Neither such inquiries nor any other investigation conducted by
or on behalf of such Purchaser or its representatives or counsel shall modify,
amend or affect such Purchaser’s right to rely on the truth, accuracy and
completeness of the Company’s representations and warranties contained in the
Transaction Documents.

 

(f) No General Solicitation. Each Purchaser acknowledges that the Securities
were not offered to such Purchaser by means of any form of general or public
solicitation or general advertising, or publicly disseminated advertisements or
sales literature, including (i) any advertisement, article, notice or other
communication published in any newspaper, magazine, or similar media, or
broadcast over television or radio or (ii) any seminar or meeting to which such
Purchaser was invited by any of the foregoing means of communications.

 

(g) Legend on Stock Certificate. The undersigned acknowledges that the shares of
common stock shall be subject to a stop transfer order and the certificate or
certificates evidencing any shares of common stock shall bear the following or a
substantially similar legend or such other legend as may appear on the forms of
shares of common stock and such other legends as may be required by state blue
sky laws:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT") OR APPLICABLE
STATE SECURITIES LAWS, AND SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH SALE OR TRANSFER IS EXEMPT FROM SUCH
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS.

 

(h) Rule 144. Such Purchaser understands that the Securities must be held
indefinitely unless they are registered under the Securities Act or an exemption
from registration is available. Such Purchaser acknowledges that such Purchaser
is familiar with Rule 144 of the rules and regulations of the Commission, as
amended, promulgated pursuant to the Securities Act (“Rule 144”), and that such
person has been advised that Rule 144 permits resales only under certain
circumstances. Such Purchaser understands that to the extent that Rule 144 is
not available, such Purchaser will be unable to sell any Securities without
either registration under the Securities Act or the existence of another
exemption from such registration requirement.

 

 

 

(i) General. Such Purchaser understands that the Securities are being offered
and sold in reliance on a transactional exemption from the registration
requirement of federal and state securities laws and the Company is relying upon
the truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of such Purchaser set forth herein in order
to determine the applicability of such exemptions and the suitability of such
Purchaser to acquire the Securities.

 

(j) Independent Investment. Except as may be disclosed in any filings with the
Commission by the Purchasers under Section 13 and/or Section 16 of the Exchange
Act, no Purchaser has agreed to act with any other Purchaser for the purpose of
acquiring, holding, voting or disposing of the Securities purchased hereunder
for purposes of Section 13(d) under the Exchange Act, and each Purchaser is
acting independently with respect to its investment in the Securities.

 

ARTICLE III.

 

OTHER AGREEMENTS OF THE PARTIES

 

Section 3.01 Transfer Restrictions.

 

(a) The Purchasers covenant that the Securities will only be disposed of
pursuant to an effective registration statement under, and in compliance with
the requirements of, the Securities Act or pursuant to an available exemption
from the registration requirements of the Securities Act, and in compliance with
any applicable state securities laws. In connection with any transfer of
Securities other than pursuant to an effective registration statement or to the
Company, or pursuant to Rule 144 at such time that the Company is not required
to be in compliance with Rule 144(c) and any other limitations or requirements
set forth in Rule 144, the Company may require the transferor to provide the
Company with an opinion of counsel selected by the transferor, the form and
substance of which opinion shall be reasonably satisfactory to the Company, to
the effect that such transfer does not require registration under the Securities
Act.

 

(b) The Purchasers agree to the imprinting of the following legend on any
certificate evidencing any of the Securities (in addition to any legend required
by applicable state securities or “blue sky” laws):

 

THESE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”) OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL
THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE
PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

 

 

 

Section 3.02 Integration. The Company shall not 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 to the Purchaser in a manner that would require the
registration under the Securities Act of the sale of the Securities to the
Purchaser or that would be integrated with the offer or sale of the Securities
for purposes of the rules and regulations of any Trading Market.

 

Section 3.03 Securities Laws Disclosure; Publicity. The Company shall, at or
before 5:30 p.m., New York time, on the fourth business day following execution
of this Agreement, file a Current Report on Form 8-K with the Commission
describing the terms of the transactions contemplated by the Transaction
Documents and including as exhibits to such Current Report on Form 8-K the
Transaction Documents, in the form required by the Exchange Act. Thereafter, the
Company shall timely file any filings and notices required by the Commission or
applicable state law with respect to the transactions contemplated hereby and
provide copies thereof to the Purchasers upon request.

 

Section 3.04 Definitions

 

For the purposes of this Agreement:

 

(i) “Affiliate” of any Person means any other Person directly or indirectly
controlling, controlled by or under direct or indirect common control with such
Person.

 

(ii) “Common Stock Equivalent” means any securities of the Company which would
entitle the holder thereof to acquire at any time Common Stock, including,
without limitation, any debt, preferred stock, right, option, warrant or other
instrument that is at any time convertible into or exercisable or exchangeable
for, or otherwise entitles the holder thereof to receive, Common Stock.

 

(iii) “Exempt Issuance” means the issuance of (A) shares of Common Stock or
options to employees, officers, consultants or directors of the Company pursuant
to any stock option plan of the Company duly adopted by the Company’s
stockholders, (B) securities upon the exercise or exchange of or conversion of
any Securities issued hereunder, (C) securities exercisable or exchangeable for
or convertible into shares of Common Stock issued and outstanding on the date of
this Agreement, provided that such securities have not been amended since the
date of this Agreement to increase the number of such securities or to decrease
the exercise price, exchange price or conversion price of such securities, (D)
securities issued (other than for cash) in connection with a merger,
acquisition, or consolidation of all or substantially all of the assets,
securities or business division of another entity so long as such issuances are
not for the principal purpose of raising capital, and (E) securities issued in
connection with bona fide license agreements or other partnering agreements so
long as such issuances are not for the principal purpose of raising capital.

 

 

 

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

 

(v) “Trading Market” means whichever of the NYSE MKT, Nasdaq Capital Market,
Nasdaq Global Market, Nasdaq Global Select Market, Bulletin Board, New York
Stock Exchange or the OTCQB over-the-counter bulletin board service maintained
by OTC Markets Group Inc. is at the time the principal trading exchange or
market for the Common Stock.

 

Section 3.05 Acknowledgment of Dilution. The Company acknowledges that the
issuance of the Securities under this Agreement, or the issuance of any
additional securities, may result in dilution of the outstanding shares of
Common Stock, which dilution may be substantial under certain market conditions.
The Company further acknowledges that its obligations under the Transaction
Documents, including, without limitation, its obligation to issue the
Securities, are unconditional and absolute and not subject to any right of set
off, counterclaim, delay or reduction, regardless of the effect of any such
dilution or any claim the Company may have against any Purchaser and regardless
of the dilutive effect that such issuance may have on the ownership of the other
stockholders of the Company.

 

Section 3.06 Furnishing of Information. Until the time that no Purchaser owns
Securities, the Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports that
are required to be filed by the Company pursuant to Section 15(d) the Exchange
Act, even if the Company is not then otherwise subject to the reporting
requirements of the Exchange Act. As long as any Purchaser owns Securities, if
the Company is not required to file reports pursuant to the Exchange Act, it
will prepare and furnish to the Purchasers and make publicly available in
accordance with Rule 144(c) such information as is required for the Purchasers
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, to the extent required from time to time to enable such Person to sell
such Securities without registration under the Securities Act within the
requirements of the exemption provided by Rule 144.

 

Section 3.07 Securities Laws Disclosure; Publicity. At any time when in
connection with a Closing the Company has received at least $350,000 from any
Purchaser, the Company shall, by 8:30 a.m. (New York City time) on the 4th
Trading Day immediately following such Closing, issue a Current Report on Form
8-K, disclosing the material terms of the transactions contemplated hereby and
including the Transaction Documents as exhibits thereto. The Company and each
Purchaser shall consult with each other in issuing any press releases with
respect to the transactions contemplated hereby, and neither the Company nor any
Purchaser shall issue any such press release or otherwise make any such public
statement without the prior consent of the Company, with respect to any press
release of any Purchaser, or without the prior consent of each Purchaser, with
respect to any press release of the Company, which consent shall not
unreasonably be withheld or delayed, except if such disclosure is required by
law, in which case the disclosing party shall promptly provide the other party
with prior notice of such public statement or communication. Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any Purchaser, or
include the name of any Purchaser in any filing with the Commission or any
regulatory agency or Trading Market, without the prior written consent of such
Purchaser, except (i) as required by federal securities law in connection with
(A) any registration statement and (B) the filing of final Transaction Documents
(including signature pages thereto) with the Commission and (ii) to the extent
such disclosure is required by law or Trading Market regulations, in which case
the Company shall provide the Purchasers with prior notice of such disclosure
permitted under this clause (ii).

 

 

 

Section 3.08 Shareholder Rights Plan. No claim will be made or enforced by the
Company or, with the consent of the Company, any other Person, that any
Purchaser is an “Acquiring Person” under any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or similar anti-takeover plan or arrangement in effect or hereafter adopted by
the Company, or that any Purchaser could be deemed to trigger the provisions of
any such plan or arrangement, by virtue of receiving Securities under the
Transaction Documents.

 

Section 3.09 Non-Public Information. Except with respect to the material terms
and conditions of the transactions contemplated by the Transaction Documents,
the Company covenants and agrees that neither it nor any other Person acting on
its behalf, will provide any Purchaser or its agents or counsel with any
information that the Company believes constitutes material non-public
information, unless prior thereto such Purchaser shall have executed a written
agreement regarding the confidentiality and use of such information. The Company
understands and confirms that each Purchaser shall be relying on the foregoing
covenant in effecting transactions in securities of the Company.

 

Section 3.10 Use of Proceeds. The Company shall use the net proceeds from the
sale of the Securities hereunder for working capital purposes and the Company
shall not use such proceeds for (a) the satisfaction of any portion of the
Company’s debt (other than payment of trade payables in the ordinary course of
the Company’s business), (b) the redemption of any Common Stock, preferred stock
or Common Stock Equivalents, or (c) the settlement of any outstanding
litigation.

 

Section 3.11 Indemnification of Purchasers. Subject to the provisions of this
Section 3.11, the Company will indemnify and hold each Purchaser and its
directors, officers, shareholders, members, partners, employees and agents (and
any other Persons with a functionally equivalent role of a Person holding such
titles notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling person (each, a
“Purchaser Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in
the other Transaction Documents or (b) any action instituted against a Purchaser
in any capacity, or any of them or their respective Affiliates, by any
stockholder of the Company who is not an Affiliate of such Purchaser, with
respect to any of the transactions contemplated by the Transaction Documents
(unless such action is based upon a breach of such Purchaser’s representations,
warranties or covenants under the Transaction Documents or any agreements or
understandings such Purchaser may have with any such stockholder or any
violations by the Purchaser of state or federal securities laws or any conduct
by such Purchaser which constitutes fraud, gross negligence, willful misconduct
or malfeasance). If any action shall be brought against any Purchaser Party in
respect of which indemnity may be sought pursuant to this Agreement, such
Purchaser Party shall promptly notify the Company in writing, and the Company
shall have the right to assume the defense thereof with counsel of its own
choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the
Company has failed after a reasonable period of time to assume such defense and
to employ counsel or (iii) in such action there is, in the reasonable opinion of
such separate counsel, a material conflict on any material issue between the
position of the Company and the position of such Purchaser Party, in which case
the Company shall be responsible for the reasonable fees and expenses of no more
than one such separate counsel. The Company will not be liable to any Purchaser
Party under this Agreement (i) for any settlement by a Purchaser Party effected
without the Company’s prior written consent, which shall not be unreasonably
withheld or delayed; or (ii) to the extent, but only to the extent that a loss,
claim, damage or liability is attributable to any Purchaser Party’s breach of
any of the representations, warranties, covenants or agreements made by such
Purchaser Party in this Agreement or in the other Transaction Documents.

 

 

 

Section 3.12 Reservation and Listing of Securities.

 

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

 

(b) If, on any date, the number of authorized but unissued (and otherwise
unreserved) shares of Common Stock is less than 100% of (i) the Required Minimum
on such date, minus (ii) the number of shares of Common Stock previously issued
pursuant to the Transaction Documents, then the Board of Directors shall use
commercially reasonable efforts to amend the Company’s certificate or articles
of incorporation to increase the number of authorized but unissued shares of
Common Stock to at least the Required Minimum at such time (minus the number of
shares of Common Stock previously issued pursuant to the Transaction Documents),
as soon as possible and in any event not later than the 75th day after such
date; provided that the Company will not be required at any time to authorize a
number of shares of Common Stock greater than the maximum remaining number of
shares of Common Stock that could possibly be issued after such time pursuant to
the Transaction Documents.

 

(c) The Company shall, if applicable: (i) in the time and manner required by the
principal Trading Market, prepare and file with such Trading Market an
additional shares listing application covering a number of shares of Common
Stock at least equal to the Required Minimum on the date of such application,
(ii) take all steps necessary to cause such shares of Common Stock to be
approved for listing on such Trading Market as soon as possible thereafter,
(iii) provide to the Purchasers evidence of such listing, and (iv) maintain the
listing of such Common Stock on any date at least equal to the Required Minimum
on such date on such Trading Market or another Trading Market.

 

 

 

Section 3.13 Form D; Blue Sky Filings. The Company agrees to timely file a Form
D with respect to the Securities as required under Regulation D. The Company
shall take such action as the Company shall reasonably determine is necessary in
order to obtain an exemption for, or to qualify the Securities for, sale to the
Purchasers at each Closing under applicable securities or “Blue Sky” laws of the
states of the United States, and shall provide evidence of such actions promptly
to the Placement Agents and upon request of any Purchaser.

 

Section 3.14 DTC Eligible. The Company through its transfer agent is a
participant in the Depository Trust Company Fast Automated Securities Transfer
Program or other system which provides for the Company’s Common Stock to be
transferred electronically.

 

ARTICLE IV.

 

MISCELLANEOUS

 

Section 4.01 Termination. This Agreement may be terminated by any Purchaser, as
to such Purchaser’s obligations hereunder only and without any effect whatsoever
on the obligations between the Company and the other Purchasers, by written
notice to the other parties, if the Closing has not been consummated on or
before July 19, 2013; provided, however, that such termination will not affect
the right of any party to sue for any breach by the other party (or parties).

 

Section 4.02 Fees and Expenses. Except as otherwise set forth in this Agreement
and the other Transaction Documents, each party shall pay the fees and expenses
of its advisors, counsel, accountants and other experts, if any, and all other
expenses, incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement. The Company shall pay all
stamp or other similar taxes and duties levied in connection with issuance of
the Shares pursuant hereto.

 

Section 4.03 Specific Enforcement, Consent to Jurisdiction.

 

(a) The Company and the Purchasers acknowledge and agree that irreparable damage
would occur in the event that any of the provisions of this Agreement or the
other Transaction Documents were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that the parties
shall be entitled to seek an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement and to enforce specifically the
terms and provisions hereof or thereof, this being in addition to any other
remedy to which any of them may be entitled by law or equity.

 

(b) Each of the Company and the Purchasers (i) hereby irrevocably submits to the
jurisdiction of the United States District Court sitting in the Southern
District of New York and the courts of the State of New York located in New York
County for the purposes of any suit, action or proceeding arising out of or
relating to this Agreement or any of the other Transaction Documents or the
transactions contemplated hereby or thereby and (ii) hereby waives, and agrees
not to assert in any such suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of the suit,
action or proceeding is improper. Each of the Company and the Purchasers
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof 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 in this Section 4.02
shall affect or limit any right to serve process in any other manner permitted
by law.

 

 

 

Section 4.04 Entire Agreement; Amendment. This Agreement (including all exhibits
hereto) and the Transaction Documents contain the entire understanding and
agreement of the parties with respect to the matters covered hereby and, except
as specifically set forth herein or in the Transaction Documents, neither the
Company nor any of the Purchasers makes any representations, warranty, covenant
or undertaking with respect to such matters and they supersede all prior
understandings and agreements with respect to said subject matter, all of which
are merged herein. No provision of this Agreement may be waived or amended other
than by a written instrument signed by the Company and the Purchasers holding a
majority of the Shares then outstanding and held by Purchasers. No such
amendment shall be effective to the extent that it applies to less than all of
the holders of the Shares then outstanding.

 

Section 4.05 Notices. Any notice, demand, request, waiver or other communication
required or permitted to be given hereunder shall be in writing and shall be
effective (a) upon hand delivery by telex (with correct answer back received),
telecopy, e-mail or facsimile at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:

 

(a) If to the Company:

 

China Health Resource, Inc.

343 Sui Zhou Zhong Road

Suining, Sichuan Province, P.R. China

629000

 

(b) If to the Purchaser at the address of such Purchaser set forth on the
signature pages hereto.

 

Any party hereto may from time to time change its address for notices by giving
at least ten (10) days written notice of such changed address to the other party
hereto.

 

 

 

Section 4.06 Waivers. No waiver by either party 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 other provisions, condition
or requirement hereof, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter.

 

Section 4.07 Headings. The article, section and subsection headings in this
Agreement are for convenience only and shall not constitute a part of this
Agreement for any other purpose and shall not be deemed to limit or affect any
of the provisions hereof.

 

Section 4.08 Successors and Assigns; Restrictions on Transfer. This Agreement
shall be binding upon and inure to the benefit of the parties and their
successors and assigns. The Company may not assign this Agreement or any rights
or obligations hereunder without the prior written consent of the Purchasers.

 

Section 4.09 No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

 

Section 4.10 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving
effect to any of the conflicts of law principles which would result in the
application of the substantive law of another jurisdiction. This Agreement shall
not be interpreted or construed with any presumption against the party causing
this Agreement to be drafted. Each party hereby irrevocably waives, to the
fullest extent permitted by applicable law, any and all rights to a trial by
jury in any legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.

 

Section 4.11 Survival. The representations and warranties of the Company and the
Purchasers shall survive the execution and delivery hereof and each Closing
hereunder for the applicable statute of limitations period.

 

Section 4.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other parties hereto, it being understood that all parties need
not sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid binding obligation
of the party executing (or on whose behalf such signature is executed) the same
with the same force and effect as if such facsimile signature were the original
thereof.

 

Section 4.13 Severability. The provisions of this Agreement and the other
Transaction Documents are severable and, in the event that any court of
competent jurisdiction shall determine that any one or more of the provisions or
part of the provisions contained in this Agreement or the other Transaction
Documents shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision or part of a provision of this Agreement or the other
Transaction Documents and such provision shall be reformed and construed as if
such invalid or illegal or unenforceable provision, or part of such provision,
had never been contained herein, so that such provisions would be valid, legal
and enforceable to the maximum extent possible.

 

 

 

Section 4.14 Further Assurances. From and after the date of this Agreement, upon
the request of any Purchaser or the Company, each of the Company and the
Purchasers shall execute and deliver such instrument, documents and other
writings as may be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement and the other
Transaction Documents.

 

Section 4.15 Like Treatment of Purchaser. No consideration shall be offered or
paid to any Purchaser to amend or consent to a waiver or modification of any
provision of any of the Transaction Documents unless the same consideration is
also offered to all of the Purchasers then holding Shares. Further, the Company
shall not make any payments or issue any securities to the Purchasers in amounts
which are disproportionate to the respective numbers of outstanding Shares held
by any Purchasers at any applicable time. For clarification purposes, this
provision constitutes a separate right granted to each Purchaser by the Company
and negotiated separately by each Purchaser, and is intended for the Company to
treat the Purchasers as a class and shall not in any way be construed as the
Purchasers acting in concert or as a group with respect to the purchase,
disposition or voting of the Securities or otherwise.

 

 

 

[SIGNATURE PAGES FOLLOWS]

 

 

 

Company Signature Page

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by
an authorized signatory as of the date first above written.

 

  CHINA HEALTH RESOURCE, INC.       By: /s/ Jiayin Wang     Name: Jiayin Wang  
  Title: Chief Executive Officer

 

 

  

Purchaser Signature Page

 

By its execution and delivery of this signature page, the undersigned Purchaser
hereby joins in and agrees to be bound by the terms and conditions of the
Securities Purchase Agreement dated as of June 19, 2013 (the “Purchase
Agreement”) by and among China Health Resource, Inc. and the Purchaser (as
defined therein), as to the number of shares of Common Stock set forth below,
and authorizes this signature page to be attached to the Purchase Agreement or
counterparts thereof.

 

      Name of Purchaser: Xingguo Deng           /s/ Xingguo Deng         
Address:   395 Xishan Road, #7-2-5-4, Chuan Shan District   Suining City,
Sichuan Province, China 629000       Email Address: 1044623538@qq.com      
Number of Shares: 50,000,000   Aggregate Purchase Price: $0.007