Document:

AGREEMENT
        FILED AS EXHIBIT 10.32 TO FORM 10-K

      FILED
        FOR
        YEAR ENDED DECEMBER 31, 2007

    

     

    BULK
      REGISTRATION CO-MARKETING AGREEMENT

    

    This
      BULK
      REGISTRATION CO-MARKETING AGREEMENT is made and entered into as of December
      20,
      2007 (the “Effective Date”) by and between Tralliance Corporation, a New York
      corporation (“Tralliance”) and Labigroup Holdings, LLC (f/k/a Labitrav, LLC), a
      Florida limited liability company (“Labigroup”). Tralliance and Labigroup are
      individually referred to herein as a “Party” and collectively as the
“Parties”.

    

    RECITALS:

    

    WHEREAS,
      Tralliance is the registry for and is engaged in the business of the marketing
      and management of the top-level domain name “.travel” intended for use on the
      world wide web or the Internet; and

    

    WHEREAS,
      Labigroup is a company that has expertise in the business of creating,
      developing, hosting, optimizing, marketing, and managing multiple domain names
      and websites for profit; and 

    

    WHEREAS,
      Tralliance desires to rapidly build a base of “.travel” domain name registered
      users and to promote active use of such domain name under a Bulk Purchasing
      Program; and

    

    WHEREAS,
      Labigroup desires to purchase large blocks of “.travel” domain names under
      Tralliance’s Bulk Purchasing Program and to develop websites containing
      contextually relevant information about the domains on which they reside for
      the
      purpose of generating advertising revenue from third parties; and

    

    WHEREAS,
      Labigroup has entered into a Domain Name Agreement (the “Domain Name Agreement”)
      dated on or about November 1, 2007, with Names Beyond, Inc., an ICANN accredited
      “.travel” registrar, which provides price discounts for bulk “.travel” domain
      name purchases; and

    

    WHEREAS,
      the
      Parties wish to enter into a mutually beneficial cost and revenue sharing
      arrangement, upon the terms, covenants and conditions set forth
      below.

    

    NOW,
      THEREFORE,
      in
      consideration of the mutual promises, benefits and covenants contained herein
      and for other good and valuable consideration, the receipt, adequacy and
      sufficiency are hereby acknowledged, the Parties, intending to be legally bound,
      hereby agree as follows:

    

    1. DEFINITIONS.

     

    1.1. “Affiliates”
      shall mean, with respect to a specified Person, any other Person that, directly
      or indirectly, Controls, is under common Control with, or is Controlled by
      such
      specified Person.

     

    1.2. “Agreement”
      means this Bulk Registration Co-Marketing Agreement. 

     

    1.3. “Control”
      and its derivatives shall mean legal, beneficial or equitable ownership,
      directly or indirectly, of more than fifty percent (50%) of the outstanding
      voting capital stock (or other ownership interest, if not a corporation) of
      an
      entity, or actual managerial or operational control over such
      entity.

     

    1.4. “Event
      of
      Default” means any of the following: (a) any representation or warranty made by
      either Party in the Agreement that proves to have been incorrect when made;
      (b)
      a material breach of the Agreement by either Party, which breach is not cured
      within fifteen (15) days after written notice of breach to the breaching Party;
      or (c) any situation in which either Party commits a material breach of the
      Agreement that is not capable of being cured within ten (10) days and fails
      to
      (i) proceed promptly and diligently to correct the breach, (ii) develop within
      fifteen (15) days following written notice of breach a complete plan for curing
      the breach, and (iii) cure the breach within fifteen (15) days of written notice
      thereof.

     

    1.5. “ICANN”
      means the Internet Corporation for Assigned Names and Numbers.

     

    1.6. “Intellectual
      Property” means all intellectual property rights, including by way of
      explanation, but not by limitation, those statutory or common law rights in
      and
      relating to copyrights, patents, trademarks, trade secrets, moral rights, or
      any
      similar rights.

     

    1.7. “Quarter”
      means for the calendar quarter ending December 31, 2007 and for all calendar
      quarters thereafter during the term of this Agreement.

     

    1.8. “Registration”
      or “Registered” shall mean the initial registration of a “.travel” domain
      name.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.9. “Renewal”
      or “Renewed” shall mean the re-registration of a “.travel” domain
      name.

     

    
      	1.10.	
              “Term”
                means the period set forth in Section
                4.1.

            

    

     

    
      	1.11.	
              “Transaction”
                shall be defined as either a Registration and/or Renewal of a “.travel”
                domain name.

            

    

     

    2. OBLIGATIONS.

     

    2.1. Registrar.
      All
      Registrations or Renewals of a “.travel” domain name by Labigroup during the
      Term of the Agreement shall be purchased through an ICANN Accredited Registrar,
      under the terms and conditions of the Bulk Purchasing Program. 

     

    2.2. Initial
      Period.
      Commencing
      on or after the Effective Date and by no later than September 30, 2008 (“Initial
      Period”), Labigroup shall purchase a minimum of *** Registrations (“Initial
      Period Registration Minimum”). In purchasing the Initial Period Registration
      Minimum, Labigroup shall be permitted to purchase Registrations in blocks of
      ***
      Registrations. For each Registration above the Initial Period Registration
      Minimum during the Initial Period, Labigroup shall be permitted to purchase
      additional Registrations in blocks of *** Registrations in exchange for the
      pricing set forth in Section 3.1.b.3 below.

     

    2.3. Remainder
      of Initial Term.
      Commencing October 1, 2008 and during the remainder of the Initial Term,
      Labigroup must purchase a minimum of *** Transactions per annum (“Yearly
      Transaction Minimum”). In purchasing the Yearly Transaction Minimum each year,
      Labigroup shall be permitted to purchase Transactions in blocks of ***
      Transactions. For each Transaction above the Yearly Transaction Minimum each
      year, Labigroup shall be permitted to purchase additional Transactions in blocks
      of *** Transactions in exchange for the pricing set forth in Section 3.1.b.3
      below.

     

    2.4. Renewal
      Periods.
      During
      both the First Renewal Term or the Second Renewal Term, if applicable, Labigroup
      must purchase a minimum of *** Transactions per annum. In purchasing the Yearly
      Transaction Minimum each year, Labigroup shall be permitted to purchase
      Transactions in blocks of *** Transactions. For each Transaction above the
      Yearly Transaction Minimum each year, Labigroup shall be permitted to purchase
      additional Transactions in blocks of *** Transactions in exchange for the
      pricing set forth in Sections 3.1.c.2 and 3.1.d.2 (as applicable).

     

    2.5. General
      Rules.
      

     

    (a) No
      Carry Over.
      In the
      event that Labigroup purchases Registrations or Transactions in excess of the
      applicable annual minimums established in Sections 2.2, 2.3 and 2.4 above,
      such
      excess Registrations or Transactions shall not apply toward succeeding years’
minimum requirements.

     

    (b) All
      Registrations and/or Renewals shall be for periods of one (1) year.
      Registrations and/or Renewals in excess of one (1) year shall not be permitted
      under this Agreement.

     

    2.6. Quarterly
      Report.
      No less
      than 45 days after the end of a quarter a Quarter, Labigroup shall provide
      to
      Tralliance (i) a list of all “.travel” Transactions under this Agreement during
      that quarter, and (ii) a report summarizing the Total Revenue and Gross Profit
      derived by Labigroup from the sale of advertising on all websites developed
      for
      any “.travel” domain name Registered or Renewed under this Agreement during that
      quarter by thirty (30) after the end of each quarter.

     

    2.7. Live
      Sites Requirement.
      Labigroup shall ensure that by no later than September 30, 2008, at least ***
      (***) “.travel” websites are launched. “.travel” web sites will contain
      contextually relevant information about the domains on which they reside.
      Websites will take on many recognizable forms such as blog, directories, news
      and events and many others. The websites will let users research travel to
      and
      from specific countries, regions and areas, as well bring them up to date on
      current events in those areas. Failure to obtain a minimum of *** new “live”
“.travel” websites shall be considered an Event of Default as defined
      herein.

     

    3. FEES,
      PAYMENTS AND AUDITS. 

     

    3.1. Fees

     

    (a) Set-up
      Fee.
      Labigroup shall pay to Tralliance an initial set-up fee of $37,500.

     

    (b) Initial
      Term Fees.

     

    
      	 	
              3.1.b.1.

            	
              Immediately
                upon execution of this Agreement, Labigroup shall pay to Tralliance
                $225,000. Such payment shall cover the Initial Period Registration
                Minimum
                as well as the Yearly Transaction Minimum for the annual period from
                October 1, 2008 to September 30,
                2009.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              3.1.b.2.

            	
              By
                no later than October 15, 2008, Labigroup shall pay to Tralliance
                $112,500
                to cover the Yearly Transaction Minimum for the final year of the
                Initial
                Term.

            

    

     

    
      	 	
              3.1.b.3.

            	
              For
                each (i) Registration above the Initial Period Registration Minimum
                made
                during the Initial Term, or (ii) each Transaction above the Yearly
                Transaction Minimum during each subsequent remaining year of the
                Initial
                Term, Labigroup shall pay to Tralliance *** per Registration or
                Transaction (as applicable) purchased by Labigroup by no later than
                fourteen
                (14) days from the date of Tralliance’s
                invoice.

            

    

     

    
      	 	
              (c)

            	
              First
                Renewal Term. 

            

    

     

    
      	 	
              3.1.c.1.

            	
              In
                the event that Labigroup elects a First Renewal Term as described
                in
                Section 4.1 below, Labigroup shall pay to Tralliance a total of (i)
                $300,000 by no later than October 15, 2010 and an additional (ii)
                $300,000
                by no later than October 15, 2011 to cover the applicable Yearly
                Transaction Minimums for the two years of the First Renewal
                Term.

            

    

     

    
      	 	
              3.1.c.2.

            	
              For
                each Transaction above the Yearly Transaction Minimum during First
                Renewal
                Term, Labigroup shall pay to Tralliance *** per Transaction purchased
                by
                Labigroup above such minimum by no later than fourteen
                (14) days from the date of Tralliance’s
                invoice.

            

    

     

    
      	 	
              (d)

            	
              Second
                Renewal Term.
                

            

    

     

    
      	 	
              3.1.d.1.

            	
              In
                the event that Labigroup elects the Second Renewal Term as described
                in
                Section 4.1 below, Labigroup shall pay to Tralliance a total of (i)
                $450,000 by no later than October 15, 2012, (ii) $450,000 by no later
                than
                October 15, 2013 and (iii) an additional $450,000 by no later than
                October
                15, 2014 to cover the applicable Yearly Transaction Minimums for
                the three
                (3) years of the Second Renewal
                Term.

            

    

     

    
      	 	
              3.1.d.2.

            	
              For
                each Transaction above the Yearly Transaction Minimum during Second
                Renewal Term, Labigroup shall pay to Tralliance *** per Transaction
                Year
                purchased by Labigroup above such minimum by no later than fourteen
                (14) days from the date of Tralliance’s
                invoice.

            

    

     

    3.2. Other
      Direct Costs.
      Labigroup shall pay to Tralliance all other direct costs or fees incurred by
      Tralliance as a result of Labigroup’s Registration or Renewal of a “.travel”
domain name. 

     

    3.3. Royalties.
      Labigroup shall pay to Tralliance a royalty of ***% of the Gross Profit derived
      by Labigroup during the Term from the sale of advertising on all websites
      developed by Labigroup for any “.travel” domain name Registered or Renewed by
      Labigroup under this Agreement. All royalties are due and payable to Tralliance
      on a Quarterly Basis no later than 30 days after the end of each applicable
      calendar quarter during the Term. For purposes of the Agreement, Gross Profit
      is
      defined as total Advertising Revenue less Cost of Goods Sold, all determined
      on
      an accrual basis in conformity with United States generally accepted accounting
      principles. Cost of Goods Sold includes all website development, hosting,
      optimization, maintenance, distribution and content feed, advertising interface,
      and any and all costs paid to Tralliance pursuant to Sections 3.1 and 3.2 above,
      but specifically excludes the cost of royalties paid or payable to Tralliance
      or
      any other third party.

     

    3.4. Payment

     

    
      	 	
              (a)

            	
              All
                fees are to be paid in U.S. dollars and, when paid, are non-cancelable,
                non-contingent and non-refundable.

            

    

     

    
      	 	
              (b)

            	
              In
                the event an undisputed payment is not received by the due date set
                forth
                on an invoice, a late fee of one and one-half percent (1.5%) per
                month or
                the highest rate allowed under the law, whichever is lower, shall
                be
                assessed against overdue amounts. 

            

    

     

    3.5. Record
      Keeping.
      Each
      Party shall maintain complete, true and accurate records of its accounting,
      business, registration and other records regarding its activities under this
      Agreement in accordance with U.S. generally accepted accounting principles
      and
      such party’s business practices. Each Party shall retain such records during the
      Term of this Agreement and for six (6) months thereafter.

     

    3.6.  Inspection.
      During
      the Term, and for six (6) months thereafter, each Party shall provide the other,
      or its designated representative, upon written request of at least fifteen
      (15)
      days, and not more than twice per calendar year, access to its records during
      normal business hours for the sole purpose of verifying compliance with the
      terms of this Agreement. 

     

    4. TERM
      AND TERMINATION.

     

    4.1. Term.
      This
      Agreement shall commence on the Effective Date
      and
      shall continue until September 30, 2010 (“Initial Term”). This Agreement shall
      automatically renew for an additional two (2) years unless Labigroup provides
      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4.2. Tralliance
      with no less than sixty (60) days written notice prior to the end of the Initial
      Term (“First Renewal Term”). Thereafter, this Agreement shall automatically
      renew for an additional three (3) years unless Labigroup provides Tralliance
      with no less than sixty (60) days written notice prior to the end of the First
      Renewal Term (“Second Renewal Term”). Collectively, the Initial Term, First
      Renewal Term and Second Renewal Term shall be referred to as the “Term”).
      Thereafter, Labigroup shall have the option to renew this Agreement for
      additional successive three (3) year periods on the same terms as were in effect
      during the Second Renewal Term upon providing written notice to Tralliance
      no
      later than sixty (60) days prior to the end of the Second Renewal Term or any
      succeeding renewal period.

     

    4.3. Material
      Breach.
      A Party
      may terminate this Agreement effective
      immediately upon
      an
      Event of Default by the other Party. 

     

    4.4. Necessary
      Requirement.
      This
      Agreement may be terminated in whole or in part and effective immediately,
      as
      necessary to comply with a requirement by ICANN or an applicable government
      authority.

     

    4.5. Insolvency.
      Labigroup may immediately terminate this Agreement if Tralliance (a) ceases
      to
      do business in the normal course for a continuous period of at least thirty
      (30)
      calendar days, (b) becomes or is declared insolvent or bankrupt, (c) is the
      subject of any proceeding related to its liquidation or insolvency (whether
      voluntarily or involuntarily) which is not dismissed within ninety (90) calendar
      days or (d) makes an assignment for the benefit of creditors. 

     

    4.6. Effect.
      Termination or expiration of this Agreement refers to the termination of all
      the
      Parties’ respective commitments and obligations hereunder from and after the
      date of termination, but does not relieve the Parties of their obligations
      incurred prior to the date of termination. Unless otherwise expressly provided,
      the termination or expiration of an Addendum, Exhibit or Schedule shall not
      serve to terminate automatically this Agreement. Within thirty (30) days after
      the expiration or termination of this Agreement, Labigroup
      shall return to Tralliance
      or destroy all original and copies (including partial copies) of all
Tralliance
      Confidential Information in Labigroup’s possession. Within such time period,
Labigroup
      shall certify in writing to Tralliance
      its compliance with this provision.

     

    4.7. Survival.
      Any
      provision that contemplates performance or observance subsequent to any
      termination or expiration of this Agreement (in whole or in part) shall survive
      any termination or expiration of the Agreement (in whole or in part, as
      applicable) and continue in full force and effect. 

     

    5. INTELLECTUAL
      PROPERTY.
      Each
      Party retains all right, title and interest in and to its respective
      Intellectual Property Rights.
      No
      licenses will be deemed to have been granted by either Party to any of its
      Intellectual Property, except as otherwise expressly authorized in this
      Agreement.

     

    6. WARRANTIES/DISCLAIMERS.
      

     

    6.1. Labigroup
      warrants that all information provided by Labigroup as part of the registration
      process shall be complete and accurate. Labigroup also warrants that each
      registration it makes is being done so in good faith and that it has no
      knowledge of it infringing upon or conflicting with the legal rights of a third
      party or a third party's registration, trademark or trade name. Labigroup also
      warrants that the domain names being registered will not be used in connection
      with any illegal activity.

     

    6.2. TRALLIANCE
      MAKES NO WARRANTY TO LABIGROUP,
      CUSTOMERS, RESELLERS, OR TO ANY OTHER ENTITY, WHETHER EXPRESS, IMPLIED OR
      STATUTORY, AS TO THE MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE, LACK
      OF VIRUSES, ACCURACY OR COMPLETENESS OF RESPONSES OR RESULTS, TITLE,
      NONINFRINGEMENT, QUIET ENJOYMENT OR QUIET POSSESSION, OR CORRESPONDENCE TO
      DESCRIPTION WITH RESPECT TO ANY CO-MARKETING PROGRAM.
      

     

    7. LIMITATION
      OF LIABILITY. 

     

    7.1. Intent.
      The
      Parties intend for each to be liable to the other only for direct damages
      incurred by the non-breaching Party as a result of the breaching Party’s failure
      to perform its obligations as required by this Agreement.

     

    7.2. Restriction.
      NEITHER
      PARTY, NOR ITS AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR ASSIGNS,
      SHALL BE LIABLE TO THE OTHER OR ANY THIRD PARTY FOR ANY SPECIAL, INCIDENTAL,
      PUNITIVE, CONSEQUENTIAL OR INDIRECT DAMAGES, INCLUDING, BUT NOT LIMITED TO,
      LOST
      PROFITS, LOSS OF BUSINESS OR ANY OTHER PECUNIARY LOSS, ARISING IN ANY WAY OUT
      OF
      OR UNDER THIS AGREEMENT, WHETHER IN TORT, CONTRACT OR OTHERWISE, EVEN IF SUCH
      PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

     

    7.3. Reliance.
      WITHOUT
      LIMITING THE FOREGOING, NEITHER PARTY, NOR ITS AFFILIATES, OFFICERS, DIRECTORS,
      EMPLOYEES, AGENTS OR ASSIGNS, SHALL BE LIABLE TO THE OTHER OR ANY THIRD PARTY,
      INCLUDING, FOR EXAMPLE, EITHER PARTY’S CUSTOMERS OR RESELLERS, FOR ANY DAMAGES
      ARISING IN ANY WAY OUT OF ITS RELIANCE ON OR USE OF CONTENT, INFORMATION, OR
      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    7.4. SERVICES
      PROVIDED ON OR THROUGH ANY
      CO-MARKETING PROGRAM OR THAT RESULT FROM OR ARE RELATED TO THE SENDING OF
      UNSOLICITED E-MAIL OR MISTAKES, OMISSIONS, INTERRUPTIONS, DELETION OF FILES,
      ERRORS, DEFECTS, DELAYS IN OPERATION OR TRANSMISSION OR ANY FAILURE OF
      PERFORMANCE OF ANY KIND. 

     

    7.5. Exceptions.
      The
      limitations set forth in this Article shall not apply with respect to: (a)
      fees
      due and owing under this Agreement; (b) third-party claims subject to
      indemnification; (c) claims arising out of a breach of Intellectual Property
      obligations; or (d) claims arising out of a breach of confidentiality
      obligations.

     

    7.6. Limitation. Tralliance
      liability to Labigroup
      arising out of or under this Agreement, whether in contract, tort or otherwise,
      shall be limited to the amounts actually paid or matched (including both
      principal and interest) to Labigroup
      by
Tralliance
      at the time that the event resulting in liability occurs.

     

    8. INDEMNIFICATION.
       

     

    8.1. Obligation.
      Each
      Party shall, at its own expense, defend or, at its option, settle any claim,
      suit or proceeding brought against the other, and its parents, subsidiaries,
      Affiliates, officers, directors, shareholders, and members, arising from,
      relating to, incurred in connection with, or based on allegations of (a) the
      damage, loss or destruction of any real or tangible personal property resulting
      from the negligence or willful misconduct of such Party; or (b) such Party’s
      breach of its obligations hereunder. In addition, Labigroup agrees to release,
      defend, indemnify and hold harmless Tralliance from and against any losses,
      damages or costs, including reasonable attorney’s fees, resulting from any
      claim, action, proceeding suit or demand arising out of or related to
      Labigroup’s registration, renewal, transfer and/or use of the .travel domain
      names. The indemnifying Party shall pay the Party seeking indemnification any
      damages finally awarded or settlement amounts agreed upon as direct damages
      to
      the extent based upon such a claim. 

     

    8.2. Contingency.
      The
      indemnification obligations set forth in this Article are contingent on the
      Party seeking indemnification providing the other Party with (i) prompt written
      notice of a claim subject to indemnification, (ii) control over the defense
      and
      settlement of such a claim, and (iii) proper and full information and assistance
      to settle or defend any such claim.

     

    9. DISPUTE
      RESOLUTION.
      Any and
      all disputes of any nature arising under or in connection with this Agreement,
      including requests for specific performance, shall be resolved through binding
      arbitration conducted as provided in this Section pursuant to the rules of
      the
      American Arbitration Association (“AAA”). The arbitration shall be conducted in
      the English language and shall occur in the County of Broward, Florida, USA.
      There shall be three (3) arbitrators: each party shall choose one arbitrator,
      who together will select a third; if the two arbitrators are not able to agree
      on a third arbitrator within fifteen (15) calendar days of the designation
      of
      the second arbitrator, the AAA shall choose the third. The parties shall bear
      the costs of the arbitration in equal shares, subject to the right of the
      arbitrators to reallocate the costs in their award as provided in the AAA rules.
      The parties shall bear their own attorneys’ fees in connection with the
      arbitration, and the arbitrators may not reallocate the attorneys’ fees in
      conjunction with their award. The arbitrators shall render their decision within
      ninety (90) calendar days of the selection of the third arbitrator. Any
      litigation brought to enforce an arbitration award shall be brought in a
      Commonwealth or federal court in the Eastern District of the Commonwealth of
      Broward County, Florida, USA; however, the parties shall also have the right
      to
      enforce a judgment of such a court in any court of competent jurisdiction.
      For
      the purpose of aiding the arbitration and/or preserving the rights of a party
      during the pendency of an arbitration, each party shall have the right to seek
      temporary or preliminary injunctive relief from the arbitration panel or any
      court of competent jurisdiction located in Broward County, Florida, USA, which
      shall not be a waiver of this arbitration agreement. 

     

    10. MISCELLANEOUS.

     

    10.1. Expenses.
      Each
      party shall be responsible for its own expenses incurred in connection with
      the
      performance of its obligations hereunder.

     

    10.2. Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Florida without regard to its principles of conflicts of
      laws.

     

    10.3. Severability.
      In the
      event that any provision of this Agreement shall be unenforceable or invalid
      under any applicable law or be so held by applicable court decision,
such
      unenforceability or invalidity shall not render this Agreement unenforceable
      or
      invalid as a whole, and, in such event, such provision shall be changed and
      interpreted so as to best accomplish the objectives of such provision within
      the
      limits of applicable law or applicable court decision.

     

    10.4. Notices.
      Any
      notice or other communication required or permitted to be delivered to any
      party
      under this Agreement shall be in writing and shall be deemed properly delivered,
      given and received when delivered by hand, by registered mail (return receipt
      requested), by courier or express delivery service, by e-mail (against of
      receipt of confirmation of delivery) or by telecopier (against receipt of
      answerback confirming delivery) during business hours to the address or
      telecopier number, or e-mail address set forth beneath the name of such party
      below or when delivery as 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    10.5. described
      above is refused by the intended recipient, unless such party has given a notice
      of a change of address in writing pursuant to the foregoing. 

     

    If
      to
      Tralliance:

    Tralliance
      Corporation

    110
      East
      Broward Blvd., Suite 1400

    Ft.
      Lauderdale, FL 33301

    Attention:
      Edward A. Cespedes

                       
      Chief Executive Officer

    Phone:
      954-769-5948

    Fax: 
      954-769-5930

    

    If
      to Labigroup:

    Labigroup,
      LLC

    110
      East
      Broward Blvd., Suite 1400

    Ft.
      Lauderdale, FL 33301

    Attention:
      Michael S. Egan

                      
      Managing Member

    Phone:
      954-769-5959

    Fax: 
      954-769-5930

    

    10.6. Labigroup
      Entities.
      Tralliance understands that Labigroup is entering into this Agreement to
      purchase “.travel” domain names for its own benefit and for the benefit of its
      current and future parent entities, subsidiaries, and/or Affiliates
      (collectively, the “Labigroup Entities”). Accordingly, Tralliance agrees that
      any “.travel” domain names provided by it to Labigroup hereunder will be
      provided by Tralliance for the use and benefit of all Labigroup Entities, and
      Tralliance further agrees that any “.travel” domain names Registered or Renewed
      hereunder in the name of any Labigroup Entity will be included in any minimum
      Registration, Renewal or other minimum requirements hereunder and that all
      protective and remedial provisions of this Agreement may be enforced against
      Tralliance by any Labigroup Entity. 

     

    10.7. Third-Party
      Beneficiaries.
      Except
      as contemplated by Section 10.5 above, this Agreement shall not be construed
      to
      create any obligation by either party to any non-party to this
      Agreement.

     

    10.8. Relationship
      of the Parties.
      Nothing
      in this Agreement shall be construed as creating an employer-employee or agency
      relationship, a partnership or a joint venture between the parties.

     

    10.9. Assignment.
      Except
      as contemplated by Section 10.5 above, Labigroup shall not assign or otherwise
      transfer all or any portion of its rights or obligations under this Agreement
      without prior written consent of Tralliance.

     

    10.10. Force
      Majeure.
      Except
      for the non-payment of Fees, neither party shall be liable to the other for
      any
      loss or damage resulting from any cause beyond its reasonable control (a “Force
      Majeure Event”) including, but not limited to, insurrection or civil disorder,
      war or military operations, national or local emergency, acts or omissions
      of
      government or other competent authority, compliance with any statutory
      obligation or executive order, industrial disputes of any kind (whether or
      not
      involving either party's employees), fire, lightning, explosion, flood,
      subsidence, weather of exceptional severity, equipment or facilities shortages
      which are being experienced by providers of telecommunications services
      generally, or other similar force beyond such Party’s reasonable control, and
      acts or omissions of persons for whom neither party is responsible. Upon
      occurrence of a Force Majeure Event and to the extent such occurrence interferes
      with either party's performance of this Agreement, such party shall be excused
      from performance of its obligations (other than payment obligations) during
      the
      first six (6) months of such interference, provided that such party uses
      commercially reasonable efforts to avoid or remove such causes of nonperformance
      as soon as possible.

     

    10.11. Waivers. No
      failure on the part of either party to exercise any power, right, privilege
      or
      remedy under this Agreement, and no delay on the part of either party in
      exercising any power, right, privilege or remedy under this Agreement, shall
      operate as a waiver of such power, right, privilege or remedy; and no single
      or
      partial exercise or waiver of any such power, right, privilege or remedy shall
      preclude any other or further exercise thereof or of any other power, right,
      privilege or remedy. Neither party shall be deemed to have waived any claim
      arising out of this Agreement, or any power, right, privilege or remedy under
      this Agreement, unless the waiver of such claim, power, right, privilege or
      remedy is expressly set forth in a written instrument duly executed and
      delivered on behalf of such party; and any such waiver shall not be applicable
      or have any effect except in the specific instance in which it is
      given.

     

    10.12. Further
      Assurances.
      Each
      party hereto shall execute and/or cause to be delivered to the other party
      hereto such instruments and other documents, and shall take such other actions,
      as such other party may reasonably request for the purpose of carrying out
      or
      evidencing any of the transactions contemplated by this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    10.13. Counterparts.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument.

     

    10.14. Entire
      Agreement.
      This
      Agreement, including any Addenda, Exhibits or Schedules hereto, completely
      and exclusively state the Agreement of the Parties regarding only to the
      particular subject matter contained herein, and supersede all prior agreements
      and understandings, whether written or oral, with respect to the subject matter
      of this Agreement. This
      Agreement shall not be modified except by a subsequently dated written amendment
      (e.g., Addendum) or appendix signed on behalf of Tralliance
      and
Labigroup
      by their
      duly authorized representatives.

     

    In
      WITNESS
      WHEREOF,
      the
      parties hereto have executed this Agreement as of the date and year set forth
      above.

     

    
      	Tralliance
              Corporation	 	 	Labigroup
              Holdings, LLC
	 	 	 	 
	
            	 	
            	
            
	By:	 	 	By:
	
              
                

              

              Name: 
Edward
                A. Cespedes

            	 	 	
              
                

              

              Name:
                Michael
                S. Egan

            
	
              Title:   
Chief
                Executive Officer

            	 	 	
              Title:
                  Managing
                MemberExhibit
      10.1

    PREFERRED
      STOCK PURCHASE AGREEMENT

    

    BETWEEN

    

    CHINA
      KANGTAI CACTUS BIO-TECH, INC.

    

    AND

    

    T
      SQUARED INVESTMENTS LLC 

    

    DATED

    

    MARCH
      21, 2008

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    PREFERRED
      STOCK PURCHASE AGREEMENT

    

    This
      PREFERRED STOCK PURCHASE AGREEMENT (the "Agreement")
      is
      made and entered into as of the 21 day of March, 2008 between China
      Kangtai Cactus Bio-Tech, Inc., a
      corporation organized and existing under the laws of the State of Nevada (“CKGT”
or the “Company”)
      and
T
      Squared Investments LLC, a
      Delaware limited liability company, (“T
      Squared Investments”
or
      “Investor”).

    

    PRELIMINARY
      STATEMENT:

     

    WHEREAS,
      the
      Investor wishes to purchase from the Company, upon the terms and subject to
      the
      conditions of this Agreement, Eight Hundred Thirty Three Thousand Three Hundred
      Thirty Three (833,333) shares of preferred stock of the Company, with such
      preferred stock being as described in the Certificate of Designations, Rights
      and Preferences (the “Certificate
      of Designations”)
      in
      substantially the form attached hereto as Exhibit
      A
      (the
“Preferred
      Stock”)
      for the
      Initial Purchase Price set forth in Section 1.3.13 hereof. Subject to the
      limitations set forth herein and in the Certificate of Designation, the
      Preferred Stock shall be initially convertible into shares of common stock
      of
      the Company at any time at a conversion ratio of One (1) share of Common Stock
      for One (1) share of Preferred Stock (the “Conversion
      Value”).
      In
      addition, the Company will issue to the Investor Common Stock Purchase Warrants
      (the “Warrants”)
      to
      purchase up to an additional 2,750,000 shares of common stock of the Company
      at
      exercise prices as stated in the Warrants; and 

     

    WHEREAS,
      the
      parties intend to memorialize the purchase and sale of such Preferred Stock
      and
      the Warrants.

    

    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, and are incorporated
      herein by this reference.

    

      PREFERRED
        STOCK PURCHASE AGREEMENT BETWEEN CHINA KANGTAI CACTUS BIO-TECH,
        INC. AND
        T SQUARED INVESTMENTS LLC

      

        PAGE  1

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.2 Superseder.
      This
      Agreement, to the extent that it is inconsistent with any other instrument
      or
      understanding among the parties governing the affairs of the Company, shall
      supersede such instrument or understanding to the fullest extent permitted
      by
      law. A copy of this Agreement shall be filed at the Company’s principal
      office.

     

    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 Articles 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 (as defined herein) by
      the
      Investor to the company is completed pursuant to this Agreement to purchase
      the
      Preferred Stock and Warrants, which shall occur on or before March 21,
      2008.

     

    1.3.7 “Common
      Stock”
means
      shares of common stock of the Company, par value $0.001 per share. 

     

    1.3.8 [Reserved].

     

    1.3.9 "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, and (c) securities issued pursuant to acquisitions
      or strategic transactions, provided any such issuance shall only be to a Person
      which is, itself or through its subsidiaries, an operating company in a business
      synergistic with the business of the Company and in which the Company receives
      benefits in addition to the investment of funds, but shall not include a
      transaction in which the Company is issuing securities primarily for the purpose
      of raising capital or to an entity whose primary business is investing in
      securities.

    

      PREFERRED
        STOCK PURCHASE AGREEMENT BETWEEN CHINA KANGTAI CACTUS BIO-TECH, INC. AND
        T
        SQUARED INVESTMENTS LLC

       

    

    PAGE  2

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.3.10 "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 and/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 the Registration Rights Agreement or to perform its
      obligations under any other material agreement.

     

    1.3.11 “Nevada
      Act”
means
      the Nevada General Corporation Law, as amended.

     

    1.3.12 “Person”
means
      an individual, partnership, firm, limited liability company, trust, joint
      venture, association, corporation, or any other legal entity.

     

    1.3.13 “Initial Purchase
      Price”
means
      the Five Hundred Thousand Dollars ($500,000.00) paid by the Investor to the
      Company for the Preferred Stock and the Warrants.

     

    1.3.14 “Registration
      Rights Agreement"
      shall
      mean the registration rights agreement between the Investor and the Company
      attached hereto as Exhibit
      B.

     

    1.3.15 "Registration
      Statement"
      shall
      mean the registration statement under the 1933 Act to be filed with the
      Securities and Exchange Commission for the registration of the Shares pursuant
      to the Registration Rights Agreement attached hereto as Exhibit
      B.

     

    1.3.16 “SEC”
means
      the Securities and Exchange Commission.

     

    1.3.17 "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 until such time as the Company
      no
      longer has an obligation to maintain the effectiveness of a Registration
      Statement as set forth in the Registration Rights Agreement.

     

    1.3.18
      "Shares"
      shall
      mean, collectively, the shares of Common Stock of the Company issued upon
      conversion of the Preferred Stock subscribed for hereunder and those shares
      of
      Common Stock issuable to the Investor upon exercise of the
      Warrants.

     

    1.3.19
      “Subsequent
      Financing”
shall
      mean any offer and sale of shares of Preferred Stock or debt that is initially
      convertible into shares of Common Stock or otherwise senior or superior to
      the
      Preferred Stock.

     

    1.3.20
      “Transaction
      Documents”
shall
      mean this Agreement, all Schedules and Exhibits attached hereto and all other
      documents and instruments to be executed and 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.

    

    PREFERRED
      STOCK PURCHASE AGREEMENT BETWEEN CHINA KANGTAI CACTUS BIO-TECH, INC. AND T
      SQUARED INVESTMENTS LLC

     

    PAGE  3

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.3.21 “Warrants”
shall
      mean the Common Stock Purchase Warrants in the form attached hereto Exhibit
      C.

    

    ARTICLE
      II

    

    SALE
      AND PURCHASE OF 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 Investor, and the Investor
      agrees to purchase from the Company, on the Closing Date 833,333 shares of
      Preferred Stock and the Warrants for the (the “Initial Purchase
      Price”)
      of
      Five Hundred Thousand Dollars ($500,000.00). The Purchase Price shall be paid
      by
      the Investor to the Company on the Closing Date by a wire transfer or check
      of
      the Purchase Price in immediately available funds payable to an account at
      the
      direction of the Company. The Company shall cause the Preferred Stock and the
      Warrants to be issued to the Investor upon the receipt of the Initial Purchase
      Price. The Company shall register the shares of Common Stock into which the
      Preferred Stock is convertible pursuant to the terms and conditions of a
      Registration Rights Agreement attached hereto as Exhibit
      B.

     

    (b) Each
      share of Preferred stock shall initially be convertible by the Investor into
      One
      (1.0) share of Common Stock; provided, however, that the Investor shall not
      be
      entitled to convert the Preferred Stock into shares of Common Stock that would
      result in beneficial ownership by the Investor and its affiliates of more than
      4.9% 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.

     

    (c) Upon
      execution and delivery of this Agreement and the Company’s receipt of the
      Initial Purchase Price from the Investor, the Company shall issue to the
      Investor the Warrant to purchase an aggregate of 2,750,000 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
      C;
      provided, however, that the Investor shall not be entitled to exercise the
      Warrants and receive shares of Common Stock that would result in beneficial
      ownership by the Investor and its affiliates of more than 4.9% 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. 

    

      PREFERRED
        STOCK PURCHASE AGREEMENT BETWEEN CHINA KANGTAI CACTUS BIO-TECH, INC. AND
        T
        SQUARED INVESTMENTS LLC

       

    

    PAGE  4

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.2 Purchase
      Price.
      The
      Initial Purchase Price shall be delivered by the Investor in the form of a
      check
      or wire transfer of immediately available funds made payable to the Company
      in
      United States Dollars from the Investor on the Closing Date.

    

    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. 

    

    3.2 Deliveries
      by the Company.
      In
      addition to and without limiting any other provision of this Agreement, the
      Company agrees to deliver, or cause to be delivered, to the escrow agent under
      the Escrow Agreement, 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)  	
              The
                executed Registration Rights
                Agreement;

            

    

    
      	 	 

    

    
      	(d)  	
              Certifications
                in form and substance acceptable to the Company and the Investor
                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 and from the Company or Investor, as appropriate, to the effect
                that reasonable reserves for any other commissions or compensation
                that
                may be claimed by any broker or agent have been set
                aside;

            

    

    
      	 	 

    

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

            

    

    
      	 	 

    

    
      	(f)  	
              Such
                other documents or certificates as shall be reasonably requested
                by
                Investor or its counsel; and

            

    

     

    
      	(g)  	
              Good
                Standing Certificate from the State of
                Nevada.

            

    

     

    3.3 Deliveries
      by Investor.
      In
      addition to and without limiting any other provision of this Agreement, the
      Investor agrees to deliver, or cause to be delivered, to the Company, the
      following: 

     

    
      	(a)  	
              A
                deposit in the amount of the Investor Funds in immediately available
                funds;

            

    

    
      	 	 

    

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

            

    

    
      	 	 

    

    
      	(c)  	
              The
                executed Registration Rights Agreement;

            

    

    
      	 	 

    

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

            

    

     

    
      PREFERRED
        STOCK PURCHASE AGREEMENT BETWEEN CHINA KANGTAI CACTUS BIO-TECH, INC. AND
        T
        SQUARED INVESTMENTS LLC

       

    

    PAGE  5

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    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 Investor shall, upon request, on or after the Closing Date,
      cooperate with each other (specifically, the Company shall cooperate with the
      Investor, and the Investor 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. 

     

    3.5 Waiver.
      The
      Investor 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. The Investor may also waive any of the requirements of the
      Company under the Escrow Agreement.

    

    ARTICLE
      IV

    

    REPRESENTATIONS
      AND WARRANTIES OF 

    THE
      COMPANY

    

    Except
      as
      set forth in the Company’s SEC Documents and the Disclosure Schedules which
      Disclosure Schedules shall be deemed a part hereof and shall qualify any
      representation or otherwise made herein to the extent of the disclosure
      contained in the corresponding section of the Disclosure Schedules, the Company
      represents and warrants to the Investor as of the date hereof and as of Closing
      (which warranties and representations shall survive the Closing regardless
      of
      what examinations, inspections, audits and other investigations the Investor
      has
      heretofore made or may hereinafter make with respect to such warranties and
      representations) 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 Nevada, 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.

    

      PREFERRED
        STOCK PURCHASE AGREEMENT BETWEEN CHINA KANGTAI CACTUS BIO-TECH, INC. AND
        T
        SQUARED INVESTMENTS LLC

       

    

    PAGE  6

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    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 Securities and Exchange
      Commission 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 April 2, 2007 and as amended on
      February 6, 2008 with the Securities and Exchange Commission and updated on
      all
      subsequent SEC Documents. All shares of capital stock have been duly authorized
      and are validly issued, and are fully paid and no 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
      200,000,000 shares of common Stock ($.001 par value) and 200,000,000 shares
      of
      preferred stock ($.001 par value), of which approximately 17,739,625 share
      of
      common Stock are issued and outstanding as of March 21, 2008. As of Closing,
      following the issuance by the Company of the Preferred Stock to the Investor,
      the authorized capital stock of the Company will consist of 200,000,000 shares
      of Common Stock ($.001 par value) and 200,000,000 shares of preferred stock
      ($.001 par value), of which approximately 17,739,625 share of Common Stock
      and
      833,333 shares of preferred stock shall be issued and outstanding. 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 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
      Schedule 4.3, 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. 

     

    4.3.3
      Except pursuant to this Agreement and as set forth in Schedule 4.3 hereto,
      and
      as set forth in the Company’s SEC Documents, filed with the SEC, as of the date
      hereof and as of the Closing Date, there are no 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.

    

      PREFERRED
        STOCK PURCHASE AGREEMENT BETWEEN CHINA KANGTAI CACTUS BIO-TECH, INC. AND
        T
        SQUARED INVESTMENTS LLC

       

    

    PAGE  7

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    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 Investor, the Company Shares hereunder, 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, the Investor will acquire good and marketable title to such 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 is 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 their respective 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 CHINA KANGTAI CACTUS BIO-TECH, INC. AND
        T
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    4.6 Report
      and Financial Statements.
      Amendment No. 1 to the Company’s Annual Report on Form 10-K for the fiscal year
      ended December 31, 2006, filed on February 6, 2008 with the SEC contains the
      audited financial statements of the Company and quarterly reports on Form 10-QSB
      for subsequent quarters filed with the SEC contains the unaudited interim
      financial statements of the Company (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 its 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 Investor 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 National Association of Securities Dealers, 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.
      The Company has not provided to the Investor any information that, according
      to
      applicable law, rule or regulation, should have been disclosed publicly prior
      to
      the date hereof by the Company, but which has not been so disclosed. 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.

    

      PREFERRED
        STOCK PURCHASE AGREEMENT BETWEEN CHINA KANGTAI CACTUS BIO-TECH, INC. AND
        T
        SQUARED INVESTMENTS LLC

       

    

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    4.10 Litigation.
      To the
      knowledge of the Company, no litigation, claim, or other proceeding before
      any
      court or governmental agency is pending or to the knowledge of the Company,
      threatened against the Company, the prosecution or outcome of which may have
      a
      Material Adverse Effect.

     

    4.11 Exemption
      from Registration.
      Subject
      to the accuracy of the Investor’s representations in Article V, except as
      required pursuant to the Registration Rights Agreement, the sale of the Common
      Stock and Warrants by the Company to the Investor will not require registration
      under the 1933 Act, but may require registration under New York state securities
      law if applicable to the Investor. When validly converted in accordance with
      the
      terms of the Preferred Stock, and upon exercise of the Warrants in accordance
      with their terms, the Shares underlying the Preferred Stock and the Warrants
      will be duly and validly issued, fully paid, and non-assessable. The Company
      is
      issuing the Preferred Stock and the Warrants in accordance with and in reliance
      upon the exemption from securities registration afforded, inter alia, by Rule
      506 under Regulation D as promulgated by the SEC under the 1933 Act, and/or
      Section 4(2) of the 1933 Act; provided, however, that certain filings and
      registrations may be required under state securities “blue sky” laws depending
      upon the residency of the Investor.

     

    4.12 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.

     

    4.13 No
      Material Adverse Effect.
      Except
      as set forth in Schedule 4.13 attached hereto and in the Company’s SEC
      Documents, since June 30, 2007, 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 June 30, 2004, 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. 

     

    4.14 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.

    

      PREFERRED
        STOCK PURCHASE AGREEMENT BETWEEN CHINA KANGTAI CACTUS BIO-TECH, INC. AND
        T
        SQUARED INVESTMENTS LLC

       

    

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    4.15 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.

     

    4.16 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
      Investor 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.

     

    ARTICLE
      V

    

    REPRESENTATIONS
      AND WARRANTIES OF THE INVESTOR

     

    The
      Investor represents and warrants to the Company that:

    

    5.1 Organization
      and Standing of the Investor.
      The
      Investor is a limited liability company duly formed, validly existing and in
      good standing under the laws of the State of Delaware. 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. The Investor was not formed for the
      purpose of investing solely in the Preferred Stock, the Warrants or the shares
      of Common Stock which are the subject of this Agreement.

     

    5.2 Authorization
      and Power.
      The
      Investor has the requisite power and authority to enter into and perform this
      Agreement and to purchase the securities being sold to it hereunder. The
      execution, delivery and performance of this Agreement by the Investor and the
      consummation by the Investor of the transactions contemplated hereby have been
      duly authorized by all necessary limited liability company action where
      appropriate. This Agreement and the Registration Rights Agreement have been
      duly
      executed and delivered by the Investor and at the Closing shall constitute
      valid
      and binding obligations of the Investor enforceable against the 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.

    

      PREFERRED
        STOCK PURCHASE AGREEMENT BETWEEN CHINA KANGTAI CACTUS BIO-TECH, INC. AND
        T
        SQUARED INVESTMENTS LLC

       

    

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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 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.
      The
      Investor is (i) an “accredited investor” as that term is defined in Rule 501 of
      Regulation D promulgated under the 1933 Act by reason of Rule 501(a)(3) and
      (6),
      (ii) experienced in making investments of the kind described in this Agreement
      and the related documents, (iii) able, by reason of the business and financial
      experience of its officers (if an entity) and professional advisors (who are
      not
      affiliated with or compensated in any way by the Company or any of its
      affiliates or selling agents), to protect its own interests in connection with
      the transactions described in this Agreement, and the related documents, and
      (iv) able to afford the entire loss of its investment in the securities being
      purchased by the Investor from the Company. 

     

    5.6 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.

     

    5.7 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.

    

      PREFERRED
        STOCK PURCHASE AGREEMENT BETWEEN CHINA KANGTAI CACTUS BIO-TECH, INC. AND
        T
        SQUARED INVESTMENTS LLC

       

    

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    5.8 Risk
      Factors.
      The
      Investor understands that such Investor’s investment in the securities being
      purchased by the Investor 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
      Closing the Company shall disperse to the Investor Fifty Thousand Dollars
      (50,000.00) for due diligence expenses. Upon the election of the Investor to
      exercise the Investor’s right to purchase an additional $1,000,000 in Preferred
      Stock in the Company as set for in Section
      6.16 below,
      the Company shall disperse to the Investor Twenty Five Thousand Dollars
      ($25,000.00) at the closing of such financing for due diligence
      expenses.

     

    ARTICLE
      VI

    

    COVENANTS
      OF THE COMPANY

     

    6.1 Registration
      Rights.
      The
      Company shall cause the Registration Rights Agreement to remain in full force
      and effect according to the provisions of the Registration Rights Agreement
      and
      the Company shall comply in all material respects with the terms
      thereof.

     

    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 of
      Common Stock underlying the Preferred Stock and Warrants. 

     

    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.

    

      PREFERRED
        STOCK PURCHASE AGREEMENT BETWEEN CHINA KANGTAI CACTUS BIO-TECH, INC. AND
        T
        SQUARED INVESTMENTS LLC

       

    

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    6.4 Exchange
      Act Registration.
      The
      Company (a) will continue its obligation to report to the SEC under 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, and will not take any action or file any document (whether
      or not permitted by the 1934 Act or the rules thereunder) to terminate or
      suspend any such registration or to terminate or suspend its reporting and
      filing obligations under the 1934 until the Investors have disposed of all
      of
      their Shares.

     

    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 agreement 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.

     

    6.6 Listing,
      Securities Exchange Act of 1934 and Rule 144
      Requirements.
      The
      Company is required to maintain their current listing on OTC Bulletin Board
      or a
      listing on a national exchange and maintain their status as a Company regulated
      by Securities Exchange Act of 1934 and if the Company is current currently
      listed on the Pink Sheets the Company must be fully reporting per Rule 144
      until
      such time as they are regulated by the Securities Exchange Act of 1934. If
      for
      any time post Closing the Company is no longer regulated by the Securities
      Exchange Act of 1934 and is not a fully reporting Company, then the Company
      shall pay to the Investors as liquidated damages and not as a penalty, one
      percent
      (1%)
      a month
      of the Initial Purchase Price plus the Additional Investment Right as described
      in Section 6.16, should such investment right be exercised, in cash or PIK
      at
      the option of the Investor. Such damages shall cease at the time the Company
      begins complying with the standards as mentioned above in Section
      6.6.

     

    6.7 Convertible
      Debt.
      On
      or
      prior to the Closing Date, the Company will cause to be cancelled all
      convertible debt in the Company. For a period of two years from the closing
      the
      Company will not issue any convertible debt below $0.90 per share.

     

    6.8 Reset
      Equity Deals.
      On
      or
      prior to the Closing Date, the Company will cause to be cancelled any and all
      reset features related to any shares outstanding that could result in additional
      shares being issued. For a period of five years from the closing the Company
      will not enter into any transactions that have any reset features that could
      result in additional shares being issued. 

     

    6.9 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
      fees in connection with the sale of such securities) for sales and marketing,
      working capital and acquisitions.

    

      PREFERRED
        STOCK PURCHASE AGREEMENT BETWEEN CHINA KANGTAI CACTUS BIO-TECH, INC. AND
        T
        SQUARED INVESTMENTS LLC

       

    

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    6.10 Right
      of First Refusal.
      Each
      Investor shall have the right to participate in any subsequent funding by the
      Company on a pro rata basis at one hundred percent (100%) of the offering price
      for a three month period following the Closing. 

     

    6.11 Price
      Adjustment.
      From
      the
      date hereof until such time as no Purchaser holds any of the Securities, the
      Company closes on the sale of a note or notes, shares of Common Stock, or shares
      of any class of Preferred Stock at a price per share of Common Stock, or with
      a
      conversion right to acquire Common Stock at a price per share of Common Stock,
      that is less than the Conversion Price (as adjusted to the capitalization per
      share as of the Closing Date, following any stock splits, stock dividends,
      or
      the like) (collectively, the “Subsequent Conversion Price”), the Company shall
      make a post-Closing adjustment in the Conversion Price so that the effective
      price per share paid by the Investor is adjusted to a price determined by
      multiplying such Conversion Price by a fraction, the numerator of which shall
      be
      the number of shares of Common Stock Outstanding (defined below) immediately
      prior to such issuance plus the number of shares of Common Stock that the
      aggregate consideration received by the Company for such issuance would purchase
      at such Conversion Price; and the denominator of which shall be the number
      of
      shares of Common Stock Outstanding (as defined below) immediately prior to
      such
      issuance plus the number of shares issued at such issuance. For purposes of
      this
Section
      6.11,
      the
      term “Common Stock Outstanding” shall mean and include the following: (1)
      outstanding Common Stock, (2) Common Stock issuable upon conversion of
      outstanding Preferred Stock, (3) Common Stock issuable upon exercise of
      outstanding warrants. Shares described in (1) through (4) above shall be
      included whether vested or unvested, whether contingent or non-contingent and
      whether exercisable or not yet exercisable.

     

    6.12 Price
      Adjustment Based on Earnings Per Share.
      In
      the
      event the Company earns between $0.0670 and $0.0335 (50% Decline) per share
      (where such earnings in this paragraph shall always be defined as earnings
      on a
      pre tax fully diluted basis (including dilution from any options, warrants
      and
      convertible securities) as reported for the audited sixth months ended
June
      30,
2008
      from
continuing
      operations before any non-cash
      items the then current Conversion Price to the Investor at the time the audited
      numbers are reported to the SEC shall be decrease
      proportionately by 0% if the pre tax earnings (for first six months ended June
      30, 2008) are $0.0670
      per
      share or greater and by 50% if the pre tax earnings (for first six months ended
      June 30, 2008) are $0.0335
      per
      share (50%
      decrease). For example if the earnings are $ 0.0536 per share or less (20%
      Decline) then the then current Conversion Price to the investor shall be reduced
      by 20%. Such adjustment shall be made automatically within five business days
      of
      the audited numbers being reported to the SEC. 

     

    In
      the
      event the Company earns between $0.1559 and $0.0780 (50% Decline) per share
      (where such earnings in this paragraph shall always be defined as earnings
      on a
      pre tax fully diluted basis (including dilution from any options, warrants
      and
      convertible securities) as reported for the audited fiscal year ending 2008
      from
      continuing operations before any non-cash items the then current Conversion
      Price to the Investor at the time the audited numbers are reported to the SEC
      shall be decrease proportionately by 0% if the pre tax earnings are $0.1559
      per
      share or greater and by 50% if the pre tax earnings are $0.0780 per share (50%
      decrease). For example if the earnings are $ 0.1247 per share or less (20%
      Decline) then the then current Conversion Price to the investor shall be reduced
      by 20%. Such adjustment shall be made automatically within five business days
      of
      the audited numbers being reported to the SEC. 

    

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        STOCK PURCHASE AGREEMENT BETWEEN CHINA KANGTAI CACTUS BIO-TECH, INC. AND
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        SQUARED INVESTMENTS LLC

       

    

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    6.13 Insider
      Selling.
      The
      earliest any “Insiders” can start selling their shares shall be six months from
      registration effectiveness. Insiders shall include all officers, consultants
      and
      directors of the Company. The managing members of the Investor and the Investor
      shall not be considered “Insiders”.

     

    6.14 Subsequent
      Equity Sales.
      From
      the
      date hereof until such time as no Purchaser holds any of the Securities, 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). 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.
      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 Purchaser 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 6.14 shall not apply in respect of an Exempt Issuance, except that
      no
      Variable Rate Transaction or MFN Transaction shall be an Exempt Issuance, nor
      shall this Section 6.14 prevent the Company from potentially granting
      anti-dilution protection to any potential future investors in the Company.
      

     

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

     

    6.16 Investor
      Additional Investment Right.
      The
      Investor has the right to purchase an additional $1,000,000 in Preferred Stock
      convertible the Company at $1.00 per share on or before 90 days post Closing.
      The Preferred Stock will have the same rights, covenants and warranties as
      the
      initial Preferred Stock (the “Call Right”). The Call Right will also have the
      same warrants coverage as the upfront investment in this Agreement; however
      the
      Call Right Warrants will have an exercise price of 125% of the respective
      exercise prices of the warrants presented in this Agreement. As illustrated
      in
      the Call Right warrants, such warrants in the Call Right will have a forced
      exercise provision at $1.90 per share and $2.50 per share, respectively. The
      shares issuable upon conversion of the Preferred Stock pursuant to this Call
      Right is to be included in the registration statement to be filed per the
      Registration Rights Agreement and have the same rights and warranties per the
      Registration Rights Agreement.

    

      PREFERRED
        STOCK PURCHASE AGREEMENT BETWEEN CHINA KANGTAI CACTUS BIO-TECH, INC. AND
        T
        SQUARED INVESTMENTS LLC

       

      PAGE  16

       

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    ARTICLE
      VII

    

    COVENANTS
      OF THE INVESTOR

    

    7.1 Compliance
      with Law.
      The
      Investor's trading activities with respect to shares of the Company's 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 Company's Common Stock is listed. 

     

    7.2 Transfer
      Restrictions. The
      Investor’s acknowledge that (1) the Preferred Stock, Warrants and shares
      underlying the Preferred Stock and Warrants 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 and shares underlying
      the Notes and Warrants 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 and shares underlying the Preferred Stock and Warrants
      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.

     

    7.3 Restrictive
      Legend. The
      Investor acknowledges and agrees that the Preferred Stock, the Warrants and
      the
      Shares underlying the Preferred Stock and Warrants, and, until such time as
      the
      Shares underlying the Preferred Stock and Warrants 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."

    7.4 Amendment
      to Articles of Incorporation.
      Investor
      hereby agrees to vote any shares of capital stock that it may own directly
      or
      beneficially, for the amendment to the Articles. Pending adoption of such
      amendment, Investor hereby agrees for itself and its successors and assigns
      that
      neither this Section 7.4 or any restriction on exercise of the Warrant shall
      be
      amended, modified or waived without the consent of the holders of a majority
      of
      the shares of Common Stock held by Persons who are not Affiliates of the
      Company, or the Investor or Affiliates of the Investor.

    

      PREFERRED
        STOCK PURCHASE AGREEMENT BETWEEN CHINA KANGTAI CACTUS BIO-TECH, INC. AND
        T
        SQUARED INVESTMENTS LLC

       

    

    PAGE  17

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    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 as of the Closing Date.

    

    8.3 Compliance
      with Covenants.
      The
      Investor 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.

    

    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. 

    

    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.

    

      PREFERRED
        STOCK PURCHASE AGREEMENT BETWEEN CHINA KANGTAI CACTUS BIO-TECH, INC. AND
        T
        SQUARED INVESTMENTS LLC

       

    

    PAGE  18

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    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 as of the Closing Date.

     

    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 Investor 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 Investor set forth in this Agreement, or the
      Investor 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 Investor, 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.

     

    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 Investor or any of their respective officers, directors, agents
      or other representatives and all rights and obligations of any party hereto
      shall cease; provided that in the event of a Terminating Breach, the breaching
      party shall be liable to the non-breaching party for all costs and expenses
      incurred by the non-breaching party not to exceed $50,000.00.

     

    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.

    

      PREFERRED
        STOCK PURCHASE AGREEMENT BETWEEN CHINA KANGTAI CACTUS BIO-TECH, INC. AND
        T
        SQUARED INVESTMENTS LLC

       

    

    PAGE  19

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    10.4 Waiver.
      At any
      time prior to the Closing Date, the Company or the Investor, 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 his or 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
      Investor such due diligence expenses as described in section 5.10.

     

    11.2 Indemnification.
      The
      Investor agrees 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
      Investor 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 an amount equal to the Initial Purchase
      Price hereunder. The indemnification by the Investor shall be limited to the
      Initial Purchase Price.

     

    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.

    

    PREFERRED
      STOCK PURCHASE AGREEMENT BETWEEN CHINA KANGTAI CACTUS BIO-TECH, INC. AND T
      SQUARED INVESTMENTS LLC

     

    PAGE  20

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    11.4 Entire
      Agreement.
      This
      Agreement (together with the Schedule, Exhibits, Warrants and documents referred
      to herein) constitute the entire agreement of the parties and supersede 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) on
      the
      date delivered by an overnight courier service; or (iv) 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:

    

    99
      Taibei
      Road

    Limin
      Economic and Technological Development Zone

    Harbin,
      China 150025

    Facsimile
      No.: +86 451 57351551

    Attention:
      Jinjiang Wang

    

    With
      a
      copy to:

     

    Crone
      Rozynko, LLP

    101
      Montgomery Street, Suite 1950

    San
      Francisco, CA 94104

    Facsimile
      No.: (415) 955-8910

    Attn:
      Alisande M. Rozynko, Esq.

     

    If
      to
      the Investor:

    

    T
      Squared
      Investments LLC

    c/o
      T
      Squared Capital LLC

    1325
      Sixth Avenue, Floor 28

    New
      York,
      New York 10019

    Attn:
      Thomas M. Sauve

    

    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.

    

    PREFERRED
      STOCK PURCHASE AGREEMENT BETWEEN CHINA KANGTAI CACTUS BIO-TECH, INC. AND T
      SQUARED INVESTMENTS LLC

     

    PAGE  21

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    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. 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 Securities and Exchange Commission
      filings.
      The
      Investor shall reasonably assist and cooperate with the Company in the
      preparation of all filings with the SEC after the Closing Date due 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.

     

    11.13 Survival.
      The
      representations, warranties, covenants and agreements made herein shall survive
      the Closing of the transaction contemplated hereby. 

    

    PREFERRED
      STOCK PURCHASE AGREEMENT BETWEEN CHINA KANGTAI CACTUS BIO-TECH, INC. AND T
      SQUARED INVESTMENTS LLC

     

    PAGE  22

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    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]

    PREFERRED
      STOCK PURCHASE AGREEMENT BETWEEN CHINA KANGTAI CACTUS BIO-TECH, INC. AND T
      SQUARED INVESTMENTS LLC

     

    PAGE  23

     

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    IN
      WITNESS WHEREOF,
      the
      Investors and the Company have as of the date first written above executed
      this
      Agreement.

    

    THE
      COMPANY:

     

    
      CHINA
        KANGTAI CACTUS BIO-TECH, INC.

       

    

    
      	 	 	 	 
	By:
              /s/
              Jinjiang Wang	 	 	
            
	
              
                

              

              Jinjiang
                Wang

              President
                and CEO

            	 	 	
            

    

     

    INVESTOR:

    

    T
      Squared
      Investments LLC

    By:
      T
      Squared Capital LLC, Managing Member

     

    
      	 	 	 	 
	By:
              /s/
              Thomas Sauve	 	 	
            
	
              
                

              

              
                Thomas
                  Sauve

                Managing
                  Member

                1325
                  Sixth Avenue, Floor 28

                New
                  York NY 10019

              

            

    

     

    PREFERRED
      STOCK PURCHASE AGREEMENT BETWEEN CHINA KANGTAI CACTUS BIO-TECH, INC. AND T
      SQUARED INVESTMENTS LLC

     

    PAGE  24

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    Schedule
      A

    

    
      	
               

               

               

               

              NAME
                AND ADDRESS

            	 	
               

               

               

              AMOUNT
                OF INVESTMENT

            	 	
              NUMBER
                OF SHARES 

              OF
                COMMON STOCK 

              INTO
                WHICH PREFERRED 

              STOCK
                IS CONVERTIBLE

            	 	
               

               

              NUMBER
                OF SHARES UNDERLYING WARRANTS

            	 
	
               

              T
                Squared Investments LLC

              1325
                Sixth Avenue, Floor 28

              New
                York, New York 10019

              Attn:
                Thomas M. Sauve

            	 	
              
              

              
              

              
              

              $

            	
              
              

              
              

              
              

              500,000

            	 	 	
              
              

              
              

              
              

              833,333

            	 	 	
              
              

              
              

              
              

              2,750,000

            	 

    

    

    
      PREFERRED
        STOCK PURCHASE AGREEMENT BETWEEN CHINA KANGTAI CACTUS BIO-TECH, INC. AND
        T
        SQUARED INVESTMENTS LLC

       

      PAGE  25

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