Document:

f8k0408ex10ii_wealthlink.htm

    EXHIBIT 10.2

     

    

    

    

    

    

    

    

    

    

    SECURITIES
PURCHASE AGREEMENT

    

    among

    

    AMERICAN
BUSINESS HOLDINGS, INC.

    as
Issuer,

    

    Tong
Liu,

    as
Chairman

    

    and

    

    THE
PERSONS LISTED ON THE SIGNATURE PAGES HERETO

    as
Purchasers

    

    

    April
__, 2008

    

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

     

     

     

    SECURITIES
PURCHASE AGREEMENT

     

    This
Securities Purchase Agreement (this “Agreement”) is dated
as of  April __, 2008 among American Business Holdings, Inc., a
Delaware corporation (the “Issuer”), Tong Liu (the “Chairman”) and each
purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and
collectively the “Purchasers”).

     

    WHEREAS,
the Purchasers have agreed to purchase, and the Issuer has agreed to sell, the
Securities (as defined herein) in connection with the Purchasers’ agreement to
provide financing to the Issuer in the amount of U.S. $2,000,000;

     

    WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to
Regulation D under the U.S. Securities Act of 1933, as amended (the “Act”) upon issuance
thereof, and until such time as the same is no longer required under the
applicable requirements of the Securities Act, the Common Stock, Warrants and
the Warrant Shares (as such terms are defined herein) shall bear the legends
relating to the offer and the sale of the Common Stock, Warrants and the Warrant
Shares as required by (i) Regulation D under the Securities Act or (ii) any
other applicable laws or regulations relating to the issuance of the
Securities.

     

    NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Issuer and each Purchaser agree as
follows:

     

     

    ARTICLE
I.

    DEFINITIONS

     

    1.1           Definitions.  In
addition to the terms defined elsewhere in this Agreement the following terms
have the meanings set forth in this Section 1.1:

     

    “Action” has the
meaning ascribed to such term in Section 3.1(j).

     

    “Affiliate” means any
Person that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a Person, as such terms are
used in and construed under Rule 405 under the Securities Act.  With
respect to a Purchaser, any investment fund or managed account that is managed
on a discretionary basis by the same investment manager as such Purchaser will
be deemed to be an Affiliate of such Purchaser.

     

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

     

    “Chairman” has the
meaning ascribed to such term in the first paragraph.

     

    “Shell” has the
meaning ascribed to such term in Section 2.3(b).

     

     

    
      
        
        

      

      
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     “Closing” means the
closing of the purchase and sale of the Securities pursuant to Section
2.1.

     

    “Closing Date” means
the Trading Day when all of the Transaction Documents have been executed and
delivered by the applicable parties thereto, and all conditions precedent to (i)
the Purchasers’ obligations to pay the Subscription Amount and (ii) the Issuer’s
obligations to deliver the Securities have been satisfied or
waived.

     

    “Commission” means the
Securities and Exchange Commission.

     

    “Common Stock” means
the common stock of the Issuer, par value $0.001 per share, and any other class
of securities into which such securities may hereafter be reclassified or
changed.

     

    “Common Stock
Equivalents” means any securities of the Issuer or the Subsidiaries which
would entitle the holder thereof to acquire at any time Common Stock, including,
without limitation, any debt, preferred stock, rights, options, warrants or
other instrument that is at any time convertible into or exercisable or
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.

     

     “Corporate Authorization
Documents” means (i) the resolutions of the Board of Directors of the
Issuer, in form and substance satisfactory to the
Purchasers,  authorizing the transactions contemplated herein,
including, without limitation, the issuance of the Common Stock and the Warrants
and the execution and delivery of the remaining Transaction Documents (ii) a
certificate of the Secretary of the Issuer in usual and customary form attesting
to the copies of the certificate of incorporation and bylaws of the Issuer
attached thereto.

     

     “Disclosure Schedules”
has the meaning ascribed to such term in Section 3.1.

     

    “Effective Date” means
the date that the initial Registration Statement filed by the Issuer pursuant to
the Registration Rights Agreement is first declared effective by the
Commission.

     

    “Escrow Agent” means
Crone Rozynko LLP.

     

    “Escrow Agreement”
means the escrow agreement entered into on the date hereof, by and among the
Issuer, the Issuer’s management, the Purchasers and the Escrow Agent pursuant to
which the Issuer’s management shall deliver into an escrow account, an aggregate
number of common shares owned by them equal to one hundred (100%) percent of the
shares issued to the Purchasers to be applied to the transactions contemplated
hereunder, in the form of Exhibit A attached
hereto.

     

     “Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

     

     

     

    
      
        
        

      

      
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    “Fundamental
Transaction” means any of the following actions or agreements by the
Issuer or any Subsidiary: (i) a merger or consolidation in which the Issuer is
not the surviving entity or the shareholders (or owners of registered capital or
other form of ownership) of the Issuer or its Subsidiary are not the controlling
shareholders after such transaction (ii) a sale of all or substantially all of
the assets of the Issuer or any Subsidiary, as the case may be, or (iii) the
sale of any of the legal and beneficial ownership of any
Subsidiary.

     

     “GAAP” has the meaning
ascribed to such term in Section 3.1(h).

     

    “Intellectual Property
Rights” has the meaning ascribed to such term in Section
3.1(o).

     

    “Legend Removal Date”
has the meaning ascribed to such term in Section 4.1(d).

     

    “Liens” means a lien,
charge, security interest, encumbrance, right of first refusal, preemptive right
or other restriction.

     

    “Lock-Up” means the
several lock-up agreements entered into on the date hereof, by and among the
Issuer and its existing shareholders pursuant to which the shareholders will be
locked up until twelve (12) months after the Closing Date, in the form of Exhibit D attached
hereto.

     

    “Material Adverse
Effect” has the meaning assigned to such term in Section
3.1(b).

     

    “Material Permits” has
the meaning ascribed to such term in Section 3.1(m).

     

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

     

    “Pre-Notice” has the
meaning ascribed to such term in Section 4.12(b).

     

    “PRC” means the
People’s Republic of China.

     

    “Proceeding” means an
action, claim, suit, investigation or proceeding (including, without limitation,
an informal investigation or partial proceeding, such as a deposition), whether
commenced or threatened.

     

    “Purchaser’s Counsel”
means Crone Rozynko LLP, with offices located at 101 Montgomery Street, Suite
1950, San Francisco, California, 94105.

     

    “Purchaser Party” has
the meaning ascribed to such term in Section 4.10.

     

     

     

    
      
        
        

      

      
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    “Registration Rights
Agreement” means the Registration Rights Agreement, dated the date
hereof, among the Issuer and the Purchasers, in the form of Exhibit B attached
hereto.

     

    “Registration
Statement” means a registration statement meeting the requirements set
forth in the Registration Rights Agreement and covering the resale of the
Underlying Shares by each Purchaser as provided for in the Registration Rights
Agreement.

     

    “Required Approvals”
has the meaning ascribed to such term in Section 3.1(e).

     

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

     

    “SEC Reports” shall
have the meaning ascribed to such term in Section 3.1(h).

     

    “Securities” means the
Common Stock, Warrants and the Underlying Shares.

     

    “Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

     

     “Short Sales” means
all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange
Act (but shall not be deemed to include the location and/or reservation of
borrowable shares of Common Stock). 

     

     “Subscription Amount”
means, as to each Purchaser, the aggregate amount to be paid for Shares and
Warrants purchased hereunder as specified below such Purchaser’s name on the
signature page of this Agreement and next to the heading “Subscription Amount,”
in United States dollars and in immediately available funds.

     

    “Subsequent Financing”
has the meaning ascribed to such term in Section 4.12.

     

    “Subsequent Financing
Notice” has the meaning ascribed to such term in Section
4.13.

     

    “Subsidiary” means any
subsidiary of the Issuer as set forth on Schedule 3.1(a) and
shall, where applicable, include any direct or indirect subsidiary of the Issuer
formed or acquired after the date hereof.

     

     “Trading Day” means a
day on which the New York Stock Exchange is open for trading.

     

    “Trading Market” means
the following markets or exchanges on which the Common Stock is listed or quoted
for trading on the date in question: the American Stock Exchange, the Nasdaq
Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the
New York Stock Exchange or the OTC Bulletin Board.

     

     

    
      
        
        

      

      
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     “Transaction
Documents” means this Agreement, the Warrants, the Registration Rights
Agreement, the Escrow Agreement, the Lock-Up and all exhibits and schedules
thereto and hereto and any other documents or agreements executed in connection
with the transactions contemplated hereunder.

     

    “Transfer Agent” means
Interest Transfer Company, Inc. with a mailing address of 1981 East Murray
Holladay Road, Suite 100, Salt Lake City, UT 84117 and a facsimile number of
(801) 277-3147 and any successor transfer agent of the Issuer.

     

    “Underlying Shares”
means the shares of Common Stock issued and issuable upon exercise of the
Warrants.

     

     “VWAP” means, for any
date, the price determined by the first of the following clauses that applies:
(a) if the Common Stock is then listed or quoted on a Trading Market, the daily
volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed
or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m.
New York City time to 4:02 p.m. New York City time); (b)  if the OTC
Bulletin Board is not a Trading Market, the volume weighted average price of the
Common Stock for such date (or the nearest preceding date) on the OTC Bulletin
Board; (c) if the Common Stock is not then listed or quoted on the OTC Bulletin
Board and if prices for the Common Stock are then reported in the “Pink Sheets”
published by Pink Sheets, LLC (or a similar organization or agency succeeding to
its functions of reporting prices), the most recent bid price per share of the
Common Stock so reported; or (d) in all other cases, the fair market value
of a share of Common Stock as determined by an independent appraiser selected in
good faith by the Purchasers of a majority in interest of the Securities then
outstanding and reasonably acceptable to the Issuer, the fees and expenses of
which shall be paid by the Issuer.

     

    “Warrants” means the
Common Stock warrants to purchase an aggregate of 2,000,000 shares of the Issuer
with an exercise price of U.S. $1.25 per share and substantially in the form of
Exhibit C
hereto.

     

    ARTICLE
II.

    PURCHASE
AND SALE

    

    2.1           Closing.

     

    (a)           On
the Closing Date, upon the terms and subject to the conditions set forth herein,
substantially concurrent with the execution and delivery of this Agreement by
the parties hereto, the Issuer agrees to sell, and the Purchasers, severally and
not jointly, agree to purchase, in the aggregate, up to $2,000,000 in principal
amount of the Shares and the Warrants.  Each Purchaser shall deliver
to the Issuer, via wire transfer or a certified check, immediately available
funds equal to its Subscription Amount to the account as specified by the Issuer
and the Issuer shall deliver to each Purchaser its respective certificates for
shares of Common Stock and the respective Warrants, and the Issuer and each
Purchaser shall deliver the other items set forth in Section 2.2 deliverable at
the Closing.  Upon satisfaction of the conditions set forth in Section
2.3, the Closing shall occur at the offices of Purchaser’s Counsel or such

     

     

    
      
        
        

      

      
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      other
location or via email and facsimile as the parties shall mutually
agree.

    

     

    (b)           Allocation of Purchase
Price. The Issuer and its independent auditors shall confirm the amount
of the aggregate purchase price of $2,000,000 allocated by the Issuer to each of
the Shares and the Warrants and shall provide the Purchasers with such
determination. The allocation shall be made in accordance with United States
GAAP.

     

    2.2           Deliveries.

     

    (a)   On
the Closing Date, the Issuer shall deliver or cause to be delivered to each
Purchaser the following:

     

    
      	
              (i)  

            	
              this
      Agreement duly executed by the
Issuer;

            

    

     

    
      	
              (ii)  

            	
              a
      Warrant certificate for the number of shares of Common Stock in an amount
      equal to such Purchaser’s Subscription Amount, registered in the name of
      such Purchaser;

            

    

     

    
      
        	
                (iii)  

              	
                the
      Registration Rights Agreement duly executed by the
  Issuer;

              

      

       

      
        
          
            	
                    (iv)  

                  	
                    

                      the
      Escrow Agreement and the certificate(s) for the shares subject thereto
      together with and at least one undated stock power signature medallion
      guaranteed for each share
certificate;

                    

                  

          

           

        

      

      
        
          
            
              	
                      (v)  

                    	
                      

                        

                          the
      Corporate Authorization Documents;
  and

                        

                      

                    

            

             

            
              
                
                  
                    
                      	
                              (vi)  

                            	
                              

                                

                                  the
      Lock-Up.

                                

                              

                            

                    

                     

                  

                

              

            

          

        

      

    

    (b)   Within
five (5) days of the Closing Date, the Issuer shall deliver or cause to be
delivered to each Purchaser the following:

     

    
      	
              (i)  

            	
              a
      certificate for shares of Common Stock in an amount equal to such
      Purchaser’s Subscription Amount, registered in the name of such
      Purchaser.

            

    

     

    (c)       On
the Closing Date, each Purchaser shall deliver or cause to be delivered to the
Issuer the following:

     

    
      
        
          
            
              
                	
                        (i)  

                      	
                        

                          

                            this
      Agreement duly executed by such
  Purchaser;

                          

                        

                      

              

               

            

          

        

      

    

    
      
        
          
            
              	
                      (ii)  

                    	
                      

                        

                          such
      Purchaser’s Subscription Amount by wire transfer to theEscrow account as
      specified in writing by the Issuer;
  and

                        

                      

                    

            

             

          

        

      

    

    
      
        
          
            
              	
                      (iiii)  

                    	
                      

                        

                          the
      Registration Rights Agreement duly executed by
      suchPurchaser

                        

                      

                    

            

             

          

        

      

    

     

     

    
      
        
        

      

      
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    2.3           Closing
Conditions.

     

    (a) The
obligations of the Issuer hereunder in connection with the Closing are subject
to the following conditions being met:

     

    
      
         

        
          
            
              
                
                  	
                          (i)  

                        	
                          

                            

                              the
      accuracy in all material respects on the Closing Date of
      therepresentations and warranties of the Purchasers contained
      herein;

                            

                          

                        

                

                 

              

            

          

        

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                        (ii)  

                                      	
                                        

                                          

                                            all
      obligations, covenants and agreements of each Purchaserrequired to be
      performed at or prior to the Closing Date shall havebeen performed;
      and

                                          

                                        

                                      

                              

                               

                              
                                 

                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          	
                                                                  (iii)  

                                                                	
                                                                  

                                                                    

                                                                      the
      delivery by each Purchaser of the items set forth in Section 2.2(b) of
      this
Agreement.

                                                                    

                                                                  

                                                                

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
    

     

    (b) The
respective obligations of the Purchasers hereunder in connection with the
Closing are subject to the following conditions being met:

     

    
       

      
        
          
            
              
                	
                        (i)  

                      	
                        

                          

                            the
      accuracy in all material respects when made and on the ClosingDate of the
      representations and warranties of the Issuercontained
      herein;

                          

                        

                      

              

               

            

          

        

      

    

    
      
        
          
            
              
                
                  	
                          (ii)  

                        	
                          

                            

                              all
      obligations, covenants and agreements of the Issuer requiredto be
      performed at or prior to the Closing Date shall have
      beenperformed;

                            

                          

                        

                

                 

              

            

          

        

      

    

    
      
        
          
            
              
                
                  	
                          (iii)  

                        	
                          

                            

                              the
      delivery by the Issuer of the items set forth in Section2.2(a) of this
      Agreement;

                            

                          

                        

                

                 

              

            

          

        

      

    

    
      	
              (iv)  

            	
              there
      shall have been no Material Adverse Effect with respect to the Issuer
      since the date hereof;

            

    

     

    
      	
              (v)  

            	
              simultaneously
      on the Closing Date, the Issuer shall have completed a transaction
      involving the acquisition of a Cayman Island Holding Company, which has
      the rights to the Issuer’s business and properties into a publicly traded
      shell (the “Shell”) listed
      on a Trading Market; the Purchasers reserve the right to approve the
      Shell; and

            

    

     

    
      
        	
                (vi)  

              	
                

                  from
      the date hereof to the Closing Date, and, at any time prior to the Closing
      Date, trading in securities generally as reported by Bloomberg L.P. shall
      not have been suspended or limited, or minimum prices shall not have been
      established on securities whose trades are reported by such service, or on
      any Trading Market, nor shall a banking moratorium have been declared
      either by the United States or New York State authorities nor shall there
      have occurred any material outbreak or escalation of hostilities or other
      national or international calamity of such magnitude in its effect on, or
      any material adverse change in, any financial market which, in each case,
      in the reasonable judgment of each Purchaser, makes it impracticable or
      inadvisable to purchase the Securities at the
    Closing.

                

              

      

       

    

     

     

    
      
        
        

      

      
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    ARTICLE
III.

    REPRESENTATIONS
AND WARRANTIES

     

    3.1           Representations and
Warranties of the Issuer.  For purposes of this Article III,
the term the “Issuer” shall be deemed to include the Issuer and each
Subsidiary.  Except as set forth in 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 Issuer
hereby makes the following representations and warranties to each
Purchaser:

     

    (a)  Subsidiaries.  All
of the direct and indirect Subsidiaries of the Issuer are set forth on Schedule
3.1(a).  The Issuer owns, directly or indirectly, all of the
capital stock or other equity interests of each Subsidiary free and clear of any
Liens, and all of the issued and outstanding shares of capital stock of each
Subsidiary are validly issued and are fully paid, non-assessable and free of
preemptive and similar rights to subscribe for or purchase
securities.

     

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

     

     

     

    
      
        
        

      

      
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    (c)  Authorization;
Enforcement.  The Issuer has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each
of the Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder.  The execution and delivery of each of the
Transaction Documents by the Issuer and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary action on the part of the Issuer and no further action is required by
the Issuer, its board of directors or its stockholders in connection therewith
other than in connection with the Required Approvals.  Each
Transaction Document has been (or upon delivery will have been) duly executed by
the Issuer and, when delivered in accordance with the terms hereof and thereof,
will constitute the valid and binding obligation of the Issuer enforceable
against the Issuer in accordance with its terms except (i) as limited by general
equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors’ rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

     

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

     

    (e)  Filings, Consents and
Approvals.  The Issuer is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Issuer of the Transaction Documents, other than
(i) filings required pursuant to Section 4.7, (ii) and the filing with the
Commission of the Registration Statement (collectively, the “Required
Approvals”).

     

     

    
      
        
        

      

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

     

    (g)  Capitalization.  The
capitalization of the Issuer is as set forth on Schedule 3.1(g),
which Schedule
3.1(g) shall also include the number of shares of Common Stock owned
beneficially, and of record, by Affiliates of the Issuer as of the date hereof.
The Issuer has not issued any capital stock since its most recently audited
financial statements.  No Person has any right of first refusal,
preemptive right, right of participation, or any similar right to participate in
the transactions contemplated by the Transaction Documents.  Except as
a result of the purchase and sale of the Securities, there are no outstanding
options, warrants, scrip rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving any Person any
right to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which the Issuer or any
Subsidiary is or may become bound to issue additional shares of Common Stock or
Common Stock Equivalents. The issuance and sale of the Securities will not
obligate the Issuer to issue shares of Common Stock or other securities to any
Person (other than the Purchasers) and will not result in a right of any holder
of Issuer securities to adjust the exercise, conversion, exchange or reset price
under any of such securities. All of the outstanding shares of capital stock of
the Issuer are validly issued, fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, and none of such
outstanding shares was issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities.  No further approval
or authorization of any stockholder, the Board of Directors of the Issuer or
others is required for the issuance and sale of the Securities.  There
are no stockholders agreements, voting agreements or other similar agreements
with respect to the Issuer’s capital stock to which the Issuer is a party or, to
the knowledge of the Issuer, between or among any of the Issuer’s
stockholders.

     

    (h)  SEC Reports; Financial
Statements.  The Shell has filed all reports, schedules, forms,
statements and other documents required to be filed by the Shell under the
Securities Act and the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the two years preceding the date hereof (or such shorter
period as the Shell was required by law or regulation to file such material)
(the foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, being collectively referred to herein as the
“SEC Reports”)
on a timely basis or has received a valid extension of such time of filing and
has filed any such SEC Reports prior to the expiration of any such
extension.  

     

     

    
      
        
        

      

      
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    As of
their respective dates, the SEC Reports complied in all material respects with
the requirements of the Securities Act and the Exchange Act, as applicable, and
none of the SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.  The
financial statements of the Shell included in the SEC Reports comply in all
material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time of
filing.  Such financial statements and the audited financial
statements of the Issuer for fiscal year ending December 31, 2007 and 2006 have
been prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods involved (“GAAP”), except as may
be otherwise specified in such financial statements or the notes thereto and
except that unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the financial
position of the Shell and the Issuer, as the case may be, and their consolidated
subsidiaries as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial, year-end audit adjustments.

     

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

     

    (j)  Litigation.  Other
than as disclosed on Schedule 3.1(j) there is no action, suit, inquiry, notice
of violation, proceeding or investigation pending or, to the knowledge of the
Issuer, threatened against or affecting the Issuer, any Subsidiary or any of
their respective properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or
foreign) (collectively, an “Action”) which (i)
adversely affects or challenges the legality, validity or enforceability of any
of the Transaction Documents or the Securities or (ii) could, if there were an
unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect.  Neither the Issuer nor any Subsidiary, nor any
director or officer thereof, is or has been the subject of any Action involving
a claim of violation of or liability under federal or state securities laws or a
claim of breach of fiduciary duty.  There has not been, and to the
knowledge of the Issuer, there is not pending or contemplated, any investigation
by the Commission involving the Issuer or any current or former director or
officer of the Issuer.

     

    (k)  Labor
Relations.  No material labor dispute exists or, to the
knowledge of the Issuer, is imminent with respect to any of the employees of the
Issuer which could reasonably be expected to result in a Material Adverse
Effect.  

     

     

    
      
        
        

      

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

     

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

     

    (m)  Regulatory
Permits.  The Issuer and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses, except where the failure to possess such permits could
not reasonably be expected to result in a Material Adverse Effect (“Material Permits”),
and neither the Issuer nor any Subsidiary has received any notice of proceedings
relating to the revocation or modification of any Material Permit. Schedule
3.1(m) sets forth a complete list of all permits and licenses and regulatory
approvals required by the subsidiaries to operate their respective business in
the PRC, each of which has been obtained and has not been revoked or
amended.  The Issuer and its Subsidiaries have paid all fees for
permits and licenses required to be paid by them in the PRC in connection with
the operation of their respective businesses.

     

    (n)   Title to
Assets.  The Issuer and the Subsidiaries have good and
marketable title in fee simple to all real property owned by them and good and
marketable title in all personal property owned by them that is material to the
business of the Issuer and the Subsidiaries, in each case free and clear of all
Liens, except for Liens as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of
such property by the Issuer and the Subsidiaries and Liens for the payment of
PRC, federal, state or other taxes, the payment of which is neither delinquent
nor subject to penalties.  Any real property and facilities held under
lease by the Issuer and the Subsidiaries are held by them under valid,
subsisting and enforceable leases with which the Issuer and the Subsidiaries are
in compliance in all respects.

     

     

    
      
        
        

      

      
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    (o)  Patents and
Trademarks.  The Issuer and the Subsidiaries have, or have
rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights,
licenses and other intellectual property rights and similar rights necessary or
material for use in connection with their respective businesses and which the
failure to so have could have a Material Adverse Effect (collectively, the
“Intellectual Property
Rights”).  Neither the Issuer nor any Subsidiary has received a
notice (written or otherwise) that any of the Intellectual Property Rights used
by the Issuer or any Subsidiary violates or infringes upon the rights of any
Person. To the knowledge of the Issuer, all such Intellectual Property Rights
are enforceable and there is no existing infringement by another Person of any
of the Intellectual Property Rights.  The Issuer and its Subsidiaries
have taken reasonable security measures to protect the secrecy, confidentiality
and value of all of their intellectual properties, except where failure to do so
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

     

    (p)  Insurance.  The
Issuer and the Subsidiaries have no insurance against losses and risks
including, but not limited to, directors and officers insurance
coverage.  Neither the Issuer nor any Subsidiary has any reason to
believe that it will not be able to obtain such coverage from insurers as may be
necessary to continue its business.

     

    (q)  Transactions with Affiliates
and Employees.  Except as contemplated by this Agreement, none
of the officers or directors of the Issuer and, to the knowledge of the Issuer,
none of the employees of the Issuer is presently a party to any transaction with
the Issuer or any Subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Issuer, any entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner, in each case in excess of $10,000
other than for (i) payment of salary or consulting fees for services rendered,
(ii) reimbursement for expenses incurred on behalf of the Issuer and (iii) other
employee benefits, including stock option agreements under any stock option plan
of the Issuer.

     

    (r)  Internal
Controls.  The Issuer maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or specific authorization,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management’s general or
specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at quarterly intervals and appropriate action
is taken with respect to any material differences.

     

     

    
      
        
        

      

      
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    (s)  Certain
Fees.  Other than as described on Schedule 3.1(s) no brokerage
or finder’s fees or commissions are or will be payable by the Issuer to any
broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated by
the Transaction Documents.  The Purchasers shall have no obligation
with respect to any fees or with respect to any claims made by or on behalf of
other Persons for fees of a type contemplated in this Section that may be due in
connection with the transactions contemplated by the Transaction
Documents.

     

    (t)  Private
Placement.  Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.3, no registration under
the Securities Act is required for the offer and sale of the Securities by the
Issuer to the Purchasers as contemplated hereby.

     

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

     

               (v)  Registration
Rights.  Other than each of the Purchasers, no Person has any
right to cause the Issuer to effect the registration under the Securities Act of
any securities of the Issuer.

     

    (w)  Leases.  The
Issuer and each Subsidiary is in compliance with the terms and conditions of all
of its material contracts and leases, and is not aware of any dispute or
disagreement with the other parties or their Affiliates regarding such contracts
or leases. The Issuer is not aware of, and has not received any notice of
(whether written or oral) or any disputes, defaults or claims under such
contracts or leases.

     

    (x)  Application of Takeover
Protections.  The Issuer and its board of directors have taken
all necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Issuer’s
certificate of incorporation (or similar charter documents) or the laws of its
state of incorporation that is or could become applicable to the Purchasers as a
result of the Purchasers and the Issuer fulfilling their obligations or
exercising their rights under the Transaction Documents, including without
limitation as a result of the Issuer’s issuance of the Securities and the
Purchasers’ ownership of the Securities.

     

    (y)  Disclosure.  Except
with respect to the material terms and conditions of the transactions
contemplated by the Transaction Documents, the Issuer confirms that neither it
nor any other Person acting on its behalf has provided any of the Purchasers or
their agents or counsel with any information that it believes constitutes or
might constitute material, nonpublic information.  

     

     

    
      
        
        

      

      
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    The
Issuer understands and confirms that the Purchasers will rely on the foregoing
representation in effecting transactions in securities of the
Issuer.  All disclosure furnished by or on behalf of the Issuer to the
Purchasers regarding the Issuer, its business and the transactions contemplated
hereby, including the Disclosure Schedules to this Agreement, is true and
correct and does not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not
misleading.   The press releases disseminated by the Issuer
during the twelve months preceding the date of this Agreement taken as a whole
do 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 and
when made, not misleading.  The Issuer acknowledges and agrees that no
Purchaser makes or has made any representations or warranties with respect to
the transactions contemplated hereby other than those specifically set forth in
Section 3.3 hereof.

     

    (z)  No Integrated
Offering. Assuming the accuracy of the Purchasers’ representations and
warranties set forth in Section 3.3, neither the Issuer, nor any of its
Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would cause this offering of the
Securities to be integrated with prior offerings by the Issuer for purposes of
the Securities Act which would require the registration of any such securities
under the Securities Act.

     

    (aa)           Exemption from
Registration. Subject to the accuracy of the Purchaser’s representations
and warranties set forth in Section 3.3, except as required pursuant to the
Registration Rights Agreement, the sale of the Common Stock and Warrants by the
Issuer to the Purchaser will not require registration under the Securities Act,
but may require registration under New York state securities law if applicable
to the Purchaser.    The Issuer is issuing the Common 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 Commission under the Securities Act, and/or Section 4(2) of
the Securities Act; provided, however, that certain filings and registrations
may be required under state securities “blue sky” laws depending upon the
residency of the Purchaser.

     

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

     

     

    
      
        
        

      

      
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    (cc)  Foreign Corrupt
Practices.  Neither the Issuer, nor to the knowledge of the
Issuer, any agent or other person acting on behalf of the Issuer, has (i)
directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Issuer (or made by any person acting on its behalf of
which the Issuer is aware) which is  in violation of law, or (iv)
violated in any material respect any provision of the Foreign Corrupt Practices
Act of 1977, as amended.

     

    (dd) Accountants.  The
Issuer’s accounting firm is set forth on Schedule 3.1(dd) of
the Disclosure Schedule.  To the knowledge and belief of the Issuer,
such accounting firm is a registered public accounting firm as required by the
Exchange Act.  If the accounting firm set forth on Schedule 3.1(dd) of
the Disclosure Schedule is not now, or in the future fails to be, a registered
public accounting firm as required by the Exchange Act, such accounting firm
will be replace immediately with an accounting firm that is a registered public
accounting firm as required by the Exchange Act.

     

    (ee)  No Disagreements with
Accountants and Lawyers.  There are no disagreements of any
kind presently existing, or reasonably anticipated by the Issuer to arise,
between the Issuer and the accountants and lawyers formerly or presently
employed by the Issuer and the Issuer is current with respect to any fees owed
to its accountants and lawyers which could affect the Issuer’s ability to
perform any of its obligations under any of the Transaction
Documents.

     

    (ff)  Tax
Status.  Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Issuer and each Subsidiary has filed all necessary federal, state
and foreign income and franchise tax returns (including, without limitation, all
PRC tax returns and filings) and has paid or accrued all taxes shown as due
thereon, has paid all PRC taxes and the Issuer has no knowledge of a tax
deficiency which has been asserted or threatened against the Issuer or any
Subsidiary.  The Issuer warrants that the transactions contemplated by
the Transaction Documents will not subject the Issuer or its subsidiaries to
U.S. taxation or require the Issuer to deem income in any material amount from
its subsidiaries to be subject to U.S. taxation.

    

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

     

     

    
      
        
        

      

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

     

    (ii)  Environmental Law
Compliance

     

    (i)           The
Issuer and each of its Subsidiaries has at all times complied with all
environmental legislation in force, relevant or applicable to each company,
whether in the PRC or elsewhere (the “Environmental
Legislation”) and there is nothing in, on, or under the Property (as
defined below) upon which the presence, existence or condition of which
constitutes a breach of such Environmental Legislation nor is there or has there
been any manufacturing, storage, generation, servicing, treatment, disposal or
other process carried on at the Property in such a way as to amount to a breach
of the same.

     

    (ii)           No
complaints have been received from any third party (includingany employee of any
of the Issuer and/or its Subsidiaries or governmental, regulatory,supervisory
oradministrative body) with regard to any breach of the Environmental
Legislation in connection with the Property and the development and construction
thereon and, after due and careful enquiry, the Issuer is not aware of any
events, circumstances or matters which may lead to such complaint.

    

    (iii)           No
toxic industrial waste or toxic substance (as defined in
anyEnvironmental  Legislation) or any other similar substance
(howsoever termed) has beensplit, released, discharged or disposed in the soil
or water in, under, around or upon the Property.

    

    For purposes of this clause, the term
“Property”
shall mean any and all locations in which the Issuer and/or each of its
Subsidiaries carry on their respective business operations.

    

     

    (jj)           PFIC.  The
Issuer is not nor intends to become a “passive foreigninvestment company” (a
“PFIC”) within
the meaning of Section 1297 of the InternalRevenue Code.

     

    (kk)           Money Laundering
Laws.  The operations of the Issuer are and have been conducted
at all times in compliance with the money laundering statutes of applicable
jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any
applicable governmental agency and no action, suit or proceeding by or before
any court or governmental agency, authority or body or any arbitrator involving
any of the Issuer with respect thereto is pending or, to the best knowledge of
the Issuer, threatened.

     

     

     

    
      
        
        

      

      
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    3.2           Other Representations and
Warranties Relating to the PRC by the Issuer.

     

    (a)           The
constitutional documents and certificates and related material contracts of the
Issuer and the Issuer’s subsidiaries have been established under the laws of the
PRC for purposes of this Section 3.2 (sometimes referred to as a “PRC Company”) and are
valid and have been duly approved or registered (as applicable) by competent PRC
governmental authorities.

     

    (b)           All
material consents, approvals, authorizations or licenses requisite under PRC law
for the due and proper establishment and operation of each PRC Company have been
duly obtained from the relevant PRC governmental authorities and are in full
force and effect.

     

    (c)           All
filings and registrations with the PRC governmental authorities required in
respect of each of the PRC Companies and their respective operations including,
without limitation, the registrations with the Ministry of Commerce, the State
Administration of Industry and Commerce, the State Administration for Foreign
Exchange, tax bureau and customs authorities have been duly completed in
accordance with the relevant PRC rules and regulations.

     

    (d)           The
Issuer has complied with all relevant PRC laws and regulations regarding the
contribution and payment of its registered share capital, the payment schedule
of which has been approved by the relevant PRC government
authorities.  There are no outstanding rights of, or commitments made
by, the Issuer to sell any equity interest in any PRC Company, or by any of the
other PRC Company’s shareholders to sell any equity interest in such other PRC
the Issuer. To the extent that any controlling shareholder of the Issuer or any
Subsidiary is subject to or under the jurisdiction of Circular 75 issued by the
PRC State Administration of Foreign Exchange on October 21, 2005, including any
amendment, implementing rules, or official interpretation thereof or any
replacement, successor or alternative legislation having the same subject matter
thereof (collectively “Circular 75”), each
of the Issuer and its Subsidiaries and any controlling shareholder represents
and warrants to the Purchaser that it shall fully comply in all respects with
Circular 75 and any related requirement of law, including without limitation,
the completion of any applicable foreign exchange registration, settlement or
remittance requirement therein within 90 days of the Closing.

     

    (e)           The
Issuer is not in receipt of any letter or notice from any relevant PRC
governmental authority notifying it of revocation of any licenses or
qualifications issued to it or any subsidy granted to it by any PRC governmental
authority for non-compliance with the terms thereof or with applicable PRC laws,
or the need for compliance or remedial actions in respect of the activities
carried out by the Issuer.

     

     

    
      
        
        

      

      
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    (f)           The
Issuer has conducted its business activities within the permitted scope of
business or has otherwise operated its business in compliance with all relevant
legal requirements and with all requisite licenses and approvals granted by
competent PRC governmental authorities.

     

    (g)           As
to licenses, approvals and government grants and concessions requisite or useful
for the conduct of any part of the PRC, the Issuer’s business which are subject
to periodic renewal, the Issuer has no knowledge of any grounds on which such
requisite renewals will not be granted by the relevant PRC governmental
authorities.

     

    (h)           With
regard to employment and staff or labor, each of the Issuer has complied with
all applicable PRC laws and regulations in all material respects, including
without limitation, laws and regulations pertaining to welfare funds, social
benefits, medical benefits, insurance, retirement benefits, pensions or the
like.

     

    

    3.3  Representations and
Warranties of the Purchasers.  Each Purchaser, for itself and
for no other Purchaser hereby, represents and warrants as of the date hereof and
as of the Closing Date to the Issuer as follows:

     

    (a) Organization;
Authority.  Such Purchaser is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with full right, corporate or partnership power and authority to
enter into and to consummate the transactions contemplated by the Transaction
Documents and otherwise to carry out its obligations hereunder and
thereunder.  The execution and delivery of the Transaction Documents
and performance by such Purchaser of the transactions contemplated by the
Transaction Documents have been duly authorized by all necessary corporate or
similar action on the part of such Purchaser.  Each Transaction
Document to which it is a party has been duly executed by such Purchaser, and
when delivered by such Purchaser in accordance with the terms hereof, will
constitute the valid and legally binding obligation of such Purchaser,
enforceable against it in accordance with its terms, except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

     

    (b) Own
Account.  Such Purchaser understands that the Securities are
“restricted securities” and have not been registered under the Securities Act or
any applicable state securities law and is acquiring the Securities as principal
for its own account and not with a view to or for distributing or reselling such
Securities or any part thereof in violation of the Securities Act or any
applicable state securities law, has no present intention of distributing any of
such Securities in violation of the Securities Act or any applicable state
securities law and has no direct or indirect arrangement or understandings with
any other persons to distribute or regarding the distribution of such Securities
(this representation and warranty not limiting such Purchaser’s right to sell
the Securities pursuant to the Registration Statement or otherwise in compliance
with applicable federal and state securities laws) in violation of the
Securities Act or any applicable state securities law.  Such Purchaser
is acquiring the Securities hereunder in the ordinary course of its
business.

     

     

    
      
        
        

      

      
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    (c) Purchaser
Status.  At the time such Purchaser was offered the Securities,
it was, and at the date hereof it is, and on each date on which it exercises any
Warrants it will be either: (i) an “accredited investor” as defined in Rule
501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a
“qualified institutional buyer” as defined in Rule 144A(a) under the Securities
Act.  Such Purchaser is not required to be registered as a
broker-dealer under Section 15 of the Exchange Act.

     

    (d) Experience of Such
Purchaser.  Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Securities, and has so evaluated the merits
and risks of such investment.  Such Purchaser is able to bear the
economic risk of an investment in the Securities and, at the present time, is
able to afford a complete loss of such investment.

     

    (e) General
Solicitation.  Such Purchaser is not purchasing the Securities
as a result of any advertisement, article, notice or other communication
regarding the Securities published in any newspaper, magazine or similar media
or broadcast over television or radio or presented at any seminar or any other
general solicitation or general advertisement.

     

    (f) Short
Sales.  Other than consummating the transactions contemplated
hereunder, such Purchaser has not directly or indirectly, nor has any Person
acting on behalf of or pursuant to any understanding with such Purchaser,
executed any purchases or sales, including Short Sales, of the securities
of the Issuer during the period commencing from the time that such Purchaser
first received a term sheet (written or oral) from the Issuer or any other
Person representing the Issuer setting forth the material terms of the
transactions contemplated hereunder until the date hereof (“Discussion
Time”).  Notwithstanding the foregoing, in the case of a
Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s assets and the portfolio
managers have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of such Purchaser’s assets, the
representation set forth above shall only apply with respect to the portion of
assets managed by the portfolio manager that made the investment decision to
purchase the Securities covered by this Agreement.

     

    (g)           Investment
Intent.  The Purchaser is not acquiring the Securities with a
view to any distribution thereof that would violate the Securities Act or the
securities laws of any state of the United States or any other applicable
jurisdiction.

     

     

    
      
        
        

      

      
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    (h)           Resale
Restrictions.  The Purchaser (A) agrees that it will not offer,
sell or otherwise transfer any of the Securities nor, unless in compliance with
the Securities Act or as allowed under Regulation D, engage in hedging
transactions involving such securities, on or prior to (x) the date which is 40
days (in the case of the Common Stock) or six months (in the case of the
Warrants and the Warrant Shares) after the later of the date of the commencement
of the offering and the date of original issuance (or of any predecessor of any
Security proposed to be transferred by the Purchaser) and (y) such later date,
if any, as may be required by applicable law, except (a) to the Issuer, (b)
pursuant to a registration statement that has been declared effective under the
Securities Act, (c) pursuant to offers and sales to Persons who are not “U.S.
Persons” (within the meaning of Regulation S) that occur outside the United
States within the meaning of Regulation S or (d) pursuant to any other available
exemption from the registration requirements of the Securities Act, and (B)
agrees that it will give to each person to whom such Security is transferred a
notice substantially to the effect of  this paragraph.  The
Purchaser acknowledges that the Securities are “restricted securities” as
defined in Rule 144 under the Securities Act and subject to resale restrictions
during the period set forth in Rule 144.

     

    

     

    ARTICLE
IV.

    POST
CLOSING COVENANTS AND OTHER AGREEMENTS OF THE PARTIES

     

    4.1           Transfer
Restrictions.

     

    (a) The Securities may only be disposed
of in compliance with state and federal securities laws.  In
connection with any transfer of Securities other than pursuant to an effective
registration statement, Regulation S or Rule 144, to the Issuer or to an
Affiliate of a Purchaser or in connection with a pledge as contemplated in
Section 4.1(c), the Issuer may require the transferor thereof to provide to the
Issuer an opinion of counsel selected by the transferor and reasonably
acceptable to the Issuer, the form and substance of which opinion shall be
reasonably satisfactory to the Issuer, to the effect that such transfer does not
require registration of such transferred Securities under the Securities
Act.  As a condition of transfer, any such transferee shall agree in
writing to be bound by the terms of this Agreement and shall have the rights of
a Purchaser under this Agreement and the Registration Rights
Agreement.

     

    (b)  The Purchasers agree to
the imprinting, so long as is required by this Section  4.1, of a
legend on any of the Securities in the following form:

    

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

     

     

    
      
        
        

      

      
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    (c)  The
Issuer acknowledges and agrees that a Purchaser may from time to time pledge
pursuant to a bona fide margin agreement with a registered broker-dealer or
grant a security interest in some or all of the Securities to a financial
institution that is an “accredited investor” as defined in Rule 501(a) under the
Securities Act and who agrees to be bound by the provisions of this Agreement
and the Registration Rights Agreement and, if required under the terms of such
arrangement, such Purchaser may transfer pledged or secured Securities to the
pledged or secured parties.  Such a pledge or transfer would not be
subject to approval of the Issuer and no legal opinion of legal counsel of the
pledge, secured party or pledgor shall be required in connection
therewith.  Further, no notice shall be required of such
pledge.  At the appropriate Purchaser’s expense, the Issuer will
execute and deliver such reasonable documentation as a pledge or secured party
of Securities may reasonably request in connection with a pledge or transfer of
the Securities, including, if the Securities are subject to registration
pursuant to the Registration Rights Agreement, the preparation and filing of any
required prospectus supplement under Rule 424(b)(3) under the Securities Act or
other applicable provision of the Securities Act to appropriately amend the list
of selling stockholders thereunder.

     

    (d) Certificates
evidencing the Underlying Shares shall not contain any legend (including the
legend set forth in Section 4.1(b) hereof): (i) while a registration statement
(including the Registration Statement) covering the resale of such security is
effective under the Securities Act, or (ii) following any sale of such
Underlying Shares pursuant to Rule 144, or (iii) if such Underlying Shares are
eligible for sale under Rule 144 or (iv) if such legend is not required under
applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the Commission). The
Issuer shall cause its counsel to issue a legal opinion to the Transfer Agent
promptly after the Effective Date if required by the Transfer Agent to effect
the removal of the legend hereunder.  If all or any portion of a
Warrant is exercised at a time when there is an effective registration statement
to cover the resale of the Underlying Shares, or if such Underlying Shares may
be sold under Rule 144 or if such legend is not otherwise required under
applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the Commission) then
such Underlying Shares shall be issued free of all legends.  The
Issuer agrees that following the Effective Date or at such time as such legend
is no longer required under this Section 4.1(d), it will, no later than three
Trading Days following the delivery by a Purchaser to the Issuer or the Transfer
Agent of a certificate representing Underlying Shares, as applicable, issued
with a restrictive legend (such third Trading Day, the “Legend Removal
Date”), deliver or cause to be delivered to such Purchaser a certificate
representing such shares that is free from all restrictive and other
legends.  The Issuer may not make any notation on its records or give
instructions to the Transfer Agent that enlarge the restrictions on transfer set
forth in this Section.  Certificates for Underlying Shares subject to
legend removal hereunder shall be transmitted by the Transfer Agent to the
Purchaser by crediting the account of the Purchaser’s prime broker with the
Depository Trust Company System as directed by such Purchaser.

     

     

    
      
        
        

      

      
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    (e) In
addition to such Purchaser’s other available remedies, the Issuer shall pay to a
Purchaser, in cash, as partial liquidated damages and not as a penalty, for each
$1,000 of Underlying Shares (based on the VWAP of the Common Stock on the date
such Securities are submitted to the Transfer Agent) delivered for removal of
the restrictive legend and subject to Section 4.1(d), $5.00 per Trading Day
(increasing to $10.00 per Trading Day 45 Trading Days after such damages have
begun to accrue) for each Trading Day after the Legend Removal Date until such
certificate is delivered without a legend.  Nothing herein shall limit
such Purchaser’s right to pursue actual damages for the Issuer’s failure to
deliver certificates representing any Securities as required by the Transaction
Documents, and such Purchaser shall have the right to pursue all remedies
available to it at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief.

     

    (f) Each
Purchaser, severally and not jointly with the other Purchasers, agrees that such
Purchaser will sell any Securities pursuant to either the registration
requirements of the Securities Act, including any applicable prospectus delivery
requirements, or an exemption therefrom, and that if Securities are sold
pursuant to a Registration Statement, they will be sold in compliance with the
plan of distribution set forth therein, and acknowledges that the removal of the
restrictive legend from certificates representing Securities as set forth in
this Section 4.1 is predicated upon the Issuer’s reliance upon this
understanding.

     

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

     

    4.3           Furnishing of
Information.  So long as the Purchaser owns Securities, the
Issuer covenants to timely file (or obtain extensions in respect thereof and
file within the applicable grace period) all reports required to be filed by the
Issuer after the date hereof pursuant to the Exchange Act.   As
long as any Purchaser owns Securities, if the Issuer is not required to file
reports pursuant to the Exchange Act, it will prepare and furnish to the
Purchasers and make publicly available in accordance with Rule 144(c) such
information as is required for the Purchasers to sell the Securities under Rule
144. The Issuer further covenants that it will take such further action as any
holder of Securities may reasonably request, to the extent required from time to
time to enable such Person to sell such Securities without registration under
the Securities Act within the requirements of the exemption provided by Rule
144.

     

     

    
      
        
        

      

      
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    4.4           Integration.  The
Issuer shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Securities to the
Purchasers in a manner that would require the registration under the Securities
Act of the sale of the Securities to the Purchasers or that would be integrated
with the offer or sale of the Securities for purposes of the rules and
regulations of any Trading Market.

     

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

     

    4.6           Listing.   The
Issuer shall use its best efforts to have its Common Stock listed with the
Nasdaq Stock Market, the American Stock Exchange or any other national exchange
as soon as possible, shall use all commercially reasonable efforts to comply
with the listing requirements and shall file any and all applications with the
Nasdaq Stock Market, the American Stock Exchange or such other national exchange
to obtain a listing for its Common Stock by the earlier of (a) the closing of
the Issuer’s the next financing or (b) August 31, 2009 and, assuming the Common
Stock is accepted for listing, shall use its best efforts to maintain such
listing for so long as the Purchasers hold shares of Common Stock.

     

    4.7           Securities Laws Disclosure;
Publicity.  The Issuer and each Purchaser shall consult with
each other in issuing any other press releases with respect to the transactions
contemplated hereby, and neither the Issuer nor any Purchaser shall issue any
such press release or otherwise make any such public statement without the prior
consent of the Issuer, with respect to any press release of any Purchaser, or
without the prior consent of each Purchaser, with respect to any press release
of the Issuer, which consent shall not unreasonably be withheld or delayed,
except if such disclosure is required by law, in which case the disclosing party
shall promptly provide the other party with prior notice of such public
statement or communication.  Notwithstanding the foregoing, the Issuer
shall not publicly disclose the name of any Purchaser, or include the name of
any Purchaser in any filing with the Commission or any regulatory agency or
Trading Market, without the prior written consent of such Purchaser, except (i)
as required by federal securities law in connection with any registration
statement contemplated by the Registration Rights Agreement and (ii) to the
extent such disclosure is required by law or Trading Market regulations, in
which case the Issuer shall provide the Purchasers with prior notice of such
disclosure permitted under this clause (ii).

     

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

     

     

    
      
        
        

      

      
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    4.9           Use of
Proceeds.   The Issuer shall use the net proceeds from the
sale of the Securities hereunder for working capital purposes.

     

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

     

    

    
      
        
        

      

      
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      4.11           Reservation of
Securities.

     

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

     

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

     

    

    4.12           Participation in Future
Financing.

     

    (a) From the
date hereof until the second anniversary of the Effective Date upon any issuance
by the Issuer or any of its Subsidiaries of Common Stock, Common Stock
Equivalents or debt security (a “Subsequent
Financing”), each Purchaser shall have the right of first refusal to
participate in the Subsequent Financing on the same terms, conditions and price
provided for in the Subsequent Financing.

     

    (b) At least
ten (10) Trading Days prior to the closing of the Subsequent Financing, the
Issuer shall deliver to each Purchaser a written notice of its intention to
effect a Subsequent Financing (“Pre-Notice”), which
Pre-Notice shall ask such Purchaser if it wants to review the details of such
financing (such additional notice, a “Subsequent Financing
Notice”).  Upon the request of a Purchaser, and only upon a
request by such Purchaser, for a Subsequent Financing Notice, the Issuer shall
promptly, but no later than one Trading Day after such request, deliver a
Subsequent Financing Notice to such Purchaser.  The Subsequent
Financing Notice shall describe in reasonable detail the proposed terms of such
Subsequent Financing, the amount of proceeds intended to be raised thereunder
and the Person or Persons through or with whom such Subsequent Financing is
proposed to be effected and shall include a term sheet or similar document
relating thereto as an attachment.  The Subsequent Financing Notice
shall also include an analysis or description of the effect of such Subsequent
Financing upon the exercise price of the Warrants and the capitalization of the
Issuer.

     

    (c) Any
Purchaser desiring to participate in such Subsequent Financing must provide
written notice to the Issuer by not later than 5:30 p.m. (New York City time) on
the 10th Trading
Day after all of the Purchasers have received the Pre-Notice that the Purchaser
is willing to participate in the Subsequent Financing, the amount of the
Purchaser’s participation, and that the Purchaser has such funds ready, willing,
and available for investment on the terms set forth in the Subsequent Financing
Notice.  If the Issuer receives no notice from a Purchaser as of such
10th
Trading Day, such Purchaser shall be deemed to have notified the Issuer that it
does not elect to participate.

     

     

     

    
      
        
        

      

      
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    (d) If by
5:30 p.m. (New York City time) on the 10th Trading
Day after all of the Purchasers have received the Pre-Notice, notifications by
the Purchasers of their willingness to participate in the Subsequent Financing
(or to cause their designees to participate) is, in the aggregate, less than the
total amount of the Subsequent Financing, then the Issuer may effect the
remaining portion of such Subsequent Financing on the terms and with the Persons
set forth in the Subsequent Financing Notice.

     

    (e) The
Issuer must provide the Purchasers with a second Subsequent Financing Notice,
and the Purchasers will again have the right of participation set forth above in
this Section 4.12, if the Subsequent Financing subject to the initial Subsequent
Financing Notice is not consummated for any reason on the terms set forth in
such Subsequent Financing Notice within 60 Trading Days after the date of the
initial Subsequent Financing Notice.

     

    (f) Notwithstanding
the foregoing, this Section 4.12 shall not apply in respect of an issuance of
(a) shares of Common Stock or options to employees, officers or directors of the
Issuer pursuant to any stock or option plan duly adopted for such purpose by a
majority of the non-employee members of the Board of Directors of the Issuer or
a majority of the members of a committee of non-employee directors established
by the Board of Directors, provided, however, in no event shall the number of
shares reserved under any such plan or issued under such plan or issued to
employees, officers, directors or officers of the Issuer exceed a number of
shares equal to 5% of the issued and outstanding shares of Common Stock of the
Issuer on the date hereof or; (b) securities upon the exercise or exchange of or
conversion of any Securities issued hereunder and/or other securities
exercisable or exchangeable for or convertible into shares of Common Stock
issued and outstanding on the date of this Agreement, provided that such
securities have not been amended since the date of this Agreement to increase
the number of such securities or to decrease the exercise, exchange or
conversion price of such securities.

     

    4.13           Subsequent Equity
Sales.

     

    (a) From the
date hereof until 180 days after the Effective Date, neither the Issuer nor any
Subsidiary shall issue shares of Common Stock or Common Stock Equivalents; provided, however, the 180 day
period set forth in this Section 4.13 shall be extended for the number of
Trading Days during such period in which  following the Effective
Date, the Registration Statement is not effective or the prospectus included in
the Registration Statement may not be used by the Purchasers for the resale of
the Underlying Shares.

     

    
       

      (b) From and
after the Effective Date the Issuer shall not issue inconnection with an
acquisition transaction  (whether in one transaction or a series
oftransactions (and regardless of the structure of any such transaction,
including, without limitation, a purchase of securities of the to be acquired
entity, a purchase or assets or a joint venture) or the purchase) shares of its
Common Stock (or securities convertible into Common Stock) equal to or in excess
of 20% of the shares of Common Stock outstanding on the date hereof without the
prior written consent of the Purchaser, which consent shall not be unreasonably
withheld.

    

     

     

     

    
      
        
        

      

      
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    4.14           Equal Treatment of
Purchasers.  No consideration shall be offered or paid to any
Person to amend or consent to a waiver or modification of any provision of any
of the Transaction Documents unless the same consideration is also offered to
all of the parties to the Transaction Documents.  For clarification
purposes, this provision constitutes a separate right granted to each Purchaser
by the Issuer and negotiated separately by each Purchaser, and is intended for
the Issuer to treat the Purchasers as a class and shall not in any way be
construed as the Purchasers acting in concert or as a group with respect to the
purchase, disposition or voting of Securities or otherwise.

     

    4.15           Short
Sales.  Each Purchaser severally and not jointly with the other
Purchasers, covenants that neither it nor any Affiliate acting on its behalf or
pursuant to any understanding with it will execute any Short Sales during the
period commencing at the Discussion Time and ending at the eighteen month
anniversary of the Closing Date.  Notwithstanding the foregoing, in the
case of a Purchaser that is a multi-managed investment vehicle whereby separate
portfolio managers manage separate portions of such Purchaser’s assets and the
portfolio managers have no direct knowledge of the investment decisions made by
the portfolio managers managing other portions of such Purchaser’s assets, the
covenant set forth above shall only apply with respect to the portion of assets
managed by the portfolio manager that made the investment decision to purchase
the Securities covered by this Agreement.

     

    

    ARTICLE
V.

    PROPERTIES
AND ADVANCES

    

    5.1           Leases.

    

    (a)     Each
of the Issuer and Chairman covenant and agree with Purchasers that the stores
listed in this Section 5.1(a) owned by Chairman shall be leased to the Issuer
pursuant to binding written lease agreements containing terms no less favorable
to the Issuer than the Issuer could have negotiated in an arm’s length
transaction with a motivated landlord, including substantially the following
terms:

    

    (i)           Harbin
Daoli Queen Demonstration Beauty Parlor: 5 years from January 1, 2008 through
December 31, 2012, for $47,300 per year, prepaid for 1 year plus an option for
additional 5 years at no more than $55,000 per year.

    

    (ii)           Harbin
Queen Beauty Demonstration Center: 5 years from January 1, 2008 through December
31, 2012 for $20,300 per year, prepaid for 1 year plus an option for additional
5 years at no more than $24,000 per year.

    

    (b)           The
Issuer covenants and agrees with Purchasers that the following stores with
leases expiring in December 2008 owned by third parties shall be extended
pursuant to binding written lease agreements containing terms no less favorable
to the Issuer than the Issuer could have negotiated in an arm’s length
transaction with a motivated landlord, including substantially the following
terms:

     

     

    
      
        
        

      

      
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     Store
shall have signed additional terms as follows:

     

    
      	
               
      

            	
              (i)
      Harbin Huang Emperor & Golden Gym Club Co., Ltd.: 5 years, at $85,100,
      prepaid 1 year, ending December
2013.

            

    

    

    

    (c) The
following stores shall be leased to the Issuer, subject to cancellation if and
when a more desirable location is found:

     

    
      	
               
      

            	
              (i)  Harbin
      Queen Beauty Demonstration Center Kunlun Branch: 5 years ending December
      2013 at no more than $13,000 per year, prepaid 1
  year.

            

    

     

    
      	
               
      

            	
              (ii)
      Harbin Queen Beauty Demonstration Center Branch: 5 years ending December
      2013 at no more than $40,000 per year, prepaid 1
  year.

            

    

     

    The
dollar amounts quoted above use an assumed exchange rate of 1:7.4 between US
Dollars (“USD”)
and Renminbi (“RMB”).  The
actual dollar amount quoted above shall be adjusted according to the actual
exchange rate between USD and RMB at the time of execution of the
lease.

     

    5.2           Office
Building.  The Issuer will purchase its current office building
during fiscal year 2008 for an amount not to exceed $1.65
million.  The purchase price for such office building will be funded
solely by the return of funds identified by the Balance Sheet item “Advance to
Employee”.  In the event the office building is not purchased, the
$1.65 million Advance to Employee shall be immediately repaid, such repayment is
unconditionally guaranteed by the Chairman.

    

    5.3           Liquidated
Damages.  In the Event the Issuer is unable to extend any lease
set forth in Section 5.1 for a minimum of 5 years by October 1, 2008, then
within 30 days of such date, the Issuer shall issue to the Purchasers 50,000
additional shares of Common Stock per lease (with registration rights comparable
to the Securities issued on the Closing Date) pro rata to the Securities issued
to Purchasers on the Closing Date, as liquidated damages for such breach and not
as a penalty.  The amount of shares issuable under this Section 5.3
shall be appropriately adjusted for any stock split, stock dividend or other
recapitalization after the Closing Date.

     

       
5.4           Certain
Payments.

    

    (a)           Advances
to suppliers shall never exceed (i) $3 million at any time for Fiscal Year 2008,
or (ii) $4 million at any time for Fiscal Year 2009.

    

    (b)           Advances
to Affiliates or employees of the Issuer shall never exceed for Fiscal Years
2008 or 2009 (i) $100,000 to any single Person, or (ii) $500,000 in the
aggregate.

     

     

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    
 

    (c)           Within
three Trading Days of the end of Fiscal Years 2008 and 2009, respectively, for
each breach of the provisions of Section 5.4(a),  the Issuer shall
issue to the Purchasers 50,000 additional shares of Common Stock per each $1
million of such breach and for each breach of the provisions of Section
5.4(b),  the Issuer shall issue to the Purchasers 50,000 additional
shares of Common Stock per each $100,000 of such breach (in each case, with
registration rights comparable to the shares issued on the Closing Date) pro
rata to the shares issued to Purchasers on the Closing Date, as liquidated
damages for such breach and not as a penalty.  The amount of shares
issuable under this Section 5.4 shall be appropriately adjusted for any stock
split, stock dividend or other recapitalization after the Closing
Date.

    

     

    ARTICLE
VI.

    MISCELLANEOUS

     

    6.1      Termination. 
This Agreement may be terminated by any Purchaser, as to such Purchaser’s
obligations hereunder only and without any effect whatsoever on the obligations
between the Issuer and the other Purchasers, by written notice to the other
parties, if the Closing has not been consummated on or before April 30, 2008;
provided, however, that such
termination will not affect the right of any party to sue for any breach by the
other party (or parties).

     

    6.2 Fees and Expenses; Breakup
Fees.

     

    (a)  At
the Closing, the Issuer will reimburse the Purchasers the sum of up to $25,000,
for their legal fees and expenses, none of which has been paid prior to the
Closing, and such other expenses as are listed on the Disbursement Schedule set
forth in Annex
A.  Except as expressly set forth in the Transaction Documents
to the contrary, each party shall pay the fees and expenses of its advisers,
counsel, accountants and other experts, if any, and all other expenses incurred
by such party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement.  The Issuer shall pay all transfer
agent fees, stamp taxes and other taxes and duties levied in connection with the
delivery of any Securities to the Purchasers.

     

    (b)           The
Purchasers will be entitled to a fee in the amount of $200,000 in the event that
(i) the Issuer or any Affiliate accepts or approves any proposal that provides
equity or debt financing to it prior to the Closing Date (any such proposal, an
“Alternative
Transaction”), or (ii) the Issuer fails to satisfy any of the closing
conditions set forth in Section 2.3(b), and such conditions have not been waived
in writing by each of the Purchasers.

    

                       
(c)    The Issuer will not be obligated to pay the fee set
forth in Section 6.2(b) if the Purchasers terminate this Agreement for any
reason other than as a result of (i) the Issuer’s willful failure to satisfy any
of the closing conditions set forth in Section 2.3(b) for the purposes of
delaying or precluding the closing of the transaction; or (ii) the Issuer’s
failure to adhere to comply with the requirements of Section 2.1 on the Closing
Date. In the event the Issuer accepts or approves an Alternative Transaction,
the fee set forth in Section 6.2(b) shall be due and payable
immediately.

     

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    
 

    (d)           To
the maximum extent permitted by applicable law, in no event will the Purchasers
be liable for any punitive damages arising out of this Agreement.

    

    6.3      Entire
Agreement.  The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and
schedules.

     

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

     

    6.5      Amendments;
Waivers.  No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument signed, in the
case of an amendment, by the Issuer and the Purchasers of at least 66% principal
amount of Securities still held by Purchasers or, in the case of a waiver, by
the party against whom enforcement of any such waived provision is
sought.  No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of any party to exercise any right hereunder in any manner impair the
exercise of any such right.

     

    6.6      Headings.  The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.

     

    6.7      Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted
assigns.  The Issuer may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of each Purchaser (other
than by merger).  Any Purchaser may assign any or all of its rights
under this Agreement to any Person to whom such Purchaser assigns or transfers
any Securities, provided that such transferee agrees in writing to be bound,
with respect to the transferred Securities, by the provisions of the Transaction
Documents that apply to the “Purchasers.”

     

    6.8 No Third-Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except as otherwise set forth in Section 4.10.

     

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

     

    6.9      Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law
thereof.  Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in  the City of
New York, New York and shall be arbitrated in accordance with the rules of the
International Chamber of Commerce before three (3) arbitrators and otherwise
held in accordance with its rules.  Each party shall choose one
arbitrator and the two arbitrators shall choose the third.  The third
arbitrator so chosen shall have a background in either corporate finance,
banking or law. The arbitration shall be conducted in the English language and
the arbitration award shall include the allocation of costs and expenses among
the parties. The arbitration ruling shall be final and binding. Each party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof
via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof.  Nothing contained herein shall
be deemed to limit in any way any right to serve process in any other manner
permitted by law.   Any ruling by the arbitration panel shall be
binding and non appealable.

     

    6.10 Survival.  The
representations and warranties shall survive the Closing and the delivery of the
Securities for the applicable statue of limitations.

     

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

     

    6.12 Severability. If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their commercially reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

     

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

     

     

    6.13 Rescission and Withdrawal
Right.  Notwithstanding anything to the contrary contained in
(and without limiting any similar provisions of) any of the other Transaction
Documents, whenever any Purchaser exercises a right, election, demand or option
under a Transaction Document and the Issuer does not timely perform its related
obligations within the periods therein provided, then such Purchaser may rescind
or withdraw, in its sole discretion from time to time upon written notice to the
Issuer, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights; provided, however, in the case
of exercise of a Warrant, the Purchaser shall be required to return any shares
of Common Stock delivered in connection with any such rescinded exercise
notice.

     

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

     

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

     

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

     

    6.17 Independent Nature of
Purchasers’ Obligations and Rights.  The obligations of each
Purchaser under any Transaction Document are several and not joint with the
obligations of any other Purchaser, and no Purchaser shall be responsible in any
way for the performance or non-performance of the obligations of any other
Purchaser under any Transaction Document.  Nothing contained herein or
in any other Transaction Document, and no action taken by any Purchaser pursuant
thereto, shall be deemed to constitute the Purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Documents.  Each Purchaser shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose.

     

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

     

    6.18 Liquidated
Damages.  The Issuer’s obligations to pay any partial
liquidated damages or other amounts owing under the Transaction Documents is a
continuing obligation of the Issuer and shall not terminate until all unpaid
partial liquidated damages and other amounts have been paid notwithstanding the
fact that the instrument or security pursuant to which such partial liquidated
damages or other amounts are due and payable shall have been
canceled.

     

    6.19 Construction. The
parties agree that each of them and/or their respective counsel has reviewed and
had an opportunity to revise the Transaction Documents and, therefore, the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of the Transaction Documents or any amendments hereto.

     

    

     

    (Signature
Pages Follow)

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

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

     

    
      	
               AMERICAN
      BUSINESS HOLDINGS,
      Inc.

               

               

            	
              Address for
      Notice:

            
	
              By:__________________________________________

                   Name:

                   Title:

               

            	
              194
      Guo Ge Li Street, Nangang District, 

              Harbin
      City, Heilongjiang Province, 

              Zip‐code:
      150001, P.R.China

              lt288@126.com
      

               

            
	
              With
      a copy to (which shall not constitute notice):

               

              Sichenzia
      Ross Friedman Ference LLP

              61
      Broadway, 32nd
      Fl.

              New
      York, New York 10006

              Fax:
      (212) 930-9725

               

            	 
      
	
               

               

              
                 

              

              Tong
      Liu

            	
              194
      Guo Ge Li Street, Nangang District, 

              Harbin
      City, Heilongjiang Province, 

              Zip‐code:
      150001, P.R.China

              lt288@126.com

               

            

    

    

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

    SIGNATURE
PAGE FOR PURCHASER FOLLOWS]

     

     

     

     

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

     

     

    [PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

    

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

     

    
      	
               
      

            	
              Name
      of Purchaser: GUERRILLA
      PARTNERS, LP

            

    

    

    Signature of Authorized Signatory of
Purchaser: ______________________________________

    Name of
Authorized Signatory:
____________________________________________________

    Title of
Authorized Signatory:
_____________________________________________________

    Email
Address of Purchaser:
______________________________________________________

    Facsimile
Number of Purchaser:
___________________________________________________

    

    Address
for Notice of Purchaser:

    237 Park
Avenue 9th Floor, New York, NY 10017

    

    

    

    With a
copy to (which shall not constitute notice):

    

    Crone
Rozynko LLP

    101
Montgomery Street

    Suite
1950

    San
Francisco, CA 94105

    Fax:
(415) 955-8910

    

    Address
for Delivery of Securities for Purchaser (if not same as above):

    

    

    

    

    

    Subscription
Amount:

    

    

    Warrant
Shares:

    

    

    

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    

    

    EIN
Number:  [PROVIDE
THIS UNDER SEPARATE COVER]

    

    [SIGNATURE
PAGES CONTINUE]

    

    

    
      	
               
      

            	
              Name
      of Purchaser: HUA-MEI
      21ST CENTURY
      PARTNERS

            

    

    

    Signature of Authorized Signatory of
Purchaser: ______________________________________

    Name of
Authorized Signatory:
____________________________________________________

    Title of
Authorized Signatory:
_____________________________________________________

    Email
Address of Purchaser:
______________________________________________________

    Facsimile
Number of Purchaser:
____________________________________________________

    

    Address
for Notice of Purchaser:

    

    237 Park
Avenue 9th Floor, New York, NY 10017

    

    

    

    

    Address
for Delivery of Securities for Purchaser (if not same as above):

    

    

    

    

    

    Subscription
Amount:

    

    

    Warrant
Shares:

    

    

    

    

    

    EIN
Number:  [PROVIDE
THIS UNDER SEPARATE COVER]

     

     

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

    
 

    [SIGNATURE
PAGES CONTINUE]

    

    

    
    

    
      Name of
Purchaser:  JAMES
J.FULD, JR. IRA

    

     

    Signature of Authorized Signatory of
Purchaser: __________________________________

    Name of
Authorized Signatory: James J. Fuld, Jr.

    Email
Address of Purchaser: fuldcorp@rcn.com

    Facsimile
Number of Purchaser:
________________________________________________

    

    Address
for Notice of Purchaser:

    

    114 East
72 Street

    New York,
NY 10021

    

    

    Address
for Delivery of Securities for Purchaser (if not same as above):

    

    

    

    

    

    Subscription
Amount:

    

    Warrant
Shares:

    

    

    

    

    EIN
Number:  [PROVIDE
THIS UNDER SEPARATE COVER]

    

    [SIGNATURE
PAGES CONTINUE]

    

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

    

    

    Annex
A

    

    CLOSING
STATEMENT

    

    Schedule
3.1 (m)

    Mege
Union:

    
      	
              ·  

            	
              Cert
      of Approval for establishment of
foreign...

            

    

    
      	
              ·  

            	
              Business
      License:

            

    

    
      	
              ·  

            	
              By-law:

            

    

    

    Queen
Beauty Demo Ctr – Biz Lic

    Ctr
Kunlun Branch – Biz Lic

    Queen
Beauty Ctr Branch – Biz Lic

    Queen
Beauty Demo Ctr – Hygienic Lic

    

    Queen
Beauty Demo Ctr:

    By-law

    Amendment
to By - law

    

    Huang
Emperor & Golden Gym Club:

    Biz
Lic

    Hygienic
Lic

    By-law

    Amendment
to By-law

    

    Daoli
Queen Parlor:

    Hygienic
License

    Biz
Lic

    

    Queen
Vocational Skill:

    Voluntary School
Permit

    School
Registration

    By-law

    

    
 

    Schedule
3.1 (s)

    The
Company is represented by Etech Securities, Inc., a member FINRA/SIPC, and has
an

    agreement
whereby Etech Securities is receive 7% of the total fund raised in cash and 2%
of the

    total
issued and outstanding shares of common stock after the financing.

    

    

    Schedule
3.1 (dd)

    Bagell,
Josephs, Levine & Company, LLC

    406
Lippincott Drive, Suite J

    Marlton,
New Jersey 08053

    (Tel)856‐346‐2828

    (Fax)856‐396‐0022f8k0408ex10iii_wealthlink.htm

    EXHIBIT 10.3

    
 

    

    REGISTRATION
RIGHTS AGREEMENT

    

    This Registration Rights Agreement
(this “Agreement”) is made
and entered into as of  ___, 2008, between American Business
Holdings, Inc., a Delaware corporation (the “Company”), and each
of the several purchasers signatory hereto (each such purchaser, a “Holder” and,
collectively, the “Holders”).

    

                   This
Agreement is made pursuant to the Securities Purchase Agreement, dated as of the
date hereof, between the Company and each Holder (the “Purchase
Agreement”).

    

                   The
Company and each Holder hereby agrees as follows:

    

            1.                      Definitions

    

                   Capitalized terms used and not
otherwise defined herein that are defined in the Purchase Agreement shall have
the meanings given such terms in the Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:

    

                       
“Advice” shall
have the meaning set forth in Section 6(d).

    

        “Conversion Shares”
means the shares of Common Stock issuable upon exercise of the
Warrants.

    

    “Effectiveness Date”
means, with respect to the initial Registration Statement required to be filed
hereunder, the 180th calendar day following the date hereof and with respect to
any additional Registration Statements which may be required pursuant to Section
3(c), the 60th calendar day following the date on which an additional
Registration Statement is required to be filed hereunder; provided, however, that in the
event the Company is notified by the Commission that one or more of the above
Registration Statements will not be reviewed or is no longer subject to further
review and comments, the Effectiveness Date as to such Registration Statement
shall be the 150th calendar day following the date hereof.

    

    “Effectiveness Period”
shall have the meaning set forth in Section 2(a).

    

    “Event” shall have the
meaning set forth in Section 2(b).

    

    “Event Date” shall
have the meaning set forth in Section 2(b).

    

    “Filing Date” means,
with respect to the initial Registration Statement required hereunder, the 60th
calendar day following the date hereof and, with respect to any additional
Registration Statements which may be required pursuant to Section 3(c), the
earliest practical date on which the Company is permitted by SEC Guidance to
file such additional Registration Statement related to the Registrable
Securities.

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
 

    “Holder” or “Holders” means the
holder or holders, as the case may be, from time to time of Registrable
Securities.

    

    “Indemnified Party”
shall have the meaning set forth in Section 5(c).

    

    “Initial Registration
Statement” means the initial Registration Statement filed pursuant to
this Agreement.

    

    “Losses” shall have
the meaning set forth in Section 5(a).

    

    “Plan of Distribution”
shall have the meaning set forth in Section 2(a).

    

    “Prospectus” means the
prospectus included in a Registration Statement (including, without limitation,
a prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion
of the Registrable Securities covered by a Registration Statement, and all other
amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.

    

    “Registrable
Securities” means all shares of Common Stock (i) issued to Holders
pursuant to the Purchase Agreement and (ii) issuable upon conversion in full of
the Warrants (assuming on the date of determination the Warrants are converted
in full without regard to any conversion limitations therein), so long as such
shares are not eligible for sale without volume restrictions pursuant to Rule
144(k).

    

    “Registration
Statement” means the registration statement required to be filed
hereunder and any additional registration statements contemplated by Section
3(c), including (in each case) the Prospectus, amendments and supplements to
such registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration
statement.

    

     “Rule 415” means Rule
415 promulgated by the Commission pursuant to the Securities Act, as such Rule
may be amended or interpreted from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
purpose and effect as such Rule.

    

    “Rule 424” means Rule
424 promulgated by the Commission pursuant to the Securities Act, as such Rule
may be amended or interpreted from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
purpose and effect as such Rule.

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
 

    “Selling Shareholder
Questionnaire” shall have the meaning set forth in Section
3(a).

    

    “SEC Guidance” means
(i) any publicly-available written or oral guidance, comments, requirements or
requests of the Commission staff and (ii) the Securities Act.

    

    “Warrants” means the
Warrants as described in the Purchase Agreement.

    

            2.                      Registration

    

    (a) On or
prior to each Filing Date, the Company shall prepare and file with the
Commission a Registration Statement covering the resale of all or such portion
of the Registrable Securities as permitted by SEC Guidance that are not then
registered on an effective Registration Statement for an offering to be made on
a continuous basis pursuant to Rule 415.  The Registration Statement
shall be on Form S-1 (or on another appropriate form in accordance herewith) and
shall contain substantially the “Plan of Distribution”
attached hereto as Annex
A.  Subject to the terms of this Agreement, the Company shall
use its best efforts to cause a Registration Statement to be declared effective
under the Securities Act as promptly as possible after the filing thereof, but
in any event prior to the applicable Effectiveness Date, and shall use its best
efforts to keep such Registration Statement continuously effective under the
Securities Act until all Registrable Securities covered by such Registration
Statement have been sold, or may be sold without volume restrictions pursuant to
Rule 144(k), as determined by the counsel to the Company pursuant to a written
opinion letter to such effect, addressed and acceptable to the Company’s
transfer agent and the affected Holders (the “Effectiveness
Period”).  The Company shall telephonically request
effectiveness of a Registration Statement as of 5:00 p.m. New York City time on
a Trading Day.   The Company shall immediately notify the Holders
via facsimile or by e-mail delivery of a “.pdf” format data file of the
effectiveness of a Registration Statement on the same Trading Day that the
Company telephonically confirms effectiveness with the Commission, which shall
be the date requested for effectiveness of a Registration
Statement.  The Company shall, by 9:30 a.m. New York City time on the
Trading Day after the Effective Date, file a final Prospectus with the
Commission as required by Rule 424.  Failure to so notify the Holder
within 1 Trading Day of such notification of effectiveness or failure to file a
final Prospectus as foresaid shall be deemed an Event under Section
2(b).  Notwithstanding any other
provision of this Agreement and subject to the payment of liquidated damages in
Section 2(b), if any SEC Guidance sets forth a limitation of the number of
Registrable Securities permitted
to be registered on a particular
Registration Statement (and notwithstanding that the Company used diligent efforts to
advocate with the Commission for the registration of all or a greater number of
Registrable Securities), unless otherwise directed in writing by a Holder as to
its Registrable Securities, the number of Registrable Securities to be
registered on such Registration Statement will first be reduced by Registrable
Securities represented by Warrant Shares (applied, in the case that some Warrant
Shares may be registered, to the Holders on a pro rata basis based on the total
number of unregistered Warrant Shares held by such Holders), and second by
Registrable Securities represented by Conversion Shares (applied, in the case that some Conversion Shares
may be registered, to the Holders on a pro rata basis based on the total number
of unregistered Conversion Shares held by such Holders).

     

     

     

    
      
        
        

      

      
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    (b) If: (i)
the Initial Registration Statement is not filed on or prior to its Filing Date
or (ii) the Company fails to file with the Commission a request for acceleration
of a Registration Statement in accordance with Rule 461 promulgated under the
Securities Act, within two (2) Trading Days of the date that the Company is
notified (orally or in writing, whichever is earlier) by the Commission that
such Registration Statement will not be “reviewed” or not be subject to further
review, or (iii) prior to the Effectiveness Date of a Registration Statement,
the Company fails to file a pre-effective amendment and otherwise respond in
writing to comments made by the Commission in respect of such Registration
Statement within 10 Trading Days after the receipt of comments by or notice from
the Commission that such amendment is required in order for such Registration
Statement to be declared effective, or (iv) as to, in the aggregate among all
Holders on a pro-rata basis based on their purchase of the Securities pursuant
to the Purchase Agreement, a Registration Statement registering for resale all
of the  Registrable Securities, is not declared effective by the
Commission by the Effectiveness Date of the Initial Registration Statement, or
(v) all of the Registrable Securities are not registered for resale pursuant to
one or more effective Registration Statements on or before the 180th calendar
day following the date hereof and, or (vi) after the Effectiveness Date of a
Registration Statement, such Registration Statement ceases for any reason to
remain continuously effective as to all Registrable Securities included in such
Registration Statement, or the Holders are otherwise not permitted to utilize
the Prospectus therein to resell such Registrable Securities, for more than 10
consecutive calendar days or more than an aggregate of 30 calendar days during
any 12-month period (which need not be consecutive calendar days) (any such
failure or breach being referred to as an “Event, and for
purposes of clause (i), (iv) or (v) the date on which such Event occurs, or for
purposes of clauses (ii) and (iii) the date which such 10 calendar day period is
exceeded, or for purposes of clause (vi) the date on which such 10 or 30
calendar day period, as applicable, is exceeded being referred to as “Event Date”), then,
in addition to any other rights the Holders may have hereunder or under
applicable law, on each such Event Date and on each monthly anniversary of each
such Event Date (if the applicable Event shall not have been cured by such date)
until the applicable Event is cured, the Company shall pay to each Holder an
amount in cash, as partial liquidated damages and not as a penalty, equal to 1%
of the aggregate purchase price paid by such Holder pursuant to the Purchase
Agreement for any unregistered Registrable Securities then held by such
Holder.  The parties agree that the maximum aggregate liquidated
damages payable to a Holder under this Agreement shall be 10% of the aggregate
Subscription Amount paid by such Holder pursuant to the Purchase
Agreement.  The partial liquidated damages pursuant to the terms
hereof shall apply on a daily pro rata basis for any portion of a month prior to
the cure of an Event.

    

    3.           Registration
Procedures.

    

                   In
connection with the Company’s registration obligations hereunder, the Company
shall:

     

     

     

    
      
        
        

      

      
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    (a) Not less
than five (5) Trading Days prior to the filing of each Registration Statement
and not less than one (1) Trading Day prior to the filing of any related
Prospectus or any amendment or supplement thereto (including any document that
would be incorporated or deemed to be incorporated therein by reference), the
Company shall (i) furnish to each Holder copies of all such documents proposed
to be filed, which documents (other than those incorporated or deemed to be
incorporated by reference) will be subject to the review of such Holders and
(ii) cause its officers and directors, counsel and independent certified public
accountants to respond to such inquiries as shall be necessary, in the
reasonable opinion of respective counsel to each Holder, to conduct a reasonable
investigation within the meaning of the Securities Act. The Company shall not
file a Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the Holders of a majority of the Registrable
Securities shall reasonably object in good faith, provided that the Company is
notified of such objection in writing no later than 5 Trading Days after the
Holders have been so furnished copies of a Registration Statement or 1 Trading
Day after the Holders have been so furnished copies of any related Prospectus or
amendments or supplements thereto. Each Holder agrees to furnish to the Company
a completed questionnaire in the form attached to this Agreement as Annex B (a “Selling Shareholder
Questionnaire”) not less than two Trading Days prior to the Filing Date
or by the end of the fourth Trading Day following the date on which such Holder
receives draft materials in accordance with this Section.

    

    (b) (i)
Prepare and file with the Commission such amendments, including post-effective
amendments, to a Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep a Registration Statement continuously
effective as to the applicable Registrable Securities for the Effectiveness
Period and prepare and file with the Commission such additional Registration
Statements in order to register for resale under the Securities Act all of the
Registrable Securities; (ii) cause the related Prospectus to be amended or
supplemented by any required Prospectus supplement (subject to the terms of this
Agreement), and, as so supplemented or amended, to be filed pursuant to Rule
424; (iii) respond as promptly as reasonably possible to any comments received
from the Commission with respect to a Registration Statement or any amendment
thereto and provide as promptly as reasonably possible to the Holders true and
complete copies of all correspondence from and to the Commission relating to a
Registration Statement (provided that the Company may excise any information
contained therein which would constitute material non-public information as to
any Holder which has not executed a confidentiality agreement with the Company);
and (iv) comply in all material respects with the provisions of the Securities
Act and the Exchange Act with respect to the disposition of all Registrable
Securities covered by a Registration Statement during the applicable period in
accordance (subject to the terms of this Agreement) with the intended methods of
disposition by the Holders thereof set forth in such Registration Statement as
so amended or in such Prospectus as so supplemented.

    

    (c) If during
the Effectiveness Period, the number of Registrable Securities at any time
exceeds 100% of the number of shares of Common Stock then registered in a
Registration Statement, then the Company shall file as soon as reasonably
practicable, but in any case prior to the applicable Filing Date, an additional
Registration Statement covering the resale by the Holders of not less than the
number of such Registrable Securities.

     

     

    
      
        
        

      

      
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    (d) Notify
the Holders of Registrable Securities to be sold (which notice shall, pursuant
to clauses (iii) through (vi) hereof, be accompanied by an instruction to
suspend the use of the Prospectus until the requisite changes have been made) as
promptly as reasonably possible (and, in the case of (i)(A) below, not less than
one Trading Day prior to such filing) and (if requested by any such Person)
confirm such notice in writing no later than one Trading Day following the day
(i)(A) when a Prospectus or any Prospectus supplement or post-effective
amendment to a Registration Statement is proposed to be filed; (B) when the
Commission notifies the Company whether there will be a “review” of such
Registration Statement and whenever the Commission comments in writing on such
Registration Statement; and (C) with respect to a Registration Statement or any
post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other federal or state governmental authority
for amendments or supplements to a Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the Commission or any other
federal or state governmental authority of any stop order suspending the
effectiveness of a Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that purpose; (iv) of the
receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
Proceeding for such purpose; (v) of the occurrence of any event or passage of
time that makes the financial statements included in a Registration Statement
ineligible for inclusion therein or any statement made in a Registration
Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires any revisions to a Registration Statement, Prospectus or other
documents so that, in the case of a Registration Statement or the Prospectus, as
the case may be, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading; and (vi) of the occurrence or existence of any pending
corporate development with respect to the Company that the Company believes may
be material and that, in the determination of the Company, makes it not in the
best interest of the Company to allow continued availability of a Registration
Statement or Prospectus, provided that any and all of such information shall
remain confidential to each Holder until such information otherwise becomes
public, unless disclosure by a Holder is required by law; provided, further, that
notwithstanding each Holder’s agreement to keep such information confidential,
each such Holder makes no acknowledgement that any such information is material,
non-public information.

    

    (e) Use its
best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of
(i) any order stopping or suspending the effectiveness of a Registration
Statement, or (ii) any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest practicable moment.

     

     

     

    
      
        
        

      

      
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    (f) Furnish
to each Holder, without charge, at least one conformed copy of each such
Registration Statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference to the extent requested by such Person, and
all exhibits to the extent requested by such Person (including those previously
furnished or incorporated by reference) promptly after the filing of such
documents with the Commission; provided, that any such item which is available
on the EDGAR system need not be furnished in physical form.

    

    (g) Subject
to the terms of this Agreement, the Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the selling
Holders in connection with the offering and sale of the Registrable Securities
covered by such Prospectus and any amendment or supplement thereto, except after
the giving of any notice pursuant to Section 3(d).

    

    (h)  The
Company shall effect a filing at its cost and expense with respect to the public
offering contemplated by each Registration Statement (an “Issuer Filing”) with
the National Association of Securities Dealers, Inc. (recently renamed Financial
Industry Regulatory Authority (“FINRA”) Corporate Financing Department pursuant
to NASD Rule 2710(b)(10)(A)(i) within one Trading Day of the date that the
Registration Statement is first filed with the Commission and pay the filing fee
required by such Issuer Filing.  The Company shall use commercially
reasonable efforts to pursue the Issuer Filing until FINRA issues a letter
confirming that it does not object to the terms of the offering contemplated by
the Registration Statement as described in the Plan of Distribution attached
hereto as Annex A.  A copy of the Issuer Filing and all related
correspondence to or from FINRA with respect thereto shall be provided to the
Holder.

    

    (i) Prior to
any resale of Registrable Securities by a Holder, use its commercially
reasonable efforts to register or qualify or cooperate with the selling Holders
in connection with the registration or qualification (or exemption from the
Registration or qualification) of such Registrable Securities for the resale by
the Holder under the securities or Blue Sky laws of such jurisdictions within
the United States as any Holder reasonably requests in writing, to keep each
registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things reasonably
necessary to enable the disposition in such jurisdictions of the Registrable
Securities covered by each Registration Statement; provided, that the Company
shall not be required to qualify generally to do business in any jurisdiction
where it is not then so qualified, subject the Company to any material tax in
any such jurisdiction where it is not then so subject or file a general consent
to service of process in any such jurisdiction.

    

    (j) If
requested by a Holder, cooperate with such Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be delivered to a transferee pursuant to a Registration Statement, which
certificates shall be free, to the extent permitted by the Purchase Agreement,
of all restrictive legends, and to enable such Registrable Securities to be in
such denominations and registered in such names as any such Holder may
request.

     

     

     

    
      
        
        

      

      
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    (k) Upon the
occurrence of any event contemplated by Section 3(d), as promptly as reasonably
possible under the circumstances taking into account the Company’s good faith
assessment of any adverse consequences to the Company and its stockholders of
the premature disclosure of such event, prepare a supplement or amendment,
including a post-effective amendment, to a Registration Statement or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, neither a Registration Statement nor such
Prospectus will contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. If the Company notifies the
Holders in accordance with clauses (iii) through (vi) of Section 3(d) above to
suspend the use of any Prospectus until the requisite changes to such Prospectus
have been made, then the Holders shall suspend use of such
Prospectus.  The Company will use its best efforts to ensure that the
use of the Prospectus may be resumed as promptly as is
practicable.  The Company shall be entitled to exercise its right
under this Section 3(k) to suspend the availability of a Registration Statement
and Prospectus, subject to the payment of partial liquidated damages otherwise
required pursuant to Section 2(b), for a period not to exceed 60 calendar days
(which need not be consecutive days) in any 12 month period.

    

    (l) Comply
with all applicable rules and regulations of the Commission.

    

    (m) The
Company may require each selling Holder to furnish to the Company a certified
statement as to the number of shares of Common Stock beneficially owned by such
Holder and, if required by the Commission, the natural persons thereof that have
voting and dispositive control over the shares. During any periods that the
Company is unable to meet its obligations hereunder with respect to the
registration of the Registrable Securities solely because any Holder fails to
furnish such information within three Trading Days of the Company’s request, any
liquidated damages that are accruing at such time as to such Holder only shall
be tolled and any Event that may otherwise occur solely because of such delay
shall be suspended as to such Holder only, until such information is delivered
to the Company.

    

            4.                      Registration
Expenses. All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company
whether or not any Registrable Securities are sold pursuant to a Registration
Statement. The fees and expenses referred to in the foregoing sentence shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses of the Company’s counsel and auditors) (A)
with respect to filings made with the Commission, (B) with respect to filings
required to be made with any Trading Market on which the Common Stock is then
listed for trading, (C) in compliance with applicable state securities or Blue
Sky laws reasonably agreed to by the Company in writing (including, without
limitation, fees and disbursements of counsel for the Company in connection with
Blue Sky qualifications or exemptions of the Registrable Securities) and (D) if
not previously paid by the 

     

     

    
      
        
        

      

      
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    Company
in connection with an Issuer Filing, with respect to any filing that may be
required to be made by any broker through which a Holder intends to make sales
of Registrable Securities with FINRA pursuant to NASD Rule 2710, so long as the
broker is receiving no more than a customary brokerage commission in connection
with such sale, (ii) printing expenses (including, without limitation, expenses
of printing certificates for Registrable Securities), (iii) messenger, telephone
and delivery expenses, (iv) fees and disbursements of counsel for the Company,
(v) Securities Act liability insurance, if the Company so desires such
insurance, and (vi) fees and expenses of all other Persons retained by the
Company in connection with the consummation of the transactions contemplated by
this Agreement.  In addition, the Company shall be responsible for all
of its internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder.  In no event shall the
Company be responsible for any broker or similar commissions of any Holder or,
except to the extent provided for in the Transaction Documents, any legal fees
or other costs of the Holders.

    

            5.                      Indemnification.

    

    (a) Indemnification by the
Company. The Company shall, notwithstanding any termination of this
Agreement, indemnify and hold harmless each Holder, the officers, directors,
members, partners, agents, brokers (including brokers who offer and sell
Registrable Securities as principal as a result of a pledge or any failure to
perform under a margin call of Common Stock), investment advisors and employees
(and any other Persons with a functionally equivalent role of a Person holding
such titles, notwithstanding a lack of such title or any other title) of each of
them, each Person who controls any such Holder (within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, members, shareholders, partners, agents and employees (and any other
Persons with a functionally equivalent role of a Person holding such titles,
notwithstanding a lack of such title or any other title) of each such
controlling Person, to the fullest extent permitted by applicable law, from and
against any and all losses, claims, damages, liabilities, costs (including,
without limitation, reasonable attorneys’ fees) and expenses (collectively,
“Losses”), as
incurred, arising out of or relating to (1) any untrue or alleged untrue
statement of a material fact contained in a Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading or (2) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act or any state securities law, or any rule or
regulation thereunder, in connection with the performance of its obligations
under this Agreement, except to the extent, but only to the extent, that (i)
such untrue statements or omissions are based upon information regarding such
Holder furnished in writing to the Company by such Holder expressly for use
therein, or to the extent that such information relates to such Holder or

     

     

    
      
        
        

      

      
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      such
Holder’s proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use in a
Registration Statement, such Prospectus or in any amendment or supplement
thereto (it being understood that the Holder has approved Annex A hereto for
this purpose) or (ii) in the case of an occurrence of an event of the type
specified in Section 3(d)(iii)-(vi), the use by such Holder of an outdated or
defective Prospectus after the Company has notified such Holder in writing that
the Prospectus is outdated or defective and prior to the receipt by such Holder
of the Advice contemplated in Section 6(d).  The Company shall notify
the Holders promptly of the institution, threat or assertion of any Proceeding
arising from or in connection with the transactions contemplated by this
Agreement of which the Company is aware.

    

    

    (b) Indemnification by
Holders. Each Holder shall, severally and not jointly, indemnify and hold
harmless the Company, its directors, officers, agents and employees, each Person
who controls the Company (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, agents or
employees of such controlling Persons, to the fullest extent permitted by
applicable law, from and against all Losses, as incurred, to the extent arising
out of or based solely upon: (x) such Holder’s failure to comply with the
prospectus delivery requirements of the Securities Act or (y) any untrue or
alleged untrue statement of a material fact contained in any Registration
Statement, any Prospectus, or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading (i) to the extent, but only to the extent,
that such untrue statement or omission is contained in any information so
furnished in writing by such Holder to the Company specifically for inclusion in
such Registration Statement or such Prospectus or (ii) to the extent that such
information relates to such Holder’s proposed method of distribution of
Registrable Securities and was reviewed and expressly approved in writing by
such Holder expressly for use in a Registration Statement (it being understood
that the Holder has approved Annex A hereto for this purpose), such Prospectus
or in any amendment or supplement thereto or (ii) in the case of an occurrence
of an event of the type specified in Section 3(d)(iii)-(vi), the use by such
Holder of an outdated or defective Prospectus after the Company has notified
such Holder in writing that the Prospectus is outdated or defective and prior to
the receipt by such Holder of the Advice contemplated in Section 6(d). In no
event shall the liability of any selling Holder hereunder be greater in amount
than the dollar amount of the net proceeds received by such Holder upon the sale
of the Registrable Securities giving rise to such indemnification
obligation.

    

    (c) Conduct of Indemnification
Proceedings. If any Proceeding shall be brought or asserted against any
Person entitled to indemnity hereunder (an “Indemnified Party”),
such Indemnified Party shall promptly notify the Person from whom indemnity is
sought (the “Indemnifying Party”)
in writing, and the Indemnifying Party shall have the right to assume the
defense thereof, including the employment of counsel reasonably satisfactory to
the Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that the failure of any Indemnified
Party to give such notice shall not relieve the Indemnifying Party of its
obligations or liabilities pursuant to this Agreement, except (and only) to the
extent that it shall be finally determined by a court of competent jurisdiction
(which determination is not subject to appeal or further review) that such
failure shall have prejudiced the Indemnifying Party.

     

     

    
      
        
        

      

      
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                   An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless:  (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and counsel to the
Indemnified Party shall reasonably believe that a material conflict of interest
is likely to exist if the same counsel were to represent such Indemnified Party
and the Indemnifying Party (in which case, if such Indemnified Party notifies
the Indemnifying Party in writing that it elects to employ separate counsel at
the expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and the reasonable fees and expenses of no
more than one separate counsel shall be at the expense of the Indemnifying
Party).  The Indemnifying Party shall not be liable for any settlement
of any such Proceeding effected without its written consent, which consent shall
not be unreasonably withheld or delayed.  No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any Indemnified Party
is a party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of
such Proceeding.

    

                   Subject
to the terms of this Agreement, all reasonable fees and expenses of the
Indemnified Party (including reasonable fees and expenses to the extent incurred
in connection with investigating or preparing to defend such Proceeding in a
manner not inconsistent with this Section) shall be paid to the Indemnified
Party, as incurred, within ten Trading Days of written notice thereof to the
Indemnifying Party; provided, that the Indemnified Party shall promptly
reimburse the Indemnifying Party for that portion of such fees and expenses
applicable to such actions for which such Indemnified Party is judicially
determined to be not entitled to indemnification hereunder.

    

    (d) Contribution. If the
indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified
Party or insufficient to hold an Indemnified Party harmless for any Losses, then
each Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Party, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. 

     

     

     

    
      
        
        

      

      
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      The
relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission.  The amount
paid or payable by a party as a result of any Losses shall be deemed to include,
subject to the limitations set forth in this Agreement, any reasonable
attorneys’ or other fees or expenses incurred by such party in connection with
any Proceeding to the extent such party would have been indemnified for such
fees or expenses if the indemnification provided for in this Section was
available to such party in accordance with its terms.

    

    

                   The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding
paragraph.  Notwithstanding the provisions of this Section 5(d), no
Holder shall be required to contribute, in the aggregate, any amount in excess
of the amount by which the net proceeds actually received by such Holder from
the sale of the Registrable Securities subject to the Proceeding exceeds the
amount of any damages that such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission.

    

    The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties.

    

            6.                      Miscellaneous.

    

    (a) Remedies.  In
the event of a breach by the Company or by a Holder of any of their respective
obligations under this Agreement, each Holder or the Company, as the case may
be, in addition to being entitled to exercise all rights granted by law and
under this Agreement, including recovery of damages, shall be entitled to
specific performance of its rights under this Agreement.  The Company
and each Holder agree that monetary damages would not provide adequate
compensation for any losses incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of any
action for specific performance in respect of such breach, it shall not assert
or shall waive the defense that a remedy at law would be adequate.

    

    (b) No Piggyback on
Registrations. Except as set forth on Schedule 6(b)
attached hereto, neither the Company nor any of its security holders (other than
the Holders in such capacity pursuant hereto) may include securities of the
Company in any Registration Statements other than the Registrable
Securities.  The Company shall not file any other registration
statements until all Registrable Securities are registered pursuant to a
Registration Statement that is declared effective by the Commission, provided
that this Section 6(b) shall not prohibit the Company from filing amendments to
registration statements filed prior to the date of this Agreement.

     

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
 

    (c) Compliance. Each
Holder covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to a Registration Statement.

    

    (d) Discontinued
Disposition.  By its acquisition of Registrable Securities,
each Holder agrees that, upon receipt of a notice from the Company of the
occurrence of any event of the kind described in Section 3(d)(iii) through (vi),
such Holder will forthwith discontinue disposition of such Registrable
Securities under a Registration Statement until it is advised in writing (the
“Advice”) by
the Company that the use of the applicable Prospectus (as it may have been
supplemented or amended) may be resumed.  The Company will use its
best efforts to ensure that the use of the Prospectus may be resumed as promptly
as it practicable.  The Company agrees and acknowledges that any
periods during which the Holder is required to discontinue the disposition of
the Registrable Securities hereunder shall be subject to the provisions of
Section 2(b).

    

    (e) Piggy-Back
Registrations. If at any time during the Effectiveness Period there is
not an effective Registration Statement covering all of the Registrable
Securities and the Company shall determine to prepare and file with the
Commission a registration statement relating to an offering for its own account
or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with the Company’s stock option or
other employee benefit plans, then the Company shall send to each Holder a
written notice of such determination and, if within fifteen days after the date
of such notice, any such Holder shall so request in writing, the Company shall
include in such registration statement all or any part of such Registrable
Securities such Holder requests to be registered; provided, however, that the
Company shall not be required to register any Registrable Securities pursuant to
this Section 6(e) that are eligible for resale pursuant to Rule 144(k)
promulgated under the Securities Act or that are the subject of a then effective
Registration Statement.

    

    (f) Amendments and
Waivers. The provisions of this Agreement, including the provisions of
this sentence, may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, unless the
same shall be in writing and signed by the Company and the Holders of a majority
of the then outstanding Registrable Securities (including, for this purpose any
Registrable Securities issuable upon exercise or conversion of any
Security).  If a Registration Statement does not register all of the
Registrable Securities pursuant to a waiver or amendment done in compliance with
the previous sentence, then the number of Registrable Securities to be
registered for each Holder shall be reduced pro rata among all Holders and each
Holder shall have the right to designate which of its Registrable Securities
shall be omitted from such Registration Statement. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates exclusively to the rights of some Holders and that does
not directly or indirectly affect the rights of other Holders may be given by
Holders of all of the Registrable Securities to which such waiver or consent
relates; provided, however, that the
provisions of this sentence may not be amended, modified, or supplemented except
in accordance with the provisions of the first  sentence of this
Section 6(f).

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
 

    (g) Notices. Any and all
notices or other communications or deliveries required or permitted to be
provided hereunder shall be delivered as set forth in the Purchase
Agreement.

    

    (h) Successors and
Assigns. This Agreement shall inure to the benefit of and be binding upon
the successors and permitted assigns of each of the parties and shall inure to
the benefit of each Holder. The Company may not assign (except by merger) its
rights or obligations hereunder without the prior written consent of all of the
Holders of the then-outstanding Registrable Securities. Each Holder may assign
their respective rights hereunder in the manner and to the Persons as permitted
under the Purchase Agreement.

    

    (i) No Inconsistent
Agreements. Neither the Company nor any of its Subsidiaries has entered,
as of the date hereof, nor shall the Company or any of its Subsidiaries, on or
after the date of this Agreement, enter into any agreement with respect to its
securities, that would have the effect of impairing the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions
hereof.  Except as set forth on Schedule 6(i),
neither the Company nor any of its subsidiaries has previously entered into any
agreement granting any registration rights with respect to any of its securities
to any Person that have not been satisfied in full.

    

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

    

    (k) Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined in
accordance with the provisions of the Purchase Agreement.

    

    (l) Cumulative Remedies.
The remedies provided herein are cumulative and not exclusive of any other
remedies provided by law.

    

    (m) Severability. If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their commercially reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

     

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    
 

    (n) Headings. The
headings in this Agreement are for convenience only, do not constitute a part of
the Agreement and shall not be deemed to limit or affect any of the provisions
hereof.

    

    (o) Independent Nature of
Holders’ Obligations and Rights. The obligations of each Holder hereunder
are several and not joint with the obligations of any other Holder hereunder,
and no Holder shall be responsible in any way for the performance of the
obligations of any other Holder hereunder. Nothing contained herein or in any
other agreement or document delivered at any closing, and no action taken by any
Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as
a partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Holders are in any way acting in concert with
respect to such obligations or the transactions contemplated by this Agreement.
Each Holder shall be entitled to protect and enforce its rights, including
without limitation the rights arising out of this Agreement, and it shall not be
necessary for any other Holder to be joined as an additional party in any
proceeding for such purpose.

    

    ********************

     

     

     

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    
 

                   IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as
of the date first written above.

     

     

    

    
      	
              American
      Business Holdings, Inc.

            
	
              By:__________________________________________

                   Name:

                   Title:

               

            

    

    

    

    

    

    

    

    

    

    

    [SIGNATURE
PAGE OF HOLDERS FOLLOWS]

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    
 

    [SIGNATURE
PAGE OF HOLDERS TO REG RIGHTS]

    

    
    

    
      Name of
Holder: GUERRILLA PARTNERS,
LP

    

    Signature of Authorized Signatory of
Holder: __________________________

    

    Name of
Authorized Signatory: _________________________

    

    Title of
Authorized Signatory: __________________________

    

    

    
    

    
      Name of
Holder: HUA-MEI 21ST CENTURY
PARTNERS

    

    Signature of Authorized Signatory of
Holder: __________________________

    

    Name of
Authorized Signatory: _________________________

    

    Title of
Authorized Signatory: __________________________

    

    

    
    

    
      Name of
Holder: JAMES
J.FULD,JR.

    

    Signature of Authorized Signatory of
Holder: __________________________

    

    Name of
Authorized Signatory: _________________________

    

    Title of
Authorized Signatory: __________________________

    

    

    

    [SIGNATURE
PAGES CONTINUE]

     

     

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    
 

    Annex A

    

    Plan of
Distribution

    

    Each
Selling Stockholder (the “Selling
Stockholders”) of the common stock and any of their pledgees, assignees
and successors-in-interest may, from time to time, sell any or all of their
shares of common stock on the [principal Trading Market] or any other stock
exchange, market or trading facility on which the shares are traded or in
private transactions.  These sales may be at fixed or negotiated
prices.  A Selling Stockholder may use any one or more of the
following methods when selling shares:

     

    
      	
              ·  

            	
              ordinary
      brokerage transactions and transactions in which the broker-dealer
      solicits purchasers;

            

    

     

    
      	
              ·  

            	
              block
      trades in which the broker-dealer will attempt to sell the shares as agent
      but may position and resell a portion of the block as principal to
      facilitate the transaction;

            

    

     

    
      	
              ·  

            	
              purchases
      by a broker-dealer as principal and resale by the broker-dealer for its
      account;

            

    

     

    
      	
              ·  

            	
              an
      exchange distribution in accordance with the rules of the applicable
      exchange;

            

    

     

    
      	
              ·  

            	
              privately
      negotiated transactions;

            

    

     

    
      	
              ·  

            	
              settlement
      of short sales entered into after the effective date of the registration
      statement of which this prospectus is a
part;

            

    

     

    
      	
              ·  

            	
              broker-dealers
      may agree with the Selling Stockholders to sell a specified number of such
      shares at a stipulated price per
share;

            

    

     

    
      	
              ·  

            	
              through
      the writing or settlement of options or other hedging transactions,
      whether through an options exchange or
  otherwise;

            

    

     

    
      	
              ·  

            	
              a
      combination of any such methods of sale;
or

            

    

     

    
      	
              ·  

            	
              any
      other method permitted pursuant to applicable
  law.

            

    

     

    The
Selling Stockholders may also sell shares under Rule 144 under the Securities
Act of 1933, as amended (the “Securities Act”), if
available, rather than under this prospectus.

     

    Broker-dealers
engaged by the Selling Stockholders may arrange for other brokers-dealers to
participate in sales.  Broker-dealers may receive commissions or
discounts from the Selling Stockholders (or, if any broker-dealer acts as agent
for the purchaser of shares, from the purchaser) in amounts to be negotiated,
but, except as set forth in a supplement to this Prospectus, in the case of an
agency transaction not in excess of a customary brokerage commission in
compliance with NASDR Rule 2440; and in the case of a principal transaction a
markup or markdown in compliance with NASDR IM-2440.

     

     

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

     

    In
connection with the sale of the common stock or interests therein, the Selling
Stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common
stock in the course of hedging the positions they assume.  The Selling
Stockholders may also sell shares of the common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities.  The
Selling Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such
transaction).

     

    The
Selling Stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales.  In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.  Each Selling
Stockholder has informed the Company that it does not have any written or oral
agreement or understanding, directly or indirectly, with any person to
distribute the Common Stock. NASD Rule 2710 requires FINRA members firms (unless
an exemption applies) to satisfy the filing requirements of Rule 2710 in
connection with the resale, on behalf of selling shareholders, of the securities
on a principal or agency basis.  FINRA has recently proposed rule changes
to NASD Rule 2710 which may, if approved, modify the requirements of its members
to make filings under NASD Rule 2710. Further, no FINRA member firm may receive
compensation in excess of that allowable under FINRA rules, including Rule 2710,
in connection with the resale of the securities by selling shareholders, which
total compensation may not generally exceed 8%, subject to the amount being
raised in the offering.

     

    The
Company is required to pay certain fees and expenses incurred by the Company
incident to the registration of the shares.  The Company has agreed to
indemnify the Selling Stockholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.

     

    Because
Selling Stockholders may be deemed to be “underwriters” within the meaning of
the Securities Act, they will be subject to the prospectus delivery requirements
of the Securities Act including Rule 172 thereunder.  In addition, any
securities covered by this prospectus which qualify for sale pursuant to Rule
144 under the Securities Act may be sold under Rule 144 rather than under this
prospectus.  There is no underwriter or coordinating broker acting in
connection with the proposed sale of the resale shares by the Selling
Stockholders.

     

    We agreed
to keep this prospectus effective until the earlier of (i) the date on which the
shares may be resold by the Selling Stockholders without registration and
without regard to any volume limitations by reason of Rule 144(k) under the
Securities Act or any other rule of similar effect or (ii) all of the shares
have been sold pursuant to this prospectus or Rule 144 under the Securities Act
or any other rule of similar effect.  

     

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

       

       

      The
resale shares will be sold only through registered or licensed brokers or
dealers if required under applicable state securities laws. In addition, in
certain states, the resale shares may not be sold unless they have been
registered or qualified for sale in the applicable state or an exemption from
the registration or qualification requirement is available and is complied
with.

    

     

    Under
applicable rules and regulations under the Exchange Act, any person engaged in
the distribution of the resale shares may not simultaneously engage in market
making activities with respect to the common stock for the applicable restricted
period, as defined in Regulation M, prior to the commencement of the
distribution.  In addition, the Selling Stockholders will be subject
to applicable provisions of the Exchange Act and the rules and regulations
thereunder, including Regulation M, which may limit the timing of purchases and
sales of shares of the common stock by the Selling Stockholders or any other
person.  We will make copies of this prospectus available to the
Selling Stockholders and have informed them of the need to deliver a copy of
this prospectus to each purchaser at or prior to the time of the sale (including
by compliance with Rule 172 under the Securities Act).

     

     

     

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

     

     

     

     

    Annex
B

     

    [__________]

     

    Selling
Securityholder Notice and Questionnaire

     

    The
undersigned beneficial owner of common stock (the “Registrable
Securities”) of China North East Petroleum Holdings, Inc, a
Nevada corporation (the “Company”),
understands that the Company has filed or intends to file with the Securities
and Exchange Commission (the “Commission”) a
registration statement (the “Registration
Statement”) for the registration and resale under Rule 415 of the
Securities Act of 1933, as amended (the “Securities Act”), of
the Registrable Securities, in accordance with the terms of the Registration
Rights Agreement (the “Registration Rights
Agreement”) to which this document is annexed.  A copy of the
Registration Rights Agreement is available from the Company upon request at the
address set forth below.  All capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Registration Rights
Agreement.

     

    Certain
legal consequences arise from being named as a selling securityholder in the
Registration Statement and the related prospectus.  Accordingly,
holders and beneficial owners of Registrable Securities are advised to consult
their own securities law counsel regarding the consequences of being named or
not being named as a selling securityholder in the Registration Statement and
the related prospectus.

     

    NOTICE

     

    The
undersigned beneficial owner (the “Selling
Securityholder”) of Registrable Securities hereby elects to include the
Registrable Securities owned by it in the Registration Statement.

     

     

     

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

     

     

     

    The
undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:

     

    QUESTIONNAIRE

     

    
      	
               
      

            	
              1.

            	
              Name.

            

    

     

    
      	
               
      

            	
              (a)

            	
              Full
      Legal Name of Selling
Securityholder

            

    

     

    
      	 
      
	 
      

    

    

    
      	
               
      

            	
              (b)

            	
              Full
      Legal Name of Registered Holder (if not the same as (a) above) through
      which Registrable Securities are
held:

            

    

     

    
      	 
      
	 
      

    

    

    
      	
               
      

            	
              (c)

            	
              Full
      Legal Name of Natural Control Person (which means a natural person who
      directly or indirectly alone or with others has power to vote or dispose
      of the securities covered by the
questionnaire):

            

    

     

    
      	 
      
	 
      

    

     

    
       

      
        	
                 
      

              	
                2.

              	
                Address
      for Notices to Selling
Securityholder:

              

      

       

    

    
      	 
      
	 
      
	 
      
	
              Telephone:

            
	
              Fax:

            
	
              Contact
      Person:

            

    

     

     

    
      
        
          	
                   
      

                	
                  3.

                	
                  Broker-Dealer
      Status:

                

        

         

      

    

     

    
      	
               
      

            	
              (a)

            	
              Are
      you a broker-dealer?

            

    

     

    Yes   o                      No   o

     

    
      	
               
      

            	
              (b)

            	
              If
      “yes” to Section 3(a), did you receive your Registrable Securities as
      compensation for investment banking services to the
    Company?

            

    

     

    Yes   o                     No   o

     

    
      	
              Note:

            	
              If
      no, the Commission’s staff has indicated that you should be identified as
      an underwriter in the Registration
Statement.

            

    

     

     

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

     

     

    
      	
               
      

            	
              (c)

            	
              Are
      you an affiliate of a
broker-dealer?

            

    

     

    Yes   o                      No   o

     

    
      	
               
      

            	
              (d)

            	
              If
      you are an affiliate of a broker-dealer, do you certify that you bought
      the Registrable Securities in the ordinary course of business, and at the
      time of the purchase of the Registrable Securities to be resold, you had
      no agreements or understandings, directly or indirectly, with any person
      to distribute the Registrable
Securities?

            

    

     

    Yes   o                      No   o

     

    
      	
              Note:

            	
              If
      no, the Commission’s staff has indicated that you should be identified as
      an underwriter in the Registration
Statement.

            

    

     

     

    
       

      
        
          
            	
                     
      

                  	
                    4.

                  	
                    Beneficial
      Ownership of Securities of the Company Owned by the Selling
      Securityholder.

                  

          

           

        

      

    

    Except
as set forth below in this Item 4, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the securities
issuable pursuant to the Purchase Agreement.

     

    
      	
               
      

            	
              (a)

            	
              Type
      and Amount of other securities beneficially owned by the Selling
      Securityholder:

            

    

     

    
      	 
      
	 
      
	 
      

    

    

     

     

     

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

     

    
       

      
         

        
          
            
              	
                       
      

                    	
                      5.

                    	
                      Relationships
      with the
Company:

                    

            

          

        

      

    

    
    

     

    Except
as set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity
securities of the undersigned) has held any position or office or has had any
other material relationship with the Company (or its predecessors or affiliates)
during the past three years.

     

     

    
      	
               
      

            	
              State
      any exceptions here:

            

    

     

    
      	 
      
	 
      
	 
      

    

    

     

    The
undersigned agrees to promptly notify the Company of any inaccuracies or changes
in the information provided herein that may occur subsequent to the date hereof
at any time while the Registration Statement remains effective.

     

    By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 5 and the inclusion of such
information in the Registration Statement and the related prospectus and any
amendments or supplements thereto.  The undersigned understands that
such information will be relied upon by the Company in connection with the
preparation or amendment of the Registration Statement and the related
prospectus.

     

    IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice
and Questionnaire to be executed and delivered either in person or by its duly
authorized agent.

     

    
      
        	
                Dated:                                                      

              	
                Beneficial
      Owner:    __________________________                                           

              
	 
      	 
      
	 
      	
                By:  _____________________________________                                                    

              
	 
      	
                Name:

              
	 
      	
                Title:

              

      

    

     

     

    

    PLEASE
FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
THE ORIGINAL BY OVERNIGHT MAIL, TO:

    

    

     

    24

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