Document:

China Biologic Products, Inc.: Exhibit 10.5 - Prepared by TNT Filings
Inc.

  

Exhibit 10.5

CHINA BIOLOGIC PRODUCTS, INC.

2008 EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT

Unless otherwise defined herein, the terms in the Stock Option Agreement (the “Option Agreement”) have the same meanings as defined in the China Biologic Products, Inc. 2008 Equity Incentive Plan (the “Plan”).   

I.

NOTICE OF STOCK OPTION GRANT

Optionee:

	
    
Address:
	 

You have been granted an Option to purchase Common Stock of the Company, subject to the terms and conditions of the Plan and this Option Agreement, as follows:

	
     
	 
	
    Grant Date:
	
    
    May 9, 2008

	
    Vesting
    Commencement Date:
	
    
    May 9, 2008

	
    Exercise
    Price per Share:
	
    
    $4.00

	
    Total
    Number of Shares Granted:
	
     

	
    Total
    Exercise Price:
	
     

	
    Type of
    Option:
	
    
    Nonstatutory Stock Option

	
    Expiration
    Date:
	
    
    Ten (10) years after Grant
    Date

	
    Vesting
    Schedule:
	
    
    Options will be fully vested
    as of the Grant Date.

	
     
	
     

	
    Termination
    Period:
	
     

To the extent vested, this Option will be exercisable for three (3) months after Optionee ceases to be a Service Provider, unless termination is due to Optionee’s death or Disability, in which case this Option will be exercisable for twelve (12) months after Optionee ceases to be a Service Provider.  Notwithstanding the foregoing sentence, in no event may this Option be exercised after any termination of the Optionee as a Service Provider determined by the Company’s Board to be for Cause or after the Expiration Date as provided above and this Option may be subject to earlier termination as provided in the Plan.
 

 

“Cause” has the meaning ascribed to such term or words of similar import in Optionee’s written employment or service contract with the Company or its Parent or any Subsidiary and, in the absence of such agreement or definition, means Optionee’s (i) conviction of, or plea of nolo contendere to, a felony or any other crime involving moral turpitude; (ii) fraud on or misappropriation of any funds or property of the Company or its subsidiaries, or any affiliate, customer or vendor; (iii) personal dishonesty, incompetence, willful misconduct, willful violation of any law, rule or regulation (other than minor traffic violations or similar offenses), or breach of fiduciary duty which involves personal profit; (iv) willful misconduct in connection with Optionee’s duties or willful failure to perform Optionee’s responsibilities in the best interests of the Company or its subsidiaries; (v) illegal use or distribution of drugs; (vi) violation of any rule, regulation, procedure or policy of the Company or its subsidiaries; or (vii) breach of any provision of any employment, non-disclosure, non-competition, non-solicitation or other similar agreement executed by Optionee for the benefit of the Company or its subsidiaries, all as determined by the Company’s Board, which determination will be conclusive.    

II.

AGREEMENT

1.

Grant of Option.  The Administrator grants to the Optionee named in the Notice of Stock Option Grant in Part I of this Option Agreement, an Option to purchase the number of Shares set forth in the Notice of Stock Option Grant, at the exercise price per Share set forth in the Notice of Stock Option Grant (the “Exercise Price”), and subject to the terms and conditions of the Plan, which is incorporated herein by reference.  In the event of a conflict between the terms and conditions of the Plan and this Option Agreement, the terms and conditions of the Plan prevail.

If designated in the Notice of Stock Option Grant as an Incentive Stock Option, this Option is intended to qualify as an Incentive Stock Option as defined in Code section 422.  Nevertheless, to the extent that it exceeds the $100,000 rule of Code section 422(d), this Option will be treated as a Nonstatutory Stock Option.

2.

Exercise of Option.

(a)

Right to Exercise.  This Option is exercisable during its term in accordance with the Vesting Schedule set out in the Notice of Stock Option Grant and with the applicable provisions of the Plan and this Option Agreement.

(b)

Method of Exercise.  This Option is exercisable by (i) delivery of an exercise notice in the form attached as Exhibit A (the “Exercise Notice”) or in a manner and pursuant to procedures as the Administrator may determine, which will state the election to exercise the Option, the number of Shares with respect to which the Option is being exercised, and other representations and agreements as may be required by the Company and (ii) paying the Company in full the aggregate Exercise Price as to all Shares being acquired, together with any applicable tax withholding.
 

This Option will be deemed to be exercised upon receipt by the Company of a fully executed Exercise Notice accompanied by the aggregate Exercise Price, together with any applicable tax withholding.
 

-2-

No Shares will be issued pursuant to the exercise of an Option unless the issuance and exercise of Shares complies with Applicable Laws.  Assuming compliance, for income tax purposes the Shares will be considered transferred to the Optionee on the date on which the Option is exercised with respect to the Shares.
 

3.

Method of Payment.  The aggregate Exercise Price may be paid by any of the following, or a combination thereof, at the election of the Optionee:

(a)

cash;

(b)

check;  

(c)

promissory note;

(d)

other Shares, provided Shares have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option will be exercised;
 

(e)

by asking the Company to withhold Shares from the total Shares to be delivered upon exercise equal to the number of Shares having a value equal to the aggregate Exercise Price of the Shares being acquired;

(f)

any combination of the foregoing methods of payment; or  

(g)

such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws.

4.

Restrictions on Exercise.  This Option may not be exercised (a) until such time as the Plan has been approved by the stockholders of the Company, or (b) if the issuance of such Shares upon such exercise or the method of payment of consideration for such shares would constitute a violation of any Applicable Laws.  The Company will be relieved of any liability with respect to any delayed issuance of shares or its failure to issue shares if such delay or failure is necessary to comply with Applicable Laws.

5.

Non-Transferability of Option.  This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by Optionee.  The terms of the Plan and this Option Agreement are binding upon the executors, administrators, heirs, successors and assigns of the Optionee.

6.

Term of Option.  This Option may be exercised only within the term set out in the Notice of Stock Option Grant, and may be exercised during the term only in accordance with the Plan and the terms of this Option.

7.

Tax Obligations.

(a)

Withholding Taxes.  Optionee agrees to arrange for the satisfaction of all Federal, state, local and foreign income and employment tax withholding requirements applicable to the Option exercise.  Optionee acknowledges and agrees that the Company may refuse to honor the exercise and refuse to deliver the Shares if withholding amounts are not delivered at the time of exercise.

-3-

(b)

Notice of Disqualifying Disposition of ISO Shares.  If the Option granted to Optionee is an ISO, and if Optionee sells or otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of (i) the date two (2) years after the Grant Date, or (ii) the date one (1) year after the date of exercise, the Optionee must immediately notify the Company of the disposition in writing.  Optionee agrees that Optionee may be subject to income tax withholding by the Company on the compensation income recognized by the Optionee.
 

(c)

Code Section 409A.  Under Code section 409A, an Option that vests after December 31, 2004 that was granted with a per Share exercise price that is determined by the Internal Revenue Service (the “IRS”) to be less than the Fair Market Value of a Share on the Grant Date (a “discount option”) may be considered deferred compensation.  An Option that is a discount option may result in (i) income recognition by the Optionee prior to the exercise of the Option, (ii) an additional twenty percent (20%) tax, and (iii) potential penalty and interest charges.  Optionee acknowledges that the Company cannot and has not guaranteed that the IRS will agree that the per Share Exercise Price of this Option equals or exceeds Fair Market Value of a Share on the Grant Date in a later examination.  Optionee agrees that if the IRS determines that the Option was granted with a per Share exercise price that was less than the Fair Market Value of a Share on the Grant Date, Optionee will be solely responsible for any and all resulting tax consequences.
 

8.

No Guarantee of Continued Service.  OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING OPTIONEE) AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER. OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS OPTION AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE IN ANY WAY WITH OPTIONEE’S RIGHT OR THE RIGHT OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING OPTIONEE) TO TERMINATE OPTIONEE’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

9.

Notices.  All notices or other communications which are required or permitted hereunder will be in writing and sufficient if
i() personally delivered or sent by telecopy, (ii) sent by nationally-recognized overnight courier or (iii) sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

if to the Optionee, to the address (or telecopy number) set forth on the Notice of Stock Option Grant; and

-4-

 

if to the Company, to the attention of the Chief Financial Officer at the address set forth below:

    China Biologic Products, Inc.

No. 14 East Hushan Road,  

Taian City, Shandong 271000

 People’s Republic of China

or to any other address as the party to whom notice is to be given may have furnished to the other party in writing in accordance herewith.  Any communication will be deemed to have been given (i) when delivered, if personally delivered, or when telecopied, if telecopied, (ii) on the first Business Day (as hereinafter defined) after dispatch, if sent by nationally-recognized overnight courier and (iii) on the fourth Business Day following the date on which the piece of mail containing the communication is posted, if sent by mail.  As used herein, “Business Day” means a day that is not a Saturday, Sunday or a day on which banking institutions in the city to which the notice or communication is to be sent are not required to be open.

10.

Specific Performance.  Optionee expressly agrees that the Company will be irreparably damaged if the provisions of this Option Agreement and the Plan are not specifically enforced.  Upon a breach or threatened breach of the terms, covenants and/or conditions of this Option Agreement or the Plan by the Optionee, the Company will, in addition to all other remedies, be entitled to a temporary or permanent injunction, without showing any actual damage, and/or decree for specific performance, in accordance with the provisions hereof and thereof.  The Administrator has the power to determine what constitutes a breach or threatened breach of this Option Agreement or the Plan.  The Administrator’s determinations will be final and conclusive and binding upon the Optionee.

11.

No Waiver.  No waiver of any breach or condition of this Option Agreement will be deemed to be a waiver of any other or subsequent breach or condition, whether of like or different nature.

12.

Optionee Undertaking.  The Optionee agrees to take whatever additional actions and execute whatever additional documents the Company may in its reasonable judgment deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed on the Optionee pursuant to the express provisions of this Option Agreement.

13.

Modification of Rights.  The rights of the Optionee are subject to modification and termination in certain events as provided in this Option Agreement and the Plan.

14.

Governing Law.  This Agreement is governed by, and construed in accordance with, the laws of the State of
Delaware, without giving effect to its conflict or choice of law principles that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.  

15.

Counterparts; Facsimile Execution.  This Option Agreement may be executed in one or more counterparts, each of which will be deemed to be an original, but all of which together constitute one and the same instrument.  Facsimile execution and delivery of this Option Agreement is legal, valid and binding execution and delivery for all purposes.

-5-

16.

Entire Agreement.  The Plan, this Option Agreement, and upon execution, the Exercise Notice, constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter hereof, and may not be modified adversely to the Optionee’s interest except by means of a writing signed by the Company and Optionee.

17.

Severability.  In the event one or more of the provisions of this Option Agreement should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect any other provisions of this Option Agreement, and this Option Agreement will be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

18.

WAIVER OF JURY TRIAL.  THE OPTIONEE EXPRESSLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS OPTION AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

Optionee acknowledges receipt of a copy of the Plan and represents that he or she is familiar with the terms and provisions thereof, and accepts this Option subject to all of the terms and provisions thereof.  Optionee has reviewed the Plan and this Option in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option and fully understands all provisions of the Option.  Optionee agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or this Option.  Optionee further agrees to notify the Company upon any change in the residence address indicated below.

	OPTIONEE	 	CHINA BIOLOGIC
    PRODUCTS, INC.
	 	 	 
	 	 	 
	
    Signature	 	
    By
	 	 	 
	 	 	 
	
    Print Name	 	
    Print Name
	 	 	 
	 	 	 
	 	 	
    Title
	 	 	 
	
    Residence Address	 	 

-6-

EXHIBIT A

2008 EQUITY INCENTIVE PLAN

EXERCISE NOTICE

China Biologic Products, Inc.

No. 14 East Hushan Road,  

Taian City, Shandong 271000

 People’s Republic of China

Attention: _______________, _________________

 

1.

Exercise of Option.  Effective as of today, _____________, _____, the undersigned (“Optionee”) elects to exercise Optionee’s option to purchase _________ shares of the Common Stock (the “Shares”) of China Biologic Products, Inc. (the “Company”) under and pursuant to the China Biologic Products, Inc. 2008 Equity Incentive Plan (the “Plan”) and the Stock Option Agreement dated ____________, ____ (the “Option Agreement”).

2.

Delivery of Payment.  Optionee herewith delivers to the Company the full purchase price of the Shares, as set forth in the Option Agreement, and any and all withholding taxes due in connection with the exercise of the Option.

3.

Representations of Optionee.  Optionee acknowledges that Optionee has received, read and understood the Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions.

4.

Rights as Stockholder.  Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder exists with respect to the Optioned Stock, notwithstanding the exercise of the Option.  Subject to the requirements of Section 6 below, the Shares will be issued to the Optionee as soon as practicable after the Option is exercised in accordance with the Option Agreement.  No adjustment will be made for a dividend or other right for which the record date is prior to the date of issuance except as provided in the Plan.

5.

Tax Consultation.  Optionee understands that Optionee may suffer adverse tax consequences as a result of Optionee’s purchase or disposition of the Shares.  Optionee represents that Optionee has consulted with any tax consultants Optionee deems advisable in connection with the purchase or disposition of the Shares and that Optionee is not relying on the Company for any tax advice.

6.

Refusal to Transfer.  The Company will not (i) transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Exercise Notice, or (ii) be required to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares have been so transferred.

 

7.

Successors and Assigns.  The Company may assign any of its rights under this Exercise Notice to single or multiple assignees, and this Exercise Notice inures to the benefit of the successors and assigns of the Company.  Subject to the restrictions on transfer herein set forth, this Exercise Notice is binding upon Optionee and his or her heirs, executors, administrators, successors and assigns.

8.

Interpretation.  Any dispute regarding the interpretation of this Exercise Notice will be submitted by Optionee or by the Company forthwith to the Administrator for review at its next regular meeting.  The resolution of disputes by the Administrator will be final and binding on all parties.

9.

Governing Law; Severability.  This Exercise Notice is be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to its conflict or choice of law principles that might otherwise refer construction or interpretation of this Exercise to the substantive law of another jurisdiction.  In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Exercise Notice will continue in full force and effect.

10.

Notices.  Any notice required or permitted hereunder will be provided in writing and deemed effective if provided in the manner specified in the Option Agreement.

11.

Further Instruments.  The parties agree to execute any further instruments and to take any further action as may be reasonably necessary to carry out the purposes and intent of the Option Agreement and this Exercise Notice.

12.

Entire Agreement.  The Plan and Option Agreement are incorporated herein by reference.  This Exercise Notice, the Plan, and the Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter hereof, and may not be modified adversely to the Optionee’s interest except by means of a writing signed by the Company and Optionee.

[Signature Page Follows]

-2-

	Submitted by:
    

    OPTIONEE 	 	Accepted by: 

    CHINA BIOLOGIC PRODUCTS, INC. 
	 	 	 
	 	 	 
	
    Signature	 	
    By
	 	 	 
	 	 	 
	
    Print Name	 	
    Print Name
	 	 	 
	 	 	 
	 	 	
    Title
	 	 	 
	Address:	 	Address:
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	
    Date Received

-3-ex10_6.htm

    
      

      

    

    
      STOCK
        PURCHASE AGREEMENT

      

      THIS
        AGREEMENT(this “Agreement”), entered
        into as of this
        13th
        day of December, 2007, is
        made by and between David E. Mead
        (the“Shareholder”),
        Media Group South, Inc. (“MGUP”), and
        Duane
        Bennett (the “Buyer”).

      

      Whereas,
        the Shareholders desire to sell to the Buyer and the Buyer wishes to purchase
        and acquire from the Shareholders all of the Shareholders’ shares of MGUP’s
        shares of capital stock, representing 72.47% of the capital stock of MGUP,
        pursuant to the terms and conditions of this Agreement.

      

      Now,
        Therefore, in consideration of the representations, warranties and
        agreements set forth herein, the parties hereto hereby agree as
        follows:

      

      ARTICLE
        1

      DEFINITIONS
        AND INTERPRETATION

      

      1.1 Definitions.
        In this Agreement
        the following terms will have the following meanings:

      

      
        	
                (a)  

              	
                “Agreement”
means
                  this
                  Stock Purchase Agreement;

              

      

      

      
        	
                (b)  

              	
                “Closing”
means
                  the
                  completion, on the date hereof, of the transactions contemplated
                  hereby in
                  accordance with Article 7 hereof;

              

      

      

      
        	
                (c)  

              	
                “Place
                  of Closing” means
                  such place as the Buyer and MGUP may mutually agree
                  upon;

              

      

      

      
        	
                (d)  

              	
                “MGUP
                  Accounts Payable and
                  Liabilities” means all accounts payable and liabilities of MGUP, on
                  a consolidated basis, due and owing or otherwise constituting a
                  binding
                  obligation of MGUP;

              

      

      

      
        	
                (e)  

              	
                “MGUP
                  Accounts
                  Receivable” means all accounts receivable and other debts owing to
                  MGUP, on a consolidated basis, as of December 13,
                  2007;

              

      

      

      
        	
                (f)  

              	
                “MGUP
                  Assets” means the
                  undertaking and all the property and assets of the MGUP Business
                  of every
                  kind and description wheresoever situated including, without limitation,
                  MGUP Equipment, MGUP Inventory, MGUP Material Contracts, MGUP Accounts
                  Receivable, MGUP Cash, MGUP Intangible Assets and MGUP Goodwill,
                  and all
                  credit cards, charge cards and banking cards issued to
                  MGUP;

              

      

      

      
        	
                (g)  

              	
                “MGUP
                  Bank Accounts”
                  means all of the bank accounts, lock boxes and safety deposit boxes
                  of
                  MGUP or relating to the MGUP
                  Business;

              

      

      

      
        	
                (h)  

              	
                “MGUP
                  Business” means all
                  aspects of any business conducted by
                  MGUP;

              

      

      

      
        	
                (i)  

              	
                “MGUP
                  Cash” means all
                  cash on hand or on deposit to the credit of MGUP on the date
                  hereof;

              

      

      

      
        	
                (j)  

              	
                “MGUP
                  Common Shares”
                  means the shares of common stock in the capital of
                  MGUP;

              

      

      

      
        	
                 

              	
                (k)

              	
                “MGUP
                  Debt to Related
                  Parties” means the debts owed by MGUP to any affiliate, director
                  or
                  officer of MGUP; 

              

      

      

      
        	
                (l)  

              	
                “MGUP
                  Equipment” means
                  all machinery, equipment, furniture, and furnishings used in the
                  MGUP
                  Business;

              

      

      

      
        	
                (m)  

              	
                “MGUP
                  Financial
                  Statements” means, collectively, the unaudited consolidated
                  financial statements of MGUP for the fiscal year ended December
                  31, 2006,
                  and the unaudited consolidated financial statements of MGUP for
                  the eight
                  month period ended August 31, 2007;

              

      

      

      
        	
                (n)  

              	
                “MGUP
                  Goodwill” means the
                  goodwill of the MGUP Business including the right to all corporate,
                  operating and trade names associated with the MGUP Business, or
                  any
                  variations of such names as part of or in connection with the MGUP
                  Business, all books and records and other information relating
                  to the MGUP
                  Business, all necessary licenses and authorizations and any other
                  rights
                  used in connection with the MGUP
                  Business;

              

      

      

      
        	
                (o)  

              	
                “MGUP
                  Insurance Policies”
                  means the public liability insurance and insurance against loss
                  or damage
                  to the MGUP Assets and the MGUP
                  Business;

              

      

      

      
        	
                (p)  

              	
                “MGUP
                  Intangible Assets”
                  means all of the intangible assets of MGUP, including, without
                  limitation,
                  MGUP Goodwill, all trademarks, logos, copyrights, designs, and
                  other
                  intellectual and industrial property of
                  MGUP;

              

      

      

      
        	
                (q)  

              	
                “MGUP
                  Inventory” means
                  all inventory and supplies of the MGUP Business as of Decembet
                  13,
                  2007;

              

      

      

      
        	
                (r)  

              	
                “MGUP
                  Material Contracts”
                  means the burden and benefit of and the right, title and interest
                  of MGUP
                  in, to and under all trade and non-trade contracts, engagements
                  or
                  commitments, whether written or oral, to which MGUP is entitled,
                  whereunder MGUP is obligated to pay or entitled to receive the
                  sum of $250
                  or more including, without limitation, any pension plans, profit
                  sharing
                  plans, bonus plans, loan agreements, security agreements, indemnities
                  and
                  guarantees, any agreements with employees, lessees, licensees,
                  managers,
                  accountants, suppliers, agents, distributors, officers, directors,
                  attorneys or others which cannot be terminated without liability
                  on not
                  more than one month's notice; and

              

      

      

      
        	
                (s)  

              	
                “Shares”
shall
                  mean the
                  MGUP Common Shares to be sold to Buyer by MGUP
                  hereunder.

              

      

      

      Any
        other terms defined within the text
        of this Agreement will have the meanings so ascribed to them.

      

      1.2 Captions
        and Section Numbers.
        The headings and section references in this Agreement are for convenience
        of
        reference only and do not form a part of this Agreement and are not intended
        to
        interpret, define or limit the scope, extent or intent of this Agreement
        or any
        provision thereof.

      

      1.3 Section
        References and
        Schedules. Any
        reference to a particular “Article”, “section”, “paragraph”, “clause” or other
        subdivision is to the particular Article, section, clause or other subdivision
        of this Agreement and any reference to a Schedule by letter will mean the
        appropriate Schedule attached to this Agreement and by such reference the
        appropriate Schedule is incorporated into and made part of this
        Agreement.

      

      1.4 Severability
        of Clauses. If
        any part of this Agreement is declared or held to be invalid for any reason,
        such invalidity will not affect the validity of the remainder which will
        continue in full force and effect and be construed as if this Agreement had
        been
        executed without the invalid portion, and it is hereby declared the intention
        of
        the parties that this Agreement would have been executed without reference
        to
        any portion which may, for any reason, be hereafter declared or held to be
        invalid.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        2

      PURCHASE
        AND SALE

      

      2.1 Issuance
        of the
        Shares.  Subject to all of the terms and conditions of this
        Agreement, the Shareholders do hereby sell, assign, transfer and convey to
        the
        Buyer, and the Buyer does hereby purchase and accept from the Shareholders,
        all
        of the Shares as set forth on Exhibit A, free
        and
        clear of all encumbrances, liens, charges and claims, which Shares represent
        72.47% of the capital stock of MGUP.

      

      2.2 Purchase
        Price; Payment. The
        purchase price for the Shares is $75,000 (collectively the “Purchase Price”) and shall be
        paid by wire transfer of immediately available funds or bank or certified
        check
        in accordance with Exhibit
        A.  The parties approve the distribution of the Purchase Price
        as set forth on Exhibit
        A.

      

      ARTICLE
        3

      SHAREHOLDER
        REPRESENTATIONS AND WARRANTIES

      

      3.1 Representations
        and
        Warranties.  The Shareholder and MGUP jointly and severally
        make the representations and warranties set forth below and intend and
        acknowledge that the Buyer will rely thereon in entering into this Agreement
        and
        in approving and completing the transactions contemplated hereby. Any schedules
        described in or contemplated by such representations and warranties shall
        be
        prepared both as of the date of this Agreement and as of the date of the
        Closing.

      

      The
        Shareholder

      

      
        	
                (a)  

              	
                Power
                  and
                  Capacity.  The Shareholder has the power, authority and
                  capacity to enter into this Agreement and to consummate the transactions
                  contemplated hereby.  This Agreement constitutes the
                  Shareholder’s valid, legal and binding obligation and is enforceable
                  against the Shareholder in accordance with its terms, subject,
                  however, as
                  to enforcement, to bankruptcy, insolvency, fraudulent transfer,
                  moratorium
                  and similar laws of general applicability relating to or affecting
                  creditors’ rights;

              

      

      

      MGUP
        - Corporate Status and Capacity

      

      
        	
                (b)  

              	
                Incorporation.
                  MGUP is a corporation duly incorporated and validly subsisting
                  under the
                  laws of the State of Nevada, and is in good standing with the office
                  of
                  the Secretary of State for the State of
                  Nevada;

              

      

      

      
        	
                (c)  

              	
                Carrying
                  on
                  Business. MGUP conducts the business as described in their Pink
                  Sheet disclosure documents.  MGUP is not required to register or
                  otherwise be qualified to carry on business in any foreign
                  jurisdiction;

              

      

      

      
        	
                (d)  

              	
                Corporate
                  Capacity. MGUP has the corporate power, capacity and authority to
                  own the MGUP Assets;

              

      

       

      
        	
                 

              	
                MGUP
                  - Capitalization 

              

      

      

      
        	
                (e)  

              	
                Authorized
                  Capital. The authorized capital of MGUP consists of:  (i)
                  100,000,000 MGUP Common Shares, $0.001 par value, of which 30,356,200
                  MGUP
                  Common Shares are presently issued and outstanding; and (ii) no
                  Preferred
                  Stock.

              

      

      

      
        	
                (f)  

              	
                No
                  Option. No
                  person, firm or corporation has any agreement, warrant or option
                  or any
                  right capable of becoming an agreement or option for the acquisition
                  of
                  MGUP Common Shares or for the purchase, subscription or issuance
                  of any
                  other securities of MGUP;

              

      

      

      
        	
                 

              	
                MGUP
                  - Records and Financial Statements 

              

      

      

      
        	
                (g)  

              	
                Charter
                  Documents. The charter documents of MGUP have not been altered
                  since its incorporation, except as filed in the record books of
                  MGUP;

              

      

      

      
        	
                (h)  

              	
                Corporate
                  Minute
                  Books. The corporate minute books of MGUP is complete and each
                  of
                  the minutes contained therein accurately reflect the actions that
                  were
                  taken at a duly called and held meeting or by consent without a
                  meeting.
                  All actions by MGUP which required director or shareholder approval
                  are
                  reflected on the corporate minute books of MGUP. MGUP is not in
                  violation
                  or breach of, or in default with respect to, any term of their
                  respective
                  Certificates of Incorporation (or other charter documents) or
                  by-laws.

              

      

      

      
        	
                (i)  

              	
                MGUP
                  Financial
                  Statements. The MGUP Financial Statements present fairly, in all
                  material respects, the assets and liabilities (whether accrued,
                  absolute,
                  contingent or otherwise) of MGUP, on a consolidated basis, as of
                  the
                  respective dates thereof, and the sales and earnings of the MGUP
                  Business
                  during the periods covered thereby, in all material respects and
                  have been
                  prepared in substantial accordance with generally accepted accounting
                  principles consistently applied;

              

      

      

      
        	
                (j)  

              	
                MGUP
                  Accounts Payable
                  and Liabilities. There are no liabilities, contingent or otherwise,
                  of MGUP which are not disclosed in Schedule “A” hereto or reflected in the
                  MGUP Financial Statements and MGUP has not guaranteed or agreed
                  to
                  guarantee any debt, liability or other obligation of any person,
                  firm or
                  corporation;

              

      

      

      
        	
                (k)  

              	
                MGUP
                  Accounts
                  Receivable. All the MGUP Accounts Receivable result from bona fide
                  business transactions and services actually rendered without, to
                  the
                  knowledge and belief of MGUP, any claim by the obligor for set-off
                  or
                  counterclaim;

              

      

      

      
        	
                (l)  

              	
                MGUP
                  Bank
                  Accounts. All of the MGUP Bank Accounts, their location, numbers
                  and the authorized signatories thereto are as set forth in Schedule
“C”
                  hereto, if any;

              

      

      

      
        	
                (m)  

              	
                No
                  Debt to Related
                  Parties. Except as disclosed in Schedule “D” hereto, MGUP is, and
                  on Closing will not be, indebted to any affiliate, director or
                  officer of
                  MGUP;

              

      

      

      
        	
                (n)  

              	
                No
                  Related Party Debt
                  to MGUP. No director or officer or affiliate of MGUP is now
                  indebted to or under any financial obligation to MGUP on any account
                  whatsoever;

              

      

      

      
        	
                (o)  

              	
                No
                  Dividends.
                  No dividends or other distributions on any shares in the capital
                  of MGUP
                  have been made, declared or authorized since the date of MGUP Financial
                  Statements;

              

      

      

      
        	
                (p)  

              	
                No
                  Payments. No
                  payments of any kind have been made or authorized since the date
                  of the
                  MGUP Financial Statements to or on behalf of officers, directors,
                  shareholders or employees of MGUP or under any management agreements
                  with
                  MGUP, except payments made in the ordinary course of business and
                  at the
                  regular rates of salary or other remuneration payable to
                  them;

              

      

      

      
        	
                (q)  

              	
                No
                  Pension
                  Plans. There are no pension, profit sharing, group insurance
                  or
                  similar plans or other deferred compensation plans affecting
                  MGUP;

              

      

      

      
        	
                (r)  

              	
                No
                  Adverse
                  Events. Since the date of the MGUP Financial
                  Statements

              

      

      

      
        	
                (i)  

              	
                there
                  has not been any adverse change in the financial position or condition
                  of
                  MGUP, its liabilities or the MGUP Assets or any damage, loss or
                  other
                  change in circumstances affecting MGUP, the MGUP Business or the
                  MGUP
                  Assets or MGUP’s right to carry on the MGUP Business, other than changes
                  in the ordinary course of business,

              

      

      

      
        	
                (ii)  

              	
                there
                  has not been any damage, destruction, loss or other event (whether
                  or not
                  covered by insurance) adversely affecting MGUP, the MGUP Business
                  or the
                  MGUP Assets,

              

      

      

      
        	
                (iii)  

              	
                there
                  has not been any increase in the compensation payable or to become
                  payable
                  by MGUP to any of MGUP’s officers, employees or agents or any bonus,
                  payment or arrangement made to or with any of
                  them,

              

      

      

      
        	
                (iv)  

              	
                the
                  MGUP Business has been and continues to be carried on in the ordinary
                  course,

              

      

      

      
        	
                (v)  

              	
                MGUP
                  has not waived or surrendered any right of material
                  value,

              

      

      

      
        	
                (vi)  

              	
                MGUP
                  has not discharged or satisfied or paid any lien or encumbrance
                  or
                  obligation or liability other than current liabilities in the ordinary
                  course of business, and

              

      

      

      
        	
                (vii)  

              	
                no
                  capital expenditures in excess of $250 individually or $500 in
                  total have
                  been authorized or made.

              

      

      

      MGUP
        - Income Tax Matters

      

      
        	
                (s)  

              	
                Tax
                  Returns.
                  All tax returns and reports of MGUP required by law to be filed
                  have been
                  filed and are true, complete and correct, and any taxes payable
                  in
                  accordance with any return filed by MGUP or in accordance with
                  any notice
                  of assessment or reassessment issued by any taxing authority have
                  been so
                  paid;

              

      

      

      
        	
                (t)  

              	
                Current
                  Taxes.
                  Adequate provisions have been made for taxes payable for the current
                  period for which tax returns are not yet required to be filed and
                  there
                  are no agreements, waivers, or other arrangements providing for
                  an
                  extension of time with respect to the filing of any tax return
                  by, or
                  payment of, any tax, governmental charge or deficiency by
                  MGUP.  There are no contingent tax liabilities or any grounds
                  which would prompt a reassessment including aggressive treatment
                  of income
                  and expenses in filing earlier tax
                  returns;

              

      

      

      MGUP
        - Applicable Laws and Legal Matters

      

      
        	
                (u)  

              	
                Licenses.
                  MGUP
                  holds all licenses and permits as may be requisite for carrying
                  on the
                  MGUP Business in the manner in which it has heretofore been carried
                  on,
                  which licenses and permits have been maintained and continue to
                  be in good
                  standing except where the failure to obtain or maintain such licenses
                  or
                  permits would not have an adverse effect on the MGUP
                  Business;

              

      

      

      
        	
                (v)  

              	
                Applicable
                  Laws. MGUP has not been charged with or received notice of breach
                  of any laws, ordinances, statutes, regulations, by-laws, orders
                  or decrees
                  to which they are subject or which apply to them the violation
                  of which
                  would have an adverse effect on the MGUP Business (greater than
                  $250), and
                  to MGUP’s knowledge, MGUP is not in breach of any laws, ordinances,
                  statutes, regulations, bylaws, orders or decrees the contravention
                  of
                  which would result in an adverse impact on the MGUP
                  Business;

              

      

      

      
        	
                (w)  

              	
                Pending
                  or Threatened
                  Litigation. There is no litigation or administrative or
                  governmental proceeding pending or threatened against or relating
                  to MGUP,
                  the MGUP Business, or any of the MGUP Assets nor does MGUP have
                  any
                  knowledge after due investigation of any deliberate act or omission
                  of
                  MGUP that would form any basis for any such action or
                  proceeding;

              

      

      

      
        	
                (x)  

              	
                No
                  Bankruptcy.
                  MGUP has not made any voluntary assignment or proposal under applicable
                  laws relating to insolvency and bankruptcy and no bankruptcy petition
                  has
                  been filed or presented against MGUP and no order has been made
                  or a
                  resolution passed for the winding-up, dissolution or liquidation
                  of
                  MGUP;

              

      

      

      
        	
                (y)  

              	
                Labor
                  Matters.
                  MGUP is not party to any collective agreement relating to the MGUP
                  Business with any labor union or other association of employees
                  and no
                  part of the MGUP Business has been certified as a unit appropriate
                  for
                  collective bargaining or, to the best knowledge of MGUP, has made
                  any
                  attempt in that regard;

              

      

      

      
        	
                (z)  

              	
                Finder's
                  Fees.
                  MGUP is not party to any agreement which provides for the payment
                  of
                  finder's fees, brokerage fees, commissions or other fees or amounts
                  which
                  are or may become payable to any third party in connection with
                  the
                  execution and delivery of this Agreement and the transactions contemplated
                  herein;

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Execution
        and Performance of Agreement

      

      
        	
                (aa)  

              	
                Authorization
                  and
                  Enforceability. The completion of the transactions contemplated
                  hereby, have been duly and validly authorized by all necessary
                  corporate
                  action on the part of MGUP;

              

      

      

      
        	
                (bb)  

              	
                No
                  Violation or
                  Breach. The execution and performance of this Agreement will
                  not:

              

      

      

      
        	
                (i)  

              	
                violate
                  the charter documents of MGUP or result in any breach of, or default
                  under, any loan agreement, mortgage, deed of trust, or any other
                  agreement
                  to which MGUP is a party,

              

      

      

      
        	
                (ii)  

              	
                give
                  any person any right to terminate or cancel any agreement including,
                  without limitation, the MGUP Material Contracts, or any right or
                  rights
                  enjoyed by MGUP,

              

      

      

      
        	
                (iii)  

              	
                result
                  in any alteration of MGUP’s obligations under any agreement to which MGUP
                  is a party including, without limitation, the MGUP Material
                  Contracts,

              

      

      

      
        	
                (iv)  

              	
                result
                  in the creation or imposition of any lien, encumbrance or restriction
                  of
                  any nature whatsoever in favor of a third party upon or against
                  the MGUP
                  Assets,

              

      

      

      
        	
                (v)  

              	
                result
                  in the imposition of any tax liability to MGUP relating to the
                  MGUP
                  Assets, or

              

      

      

      
        	
                (vi)  

              	
                violate
                  any court order or decree to which MGUP is
                  subject;

              

      

      

      MGUP
        Assets - Ownership and Condition

      

      
        	
                (cc)  

              	
                Business
                  Assets. The MGUP Assets comprise all of the property and assets
                  of
                  the MGUP Business, and no other person, firm or corporation owns
                  any
                  assets used by MGUP in operating the MGUP Business, whether under
                  a lease,
                  rental agreement or other
                  arrangement;

              

      

      

      
        	
                (dd)  

              	
                Title.
                  MGUP is
                  the legal and beneficial owner of the MGUP Assets, free and clear
                  of all
                  mortgages, liens, charges, pledges, security interests, encumbrances
                  or
                  other claims whatsoever;

              

      

      

      
        	
                (ee)  

              	
                No
                  Option. No
                  person, firm or corporation has any agreement or option or a right
                  capable
                  of becoming an agreement for the purchase of any of the MGUP
                  Assets;

              

      

      

      
        	
                (ff)  

              	
                MGUP
                  Insurance
                  Policies. MGUP does not maintain the public liability insurance
                  and
                  insurance against loss or damage to the MGUP Assets and the MGUP
                  Business;

              

      

      

      
        	
                (gg)  

              	
                MGUP
                  Material
                  Contracts. The MGUP Material Contracts listed in Schedule “I”
                  constitute all of the material contracts of MGUP, if
                  any;

              

      

      

      
        	
                (hh)  

              	
                No
                  Default.
                  There has not been any default in any obligation of MGUP or any
                  other
                  party to be performed under any of the MGUP Material Contracts,
                  each of
                  which is in good standing and in full force and effect and unamended
                  (except as disclosed in Schedule “I” hereto, if applicable), and MGUP is
                  not aware of any default in the obligations of any other party
                  to any of
                  the MGUP Material Contracts;

              

      

      

      
        	
                (ii)  

              	
                No
                  Compensation on
                  Termination. There are no agreements, commitments or understandings
                  relating to severance pay or separation allowances on termination
                  of
                  employment of any employee of MGUP. MGUP is not obliged to pay
                  benefits or
                  share profits with any employee after termination of employment
                  except as
                  required by law;

              

      

      

      MGUP
        Assets - MGUP Equipment

      

      
        	
                (jj)  

              	
                MGUP
                  Equipment.
                  The MGUP Equipment has been maintained in a manner consistent with
                  that of
                  a reasonably prudent owner and such equipment is in good working
                  condition;

              

      

      

      MGUP
        Assets - MGUP Goodwill and Other Assets

      

      
        	
                (kk)  

              	
                MGUP
                  Goodwill.
                  MGUP does not carry on the MGUP Business under any other business
                  or trade
                  names. MGUP does not have any knowledge of any infringement by
                  MGUP of any
                  patent, trademarks, copyright or trade
                  secret;

              

      

      

      MGUP
        Business

      

      
        	
                (ll)  

              	
                Maintenance
                  of
                  Business. Since the date of the MGUP Financial Statements, MGUP
                  has
                  not entered into any agreement or commitment except as disclosed
                  herein;

              

      

      

      
        	
                (mm)  

              	
                Subsidiaries.
                  MGUP does not own any subsidiaries and does not otherwise own,
                  directly or
                  indirectly, any shares or interest in any other corporation, partnership,
                  joint venture or firm; and

              

      

      

      MGUP
        - Shares

      

      
        	
                (nn)  

              	
                Shares.
                  The
                  Shares when delivered to the Buyer shall be validly issued and
                  outstanding
                  as fully paid and non-assessable shares and the Shares shall be
                  transferable upon the books of MGUP, in all cases subject to the
                  provisions and restrictions of all applicable securities
                  laws.

              

      

      

      3.2  Survival.
        The representations and
        warranties herein will be true at and as of the date hereof in all material
        respects.  Notwithstanding the completion of the transactions
        contemplated hereby, the waiver of any condition contained herein (unless
        such
        waiver expressly releases a party from any such representation or warranty)
        or
        any investigation made by the Buyer, the representations and warranties made
        herein shall survive the Closing and be effective for a period of twelve
        months
        (12) months from the date hereof.

      

      3.3 Indemnity.
        The Shareholder
        agrees to indemnify and save harmless the Buyer from and against any and
        all
        claims, demands, actions, suits, proceedings, assessments, judgments, damages,
        costs, losses and expenses, including any payment made in good faith in
        settlement of any claim (subject to the right of the Shareholder to defend
        any
        such claim), resulting from the breach by them of any representation or warranty
        made under this Agreement or from any misrepresentation in or omission from
        any
        certificate or other instrument furnished or to be furnished by MGUP to the
        Buyer hereunder.

      

      ARTICLE
        4

      REPRESENTATIONS
        AND WARRANTIES OF THE BUYER

      

      4.1 Representations
        and
        Warranties. The Buyer makes the representations and warranties set forth
        below and intend and acknowledge that MGUP and the Shareholder will rely
        thereon
        in entering into this Agreement and in approving and completing the transactions
        contemplated hereby. Any schedules described in or contemplated by such
        representations and warranties shall be prepared both as of the date of this
        Agreement and as of the date of the Closing.

      

      
        	
                (a)  

              	
                Power
                  and
                  Capacity. The Buyer has the power, authority and capacity to enter
                  into this Agreement and to consummate the transactions contemplated
                  hereby.  This Agreement constitutes the Buyer’s valid, legal and
                  binding obligation and is enforceable against it in accordance
                  with its
                  terms, subject, however, as to enforcement, to bankruptcy, insolvency,
                  fraudulent transfer, moratorium and similar laws of general applicability
                  relating to or affecting creditors’ rights and to general principles of
                  equity, regardless of whether such enforceability is considered
                  in equity
                  or at law;

              

      

      

      
        	
                (b)  

              	
                No
                  Conflict.  Neither the execution and delivery of this
                  Agreement by the Buyer, nor compliance with any of the provisions
                  hereof,
                  nor the consummation of the transactions contemplated hereby, will:
                  (a)
                  result in a default, or give rise to any right of termination,
                  cancellation or acceleration, under any term, condition or provision
                  of
                  any contract or other instrument or obligation to which the Buyer
                  is a
                  party or by which its assets may be bound; or (b) violate any order,
                  writ,
                  injunction or decree applicable to the Buyer, or any of its properties
                  or
                  assets.

              

      

      

      
        	
                (c)  

              	
                Legal
                  Proceedings,
                  Etc. There
                  is no legal,
                  equitable, administrative or arbitration action, suit, proceeding
                  or known
                  investigation pending or threatened against or affecting the
                  Buyer.  There is no judgment, decree, injunction, rule or order
                  of any court, governmental department, commission, agency, instrumentality
                  or arbitrator outstanding against the Buyer and there is no basis
                  for any
                  action, suit, proceeding or investigation against the
                  Buyer.

              

      

      

      4.2 Survival.
        The representations and
        warranties of the Buyer contained herein will be true at and as of Closing
        in
        all material respects as though such representations and warranties were
        made as
        of such time.  Notwithstanding the completion of the transactions
        contemplated hereby, the waiver of any condition contained herein (unless
        such
        waiver expressly releases a party from any such representation or warranty)
        or
        any investigation made by the Shareholder, the representations and warranties
        of
        the Buyer made herein shall survive the Closing and be effective for a period
        of
        twelve (12) months from the date hereof.

      

      4.3 Indemnity.
        The Buyer agrees to
        indemnify and save harmless MGUP and the Shareholder from and against any
        and
        all claims, demands, actions, suits, proceedings, assessments, judgments,
        damages, costs, losses and expenses, including any payment made in good faith
        in
        settlement of any claim (subject to the right of the Buyer to defend any
        such
        claim), resulting from the breach by any of them of any representation or
        warranty of such party made under this Agreement or from any misrepresentation
        in or omission from any certificate or other instrument furnished or to be
        furnished by the Buyer to the Shareholder hereunder.

      

      4.4 Escrow.
        The full amount of the
        Purchase Price has been placed in escrow (the “Escrow Proceeds”) with JPF
        Securities Law, LLC.  Upon Closing of the transactions contemplated
        hereby, the Parties hereby authorize the release of the Escrow Proceeds as
        follows:  $75,000 to the Seller.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        5

      FURTHER
        COVENANTS

      

      5.1  Legend.   The
        Buyer agrees to the imprinting of the following legend on any certificates
        representing the Shares:

       

      “THESE
        SECURITIES HAVE 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.  THESE SECURITIES ARE “RESTRICTED SECURITIES” WITHIN
        THE MEANING OF RULE 144(3) OF THE SECURITIES ACT AND MAY NOT BE RESOLD PUBLICLY
        UNDER RULE 144 UNTIL CERTAIN HOLDING PERIOD REQUIREMENTS ARE MET.”

      

      5.2  Expenses
        of the
        Parties.  Except as otherwise expressly provided in this
        Agreement, all expenses incurred by any party to this Agreement in the
        preparation, negotiation, authorization and consummation of this Agreement
        and
        the transactions contemplated hereby, including all fees and expenses of
        agents,
        representatives, counsel and accountants, shall be borne solely by the party
        incurring such expense(s), with the caveat that any expenses incurred by
        MGUP
        shall be paid prior to the Closing of the transactions contemplated
        hereby.

      

      5.3 Further
        Assurances.  Each party shall cooperate with the other, take
        such further action and execute and deliver such further documents as may
        be
        reasonably requested by any other party in order to carry out the terms and
        purposes of this Agreement.

      

      ARTICLE
        6

      CONDITIONS
        PRECEDENT

      

      6.1 Conditions
        Precedent in favor of MGUP
        and the Shareholder. The obligations of MGUP and the Shareholder to carry
        out the transactions contemplated hereby are subject to the fulfillment of
        each
        of the following conditions precedent on or before the Closing:

      

      
        	
                (a)  

              	
                all
                  documents or copies of documents required to be executed and delivered
                  to
                  MGUP hereunder will have been so executed and
                  delivered;

              

      

      

      
        	
                (b)  

              	
                all
                  of the terms, covenants and conditions of this Agreement to be
                  complied
                  with or performed by the Buyer at or prior to the Closing will
                  have been
                  complied with or performed; and

              

      

      

      
        	
                (c)  

              	
                the
                  transactions contemplated hereby shall have been approved by all
                  other
                  regulatory authorities having jurisdiction over the subject matter
                  hereof,
                  if any.

              

      

      

      6.2
Waiver
        by MGUP and the
        Shareholder. The conditions precedent set out in the preceding section
        are inserted for the exclusive benefit of MGUP and the Shareholder and any
        such
        condition may be waived in whole or in part by MGUP or the Shareholder at
        or
        prior to Closing by delivering to the Buyer a written waiver to that effect
        signed by MGUP or the Shareholder, as the case may be. In the event that
        the
        conditions precedent set out in the preceding section are not satisfied on
        or
        before the Closing, the Shareholder shall be released from all obligations
        under
        this Agreement.

      

      6.3 Conditions
        Precedent in Favor of the
        Buyer. The obligation of the Buyer to carry out the transactions
        contemplated hereby is subject to the fulfillment of each of the following
        conditions precedent on or before the Closing:

      

      
        	
                (a)  

              	
                all
                  documents or copies of documents required to be executed and delivered
                  to
                  the MGUP or the Shareholder hereunder will have been so executed
                  and
                  delivered;

              

      

      

      
        	
                (b)  

              	
                all
                  of the terms, covenants and conditions of this Agreement to be
                  complied
                  with or performed by the Shareholder or MGUP at or prior to the
                  Closing
                  will have been complied with or
                  performed;

              

      

      

      
        	
                (c)  

              	
                MGUP
                  will have delivered the Shares, duly and validly issued, to the
                  Buyer at
                  the Closing;

              

      

      

      
        	
                (d)  

              	
                title
                  to the Shares will be free and clear of all mortgages, liens, charges,
                  pledges, security interests, encumbrances or other claims
                  whatsoever;

              

      

      

      
        	
                (e)  

              	
                MGUP
                  shall terminate their current transfer agent and transfer the account
                  to
                  Guardian Registrar & Transfer,
                  Inc.;

              

      

      

      
        	
                (h)  

              	
                the
                  transactions contemplated hereby shall have been approved by all
                  other
                  regulatory authorities having jurisdiction over the subject matter
                  hereof,
                  if any;

              

      

      

      
        	
                (i)  

              	
                the
                  completion of the transfer of all assets and liabilities of MGUP
                  on or
                  prior to the Closing will have been completed to the satisfaction
                  of the
                  Buyer, which transfer shall reflected in the schedules provided
                  to the
                  Buyer as of the date of the Closing;
                  and

              

      

      

      6.4  Waiver
        by the Buyer. The
        conditions precedent set out in the preceding section are inserted for the
        exclusive benefit of the Buyer and any such condition may be waived in whole
        or
        in part by the Buyer at or prior to the Closing by delivering to MGUP and
        Shareholder a written waiver to that effect signed by the Buyer. In the event
        that the conditions precedent set out in the preceding section are not satisfied
        on or before the Closing the Buyer shall be released from all obligations
        under
        this Agreement.

      

      6.5 Confidentiality
        Notwithstanding any provision herein to the contrary, the parties hereto
        agree
        that the existence and terms of this Agreement are confidential and that
        if this
        Agreement is terminated pursuant to the preceding section the parties agree
        to
        return to one another any and all financial, technical and business documents
        delivered to the other party or parties in connection with the negotiation
        and
        execution of this Agreement and shall keep the terms of this Agreement and
        all
        information and documents received from the other party and the contents
        thereof
        confidential and not utilize nor reveal or release same.

      

      ARTICLE
        7

      CLOSING

      

      7.1 Closing.
        The sale of the
        Shares and the other transactions contemplated by this Agreement will be
        closed
        at the Place of Closing in accordance with the closing procedure set out
        in this
        Article.

      

      7.2 Closing
        Deliveries of the Buyer.
On or before the Closing, the Buyer will deliver or cause to be delivered
        to the Shareholder:

      

      
        	
                (a)  

              	
                this
                  Agreement, duly executed by the
                  Buyer;

              

      

      

      
        	
                (b)  

              	
                the
                  Purchase Price

              

      

      

      
        	
                (c)  

              	
                all
                  reasonable consents or approvals required to be obtained by the
                  Buyer for
                  the purposes of completing the transaction contemplated herein
                  and
                  preserving and maintaining the interests of the Buyer;
                  and

              

      

      

      
        	
                (d)  

              	
                such
                  other documents as MGUP may reasonably require to give effect to
                  the terms
                  and intention of this Agreement.

              

      

      

      7.3 Closing
        Deliveries of
        MGUPand
        Shareholder. On or before the Closing, MGUP and the Shareholder shall
        deliver or cause to be delivered to the Buyer:

      

      
        	
                (a)  

              	
                this
                  Agreement, duly executed by the
                  Shareholder;

              

      

      

      
        	
                (b)  

              	
                medallion
                  stamped share certificates representing the
                  Shares;

              

      

      

      
        	
                (c)  

              	
                updated
                  schedules of MGUP and the Shareholder, dated as of the date of
                  the
                  Closing;

              

      

      

      
        	
                (d)  

              	
                a
                  certified copy of a resolution of the directors of MGUP dated as
                  of the
                  date of Closing appointing Duane Bennett as Chief Executive Office,
                  Treasurer,  Secretary and Vice President of
                  MGUP;

              

      

      

      
        	
                (e)  

              	
                a
                  certified copy of a resolution of the directors of MGUP dated as
                  of the
                  date of Closing appointing Duane Bennett to the board of directors
                  of MGUP
                  effective immediately;

              

      

      

      
        	
                (f)  

              	
                resignations
                  of all directors other than Duane Bennett, as directors of MGUP
                  dated as
                  of Closing;

              

      

      

      
        	
                (g)  

              	
                resignations
                  of all officers other than Duane Bennett, as officers of MGUP dated
                  as of
                  Closing;

              

      

      

      
        	
                (h)  

              	
                all
                  reasonable consents or approvals required to be obtained by the
                  Buyer for
                  the purposes of completing the transaction contemplated herein
                  and
                  preserving and maintaining the interests of the
                  Buyer;

              

      

      

      
        	
                (i)  

              	
                delivery
                  of two letters from the Company regarding their transfer agent,
                  the first
                  from the old transfer agent indicating that there is no outstanding
                  balance on the account and the second letter addressed to the new
                  transfer
                  agent authorizing the Buyer’s designees to make transfers on the
                  account;

              

      

      

      
        	
                (j)  

              	
                MGUP
                  corporate book;

              

      

      

      
        	
                (k)  

              	
                Certificate
                  of Good Standing from the State of Nevada, evidencing that MGUP
                  is in good
                  standing with the State of Nevada as of a date within five business
                  days
                  of the Closing; and

              

      

      

      
        	
                (l)  

              	
                such
                  other documents as the Buyer may reasonably require to give effect
                  to the
                  terms and intention of this
                  Agreement.

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        8

      POST-CLOSING
        MATTERS

      

      Forthwith
        after the Closing, the
        Buyer and the Shareholder agree to use all their best efforts to:

      

      

      
        	
                (a)  

              	
                take
                  such steps are required to change the name of MGUP to as Buyer
                  may
                  determine.

              

      

      

      ARTICLE
        9

      GENERAL
        PROVISIONS

      

      9.1 Arbitration.
        The parties
        hereto shall attempt to resolve any dispute, controversy, difference or claim
        arising out of or relating to this Agreement by negotiation in good
        faith.  If such good negotiation fails to resolve such dispute,
        controversy, difference or claim within fifteen (15) days after any party
        delivers to any other party a notice of its intent to submit such matter
        to
        arbitration, then any party to such dispute, controversy, difference or claim
        may submit such matter to arbitration in Las Vegas, Nevada.

      

      9.2 Notice.
        Any notice required or
        permitted to be given by any party will be deemed to be given when in writing
        and delivered to the address for notice of the intended recipient by personal
        delivery, prepaid single certified or registered mail, or telecopier. Any
        notice
        delivered by mail shall be deemed to have been received on the fourth business
        day after and excluding the date of mailing, except in the event of a disruption
        in regular postal service in which event such notice shall be deemed to be
        delivered on the actual date of receipt. Any notice delivered personally
        or by
        telecopier shall be deemed to have been received on the actual date of
        delivery.

      

      9.3
Addresses
        for Service. The
        address for service of notice of each of the parties hereto is as
        follows:

      

      
        	
                (a)  

              	
                the
                  Shareholder:

              

      

      

      ___

      ___

      ___

      

      
        	
                (b)  

              	
                the
                  Buyer:

              

      

      

      Duane
        Bennett

      _____

      _____

      _____

       

      9.4 Change
        of Address. Any party
        may, by notice to the other parties change its address for notice to some
        other
        address in North America and will so change its address for notice whenever
        the
        existing address or notice ceases to be adequate for delivery by hand. A
        post
        office box may not be used as an address for service.

      

      9.5 Amendment.  This
        Agreement may be amended only by a writing executed by each of the parties
        hereto.

      

      9.6 Entire
        Agreement. The
        provisions contained herein constitute the entire agreement among the Buyer
        and
        the Shareholder respecting the subject matter hereof and supersede all previous
        communications, representations and agreements, whether verbal or written,
        among
        the Buyer and the Shareholder with respect to the subject matter
        hereof.

      

      9.7 Enurement.
        This Agreement will
        enure to the benefit of and be binding upon the parties hereto and their
        respective heirs, executors, administrators, successors and permitted
        assigns.

      

      9.9 Assignment.
        This Agreement is
        not assignable without the prior written consent of the parties
        hereto.

      

      9.10 Counterparts.
        This Agreement
        may be executed in counterparts, each of which when executed by any party
        will
        be deemed to be an original and all of which counterparts will together
        constitute one and the same Agreement. Delivery of executed copies of this
        Agreement by telecopier will constitute proper delivery, provided that
        originally executed counterparts are delivered to the parties within a
        reasonable time thereafter.

      

      9.11 Governing
        Law. This Agreement
        shall be governed by and construed in accordance with the laws of the State
        of
        Nevada applicable to agreements made and to be performed entirely within
        such
        State.  The parties agree to be subject to the exclusive jurisdiction
        and venue of the state and federal courts located in Clark County,
        Nevada.

       

      [Remainder
        of page intentionally left blank.]

      

      IN
        WITNESS WHEREOF the parties
        have executed this Agreement effective as of the day and year first above
        written.

       

      Shareholder:

      

      

      _________________________

      Name:
        David E. Mead, Individual

      

       

      Media
        Group South, Inc.

       

      By:______________________

      Name:
        David E. Mead

      Title:  President
        and
        Director

      

      Buyer:

       

      _________________________

                 Name:
        Duane Bennett, Individual

      

      Exhibit
        A

      

      

      
        	
                Name
                  of Shareholder

              	 	
                Number
                  of Shares

              	 	 	
                Percent
                  of Outstanding

              	 
	
                
                

                David
                  E. Mead

              	 	 	22,000,000	 	 	 	%72.47	 
	 	 	 	 	 	 	 	 	 

      

       

      PURCHASE
        PRICE

      

      
        	
                Name

              	 	
                Dollar
                  Amount

              	 
	
                
                

                Duane
                  Bennett

              	 	$	75,000

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