Document:

Unassociated Document

STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (this “Agreement”), dated as of July 1, 2011, by and among Xandros, Inc., a Delaware corporation with its offices located at 488 Madison Avenue, 3rd Floor, New York, New York 10016 (“Xandros”), Scalix, Inc., a Delaware corporation (“Scalix”), and Sebring Software Inc., a Nevada corporation with its offices at 1400 Cattlemen Road, Suite D, Sarasota, Florida 34232 (“Sebring”).

WITNESSETH:

WHEREAS, Xandros owns 100 shares of the common stock of Scalix (the “Scalix Shares”);

WHEREAS, Xandros desires to sell, assign, and transfer to Sebring 49 of the Scalix Shares (the “Shares”), and Sebring desires to purchase the Shares from Xandros, upon the terms and conditions set forth herein; and

WHEREAS, certain definitions are set forth in Section 8.12.

NOW, THEREFORE, in consideration of the premises and the mutual agreements, representations, warranties, conditions, and covenants contained herein, the parties hereto, intending to be legally bound, agree as follows:

1.   Sale and Purchase of Shares.

1.1   Sale and Purchase.  Xandros hereby agrees to sell, assign, and deliver the Shares to Sebring, and Sebring hereby agrees to purchase the Shares from Xandros, for an aggregate purchase price of $5,750,000 (the “Purchase Price”).

1.2   Consideration; Certificates.  The Purchase Price shall be payable as provided in Exhibit 1.  Sebring shall pay the Purchase Price by delivering to Xandros a certified or cashier's check (or other form of payment acceptable to Xandros, in its sole discretion).  Upon receipt of payment, Xandros will deliver to Sebring a stock certificate representing the Shares (or a pro rata portion of the Shares if such payment is for less than the full Purchase Price), which certificate shall be in definitive form and registered in the name of Sebring.

2.   Representations and Warranties by Xandros and Scalix. Xandros and Scalix represent and warrant to Sebring as follows:

2.1   Organization and Qualification.  Xandros is a corporation duly organized, validly existing, and, except as set forth in Schedule 2.1, in good standing under the laws of the State of Delaware, and has the full corporate power and authority to own, lease, and operate its properties as it now does and to carry on its business as it presently is being conducted.  Scalix is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, and has the full corporate power and authority to own, lease, and operate its properties as it now does and to carry on its business as it presently is being conducted.

 

  

  

  

2.2   Authorization.  This Agreement constitutes a valid and binding obligation of Xandros and Scalix, enforceable against Xandros and Scalix in accordance with its terms, except as may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights in general and subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).  Xandros and Scalix have the power and authority to execute, deliver, and perform this Agreement and to consummate the transactions contemplated herein.

2.3   No Conflicts.   Except as provided in Schedule 2.3, the execution, delivery, and performance of this Agreement by Xandros and Scalix will not (a) conflict with, or result in the breach or termination of, or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, any material lease, agreement, commitment, or other instrument, or any order, judgment, or decree to which Xandros or Scalix is a party or by which Xandros or Scalix is bound, or (b) conflict with or violate Xandros’ or Scalix’s Certificate of Incorporation or By-laws, or constitute or result in a violation by Xandros or Scalix of any law, regulation, order, writ, judgment, injunction, or decree applicable to Xandros or Scalix, respectively.

2.4   Capitalization.  Scalix’s total authorized capital stock consists of 100 shares of common stock, 100 of which are outstanding and owned by Xandros.  There are no outstanding options, warrants, subscriptions, or rights of any kind to acquire any shares or interests of any class of capital stock of Scalix, there are no outstanding securities convertible into any shares or interests of any class of capital stock of Scalix, and there are no obligations to issue any such options, warrants, subscriptions, rights, or securities.  None of the Shares were issued in violation of the Securities Act of 1933, as amended (the “Securities Act”) or any other laws or regulations.

2.5   The Shares.

(a)   Xandros is not a party to any agreement, written or oral, creating rights in respect of any of the Shares in any third Person or relating to the voting of the Shares.

(b)   Xandros is the lawful owner of the Shares, and the Shares are free and clear of all security interests, liens, mortgages, claims, pledges, encumbrances, equities and other charges (collectively, “Liens”).

(c)   There are no existing warrants, options, stock purchase agreements, or restrictions of any nature (other than restrictions on transferability under federal securities laws) relating to the Shares.

(d)   The Shares represent 49% of Xandros’ entire ownership interest in Scalix.

 

  

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2.6   Title to Properties; Encumbrances. Scalix does not own any real property.   Scalix owns all material properties and assets (whether fixtures, personal, or mixed and whether tangible or intangible) that it purports to own, including all of the properties and assets reflected in the Balance Sheet, and all of the properties and assets purchased or otherwise acquired by Scalix since the date of the Balance Sheet (except for personal property acquired and sold since the date of the Balance Sheet in the ordinary course of business and consistent with past practice).  To our actual knowledge, all material properties and assets reflected in the Balance Sheet are free and clear of all Liens, except for the following (collectively, “Permitted Liens”) (i) Liens for taxes which are not due and payable as of the date hereof or are being contested in good faith by appropriate proceedings which suspend the collection thereof; (ii) Liens for mechanics, materialmen, laborers, employees, suppliers, or other Liens arising by operation of law for sums which are not due and payable as of the date hereof or are being contested in good faith by appropriate proceedings; (iii) pledges, deposits or other Liens securing the performance of bids, trade contracts, leases or statutory obligations (including workers’ compensation, unemployment insurance or other social security legislation); (iv) Liens created in the ordinary course of business in connection with the leasing, licensing, or financing of equipment, supplies or other assets; and (vi) as to any premises leased by Scalix, the ownership and reversion rights of the premises owner, and zoning laws and other land use restrictions that do not impair the present or anticipated use of the property subject thereto.

2.7   Financial Statements.   Xandros has delivered to Sebring: (a) a management report of unaudited and preliminary balance sheet of Scalix as at March 31, 2011 (the “Balance Sheet”), and the related management report of the unaudited and preliminary statement of income for the quarter ending March 31, 2011; and (b) audited balance sheets of Scalix as at December 31 in each of the fiscal years 2009 through 2010, and the related audited statements of income, changes in shareholders’ equity and cash flows for each of the fiscal years then ended,  (collectively, the “Financial Statements”).  Such Financial Statements fairly and accurately present, in all material respects, the financial condition and the results of operations, changes in shareholders’ equity and cash flows of Scalix as at the respective dates of and for the periods referred to in such Financial Statements.

2.8   Listings and Other Data.  All accounts receivable reflected on the Balance Sheet, net of reserves, represent valid obligations arising from sales actually made or services actually performed by Scalix in the ordinary course of business.   Scalix does not have any actual knowledge of any specific facts or circumstances (other than general economic conditions) which would result in any material increase in the uncollectability of such receivables as a class in excess of the reserves therefor as set forth on the Balance Sheet or accounting records.   Except as may be indicated in Scalix’s accounting books and records, to Scalix’s actual knowledge, no current customer or vendor intends to modify or terminate any of its outstanding orders or contracts and Scalix has received no notice to such effect.

2.9   Undisclosed Liabilities.   Scalix has no material liabilities except for liabilities reflected or reserved against in the Balance Sheet, current liabilities incurred in the ordinary course of business of Scalix since the date of the Balance Sheet, and obligations under the express terms of any Material Contracts (or under contracts that are not Material Contracts).

 

  

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2.10   Taxes and Tax Returns.  Except as set forth on Schedule 2.10 or as indicated in the Financial Statements, Scalix has filed all tax returns that it is required to have filed, and such returns are true and correct in all material respects.  Scalix has paid or made provision (i.e., accrued) all taxes that have accrued or become due for all periods covered by such tax returns, or pursuant to any assessment received by Scalix, except such taxes, if any that are disclosed to Sebring and are being contested in good faith and as to which adequate reserves (determined in accordance with generally accepted accounting principles as applied in the United States) (“GAAP”) have been provided in the Balance Sheet.

2.11   Litigation, Compliance With Laws; Licenses and Permits.  Except for payment related litigation in the normal course of business that is not material, and except as set forth in Schedule 2.11, there is no proceeding pending or, to our knowledge, threatened against Scalix or the Shares or the propriety of this Agreement or any of the transactions contemplated hereby, at law or in equity, or before or by any court, arbitrator or governmental authority, and Scalix is not being operated under or subject to any order, final non-appealable judgment, decree, license or injunction of any court, arbitrator or governmental authority.

2.12   Absence of Adverse Changes.  Since the date of the Balance Sheet, there has been no material adverse change to the long term condition of Scalix or its assets, except for any change resulting from any Excluded Matter.  An “Excluded Matter” means any of the following, either alone or in combination:  (a) circumstances, changes, events or developments generally affecting the industry or market in which Scalix operates (but solely to the extent that any such circumstances, changes, events, or developments do not have a disproportionate effect on Scalix as compared to its competitors); (b) changes in general economic or political conditions or changes in currency exchange rates or currency fluctuations; (c) any natural disaster or any acts of terrorism, sabotage, military action or war (whether or not declared) or any escalation or worsening thereof; (d) the enactment, repeal or change in any law or any change in GAAP; (e) an action consented to in writing by Sebring; (f) any action required to be taken under any law, this Agreement, or any Material Contract, (g) this Agreement or the consummation of the transactions contemplated hereby, or the announcement hereof or thereof, (h) the announcement by Sebring or any of its Affiliates of its plans or intentions (including in respect of employees) with respect to the business of Scalix, or (i) the resignation, death or termination of any employee of Scalix.

2.13   Contracts.  Xandros has disclosed in writing or made available to Sebring true and complete copies of all of Scalix’s written contracts and agreements (and written summaries of any oral agreements) to which Scalix is a party, including, without limitation, all current customer contracts relating to Scalix’s business, but excluding agreements which (a) are cancellable by Scalix on 30 days notice or less without penalty, or (b) do not involve aggregate payments of $25,000 or more (collectively, “Material Contracts”).  All of the Material Contracts are in full force and effect and are valid and enforceable according to their terms, and neither Scalix nor, to Scalix’s actual knowledge, any other party to any such Material Contract (aa) is in breach of or default under the terms thereof in any material respect, or (bb) has indicated its intention to terminate or not renew any Material Contract.  Scalix has not entered into any agreement or understanding, whether written or oral, that waives any of its respective rights under any Material Contracts.

 

  

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2.14   Employees.  No officer or key employee of Scalix has advised Scalix (in writing) that he intends to terminate employment with Scalix.  No person has an employment or consulting agreement or understanding, whether oral or written, with Scalix, which is not terminable on notice by Scalix without cost or other liability to Scalix (other than for amounts earned or reimbursable prior to such termination).

2.15   Solvency.  Scalix has not been the subject of any bankruptcy proceedings (whether voluntary or involuntary), made an assignment for the benefit of creditors, been adjudicated bankrupt or insolvent, petitioned for or been assigned any receiver or trustee relating to Scalix or any of its assets, commenced any reorganization or restructuring of debt, or otherwise failed to fulfill its payment obligations in the ordinary course.  None of the above has been commenced or, to Xandros’ actual knowledge, threatened against Scalix.

2.16   Certain Interests.  Except as set forth in the Financial Statements, Scalix does not have any liability or any material obligation of any nature whatsoever to any officer, director or shareholder of Scalix, or to any relative or spouse (or relative of such spouse) who resides with, or is a dependent of, any such officer, director or shareholder. Sebring will only be responsible for forward oriented expenses of Scalix and not its payables prior to the date of this agreement, which however will continue to remain the responsibility of Scalix itself.

2.17   Intellectual Property.  Except as set forth on Schedule 2.17, Scalix owns, free and clear of all Liens (other than Permitted Liens), or has an enforceable right or license to use, all of the Intellectual Property Assets.  The use of the Intellectual Property Assets by Scalix in connection with Scalix’s business does not, to Scalix’s actual knowledge, infringe on the rights of any person, and no person has asserted any such claim against Scalix.  “Intellectual Property Assets” means all material intellectual property owned or licensed by Scalix (other than Commercial Software) in which Scalix has a proprietary interest, including (i) all trade names, trade marks, service marks and applications, (ii) all patents, patent applications and inventions and discoveries that may be patentable, (iii) all registered copyrights, (iv) all know-how, trade secrets, confidential or proprietary information, customer lists, software, technical information, data, process technology, plans and drawings, and (v) Internet web sites and internet domain names.

3.   Representations, Warranties, and Covenants of Sebring.  Sebring hereby represents, warrants, and covenants to Xandros as follows:

3.1   Organization and Qualification.  Sebring is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada, and has the full corporate power and authority to own, lease, and operate its properties as it now does and to carry on its business as it presently is being conducted.

 

  

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3.2   Authorization.  This Agreement constitutes a valid and binding obligation of Sebring, enforceable against Sebring in accordance with its terms, except as may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights in general and subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).  Sebring has the power and authority to execute, deliver, and perform this Agreement and to consummate the transactions contemplated herein.

3.3   No Conflicts. The execution, delivery, and performance of this Agreement by Sebring will not (a) conflict with, or result in the breach or termination of, or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, any material lease, agreement, commitment, or other instrument, or any order, judgment, or decree to which Sebring is a party or by which Sebring is bound, or (b) conflict with or violate Sebring’s Certificate of Incorporation or By-laws, or constitute or result in a violation by Sebring of any law, regulation, order, writ, judgment, injunction, or decree applicable to Sebring.

3.4   Accredited Investor.  Sebring is an “accredited investor” within the meaning of Rule 501 promulgated under the Securities Act of 1933, as amended (the “Act”).

3.5   Investment Knowledge.  Sebring has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the risks and merits of Sebring’s investment in Scalix.

3.6   Investor’s Independent Investigation.  Sebring, in purchasing Shares hereunder, has relied solely upon an independent investigation made by it and its representatives, if any.  Prior to the date hereof, Sebring has been given the opportunity to ask questions of, and receive answers from, representatives of Scalix.  Sebring also has been given access to and the opportunity to examine all books and records of Scalix, and all material contracts and documents of Scalix, if any. In making its investment decision to purchase the Shares, Sebring is not relying on any oral or written representations or assurances from Xandros or any other Person other than as set forth in this Agreement.  Sebring is knowledgeable about the affairs of Scalix and understands that the business of Scalix will need significant commitment by Sebring to rebuilding, especially after any deterioration suffered in the last six months due to delays in closing any funding.

3.7   Investment Intent.  The Shares are being acquired for Sebring’s own account for the purpose of investment and not with a view to or for resale in connection with any distribution thereof or interest therein.

3.8   Registration.  Sebring understands that (a) the offer and sale of the Shares have not been registered under the Act by reason of their issuance in a transaction exempt from the registration requirements of the Act, (b) the Shares must be held indefinitely unless a subsequent disposition thereof is registered under the Act or is exempt from such registration, (c) the certificates evidencing the Shares shall bear a legend to such effect.

 

  

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3.9   Investor’s Economic Risk.  Sebring understands and acknowledges that an investment in Scalix involves numerous and substantial risks.  Sebring is able to bear the economic risk of an investment in Scalix, including a possible total loss of investment.  Sebring has adequate means of providing for Sebring’s current needs and contingencies, and Sebring is able to afford to hold the Shares for an indefinite period.  Further, Sebring has no present need for liquidity in the Shares, and Sebring is willing to accept such investment risks.

3.10   No Government Recommendation or Approval.  Sebring understands that no United States federal or state agency, or similar agency of any other country, has reviewed, approved, passed upon, or made any recommendation or endorsement of Scalix or the purchase of the Shares.

4.   Call Option.  For the 30-day period commencing on March 31, 2012 (the “Call Exercise Period”), provided the Purchase Price has been paid in full, Sebring shall have the right (the “Call Option”) to purchase from Xandros all, but not less than all, of the balance of the Scalix Shares then owned by Xandros (the “Remaining Shares”) for an  additional purchase price of $6,250,000 (the “Exercise Price”).   The Exercise Price shall be payable in shares of Sebring common stock (the “Sebring Stock”), valuing each share of Sebring Stock at $1.00 (or, if Sebring raised money at a lower price than $1.00 prior to payment of the Exercise Price, at that lowest price that Sebring raised money), and as adjusted for stock splits, stock dividends, and the like (the “Stock Price”).  In order to exercise the Call Option, Sebring must give Xandros written notice of exercise (the “Call Exercise Notice”) prior to the expiration of the Call Exercise Period.   If the Call Option has been exercised in accordance with the foregoing, then on the third business day after Xandros’ receipt of the Call Exercise Notice (or such other date as the parties may agree) (the “Call Closing Date”), Xandros shall cause to be delivered to Sebring a stock certificate evidencing the Remaining Shares, together with a stock power duly executed in blank, against Sebring’s delivery to Xandros of the shares of Sebring Stock comprising the Exercise Price (such shares to be evidenced by a stock certificate, in definitive form, registered in the name of Xandros or its designee (together, the “Registered Holder”)).  The Call Option shall terminate forthwith upon the exercise of the Put Option (as defined below).

5.   Put Option.  For the period commencing upon payment of the Purchase Price in full, or earlier at Xandros sole and exclusive option, and ending on April 1, 2012 (the “Put Exercise Period”), Xandros shall have the right (the “Put Option”) to require Sebring to purchase from Xandros all, but not less than all, of the Remaining Shares for the Exercise Price.   The Exercise Price shall be payable in Sebring Stock, valuing each share of Sebring Stock at the Stock Price.  In order to exercise the Put Option, Xandros must give Sebring written notice of exercise (the “Put Exercise Notice”) prior to the expiration of the Put Exercise Period.  If the Put Option has been exercised in accordance with the foregoing, then on the third business day after Sebring’s receipt of the Put Exercise Notice (or such other date as the parties may agree) (the “Put Closing Date”), Xandros shall cause to be delivered to Sebring a stock certificate evidencing the Remaining Shares, together with a stock power duly executed in blank, against Sebring’s delivery to Xandros of the shares of Sebring Stock comprising the Exercise Price (such shares to be evidenced by a stock certificate, in definitive form, registered in the name of the Registered Holder).

 

  

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6.   Registration Rights.

6.1   Demand Registration.

(a)   In case Sebring shall receive from the Registered Holder a written request that Sebring effect a Registration with respect to the resale by the Registered Holder of its Registrable Securities, Sebring will as soon as practicable, effect such Registration (including, without limitation, but subject to the limitations set forth herein, appropriate qualification under applicable state securities laws and appropriate compliance with applicable regulations issued under the Act and any other governmental requirements or regulations) as may be so requested and as would permit or facilitate the sale and distribution by the Registered Holder of all or such portion of such Registrable Securities as are specified in such request.  The Registration Statement covering the resale of all of the Registrable Securities shall be filed for an offering to be made on a continuous basis pursuant to Rule 415.  The Registration Statement required hereunder shall be on Form S-1 (or such other form as may be appropriate).

(b)   Sebring shall prepare and file with the Securities and Exchange Commission (“SEC”) such amendments and supplements to the Registration Statement filed under this Section 6.1 as may be reasonably necessary to keep such Registration Statement effective until all Registrable Securities have been sold pursuant to such Registration Statement or pursuant to Rule 144.  Sebring shall comply with the provisions of the Act with respect to the disposition of all Registrable Securities covered by such Registration Statement during such period in accordance with the intended methods of disposition by the Registered Holder as set forth in such Registration Statement.

(c)   The right of the Registered Holder to demand that the Registrable Securities be registered for resale may only be exercised once, provided that the Registration Statement filed pursuant to such demand is declared effective.

(d)   Sebring shall not be required to effect a demand registration during the period starting with the date sixty (60) days prior to Sebring’s good faith estimate of the date of filing of, and ending on the date ninety (90) days following the effective date of, a Sebring-initiated Registration Statement that is subject to Section 6.2 below, provided that Sebring is actively employing in good faith its reasonable best efforts to cause such Registration Statement to become effective.

(e)   Sebring may defer taking any action to effect a Registration pursuant to Section 6.1 if Sebring furnishes to the Registered Holder a certificate signed by the Chief Executive Officer of Sebring stating that in the good faith judgment of the Board of Directors of Sebring it would be materially detrimental to Sebring and its stockholders for the requested registration to be effected (or to remain effective for the period for which the subject registration statement would otherwise be required to remain effective) because such action (x) would materially interfere with a significant acquisition, corporate reorganization or other similar transaction involving Sebring, or (y) would require premature disclosure of material information that Sebring has a bona fide business purpose for preserving as confidential.  Sebring shall have the right to defer taking action with respect to the requested Registration pursuant to this Section 6.1 only on one occasion and for a period of not more than sixty (60) days after receipt of the Registration request under Section 6.1.

 

  

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(f)   Sebring shall be entitled to include in any Registration Statement referred to in this Section 6.1 shares of Sebring Stock to be sold by Sebring for its own account, except as and to the extent that, in the opinion of the managing underwriter (if such method of disposition shall be an underwritten public offering), such inclusion would adversely affect the marketing of the Registrable Securities to be sold.  To the extent that the managing underwriter in any such underwritten public offering requires the exclusion of any securities from such offering, all such excluded securities shall come solely from the shares to be sold by Sebring prior to the exclusion of any Registrable Securities.

6.2   Piggyback Registration

(a)   If, at any time, Sebring proposes to file a Registration Statement (other than under a Registration Statement pursuant to Form S-8 or Form S-4 or successor forms) to register its securities, and all of the Registrable Securities are not then covered by an effective Registration Statement, Sebring shall:  (A) give written notice by registered mail, at least 20 days prior to the filing of such Registration Statement to the Registered Holder of its intention to do so, and (B) include all Registrable Securities in such Registration Statement with respect to which Sebring has received written request for inclusion therein within 15 days of after delivery of Sebring’s notice.

(b)   Sebring shall have the right at any time after it shall have given written notice pursuant to this Section 6.2 (irrespective of whether a written request for inclusion of any Registration Securities shall have been made) to elect not to file any such Registration Statement, or to withdraw the same after the filing but prior to the effective date thereof.

(c)   If the Registration Statement pursuant to this Section 6.2 relates to a firmly underwritten public offering and the managing underwriter(s) advise Sebring in writing that in their opinion the number of securities proposed to be included in the Registration Statement (including the Registrable Securities) exceeds the number of securities which can be sold therein without adversely affecting the marketability of the public offering, Sebring will include in such Registration Statement the number of securities requested to be included which in the opinion of such underwriter(s) can be sold without adversely affecting the marketability of the offering, pro rata among the respective holders of all securities proposed to be included in the Registration Statement; provided, however, such number of Registrable Securities shall not be reduced if any shares are to be included in such underwriting for the account of any Person other than the Sebring or Registered Holder; and provided, further, however, in no event may less than one-third of the total number of shares of Sebring Stock to be included in such underwriting be made available for the Registrable Securities. In addition, Sebring shall not be required to include any Registrable Securities in such underwriting unless the Registered Holder accepts the terms of the underwriting as agreed upon by Sebring and the managing underwriters selected by it.

 

  

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6.3   Covenants of Sebring with Respect to Registration.  In connection with each Registration under this Section 6, Sebring covenants and agrees as follows:

(a)   Sebring shall use its commercially reasonable best efforts to have any Registration Statement declared effective at the earliest practicable time.  Sebring will promptly notify the Registered Holder and confirm such advice in writing, (A) when such Registration Statement becomes effective, (B) when any post-effective amendment to such Registration Statement becomes effective, and (C) of any request by the SEC for any amendment or supplement to such Registration Statement or any prospectus relating thereto or for additional information.

(b)   Sebring shall furnish to the Registered Holder such number of copies of such Registration Statement and of each such amendment and supplement thereto (in each case including each preliminary prospectus and summary prospectus) in conformity with the requirements of the Act, and such other documents as it may reasonably request in order to facilitate its disposition of the Registrable Securities.

(c)   If at any time the SEC should institute or threaten to institute any proceedings for the purpose of issuing a stop order suspending the effectiveness of any Registration Statement, Sebring will promptly notify the Registered Holder and will use all reasonable efforts to prevent the issuance of any such stop order or to obtain the withdrawal thereof as soon as possible.

(d)   Sebring will use its good faith reasonable efforts and take all reasonably necessary action which may be required in qualifying or registering the Registrable Securities included in a Registration Statement for offering and sale under the securities or blue sky laws of such states as reasonably are required by the Registered Holder, provided that Sebring shall not be obligated to execute or file any general consent to service of process or to qualify as a foreign corporation to do business under the laws of any such jurisdiction.

(e)   Sebring shall deliver promptly to the Registered Holder and to the managing underwriter, if any, copies of all correspondence between the SEC and Sebring, its counsel or auditors and all non-privileged memoranda relating to discussions with the SEC or its staff with respect to the Registration Statement.

(f)   All expenses incident to Sebring’s performance of or compliance with this Section 6, including without limitation all registration and filing fees, fees and expenses of compliance with securities or blue sky laws, printing expenses, messenger and delivery expenses, and fees and disbursements of counsel for Sebring and all independent certified public accountants, underwriters (excluding discounts and commissions) and other Persons retained by Sebring will be borne by Sebring.  In no event shall Sebring be obligated to pay any discounts or commissions with respect to the Registrable Shares sold by the Registered Holder.

 

  

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6.4   Indemnification and Contribution

(a)   Sebring shall indemnify the Registered Holder, each of its officers, directors and agents (including brokers and underwriters selling Registrable Securities on behalf of the Registered Holder), and each Person, if any, who controls the Registered Holder within the meaning of Section 15 of the Act or Section 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) against all losses, claims, damages, expenses and/or liabilities (including all expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which any of them may become subject under the Act, the Exchange Act, any state securities laws or otherwise, arising from such Registration Statement, including, without limitation, any and all losses, claims, damages, expenses and liabilities caused by (A) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, or (B) any omission or alleged omission to state in the Registration Statement a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances under which they were made, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information furnished in writing to Sebring by the Registered Holder expressly for use therein.

(b)   Prior to the filing of any Registration Statement covering the Registrable Securities, the Registered Holder shall indemnify Sebring, its officers and directors and each Person, if any, who controls Sebring within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, against all losses, claims, damages, expenses and/or liabilities (including all expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which they may become subject under the Act, the Exchange Act or otherwise, arising from written information furnished by the Registered Holder for specific inclusion in such Registration Statement, except that the maximum amount which may be recovered from the Registered Holder pursuant to this Section 6.4(b) or otherwise shall be limited to the amount of the net proceeds received by the Registered Holder from the sale of the Registrable Securities under such Registration Statement.

(c)   In case any proceeding (including any governmental investigation) shall be instituted involving any Person in respect of which indemnity may be sought pursuant to this Section 6.4, such Person (an “Indemnified Party”) shall promptly notify the Person against whom such indemnity may be sought (the “Indemnifying Party”) in writing and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Party, and shall assume the payment of all fees and expenses; provided that the failure of any Indemnified Party so to notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder except to the extent (and only to the extent that) that the Indemnifying Party is materially prejudiced by such failure to notify.  In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (A) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (B) in the reasonable judgment of such Indemnified Party representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them.  It is understood that the Indemnifying Party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for all such Indemnified Parties (including in the case of the Registered Holder, all of its officers, directors and controlling persons) and that all such fees and expenses shall be reimbursed as they are incurred.  In the case of any such separate firm for the Indemnified Parties, the Indemnified Parties shall designate such firm in writing to the Indemnifying Party.  The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent (which consent shall not be unreasonably withheld or delayed), but if settled with such consent, or if there be a final judgment for the plaintiff, the Indemnifying Party shall indemnify and hold harmless such Indemnified Parties from and against any loss or liability (to the extent stated above) by reason of such settlement or judgment.  No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability arising out of such proceeding.

 

  

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(d)   To the extent any indemnification by an Indemnifying Party is prohibited or limited by law, the Indemnifying Party agrees to make the maximum contribution with respect to any amounts for which, he, she or it would otherwise be liable under this Section 6.4 to the fullest extent permitted by law; provided, however, (A) no contribution shall be made under circumstances where a party would not have been liable for indemnification under this Section 6.4, and (B) no seller of Registrable Securities guilty of fraudulent misrepresentation (within the meaning used in the Act) shall be entitled to contribution from any party who was not guilty of such fraudulent misrepresentation.

7.   Covenants.

7.1   Board of Directors.  During the period (the “Covenant Period”) commencing on Xandros’ receipt of the Agreement Execution Deposit Amount and ending on the earlier of the Put Closing Date and the Call Date (as defined below), provided that Xandros has received (a) the Minimum Amount Payable or the full Purchase Price on or before the Minimum Payment Date (as provided in Exhibit 1), or (b) if the Minimum Amount Payable was paid on or before the Minimum Payment Date, the full Purchase Price on or before September  30, 2011, Xandros and Sebring each shall use its best efforts to cause the Board of Directors of Scalix (the “Board”) to be comprised of three persons, and shall vote its shares of Scalix common stock for the election of a designee of Xandros, a designee of Sebring, and a third person mutually agreed upon by Xandros and Sebring, to serve as members of the Board.  As used herein, “Call Date” means the expiration of the Call Exercise Period, provided that if the Call Exercise Notice is timely delivered as provided herein, the Call Date shall mean the Call Closing Date.  The initial Xandros designee is Andreas Typaldos.  The initial Sebring designee is Leif Andersen.   If a member of the Board ceases to serve as a director of Scalix for any reason, then the party(ies) entitled hereunder to designate such director shall have the right to designate a successor director by giving notice of such designation to the other party and Scalix.  Forthwith after such notice is provided, the parties shall, by vote or consent, cause such successor to be elected to the Board.  The party(ies) entitled to designate a member of the Board also is entitled to remove its designee from the Board at any time and from time to time, with or without cause, in its sole and absolute discretion, by providing notice of such removal to Scalix and the other party.  If a party determines to remove its designee from the Board, Scalix and the other party shall take all actions necessary to cause such removal to be effected promptly, including, without limitation, calling a stockholders meeting for the earliest practicable time for the purpose of removing such designee from the Board and voting in favor of, or consenting to, such removal.

7.2   Management.

(a)   At the commencement of the Covenant Period, the parties shall cause Scalix to appoint Leif Andersen as the Chief Executive Officer of Scalix, provided that Xandros has received (a) the Minimum Amount Payable or the full Purchase Price on or before the Minimum Payment Date (as provided in Exhibit 1), or (b) if the Minimum Amount Payable was paid on or before the Minimum Payment Date, the full Purchase Price on or before September  30, 2011.  In such capacity, he will provide day-to-day management of the operations of Scalix, including maintaining the books and records of Scalix, providing financial statements, and maintaining and controlling bank accounts (subject to Board oversight).

(b)   During the Covenant Period and until the one-year anniversary of the date on which Sebring purchases all of Scalix, Xandros shall provide those engineering services to Scalix as are set forth in Schedule A hereto, in exchange for the fees set forth in Schedule A hereto.  In addition, concurrently with the execution and delivery of this Agreement, Sebring shall retain Andreas Typaldos as a strategy consultant for a term of not less than one year, at a monthly fee of $10,000, payable to Xandros.

7.3   Restrictive Covenants.  During the Covenant Period (provided that Xandros has received (a) the Minimum Amount Payable or the full Purchase Price on or before the Minimum Payment Date (as provided in Exhibit 1), or (b) if the Minimum Amount Payable was paid on or before the Minimum Payment Date, the full Purchase Price on or before August 15, 2011), Scalix shall not take any of the following actions without the prior approval of both Sebring and Xandros:

(a)   The sale, lease, exchange, mortgage, pledge, or other transfer or disposition of any of its material assets, except for inventory sold in the ordinary course of business consistent with prior practice;

(b)   The consummation of any merger or consolidation with, or purchase of all or substantially all of the assets of, or other acquisition of any assets, securities or business of, any company, trust or other entity;

 

  

12

  

(c)   The amendment to its Certificate of Incorporation or By-Laws;

(d)   The incurrence of any indebtedness, obligation or liability, except liabilities for trade or business obligations incurred in connection with the purchase of goods or services in the ordinary course of business consistent with prior practice;

(e)   The assignment, mortgage, pledge or encumbrance of any property, business or assets, tangible or intangible, held in connection with Scalix’s business;

(f)   Any material change to the nature of Scalix’s business;

(g)   The pledge of the credit or the issuance of any guarantee or indemnity to secure the liabilities or obligations of any Person;

(h)   The making of a general assignment for the benefit of creditors of Scalix or the filing of any petition or application for relief under Title 11 of the United States Code or any similar statute;

(i)   The release, waiver, assignment or transfer of any right of substantial value, or the foregiveness, cancellation or compromise of any material debt;

(j)   The confession of a judgment against Scalix, or the commencement, abandonment, compromise or settlement of any lawsuit, proceeding, audit, claim, or controversy, other than in the ordinary course of business consistent with past practice, but not in any case involving amounts in excess of $20,000;

(k)   The retention of any employee or independent contractor to perform services for Scalix for an amount of compensation in excess of $100,000 per annum, or the termination of any such person’s engagement;

(l)   The making of any loan or advance or capital contribution to, or investment in, or the giving of any credit to any Person by Scalix, except for vendor financing in the ordinary course consistent with past practice;

(m)   The making of any capital expenditures or capital additions or improvements in excess of $100,000 in the aggregate;

(n)   The entry into any transaction, contract, arrangement or commitment  other than in the ordinary course of business consistent with prior practice, which is in excess of $100,000.;

(o)   The issuance or sale of any shares or other securities of Scalix, the issuance of any options, warrants, or other rights to purchase or otherwise acquire shares of capital stock or other securities of Scalix, or the redemption or other acquisition of any shares or other securities of Scalix;

 

  

13

  

(p)   Any reorganization, reclassification, split, combination or other adjustment of any securities of Scalix;

(q)   The payment, setting aside or declaration of any dividends or other distributions in respect of the Shares or any other shares of capital stock or other securities of Scalix;

(r)   The entry into any transaction with or the making of any payment to or on behalf of any Affiliate of either Scalix or Xandros (except for the payment of salaries and the reimbursement of expenses incurred on behalf of Scalix, all in the ordinary course of business consistent with past practice);

(s)   Any change in accounting principles, methods, or practices (except for changes required by GAAP), or making or rescission of any tax election;

(t)   Any change in the rate of compensation, commission, bonus or other direct or indirect remuneration payable, or the payment of any bonus, incentive, retention or other compensation, retirement, welfare, fringe or severance benefit or vacation pay, to or in respect of any shareholder, employee, consultant, salesman, distributor or agent;

(u)   The change of the principal office of Scalix, other than to co-locate with the principal office of Sebring;

(v)   The transfer or grant of any rights or licenses under, or the entry into any settlement regarding the breach or infringement of, any proprietary rights, or the modification of any existing rights with respect thereto; or

(w)   The taking of any action or the failing to take any action that would result in the occurrence of any of the foregoing.

7.4   Working Capital and Expansion Funding Support of Scalix; Scalix Revenues.  During the Covenant Period and until Sebring purchases all of Scalix, Sebring shall fund Scalix’s working capital and expansion funding needs as determined by the Board and, unless otherwise approved by the unanimous consent of the Board, all such funding shall be in the form of two-year unsecured, prepayable loans bearing interest at the applicable federal rate.

8.   Miscellaneous.

8.1   Notices.  Any notice or other communication under this Agreement shall be in writing and shall be considered given when delivered personally, one business day after being sent by a major overnight courier for next business day delivery, or five days after being mailed by registered air mail, to the parties at their respective addresses first set forth above (or at such other address as a party may specify by notice to the other).

 

  

14

  

8.2   Expenses.  Each party shall bear its own expenses in connection with this Agreement and in connection with all obligations required to be performed by it under this Agreement.

8.3   Finders.  Sebring and Xandros each represent and warrant to the other that it has not retained or dealt with any broker or finder in connection with the transactions contemplated by this Agreement.

8.4   Entire Agreement.  This Agreement, including the exhibits hereto, contains a complete statement of all the arrangements between the parties with respect to its subject matter and supersedes any previous agreements between them relating to that subject matter.

8.5   Headings.  The section headings of this Agreement are for reference purposes only and are to be given no effect in the construction or interpretation of this Agreement.

8.6   Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Florida, without giving any effect to any doctrine pertaining to the conflict of laws.  The parties hereto irrevocably (a) submit to the jurisdiction of any state or federal court of competent jurisdiction sitting in the State of Florida, County of Florida, in any action or proceeding arising out of or relating to this Agreement, (b) agree that all claims with respect to such action or proceeding shall be heard and determined in such a Florida state or federal court, and (c) waive, to the fullest extent possible, the defense of an inconvenient forum.  The parties hereby consent to and grant any such court jurisdiction over the persons of such parties and over the subject matter of any such dispute and agree that delivery or mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 8.1 hereof or in such other manner as may be permitted by law shall be valid and sufficient service thereof.

8.7   Separability. If any provision of this Agreement is invalid or unenforceable, the balance of this Agreement shall remain in effect.

8.8   Amendment; Waiver.  This Agreement cannot be altered, amended, changed, waived, terminated, or modified in any respect unless the same shall be in writing and signed by the party to be charged therewith.  No waiver of any provision shall be construed as a waiver of any other provision.

8.9   No Third Party Beneficiaries; Assignments.  Except as provided in Section 6 hereof with respect to the Indemnified Parties, nothing in this Agreement shall create or be deemed to create any third party beneficiary rights in any Person not a party to this Agreement.

8.10   Counterparts.  This Agreement may be executed in counterparts, which together shall constitute the same instrument.

 

  

15

  

8.11   Survival. The representations and warranties of Xandros and Sebring contained in or made pursuant to this Agreement shall survive until the first anniversary of the date hereof.

8.12   Definitions.  The following terms have the meanings set forth below:

(a)   “Affiliate” means with respect to any Person, any other Person controlling, controlled by or under common control with such Person.

(b)   “Commercial Software” means “click-wrap” or “shrink-wrap” software or software contained in off-the-shelf software with fees not exceeding fifteen thousand dollars ($15,000) per software program.

(c)   “Control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of a Person, whether through the ownership of voting securities, by contract or credit arrangement, as trustee or executor, or otherwise.

(d)   “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof.

(e)   “Registrable Securities” means the shares of Sebring Stock delivered in payment of the Exercise Price and any securities issued with respect to such shares of Sebring Stock, provided that such shares and such other securities shall no longer be Registrable Securities once they have been sold or transferred pursuant to an effective Registration Statement under the Act or pursuant to Rule 144.

(f)   “Registration” shall mean a registration of the sale of the Registrable Securities under the Act pursuant to Section 6 of this Agreement.

(g)   “Registration Statement” shall mean the registration statement, as amended from time to time, filed with the SEC in connection with a Registration, and each prospectus that is used in connection with such Registration Statement (including any preliminary prospectus).

(h)   “Rule 144” means Rule 144 of the SEC under the Act.

8.13   Specific Performance.  The parties hereby acknowledge and agree that the failure of any party to perform its agreements and covenants hereunder, including its failure to take all actions as are necessary on its part to the consummation of the transactions contemplated herein, will cause irreparable injury to the other parties for which damages, even if available, will not be an adequate remedy.  Accordingly, each party hereby consents to the issuance of injunctive relief by any court of competent jurisdiction to compel performance of such party’s obligations and to the granting by any court of the remedy of specific performance of its obligations hereunder.

 

  

16

  

 

IN WITNESS WHEREOF, this Agreement has been duly executed by the respective parties as of the day and year first above written.

 

	 	
Xandros, Inc.

By: /s/ Andreas Typaldos                                

Andreas Typaldos, CEO

Scalix, Inc.

 
By: /s/ Andreas Typaldos                                

Andreas Typaldos, CEO

 

Sebring Software, Inc.

By: /s/ Leif Andersen                                        

Leif Andersen, CEO

 

  

17

  

Exhibit 1

Purchase Price Payment Schedule

Payment of the Purchase Price by Sebring to Xandros will be as follows, and subject to the following conditions, made part of this Agreement by reference hereunder.

	 	
1. 

	
Upon execution of this Agreement, Sebring will pay to Xandros  $150,000; ( and will also pay (i) an additional $200,000 upon closing of a transaction with Socius; and (iii) $150,000 upon closing of a $1,750,000 transaction with Tenor Capital (this combined total of $500,000 to be defined as the “Agreement Execution Deposit Amount”).

	
2.  

	
If Sebring receives $10M in aggregate gross investment (the “Sebring Target Raise Amount”), then the Purchase Price will be paid as follows:

	
a.  

	
Within 5 days of receipt by Sebring of aggregate gross investments equal to or exceeding the Sebring Target Raise Amount, Sebring will pay to Xandros the Purchase Price less the Agreement Execution Deposit Amount if such was previously paid, less any amounts previously paid pursuant to Section 3 below.

	
3.  

	
If Sebring receives an investment the gross amount of which is less than the Sebring Target Amount (each, a “Tranche Raise”), then the Purchase Price (less the Agreement Execution Amount, if previously paid) will be paid as follows (until the Purchase Price is paid in full or, if earlier, Section 2 above becomes applicable):

	
a.  

	
Within 5 days of receipt by Sebring of a Tranche Raise, Sebring will pay to Xandros (a) 20% of the Tranche Raise if the cumulative Tranche Raises up to that point, including the Tranche Raise at hand, is less than $3,750,000; or (b) 40% of the Tranche Raise if the cumulative Tranche Raises up to that point, including the Tranche Raise at hand, is equal to or greater than $3,750,000, or when the above mentioned Tenor Capital transaction occurs

	
4.  

	
If by October 15, 2011(the “Minimum Payment Date”), Xandros does not receive the Purchase Price in full, Sebring shall have the option to pay Xandros $500,000 (not inclusive of amounts previously paid hereunder) (the “Minimum Amount Payable”) in exchange for a two-month extension to pay the Purchase Price in full.  The Minimum Amount Payable shall be applied against the Purchase Price.  In the event (a) Xandros does not receive the Purchase Price or Minimum Amount Payable on or before the Minimum Payment Date, or (b) in the event that Sebring has paid the Minimum Amount Payable on or before the Minimum Payment Date, Xandros does not receive the Purchase Price by January 1, 2012, then at its option Xandros can terminate this Agreement, including Xandros’ obligation hereunder to sell and deliver those Shares that, as of the date of termination of this Agreement, had not yet been purchased by Sebring hereunder. For purposes of clarification, upon such termination of this Agreement, Sebring shall own a number of shares of Scalix which is calculated pro rata based on the amounts paid to Xandros against the $5,750,000 to be paid for the full 49 shares of Scalix.

  

18

  

Schedule A

Outsourced Services Provided by Xandros to Scalix

	
·  

	
Services to be provided:

	
o  

	
Development and Support Management: Ming Poon (part time) Elias Typaldos (part time)

	
o  

	
QA (India resources); QA Management (Ken Wong, part time)

	
o  

	
Facilities (computer, rent, etc)

	
o  

	
Accounting

	
·  

	
Monthly Payment Fees to Xandros: $25,000

	
·  

	
Minimum Period: from date of execution of this Agreement until one year after full Purchase Price is received by Xandros

 

  

19SHARE EXCHANGE AGREEMENT

THIS SHARE EXCHANGE AGREEMENT is dated and made for reference effective as fully executed on this 8th day of July, 2011.

BETWEEN:

HUBEI MINKANG PHARMACEUTICAL LTD., a corporation organized under the laws of the State of Nevada and having an address for notice and delivery located at 2808 Cowan Circle, Las Vegas, Nevada 89107

(the “Acquirer”);

AND:

HBMK PHARMACEUTICAL LIMITED, a British Virgin Island business company incorporated and existing under the laws of the British Virgin Islands with its registered office at P.O Box 957, Offshore Incorporations Center, Road Town, Tortola, British Virgin Islands, and having an address for notice and delivery located at 57/F The Center, 99 Queen’s Road, Central, Hong Kong

(the “Company”);

AND:

LEE TONG TAI, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at 2 Normanton Park, #04-151, Normanton Park, Singapore

AND:

ANG SIEW KHIM, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at 39b Daisy Road, Daisy Appartments, Singapore

AND:

HONG LENA, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at 77 Poh Huat Road, #01-18, Parry Fontaine, Singapore  546785

AND:

JOSEPH SOON KWO PIN, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at 13 Almond Crescent, Singapore

 

  

  

  

 

AND:

LEE HUNG MING, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at 28 Marlene Avenue, Serangoon Garden Estate, Singapore

AND:

LEE TONG JIUH, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at 293 Bishan Street 22, #20-83, Singapore

AND:

LEE YENG FEN, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at 28 Marlene Avenue, Serangoon Garden Estate, Singapore

AND:

SEAH CHEE SENG, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at 68 Ming Tech Park, Ming Tech Park, Singapore

AND:

TAY AH MENG, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at 13 Jalan Kurina, Singapore

AND:

MUI CHARK (PRIVATE) LIMITED, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at 101A Upper Cross Street, #11-14, People’s PK CTR, Singapore

AND:

UNIVERSAL METAL WORKS (PRIVATE) LIMITED, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at 14 Jalan Lembah Kallang, Singapore

AND:

KOH CHEOH NGUAN, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at 20 Tai Hwan Avenue, Tai Hwan Garden, Singapore

 

  

2

  

 

AND:

KOH BOON HUA, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at 424 Ang Mo Kio Avenue 3, #12-2422, Singapore

AND:

KOH LEE BOON, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at 46 Jalan Arnap, Kim Lin Park, Singapore

AND:

KOH SOCK HUA, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at 46 Jalan Arnap, Kim Lin Park, Singapore

AND:

KOH SOK YONG, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at 46 Jalan Arnap, Kim Lin Park, Singapore

AND:

KOH CHEOK CHUAN, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at 424 Canberra Road, #13-455, Singapore

AND:

KOH CHEOK KOW, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at 350 Hougang Avenue 7, #10-647 Hougang N3 (HUDC), Singapore

AND:

KOH CHEOH KWANG, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at 46 Jalan Arnap, Kim Lin Park, Singapore

AND:

LEE WEI MENG, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at 2, Normanton Park #04-151, Singapore

 

  

3

  

 

AND:

JESSELINE SIAH CHIEW CHOON, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at 293 Bishan Street 22, #20-83, Singapore

AND:

RAMASWAMY SREEGHANDHAN, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at 11 Sengkang Square, #14-37, Compass Heights, Singapore

AND:

CHOO KEANG HAI, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at 201 Clementi Avenue 6, #14-37, Singapore

AND:

TOH LING LING, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at 11, Pemimpin Drive, #13-02, Marymount View Condo, Singapore  576148

AND:

TEY KIM KEE, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at 48 Carpmael Road, #03-06, Singapore  429974

AND:

JOHNNY LIAN TIAN YONG, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at Blk. 84, Jalan Daud, #06-01, Singapore  419593

AND:

CHAN BOON WEE, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at Blk. 510, Serangoon North Ave. 4, #03-333, Singapore  550510

AND:

VERNON WONG HOCK LEONG, a shareholder of HBMK Pharmaceutical Limited, having an address for notice and delivery located at 33 Ubi Ave. 3, #04-42, Vertex, Singapore  408868

 

  

4

  

 

(Lee Tong Tai, Ang Siew Khim, Hong Lena, Joseph Soon Kwo Pin, Lee Hung Ming, Lee Tong Jiuh, Lee Yeng Fen, Seah Chee Seng, Tay Ah Meng, Mui Chark (Private) Limited, Universal Metal Works (Private) Limited, Koh Cheoh Nguan, Koh Boon Hua, Koh Lee Boon, Koh Sock Hua, Koh Sok Yong, Koh Cheok Chuan, Koh Cheok Kow, Koh Cheoh Kwang, Lee Wei Meng, Jesseline Siah Chiew Choon, Ramaswamy Sreeghandhan, Choo, Keang Hai, Toh Ling Ling, Tey Kim Kee, Johnny Lian Tian Yong, Chan Boon Wee and Vernon Wong Hock Leong, each being hereinafter singularly referred to as a “Vendor” and collectively referred to as the “Vendors” as the context so requires”);

(the Vendors, the Company and the Acquirer being hereinafter singularly also referred to as a “Party” and collectively referred to as the “Parties” as the context so requires).

WHEREAS:

A.                      The Company is a British Virgin Islands business company incorporated and existing under the laws of the British Virgin Islands;

B.                      The Company is the sole shareholder of Hubei Minkang Pharmaceutical Co., Ltd., a company organized under the laws of the People’s Republic of China, which is in the business of producing and marketing Traditional Chinese Medicine in China as well as marketing its products to the US, Japan, Canada, Singapore, Malaysia, Thailand and Hong Kong among other countries (collectively, the “Company’s Business”);

C.                      The Vendors are the legal and beneficial owner of all of the issued and outstanding shares in the capital of the Company (the “Company Stock”); the particulars of the registered and beneficial ownership of such Company Stock being set forth in Schedule “A” which is attached hereto and which forms a material part hereof;

D.                      The Parties hereto have agreed to enter into this Share Exchange Agreement (the “Agreement”) which formalizes and which clarifies their respective duties and obligations in connection with the acquisition by the Acquirer from the Vendors of all of the Company Stock together with the further development of the Company’s Business as a consequence thereof; and

E.                      The exchange of Company Stock for Acquirer Stock is intended to constitute a tax-free reorganization under Section 368 of the Internal Revenue Code of 1986, as amended (the “Code”), or such other tax free reorganization exemptions that may be available under the Code.

NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the mutual promises, covenants and agreements herein contained, THE PARTIES HERETO COVENANT AND AGREE WITH EACH OTHER as follows:

 

  

5

  

 

Article 1

DEFINITIONS

1.1                      Definitions.   For the purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, the following words and phrases shall have the following meanings:

	
  

	
(a)

	
“Action” has the meaning ascribed to it in Article “4.1(v)” hereinbelow;

	
  

	
(b)

	
“Acquirer” means Hubei Minkang Pharmaceutical Ltd., a corporation organized under the laws of the State of Nevada, or any successor company, however formed, whether as a result of merger, amalgamation or other action;

	
  

	
(c)

	
“Acquirer Commission Documents” has the meaning ascribed to it in Article “4.1(q)” hereinbelow;

	
  

	
(d)

	
“Acquirer’s Initial Due Diligence” has the meaning ascribed to it in Article “5.1(b)” hereinbelow;

	
  

	
(e)

	
“Acquirer Material Adverse Effect” means a material adverse effect on Acquirer, a material adverse effect on the ability of the Acquirer to perform its obligations under this Agreement or on the ability of the Acquirer to consummate the Takeover;

	
  

	
(f)

	
“Acquirer’s Ratification” has the meaning ascribed to it in Article “5.1(a)” hereinbelow;

	
  

	
(g)

	
“Acquirer Stock” means the 33,500,000 (post-reverse stock split on a basis of one (1) new share for each eight (8) old shares, which was completed on October 20, 2010) shares of common stock of the Acquirer to be issued and delivered to the Vendors on a pro rata basis as the Consideration for the Company Stock;

	
  

	
(h)

	
“Affiliate” with respect to any specified Person at any time, means each Person directly or indirectly through one or more intermediaries controlling, controlled by or under direct or indirect common control with such specified Person at such time.

	
  

	
(i)

	
“Agreement” means this “Share Exchange Agreement” as entered into among the Vendors, the Company and the Acquirer herein, together with any amendments thereto and any Schedules as attached thereto;

	
  

	
(j)

	
“Applicable Securities Laws” means all applicable securities laws in all jurisdictions relevant to the issuance of securities of the Acquirer pursuant to the terms of this Agreement;

	
  

	
(k)

	
“Board of Directors” means, as applicable, the respective Board of Directors of each of the Parties hereto as duly constituted from time to time;

	
  

	
(l)

	
“business day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York, New York, are authorized or required by law to remain closed;

	
  

	
(m)

	
“Business Documentation” means any and all records and other factual data and information relating to the Company’s Business interests and assets and including, without limitation, all plans, agreements and records which are in the possession or control of the Vendors or the Company in that respect;

 

  

6

  

 

	
  

	
(n)

	
“Closing” has the meaning ascribed to it in Article “6.1” hereinbelow;

	
  

	
(o)

	
“Closing Date” has the meaning ascribed to it in Article “6.1” hereinbelow;

	
  

	
(p)

	
“Code” has the meaning ascribed to it in recital “E.” hereinabove;

	
  

	
(q)

	
“Commission” means the United States Securities and Exchange Commission;

	
  

	
(r)

	
“Company” means HBMK Pharmaceutical Limited, a British Virgin Islands business company incorporated and existing under the laws of the British Virgin Islands under the laws of the British Virgin Islands, or any successor company, however formed, whether as a result of merger, amalgamation or other action;

	
  

	
(s)

	
“Company’s Assets” means all assets, contracts, equipment, goodwill, inventory and Intellectual Property of the Company;

	
  

	
(t)

	
“Company’s Business” has the meaning ascribed to it in recital “B.” hereinabove;

	
  

	
(u)

	
“Company’s Financial Statements” has the meaning ascribed to it in Article “3.3(s)” hereinbelow;

	
  

	
(v)

	
“Company Stock” has the meaning ascribed to it in recital “C.” hereinabove; the particulars of the registered and beneficial ownership of such Company Stock being set forth in Schedule “A” which is attached hereto;

	
  

	
(w)

	
“Consideration” has the meaning ascribed to it in Article “2.2” hereinbelow;

	
  

	
(x)

	
“Defaulting Party” and “Non-Defaulting Party” have the meanings ascribed to them in Article “13” hereinbelow;

	
  

	
(y)

	
“Encumbrances” means any lien, claim, charge, pledge, hypothecation, security interest, mortgage, title retention agreement, option or encumbrance of any nature or kind whatsoever, other than: (i) statutory liens for Taxes not yet due and payable and (ii) such imperfections of title, easements and encumbrances, if any, that will not result in a Material Adverse Effect;

	
  

	
(z)

	
“Environmental Laws” means all applicable international, federal, provincial, state, municipal and local treaties, conventions, laws, statutes, ordinances, by-laws, codes, regulations, and all policies, guidelines, standards, orders, directives and decisions rendered or promulgated by any ministry, department or administrative or regulatory agency or body whatsoever (including international organizations formed by or participated in by any national, provincial or state government or representatives thereof) relating to fisheries, health and safety, the protection or preservation of the environment or the manufacture, processing, distribution, use, treatment, storage, disposal, discharge, transport or handling of any contaminant, pollutant, dangerous substance, liquid waste, industrial waste, hauled liquid waste, toxic substance, special waste, hazardous waste, hazardous material or hazardous substance as defined in or pursuant to any Environmental Laws, law, judgment, decree, order, injunction, rule, statute or regulation of any court, arbitrator or governmental authority by which the Company or any of the Company’s respective businesses or assets is bound or is subject to;

 

  

7

  

 

	
  

	
(aa)

	
“Environmental Liabilities” means all Liabilities of a Person (whether such Liabilities are owed by such Person to governmental bodies, third parties or otherwise) whether currently in existence or arising hereafter that arise under or relate to any Environmental Laws;

	
  

	
(bb)

	
“Exchange Act” means the Securities Exchange Act of 1934, as amended;

	
  

	
(cc)

	
“Execution Date” means the actual date of the complete execution of this Agreement and any amendment thereto by all Parties hereto as set forth on the front page hereof;

	
  

	
(dd)

	
“GAAP” means United States generally accepted accounting principles applied on a consistent basis during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements);

	
  

	
(ee)

	
“Governmental Body” means any: (i) nation, state, county, city, town, village, district, or other jurisdiction of any nature; (ii) federal, state, local, municipal, foreign, or other government; (iii) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal); (iv) multi-national organization or body, or; (v) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature;

	
  

	
(ff)

	
“Indemnified Party” and “Indemnified Parties” have the meanings ascribed to them in Article “8.1” hereinbelow;

	
  

	
(gg)

	
“Intellectual Property” means all right and interest to all patents, patents pending, inventions, know-how, any operating or identifying name or registered or unregistered trademarks and trade names, all computer programs, licensed end-user software, source codes, products and applications (and related documentation and materials) and other works of authorship (including notes, reports, other documents and materials, magnetic, electronic, sound or video recordings and any other work in which copyright or similar right may subsist) and all copyrights (registered or unregistered) therein, industrial designs (registered or unregistered), franchises, licenses, authorities, restrictive covenants or other industrial or intellectual property;

	
  

	
(hh)

	
“Inventory” means all items of inventory notwithstanding how classified in the financial records of a Person, including all raw materials, work-in-process, finished goods, supplies, spare parts, samples, cores and stores of a Person;

	
  

	
(ii)

	
“Liabilities” means, with respect to any Person, any liability or obligation of such Person of any kind, character or description, whether known or unknown, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, vested or unvested, determined, determinable or otherwise and whether or not the same is required to be accrued on the financial statements of such Person;

	
  

	
(jj)

	
“Lien” means, with respect to any asset, any mortgage, assignment, trust or deemed trust (whether contractual, statutory or otherwise arising), title defect or objection, lien, pledge, charge, security interest, hypothecation, restriction, Encumbrance or charge of any kind in respect of such assets;

 

  

8

  

 

	
  

	
(kk)

	
“Material Adverse Effect” when used in connection with an entity means any change, event, violation, inaccuracy, circumstance or effect that is materially adverse to the business, assets (including intangible assets), liabilities, capitalization, ownership, financial condition or results of operations of such entity and all of its Affiliates, taken as a whole, other than any change, event, circumstance or effect to the extent resulting from (A) the announcement of the execution of this Agreement and the transactions contemplated hereby, (B) changes in legal or regulatory conditions generally affecting the Company’s Business, except that any change, effect, event or occurrence described in this subsection (B) will be considered in determining whether there has been, or will be, a Material Adverse Effect if the same disproportionately affects the Company or the Business, (C) changes or effects that generally affect the Company’s Business, (D) changes in general economic conditions or (E) changes in GAAP;

	
  

	
(ll)

	
“Material Contracts” means those subsisting commitments, contracts, instruments, leases and other agreements, oral or written, entered into by either the Company or its subsidiaries, by which the Company or its subsidiaries are bound or to which they or their respective assets are subject which have total payment obligations on the part of either the Company or its subsidiaries which exceed $25,000 or are for a term of or in excess of one (1) year;

	
  

	
(mm)

	
“Organizational Documents” means (a) the articles of association, memorandum of association or certificate of incorporation and the by-laws or code of regulations of a corporation; (b) the partnership agreement and any statement of partnership of a general partnership; (c) the limited partnership agreement and the certificate of limited partnership of a limited partnership; (d) the articles or certificate of formation and operating agreement of a limited liability company; (e) any other document performing a similar function to the documents specified in clauses (a), (b), (c) and (d) adopted or filed in connection with the creation, formation or organization of a Person; and (f) any and all amendments to any of the foregoing;

	
  

	
(nn)

	
“OTCBB” means the Over-the-Counter Bulletin Board;

	
  

	
(oo)

	
“Parties” or “Party” means, respectively, the Vendors, the Company and/or the Acquirer hereto, as the case may be, together with their respective successors and permitted assigns as the context so requires;

	
  

	
(pp)

	
“Permitted Liens” means (i) Liens for Taxes or governmental assessments, charges or claims the payment of which is not yet due, or for Taxes the validity of which is being contested in good faith by appropriate proceedings; (ii) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen and other similar Persons and other Liens imposed by applicable laws incurred in the ordinary course of business for sums not yet delinquent or being contested in good faith; (iii) Liens relating to deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security or to secure the performance of leases, trade contracts or other similar agreements (iv) Liens and Encumbrances specifically identified in the balance sheet included in the Company’s Financial Statements; (v) Liens securing executory obligations under any lease that constitutes an “operating lease” under GAAP; provided, however, that, with respect to each of clauses (i) through (v), to the extent that any such Encumbrance or Lien arose prior to the date of the balance sheet included in the Company’s Financial Statements and relates to, or secures the payment of, a Liability that is required to be accrued under GAAP, such Encumbrance or Lien shall not be a Permitted Lien unless adequate accruals for such Liability have been established therefor on such balance sheet in conformity with GAAP;

 

  

9

  

 

	
  

	
(qq)

	
“Person” includes an individual, corporation, body corporate, partnership, joint venture, association, trust or unincorporated organization or any trustee, executor, administrator or other legal representative thereof;

	
  

	
(rr)

	
“Proceeding” means any action, arbitration, audit, hearing, investigation, litigation, or suit (whether civil, criminal, administrative, investigative, or informal) commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental Body or arbitrator;

	
  

	
(ss)

	
“Regulation S” means Regulation S promulgated under the Securities Act;

	
  

	
(tt)

	
“Rule 144” means Rule 144 under the Securities Act, as the same may be amended from time to time, or any successor statute.

	
  

	
(uu)

	
“Securities Act” means the Securities Act of 1933, as amended;

	
  

	
(vv)

	
“Takeover” means that transaction or series of transactions pursuant to which the Acquirer will acquire all of the Company Stock of the Company from the Vendors in exchange for the issuance by the Acquirer of 33,500,000 shares of common stock of the Acquirer and all matters necessarily ancillary thereto;

	
  

	
(ww)

	
“Taxes” means all foreign, federal, state or local taxes, charges, fees, levies, imposts, duties and other assessments, as applicable, including, but not limited to, any income, alternative minimum or add-on, estimated, gross income, gross receipts, sales, use, transfer, transactions, intangibles, ad valorem, value-added, franchise, registration, title, license, capital, paid-up capital, profits, withholding, payroll, employment, unemployment, excise, severance, stamp, occupation, premium, real property, recording, personal property, federal highway use, commercial rent, environmental (including, but not limited to, taxes under Section 59A of the Code) or windfall profit tax, custom, duty or other tax, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest, penalties or additions to tax with respect to any of the foregoing; and “Tax” means any of the foregoing Taxes;

	
  

	
(xx)

	
“Tax Return” means any return, declaration, report, claim for refund or credit, information return, statement or other similar document filed with any Governmental Body with respect to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

	
  

	
(yy)

	
“Time of Closing” means 2:00 o’clock, p.m. (New York City Time) on the Closing Date;

	
  

	
(zz)

	
“Transfer Agent” means Quicksilver Stock Transfer;

	
  

	
(aaa)

	
“U.S. Person” has the meaning ascribed thereto in Regulation S and set forth on Exhibit A hereto; and

 

  

10

  

 

	
  

	
(bbb)

	
“Vendors” means the shareholders of the Company who have executed this Agreement as a Party hereto.

1.2                      Schedules. For the purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, the following shall represent the Schedules which are attached to this Agreement and which form a material part hereof:

 

	
Schedule

	  	
   Description

	  	  	  
	
Schedule “A”:

	  	
Company Stock and Vendors;

	
Schedule “B”

	  	
Certificate of Non-U.S. Shareholder;

	
Schedule “C”

	  	
Company Subsidiaries

	
Schedule “D”

	  	
Financial Statement;

	
Schedule “E”

	  	
Material Contracts;

	
Schedule “F”

	  	
Encumbrances;

	
Schedule “G”

	  	
Pending, Outstanding or Unresolved Claims or Grievances; and

	
Schedule “H”

	  	
Banks and Bank Accounts.

 

1.3                      Interpretation. For the purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

	
  

	
(a)

	
the words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, clause, section or other subdivision or Schedule of this Agreement;

	
  

	
(b)

	
any reference to an entity shall include and shall be deemed to be a reference to any entity that is a permitted successor to such entity;

	
  

	
(c)

	
words in the singular include the plural and words in the masculine gender include the feminine and neuter genders, and vice versa;

	
  

	
(d)

	
the word “or” is not exclusive and the word “including” is not limiting (whether or not non-limiting language such as “without limitation” or “but not limited to” or other words of similar import are used with reference thereto);

	
  

	
(e)

	
where the phrase “to the best of the knowledge of” or phrases of similar import are used in this Agreement, it will be a requirement that the Person in respect of whom the phrase is used will have made such due enquiries as are reasonably necessary to enable such Person to make the statement or disclosure; and

	
  

	
(f)

	
the parties acknowledge that this Agreement is the product of arm’s length negotiation between the parties, each having obtained its own independent legal advice, and that this Agreement will be construed neither strictly for nor strictly against any party irrespective of which party was responsible for drafting this Agreement.

 

  

11

  

 

Article 2

EXCHANGE OF SHARES

2.1                      Share Exchange.   Subject to the terms and conditions hereof and based upon the representations and warranties contained in Articles “3” and “4” hereinbelow and prior satisfaction of the conditions precedent which are set forth in Article “5” hereinbelow, the Vendors hereby agree to assign, sell and transfer at the Closing Date (as hereinafter determined) all of their respective rights, entitlement and interest in and to the Company Stock to the Acquirer and the Acquirer hereby agrees to acquire all of the Company Stock from the Vendors on the terms and subject to the conditions contained in this Agreement.

2.2                      Consideration.   The aggregate consideration (the “Consideration”) for all of the Company Stock will be satisfied by way of the issuance and delivery by the Acquirer to the Vendors, in accordance with section “2.3” hereinbelow, of an aggregate of 33,500,000 shares of common stock in the capital of the Acquirer (the “Acquirer Stock”), which will represent approximately seventy-seven percent (77%) of the issued and outstanding shares of common stock of the Acquirer upon Closing, on a pro rata basis in accordance with each Vendors percentage ownership in the Company as set forth in Schedule “A” hereto at a deemed issuance price of $0.20 per share.  The Vendors acknowledge and agree that the Acquirer Stock is being issued pursuant to an exemption from the registration requirements of the Securities Act.  The Vendors agree to abide by all applicable resale restrictions and hold periods imposed by Applicable Securities Laws.  The certificate(s) representing the Acquirer Stock to be issued on Closing will be endorsed with the following legend, pursuant to the Securities Act, in order to reflect the fact that the Acquirer Stock will be issued to the Vendors pursuant to an exemption from the registration requirements of the Securities Act:

“THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN AN OFFSHORE TRANSACTION TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”).

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (1) IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S PROMULGATED UNDER THE SECURITIES ACT, AND BASED ON AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT THE PROVISIONS OF REGULATION S HAVE BEEN SATISFIED (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR (3) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, IN WHICH CASE THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE COMPANY AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED IN THE MANNER CONTEMPLATED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE ACT.”

 

  

12

  

 

2.3                      Restricted Securities.   The Vendors acknowledge that the Acquirer Stock issued pursuant to the terms and conditions set forth in this Agreement will have such hold periods as are required under Applicable Securities Laws, and, as a result, may not be sold, transferred or otherwise disposed of, except pursuant to an effective registration statement or prospectus, or pursuant to an exemption from, or in a transaction not subject to, the registration or prospectus requirements of Applicable Securities Laws and in each case only in accordance with all Applicable Securities Laws.

2.4                      Fractional Securities.   Notwithstanding any other provision of this Agreement, no fractional Acquirer Stock will be issued in the Takeover.  In lieu of any such fractional securities, the Vendors will be entitled to have any such fraction of one–half or more rounded up to the nearest whole number and any such fraction of less than one-half rounded down to the nearest whole number of applicable Acquirer Stock and will receive from the Acquirer a certificate representing same.

2.5                      Exemptions.   The Vendors acknowledge that the Acquirer has advised the Vendors that it is issuing the Acquirer Stock to the Vendors under exemptions from the prospectus and registration requirements of Applicable Securities Laws and, as a consequence, certain protections, rights and remedies provided by Applicable Securities Laws, including statutory rights of rescission or damages, will not be available to the Vendors.  To evidence the Vendors’ eligibility for such exemptions, the Vendors agree to deliver a fully completed and executed Certificate of Non-U.S. Shareholder (the “Certificate”), in the form attached hereto as Schedule “B” to the Acquirer, and agree that the representations and warranties set out in the Certificate as executed by the Vendors will be true and complete on the Closing Date.

2.6                      Section 368 Reorganization.   For U.S. federal income tax purposes, the Takeover is intended to constitute a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”). The parties to this Agreement hereby adopt this Agreement as a “plan of reorganization” within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations. Notwithstanding the foregoing or anything else to the contrary contained in this Agreement, the parties acknowledge and agree that no party is making any representation or warranty as to the qualification of the Takeover as a reorganization under Section 368(a) of the Code or as to the effect, if any, that any transaction consummated prior to the Closing Date has or may have on any such reorganization status. The parties acknowledge and agree that each (i) has had the opportunity to obtain independent legal and tax advice with respect to the transaction contemplated by this Agreement, and (ii) is responsible for paying its own Taxes, including without limitation, any adverse Tax consequences that may result if the transaction contemplated by this Agreement is not determined to qualify as a reorganization under Section 368(a) of the Code.

Article 3

REPRESENTATIONS, WARRANTIES AND COVENANTS

BY THE COMPANY AND THE VENDORS

3.1                      General Representations, Warranties and Covenants by the Company and the Vendors.   In order to induce the Acquirer to enter into and consummate this Agreement, the Company and the Vendors, severally but not jointly, represent to, warrant to and covenant with the Acquirer, with the intent that the Acquirer will rely thereon in entering into this Agreement and in concluding the transactions contemplated herein, that, to the best of the knowledge, information and belief of each of the Vendors and the Company, after having made due inquiry:

 

  

13

  

 

	
  

	
(a)

	
if a corporation, it is duly organized under the laws of its respective jurisdiction of incorporation and is validly existing and in good standing with respect to all statutory filings required by the applicable corporate laws;

	
  

	
(b)

	
it is qualified to do business in those jurisdictions where it is necessary to fulfill its obligations under this Agreement and it has the full power and authority to enter into this Agreement and any agreement or instrument referred to or contemplated by this Agreement;

	
  

	
(c)

	
it has the requisite power, authority and capacity to own and use all of its respective business assets and to carry on its respective business as presently conducted by it and to fulfill its respective obligations under this Agreement;

	
  

	
(d)

	
the execution and delivery of this Agreement and the agreements contemplated hereby have been duly authorized by all necessary action, corporate or otherwise, on its respective part;

	
  

	
(e)

	
there are no other consents, approvals or conditions precedent to the performance of this Agreement which have not been obtained;

	
  

	
(f)

	
this Agreement constitutes a legal, valid and binding obligation of it enforceable against it in accordance with its terms, except as enforcement may be limited by laws of general application affecting the rights of creditors;

	
  

	
(g)

	
no proceedings are pending for, and it is unaware of, any basis for the institution of any proceedings leading to its respective dissolution or winding up, or the placing of it in bankruptcy or subject to any other laws governing the affairs of insolvent companies or persons;

	
  

	
(h)

	
the making of this Agreement and the completion of the transactions contemplated hereby and the performance of and compliance with the terms hereof does not and will not:

	
  

	
(i)

	
if a corporation, conflict with or result in a breach of or violate any of the terms, conditions or provisions of its respective organizational documents;

	
  

	
(ii)

	
conflict with or result in a breach of or violate any of the terms, conditions or provisions of any law, judgment, order, injunction, decree, regulation or ruling of any Court or governmental authority, domestic or foreign, to which it is subject, or constitute or result in a default under any agreement, contract or commitment to which it is a party;

	
  

	
(iii)

	
give to any party the right of termination, cancellation or acceleration in or with respect to any agreement, contract or commitment to which it is a party;

	
  

	
(iv)

	
give to any government or governmental authority, or any municipality or any subdivision thereof, including any governmental department, commission, bureau, board or administration agency, any right of termination, cancellation or suspension of, or constitute a breach of or result in a default under, any permit, license, control or authority issued to it which is necessary or desirable in connection with the conduct and operations of its respective business and the ownership or leasing of its respective business assets;

 

  

14

  

 

	
  

	
(v)

	
constitute a default by it, or any event which, with the giving of notice or lapse of time or both, might constitute an event of default, under any agreement, contract, indenture or other instrument relating to any indebtedness of it which would give any party to that agreement, contract, indenture or other instrument the right to accelerate the maturity for the payment of any amount payable under that agreement, contract, indenture or other instrument; or

	
  

	
(vi)

	
result in the imposition or creation of any Encumbrance upon or with respect to any of the assets owned or used by the Company or its subsidiaries;

	
  

	
(i)

	
neither this Agreement nor any other document, certificate or statement furnished to the Acquirer by or on behalf of any of the Vendors or the Company in connection with the transactions contemplated hereby knowingly or negligently contains any untrue or incomplete statement of material fact or omits to state a material fact necessary in order to make the statements therein not misleading which would likely affect the decision of the Acquirer to enter into this Agreement.

	
  

	
(j)

	
the Company is the sole shareholder of Hubei Minkang Pharmaceutical Co., Ltd., a company organized under the laws of the People’s Republic of China.

	
  

	
(k)

	
this Agreement has been duly authorized, executed and delivered by the Vendors and the Company and is a legal, valid and binding obligation of each of the Vendors and the Company, enforceable against each of the Vendors and/or the Company, as the case may be, by the Acquirer in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency and other laws affecting the rights of creditors generally and except that equitable remedies may be granted only in the discretion of a court of competent jurisdiction.

	
  

	
(l)

	
no person other than the Acquirer has any written or oral agreement or option or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement, or option for the purchase or acquisition from the Vendors of any of the Company Stock.

	
  

	
(m)

	
the Company Stock is beneficially owned by the Vendors with good and marketable title thereto free of all Encumbrances and is registered in the books of the Company in the name of the Vendors and, without limitation thereto, none of the Company Stock is subject to any voting trust, unanimous shareholders agreement, other shareholders agreements, pooling agreements or voting agreements.

	
  

	
(n)

	
upon completion of the transactions contemplated by this Agreement, all of the Company Stock will be owned by the Acquirer as the beneficial owner of record, with good and marketable title thereto (except for such Encumbrances as may have been granted by the Acquirer).

	
  

	
(o)

	
the Vendors have no information or knowledge of any fact not communicated to the Acquirer and relating to the Company or to the Company’s Business or to the Company Stock which, if known to the Acquirer, might reasonably be expected to deter the Acquirer from entering into this Agreement or from completing the transactions contemplated by this Agreement.

 

  

15

  

 

3.2                      Representations, Warranties and Covenants by the Vendors respecting the Company Stock and the Acquirer Stock.   In order to induce the Acquirer to enter into and consummate this Agreement, the Vendors, severally and not jointly, hereby represent to, warrant to and covenant with the Acquirer, with the intent that the Acquirer will also rely thereon in entering into this Agreement and in concluding the transactions contemplated herein, that, to the best of the knowledge, information and belief of the Vendors, after having made due inquiry:

	
  

	
(a)

	
the Vendors have good and marketable title to and are the legal and beneficial owner of all of the Company Stock, and each share of the Company Stock is fully paid and non-assessable and is free and clear of liens, charges, encumbrances, pledges, mortgages, hypothecations, security interests and adverse claims of any and all nature whatsoever and including, without limitation, options, pre-emptive rights and other rights of acquisition in favor of any person, whether conditional or absolute;

	
  

	
(b)

	
the Vendors have the right, power, authority and capacity to own and dispose of the Company Stock, and the Company Stock is not subject to any voting or similar arrangement;

	
  

	
(c)

	
there are no actions, suits, proceedings or investigations (whether or not purportedly against or on behalf of the Vendors or the Company), pending or threatened, which may affect, without limitation, the rights of the Vendors to transfer any of the Company Stock to the Acquirer at law or in equity, or before or by any federal, state, provincial, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, and, without limiting the generality of the foregoing, there are no claims or potential claims under any relevant family relations legislation or other equivalent legislation affecting the Company Stock.  In addition, the Vendors are not now aware of any existing ground on which any such action, suit or proceeding might be commenced with any reasonable likelihood of success;

	
  

	
(d)

	
no other person, firm or corporation has any agreement, option or right capable of becoming an agreement for the purchase of any of the Company Stock;

	
  

	
(e)

	
no Person has, or as a result of the transactions contemplated herein will have, any right or valid claim against such Vendor for any commission, fee or other compensation as a finder or broker, or in any similar capacity, and such Vendor will indemnify and hold the Acquirer harmless against any liability or expense arising out of, or in connection with, any such claim.

	
  

	
(f)

	
the Vendors acknowledge that the Acquirer Stock to be issued pursuant to this Agreement have not been registered under the Securities Act or the securities laws of any state of the U.S. and that the Acquirer Stock will be issued in reliance upon an exemption from registration afforded under Regulation S for offers and sales of securities outside of the U.S., and that, as a result, the Vendors may be restricted from using most of the remedies that would otherwise be available to the Vendors, the Vendors will not receive information that would otherwise be required to be provided to the Vendors and the Acquirer is relieved from certain obligations that would otherwise apply to the Acquirer, in either case, under applicable securities legislation;

	
  

	
(g)

	
each Vendor, by its execution of this Agreement, severally and not jointly, represents and warrants to the Acquirer that such Vendor is not a U.S. Person.  Each Vendor severally understands that the Acquirer Stock is being offered and sold to such Vendor in reliance upon the truth and accuracy of the representations, warranties, covenants, agreements, acknowledgements and understanding of such Vendor set forth in this Agreement, in order that the Acquirer may determine the applicability and availability of the exemptions from registration of the Acquirer Stock on which the Acquirer is relying;

 

  

16

  

 

	
  

	
(h)

	
the Vendors have not received, nor have the Vendors requested nor do the Vendors require to receive, any offering memorandum or a similar document describing the business and affairs of the Acquirer in order to assist the Vendors in entering into this Agreement and in consummating the transactions contemplated herein;

	
  

	
(i)

	
the Vendors acknowledge and agree that the Acquirer Stock has not been and will not be qualified or registered under the securities laws of the United States or any other jurisdiction and, as such, the Vendors may be restricted from selling or transferring such Acquirer Stock under applicable law;

	
  

	
(j)

	
the Vendors acknowledge that the certificates representing the Acquirer Stock, and each certificate issued in transfer thereof, will in addition to the legends set forth under Section “2.2” hereinabove, also bear any other legend required under any applicable law, including, without limitation, any U.S. state corporate and state securities law, or contract;

	
  

	
(k)

	
the Vendors are resident in the jurisdiction as set forth under the Vendors’ address in Schedule “A” which is attached hereto, and that all negotiations and other acts in furtherance of the execution and delivery of this Agreement by the Vendors in connection with the transactions contemplated herein have taken place and will take place solely in such jurisdiction or in the state of Nevada; and

	
  

	
(l)

	
the Company Stock has been issued in accordance with all applicable securities and corporate legislation and policies.

3.3                      Additional Representations, Warranties and Covenants by the Company.  In order to induce the Acquirer to enter into and consummate this Agreement, the Company hereby represents to, warrants to and covenants with the Acquirer, with the intent that the Acquirer will also rely thereon in entering into this Agreement and in concluding the transactions contemplated herein, that, to the best of the knowledge, information and belief of the Company, after having made due inquiry:

Organization and Good Standing

	
  

	
(a)

	
The Company is duly incorporated and validly existing under the laws of the British Virgin Islands, has all requisite authority and power (corporate and other), governmental licenses, authorizations, consents and approvals to carry on its business as presently conducted and as contemplated to be conducted, to own, hold and operate its properties and assets as now owned, held and operated by it, to enter into this Agreement, to carry out the provisions hereof except where the failure to be so organized, existing and in good standing or to have such authority or power will not, in the aggregate, have a Material Adverse Effect. The Company is duly qualified, licensed or domesticated as a foreign corporation in good standing in each jurisdiction wherein the nature of its activities or its properties owned or leased makes such qualification, licensing or domestication necessary, except where the failure to be so qualified, licensed or domesticated will not have a Material Adverse Effect;

 

  

17

  

 

	
  

	
(b)

	
As of the date hereof, each of the Company’s subsidiaries has been duly organized, validly existing and in good standing under the laws of its applicable jurisdiction of organization, and have all requisite authority and power (corporate and other), governmental licenses, authorizations, consents and approvals to carry on their respective businesses as presently conducted and to own, hold and operate their respective properties and assets as now owned, held and operated, except where the failure to be so organized, existing and in good standing or to have such authority and power, governmental licenses, authorizations, consents or approvals would not have a Material Adverse Effect. All registered capital and other capital contributions shall have been duly paid up in accordance with any relevant regulations in its applicable jurisdiction of organization and requirements and all necessary capital verification reports have been duly issued and not revoked.

Subsidiaries

	
  

	
(c)

	
Each Company subsidiary and affiliated company of the Company is set forth on Schedule “C”.  For each entity listed thereon, Schedule “C” sets forth its jurisdiction of organization and the percentage of the outstanding capital stock or other equity interests of such entity that is held by the Company;

	
  

	
(d)

	
Except as set forth on Schedule “C”, the Company does not, directly or indirectly, own any capital stock or other securities of, or have any beneficial ownership interest in, or hold any equity or similar interest, or have any investment in any corporation, limited liability company, partnership, limited partnership, joint venture or other company, person or other entity;

Articles of Incorporation and Bylaws

	
  

	
(e)

	
The copies of the Memorandum and Articles of Association of the Company adopted on June 29, 2010, and the documents which constitute all other Organization Documents of the Company, that have been delivered to the Acquirer prior to the execution of this Agreement are true and complete and have not been amended or repealed. The Company is not in violation or breach of any of the provisions of its Organizational Documents, except for such violations or breaches as, in the aggregate, will not have a Material Adverse Effect;

	
  

	
(f)

	
True, correct and complete certified translated copies of the organizational documents of each of the Company subsidiaries have been delivered to the Acquirer prior to the execution of this Agreement, and no action has been taken to amend or repeal such organizational documents. No Company subsidiaries is in violation or breach of any of the provisions of its organizational documents, except for such violations or breaches as, would not have a Material Adverse Effect. The organizational documents of each of the Company subsidiaries are valid and subsisting and none of the Company subsidiaries are in violation of any of the provisions of their respective charter or bylaws or equivalent organizational documents;

 

  

18

  

 

Capitalization

	
  

	
(g)

	
The authorized capital stock of the Company consists of 5,000,000 shares of a single class each with a par value of $1.00, of which 3,620,000 shares are issued and outstanding. There are no outstanding or authorized options, warrants, calls, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require the Company to issue, sell or otherwise cause to become outstanding any of its authorized but unissued shares of capital stock or any securities convertible into, exchangeable for or carrying a right or option to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal or other contracts pertaining to the capital stock of the Company. The issuance of all of the shares of Company Stock have been in compliance with the laws of the British Virgin Islands.  All issued and outstanding shares of the Company’s capital stock are duly authorized, validly issued, fully paid and non-assessable and have not been issued in violation of any preemptive or similar rights.  None of the outstanding shares of the Company Stock were issued in violation of any applicable corporate or securities legislation or any other legal requirements;

	
  

	
(h)

	
the Vendors owns and have good marketable title to the Company Stock, as the legal and beneficial owners thereof, free of all Encumbrances;

	
  

	
(i)

	
The capitalization of each Company subsidiary is set forth on Schedule “C” and there are no other outstanding shares of capital stock or voting securities and no outstanding commitments to issue any shares of capital stock or voting securities after the date hereof. The issued and outstanding shares of capital stock of each Company subsidiary set forth on such schedule have been duly authorized, validly issued, fully paid and non-assessable, are free of any liens or encumbrances other than any liens or encumbrances created by or imposed upon the holders thereof, and are not subject to preemptive rights or rights of first refusal created by statute, their respective organizational documents or any agreement to which such company is a party or by which it is bound, and such shares constitute all of the issued and outstanding capital stock of each such Company subsidiary. All registered capital and other capital contributions regarding the Company subsidiaries have been duly paid up in accordance with the relevant regulations and requirements of the applicable jurisdiction of organization and all necessary capital verification reports have been duly issued and not revoked or withdrawn. The owners of the shares of each of the Company subsidiaries own, and have good, valid and marketable title to, all shares of capital stock of each such Company subsidiary. There are no outstanding or authorized options, warrants, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require any of the Company subsidiaries to issue, sell or otherwise cause to become outstanding any of its respective authorized but unissued shares of capital stock, or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, rights of first refusal or other contracts pertaining to the capital stock of any of the Company subsidiaries. None of the outstanding shares of capital stock of any of the Company subsidiaries has been issued in violation of any rights of any Person or in violation of any applicable corporate or securities legislation or any other legal requirements;

Title to Personal Property and Encumbrances

	
  

	
(j)

	
The Company and its subsidiaries possess, and have good and marketable title to all personal property necessary for the continued operation of the Business as presently conducted and as represented to the Acquirer, including all assets reflected in the Company’s Financial Statements and the financial statements of the Company subsidiary, Hubei Minkang Pharmaceutical Co., Ltd., or acquired since the date of such financial statements.  All such property is in reasonably good operating condition (normal wear and tear excepted), and is reasonably fit for the purposes for which such property is presently used.  All material equipment, furniture, fixtures and other tangible personal property and assets owned or leased by the Company or its subsidiary is owned by such free and clear of all Encumbrances, except as previously disclosed in writing to the Acquirer;

 

  

19

  

 

Title to Real Property and Encumbrances

	
  

	
(k)

	
The Company and its subsidiaries possess, and have good and marketable title to all real property and leaseholds or other such interests necessary for the continued operation of the Business as presently conducted and as represented to the Acquirer, including all assets reflected in the Company’s Financial Statements and the financial statements of Hubei Minkang Pharmaceutical Co., Ltd., or acquired since the date of such financial statements.  All such property is in reasonably good operating condition (normal wear and tear excepted), and is reasonably fit for the purposes for which such property is presently used.  All material real property and leaseholds are owned or leased by the Company and its subsidiaries free and clear of all Encumbrances, except as previously disclosed in writing to the Acquirer.  The Company and its subsidiaries have delivered or made available, or will make available on request, to the Acquirer copies of the deeds and other instruments (as recorded) by which the Company and its subsidiaries acquired such real property and interests, and copies of all title insurance policies, opinions, abstracts and surveys in the possession of either the Company or its subsidiaries and relating to such property or interests;

Condition and Sufficiency of Assets

	
  

	
(l)

	
All plant, machinery, facilities and equipment and other assets used by the Company or its subsidiaries in connection with the Business are owned by the Company or its subsidiaries or used by such under valid and subsisting leases, licenses, operating agreements or other arrangements and are in good operating condition, fit for their intended use and in a good state of maintenance and repair for equipment of similar age relative to the standards of maintenance and repair maintained by other companies carrying on similar business, except for ordinary, routine maintenance and repairs that are not material in nature or cost.  The building, plants, structures and equipment of the Company and its subsidiaries are sufficient for the continued conduct of the Business after the Closing in substantially the same manner as conducted prior to the Closing;

Accounts Receivable

	
  

	
(m)

	
All accounts receivable of the Company and its subsidiaries that are reflected on the balance sheet included in the Company’s Financial Statements and the financial statements of Hubei Minkang Pharmaceutical Co., Ltd., or on the accounting records of such company as of the Closing Date (collectively, the “Accounts Receivable”) have been recorded by the Company or its subsidiaries in accordance with its usual accounting practices consistent with prior periods and represent or will represent valid obligations arising from sales actually made or services actually performed in the ordinary course of business. To the best of the knowledge of the Vendors, the Accounts Receivable are or will be as of the Closing Date current and collectible net of the respective reserves shown on the balance sheet included in the Company’s Financial Statements or the financial statements of Hubei Minkang Pharmaceutical Co., Ltd., or on the accounting records of such company.  The reserve taken for doubtful or bad debtor accounts is adequate based on the past experience of the Company and its subsidiaries and is consistent with the accounting procedures used in previous fiscal periods. There is nothing which would indicate that such reserves are not adequate or that a higher reserve should be taken.  There is no contest, claim, or right of set-off, other than returns in the ordinary course of business, under any contract with any obligor of an Account Receivable relating to the amount or validity of such Account Receivable;

 

  

20

  

 

Material Contracts

	
  

	
(n)

	
The Company and its subsidiaries have made available all the present outstanding Material Contracts entered into by the Company or its subsidiaries in the course of carrying on the Business.  Except as previously disclosed in writing to the Acquirer, the Company or its subsidiaries is not a party to or bound by any other Material Contract, whether oral or written, and the contracts and agreements are all valid and subsisting, in full force and effect and unamended, no material default or violation exists in respect thereof on the part of either the Company or its subsidiaries or, to the best of the knowledge of the Company, on the part of any of the other parties thereto.  The Company and its subsidiaries are not aware of any intention on the part of any of the other parties thereto to terminate or materially alter any such contracts or agreements or any event that with notice or the lapse of time, or both, will create a material breach or violation thereof or default under any such contracts or agreements.  To the best knowledge of the Company and its subsidiaries, the continuation, validity, and effectiveness of each Material Contract will in no way be affected by the consummation of the transactions contemplated by this Agreement.  There exists no actual or threatened termination, cancellation, or limitation of, or any amendment, modification, or change to any Material Contract;

Tax Matters

	
  

	
(o)

	
To the knowledge of the Company and its subsidiaries, the Company and its subsidiaries have filed or caused to be filed all Tax Returns that are or were required to be filed by or with respect to it, either separately or as a member of a group of corporations, pursuant to all applicable statutes and other legal requirements.  The Company and its subsidiaries have made available to the Acquirer copies of all such Tax Returns filed by the Company and its subsidiaries.  Except as previously disclosed in writing ot the Acquirer, the Company and its subsidiaries have not given or been requested to give waivers or extensions (or is or would be subject to a waiver or extension given by any other Person) of any statute of limitations relating to the payment by the Company or its subsidiaries or for which the Company or its subsidiaries may be liable;

	
  

	
(p)

	
All Taxes that the Company or its subsidiaries is or was required to withhold or collect have been duly withheld or collected and, to the extent required, have been paid to the proper Governmental Body or other Person;

	
  

	
(q)

	
All Tax Returns filed by (or that include on a consolidated basis) the Company or its subsidiaries are true, correct, and complete. There is no tax sharing agreement that will require any payment by the Company or its subsidiaries after the date of this Agreement;

 

  

21

  

 

	
  

	
(r)

	
The Company and its subsidiaries have paid all Taxes that have become or are due with respect to any period ended on or prior to the date hereof and has established an adequate reserve therefore in the Company’s Financial Statements and the financial statements of Hubei Minkang Pharmaceutical Co., Ltd., for those Taxes not yet due and payable, except for (i) any Taxes the non-payment of which will not have a Material Adverse Effect on the Company or its subsidiaries, and (ii) such Taxes, if any, as are previously disclosed in writing to the Acquirer and are being contested in good faith and as to which adequate reserves (determined in accordance with GAAP) have been provided in the Company’s Financial Statements and the financial statements of Hubei Minkang Pharmaceutical Co., Ltd.;

	
  

	
(s)

	
The Company and its subsidiaries are not presently under, or have received notice of, any contemplated investigation or audit by any regulatory or government agency or body or any foreign, provincial or state taxing authority concerning any fiscal year or period ended prior to the date hereof.

	
  

	
(t)

	
To the Company’s knowledge, the Company’s Financial Statements and the financial statements of Hubei Minkang Pharmaceutical Co., Ltd., contain full provision for all Taxes including any deferred Taxes that may be assessed to the Company or its subsidiaries.

No Agents

	
  

	
(u)

	
The Company warrants to the Acquirer that no broker, agent or other intermediary has been engaged by either the Company or its subsidiaries in connection with the transactions contemplated hereby and, consequently, no commission is payable or due to a third party from either the Company or its subsidiaries;

Employee Benefit Plans and Compensation; Employment Matters.

	
  

	
(v)

	
For purposes of this Section 3.3(v), the following terms will have the meanings set forth below:

	
  

	
(i)

	
“Employee Plan” refers to any plan, program, policy, practice, contract, agreement or other arrangement providing for bonuses, severance, termination pay, performance awards, stock or stock-related awards, fringe benefits or other employee benefits of any kind, whether formal or informal, funded or unfunded and whether or not legally binding, and pursuant to which the Company or its subsidiaries has or may have any material liability contingent or otherwise;

	
  

	
(ii)

	
“Employee” means any current, former, or retired employee, officer, or director of the Company or its subsidiaries; and

	
  

	
(iii)

	
“Employee Agreement” refers to each employment, severance, consulting or similar agreement or contract between the Company or its subsidiaries and any Employee;

 

  

22

  

 

	
  

	
(w)

	
Each of the Company and its subsidiaries has made available to Acquirer:

	
  

	
(i)

	
correct and complete copies of all documents embodying each Employee Plan and each Employee Agreement including all amendments thereto and copies of all forms of agreement and enrollment used in connection therewith;

	
  

	
(i)

	
the most recent annual actuarial valuations, if any, prepared for each Employee Plan;

	
  

	
(ii)

	
if the Employee Plan is funded, the most recent annual and periodic accounting of the Employee Plan assets; and

	
  

	
(iii)

	
all communications material to any Employee or Employees relating to the Employee Plan and any proposed Employee Plan, in each case, relating to any amendments, terminations, establishments, increases or decreases in benefits, acceleration of payments or vesting schedules or other events which would result in any material liability to the Company or its subsidiaries;

	
  

	
(x)

	
The Company and its subsidiaries has performed, in all material respects, all obligations required to be performed by it under, is not in default or violation of, and has no knowledge of any default or violation by another party to any Employee Plan, and all Employee Plans have been established and maintained in all material respects in accordance with their respective terms and in substantial compliance with all applicable laws.  There are no actions, suits or claims pending, or, to the knowledge of the Company or its subsidiaries, threatened or anticipated (other than routine claims for benefits), against any Employee Plan or against the assets of any Employee Plan.  The Employee Plans can be amended, terminated or otherwise discontinued after the Closing in accordance with their terms, without liability to the Company or its subsidiaries, the Acquirer or any Affiliate thereof (other than ordinary administration expenses typically incurred in a termination event).  There are no audits, inquiries or proceedings pending or, to the knowledge of either the Company or its subsidiaries, threatened, by any Governmental Body;

	
  

	
(y)

	
The execution of this Agreement and the consummation of the transactions contemplated hereby will not (either alone or upon the occurrence of any additional or subsequent events) constitute an event under an Employee Plan, Employee Agreement, trust or loan that will or may result in any payment (whether of severance pay or otherwise), acceleration, forgiveness of indebtedness, vesting, distribution, increase in benefits or obligation to fund benefits with respect to any Employee;

	
  

	
(z)

	
To the knowledge of the Company, the Company and its subsidiaries:

	
  

	
(i)

	
are in compliance in all material respects with all applicable laws respecting employment, employment practices, terms and conditions of employment and wages and hours, in each case, with respect to Employees;

	
  

	
(ii)

	
have withheld all amounts required by law or by agreement to be withheld from the wages, salaries and other payments to Employees;

	
  

	
(iii)

	
are not liable for any arrears of wages or any taxes or any penalty for failure to comply with any of the foregoing;

 

  

23

  

 

	
  

	
(iv)

	
are not liable for any payment to any trust or other fund or to any governmental or administrative authority, with respect to unemployment compensation benefits, social security or other benefits for Employees (other than routine payments to be made in the normal course of business and consistent with past practice);

	
  

	
(v)

	
have provided the Employees with all wages, benefits, stock options, bonuses, incentives and all other compensation that became due and payable through the date of the Agreement; and

	
  

	
(vi)

	
represents that in the last three (3) years, no citation has been issued by any federal, state or provincial occupational safety and health board or agency against them and no notice of contest, claim, complaint, charge, investigation or other administrative enforcement proceeding involving them has been filed or is pending or, to their knowledge, threatened, against them under any federal, state or provincial occupational safety and health board or any other applicable law relating to occupational safety and health;

	
  

	
(aa)

	
No work stoppage, labour strike or other “concerted action” involving Employees against the Company or its subsidiaries is pending or, to the knowledge of either the Company or its subsidiaries, threatened.  The Company and its subsidiaries is not involved in nor, to the knowledge of such company, threatened with, any labour dispute, grievance, or litigation relating to labour, safety or discrimination matters involving any Employee, including, without limitation, charges of unfair labour practices or discrimination complaints, which, if adversely determined, would, individually or in the aggregate, result in a Material Adverse Effect on either the Company or its subsidiaries.  The Company and its subsidiaries are not presently, nor have been in the past, a party to, or bound by, any collective bargaining agreement or union contract with respect to any Employees and no collective bargaining agreement is being negotiated.  To the knowledge of the Company, there are no activities or proceedings of a labour union to organize any of the Employees;

	
  

	
(bb)

	
The Company has disclosed in writing to the Acquirer a complete and accurate list of the names of all individuals who are key personnel of the Company and its subsidiaries.  The Company is not aware of the intention of any key personnel to terminate his or her employment with the Company or its subsidiaries;

	
  

	
(cc)

	
Except as previously disclosed in writing to the Acquirer and except for claims by Employees under any applicable workers’ compensation or similar legislation which, if adversely determined, would not, either individually or in the aggregate, have a Material Adverse Effect on the Company or its subsidiaries, there are no complaints, claims or charges pending or outstanding or, to the best of the knowledge of the Company, anticipated, nor are there any orders, decisions, directions or convictions currently registered or outstanding by any tribunal or agency against or in respect of the Company or its subsidiaries under or in respect of any employment legislation.  The Company has disclosed in writing to the Acquirer a list of all Employees in respect of whom either the Company or its subsidiaries has been advised by any workers compensation or similar authority that such Employees are in receipt of benefits under workers’ compensation or similar legislation. There are no appeals pending before any workers compensation or similar authority involving either the Company or its subsidiaries and all levies, assessments and penalties made against either the Company or its subsidiaries pursuant to workers’ compensation or similar legislation have been paid.  Neither the Company nor its subsidiaries is aware of any audit currently being performed by any workers compensation or similar authority, and all payments required to be made in respect of termination or severance pay under any employment standards or similar legislation in respect of former employees or employees previously disclosed in writing to the Acquirer have been made;

 

  

24

  

 

Consents

	
  

	
(dd)

	
Except as previously disclosed in writing to the Acquirer, no authorization, approval, order, license, permit or consent of any Governmental Body, regulatory body, agency, other authority or any Person, including any governmental department, commission, bureau, board or administrative agency or court, and no registration, declaration or filing by either the Company or its subsidiaries with any such Governmental Body, regulatory body or agency or court is required in order for either the Company or its subsidiaries to:

	
  

	
(i)

	
consummate the transactions contemplated by this Agreement;

	
  

	
(ii)

	
execute and deliver all of the documents and instruments to be delivered by the Company under this Agreement;

	
  

	
(iii)

	
duly perform and observe the terms and provisions of this Agreement; or

	
  

	
(iv)

	
render this Agreement legal, valid, binding and enforceable;

Compliance with Legal Requirements

	
  

	
(ee)

	
each of the Company and its subsidiaries is, and at all times has been, in full compliance with all of the terms and requirements of each governmental authorization required for the operation of the Business;

	
  

	
(ff)

	
no event has occurred or circumstance exists that may (with or without notice or lapse of time) constitute or result directly or indirectly in a violation of or a failure to comply with any term or requirement of any governmental authorization required for the operation of the Business or may result directly or indirectly in the revocation, withdrawal, suspension, cancellation, or termination of, or any modification to, any governmental authorization required for the operation of the Business;

	
  

	
(gg)

	
neither the Company nor its subsidiaries have received any notice or other communication (whether oral or written) from any Governmental Body or any other Person regarding any actual, alleged, possible, or potential violation of or failure to comply with any term or requirement of any governmental authorization, or any actual, proposed, possible, or potential revocation, withdrawal, suspension, cancellation, termination of, or modification to any governmental authorization; and

	
  

	
(hh)

	
all applications required to have been filed for the renewal of the governmental authorizations required for the operation of the Business have been duly filed on a timely basis with the appropriate Governmental Bodies, and all other filings required to have been made with respect to such governmental authorizations have been duly made on a timely basis with the appropriate Governmental Bodies;

 

  

25

  

 

Legal Proceedings

	
  

	
(ii)

	
there is no pending Proceeding:

	
  

	
(i)

	
that has been commenced by or against either the Company or its subsidiaries or that otherwise relates to or may affect the Business, or any of the assets owned or used by, the Company or its subsidiaries; or

	
  

	
(ii)

	
that challenges, or that may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any of the transactions contemplated herein;

	
  

	
(jj)

	
to the knowledge of the Company, no Proceeding has been threatened, and no event has occurred or circumstance exists that may give rise to or serve as a basis for the commencement of any such Proceeding;

	
  

	
(kk)

	
there is no Order to which either the Company or its subsidiaries, the Business, or any of the assets owned or used by any of them, is subject; and

	
  

	
(ll)

	
no officer, director, agent, or employee of either the Company or its subsidiaries is subject to any Order that prohibits such officer, director, agent, or employee from engaging in or continuing any conduct, activity, or practice relating to the Business;

Insurance

	
  

	
(mm)

	
all insurance policies to which either the Company or its subsidiaries is a party or that provides coverage to either the Company or its subsidiaries, or to any director or officer of either the Company or its subsidiaries:

	
  

	
(i)

	
are valid, outstanding, and enforceable;

	
  

	
(ii)

	
are issued by an insurer that is financially sound and reputable;

	
  

	
(iii)

	
taken together, provide adequate insurance coverage for the assets and the operations of the Company and its subsidiaries for all risks normally insured against by a Person carrying on the same business as the Company and its subsidiaries;

	
  

	
(iv)

	
are sufficient for compliance with all legal requirements and contracts to which either the Company or its subsidiaries is a party or by which either is bound;

	
  

	
(v)

	
will continue in full force and effect following the consummation of the transactions contemplated herein; and

	
  

	
(vi)

	
do not provide for any retrospective premium adjustment or other experienced-based liability on the part of either the Company or its subsidiaries;

	
  

	
(nn)

	
Neither the Company nor its subsidiaries have received (a) any refusal of coverage or any notice that a defense will be afforded with reservation of rights, or (b) any notice of cancellation or any other indication that any insurance policy is no longer in full force or effect or will not be renewed or that the issuer of any policy is not willing or able to perform its obligations thereunder;

 

  

26

  

 

	
  

	
(oo)

	
Each of the Company and its subsidiaries has paid all premiums due, and has otherwise performed all of their respective obligations, under each policy to which either the Company or its subsidiaries is a party or that provides coverage to either the Company or its subsidiaries or any director thereof;

	
  

	
(pp)

	
Each of the Company and its subsidiaries have given prompt notice to its insurers of all claims or possible claims that may be insured by any of their respective policies;

Interested Party Transactions

	
  

	
(qq)

	
Except as previously disclosed in writing to the Acquirer, no officer, director or stockholder of the Company or its subsidiaries or any Affiliate or “associate” (as such term is defined in Rule 405 of the Commission under the Securities Act) of any such Person, has or has had, either directly or indirectly, (1) an interest in any Person which (a) furnishes or sells services or products which are furnished or sold or are proposed to be furnished or sold by the Company or its subsidiaries, or (b) purchases from or sells or furnishes to, or proposes to purchase from, sell to or furnish the Company or its subsidiaries any goods or services; or (2) a beneficial interest in any contract or agreement to which the Company or its subsidiaries is a party or by which it may be bound or affected;

Bank Accounts and Safe Deposit Boxes

	
  

	
(rr)

	
Schedule “H” discloses the title and number of each bank or other deposit or financial account, and each lock box and safety deposit box used by the Company or its subsidiaries, the financial institution at which that account or box is maintained and the names of the persons authorized to draw against the account or otherwise have access to the account or box, as the case may be;

Inventory

	
  

	
(ss)

	
All of the inventory of each of the Company and its subsidiaries, including finished goods, work in progress, raw materials and packaging, is in good and saleable condition and:

	
  

	
(i)

	
there is no redundant, obsolete or stale-dated inventory on hand that has not been written down or fully allowed for on the books and records of the Company or its subsidiaries;

	
  

	
(ii)

	
all inventory or product produced or sold by the Company or its subsidiaries has been produced or sold in accordance with the required government standards and specifications;

	
  

	
(iii)

	
there are no forward commitments, either written or oral, for the purchase of any inventories, including raw materials or supplies; and

 

  

27

  

 

	
  

	
(iv)

	
there are no discounts, credits, rebates, coupons or other allowances that have been provided to any customers of the Company or its subsidiaries which are outstanding or unsatisfied in any respect;

Intellectual Property

	
  

	
(tt)

	
the Company has provided the Acquirer with a complete and accurate list of all Intellectual Property owned or used by the Company and its subsidiaries in carrying on the Company’s Business and all applications therefor and all goodwill connected therewith, including, without limitation, all licenses, registered user agreements and all like rights used by or granted to the Company or its subsidiaries in connection with the Company’s Business and all right to register or otherwise apply for the protection on any of the foregoing;

	
  

	
(uu)

	
the Intellectual Property comprises all trademarks, trade names, business names, patents, inventions, know-how, copyrights, service marks, brand marks, industrial designs and all other industrial or intellectual property necessary to conduct the Company’s Business;

	
  

	
(vv)

	
the Company or its subsidiaries are the beneficial owner of the Intellectual Property, free and clear of all Encumbrances, and is not a party to or bound by any contract or other obligation whatsoever that limits or impairs its ability to sell, transfer, assign or convey, or that otherwise affects, the Intellectual Property;

	
  

	
(ww)

	
no person has been granted any interest in or right to use all or any portion of the Intellectual Property;

	
  

	
(xx)

	
the Company is not aware of a claim of any infringement or breach of any industrial or Intellectual Property rights of any other person by the Company or its subsidiaries.  The Company or its subsidiaries have not received any notice that the conduct of the Company’s Business infringes or breaches any industrial or Intellectual Property rights of any other person, and the Company, after due inquiry, has no knowledge of any infringement or violation of any of their rights or the rights of the Company or its subsidiaries in the Intellectual Property;

	
  

	
(yy)

	
the conduct of the Company’s Business does not infringe upon the patents, trademarks, licenses, trade names, business names, copyright or other industrial or Intellectual Property rights, domestic or foreign, of any other Person;

	
  

	
(zz)

	
the Company is not aware of any state of facts that casts doubt on the validity or enforceability of any of the Intellectual Property;

	
  

	
(aaa)

	
the Company has provided to the Acquirer a true and complete copy of all contracts and amendments thereto that comprise or relate to the Intellectual Property;

Financial Statements

	
  

	
(bbb)

	
the Company’s audited Financial Statements for the fiscal years ended December 31, 2010 and 2009 and the Company’s unaudited Financial Statements for the three (3) month period ended March 31, 2011 (collectively, the “Company’s Financial Statements”) have been prepared in accordance with GAAP by a PCAOB registered audit firm, are correct and complete and present fairly the assets, liabilities (whether accrued, absolute, contingent or otherwise) and financial condition of the Company as at the respective dates of and for the respective periods covered by the Company’s Financial Statements;

 

  

28

  

 

	
  

	
(ccc)

	
for any period up to the Time of Closing the Company will not have any debts or liabilities whatsoever (whether accrued, absolute or contingent or otherwise), including any liabilities for federal, state, provincial, sales, excise, income, corporate or any other Taxes of the Company except for;

	
  

	
(i)

	
the debts and liabilities disclosed on, provided for or included in the balance sheet forming a part of the most recent of the Company’s Financial Statements;

	
  

	
(ii)

	
debts or liabilities disclosed in this Agreement or any Schedule hereto; and

	
  

	
(iii)

	
liabilities incurred by the Company or its subsidiaries in the ordinary course of the Company’s Business subsequent to the date of the balance sheet referred to in the Company’s Financial Statements;

Books and Records

	
  

	
(ddd)

	
the books and records of the Company and its subsidiaries fairly and correctly set out and disclose, in all material respects, in accordance with GAAP, the financial condition of the Company as of the date of this Agreement and all material financial transactions of the Company and its subsidiaries have been accurately recorded in such books and records;

Corporate Records

	
  

	
(eee)

	
the Corporate records and minute books of the Company contain complete and accurate minutes, (duly signed by the chairman and/or secretary of the appropriate meeting) of all meetings of the directors and shareholders of the Company since its date of incorporation;

	
  

	
(fff)

	
the share certificate records, the securities register, the register of disclosures , the register of directors and officers for the Company are contained in the corporate minute book and are complete and accurate in all respects;

Directors and Officers

	
  

	
(ggg)

	
the present directors and officers of the Company are as follows:

 

	
Name

	
Position

	  	  
	
Lee Tong Tai

	
Director

	
Ang Siew Khim

	
Director

	
Koh Sock Hua

	
Director

	
Lee Tong Jiuh

	
Director

  

Environmental Matters

	
  

	
(hhh)

	
Each of the Company and its subsidiaries has obtained all approvals, authorizations, certificates, consents, licences, orders and permits or other similar authorizations of all Governmental Bodies, or from any other Person, that are required under any Environmental Laws;

 

  

29

  

 

	
  

	
(iii)

	
Each of the Company and its subsidiaries is in compliance with all material terms and conditions of all approvals, authorizations, certificates, consents, licences, orders and permits or other similar authorizations of all Governmental Bodies required under all Environmental Laws.  Each of the Companies is also in compliance with all other limitations, restrictions, conditions, standards, requirements, schedules and timetables required or imposed under all Environmental Laws;

	
  

	
(jjj)

	
There are no past or present events, conditions, circumstances, incidents, actions or omissions that constituted, constitute or may, after the Closing, constitute a violation by either the Company or its subsidiaries of any Environmental Law or that may give rise to any Environmental Liabilities of the Company or its subsidiaries, or otherwise form the basis of any claim, action, demand, suit, Proceeding, hearing, study or investigation relating to or in any way affecting either the Company or its subsidiaries (i) under any Environmental Laws or (ii) based on or related to the manufacture, processing, distribution, use, treatment, storage (including underground storage), disposal, transport, handling, emission, discharge, release or threatened release of any contaminants;

	
  

	
(kkk)

	
Copies of all environmental audits, environmental assessments and environmental studies or evaluations related in any way to either the Company or its subsidiaries or the operation of the Business done by or on behalf of either the Company or its subsidiaries or any other Person have been provided to Acquirer;

	
  

	
(lll)

	
Except as has been previously disclosed in writing to the Acquirer:

	
  

	
(i)

	
neither the Company nor its subsidiaries have been charged with or convicted of an offence for non-compliance with or breach of any Environmental Laws or fined or otherwise sentenced for non-compliance with or breach of any Environmental Laws or settled any prosecution short of conviction for non-compliance with or breach of any Environmental Laws;

	
  

	
(ii)

	
neither the Company nor its subsidiaries have caused or permitted, and neither has any knowledge of, the release or disposal of any contaminant on, from, under or to the premises or of any release or disposal from any facility owned or operated by any other Person for which either the Company or its subsidiaries may have any liability; and

	
  

	
(iii)

	
all contaminants generated, handled, stored, treated, processed, transported or disposed of by or on behalf of either the Company or its subsidiaries have been generated, handled, stored, treated, processed, transported or disposed of in compliance with all applicable Environmental Laws;

Accuracy of Warranties

	
  

	
(mmm)

	
neither this Agreement nor any document, schedule, list, certificate, declaration under oath or written statement now or hereafter furnished by the Vendors or the Company to the Acquirer in connection with the transactions contemplated by this Agreement contains or will contain any untrue statement or representation of a material fact on the part of the Vendors or the Company, or omits or will omit on behalf of the Vendors or the Company to state a material fact necessary to make any such statement or representation therein or herein contained not misleading.

 

  

30

  

 

3.4                      Survival of the Representations, Warranties and Covenants by each of the Vendors and the Company.   To the extent they have not been fully performed at or prior to the Time of Closing, each and every representation and warranty of the Vendors or the Company contained in this Agreement and any agreement, instrument, certificate or other document executed or delivered pursuant to this Agreement shall:

	
  

	
(a)

	
be true and correct on and as of the Closing Date with the same force and effect as though made or given on the Closing Date;

	
  

	
(b)

	
remain in full force and effect notwithstanding any investigations conducted by or on behalf of the Acquirer; and

	
  

	
(c)

	
survive the completion of the transactions contemplated by this Agreement until the second anniversary of the Closing Date and shall continue in full force and effect for the benefit of the Acquirer during that period, except that:

	
  

	
(i)

	
the representations and warranties set out in section 3.2(a) to and including 3.2(l) and 3.3(g), 3.3(h) and 3.3(i) above shall survive and continue in full force and effect without limitation of time;

	
  

	
(iv)

	
the representations, warranties and covenants set out in section 3.3(o) to and including 3.3(t) above shall survive and continue in full force and effect during the applicable statute of limitations periods with respect thereto; and

	
  

	
(iii)

	
a claim for any breach of any of the representations and warranties contained in this Agreement or in any agreement, instrument, certificate or other document executed or delivered pursuant hereto involving fraud or fraudulent misrepresentation may be made at any time following the Closing Date, subject only to applicable limitation periods imposed by law.

	
  

	
(d)

	
to the extent they have not been fully performed at or prior to the Time of Closing, each and every covenant of the Vendors and the Company contained in this Agreement and any agreement, instrument, certificate or other document executed or delivered pursuant to this Agreement shall survive the completion of the transactions contemplated by this Agreement and, notwithstanding such completion, shall continue in full force and effect for the benefit of the Acquirer.

Article 4

WARRANTIES, REPRESENTATIONS AND COVENANTS BY THE ACQUIRER

4.1                      Warranties, Representations and Covenants by the Acquirer.  In order to induce the Vendors and the Company to enter into and consummate this Agreement, the Acquirer hereby warrants to, represents to and covenants with each of the Vendors and the Company, with the intent that each of the Vendors and the Company will rely thereon in entering into this Agreement and in concluding the transactions contemplated herein, that, to the best of the knowledge, information and belief of the Acquirer, after having made due inquiry:

 

  

31

  

 

Organization and Good Standing

	
  

	
(a)

	
The Acquirer is a corporation duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation, with full corporate power, authority and capacity to conduct its business as presently conducted, to own or use the properties and assets that it purports to own or use, and to perform all its obligations under any applicable contracts.

Authorization

	
  

	
(b)

	
this Agreement has been duly authorized, executed and delivered by the Acquirer and is a legal, valid and binding obligation of the Acquirer, enforceable against the Acquirer, as the case may be, by the Vendors and/or the Company in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency and other laws affecting the rights of creditors generally and except that equitable remedies may be granted only in the discretion of a court of competent jurisdiction;

Capitalization

	
  

	
(c)

	
The entire authorized capital stock of the Acquirer consists of 168,750,000 shares of common stock with a par value of $0.001 per share. As of the date of this Agreement, there are 9,547,169 shares of common stock issued and outstanding.  Except for the Acquirer Stock and except as set out in this Agreement, there are no outstanding options, warrants, subscriptions, conversion rights, or other rights, agreements, or commitments obligating the Acquirer to issue any additional shares of common stock of the Acquirer, or any other securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire from the Acquirer any shares of common stock of the Acquirer.  There are no agreements purporting to restrict the transfer of any of the issued and outstanding shares of common stock of the Acquirer, no voting agreements, shareholders’ agreements, voting trusts, or other arrangements restricting or affecting the voting of any of the shares of common stock of the Acquirer to which the Acquirer is a party or of which the Acquirer is aware.

	
  

	
(e)

	
all of the issued and outstanding shares of the Acquirer are currently listed and posted for trading on the OTCBB;

Validity of Acquirer Stock Issuable Upon the Transaction

	
  

	
(f)

	
The Acquirer Stock to be issued to the Vendors at Closing will, upon issuance, have been duly and validly authorized and, the Acquirer Stock when so issued in accordance with the terms of this Agreement, will be duly and validly issued, fully paid and non-assessable.

Non-Contravention

	
  

	
(g)

	
Neither the execution, delivery and performance of this Agreement, nor the consummation of the transactions contemplated herein, will:

	
  

	
(i)

	
conflict with, result in a violation of, cause a default under (with or without notice, lapse of time or both) or give rise to a right of termination, amendment, cancellation or acceleration of any obligation contained in or the loss of any material benefit under, or result in the creation of any Lien, security interest, charge or Encumbrance upon any of the material properties or assets of the Purchaser under any term, condition or provision of any loan or credit agreement, note, debenture, bond, mortgage, indenture, lease or other agreement, instrument, permit, license, judgment, Order, decree, statute, law, ordinance, rule or regulation applicable to the Purchaser or its material property or assets;

 

  

32

  

 

	
  

	
(ii)

	
violate any provision of the Organizational Documents of the Acquirer or any applicable laws; or

	
  

	
(iii)

	
violate any order, writ, injunction, decree, statute, rule, or regulation of any court or Governmental Body applicable to the Acquirer or any of its material property or assets;

Corporate Records of the Acquirer

	
  

	
(h)

	
The corporate records of the Acquirer, as required to be maintained by it pursuant to the laws of the State of Nevada, are accurate, complete and current in all material respects, and the minute books of the Acquirer are, in all material respects, correct and contain all material records required by the laws of the State of Nevada in regards to all proceedings, consents, actions and meetings of the shareholders and the board of directors of the Acquirer;

Actions and Proceedings

	
  

	
(i)

	
Except as disclosed in the Acquirer’s disclosure filings with the Commission, to the best knowledge of the Acquirer, there is no basis for and there is no claim, charge, arbitration, grievance, action, suit, judgment, demand, investigation or Proceeding by or before any court, arbiter, administrative agency or other Governmental Body now outstanding or pending or, to the best knowledge of the Acquirer, threatened against or affecting the Acquirer which involves any of the business, property or assets of the Acquirer that, if adversely resolved or determined, would have a Material Adverse Effect on the Acquirer.  There is no reasonable basis for any claim or action that, based upon the likelihood of its being asserted and its success if asserted, would have a Material Adverse Effect on the Acquirer;

	
  

	
Absence of Rights to Acquire Securities

	
  

	
(j)

	
no person has any agreement or option or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement, including convertible securities, warrants or convertible obligations of any nature, for the purchase, subscription, allotment or issuance of any unissued shares or other securities of the Acquirer;

Filings, Consents and Approvals

	
  

	
(k)

	
No filing or registration with, no notice to and no permit, authorization, consent, or approval of any public or Governmental Body or any other Person is necessary for the consummation by the Acquirer of the transactions contemplated herein or to continue to conduct its business after the Closing Date in a manner which is consistent with that in which it is presently conducted;

 

  

33

  

 

Directors and Officers

	
  

	
(l)

	
the present directors and officers of the Acquirer are as follows:

 

	
Name

	
Position

	  	  
	
Hsien Loong Wong

	
President, CEO, CFO, Secretary, Treasurer & Director

  

No Agent

	
  

	
(m)

	
the Acquirer warrants to the Vendors that no broker, agent or other intermediary has been engaged by the Acquirer in connection with the transactions contemplated hereby, and consequently, no commission is payable or due to a third party from the Acquirer;

Listing and Maintenance Requirements

	
  

	
(n)

	
the Acquirer is currently quoted on the OTCBB and has not, in the 12 months preceding the date hereof, received any notice from the OTCBB or FINRA or any trading market on which the Acquirer’s common stock is or has been listed or quoted, to the effect that the Acquirer is not in compliance with the quoting, listing or maintenance requirements of the OTCBB or such other trading market. No securities commission or other regulatory authority has issued any order preventing or suspending the trading of the Acquirer’s secuirites or prohibiting the issuance of the Acquirer Stock to be delivered hereunder, and, to the Acquirer’s knowledge, no Proceedings for such purpose are pending or threatened;

Certain Transactions

	
  

	
(o)

	
Except as previously disclosed in the Acquirer’s disclosure filings with the Commission, or as disclosed to the Vendors and the Company, the Acquirer is not a guarantor or indemnitor of any indebtedness of any Person;

Taxes

(p)           As of the date hereof:

	
  

	
(i)

	
the Acquirer has timely filed all tax returns, if any were filed, in connection with any Taxes which are required to be filed on or prior to the date hereof, taking into account any extensions of the filing deadlines which have been validly granted to it, and

	
  

	
(ii)

	
all such returns, if any were filed, are true and correct in all material respects;

	
  

	
(q)

	
the Acquirer has paid all Taxes that have become or are due with respect to any period ended on or prior to the date hereof and has established an adequate reserve therefore on its balance sheets for those Taxes not yet due and payable, except for any Taxes the non-payment of which will not have a Material Adverse Effect on the Acquirer;

 

  

34

  

 

	
  

	
(r)

	
the Acquirer is not presently under and has not received notice of, any contemplated investigation or audit by any regulatory or government agency or body or any foreign or state taxing authority concerning any fiscal year or period ended prior to the date hereof;

	
  

	
(s)

	
all Taxes required to be withheld on or prior to the date hereof from employees for income Taxes, social security Taxes, unemployment Taxes and other similar withholding Taxes have been properly withheld and, if required on or prior to the date hereof, have been deposited with the appropriate Governmental Body;

	
  

	
(t)

	
to the best knowledge of the Acquirer, the Acquirer’s financial statements contain full provision for all Taxes including any deferred Taxes that may be assessed to the Acquirer for the most recent accounting period ended and filed with the Commission or for any prior period in respect of any transaction, event or omission occurring, or any profit earned, on or prior to the most recent accounting period ended and filed with the Commission or for which the Acquirer is accountable up to such date and all contingent Liabilities for Taxes have been provided for or disclosed in the Acquirer’s financial statements;

Commission Documents; Undisclosed Liabilities

	
  

	
(u)

	
the Acquirer’s shares of common stock is currently registered pursuant to Section 12(g) of the Exchange Act, and the Acquirer has filed all reports, schedules, forms, statements and other documents required to be filed by Acquirer with the Commission pursuant to the reporting requirements of the Exchange Act, including material filed pursuant to Section 13(a) or 15(d) of the Exchange Act (all of the foregoing, including filings incorporated by reference therein, the “Acquirer Commission Documents”);

	
  

	
(v)

	
as of its respective filing date, each Acquirer Commission Document complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder applicable to such Acquirer Commission Document, and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  Except to the extent that information contained in any Acquirer Commission Document has been revised or superseded by a later filed Acquirer Commission Document, none of the Acquirer Commission Documents contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  The financial statements of Acquirer included in the Acquirer Commission Documents comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the Commission with respect thereto, have been prepared in accordance GAAP (except, in the case of unaudited statements, as permitted by the rules and regulations of the Commission) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly present the financial position of Acquirer as of the dates thereof and the results of its operations and cash flows for the periods shown (subject, in the case of unaudited statements, to normal year-end audit adjustments);

 

  

35

  

 

	
  

	
(w)

	
except as set forth in the Acquirer Commission Documents, Acquirer has no liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) required by GAAP to be set forth on a balance sheet of Acquirer or in the notes thereto that are not so set forth.  As of the date hereof and up to the Time of Closing the Acquirer will not have any debts or liabilities whatsoever (whether accrued, absolute, contingent or otherwise), including any liabilities for federal, state, provincial, sales, excise, income, corporate or any other taxes of the Acquirer except for;

	
  

	
(i)

	
the debts and liabilities disclosed on, provided for or included in the Acquirer Commission Documents;

	
  

	
(ii)

	
debts or liabilities disclosed in this Agreement or any Schedule hereto; and

	
  

	
(iii)

	
liabilities incurred by the Acquirer in the ordinary course of business, and in relation to this Agreement subsequent to the date of the most recent balance sheet referred to in the Acquirer Commission Documents;

Absence of Certain Changes or Events

	
  

	
(x)

	
from the date of the most recent audited financial statements included in the Acquirer Commission Documents or as disclosed in the Acquirer Commission Documents to the date of this Agreement, Acquirer has conducted its business only in the ordinary course, and during such period there has not been:

	
  

	
(i)

	
any change in the assets, liabilities, financial condition or operating results of Acquirer from that reflected in the Acquirer Commission Documents, except changes in the ordinary course of business that have not caused, in the aggregate, a Material Adverse Effect to the Acquirer;

	
  

	
(ii)

	
any damage, destruction or loss, whether or not covered by insurance, that would have a Material Adverse Effect to the Acquirer;

	
  

	
(iii)

	
any waiver or compromise by Acquirer of a valuable right or of a material debt owed to it;

	
  

	
(iv)

	
any satisfaction or discharge of any lien, claim, or encumbrance or payment of any obligation by Acquirer, except in the ordinary course of business and the satisfaction or discharge of which would not have a Material Adverse Effect to the Acquirer;

	
  

	
(v)

	
any material change to a material contract by which Acquirer or any of its assets is bound or subject;

	
  

	
(vi)

	
any material change in any compensation arrangement or agreement with any employee, officer, director or stockholder;

	
  

	
(vii)

	
any mortgage, pledge, transfer of a security interest in, or lien, created by Acquirer, with respect to any of its material properties or assets, except liens for taxes not yet due or payable and liens that arise in the ordinary course of business and do not materially impair Acquirer’s ownership or use of such property or assets;

 

  

36

  

 

	
  

	
(viii)

	
any loans or guarantees made by Acquirer to or for the benefit of its employees, officers or directors, or any members of their immediate families, other than travel advances and other advances made in the ordinary course of its business;

	
  

	
(ix)

	
any declaration, setting aside or payment or other distribution in respect of any of Acquirer’s capital stock, or any direct or indirect redemption, purchase, or other acquisition of any of such stock by Acquirer;

	
  

	
(x)

	
any alteration of Acquirer’s method of accounting or the identity of its auditors; or

	
  

	
(xi)

	
any issuance of equity securities to any officer, director or affiliate;

 

Benefit Plans

	
  

	
(y)

	
Acquirer does not have or maintain any collective bargaining agreement or any bonus, pension, profit sharing,  deferred compensation, incentive compensation, stock ownership, stock purchase, stock option, phantom stock, retirement, vacation, severance, disability, death benefit, hospitalization, medical or other plan, arrangement or understanding (whether or not legally binding) providing benefits to any current or former employee, officer or director of Acquirer.  As of the date of this Agreement there are not any employment, consulting, indemnification, severance or termination agreements or arrangements between Acquirer and any current or former employee, officer or director of Acquirer, nor does Acquirer have any general severance plan or policy;

Compliance with Applicable Laws

	
  

	
(z)

	
Acquirer is in compliance with all applicable laws, including those relating to occupational health and safety and the environment, except for instances of noncompliance that, individually and in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect to the Acquirer.  Except as set forth in the Acquirer Commission Documents, Acquirer has not received any written communication during the past two years from a governmental entity that alleges that Acquirer is not in compliance in any material respect with any applicable law.  Acquirer is in compliance with all requirements of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations thereunder, that are applicable to it.  This Section 4.1(z) does not relate to matters with respect to Taxes, which are the subject of Sections 4.1(p) through 4.1(t);

Contracts

	
  

	
(aa)

	
except as disclosed in and filed as exhibits to the Acquirer Commission Documents, there are no contracts that are material to the business, properties, assets, condition (financial or otherwise), results of operations or prospects of the Acquirer.  Acquirer is not in violation of or in default under (nor does there exist any condition which upon the passage of time or the giving of notice would cause such a violation of or default under) any contract to which it is a party or by which it or any of its properties or assets is bound, except for violations or defaults that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect to the Acquirer;

 

  

37

  

 

Real, Personal and Intellectual Property

	
  

	
(bb)

	
Acquirer does not own any real property.  Acquirer has good title to, or valid working interests in, all of its properties and assets used in the conduct of its business;

	
  

	
(cc)

	
there are no claims pending or, to the knowledge of Acquirer, threatened that Acquirer is infringing or otherwise adversely affecting the rights of any person with regard to any Intellectual Property right;

Labor Matters

	
  

	
(dd)

	
there are no collective bargaining or other labor union agreements to which Acquirer is a party or by which it is bound;

Certain Registration Matters

	
  

	
(ee)

	
except as specified in the Acquirer Commission Documents, Acquirer has not granted or agreed to grant to any person any rights (including “piggy-back” registration rights) to have any securities of Acquirer registered with the Commission or any other governmental authority that have not been satisfied;

Preservation of Business

	
  

	
(ff)

	
from the date of this Agreement until the Closing Date, the Acquirer shall operate only in the ordinary and usual course of business consistent with past practices, provided, however, that the Acquirer shall not issue any securities without the prior written consent of the Company, except in connection with any equity financing and the Closing of this Agreement.

Full Disclosure

	
  

	
(gg)

	
the Acquirer has no information or knowledge of any fact not communicated to the Vendors and the Company and relating to the Acquirer or to the Acquirer’s business or to its issued and outstanding securities which, if known to the Vendors and/or the Company, might reasonably be expected to deter the Vendors and/or the Company from entering into this Agreement or from completing the transactions contemplated by this Agreement;

4.2                      Survival of the Representations, Warranties and Covenants by the Acquirer.  To the extent they have not been fully performed at or prior to the Time of Closing, each representation and warranty of the Acquirer contained in this Agreement or in any document, instrument, certificate or undertaking given pursuant hereto shall:

	
  

	
(a)

	
be true and correct on and as of the Closing Date with the same force and effect as though made or given on the Closing Date;

	
  

	
(b)

	
remain in full force and effect notwithstanding any investigations conducted by or on behalf of the Company and/or Vendors, and

	
  

	
(c)

	
survive the completion of the transactions contemplated by this Agreement until the second anniversary of the Closing Date and shall continue in full force and effect for the benefit of the Vendors and the Company during that period, except that a claim for any breach of any of the representations and warranties contained in this Agreement or in any agreement, instrument, certificate or other document executed or delivered pursuant hereto involving fraud or fraudulent misrepresentation may be made at any time following the Closing Date, subject only to applicable limitation periods imposed by law.

 

  

38

  

 

	
  

	
(d)

	
To the extent they have not been fully performed at or prior to the Time of Closing, each and every covenant of the Acquirer contained in this Agreement and any agreement, instrument, certificate or other document executed or delivered pursuant to this Agreement shall survive the completion of the transactions contemplated by this Agreement and, notwithstanding such completion, shall continue in full force and effect for the benefit of the Vendors and the Company.

Article 5

CONDITIONS PRECEDENT TO CLOSING

5.1                      Parties’ Conditions Precedent prior to the Closing Date.  All of the rights, duties and obligations of each of the Parties hereto under this Agreement are subject to the following conditions precedent for the exclusive benefit of each of the Parties to be fulfilled in all material aspects in the reasonable opinion of each of the Parties or to be waived by each or any of the Parties, as the case may be, as soon as possible after the Execution Date; however, unless specifically indicated as otherwise, not later than the Time of Closing:

	
  

	
(a)

	
the specific ratification of the terms and conditions of this Agreement by the Board of Directors of the Acquirer within five business days of the due and complete execution of this Agreement by each of the Parties hereto (the “Acquirer’s Ratification”);

	
  

	
(b)

	
the completion by the Acquirer of an initial due diligence and operations review of the Company’s Business and operations within twenty-five calendar days after the Acquirer’s Ratification (the “Acquirer’s Initial Due Diligence”);

5.2                      Parties’ Waiver of Conditions Precedent.   The conditions precedent set forth in section “5.1” hereinabove are for the exclusive benefit of each of the Parties hereto and may be waived by each of the Parties in writing and in whole or in part at or prior to the Time of Closing.

5.3                      The Vendors’ and the Company’s Conditions Precedent.   The acquisition of the Company Stock is subject to the following terms and conditions for the exclusive benefit of the Vendors and the Company, to be fulfilled or performed at or prior to the Time of Closing:

	
  

	
(a)

	
the representations and warranties of the Acquirer contained in this Agreement shall be true and correct in all material respects at the Time of Closing, with the same force and effect as if such representations and warranties were made at and as of such time;

	
  

	
(b)

	
all of the terms, covenants and conditions of this Agreement to be complied with or performed by the Acquirer at or before the Time of Closing shall have been complied with or performed in all material respects;

	
  

	
(c)

	
there shall have been obtained, from all appropriate federal, provincial, municipal or other governmental or administrative bodies, such licenses, permits, consents, approvals, certificates, registrations and authorizations as are required by law, if any, to be obtained by the Acquirer to permit the issuance of the Acquirer Stock to the Vendors contemplated hereby;

 

  

39

  

 

	
  

	
(d)

	
no legal or regulatory action or proceeding shall be pending or threatened by any Person to enjoin, restrict or prohibit the acquisition of the Company Stock contemplated hereby;

	
  

	
(e)

	
the Acquirer shall have delivered a letter of resignation from Hsien Loong Wong from the positions of Chief Executive Officer, President, Chief Financial Officer, Treasurer, Secretary and Director of the Acquirer, effective upon the Closing;

	
  

	
(f)

	
the Acquirer shall have delivered evidence of the due appointment of Lee Tong Tai as the Chief Executive Officer and President of the Acquirer, Ang Siew Khim as the Secretary and Treasurer of the Acquirer, and Loke Hip Meng as the Chief Financial Officer of the Acquirer, all to be effective upon the Closing;

	
  

	
(g)

	
on or prior to the Closing, the Acquirer shall take all action necessary to (i) cause the number of directors that will comprise the full Board of Directors of the Acquirer effective as of immediately following the Closing to be fixed at three, (ii) cause the Board of Directors of the Acquirer effective as of immediately following the Closing to consist of Lee Tong Tai, Johnny Lian Tian Yong and Ang Siew Khim, and (iii) cause the individuals identified or designated pursuant to the preceding clause (ii) to be appointed to the Board of Directors of the Acquirer effective as of immediately following the Closing; and

	
  

	
(h)

	
on or prior to the Closing, the Acquirer shall take all action necessary to cause the divestiture of its oil and gas assets to another entity or individual;

If any of the conditions contained in this section 5.3 shall not be performed or fulfilled at or prior to the Time of Closing to the satisfaction of the Vendors and the Company, acting reasonably, the Vendors and/or the Company may, by notice to the Acquirer, terminate this Agreement and the obligations of the Vendors, the Company and the Acquirer under this Agreement, other than the obligations contained in Article 10 hereinbelow, shall be terminated, provided that the Vendors and the Company may also bring an action pursuant to Article 9 against the Acquirer for damages suffered by the Vendors and/or the Company where the non-performance or non-fulfillment of the relevant condition is as a result of a breach of covenant, representation or warranty by the Acquirer.  Any such condition may be waived in whole or in part by the Vendors and the Company in writing without prejudice to any claims it may have for breach of covenant, representation or warranty.

5.4                      Acquirer’s Conditions Precedent prior to the Closing Date.  The acquisition of the Company Stock is subject to the following terms and conditions for the exclusive benefit of the Acquirer, to be fulfilled or performed at or prior to the Time of Closing:

	
  

	
(a)

	
the representations and warranties of the Vendors and the Company contained in this Agreement shall be true and correct at the Time of Closing, with the same force and effect as if such representations and warranties were made at and as of such time;

	
  

	
(b)

	
approval of the board of directors of each of the Acquirer, the Company and any corporate Vendors being obtained;

	
  

	
(c)

	
the Acquirer shall have received a copy of the Company’s Financial Statements from the Company and the Acquirer and its accountants will be reasonably satisfied with their review of the Company’s Financial Statements;

 

  

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(d)

	
all of the terms, covenants and conditions of this Agreement to be complied with or performed by the Vendors and the Company at or before the Time of Closing shall have been complied with or performed;

	
  

	
(e)

	
there shall have been obtained, from all appropriate federal, provincial, municipal or other governmental or administrative bodies, such licenses, permits, consents, approvals, certificates, registrations and authorizations as are required to be obtained, if any, by the Vendors and the Company to permit the change of ownership of the Company Stock contemplated hereby;

	
  

	
(f)

	
there shall have been no material adverse changes in the condition (financial or otherwise), assets, liabilities, operations, earnings, the Company’s Business or prospects of the Company since the date of the Company’s Financial Statements;

	
  

	
(g)

	
the Acquirer will be reasonably satisfied that its due diligence, analysis and other customary examinations that it has performed regarding the Company and its subsidiaries, the financial position of the Company and its subsidiaries and the Company’s Business are consistent, in all material respects, with the representations and warranties of the Vendors and the Company set forth in this Agreement;

	
  

	
(h)

	
no legal or regulatory action or proceeding shall be pending or threatened by any Person to enjoin, restrict or prohibit the acquisition of the Company Stock contemplated hereby;

	
  

	
(i)

	
no claim will have been asserted or made that any Person (other than the Acquirer) is the holder or the beneficial owner of, or has the right to acquire or to obtain beneficial ownership of, any of the Company Stock, or any other voting, equity, or ownership interest in, the Company, or (other than the Vendors) is entitled to all or any portion of the Acquirer Stock;

	
  

	
(j)

	
no material damage by fire or other hazard to the whole or any material part of the property or assets of the Company shall have occurred from the date hereof to the Time of Closing;

If any of the conditions contained in this section 5.4 shall not be performed or fulfilled at or prior to the Time of Closing to the satisfaction of the Acquirer, acting reasonably, the Acquirer may, by notice to the Vendors and the Company, terminate this Agreement and the obligations of the Vendors, the Company and the Acquirer under this Agreement, other than the obligations set forth in Article 10, shall be terminated, provided that the Acquirer may also bring an action pursuant to Article 9 against the Vendors and/or the Company for damages suffered by the Acquirer where the non-performance or non-fulfillment of the relevant condition is as a result of a breach of covenant, representation or warranty by the Vendors or the Company.  Any such condition may be waived in whole or in part by the Acquirer without prejudice to any claims it may have for breach of covenant, representation or warranty.

Article 6

CLOSING AND EVENTS OF CLOSING

6.1                      Closing and Closing Date.   The closing (the “Closing”) of the acquisition of the Company Stock, as contemplated in the manner as set forth in Article “2” hereinabove, together with all of the transactions contemplated by this Agreement shall occur on July 21, 2011 (the “Closing Date”), or on such earlier or later Closing Date as may be agreed to in advance and in writing by each of the Parties hereto, and will be closed at the offices of solicitors for the Acquirer, Lunny MacInnes Dawson Shannon Law Corporation, 2550 – 555 W. Hastings St., Vancouver, BC, Canada, at 11:00 am (Vancouver time) on the Closing Date.

 

  

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6.2                      Latest Closing Date.   If the Closing Date has not occurred by August 1, 2011 subject to an extension as may be mutually agreed to by the Parties for a maximum of 15 days per extension, then the Acquirer and the Vendors shall each have the option to terminate this Agreement by delivery of written notice to the other Party.  Upon delivery of such notice, this Agreement shall cease to be of any force and effect except for Article “10” hereinbelow, which shall remain in full force and effect notwithstanding the termination of this Agreement.

6.3                      Documents to be delivered by the Company and the Vendors prior to the Closing Date.   Not later than the Closing Date, and in addition to the documentation which is required by the agreements and conditions precedent which are set forth hereinabove, the Company and the Vendors shall also execute and deliver or cause to be delivered to Acquirer’s counsel all such other documents, resolutions and instruments as may be necessary, in the opinion of counsel for the Acquirer, acting reasonably, to complete all of the transactions contemplated by this Agreement and including, without limitation, the necessary transfer of all of the Company Stock to the Acquirer free and clear of all liens, security interests, charges and encumbrances, and in particular including, but not being limited to, the following materials:

	
  

	
(a)

	
all documentation as may be necessary and as may be required by the solicitors for the Acquirer, acting reasonably, to ensure that all of the Company Stock has been transferred, assigned and are registerable in the name of and for the benefit of the Acquirer under all applicable corporate and securities laws;

	
  

	
(b)

	
certificates representing the Company Stock registered in the name of the Vendors, duly endorsed for transfer to the Acquirer and/or irrevocable stock powers transferring the Company Stock to the Acquirer;

	
  

	
(c)

	
a certified copy of resolutions of the directors (and of the Vendors/shareholders, if necessary) of the Company authorizing the transfer of the Company Stock to the Acquirer, directions to the registered agent of the Company to register of the Company Stock in the name of the Acquirer in the register of members of the Company, and the issue of share certificates representing the Company Stock registered in the name of the Acquirer;

	
  

	
(d)

	
a certified copy of the register of members of the Company showing the Acquirer as the registered owner of the Company Stock;

	
  

	
(e)

	
all such instruments of transfer, duly executed, which in the opinion of the Acquirer acting reasonably are necessary to effect and evidence the transfer of the Company Stock to the Acquirer free and clear of all Encumbrances;

	
  

	
(f)

	
a copy of all corporate records and books of account of the Company and including, without limiting the generality of the foregoing, a copy of all minute books, share register books, share certificate books and annual reports of the Company;

	
  

	
(g)

	
all remaining Business Documentation; and

	
  

	
(h)

	
all such other documents and instruments as the Acquirer’s solicitors may reasonably require.

 

  

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6.4                      Documents to be delivered by the Acquirer prior to the Closing Date.  Not later than the Closing Date, and in addition to the documentation which is required by the agreements and conditions precedent which are set forth hereinabove, the Acquirer shall also execute and deliver or cause to be delivered to the Company’s and the Vendors’ counsel, all such other documents, resolutions and instruments that may be necessary, in the opinion of counsel for the Company and the Vendors, acting reasonably, to complete all of the transactions contemplated by this Agreement and including, without limitation, the necessary acceptance of the transfer of all of the Company Stock to the Acquirer free and clear of all liens, charges and encumbrances, and in particular including, but not being limited to, the following materials:

	
  

	
(a)

	
a copy of the resolutions of the directors of the Acquirer providing for the approval of all of the transactions contemplated hereby;

	
  

	
(b)

	
certificates representing the Acquirer Stock issued to the Vendors in accordance with sections “2.2” and “2.3” hereinabove; and

	
  

	
(c)

	
all such other documents and instruments as the Company’s and the Vendors’ respective solicitors may reasonably require.

Article 7

CONDUCT OF BUSINESS PRIOR TO CLOSING

7.1                      Conduct.   Except as otherwise contemplated or permitted by this Agreement, during the period from the date of this Agreement to the Closing Date, the Company and its subsidiaries will do the following:

	
  

	
(a)

	
conduct the Company’s Business in the ordinary and usual course and in a continuous fashion and will not, without the prior written consent of the Acquirer:

	
  

	
(i)

	
enter into any transaction which would constitute a breach of any of the Company’s representations, warranties or agreements contained herein;

	
  

	
(ii)

	
increase the salaries or other compensation of, or make any advance (excluding advances for ordinary and necessary business expenses) or loan to, any of their employees, officers or directors of the Company or its subsidiaries or make any increase in, or any addition to, other benefits to which any of their employees, officers or directors may be entitled;

	
  

	
(iii)

	
create, incur, assume or guarantee any indebtedness for money borrowed, or mortgaged or pledged by the Company or its subsidiaries or a third party and will not subject any of the material assets or properties of the Company or its subsidiaries to any mortgage, lien, pledge, security interest, conditional sales contract or other Encumbrance related to any such indebtedness for money borrowed;

	
  

	
(iv)

	
declare, set aside or pay any dividend or make or agree to make any other distribution or payment in respect of the Company’s capital shares or redeem, repurchase or otherwise acquire or agree to redeem, purchase or acquire any of the Company’s capital shares or equity securities, or

 

  

43

  

 

	
  

	
(v)

	
pay any amount (other than salaries in the ordinary course of business) to any related party of the Company or its subsdiaries;

	
  

	
(b)

	
comply with all laws affecting the operation of the Business and pay all required Taxes;

	
  

	
(c)

	
not take any action or omit to take any action which would, or would reasonably be expected to, result in a breach of or render untrue any representation, warranty, covenant or other obligation of the Company and the Vendors contained herein;

	
  

	
(d)

	
use commercially reasonable efforts to preserve intact the Business and the assets, operations and affairs of each of the Company and its subsidiaries and carry on the business and the affairs of the Company and its subsidiaries substantially as currently conducted, and use commercially reasonable efforts to promote and preserve for the Acquirer the goodwill of suppliers, customers and others having business relations with either the Company or its subsidiaries;

	
  

	
(e)

	
take all necessary actions, steps and proceedings that are necessary to approve or authorize, or to validly and effectively undertake, the execution and delivery of this Agreement and the completion of the transactions contemplated by this Agreement;

	
  

	
(f)

	
otherwise respond reasonably promptly to reasonable requests from the Acquirer for information concerning the status of the business, operations, and finances of either the Company or its subsidiaries; and

	
  

	
(g)

	
comply with the provisions of Article 8 of this Agreement.

Article 8

ADDITIONAL COVENANTS OF THE PARTIES

8.1                      Acquirer Dispositions.   The Acquirer agrees that in connection with the Closing, all oil and gas assets of the Acquirer will be transferred or assigned by the Acquirer to such party as the Acquirer may determine.

8.2                      Notification.   Between the date of this Agreement and the Closing Date, each of the parties to this Agreement will promptly notify the other parties in writing if it becomes aware of any fact or condition that causes or constitutes a material breach of any of its representations and warranties as of the date of this Agreement, if it becomes aware of the occurrence after the date of this Agreement of any fact or condition that would cause or constitute a material breach of any such representation or warranty had such representation or warranty been made as of the time of occurrence or discovery of such fact or condition.  Should any such fact or condition require any change in the Schedules relating to such party, such party will promptly deliver to the other parties a supplement to the Schedules specifying such change.  During the same period, each party will promptly notify the other parties of the occurrence of any material breach of any of its covenants in this Agreement or of the occurrence of any event that may make the satisfaction of such conditions impossible or unlikely.

8.3                      Board of Directors.   The current directors of the Acquirer will adopt resolutions appointing the nominees of the Company to the Board of Directors of the Acquirer, which appointment will be effective on Closing or, if applicable, ten days after the filing of a Schedule 14f-1 in connection with the Takeover.  If applicable, the Acquirer will prepare and file a Schedule 14f-1 information statement with the SEC as required under the Exchange Act in connection with the change of directors arising in connection with the completion of the Takeover.

 

  

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8.4                      Officers.   The current directors of the Acquirer will adopt resolutions appointing the nominees of the Company as officers of the Acquirer and will accept the resignation of Hsien Loong Wong from all officer positions, which appointment and resignation will be effective on Closing or, if applicable, ten days after the filing of a Schedule 14f-1 in connection with the Takeover.

8.5                      Consents.   The Company, Vendors and the Acquirer covenant and agree that they will use commercially reasonable efforts to obtain the consents, renunciations and approvals of third parties which are necessary to the completion of the transactions contemplated by this Agreement, provided that such consents, renunciations or approvals may be validly given by such third parties in accordance with relevant agreements, covenants or applicable law.

8.6                      Exclusivity.   Until such time, if any, as this Agreement is terminated pursuant to the provisions of this Agreement, neither the Company or its subsidiaries or the Vendors (through their advisors, directors, bankers, employees, shareholders, agents or otherwise) will, directly or indirectly:

	
  

	
(a)

	
solicit, initiate, encourage, facilitate or discuss any proposition, offer, inquiry, submission or proposal from any other Person concerning the purchase of whatever part of the issued and outstanding shares, other securities, significant elements of assets of the Company or its subsidiaries or any merger, reorganization, arrangement, capitalization or any other form of business merger implicating, directly or indirectly, the Company or its subsidiaries or the Business (a “Proposed Transaction”); or

	
  

	
(b)

	
enter into any agreement, discussions or negotiations with any person, company or other entity with respect to a Proposed Transaction.

The Company and the Vendors will inform the Acquirer of all propositions, offers or bids, or information requests that they might receive regarding a Proposed Transaction and must provide the Acquirer with all relevant information in their possession.

8.7                      Best Efforts.   Between the date of this Agreement and the Closing Date, the parties will use their best efforts to cause the conditions contained in this Agreement to be satisfied.

Article 9

INDEMNIFICATION AND LEGAL PROCEEDINGS

9.1                      Indemnification.   The Parties hereto agree to indemnify and save harmless the other Parties hereto and including, where applicable, their respective affiliates, directors, officers, employees and agents (each such party being an “Indemnified Party”) harmless from and against and agree to be liable for any and all losses, claims, actions, suits, proceedings, damages, liabilities or expenses of whatever nature or kind, including any investigation expenses incurred by any Indemnified Party, to which an Indemnified Party may become subject by reason of the terms and conditions of this Agreement.

9.2                      No Indemnification.   This indemnity will not apply in respect of an Indemnified Party in the event and to the extent that a court of competent jurisdiction in a final judgment shall determine that the Indemnified Party was grossly negligent or guilty of willful misconduct.

9.3                      Claim of Indemnification.   The Parties hereto agree to waive any right they might have of first requiring the Indemnified Party to proceed against or enforce any other right, power, remedy, security or claim payment from any other person before claiming this indemnity.

 

  

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9.4                      Notice of Claim.   In case any action is brought against an Indemnified Party in respect of which indemnity may be sought against any of the Parties hereto, the Indemnified Party will give the relevant Party hereto prompt written notice of any such action of which the Indemnified Party has knowledge and such Party will undertake the investigation and defense thereof on behalf of the Indemnified Party, including the prompt consulting of counsel acceptable to the Indemnified Party affected and the payment of all expenses.  Failure by the Indemnified Party to so notify shall not relieve any Party hereto of such Party’s obligation of indemnification hereunder unless (and only to the extent that) such failure results in a forfeiture by any Party hereto of substantive rights or defenses.

9.5                      Settlement.   No admission of liability and no settlement of any action shall be made without the consent of each of the Parties hereto and the consent of the Indemnified Party affected, such consent not to be unreasonably withheld.

9.6                      Legal Proceedings.   Notwithstanding that the relevant Party hereto will undertake the investigation and defense of any action, an Indemnified Party will 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 will be at the expense of the Indemnified Party unless:

	
  

	
(a)

	
such counsel has been authorized by the relevant Party hereto;

	
  

	
(b)

	
the relevant Party hereto has not assumed the defense of the action within a reasonable period of time after receiving notice of the action;

	
  

	
(c)

	
the named parties to any such action include that any Party hereto and the Indemnified Party shall have been advised by counsel that there may be a conflict of interest between any Party hereto and the Indemnified Party; or

	
  

	
(d)

	
there are one or more legal defenses available to the Indemnified Party which are different from or in addition to those available to any Party hereto.

9.7                      Contribution.   If for any reason other than the gross negligence or bad faith of the Indemnified Party being the primary cause of the loss claim, damage, liability, cost or expense, the foregoing indemnification is unavailable to the Indemnified Party or insufficient to hold them harmless, the relevant Party hereto shall contribute to the amount paid or payable by the Indemnified Party as a result of any and all such losses, claim, damages or liabilities in such proportion as is appropriate to reflect not only the relative benefits received by any Party hereto on the one hand and the Indemnified Party on the other, but also the relative fault of the Parties and other equitable considerations which may be relevant.  Notwithstanding the foregoing, the relevant Party hereto shall in any event contribute to the amount paid or payable by the Indemnified Party, as a result of the loss, claim, damage, liability, cost or expense (other than a loss, claim, damage, liability, cost or expenses, the primary cause of which is the gross negligence or bad faith of the Indemnified Party), any excess of such amount over the amount of the fees actually received by the Indemnified Party hereunder.

Article 10

NON-DISCLOSURE

10.1                      Public Announcements and Disclosure to Regulatory Authorities.   All information relating to the Agreement and the transaction contemplated therein shall be treated as confidential and no public disclosure shall be made by any Party without the prior approval of the Company and the Acquirer.  Notwithstanding the provisions of this Article, the Parties hereto agree to make such public announcements and disclosure to the Regulatory Authorities of this Agreement promptly upon its execution all in accordance with the requirements of applicable securities legislation and regulations.

 

  

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Article 11

ASSIGNMENT AND AMENDMENT

11.1                      Assignment.   Save and except as provided herein, no Party hereto may sell, assign, pledge or mortgage or otherwise encumber all or any part of its respective interest herein without the prior written consent of all of the other Parties hereto.

11.2                      Amendment.   This Agreement and any provision thereof may only be amended in writing and only by duly authorized signatories of each of the respective Parties hereto.

Article 12

FORCE MAJEURE

12.1                      Events.   If any Party hereto is at any time prevented or delayed in complying with any provisions of this Agreement by reason of strikes, walk-outs, labor shortages, power shortages, fires, wars, acts of God, earthquakes, storms, floods, explosions, accidents, protests or demonstrations by environmental lobbyists or native rights groups, delays in transportation, breakdown of machinery, inability to obtain necessary materials in the open market, unavailability of equipment, governmental regulations restricting normal operations, shipping delays or any other reason or reasons beyond the control of that Party, then the time limited for the performance by that Party of its respective obligations hereunder shall be extended by a period of time equal in length to the period of each such prevention or delay.

12.2                      Notice.   A Party shall, within seven calendar days, give notice to the other Parties of each event of force majeure under section “12.1” hereinabove, and upon cessation of such event shall furnish the other Parties with notice of that event together with particulars of the number of days by which the obligations of that Party hereunder have been extended by virtue of such event of force majeure and all preceding events of force majeure.

Article 13

ARBITRATION

13.1                      Arbitration.  Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration in Singapore in accordance with the Arbitration Rules of the Singapore International Arbitration Centre (“SIAC”) for the time being in force, which rules are deemed to be incorporated by reference in this clause. The Tribunal shall consist of one arbitrator to be appointed by the Chairman of the SIAC. The language of the arbitration shall be English.

Article 14

DEFAULT AND TERMINATION

14.1                      Default.   The Parties hereto agree that if any Party hereto is in default with respect to any of the provisions of this Agreement (herein called the “Defaulting Party”), the non-defaulting Party (herein called the “Non-Defaulting Party”) shall give notice to the Defaulting Party designating such default, and within 10 calendar days after its receipt of such notice, the Defaulting Party shall either:

	
  

	
(a)

	
cure such default, or commence proceedings to cure such default and prosecute the same to completion without undue delay; or

 

  

47

  

 

	
  

	
(b)

	
give the Non-Defaulting Party notice that it denies that such default has occurred and that it is submitting the question to arbitration as herein provided.

14.2                      Arbitration.   If arbitration is sought, a Party shall not be deemed in default until the matter shall have been determined finally by appropriate arbitration under the provisions of Article “13” hereinabove.

14.3                      Curing the Default.   If:

	
  

	
(a)

	
the default is not so cured or the Defaulting Party does not commence or diligently proceed to cure the default; or

	
  

	
(b)

	
arbitration is not so sought; or

	
  

	
(c)

	
the Defaulting Party is found in arbitration proceedings to be in default, and fails to cure it within five calendar days after the rendering of the arbitration award,

the Non-Defaulting Party may, by written notice given to the Defaulting Party at any time while the default continues, terminate the interest of the Defaulting Party in and to this Agreement.

14.4                      Termination.   In addition to the foregoing it is hereby acknowledged and agreed by the Parties hereto that this Agreement will be terminated in the event that:

	
  

	
(a)

	
the Acquirer’s Ratification is not received within five business days of the due and complete execution of this Agreement by each of the Parties hereto;

	
  

	
(b)

	
the Acquirer fails to complete a successful Acquirer’s Initial Due Diligence review of the Company’s business and operations within twenty-five calendar days of the prior satisfaction by the Acquirer of the Acquirer’s Ratification;

	
  

	
(c)

	
the conditions specified in section “5.1” hereinabove have not been satisfied at or prior to the Time of Closing;

	
  

	
(d)

	
either of the Parties hereto has not either satisfied or waived each of their respective conditions precedent at or prior to the Time of Closing in accordance with the provisions of Article “5” hereinabove;

	
  

	
(e)

	
either of the Parties hereto has failed to deliver or caused to be delivered any of their respective documents required to be delivered by Articles “5” and “6” hereinabove at or prior to the Time of Closing in accordance with the provisions of Articles “5” and “6”; or

	
  

	
(f)

	
the Closing has not occurred on or before August 1, 2011, or such later date, all in accordance with section “6.2” hereinabove; or

	
  

	
(g)

	
by agreement in writing by each of the Parties hereto;

and in such event this Agreement will be terminated and be of no further force and effect other than the obligations under Article “10” hereinabove.

 

  

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Article 15

NOTICE

15.1                      Notice.   Each notice, demand or other communication required or permitted to be given under this Agreement shall be in writing and shall be sent by prepaid registered mail deposited in a post office addressed to the Party entitled to receive the same, or delivered to such Party, at the address for such Party specified above.  The date of receipt of such notice, demand or other communication shall be the date of delivery thereof if delivered, or, if given by registered mail as aforesaid, shall be deemed conclusively to be the third calendar day after the same shall have been so mailed, except in the case of interruption of postal services for any reason whatsoever, in which case the date of receipt shall be the date on which the notice, demand or other communication is actually received by the addressee.

15.2                      Change of Address.   Either Party may at any time and from time to time notify the other Party in writing of a change of address and the new address to which notice shall be given to it thereafter until further change.

Article 16

 GENERAL PROVISIONS

16.1                      Entire Agreement.   This Agreement constitutes the entire agreement to date between the Parties hereto and supersedes every previous agreement, communication, expectation, negotiation, representation or understanding, whether oral or written, express or implied, statutory or otherwise, between the Parties with respect to the subject matter of this Agreement and including, without limitation, the agreement as between the Acquirer, the Vendors and the Company.

16.2                      Enurement.   This Agreement will enure to the benefit of and will be binding upon the Parties hereto, their respective heirs, executors, administrators and assigns.

16.3                      Schedules.   The Schedules to this Agreement are hereby incorporated by reference into this Agreement in its entirety.

16.4                      Time of the Essence.   Time will be of the essence of this Agreement.

16.5                      Representation and Costs.   It is hereby acknowledged by each of the Parties hereto that, as between the Parties hereto, Lunny MacInnes Dawson Shannon Law Corporation, Barristers and Solicitors, acts solely for the Acquirer, and that each of the Vendors and the Company have been advised by Lunny MacInnes Dawson Shannon Law Corporation to obtain independent legal advice with respect to their respective reviews and execution of this Agreement.  In addition, it is hereby further acknowledged and agreed by the Parties hereto that each Party to this Agreement will bear and pay its own costs, legal and otherwise, in connection with its respective preparation, review and execution of this Agreement, and, in particular, that the costs involved in the preparation of this Agreement, and all documentation necessarily involved thereto, by Lunny MacInnes Dawson Shannon Law Corporation shall be at the cost of the Acquirer.

16.6                      Governing Law; Venue.   This Agreement, the legal relations between the parties and the adjudication and the enforcement thereof, shall be governed by and interpreted and construed in accordance with the substantive laws of the Province of British Columbia without regard to applicable choice of law provisions thereof, except to the extent the laws of the State of Nevada are mandatorily applicable to the Takeover.  The parties hereto agree that any action, suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby may be brought in any court located in the Province of British Columbia and each party hereto irrevocably submits to the jurisdiction of each of those courts.

 

  

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16.7                      Further Assurances.   The parties will execute and deliver all such further documents, do or cause to be done all such further acts and things, and give all such further assurances as may be necessary to give full effect to the provisions and intent of this Agreement.

16.8                      Severability and Construction.   Each Article, section, paragraph, term and provision of this Agreement, and any portion thereof, shall be considered severable, and if, for any reason, any portion of this Agreement is determined to be invalid, contrary to or in conflict with any applicable present or future law, rule or regulation in a final unappealable ruling issued by any court, agency or tribunal with valid jurisdiction in a proceeding to any of the Parties hereto is a party, that ruling shall not impair the operation of, or have any other effect upon, such other portions of this Agreement as may remain otherwise intelligible (all of which shall remain binding on the Parties and continue to be given full force and agreement as of the date upon which the ruling becomes final).

16.9                      Captions.   The captions, section numbers, Article numbers and Schedule numbers appearing in this Agreement are inserted for convenience of reference only and shall in no way define, limit, construe or describe the scope or intent of this Agreement nor in any way affect this Agreement.

16.10                      Counterparts.   This Agreement may be signed by the Parties hereto in as many counterparts as may be necessary, and via facsimile or pdf email attachment if necessary, each of which so signed being deemed to be an original and such counterparts together constituting one and the same instrument and, notwithstanding the date of execution, being deemed to bear the effective Execution Date as set forth on the front page of this Agreement.

16.11                      No Partnership or Agency.   The Parties hereto have not created a partnership and nothing contained in this Agreement shall in any manner whatsoever constitute any Party the partner, agent or legal representative of any other Party, nor create any fiduciary relationship between them for any purpose whatsoever.  No Party shall have any authority to act for, or to assume any obligations or responsibility on behalf of, any other party except as may be, from time to time, agreed upon in writing between the Parties or as otherwise expressly provided.

 

  

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16.12                      Consents and Waivers.   No consent or waiver expressed or implied by either Party hereto in respect of any breach or default by any other Party in the performance by such other of its obligations hereunder shall:

	
  

	
(a)

	
be valid unless it is in writing and stated to be a consent or waiver pursuant to this section;

	
  

	
(b)

	
be relied upon as a consent to or waiver of any other breach or default of the same or any other obligation;

	
  

	
(c)

	
constitute a general waiver under this Agreement; or

	
  

	
(d)

	
eliminate or modify the need for a specific consent or waiver pursuant to this section in any other or subsequent instance.

IN WITNESS WHEREOF each of the Parties hereto has hereunto executed this Agreement as of the Execution Date as set forth on the front page of this Agreement.

	
HBMK PHARMACEUTICAL LIMITED

	
)

	  	  
	
the Company herein,

	
)

	  	  
	  	
)

	  	  
	  	
)

	  	  
	
Per:    /s/ Lee Tong Tai

	
)

	  	  
	
Authorized Signatory

	
)

	  	  
	  	
)

	  	  
	
Lee Tong Tai, director

	
)

	  	  
	
(print name and title)

	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	
HUBEI MINKANG

	
)

	  	  
	
PHARMACEUTICAL LTD.,

	
)

	  	  
	
the Acquirer herein,

	
)

	  	  
	  	
)

	  	  
	  	
)

	  	  
	
Per:/s/ Hsien Loong Wong

	
)

	  	  
	
Authorized Signatory

	
)

	  	  
	  	
)

	  	  
	
Hsien Loong Wong, Director

	
)

	  	  
	
(print name and title)

	  	  	  

  

  

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SIGNED and DELIVERED by

	
)

	  	  	 
	
LEE TONG TAI, a Vendor

	
)

	  	  	 
	
herein, in the presence of:

	
)

	  	  	 
	  	
)

	  	  	 
	
    /s/ Ang Siew Khim

	
)

	  	  	 
	
Witness Signature

	
)

	  	
/s/ Lee Tong Tai

	 
	  	  	  	
LEE TONG TAI

	 
	
39B Daisy Road, Singapore

	
)

	  	  	 
	
Witness Address

	
)

	  	  	 
	  	
)

	  	  	 
	
Ang Siew Khim, director

	
)

	  	  	 
	
Witness Name and Occupation

	
)

	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	
SIGNED and DELIVERED by

	
)

	  	  	 
	
ANG SIEW KHIM, a Vendor

	
)

	  	  	 
	
herein, in the presence of:

	
)

	  	  	 
	  	
)

	  	  	 
	
    /s/ Lee Tong Tai

	
)

	  	  	 
	
Witness Signature

	
)

	  	
/s/ Ang Siew Khim

	 
	  	
)

	  	
ANG SIEW KHIM

	 
	
2, Normanton Park, #04-151, Singapore

	
)

	  	  	 
	
Witness Address

	
)

	  	  	 
	  	
)

	  	  	 
	
Lee Tong Tai, President

	
)

	  	  	 
	
Witness Name and Occupation

	
)

	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	
SIGNED and DELIVERED by

	
)

	  	  	 
	
HONG LENA, a Vendor

	
)

	  	  	 
	
herein, in the presence of:

	
)

	  	  	 
	  	
)

	  	  	 
	
    /s/ Ang Siew Khim

	
)

	  	  	 
	
Witness Signature

	
)

	  	
/s/ Hong Lena

	 
	  	
)

	  	
HONG LENA

	 
	
39B Daisy Road Singapore

	
)

	  	  	 
	
Witness Address

	
)

	  	  	 
	  	
)

	  	  	 
	
Ang Siew Khim, director

	
)

	  	  	 
	
Witness Name and Occupation

	
)

	  	  	 

 

  

52

  

 

	
SIGNED and DELIVERED by

	
)

	  	  	 
	
JOSEPH SOON KWO PIN, a Vendor

	
)

	  	  	 
	
herein, in the presence of:

	
)

	  	  	 
	  	
)

	  	  	 
	
    /s/ Ang Siew Khim

	
)

	  	  	 
	
Witness Signature

	
)

	  	
/s/ Joseph Soon Kwo Pin

	 
	  	
)

	  	
JOSEPH SOON KWO PIN

	 
	
39B Daisy Road, Singapore

	
)

	  	  	 
	
Witness Address

	
)

	  	  	 
	  	
)

	  	  	 
	
Ang Siew Khim, director

	
)

	  	  	 
	
Witness Name and Occupation

	
)

	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	
SIGNED and DELIVERED by

	
)

	  	  	 
	
LEE HUNG MING, a Vendor

	
)

	  	  	 
	
herein, in the presence of:

	
)

	  	  	 
	  	
)

	  	  	 
	
    /s/ Ang Siew Khim

	
)

	  	  	 
	
Witness Signature

	
)

	  	
/s/ Lee Hung Ming

	 
	  	
)

	  	
LEE HUNG MING

	 
	
39B Daisy Road, Singapore

	
)

	  	  	 
	
Witness Address

	
)

	  	  	 
	  	
)

	  	  	 
	
Ang Siew Khim, director

	
)

	  	  	 
	
Witness Name and Occupation

	
)

	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	
SIGNED and DELIVERED by

	
)

	  	  	 
	
LEE TONG JIUH, a Vendor

	
)

	  	  	 
	
herein, in the presence of:

	
)

	  	  	 
	  	
)

	  	  	 
	  	
)

	  	  	 
	
Witness Signature

	
)

	  	
/s/ Lee Tong Jiuh

	 
	  	
)

	  	
LEE TONG JIUH

	 
	  	
)

	  	  	 
	
Witness Address

	
)

	  	  	 
	  	
)

	  	  	 
	  	
)

	  	  	 
	
Witness Name and Occupation

	
)

	  	  	 

 

  

53

  

 

	
SIGNED and DELIVERED by

	
)

	  	  	 
	
LEE YENG FEN a Vendor

	
)

	  	  	 
	
herein, in the presence of:

	
)

	  	  	 
	  	
)

	  	  	 
	
    /s/ Ang Siew Khim

	
)

	  	  	 
	
Witness Signature

	
)

	  	
/s/ Lee Yeng Fen

	 
	  	
)

	  	
LEE YENG FEN

	 
	
39B Daisy Road, Singapore

	
)

	  	  	 
	
Witness Address

	
)

	  	  	 
	  	
)

	  	  	 
	
Ang Siew Khim, director

	
)

	  	  	 
	
Witness Name and Occupation

	
)

	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	
SIGNED and DELIVERED by

	
)

	  	  	 
	
SEAH CHEE SENG, a Vendor

	
)

	  	  	 
	
herein, in the presence of:

	
)

	  	  	 
	  	
)

	  	  	 
	
    /s/ Ang Siew Khim

	
)

	  	  	 
	
Witness Signature

	
)

	  	
/s/ Seah Chee Seng

	 
	  	
)

	  	
SEAH CHEE SENG

	 
	
39B Daisy Road, Singapore

	
)

	  	  	 
	
Witness Address

	
)

	  	  	 
	  	
)

	  	  	 
	
Ang Siew Khim, director

	
)

	  	  	 
	
Witness Name and Occupation)

	  	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	
SIGNED and DELIVERED by

	
)

	  	  	 
	
TAY AH MENG, a Vendor

	
)

	  	  	 
	
herein, in the presence of:

	
)

	  	  	 
	  	
)

	  	  	 
	
    /s/ Ang Siew Khim

	
)

	  	  	 
	
Witness Signature

	
)

	  	
/s/ Tay Ah Meng

	 
	  	
)

	  	
TAY AH MENG

	 
	
39B Daisy Road, Singapore

	
)

	  	  	 
	
Witness Address

	
)

	  	  	 
	  	
)

	  	  	 
	
Ang Siew Khim, director

	
)

	  	  	 
	
Witness Name and Occupation

	
)

	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	
MUI CHARK (PRIVATE) LIMITED

	
)

	  	  	 
	
a Vendor herein,

	
)

	  	  	 
	  	
)

	  	  	 
	  	
)

	  	  	 
	
Per:    /s/ Koh Cheok Kow

	
)

	  	  	 
	
Authorized Signatory

	
)

	  	  	 
	  	
)

	  	  	 
	
Koh Cheok Kow, director

	
)

	  	  	 
	
(print name and title)

	  	  	  	 

 

  

54

  

  

	
UNIVERSAL METAL WORKS

	
)

	  	  	 
	
(PRIVATE) LIMITED, a Vendor herein,

	
)

	  	  	 
	  	
)

	  	  	 
	  	
)

	  	  	 
	
Per:    /s/ Koh Cheoh Nguan

	
)

	  	  	 
	
Authorized Signatory

	
)

	  	  	 
	  	
)

	  	  	 
	
Koh Cheoh Nguan, director

	
)

	  	  	 
	
(print name and title)

	  	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	
SIGNED and DELIVERED by

	
)

	  	  	 
	
KOH CHEOH NGUAN a Vendor

	
)

	  	  	 
	
herein, in the presence of:

	
)

	  	  	 
	  	
)

	  	  	 
	  	
)

	  	  	 
	
Witness Signature

	
)

	  	
/s/ Koh Cheoh Nguan

	 
	  	
)

	  	
KOH CHEOH NGUAN

	 
	  	
)

	  	  	 
	
Witness Address

	
)

	  	  	 
	  	
)

	  	  	 
	  	
)

	  	  	 
	
Witness Name and Occupation

	
)

	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	
SIGNED and DELIVERED by

	
)

	  	  	 
	
KOH BOON HUA, a Vendor

	
)

	  	  	 
	
herein, in the presence of:

	
)

	  	  	 
	  	
)

	  	  	 
	
    /s/ Koh Cheok Chuan

	
)

	  	  	 
	
Witness Signature

	
)

	  	
/s/ Koh Boon Hua

	 
	
BLK. 424, Canberra Rd., #13-455

	
)

	  	
KOH BOON HUA

	 
	
Singapore  750424

	
)

	  	  	 
	
Witness Address

	
)

	  	  	 
	  	
)

	  	  	 
	
Koh Cheok Chuan, director

	
)

	  	  	 
	
Witness Name and Occupation

	
)

	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	
SIGNED and DELIVERED by

	
)

	  	  	 
	
KOH LEE BOON, a Vendor

	
)

	  	  	 
	
herein, in the presence of:

	
)

	  	  	 
	  	
)

	  	  	 
	  	
)

	  	  	 
	
Witness Signature

	
)

	  	
/s/ Koh Lee Boon

	 
	  	
)

	  	
KOH LEE BOON

	 
	  	
)

	  	  	 
	
Witness Address

	
)

	  	  	 
	  	
)

	  	  	 
	  	
)

	  	  	 
	
Witness Name and Occupation

	
)

	  	  	 

 

  

55

  

 

	
SIGNED and DELIVERED by

	
)

	  	  	 
	
KOH SOCK HUA, a Vendor

	
)

	  	  	 
	
herein, in the presence of:

	
)

	  	  	 
	  	
)

	  	  	 
	
    /s/ Koh Cheok Kow

	
)

	  	  	 
	
Witness Signature

	
)

	  	
/s/ Koh Sock Hua

	 
	  	
)

	  	
KOH SOCK HUA

	 
	
350, Huogang Ave. 7, Singapore

	
)

	  	  	 
	
Witness Address

	
)

	  	  	 
	  	
)

	  	  	 
	
Koh Cheok Kow

	
)

	  	  	 
	
Witness Name and Occupation

	
)

	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	
SIGNED and DELIVERED by

	
)

	  	  	 
	
KOH SOK YONG, a Vendor

	
)

	  	  	 
	
herein, in the presence of:

	
)

	  	  	 
	  	
)

	  	  	 
	
    /s/ Koh Cheok Kow

	
)

	  	  	 
	
Witness Signature

	
)

	  	
/s/ Koh Sok Yong

	 
	  	
)

	  	
KOH SOK YONG

	 
	
350, Hougang Ave. 7, Singapore

	
)

	  	  	 
	
Witness Address

	
)

	  	  	 
	  	
)

	  	  	 
	
Koh Cheok Kow

	
)

	  	  	 
	
Witness Name and Occupation

	
)

	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	
SIGNED and DELIVERED by

	
)

	  	  	 
	
KOH CHEOK CHUAN, a Vendor

	
)

	  	  	 
	
herein, in the presence of:

	
)

	  	  	 
	  	
)

	  	  	 
	
    /s/ Koh Cheok Kow

	
)

	  	  	 
	
Witness Signature

	
)

	  	
/s/ Koh Cheok Chuan

	 
	  	
)

	  	
KOH CHEOK CHUAN

	 
	
350, Hougang Ave. 7, Singapore

	
)

	  	  	 
	
Witness Address

	
)

	  	  	 
	  	
)

	  	  	 
	
Koh Cheok Kow

	
)

	  	  	 
	
Witness Name and Occupation

	
)

	  	  	 

 

  

56

  

 

	
SIGNED and DELIVERED by

	
)

	  	  	 
	
KOH CHEOK KOW, a Vendor

	
)

	  	  	 
	
herein, in the presence of:

	
)

	  	  	 
	  	
)

	  	  	 
	
    /s/ Koh Sok Yong

	 
)

	 	  	 
	
Witness Signature

	
)

	  	
/s/ Koh Cheok Kow

	 
	  	
)

	  	
KOH CHEOK KOW

	 
	
46 Jalan Arnap, Singapore

	
)

	  	  	 
	
Witness Address

	
)

	  	  	 
	  	
)

	  	  	 
	
Koh Sok Yong

	
)

	  	  	 
	
Witness Name and Occupation

	
)

	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	
SIGNED and DELIVERED by

	
)

	  	  	 
	
KOH CHEOH KWANG, a Vendor

	
)

	  	  	 
	
herein, in the presence of:

	
)

	  	  	 
	  	
)

	  	  	 
	
    /s/ Koh Cheok Kow

	
)

	  	  	 
	
Witness Signature

	
)

	  	
/s/ Koh Cheoh Kwang

	 
	  	
)

	  	
KOH CHEOH KWANG

	 
	
350, Hougang Ave. 7, Singapore

	
)

	  	  	 
	
Witness Address

	
)

	  	  	 
	  	
)

	  	  	 
	  	
)

	  	  	 
	
Witness Name and Occupation

	
)

	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	
SIGNED and DELIVERED by

	
)

	  	  	 
	
LEE WEI MENG, a Vendor

	
)

	  	  	 
	
herein, in the presence of:

	
)

	  	  	 
	  	
)

	  	  	 
	
    /s/ Ang Siew Khim

	
)

	  	  	 
	
Witness Signature

	
)

	  	
/s/ Lee Wei Meng

	 
	  	
)

	  	
LEE WEI MENG

	 
	
39B Daisy Road, Singapore

	
)

	  	  	 
	
Witness Address

	
)

	  	  	 
	  	
)

	  	  	 
	
Ang Siew Khim, director

	
)

	  	  	 
	
Witness Name and Occupation

	
)

	  	  	 

 

  

57

  

 

	
SIGNED and DELIVERED by

	
)

	  	  	 
	
JESSELINE SIAH CHIEW CHOON

	
)

	  	  	 
	
a Vendor

	
)

	  	  	 
	
herein, in the presence of:

	
)

	  	  	 
	  	
)

	  	  	 
	
    /s/ Lee tong Tai

	
)

	  	  	 
	
Witness Signature

	
)

	  	
/s/ Jesseline Siah Chiew Choon

	 
	  	
)

	  	
JESSELINE SIAH CHIEW CHOON

	 
	
2, Normanton Park, #04-151, Singapore

	
)

	  	  	 
	
Witness Address

	
)

	  	  	 
	  	
)

	  	  	 
	
Lee Tong Tai, President

	
)

	  	  	 
	
Witness Name and Occupation

	
)

	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	
SIGNED and DELIVERED by

	
)

	  	  	 
	
RAMASWAMY SREEGHANDHAN

	
)

	  	  	 
	
a Vendor

	
)

	  	  	 
	
herein, in the presence of:

	
)

	  	  	 
	  	
)

	  	  	 
	
    /s/ Lee Tong Tai

	
)

	  	  	 
	
Witness Signature

	
)

	  	
/s/ Ramaswamy Sreeghandhan

	 
	  	
)

	  	
RAMASWAMY SREEGHANDHAN

	 
	
2, Normanton Park, #04-151, Singapore

	
)

	  	  	 
	
Witness Address

	
)

	  	  	 
	  	
)

	  	  	 
	
Lee Tong Tai, President

	
)

	  	  	 
	
Witness Name and Occupation

	
)

	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	
SIGNED and DELIVERED by

	
)

	  	  	 
	
CHOO KEANG HAI, a Vendor

	
)

	  	  	 
	
herein, in the presence of:

	
)

	  	  	 
	  	
)

	  	  	 
	
    /s/ Lee Tong Tai

	
)

	  	  	 
	
Witness Signature

	
)

	  	
/s/ Choo Keang Hai

	 
	  	
)

	  	
CHOO KEANG HAI

	 
	
2, Normanton Park, #04-151, Singapore

	
)

	  	  	 
	
Witness Address

	
)

	  	  	 
	  	
)

	  	  	 
	
Lee Tong Tai, President

	
)

	  	  	 
	
Witness Name and Occupation

	
)

	  	  	 

 

  

58

  

 

	
SIGNED and DELIVERED by

	
)

	  	  	 
	
TOH LING LING, a Vendor

	
)

	  	  	 
	
herein, in the presence of:

	
)

	  	  	 
	  	
)

	  	  	 
	
    /s/ Ang Siew Khim

	
)

	  	  	 
	
Witness Signature

	
)

	  	
/s/ Toh Ling Ling

	 
	  	
)

	  	
TOH LING LING

	 
	
39B Daisy Road, Singapore

	
)

	  	  	 
	
Witness Address

	
)

	  	  	 
	  	
)

	  	  	 
	
Ang Siew Khim, director

	
)

	  	  	 
	
Witness Name and Occupation

	
)

	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	
SIGNED and DELIVERED by

	
)

	  	  	 
	
TEY KIM KEE, a Vendor

	
)

	  	  	 
	
herein, in the presence of:

	
)

	  	  	 
	  	
)

	  	  	 
	
    /s/ Ang Siew Khim

	
)

	  	  	 
	
Witness Signature

	
)

	  	
/s/ Tey Kim Kee

	 
	  	
)

	  	
TEY KIM KEE

	 
	
39B Daisy Road, Singapore

	
)

	  	  	 
	
Witness Address

	
)

	  	  	 
	  	
)

	  	  	 
	
Ang Siew Khim, director

	
)

	  	  	 
	
Witness Name and Occupation

	
)

	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	
SIGNED and DELIVERED by

	
)

	  	  	 
	
JOHNNY LIAN TIAN YONG, a Vendor

	
)

	  	  	 
	
herein, in the presence of:

	
)

	  	  	 
	  	
)

	  	  	 
	
    /s/ Ang Siew Khim

	
)

	  	  	 
	
Witness Signature

	
)

	  	
/s/ Johnny Lian Tian Yong

	 
	  	
)

	  	
JOHNNY LIAN TIAN YONG

	 
	
39B Daisy Road, Singapore

	
)

	  	  	 
	
Witness Address)

	  	  	  	 
	  	
)

	  	  	 
	
Ang Siew Khim, director

	
)

	  	  	 
	
Witness Name and Occupation

	
)

	  	  	 

 

  

59

  

 

	
SIGNED and DELIVERED by

	
)

	  	  	 
	
CHAN BOON WEE, a Vendor

	
)

	  	  	 
	
herein, in the presence of:

	
)

	  	  	 
	  	
)

	  	  	 
	
    /s/ Ang Siew Khim

	
)

	  	  	 
	
Witness Signature

	
)

	  	
/s/ Chan Boon Wee

	 
	  	
)

	  	
CHAN BOON WEE

	 
	
39B Daisy Road, Singapore

	
)

	  	  	 
	
Witness Address

	
)

	  	  	 
	  	
)

	  	  	 
	
Ang Siew Khim, director

	
)

	  	  	 
	
Witness Name and Occupation

	
)

	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	  	  	  	  	 
	
SIGNED and DELIVERED by

	
)

	  	  	 
	
VERNON WONG HOCK LEONG, a Vendor

	
)

	  	  	 
	
herein, in the presence of:

	
)

	  	  	 
	  	
)

	  	  	 
	  	
)

	  	  	 
	
Witness Signature

	
)

	  	
/s/ Vernon Wong Hock Leong

	 
	  	
)

	  	
VERNON WONG HOCK LEONG

	 
	  	
)

	  	  	 
	
Witness Address

	
)

	  	  	 
	  	
)

	  	  	 
	  	
)

	  	  	 
	
Witness Name and Occupation

	
)

	  	  	 

 

  

60

  

 

Schedule A

This is Schedule “A” to that certain Share Exchange Agreement among Hubei Minkang Pharmaceutical Ltd., HBMK Pharmaceutical Limited and the vendor shareholders of HBMK Pharmaceutical Limited.

 

 

Company Stock and Vendors

 

	
Authorized Capital:

	
5,000,000 shares

 

	
Issued Capital:

	
3,620,000 shares

 

 

	
Vendor

	
Number of shares of Company Stock

	
Number of shares of Acquirer Stock to receive

	
Lee Tong Tai

	
854,620

	
7,117,898

	
Ang Siew Khim

	
246,377

	
2,052,007

	
Hong Lena

	
108,600

	
904,500

	
Joseph Soon Kwo Pin

	
217,200

	
1,809,000

	
Lee Hung Ming

	
20,816

	
173,371

	
Lee Tong Jiuh

	
246,377

	
2,052,007

	
Lee Yeng Fen

	
20,816

	
173,371

	
Seah Chee Seng

	
44,348

	
369,362

	
Tay Ah Meng

	
246,377

	
2,052,007

	
Mui Chark (Private) Limited

	
246,379

	
2,052,024

	
Universal Metal Works (Private) Limited

	
201,890

	
1,681,487

	
Koh Cheoh Nguan

	
45,077

	
375,434

	
Koh Boon Hua

	
18,637

	
155,223

	
Koh Lee Boon

	
18,637

	
155,223

	
Koh Sock Hua

	
24,897

	
207,360

	
Koh Sok Yong

	
37,274

	
310,445

	
Koh Cheok Chuan

	
24,859

	
207,044

	
Koh Cheok Kow

	
24,859

	
207,044

	
Koh Cheoh Kwang

	
24,859

	
207,044

	
Lee Wei Meng

	
115,623

	
962,993

	
Jesseline Siah Chiew Choon

	
151,823

	
1,264,493

	
Ramaswamy Sreeghandhan

	
208,150

	
1,733,625

	
Choo Keang Hai

	
208,150

	
1,733,625

	
Toh Ling Ling

	
25,123

	
209,243

	
Tey Kim Kee

	
238,232

	
1,984,170

	
Johnny Lian Tian Yong

	  	
1,675,000

	
Chan Boon Wee

	  	
837,500

	
Vernon Wong Hock Leong

	  	
837,500

 

  

61

  

 

Schedule B

This is Schedule “B” to that certain Share Exchange Agreement among Hubei Minkang Pharmaceutical Ltd., HBMK Pharmaceutical Limited and the vendor shareholders of HBMK Pharmaceutical Limited.

CERTIFICATE OF NON-U.S. SHAREHOLDER

In connection with the issuance of the Acquirer Stock to the undersigned, the undersigned hereby agrees, acknowledges, represents and warrants that:

1.           the undersigned is not a “U.S. Person” as such term is defined by Rule 902 of Regulation S (the definition of which includes, but is not limited to, an individual resident in the U.S. and an estate or trust of which any executor or administrator or trust, respectively is a U.S. Person and any partnership or corporation organized or incorporated under the laws of the U.S.);

2.           none of the Acquirer Stock have been or will be registered under the Securities Act, or under any state securities or “blue sky” laws of any state of the United States, and may not be offered or sold in the United States or, directly or indirectly, to U.S. Persons, as that term is defined in Regulation S, except in accordance with the provisions of Regulation S or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any Applicable Securities Laws;

3.           offers and sales of any of the Acquirer Stock prior to the expiration of a period of six months after the date of original issuance of the Acquirer Stock (the six month period hereinafter referred to as the “Distribution Compliance Period”) shall only be made in compliance with the safe harbor provisions set forth in Regulation S, pursuant to the registration provisions of the Securities Act or an exemption therefrom, and that all offers and sales after the Distribution Compliance Period shall be made only in compliance with the registration provisions of the Securities Act or an exemption therefrom and in each case only in accordance with applicable state and foreign securities laws;

4.           the undersigned will not engage in any hedging transactions involving any of the Acquirer Stock unless such transactions are in compliance with the provisions of the Securities Act and in each case only in accordance with Applicable Securities Laws;

5.           the undersigned is acquiring the Acquirer Stock for investment only and not with a view to resale or distribution and, in particular, it has no intention to distribute either directly or indirectly any of the Acquirer Stock in the United States or to U.S. Persons;

6.           the undersigned has not acquired the Acquirer Stock as a result of, and will not itself engage in, any directed selling efforts (as defined in Regulation S) in the United States in respect of the Acquirer Stock which would include any activities undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for the resale of any of the Acquirer Stock; provided, however, that the undersigned may sell or otherwise dispose of the Acquirer Stock pursuant to registration thereof under the Securities Act and any Applicable Securities Laws or under an exemption from such registration requirements;

7.           the statutory and regulatory basis for the exemption claimed for the sale of the Acquirer Stock, although in technical compliance with Regulation S, would not be available if the offering is part of a plan or scheme to evade the registration provisions of the Securities Act or any Applicable Securities Laws;

8.           except as set out in the Agreement, the Purchaser has not undertaken, and will have no obligation, to register any of the Acquirer Stock under the Securities Act;

9.           the Acquirer is entitled to rely on the acknowledgements, agreements, representations and warranties of the undersigned contained in the Agreement and this Certificate, and the undersigned will hold harmless the Acquirer from any loss or damage either one may suffer as a result of any such acknowledgements, agreements, representations and/or warranties made by the undersigned not being true and correct;

 

  

62

  

 

10.           the undersigned has been advised to consult its own respective legal, tax and other advisors with respect to the merits and risks of an investment in the Acquirer Stock and, with respect to applicable resale restrictions, is solely responsible (and the Acquirer is not in any way responsible) for compliance with applicable resale restrictions;

11.           the undersigned and the undersigned’s advisor(s) have had a reasonable opportunity to ask questions of and receive answers from the Acquirer in connection with the acquisition of the Acquirer Stock under the Agreement, and to obtain additional information, to the extent possessed or obtainable by the Acquirer without unreasonable effort or expense;

12.           the books and records of the Acquirer were available upon reasonable notice for inspection, subject to certain confidentiality restrictions, by the undersigned during reasonable business hours at its principal place of business and that all documents, records and books in connection with the acquisition of the Acquirer Stock under the Agreement have been made available for inspection by the undersigned, the undersigned’s attorney and/or advisor(s);

13.           the undersigned:

	
  

	
(a)

	
is knowledgeable of, or has been independently advised as to, the Applicable Securities Laws of the securities regulators having application in the jurisdiction in which the undersigned is resident (the “International Jurisdiction”) which would apply to the acquisition of the Acquirer Stock;

	
  

	
(b)

	
the undersigned is acquiring the Acquirer Stock pursuant to exemptions from prospectus or equivalent requirements under Applicable Securities Laws or, if such is not applicable, the undersigned is permitted to acquire the Acquirer Stock under the Applicable Securities Laws of the securities regulators in the International Jurisdiction without the need to rely on any exemptions;

	
  

	
(c)

	
the Applicable Securities Laws of the authorities in the International Jurisdiction do not require the Acquirer to make any filings or seek any approvals of any kind whatsoever from any securities regulator of any kind whatsoever in the International Jurisdiction in connection with the issue and sale or resale of the Acquirer Stock; and

	
  

	
(d)

	
the acquisition of the Acquirer Stock by the undersigned does not trigger:

	
  

	
(i)

	
any obligation to prepare and file a prospectus or similar document, or any other report with respect to such purchase in the International Jurisdiction; or

	
  

	
(ii)

	
any continuous disclosure reporting obligation of the Acquirer in the International Jurisdiction; and

the undersigned will, if requested by the Acquirer, deliver to the Acquirer a certificate or opinion of local counsel from the International Jurisdiction which will confirm the matters referred to in Sections 13(c) and 13(d) above to the satisfaction of the Acquirer, acting reasonably;

14.           the undersigned (i) is able to fend for itself in connection with the acquisition of the Acquirer Stock; (ii) has such knowledge and experience in business matters as to be capable of evaluating the merits and risks of its prospective investment in the Acquirer Stock; and (iii) has the ability to bear the economic risks of its prospective investment and can afford the complete loss of such investment;

15.           the undersigned is not aware of any advertisement of any of the Acquirer Stock and is not acquiring the Acquirer Stock as a result of any form of general solicitation or general advertising including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising;

16.           except as set out in the Agreement, no Person has made to the undersigned any written or oral representations:

	
  

	
(a)

	
that any Person will resell or repurchase any of the Acquirer Stock;

	
  

	
(b)

	
that any Person will refund the purchase price of any of the Acquirer Stock;

	
  

	
(c)

	
as to the future price or value of any of the Acquirer Stock; or

 

  

63

  

 

	
  

	
(d)

	
that any of the Acquirer Stock will be listed and posted for trading on any stock exchange or automated dealer quotation system or that application has been made to list and post any of the Acquirer Stock on any stock exchange or automated dealer quotation system, except that currently certain market makers make market in the Acquirer’s shares of common stock on the OTCBB;

17.           the undersigned is outside the United States when receiving and executing this Agreement and is acquiring the Acquirer Stock as principal for their own account, for investment purposes only, and not with a view to, or for, resale, distribution or fractionalization thereof, in whole or in part, and no other Person has a direct or indirect beneficial interest in the Acquirer Stock;

18.           neither the SEC nor any other securities commission or similar regulatory authority has reviewed or passed on the merits of the Acquirer Stock;

19.           the Acquirer Stock is not being acquired, directly or indirectly, for the account or benefit of a U.S. Person or a Person in the United States; and

20.           the undersigned acknowledges and agrees that the Acquirer shall refuse to register any transfer of Acquirer Stock not made in accordance with the provisions of Regulation S, pursuant to registration under the Securities Act, or pursuant to an available exemption from registration under the Securities Act.

IN WITNESS WHEREOF, I have executed this Certificate of Non-U.S. Shareholder.

 

	  	  	
Date:

	 	  	
, 2011

	
Signature

	  	  	 	  	  
	  	  	  	 	  	  
	  	  	  	 	  	  
	
Print Name

	  	  	 	  	  
	  	  	  	 	  	  
	  	  	  	 	  	  
	
Title (if applicable)

	  	  	 	  	  
	  	  	  	 	  	  
	  	  	  	 	  	  
	
Address

	  	  	 	  	  
	  	  	  	 	  	  

  

  

64

  

 

Schedule C

This is Schedule “C” to that certain Share Exchange Agreement among Hubei Minkang Pharmaceutical Ltd., HBMK Pharmaceutical Limited and the vendor shareholders of HBMK Pharmaceutical Limited.

 

 

Company Subsidiaries

 

	
  

	
1.

	
Hubei Minkang Pharmaceutical Co., Ltd.

  

 

  

65

  

 

Schedule D

This is Schedule “D” to that certain Share Exchange Agreement among Hubei Minkang Pharmaceutical Ltd., HBMK Pharmaceutical Limited and the vendor shareholders of HBMK Pharmaceutical Limited.

 

 

Financial Statements

	
  

	
1.

	
Audited Financial Statements for HBMK Pharmaceutical Limited for the fiscal years ended December 31, 2010 and 2009; and

	
  

	
2.

	
Unaudited Financial Statements for HBMK Pharmaceutical Limited for the three month period ended March 31, 2011.

 

 

Refer to the attached materials

 

 

 

 

 

  

66

  

 

Schedule E

This is Schedule “E” to that certain Share Exchange Agreement among Hubei Minkang Pharmaceutical Ltd., HBMK Pharmaceutical Limited and the vendor shareholders of HBMK Pharmaceutical Limited.

 

 

Material Contracts

  

67

  

 

Schedule F

This is Schedule “F” to that certain Share Exchange Agreement among Hubei Minkang Pharmaceutical Ltd., HBMK Pharmaceutical Limited and the vendor shareholders of HBMK Pharmaceutical Limited.

 

 

Encumbrances

  

68

  

 

Schedule G

This is Schedule “G” to that certain Share Exchange Agreement among Hubei Minkang Pharmaceutical Ltd., HBMK Pharmaceutical Limited and the vendor shareholders of HBMK Pharmaceutical Limited.

 

Pending, Outstanding or Unresolved Claims or Grievances

None.

 

  

69

  

 

Schedule H

This is Schedule “H” to that certain Share Exchange Agreement among Hubei Minkang Pharmaceutical Ltd., HBMK Pharmaceutical Limited and the vendor shareholders of HBMK Pharmaceutical Limited.

 

Banks and Bank Accounts

 

Refer to the attached materials

 

 

 

  

70

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