Document:

Exhibit
4.1

 

No.            

 

 

 

 

SUBSCRIPTION AGREEMENT

 

BY AND AMONG

 

JASMINE’S GARDEN

 

AND

 

THE INVESTORS LISTED ON
SCHEDULE 1

 

 

Dated as of March 17, 2004

 

 

 

 

THE SECURITIES OFFERED BY THIS
SUBSCRIPTION AGREEMENT HAVE NOT BEEN REGISTERED WITH OR APPROVED OR DISAPPROVED
BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION, NOR HAS SUCH
COMMISSION OR ANY STATE SECURITIES BUREAU, COMMISSION OR OTHER REGULATORY
AUTHORITY PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY
OR ADEQUACY OF THIS SUBSCRIPTION AGREEMENT. 
ACCORDINGLY, YOU MAY NOT OFFER OR SELL THE OFFERED SECURITIES IN THE
UNITED STATES OR TO U.S. PERSONS (AS SUCH TERM IS DEFINED IN RULE 902(K)
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”)
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR EVIDENCE ACCEPTABLE TO US AND OUR COUNSEL, WHICH MAY INCLUDE AN OPINION OF
COUNSEL, THAT REGISTRATION IS NOT REQUIRED. 
HEDGING TRANSACTIONS INVOLVING THE OFFERED SECURITIES MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.  ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

 

THIS SUBSCRIPTION AGREEMENT MAY NOT
BE SHOWN OR GIVEN TO ANY PERSON OTHER THAN THE PERSON WHOSE NAME APPEARS ABOVE
AND MAY NOT BE PRINTED OR REPRODUCED IN ANY MANNER WHATSOEVER.  FAILURE TO COMPLY WITH THIS DIRECTIVE CAN
RESULT IN A VIOLATION OF THE SECURITIES ACT. 
ANY FURTHER DISTRIBUTION OR REPRODUCTION OF THIS SUBSCRIPTION AGREEMENT
IN WHOLE OR IN PART, OR THE DIVULGENCE OF ANY OF ITS CONTENTS BY AN OFFEREE, IS
UNAUTHORIZED.  BY ACCEPTING THIS
SUBSCRIPTION AGREEMENT, YOU EXPRESSLY AGREE TO COMPLY WITH THESE AND THE OTHER
RESTRICTIONS CONTAINED HEREIN.

 

 

LIST OF
EXHIBITS

 

	
  EXHIBIT
  A

  	
   

  	
  Irrevocable
  Proxy

  
	
  EXHIBIT
  B

  	
   

  	
  Accredited
  Investor Questionnaire

  

 

i

 

SUBSCRIPTION
AGREEMENT

 

THIS SUBSCRIPTION AGREEMENT (this “Agreement”) is made
and entered into as of the 16th day of March, 2004 by and among Jasmine’s
Garden, a Nevada corporation (the “Company”), and the investors named on
Schedule 1 attached hereto (each such investor is referred to herein as an
“Investor” and collectively as the “Investors”).  Certain terms used and not otherwise defined in the text of this
Agreement are defined in Section 8 of this Agreement.

 

W I T N E S
S E T H

 

WHEREAS, the Company
is a reporting company with certain shares of its issued and outstanding Common
Stock listed on the Over-The-Counter Electronic Bulletin Board under the ticker
symbol JASG.OB; and

 

WHEREAS, the Company
desires to issue and to sell to the Investors, and the Investors desire to
purchase from the Company, up to Thirty Million (30,000,000) fully paid and
non-assessable shares of restricted Common Stock, par value $0.001, at a per
share purchase price of $0.05, for an aggregate of One Million Five Hundred
Thousand Dollars ($1,500,000) in accordance with the terms and provisions of
this Agreement.

 

NOW,
THEREFORE, in consideration of the foregoing and the mutual
representations, warranties and covenants herein contained, the parties hereto
hereby agree as follows:

 

ARTICLE
I

AUTHORIZATION
OF SECURITIES

 

1.1                                 Authorization of Securities.  Prior to the Closing Date, the Company’s
Board of Directors shall have taken all action necessary to authorize the
issuance and sale of Thirty Million (30,000,000) shares of its restricted
Common Stock (the “Securities”) to the Investors.

ARTICLE
II

SALE
AND PURCHASE OF THE SECURITIES

 

2.1                                 Sale and Purchase of Restricted Common Stock.  Subject to the
terms and conditions set forth in this Agreement, each Investor hereby
subscribes for and agrees to acquire from the Company at the Closing, and the
Company hereby agrees that it shall issue to each Investor at the Closing, free
and clear of any Encumbrances, the number of shares of restricted Common Stock
set forth opposite such Investor’s name on Schedule 1 hereto against payment of
the purchase price (the “Purchase Price”) therefore set forth next to each
Investors’ name on Schedule 1 hereto. 
Each Investor acknowledges that the Securities acquired hereunder are
subject to restrictions on transfer under federal and state securities laws.

 

ARTICLE
III

CLOSING

 

3.1                                 Closing. The
closing of the sale to, and purchase by, the Investors of the Securities (the
“Closing”) shall occur by mail at the offices of Liner Yankelevitz Sunshine
&

 

1

 

Regenstreif LLP, 1100 Glendon Avenue, 14th Floor,
Los Angeles California 90024, on the date hereof or at such other time and
place as the parties hereto may agree (the “Closing Date”).  In the event that such date is not a
Business Day, the Closing Date shall be deemed to be the first Business Day
following such date.

 

3.2                                 Deliveries by the Company.

 

(a)                                  At the Closing, the Company shall deliver to each Investor
one or more certificates evidencing the number of Securities to be purchased by
such Investor at the Closing each of which shall be registered in such
Investor’s name or its designee, against delivery to the Company of the
Purchase Price payable by wire transfer of immediately available funds to an
account that the Company designated in writing to the Investor prior to the
Closing Date; and

 

3.3                                 Deliveries by the Investor.
At the Closing, each Investor shall deliver to the Company:

 

(a)                                  The Purchase Price payable by wire transfer or other form
acceptable to the Company of immediately available funds to an account that the
Company designated in writing to the Investor prior to the Closing Date; and

 

(b)                                 The original of the Irrevocable Proxy in the form attached
hereto as Exhibit A (the “Proxy”), executed by the Investor;

 

(c)                                  Such other documents as are required to be delivered by the
Investor to the Company.

 

3.4                                 Other Deliveries. At the
Closing, the Company and Investor will deliver such duly executed Transaction
Documents as are required to be executed by the parties hereunder or
thereunder.

 

ARTICLE
IV

REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE INVESTOR

 

Each Investor acknowledges that this Agreement is
made with Investor in reliance upon Investor’s representation to the
Company.  Each Investor, severally as to
itself and not jointly, represents and warrants to and agrees with the Company
as follows:

 

4.1                                 Regulation S Representations and Warranties.

 

(a)  US Person. 
Investor represents that it is not an “U.S. person “ as that term is
defined in Rule 902(k) of Regulation S promulgated under the Securities Act,
that it resides outside of the United States, and that it has accurately
completed the accredited investor questionnaire set forth as Exhibit B attached
hereto.

 

(b)  Dealer; Distributor. 
Investor represents that it is not a distributor or dealer as such term
is defined in Section 2(a)(12) of the Securities Act, or a Person receiving a
selling concession, fee or other remuneration in connection with the
Securities.

 

2

 

(c)  Resale Limitations. 
Investor understands that the Securities have not been, and will not
upon issuance be, registered under the Securities Act of 1933, as amended (the
“Securities Act”), and further understands that the Securities are restricted
securities as such term is defined in Rule 144 promulgated under the Act and
may be resold without registration under the Act and the applicable rules and
regulations under the Act, only in very limited circumstances.  In this connection, Investor represents that
it is familiar with the terms and provisions of Regulation S (including Rule
903 and Rule 904 promulgated under the Securities Act) and Rule 144 promulgated
under the Securities Act, as presently in effect, and understands the resale
limitations imposed thereby and by the Securities Act.  Investor further agrees that all offers and
sales of the Securities (including those made prior to the expiration of the
one year distribution compliance period described in Regulation S) shall be
made in accordance with the terms and provisions of the Securities Act
including without limitation Rules 144, 903 and 904 promulgated under the
Securities Act, pursuant to a registration of the Securities under the
Securities Act, or pursuant to an available exemption from the registration
requirements of the Securities Act.

 

(d)  Hedging Transactions. 
Investor agrees not to engage in hedging transactions with regard to the
Securities prior to the expiration of the one-year distribution compliance
period described in Regulation S.

 

(e)  Restrictive Legends. 
Investor further understands that the certificates evidencing the
Securities shall bear one or more of the following legends:

 

•                  “These
securities have not been registered under the Securities Act of 1933, as
amended (the “Act”).  They may not be
sold, offered for sale, pledged or hypothecated in the absence of a
registration statement in effect with respect to the securities under the Act
unless an opinion of counsel to the Company is delivered to the effect that
such registration is not required or that the securities are being sold
pursuant to Rule 144 of the Act and therefore this legend should be removed.”

 

•                   “Transfer of
these securities is prohibited except in accordance with the provisions of
Regulation S promulgated under the Securities Act of 1933, as amended (the
“Act”), pursuant to registration under the Act, or pursuant to an available
exemption from registration.  Hedging
transactions involving these securities may not be conducted unless in
compliance with the Act.”

 

•                  Any other
legend required by the securities laws of any applicable jurisdictions.

 

(f)  Acquisition for Own Account.  Investor hereby confirms that: (i) the Securities will be
acquired for investment for Investor’s own account, not as a nominee or agent,
not with a view to the resale or distribution of any part thereof, and not for
the benefit or the account of a U.S. Person; (ii) Investor does not have any
present intention of selling, granting any participation in or otherwise
distributing any such Securities; and (iii) Investor does not have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer, encumber, pledge, hypothecate or grant participations to such person
or to any third person, with respect to any of the Securities.

 

3

 

(g)  No Public Review/ No Soliciting Materials.  Investor understands that no federal or
state agency has recommended or endorsed the offer, sale or purchase of the
Securities or passed on the adequacy or accuracy of the information set forth
in this Agreement.  Investor
acknowledges that it has not seen, received, been presented with, or been
solicited by any leaflet, public promotional meeting, newspaper or magazine
article or advertisement, radio or television advertisement, or any other form
of advertising or general solicitation with respect to the sale of the
Securities.

 

4.2                                 General
Representations and Warranties.

 

(a)  Organization. If Investor is an entity, Investor is
validly existing and in good standing under the laws of its jurisdiction of
organization, has all requisite power and authority to enter into this
Agreement and consummate the transactions contemplated hereby and all of its
Control Persons satisfy the requirements of Regulation S promulgated under the
Act. 

 

(b)  Validity. The execution, delivery and performance of this
Agreement, and the other documents and instruments referred to herein, in each
case to which Investor is a party, and the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary action on the
part of Investor.  This Agreement and
each other Transaction Document have been duly and validly executed and
delivered by Investor and assuming their due authorization, execution and
delivery by the Company constitute a valid and binding obligation of Investor,
enforceable against it in accordance with the terms of each Transaction
Document, subject to bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium and other similar laws now or hereafter in effect relating
to or affecting creditors’ rights generally and the rights of creditors of
insurance companies generally.

 

(c)  Disclosure of Information.   Investor understands and acknowledges that the Company is a
reporting company under the Exchange Act of 1934, as amended (the “Exchange
Act”) and that disclosures regarding the Company are publicly available at www.sec.gov,
among other places.  Investor
acknowledges that it has received or has had the opportunity to review all the
information it considers necessary or appropriate for deciding whether to
purchase the Securities.  Investor
further represents that it has had an opportunity to ask questions and receive
answers from the Company regarding the terms and conditions of the offering of
the Securities and the business, properties, prospects and financial condition
of the Company.  Investor is aware of
the Company’s current operations and financial condition and is making this
investment on an “As Is Where Is”
basis.  

 

(d)  Investment Experience. 
Investor is an investor in securities of companies in the development
stage and acknowledges that it is able to fend for itself, can bear the economic
risk of its investment and has such knowledge and experience in financial or
business matters such that it is capable of evaluating the merits and risks of
the investment in the Securities.  If
the Investor is an entity, Investor represents that it has not been organized
for the purpose of acquiring the Securities. 

 

(e)  Acknowledgment of Risk. Investor has read and understands
the risks involved in investing in the Company, as described in Article VI
below.

 

4

 

(f)  Tax Consequences. 
Investor is aware that there can be no assurance regarding the federal,
state, local or foreign tax consequences of an investment in the Company, nor
can there be any assurance that the Code or the regulations promulgated
thereunder or other applicable laws and regulations will not be amended at some
future time in such manner as to deprive the Company and its stockholders of
any tax benefits that might be received. 
In making this investment, Investor is relying upon the advice of its
personal tax advisor with respect to the tax aspects of an investment in the
Company and not on the Company or any agent thereof.

 

(g)  Tax Allocation. 
Investor understands that taxable income and gain allocated to the
Investor by the Company and the tax on the portion thereof allocated to the
Investor for any year may exceed the cash distributions from the Company to the
Investor and, if so, the Investor will have to look to sources other than
distributions from the Company to pay such tax.

 

(h)  Brokers. There is no broker, investment banker, financial
advisor, finder or other Person which has been retained by or is authorized to
act on behalf of Investor who might be entitled to any fee or commission for
which the Company will be liable in connection with the execution of this
Agreement.

 

ARTICLE
V

REPRESENTATIONS,
WARRANTIES AND COVENANTS BY THE COMPANY

 

The Company represents and warrants to and agrees
with each Investor as follows:

 

5.1                                 Limitation.  The Company makes
no representations or warranties other than the representations and warranties
contained in this Agreement.

 

5.2                                 Due
Issuance and Authorization of Capital Stock.  All of the outstanding shares of capital
stock of the Company have been validly issued and are fully paid and nonassessable.  No shares of capital stock of the Company
are subject to any lien, claim, judgment, charge, mortgage, security interest,
pledge, escrow equity or other encumbrance of any kind (including any agreement
to give any of the foregoing, any conditional sale or other title retention
agreement, and any lease in the nature thereof) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing
(collectively, “Encumbrances”) and the sale and delivery of the Securities to
the Investor pursuant to the terms hereof will vest in the Investor legal and
valid title to such Securities free and clear of all Encumbrances.

 

5.3                                 Organization.  The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada.  The
Company is duly authorized by all necessary
consents, approvals, authorizations, orders, registrations, qualifications,
licenses and permits of and from all public, regulatory or governmental
agencies and bodies, to own, lease and operate its assets and properties and to
conduct its business as it is now being conducted and is duly qualified or
licensed to do business and in good standing in each jurisdiction in which the
nature of its business or the ownership, leasing or operation of its assets and
properties makes such qualification or licensing necessary.

 

5

 

5.4                                 Authorization;
Enforcement.  The Company has all requisite corporate power and has taken all
necessary corporate action required for the due authorization, execution,
delivery and performance by the Company of this Agreement and the consummation
of the transactions contemplated hereby (including, without limitation, the
issuance of the Securities).  The
execution, delivery and performance by the Company of each of the Transaction
Documents and the consummation by the Company of the transactions contemplated
hereby and thereby, have been duly authorized by all necessary corporate action
on the part of the Company.  The Company
has taken all actions under its Articles of Incorporation and its By-Laws as
may be necessary or advisable to provide the Investor with the rights hereby
contemplated.  This Agreement and each
other Transaction Document have been duly and validly executed and delivered by
the Company, and assuming due authorization, execution and delivery by each
Investor (as the case may be), constitute the valid and binding obligation of
the Company, enforceable against the Company in accordance with their
respective terms, subject to bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium and other similar laws now or hereafter in effect relating
to or affecting creditors’ rights generally and the rights of creditors
generally.

 

5.5                                 Issuance
of Shares.  Upon issuance, the Securities will be duly authorized, validly
issued, fully paid and non-assessable, and such Securities will be free from
all taxes, liens, claims and Encumbrances, and will not impose personal liability
upon the holder thereof.

 

ARTICLE
VI

RISK
FACTORS

 

6.1                                 Risk Factors.  THIS OFFERING INVOLVES A HIGH DEGREE OF
RISK. EACH INVESTOR HAS CAREFULLY CONSIDERED THE RISKS DESCRIBED BELOW AND THE
OTHER INFORMATION IN THIS AGREEMENT OR OTHERWISE PUBLICLY AVAILABLE AT WWW.SEC.GOV
BEFORE IT HAS MADE ITS INVESTMENT. ADDITIONAL RISKS AND UNCERTAINTIES,
INCLUDING THOSE GENERALLY AFFECTING THE MARKET IN WHICH THE COMPANY OPERATES OR
THAT THE COMPANY CURRENTLY DEEMS IMMATERIAL, MAY ALSO IMPAIR THE COMPANY’S
BUSINESS.

 

a.                                       We
Have Recently Adopted A New Business Plan. 
There Is No Assurance That We Will Be Successful In Implementing Our
Business Plan.  We intend to abandon
our current business plan and have recently adopted a new business plan to
engage in a merger or acquisition with an unidentified company or entity.  In connection therewith, we intend to
appoint a new management team to further our new business plan.  As a result, our financial statements may
materially change in the future as we implement our new plan or strategic focus
and historical financial statements will not be accurate indicators of the
prospective performance of the Company. 
Prior to the new plan, we were engaged in the business of nationwide
wholesale and retail sales of greeting cards, note cards and gift tags made
from a design process involving photography and computer graphics.  We have a limited operating history and are
considered a development stage enterprise because we have not generated
significant revenues from the sale of our products.  We have nominal assets with which to create operating capital. We
have an accumulated deficit of $3,835 at September 30, 2003.  These factors raise substantial doubt about
our ability to continue as a going concern if we do not implement our new
business plan.  There can be no
assurance, however, that we

 

6

 

will be successful in implementing our new business plan or that we will able to generate revenues sufficient to continue as a going concern under our new business plan.

 

b.                                      The
Company Will Need, But May Not Be Able To Obtain Additional Financing On
Reasonable Terms Or At All.  Since inception, we have had
minimal revenues and minimal profits. 
We have financed our operations primarily through the sale of our common
stock and with income derived from operations.We do not intend to devote the proceeds of this Offering to further
our existing business.  We intend to
devote the proceeds of this Offering to implement our new business plan.  We believe that the proceeds of this
Offering, together with other available funds, will be sufficient to meet our
anticipated needs for the new business plan and for working capital and capital
expenditures for at least the next 13 months. 
Thereafter, we will need to raise additional funds.  We may need to raise additional funds sooner
in order to accelerate the implementation of our new business plan, to develop
new or enhanced services or products, to respond to competitive pressures or to
acquire complementary products, businesses or technologies.  We may also need to raise funds if our
available funds decrease.  If additional
funds are raised through the issuance of equity or convertible debt securities,
the percentage ownership of our stockholders will be reduced and stockholders
may experience additional and substantial dilution.  Moreover, such securities may have rights, preferences and
privileges senior to those of our Common Stock.  There can be no assurance that additional financing will be
available on terms favorable to us or at all. 
If adequate funds are not available or are not available on acceptable
terms, we may not be able to fund our expansion, take advantage of
unanticipated acquisition opportunities, develop or enhance products or respond
to competitive pressures.  Thus, we may
be adversely impacted if the full proceeds are not raised and investors may
lose their entire investment. The funds raised by this Offering will be used,
as received, for the purposes set forth in Section 7.1 hereof.  Such inability could have a material adverse
effect on our business, results of operations and financial condition.

 

c.                                       We
Have Broad Management Discretion Over the Allocation of Proceeds from this
Offering.  The net maximum proceeds
from the sale of the maximum offering of 30,000,000 shares of Common Stock
offered by the Company is estimated to be approximately $1,500,000. Our
management retains broad discretion as to the allocation of the proceeds of
this offering.  The failure of management
to apply such funds effectively could have a material adverse effect on our
business, results of operations and financial condition.

 

d.                                      No
Assurance Of Profitability.  The
Company has not yet implemented its new business plan.  There can be no assurance that the Company
will achieve positive cash flow or profitability from its new operations or the
new business plan.

 

e.                                       Change
in Control.  Once the Offering is
completed, assuming a full subscription, the Investors as a group will
beneficially own 62.5% of the then issued and outstanding shares of Common
Stock.  As a result, the Investors as a
group will be able to exercise control over any matters requiring the vote of
stockholders, including the election of directors.  This could delay or prevent a change in control of our board of
directors.  This may have

 

7

 

the effect of precluding or delaying the opportunity of minority stockholders to sell their Common Stock to interested purchasers or may significantly reduce the offering price in any such transaction.
 

f.                                         Equity
Incentive Plan.  We plan to attract
and retain employees in part by offering stock grants, stock options and other
purchase rights for a significant number of our shares of Common Stock.  We have approved and adopted a 2004 Equity
Incentive Plan authorizing the issuance of 12,000,000 shares (approximately 25%
on a fully diluted basis) of free trading stock and have filed a registration
statement on Form S-8 covering the securities issuable thereunder.  There is no assurance that we will not adopt
additional equity incentive plans or stock option plans, which may further
dilute the holdings of the Investors in the Company.

 

g.                                      Number
Of Authorized Shares Of Common Stock Available For Future Issuance; Possible
Dilutive And Anti-takeover Effects. 
We are currently authorized by our Articles of Incorporation, as
amended, to issue 50,000,000 shares of Common Stock, of which 18,015,400 are
issued and outstanding.  The Board of
Directors of the Company has approved, and subject to shareholder approval,
intend to amend our Articles of Incorporation to increase the number of
authorized shares of Common Stock from 50,000,000 to 140,000,000 and authorize
black check preferred stock consisting of 60,000,000 shares.  Upon the amendment of the Articles of
Incorporation, the Board of Directors will have the power to issue substantial
amounts of additional Common Stock and Preferred Stock without shareholder
approval and shall have the right to set the rights, preferences and privileges
of the Preferred Stock without shareholder approval.  We may issue a substantial number of additional securities in
connection with future financings or acquisitions.  To the extent that additional shares of Common Stock or Preferred
Stock are issued, dilution of the interests of our shareholders (including the
Investors) will occur.  In addition, the
issuance of Preferred Stock and Common Stock could be utilized, under certain
circumstances, as a method of discouraging, delaying or preventing a change in
control of the Company.  We currently
are not committed to issue any shares of Preferred Stock.

 

h.                                      No
Minimum Capitalization.  There is no
minimum capitalization required in this Offering.  We intend on using investors’ subscription funds as soon as they
are received to further our business plan.

 

i.                                          Dividends.  We do not intend to declare or pay any
dividends in the foreseeable future. 
Therefore, there can be no assurance that holders of Common Stock will
receive any additional cash, stock or other dividends on their shares of Common
Stock until the Company has funds which the Board of Directors determines can
be allocated to dividends.  Future
dividends on Common Stock, if any, will depend on future earnings, financing
requirements and other factors.  There
can be no assurance that the proposed operations of the Company will result in
sufficient revenues to enable us to operate at profitable levels or to generate
a positive cash flow.  Revenues received
by the Company and not distributed must nevertheless be taken into account at
the end of each year of income tax purposes, whether or not any cash is
distributed to them.

 

8

 

j.                                          Nevada
Law and Our Articles of Incorporation Impose Limitations on the Liability of
Our Directors to the Stockholders. 
Our Articles of Incorporation provide, as permitted by governing Nevada
law, that our directors shall not be personally liable to our stockholders for
monetary damages for breach of fiduciary duty as a director, with certain exceptions.  These provisions may discourage stockholders
from bringing suit against a director for breach of fiduciary duty.

 

k.                                       Lack
Of Liquidity Of Investment.   There
are substantial restrictions on the transferability of the Securities as a
result of both federal and state securities laws. While there is a limited
public market for the shares of the Company’s Common Stock, the Securities are
restricted stock and subject to significant resale and transfer restrictions
under federal and state securities laws, including without limitation, Rules
144, 903 and 904 promulgated under the Securities Act.  The Company does not currently intend to
register the Securities for public sale under federal or state securities laws.  Even if the Securities are registered, there
can be no assurance that the public market for the Securities will be
sustained. Accordingly, the Securities may be acquired for investment purposes
only and not with a view toward resale. For such reasons, an Investor should
consider that an investment in the Securities is illiquid.

 

ARTICLE
VII

COVENANTS

 

7.1                                 Use
of Proceeds.  The Company covenants to use the proceeds from the sale of the
Securities to implement the new business plan, for working capital purposes and
other general corporate purposes, as determined by the Company’s Board of
Directors.

 

7.2                                 Further
Assurances.  Upon the terms and subject to the conditions herein provided,
each of the parties hereto shall use their commercially reasonable efforts to
take, or cause to be taken, all actions or do, or cause to be done, all things
or execute any documents necessary, proper or advisable to consummate and make
effective the transactions contemplated hereby.

 

7.3                                 Governmental
Entity Filings and Approvals.  The parties hereto shall (i) as promptly as
practicable file, or cause to be filed or submitted to Governmental Entities
all notices, applications, documents and other materials necessary in
connection with the consummation of such transactions (other than any notices,
applications, documents and other materials which are permitted under
applicable Law to be submitted following the Closing) and (ii) use their
respective commercially reasonable efforts to respond as promptly as
practicable to all inquiries received from all Governmental Entities for
additional information or documentation in connection with such
transactions.  The parties shall furnish
each other such necessary information and reasonable assistance as the other
may reasonably request in connection with its preparation of such necessary
filings or submissions to any Governmental Entity.  The parties shall provide each other with draft copies and
as-filed copies of all such filings and submissions to Governmental Entities
and shall provide the other with a reasonable opportunity to comment upon all
such draft copies.  The parties hereto
shall have the right to participate in any meetings with any Governmental
Entity relating to such filings and submissions.

 

9

 

7.4                                 Stop
Orders; Refusal of Registration.  Each of the parties acknowledges and agrees
that unless the Company is prohibited under foreign law from refusing to
register securities transfers or if the securities are in bearer form, the
Company shall refuse to register any transfer of the Securities not made in
accordance with the provisions of Regulation S promulgated under the Securities
Act, pursuant to registration under the Securities Act, or pursuant to an
available exemption from registration.

 

ARTICLE
VIII

DEFINITIONS

 

8.1                                 Definitions.  Unless the context
otherwise requires, the terms defined in this Section 11.1 shall have the
meanings specified for all purposes of this Agreement.

 

Except as otherwise
expressly provided, all accounting terms used in this Agreement, whether or not
defined in this Section 8.1, shall be construed in accordance with United
States generally accepted accounting principles.

 

“Affiliate” of any Person
means any other Person which directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such Person.  The term “control”
(including the terms “controlled by” and “under common control with”) as used
with respect to any Person means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise.

 

“Agreement” means this
Agreement.

 

“Article of Incorporation”
shall mean the certificate of incorporation of the Company as in effect on the
Closing Date and as hereafter from time to time amended, modified, supplemented
or restated.

 

“Business Day” means a day
other than a Saturday, Sunday or day on which banking institutions in Los
Angeles, California are authorized or required to remain closed.

 

“By-Laws” shall mean the
By-Laws of the Company as in effect on the Closing Date and as hereafter from
time to time amended, modified, supplemented or restated.

 

“ Common Stock” means the
shares of the Company’s voting common stock with a par value of $0.001 per
share authorized in, and designated as, “Common Stock” in the Company’s Article
of Incorporation.

 

“Closing” has the meaning
assigned to it in Section 3.1 hereof.

 

“Closing Date” has the
meaning assigned to it in Section 3.1 hereof.

 

“Code” means the Internal
Revenue Code of 1986, as amended.

 

10

 

“Control Persons” means any
Person or Persons (as defined under Section 2(a)2 of the Act) that possesses
directly or indirectly, the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities or contract or otherwise.

 

“Encumbrances” has the
meaning assigned to it in Section 5.2 hereof.

 

“Governmental Entity” means
any national, federal, state, municipal, local, territorial, foreign or other
government or any department, commission, board, bureau, agency, regulatory
authority or instrumentality thereof, or any court, judicial, administrative or
arbitral body or public or private tribunal.

 

“Indemnification Period”
shall have the meaning set forth in Section 10.3.

 

“Indemnified Party” shall
have the meaning set forth in Section 10.3.

 

“Indemnifying Party” shall
have the meaning set forth in Section 10.3.

 

“Investor” has the meaning
set forth in the recitals.

 

“Losses” shall mean all or
any loss, liability, claim, damage, expense (including costs of investigation
and defense and reasonable attorneys’ fees but excluding in all events
consequential, punitive, or so-called special damages) or diminution of value,
whether or not involving a third-party claim.

 

“Person” means any
individual, sole proprietorship, partnership, limited liability company, joint
venture, trust, incorporated organization, association, corporation,
institution, public benefit corporation, government (whether federal, state,
country, city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof) or other entity.

 

“Purchase Price” has the
meaning assigned it in Section 2.1 hereof.

 

“SEC” means the Securities
and Exchange Commission.

 

“Securities” shall have the
meaning assigned to such term in Section 1.1 hereof.

 

“Securities Act” or “Act”
means the Securities Act of 1933, as amended.

 

“Third Party Claimant” shall
have the meaning set forth in Section 10.3.

 

“Transaction Documents”
shall mean this Agreement, the Proxy and all other documents as are required to
be delivered by the Investor to the Company pursuant to this Agreement.

 

11

 

ARTICLE
IX

ENFORCEMENT

 

9.1                                 Remedies
at Law or in Equity.  If any representation or warranty made by or
on behalf of the Company or any Investor in this Agreement is untrue or
misleading as of the Closing Date, or any covenant made by the Company or any
Investor is breached by any such party, the other party or parties may proceed
to protect and enforce its rights by suit in equity or action at law, whether
for the specific performance of any term contained in this Agreement or for an
injunction against the breach of any such term or in aid of the exercise of any
power granted in this Agreement, as amended or to enforce any other legal or
equitable right of such party, or to take any one or more of such actions.

 

In the event an Investor brings such an action
against the Company or the Company brings an action against an Investor arising
under this Agreement, the prevailing party in such dispute shall be entitled to
recover from the losing party all fees, costs and expenses of enforcing any
right of such prevailing party under or with respect to this Agreement
including, without limitation, such reasonable fees and expenses of attorneys
and accountants, which shall include, without limitation, all fees, costs and
expenses of appeals.

 

9.2                                 Cumulative
Remedies. 
Except as otherwise provided herein, none of the rights, powers or
remedies conferred upon the parties shall be mutually exclusive, and each such
right, power or remedy shall be cumulative and in addition to every other
right, power or remedy, whether conferred hereby or now or hereafter available
at law, in equity, by statute or otherwise.

 

ARTICLE
X

MISCELLANEOUS

 

10.1                           Waivers and
Amendments.  Upon the approval of the Company, and the written consent of the
each of the Investors (a) the obligations of the Company, and the rights of an
Investor under this Agreement may be waived (either generally or in a
particular instance, either retroactively or prospectively and either for a
specified period of time or indefinitely), and (b) the Company, may enter into
a supplemental agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement,
or of any supplemental agreement or modifying in any manner the rights and
obligations hereunder or thereunder of the Investors and the Company; provided,
however, that without each Investor’s written consent, no such amendment or
waiver shall affect adversely such Investor’s rights hereunder in a
discriminatory manner inconsistent with its adverse effects on rights of other
Investors hereunder (other than as reflected by the different number of shares
held by such Investors).

 

The foregoing notwithstanding, no such waiver or
supplemental agreement shall affect any of the rights of any holder of a
security created by any subsequent amendments to the Articles of Incorporation
or by the Nevada Revised Statutes without compliance with all applicable
provisions of the Articles of Incorporation as may be amended and the Nevada
Revised Statutes.

 

Neither this Agreement, nor any provision hereof,
may be changed, waived, discharged or terminated orally or by course of
dealing, but only by a statement in writing signed by the party

 

12

 

against which enforcement of
the change, waiver, discharge or termination is sought, except to the extent
provided in this Section.

 

10.2                           Notices. All notices, requests, consents and other communications
required or permitted hereunder shall be in writing and shall be hand delivered
or mailed postage prepaid by registered or certified mail or transmitted by
facsimile transmission (with immediate telephonic confirmation thereafter),

 

(a)                                  If to an
Investor, to the respective addresses set forth on the counterpart signature
pages of this Agreement signed by such Investor:

 

or                                      (b)                                If to the
Company:

 

 

Attention: Chief Executive Officer

Facsimile No.: (   )

 

or at such other
address as the Company or an Investor each may specify by written notice to the
others, and each such notice, request, consent and other communication shall
for all purposes of the Agreement be treated as being effective or having been
given when delivered if delivered personally, upon receipt of facsimile confirmation
if transmitted by facsimile, or, if sent by mail, at the earlier of its receipt
or 72 hours after the same has been deposited in a regularly maintained
receptacle for the deposit of United States mail, addressed and postage prepaid
as aforesaid.

 

10.3                           Indemnification
of the Company.

 

(a)                                  Each
Investor, severally as to itself and not jointly, hereby indemnifies the
Company against and agrees to hold the Company harmless from any and all Losses
arising out of any misrepresentation or breach of warranty by such Investor
pursuant to this Agreement.

 

(b)                                 Claims
Notice. 
In the event the Company wishes to assert a claim for indemnification
hereunder, (the “Indemnified Party”) it shall deliver written notice (a “Claims
Notice”) to the applicable Investor (the “Indemnifying Party”), specifying the
facts constituting the basis for, and the amount (if known) of the claim
asserted.

 

(c)                                  Third
Party Claims.  Upon making any indemnification payment, the Indemnifying Party
will, to the extent of such payment, be subrogated to all rights of the
Indemnified Party against any third party in respect of the Loss to which the
payment relates; provided, however, that until the Indemnified Party recovers
full payment of its Loss, any and all claims of the Indemnifying Party against
any such third party on account of the payment are hereby made expressly
subordinated and subjected in right of payment to the Indemnified Party’s
rights against such third party. 
Without limiting the generality of any other provision hereof, the
Indemnified Party and Indemnifying Party will duly execute upon request all
instruments reasonably necessary to evidence and perfect the above-described
subrogation and subordination rights.

 

13

 

(d)                                 Right
to Contest Claims of Third Parties.

 

(i)                                     If
an Indemnified Party asserts, or may in the future seek to assert, a claim for
indemnification hereunder because of any action, cause of action or suit
brought by any Person not a party to this Agreement (a “Third Party Claimant”)
that may result in a Loss with respect to which the Indemnified Party would be
entitled to indemnification pursuant to this Section 10.3 (an “Asserted
Liability”), the Indemnified Party shall deliver to the Indemnifying Party a
Claims Notice with respect thereto, which Claims Notice shall, in accordance
with the provisions of Section 10.2 hereof, be delivered as promptly as
practicable after an action in connection with such Asserted Liability is
commenced against the Indemnified Party.

 

(ii)                                  The Indemnifying Party shall have the right, upon written
notice to the Indemnified Party, to investigate, contest, defend or settle any
Asserted Liability that may result in a Loss with respect to which the
Indemnified Party is entitled to indemnification pursuant to this Section 10.3;
provided that (A) the counsel for the Indemnifying Party who conducts the
defense of such claim or litigation is reasonably satisfactory to the
Indemnified Party, and (B) the Indemnified Party may, at its option and at its
own expense, participate in the investigation, contesting, defense or
settlement of any such Asserted Liability through representatives and counsel
of its own choosing (it being understood that the Indemnifying Party shall bear
the cost of such counsel if the Indemnified Party in good faith determines that
it may have one or more defenses or counterclaims that are inconsistent with
one or more of those of the Indemnifying Party in respect of the Asserted
Liability); and, provided further, that the Indemnifying Party shall not settle
any Asserted Liability unless (i) such settlement is on exclusively monetary
terms and provides as an unconditional term an immediate release of the
Indemnified Party for all liability with respect to such Asserted Liability or
(ii) the Indemnified Party has consented to the terms of such settlement.  If requested by the Indemnifying Party, the
Indemnified Party will, at the sole cost and expense of the Indemnifying Party,
cooperate with reasonable requests of the Indemnifying Party and its counsel in
contesting any Asserted Liability, including, if appropriate and related to the
Asserted Liability in question, in making any counterclaim against the Third
Party Claimant, or any cross-complaint against any Person (other than the
Indemnified Party or its Affiliates). 
If the Indemnifying Party fails to undertake the defense of the Asserted
Liability reasonably promptly, the Indemnified Party may, at its option and at
the Indemnifying Party’s expense, to do so in such manner as it deems
appropriate; provided, however, that the Indemnified Party shall not settle or
compromise any Asserted Liability for which it seeks indemnification hereunder
without the prior written consent of the Indemnifying Party (which shall not be
unreasonably withheld or delayed).

 

(iii)                               The
Indemnifying Party may participate in (but not control) the defense of any
Asserted Liability that it has not elected to defend with its own counsel and
at its own expense.

 

(iv)                              The Indemnifying Party and the Indemnified Party shall make
mutually available to each other all relevant information in their possession
relating to any Asserted Liability (except to the extent that such action would
result in a loss of attorney-client privilege or would violate any applicable law)
and shall cooperate with each other in the defense thereof.

 

14

 

(e)                                  No Duplication; Sole Remedy.

 

(i)                                     Any
liability for indemnification hereunder shall be determined without duplication
of recovery by reason of the state of facts giving rise to such liability
constituting a breach of more than one representation or warranty.

 

(ii)                                  The
parties’ respective rights to indemnification provided for in this Section 10.3
shall be the exclusive remedy for any Losses for which indemnification is
provided hereunder; provided, however, that nothing contained herein shall
prevent an Indemnified Party from pursuing remedies that may be available to
such party under applicable law in the event of an Indemnifying Party’s failure
to comply with its indemnification obligations under this Section 10.3 or in
the case of fraud.

 

10.4                           Survival of
Representations, Warranties and Covenants.  The representations and warranties of the
parties hereto made pursuant to this Agreement shall survive the Closing until
two (2) years after the Closing Date, provided that the representations and
warranties contained in Sections 4.1, 4.2, 5.2, and 5.3 shall survive
indefinitely.

 

10.5                                 No
Implied Waivers.  No failure or delay by any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by
law.

 

10.6                           Successors
and Assigns.  All the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective parties
hereto, the successors and assigns of the respective Investors and the
successors of the Company whether so expressed or not.  None of the parties hereto may assign any of
its rights or obligations hereunder without the prior written consent of the
other parties hereto, except that an Investor may, without the prior consent of
the Company, assign its rights hereunder to any of its Affiliates.  This Agreement shall not inure to the
benefit of or be enforceable by any other Person.

 

10.7                           Headings.  The headings of the
Sections and paragraphs of this Agreement have been inserted for convenience of
reference only and do not constitute a part of this Agreement.

 

10.8                           Governing
Law. 
This Agreement will be governed by and construed under the laws of the
State of California without regard to conflicts of laws principles.  

 

10.9                           Expenses.  Except as otherwise
specifically provided in this Agreement, the parties to this Agreement shall
bear their respective costs and expenses incurred in connection with the
preparation and execution of this Agreement and the transactions contemplated
hereby.

 

10.10                     Jurisdiction.  Any suit, action or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the transactions contemplated
hereby may be brought in any federal or state court located in the County of
Los Angeles and State of California, and each of the parties hereby consents to
the jurisdiction of such courts (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and

 

15

 

irrevocably waives, to the fullest extent permitted by law,
any objection which it may now or hereafter have to the laying of the venue of
any such suit, action or proceeding in any such court or that any such suit,
action or proceeding which is brought in any such court has been brought in an
inconvenient forum.  Process in any such
suit, action or proceeding may be served on any party anywhere in the world,
whether within or without the jurisdiction of any such court.  Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 10.2 shall
be deemed effective service of process on such party.

 

10.11                     Waiver of
Jury Trial.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

10.12                     Counterparts;
Effectiveness. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, with the same effect as if all parties had signed the
same document.  All such counterparts shall
be deemed an original, shall be construed together and shall constitute one and
the same instrument.  This Agreement
shall become effective when each party hereto has received counterparts hereof
signed by all of the other parties hereto.

 

10.13                     Entire
Agreement.  This Agreement and the other Transaction Documents contain the
entire agreement among the parties hereto with respect to the subject matter
hereof and such Agreement supersedes and replaces all other prior agreements,
written or oral, among the parties hereto with respect to the subject matter
hereof.

 

10.14                     Severability.  If any term,
provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party.  Upon such a
determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent
possible.

 

10.15                     No Further
Obligation.  Following the Closing, except for the payment by each Investor of
the Purchase Price in accordance with the terms hereof, no Investor has any
further obligation to invest in the Company under this Agreement, the other
Transaction Documents, or any of the transactions contemplated hereby or
thereby.  

 

16

 

 

 

 

 

 

EXHBIT A

IRREVOCABLE PROXY 

 

[See
attachment]

 

 

17

 

 

EXHIBIT
B

ACCREDITED
INVESTOR QUESTIONNAIRE

 

To:                            Jasmine’s Garden (the “Company”)

 

The undersigned hereby
represents and warrants that the information contained in this accredited
investor questionnaire is true and accurate and acknowledges that the Company
is relying thereon.

 

Status as an “Accredited Investor”.  Investor is (check ALL that apply):

 

(i)                                               A natural person whose individual net worth
(assets less liabilities), or joint net worth with his or her spouse, exceeds
$1,000,000.

 

(ii)                                            A natural person whose individual income was
in excess of $200,000, or whose joint income with his or her spouse was in
excess of $300,000, in each of the two most recent years, and who has a
reasonable expectation of reaching the same income level for the current year.

 

(iii)                                         A director or an executive officer of the
Company.

 

(iv)                                        A bank, insurance company, registered
investment business development company, small business investment company or
employee benefit plan.

 

(v)                                           A savings and loan association, credit union,
or similar financial institution, or a registered broker or dealer.

 

(vi)                                        A private business development company.

 

(vii)                                     An organization described in Section
501(c)(3) of the Internal Revenue Code with assets in excess of $5,000,000.

 

(viii)                                  A corporation, Massachusetts or similar
business trust, or partnership with assets in excess of $5,000,000.

 

(ix)                                          A trust with assets in excess of $5,000,000.

 

(x)                                             An entity in which all of the equity owners
are accredited investors.  Also check
the item(s) [(i)-(ix)] that apply to the equity owners.  [This item is not available to an
irrevocable trust.]

 

(xi)                                          A
self-directed IRA, Keogh, or similar plan of which the individual directing the
investments qualifies as an “accredited investor” in one or more of items
(i)-(x) above.  Also check the item(s)
[(i)-(x)] that apply to the individual.

 

(xii)                                       None of the
above.

 

The undersigned submits this accredited investor
questionnaire as of the date written below.

 

	
   

  	
   

  
	
   

  	
   

  
			

 

18

 

SCHEDULE
1

 

	
  Investors

  	
   

  	
  Address

  	
   

  	
  Number of

  Shares of

  Common Stock

  Acquired

  	
   

  	
  Purchase

  Price

  	
   

  
	
  Xiong Xin Gan

  	
   

  	
   

  	
   

  	
  7,200,000

  	
   

  	
  $

  	
  360,000

  	
   

  
	
  Ruan Ju Xiang

  	
   

  	
   

  	
   

  	
  6,000,000

  	
   

  	
  $

  	
  300,000

  	
   

  
	
  Fan Xi

  	
   

  	
   

  	
   

  	
  5,400,000

  	
   

  	
  $

  	
  270,000

  	
   

  
	
  Fang Zao Jie

  	
   

  	
   

  	
   

  	
  1,250,000

  	
   

  	
  $

  	
  62,500

  	
   

  
	
  Wang Fu Xiang

  	
   

  	
   

  	
   

  	
  1,900,000

  	
   

  	
  $

  	
  95,000

  	
   

  
	
  Xu Zhu Zhuan

  	
   

  	
   

  	
   

  	
  3,750,000

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  Xu Zu Hong

  	
   

  	
   

  	
   

  	
  4,500,000

  	
   

  	
  $

  	
  225,000

  	
   

  

 

19Exhibit 4.2

 

IRREVOCABLE PROXY

 

WHEREAS, the undersigned is executing this
Irrevocable Proxy in connection with that certain Subscription Agreement dated
as of March 17, 2004 by and between Jasmines Garden (the “Company”) and certain
investors, including the undersigned (the “Agreement”); and

 

WHEREAS, capitalized terms not otherwise defined
herein have the meaning ascribed to them in the Agreement.

 

For good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged by the undersigned, the
undersigned, intending to be legally bound, hereby irrevocably constitutes and
appoints Yi Bo Sun (“Appointee”) with full power of substitution and
revocation, as the undersigned’s true and lawful agent, attorney and proxy, for
the undersigned and in the undersigned’s name, place and stead, giving and
granting to Appointee all the powers the undersigned would possess if
personally present, to vote all shares of common stock, par value $0.001 per
share, held by the undersigned (collectively, the “Shares”), in connection with
any matters, presented at any or all meetings, regular or special, of any
holders of voting securities of the Company, or any adjournments or
postponements thereof, in accordance with Appointee’s sole and absolute
discretion.

 

Notwithstanding the foregoing, Appointee shall
vote the undersigned’s Shares in favor of any proposal to increase the
authorized number of shares of common stock and to create a class of preferred
stock on terms and conditions as may be determined by the Company.

 

By executing this proxy, the undersigned hereby
revokes all proxies heretofore made by the undersigned.  The undersigned acknowledges that this proxy
is coupled with an interest in the Shares.

 

This Irrevocable Proxy shall be irrevocable by
the undersigned during its term, which shall expire on May 1, 2004.

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
  Name of Holder of Shares:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00063-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00063-of-00352.parquet"}]]