Document:

Unassociated Document

 

STOCK PURCHASE AGREEMENT

 

STOCK PURCHASE AGREEMENT (the “Agreement”), dated as of August   26  , 2014 (the “Effective Date”), by and among Aoxin Tianli Group, Inc., a British Virgin Islands corporation (“Buyer”), and each of the parties listed on Schedule A attached hereto (individually, a “Seller,” collectively, the “Sellers”)

RECITALS

 

A. The Sellers collectively are the record holders and beneficial owners of all of the issued and outstanding capital stock (the “Capital Stock”), of Wuhan Optical Valley Orange Technology Co., Ltd., a corporation organized under the laws of the People’s Republic of China (the “Company”).

 

B. Hubei Aoxin Science & Technology Group Co. Ltd. (“Aoxin Group”) and Guoqiang Wan are the holders of record and beneficial owners of 27,500,000 shares representing 55% of the issued and outstanding shares of the Company’s Capital Stock and Jin Wu is the beneficial owner of 15,000,000 shares representing 30% of the Company’s issued and outstanding shares of Capital Stock which are registered in the name of Ting Liu, his friend.  Aoxin Group, Guoqiang Wan, Jin Wu and Ting Liu are referred to collectively herein as the “Controlling Shareholders.”

 

C. Hai Liu, the CEO of the Company (the “Management Stockholder”), is the beneficial owner of 7,500,000 shares representing 15% of the outstanding shares of the Company’s Capital Stock, which shares are registered in the name of Li-Na-Deng, his mother.

 

D. The Controlling Stockholders desire to sell to Buyer, and Buyer desires to purchase from the Controlling Stockholders an aggregate of 40,000,000 shares of the Company’s Capital Stock, representing 80% of their 85% equity interest in the Company, with Aoxin Group retaining the remaining 5% equity interest in the Company.

 

E. The Management Stockholder also wishes to sell to Buyer his equity interest in the Company, and Buyer is willing to purchase from the Management Stockholder all 7,500,000 shares of the Company’s Capital Stock held by the Management Stockholder subject to the Company achieving certain Target Net Income (as defined herein below) in the fiscal years ending December 31, 2014, 2015 and 2016 (the “Earn Out Period”)..

 

F. As a condition to the sale of their shares, Jin Wu and Ting Liu, and Hai Liu and Li-Na-Deng have requested that Jin Wu and Hai Liu be granted options to repurchase their shares of Capital Stock on the terms and conditions set forth herein.

 

G. At the Effective Date, Buyer will hold of record and be the beneficial owner of 47,500,000 shares of the Company’s Capital Stock (the “Shares”), constituting 95% of the total issued and outstanding shares of the Company’s Capital Stock.   

 

  

  

  

 

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

 

Article I.                      Purchase and Sale

 

Section 1.01 Purchase and Sale of the Shares

 

(a) Upon the terms and subject to the conditions of this Agreement, each of the Sellers hereby assigns, transfers and delivers that number of shares of the Company (the “Company Shares”) set forth opposite such Seller’s name on Schedule A attached hereto, which Company Shares shall be free and clear of all liens, pledges, encumbrances, charges, restrictions or known claims of any kind, nature, or description (“Liens”).

 

(b) The aggregate purchase price for the Company Shares is (a) 2,149,000 common shares, par value $0.001 per share, of Buyer (the “Firm Buyer Shares”) payable to the Controlling Stockholders and (b) 403,000 common shares, par value $0.001 per share, of Buyer payable to the Managing Stockholder (the “Escrow Buyer Shares”)” and, together with the Firm Buyer Shares, collectively referred to herein as the “Buyer Shares” or the “Purchase Price”), payable as provided in Section 1.02 below.

 

(c) The Sellers hereby acknowledge that the distribution of the Buyer Shares among them has been determined by agreement among them and that the Management Stockholder has agreed to receive the Escrow Buyer Shares subject to certain provisions regarding the achievement of Target Net Income amounts during the Earn Out Period, as provided in Section 1.03 below.

 

Section 1.02 Deliveries by the Parties

 

(a) Buyer herewith delivers the Purchase Price, as follows:

 

(i) With respect to the Controlling Stockholders,  certificates  registered in the names of the Controlling Stockholders for the number of Firm Buyer Shares set opposite the name of the Controlling Stockholder on Schedule A attached hereto.  The Firm Buyer Shares issued to each Controlling Shareholder shall not be transferable by the holder thereof prior to September 1, 2015; and

 

(ii) With respect to the Management Stockholder, certificate(s) registered in the name of the Management Stockholder for the Escrow Buyer Shares, with any required transfer stamps affixed thereto, deposited in escrow, to be held in escrow, until ultimately released and disbursed in accordance with and subject to the terms and provisions of the Earn Out provisions set forth in Section 1.03 below.

 

  

  

  

 

(b) Sellers shall each deliver, or cause to be delivered, to Buyer:

 

(i) certificates for the number of Company Shares set opposite their names on Schedule A, in appropriate form, duly endorsed or accompanied by stock powers duly endorsed, and with any required transfer stamps affixed thereto, together with all other documents and instruments necessary to vest in Buyer all of such Seller’s right, title and interest in and to the Company Shares, free and clear of all Liens (other than restrictions arising pursuant to applicable securities laws);

 

(ii) the Company’s Corporate minute book, bank statements, invoices from previous periods, Tax statements, and miscellaneous historical documents; and

 

(iii) written resignations, substantially in the form attached as Exhibit B hereto, of certain officers of the Company and each director of the Company, all effective as of the date hereof.

 

Section 1.03 Earn Out Payment

 

(a) At the Effective Date, Buyer shall deposit the Escrow Buyer Shares in escrow, in certificated form (the “Escrowed Certificate”), evidencing collectively an aggregate of 403,000 common shares of Buyer.

 

(b)  On or before March 15 of 2015, 2016 and 2017 of each year the parties shall cause the Company to have prepared a consolidated income statement for the Company and its subsidiaries for the immediately preceding year (the “Company Income Statement”).  The Company Income Statement shall be prepared in accordance with United States generally accepted accounting principles (“GAAP”) consistently applied.  For purpose of this Agreement, “Net Income” for any year shall mean the Company’s net income, inclusive of non-recurring items, as shown on the Company Income Statement for such year and, for the avoidance of doubt, shall reflect the Company’s (i) gross yearly revenue minus (ii) the sum of all of the expenses on the Company Income Statement, including, without limitation, cost of goods sold, selling, general and administrative expenses, taxes, and interest, and a reasonable amount reflective of the cost of being a public company for such fiscal year, on a consolidated basis, using the Company Income Statement.  For the avoidance of doubt, for purposes of determining the Company’s Net Income for 2014, the Company Income Statement shall include the operations of the Company for the period from January 1, 2014 through to December 31, 2014.

 

(c) The Target Net Income amount for each of 2014, 2015 and 2016 is set forth on Schedule B.  For each fiscal year, there shall be computed a fraction (expressed as a decimal) equal to the actual Net Income for such year over the Target Net Income for such year provided that in any fiscal year in which the Net Income equals or exceeds 90% of the Target Net Income, the fraction shall be deemed to be 1.  For example, if the Net Income for 2014 is RMB 2.34 million, the fraction for such year shall be 1.  The number of shares to be delivered to the Management Stockholder shall be determined in 2017 and shall be equal to the product of (i) the product of the fractions for each fiscal year times (ii) the number of shares issuable to such Management Shareholder.

 

  

  

  

 

For example, if the Net Income for 2014, 2015 and 2016 are RMB2.34million, RMB6.9million and RMB8.4million, respectively, the number of shares to be delivered to the Management Stockholder would be 322,400 determined as follows:

 

(2.34  x 6.9 x 8.4) x 403,000 = number of shares, except that both 2.34/2.60 and 6.9/6.8 shall be deemed to be equal to 1,

                                 2.60     6.8    10.5                                                                       so the formula is:

 

 (1 x 1 x 0.8) x 403,000 = number of shares, or 0.8 x 403,000 = 322,400.

 

(d) Upon computation of the Net Income and the amount of shares due the Management Stockholder in 2017, the Buyer shall direct the escrow agent to deliver the shares due to the Management Stockholder and return the balance to the Buyer’s authorized but unissued shares.  If the Net Income for 2014 or 2015 is less than 90% of the Target Net Income for such years, so it is inevitable that the Management Stockholder will receive less than the 403,000 shares, the parties shall direct the escrow agent to return to the Buyer the number of shares which the Management Stockholder is no longer eligible to receive.

 

(e) Until such time as released from escrow and disbursed to the Management Stockholder in accordance with an Earn Out Payment, the Escrowed Certificate shall be deemed to be owned by the Management Stockholder and he shall receive any dividends or other distributions thereon and shall have the right to vote such shares or exercise such other rights as he may hold as a shareholder of Buyer.

  

(f)           (i) If the Target Net Income has been met for all three years, the Management Stockholder shall have the option, exercisable for a period of three months (the “Option Period”) commencing March 16 and terminating June 15, 2017, to purchase from Buyer up to 7,500,000 shares of the Capital Stock of the Company as appropriately adjusted to reflect any recapitalization, reorganization, merger, consolidation of stock by OV subsequent to the date hereof (the “Management OV Shares”).

(ii) If the Target Net Income has been met for all three years and Jin Wu and Ting Liu have not sold or otherwise transferred any of the 806,000 Firm Buyer Shares issued to them pursuant hereto then Jin Wu shall have the option, exercisable during the Option Period, to purchase from Buyer up to 15,000,000 shares of the Capital Stock of the Company as appropriately adjusted to reflect any recapitalization, reorganization, merger or consolidation of OV subsequent to the date hereof (the “Jin Wu OV Shares” and collectively with the Management OV Shares, the “OV Shares”).

(iii) If either the Management Stockholder or Jin Wu exercises his option to acquire OV Shares, he must use the Firm Buyer Shares or the Escrow Buyer Shares (“Issued Shares”) issued to him pursuant hereto to pay all or a portion of the purchase price of his OV shares and the Issued Shares and the OV Shares will be valued at the FMV thereof.  If the FMV of all of the Issued Shares of Management Stockholder or Jin Wu is less than the FMV of all of the OV Shares he may acquire, he shall pay for such portion of the OV Shares he desires to acquire by delivering an equal portion of his Issued Shares and shall not be required to pay any other consideration for his OV Shares.  For example, if the FMV of the Issued Shares held by Jin Wu is less than the FMV of the OV Shares he may acquire 1⁄2 of such OV Shares by transferring to Aoxin Tianli 1⁄2 of his Issued Shares and he shall not be required to deliver any additional consideration.  If the FMV of all of the OV Shares to be acquired by either Management Stockholder or Jin Wu is less than the FMV of his Issued Shares, then he need only deliver to Aoxin Tianli such portion of his Issued Shares as has a FMV equal to the OV shares he desires to acquire and may retain the balance of his Issued Shares.   Should the Management Stockholder or Jin Wu desire to exercise his option he shall do so by giving notice to the Buyer in accordance with the notice provisions of this Agreement.

 

  

  

  

 

(iv)  For purposes hereof, the FMV of either the Issued Shares or the OV Shares, at any date shall be deemed to be the last reported sale price, or, in case no such reported sale takes place on such day, the average of the last reported bid and asked prices for such day, in either case as officially reported by the principal securities exchange, if any, on which such shares are listed or admitted to trading, or, if the Issued Shares or the OV Shares, as the case may be, are not listed or admitted to trading on any exchange, the average closing sale price as furnished by a regulated reporting agency if such shares are regularly traded in an “over the counter” market, or if such shares are not listed on an exchange or regularly quoted in an over the counter market, as determined in good faith by resolution of the Board of Directors of Aoxin Tianli, based on the best information available to it. Solely for the purposes of this Section, FMV shall be calculated as the average of the last reported sales price or the average of the last reported bid and asked prices, as the case may be, for each of the five trading days immediately preceding the date on which a notice of exercise of his option is given by either the Management Stockholder or Jin Wu.

If due to a lack of a trading market for the Issued Shares or the OV Shares, it is necessary for the Board of Aoxin Tianli to determine their FMV, the Board shall, within twenty (20) days after a request for such determination by the Management Stockholder or Jin Wu, make such determination in good faith and shall provide the Management Stockholder and Jin Wu with a reasonably detailed written summary of the analysis used by the Board to determine such amount (the “Initial Notice”).  If the Management Stockholder or Jin Wu disagrees with the Board’s determination of FMV as set forth in the Initial Notice, he (the “Disputing Party”) shall deliver to the Board notice of such dispute within ten (10) days of receipt of the Initial Notice (a “Dispute Notice”).

The Board and the Disputing Party shall then negotiate in good faith for ten (10) days (or for such longer period as they mutually agree) in an effort to reach agreement on FMV.  If such negotiation is unsuccessful, the Board and Disputing Party shall promptly designate an Appraiser nationally recognized in China (and, if the parties are unable to agree upon an Appraiser within seven (7) days of the end of such negotiation period, either the Disputing Party or the Board may apply to the relevant court in Hubei and ask it to appoint such Appraiser, and the Person so appointed by the Court shall be the Appraiser).

 

  

  

  

 

On the fifth (5th) day after appointment of the Appraiser, the Disputing Party and the Board shall simultaneously deliver to the Appraiser a written notice of its final determination of FMV (each, a “Valuation Notice”).  The Appraiser shall be instructed to determine, within thirty (30) days of its receipt of all Valuation Notices, which of the FMVs submitted by the Board and the Disputing Party in its Valuation Notice is closer to the actual FMV, and whichever is determined to be closer shall be the final FMV, as applicable.  In making such determination, the Appraiser (x) shall be instructed that the initial determination of FMV set forth in the Initial Notice shall not be used as evidence of the actual FMV or the correctness of the Board’s or the Disputing Party’s determination of FMV set forth in the Valuation Notice and (y) may request additional submissions information from the Board or Disputing Party.  Such Appraiser’s decision will be final and binding on the parties and the costs for the appraisal will be borne by the party whose FMV was not determined by the Appraiser to be closer to the actual FMV.

(v) The right of the Management Stockholder or Jin Liu to exercise the option granted herein shall terminate immediately if he or, in the case of Ting Liu, Jin Wu, for any reason, is no longer employed by the Company or a member of its Board of Directors.

(vi)  If the Management Stockholder and Jin Wu both exercise their options, no matter when actually exercised they will be deemed  have been exercised on the same date.

(g) No later than the end of the first quarter of 2016 the Buyer will adopt a Stock Option Incentive Plan.

 

Article II.              REPRESENTATIONS AND WARRANTIES REGARDING SHARES AND AGREEMENT

 

Each Seller represents and warrants to Buyer as of the date hereof that the statements contained in this Article II are true and correct:

 

Section 2.01 Title to Shares.

 

(a) Seller has good and valid title to the Company Shares set opposite such Seller’s name on Schedule A attached hereto, free and clear of all (other than encumbrances arising pursuant to applicable securities laws).  Upon delivery of any certificate or certificates duly assigned, representing the same as herein contemplated and/or upon registering of Buyer as the new owner of such Company Shares in the share register of the Company, Buyer will receive good title to such Company Shares, free and clear of all Liens.

 

(b) Other than this Agreement, the Company Shares are not subject to any voting trust agreement or other contract, lease, license, indenture, note, bond, agreement, concession, franchise or other instrument (“Contract”), including any Contract restricting or otherwise relating to the voting, dividend rights or disposition of the Company Shares.

 

Section 2.02 Capacity and Enforceability.

 

Seller has the necessary legal right, power and capacity to execute, deliver and perform under this Agreement and the transactions contemplated hereby.   This Agreement has been duly executed and delivered by Seller and, assuming due authorization, execution and delivery by Buyer, constitutes Seller’s legal, valid and binding obligation, enforceable against him in accordance with its terms.

 

  

  

  

 

Section 2.03 No Conflicts; Consents.

 

(a) The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or provision of, or constitute an event of default under, any material indenture, mortgage, deed of trust or other material contract, agreement or instrument to which Seller is a party or to which any of their properties or operations are subject, or result in the creation of any Lien on the Company Shares.

 

(b) No material consent, approval, waiver, license, permit, order or authorization (“Consent”) of, or registration, declaration or filing with, or Governmental Authorization from, any Federal, state, local, tribal or foreign government or any court of competent jurisdiction, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign (a “Governmental Entity”) is required to be obtained or made by Seller in connection with the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated by this Agreement.

 

Section 2.04 Purchase of Shares for Investment

 

(a) The shares acquired by Sellers pursuant to this Agreement are being acquired as an investment for Sellers’ own account and not as a nominee or agent, and not with a view to any public distribution thereof.  No Seller shall offer to sell or otherwise dispose of, or sell or otherwise dispose of, the Shares so acquired by it in violation of any of the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”).

 

(b) Each Seller which is to receive shares represents and warrants that such Seller (i) can bear the economic risk of such Seller’s respective investments, and (ii) possesses such knowledge and experience in financial and business matters that such Seller is capable of evaluating the merits and risks of the investment in the Buyer and its securities.

 

(c) No Seller which is to receive shares is a “U.S. Person” as defined in Rule 902(k) of Regulation S of the Securities Act (“Regulation S”) and understands that the shares to be issued to him are not registered under the Securities Act and that the issuance thereof to such Seller is intended to be exempt from registration under the Securities Act pursuant to Regulation S.  No Seller has any intention of becoming a U.S. Person.  At the time of the origination of contact concerning this Agreement and the date of the execution and delivery of this Agreement, the Buyer and Sellers were outside of the United States.  Each certificate representing the shares to be issued to Sellers shall be endorsed with the following legends, in addition to any other legend required to be placed thereon by applicable federal or state securities laws:

 

“THE SECURITIES ARE BEING OFFERED TO INVESTORS WHO ARE NOT U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“SECURITIES ACT”)) AND WITHOUT REGISTRATION WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT IN RELIANCE UPON REGULATION S PROMULGATED UNDER THE SECURITIES ACT.”

 

  

  

  

 

“TRANSFER OF THESE SECURITIES IS PROHIBITED, EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO AVAILABLE EXEMPTION FROM REGISTRATION.  HEDGING TRANSACTIONS MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.”

 

In addition, the following legend will appear only on the certificates representing the shares issued to the Controlling Shareholders:

 

“TRANSFER OF THESE SECURITIES PRIOR TO SEPTEMBER 1, 2015 IS PROHIBITED.”

 

 Each Seller understands that the shares to be acquired by him may not be sold, transferred, or otherwise disposed of without registration under the Securities Act or an exemption therefrom, and that in the absence of an effective registration statement covering the Shares or any available exemption from registration under the Securities Act, the Shares may have to be held indefinitely.

 

Section 2.05 No Broker.

 

No broker, investment banker, financial advisor or other person, is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with this Agreement or the transactions contemplated hereby based upon arrangements made by or on behalf of Seller.

 

Article III.               REPRESENTATIONS AND WARRANTIES REGARDING COMPANY

 

The Sellers, jointly and severally, represent and warrant to Buyer as of the date hereof that the statements contained in this Article III are true and correct:

 

Section 3.01 Organization.

 

The Company is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized and has full corporate power and authority and possesses all governmental franchises, licenses, permits, authorizations and approvals necessary to enable it to own, lease or otherwise hold and operate its properties and assets and to conduct its businesses as presently conducted.  The Company is duly qualified to do business in each jurisdiction where the nature of its business or its ownership, operation or leasing of its properties make such qualification necessary.

 

Section 3.02 Capitalization.

 

(a) The Company’s authorized and outstanding capitalization consists of 50 million shares of capital stock.   The Shares to be acquired by Buyer constitute 95% of the issued and outstanding shares of Capital Stock of the Company and are duly authorized, validly issued, fully paid and non-assessable and were not issued in violation of any applicable foreign, federal or state securities laws, of the Company’s organizational documents, or of any preemptive or other rights of any Person.

 

  

  

  

 

(b) There are no (i) outstanding options, warrants, puts, calls, convertible securities, preemptive or similar rights, (ii) bonds, debentures, notes or other indebtedness having general voting rights or that are convertible or exchangeable into securities having such rights, or (iii) subscriptions or other rights, agreements, arrangements, or commitments of any character, relating to the issued or unissued Capital Stock of, or other equity interests in, the Company or obligating the Company to issue, transfer, deliver or sell any options or Capital Stock of, or other equity interest in, the Company or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment for such equity interest.  There are no outstanding obligations of the Company to repurchase, redeem or otherwise acquire any capital stock of, or other equity interests in, the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any other entity.

 

(c) There are not any registration rights, and there is no voting trust, proxy, rights plan, anti-takeover plan or other agreement or understanding to which the Company is a party or by which it is bound with respect to any equity security of any class of the Company, and there are no agreements to which the Company is a party, or which the Company has knowledge of, which conflicts with this Agreement or the transactions contemplated herein or otherwise prohibits the consummation of the transactions contemplated hereunder.

 

(d) The Company has not entered into any other agreements or commitments to issue any Capital Stock or ratified any future split, combination or reclassification of the Capital.

 

Section 3.03 Subsidiaries; Equity Interests of the Company

 

(a) Except for its interests in the subsidiary set forth on Schedule C (the “Subsidiary”), the Company does not as of the date of this Agreement own, directly or indirectly, any capital stock, membership interest, partnership interest, joint venture interest or other equity interest in any person.  All the outstanding equity interests of the Subsidiary directly or indirectly held by the Company have been validly issued and are fully paid, nonassessable and owned by the Company, free and clear of Liens. The Company owns all of the outstanding capital stock of each Subsidiary.

 

(b) The Subsidiary is validly existing and in good standing under the Laws of the jurisdiction of its formation, has all requisite power to own, lease and operate its properties and to carry on its business as currently conducted and as proposed to be conducted, and is duly qualified to do business and is in good standing in each jurisdiction in which it owns or leases property or conducts any business so as to require such qualification.

 

(c) There are no obligations, contingent or otherwise, of the Company to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any Person.

 

  

  

  

 

Section 3.04 No Conflicts; Authorizations

 

(a) The execution and delivery of this Agreement by the Sellers does  not, and the consummation by Sellers of the transactions contemplated hereby (in each case, with or without the giving of notice or lapse of time, or both) will not, directly or indirectly, (i) violate the provisions of any of the organizational documents of the Company or the Subsidiary, (ii) violate or constitute a default, an event of default or an event creating rights of acceleration, termination, cancellation, imposition of additional obligations or loss of rights, or require a consent to assignment, under any Contract to which the Company or the Subsidiary is a party, or by which the Company or the Subsidiary or any of their respective assets is bound, (iii) violate or conflict with any Law applicable to the Company or any Subsidiary, or give any Governmental Entity or other Person the right to challenge any of the transactions contemplated by this Agreement, or (iv) result in the creation of any Liens upon any of the assets owned or used by the Company or the Subsidiary.

 

(b) No Authorization or registration, declaration or filing with, or notice to, any Governmental Entity or other Person is required by or with respect to the Company or the Subsidiary in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby.

 

Section 3.05 Financial Statements

 

(a) The Sellers have made available to Buyer true and complete copies of (i) the consolidated balance sheets of the Company as of December 31, 2013, and June 30, 2014, and the related consolidated statement of operations, changes in the Company’s equity and cash flows for the fiscal year ended December 31, 2013, and the six month period ended June 30, 2014 (such financial statements, the “Company Financial Statements”).

 

(b) The Company Financial Statements (i) fairly present in all material respects the consolidated financial condition and the consolidated results of operations, changes in the Company’s equity, and cash flows of the Company as of the respective dates of, and for the periods referred to in, the Company Financial Statements and (ii) have been prepared in accordance with GAAP, applied on a consistent basis during the periods involved.  The Financial Statements are based on the books and records of the Company and the Subsidiary and fairly present the financial condition of the Company on a consolidated basis as of the respective dates they were prepared and the results of the operations of the Company for the periods indicated.

 

Section 3.06 No Undisclosed Liabilities

 

(a) The Company and the Subsidiary have no liabilities, obligations or commitments of any nature whatsoever, asserted or unasserted, known or unknown, absolute or contingent, accrued or unaccrued, matured or unmatured or otherwise, except (a) those which are adequately reflected or reserved against in the Company Financial Statements as of the respective dates thereof, and (b) those which have been incurred in the ordinary course of business and consistent with past practice since June 30, 2014 and which are not, individually or in the aggregate, material in amount.

 

  

  

  

 

Section 3.07 Inventory

 

(a) All inventory of the Company and the Subsidiary (including materials, supplies, parts, work-in-process and finished goods) is of a quality, quantity and condition useable or saleable in the ordinary course of business. None of such inventory is obsolete and no write-down of such inventory has been made or should have been made in the period since June 30, 2014. The quantities of each item of inventory are not excessive and are reasonable in the present circumstances of the Company and its Subsidiary. All work-in-process and finished goods inventory is free of any defect or other deficiency.

 

Section 3.08 Taxes

 

The Company has filed all foreign, national, municipal, provincial, local tax returns of any kind whatsoever, including its VAT returns, required to be filed by the date hereof.  Each of such tax returns reflects the taxes due for the period covered thereby and the Company has paid all such amounts. The Company has no liabilities with respect to the payment of any taxes (including any deficiencies, interest or penalties), except for taxes accrued but not yet due and payable.

 

Section 3.09 Books and Records

 

All of the books and records of the Company are complete and accurate in all material respects and have been maintained in the ordinary course and in accordance with applicable laws and standard industry practices with regard to the maintenance of such books and records.  The records, systems, controls, data and information of the Company and its subsidiaries are recorded, stored, maintained and operated under means (including any electronic, mechanical or photographic process, whether computerized or not) that are under the exclusive ownership and direct control of the Company or its accountants (including all means of access thereto and therefrom).

 

Section 3.10 Compliance with Law

 

The Company is in compliance with all laws applicable to it and the conduct of its business as currently conducted.  The Company is not in conflict with, or in default or violation of, nor has it received any notice of any conflict with, or default or violation of, (a) any applicable law by which the Company or any of its property or assets is bound or affected, or (b) any agreement to which the Company was a party or by which the Company or any property, asset or right of the Company was bound or affected, except, in each case, for any such conflicts, defaults or violations that would not reasonably be expected to have a material adverse effect.

 

Section 3.11 Business Operations and Assets.

 

(a) Each of the Company and its Subsidiary owns, holds or lawfully uses in the operation of its business all Authorizations which are necessary for it to conduct its business as currently conducted or for the ownership and use of the assets owned or used by the Company or the Subsidiary in the conduct of its business free and clear of all Liens. Such Authorizations are valid and in full force and effect and none of such Authorizations will be terminated or impaired or become terminable as a result of the transactions contemplated by this Agreement.

 

  

  

  

 

(b) All real property used in or necessary for the conduct of the businesses and operations of the Company and its Subsidiary as currently conducted and as proposed to be conducted is in suitable condition and currently owned in fee or leased by the Company and the Subsidiary, with good and marketable title or exclusive possession thereto. No Governmental Entity having the power of eminent domain over the real property has commenced or, to Sellers’ Knowledge, intends to exercise the power of eminent domain or a similar power with respect to all or any part of such real property.

 

(c) All buildings, plants, leasehold improvements, structures, facilities, equipment and other items of tangible property and assets which are owned, leased or used by the Company or the Subsidiary are structurally sound, are in good operating condition and repair (subject to normal wear and tear given the use and age of such assets), are usable in the ordinary course of business and conform [in all material respects] to all Laws and Authorizations relating to their construction, use and operation.

 

(d) All contracts, agreements, franchises, license agreements, and other commitments to which the Company or any Subsidiary is party or is bound as of the date hereof necessary for the conduct of the businesses and operations of the Company and its Subsidiaries as currently conducted and as proposed to be conducted (the “Material Contracts”) constitutes a valid and binding obligation of the Company or Subsidiary and, to the Sellers’ Knowledge, the other parties thereto; (b) assuming such Material Contract is a valid and binding obligation of and enforceable against the other parties thereto, is enforceable against the Company or the Subsidiary, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting the enforcement of creditors’ rights in general and subject to general principles of equity and (c) neither the Company nor the Subsidiary is in breach or default, and no event has occurred which, with due notice or lapse of time or both, would constitute a breach or default by the Company or the Subsidiary, under any Material Contract, and neither the Company nor Subsidiary has given notice of a material breach or material default of any material provision thereof to any other party thereto.

 

Section 3.12 Absence of Certain Changes or Events

 

Since June 30, 2014:

 

(a) the Company and its Subsidiary has been operated in the ordinary course of business as was operated in the past with no extraordinary actions or transactions.

 

(b) there has not been: (A) any material adverse change in the business, operations, properties, assets or condition of the Company or its Subsidiary or (B) any damage, destruction or loss to the Company (whether or not covered by insurance) materially and adversely affecting the business, operations, properties, assets or condition of the Company or its Subsidiary;

 

(c) the Company has not: (A) amended its organizational documents; (B) declared or made, or agreed to declare or make any payment of dividends or distributions of any assets of any kind whatsoever to Buyers or purchased or redeemed, or agreed to purchase or redeem, any of its capital stock; (C) waived any rights of value which in the aggregate are outside of the ordinary course of business or material considering the business of the Company; (D) made any material change in its method of management, operation, or accounting; (E) entered into any transactions or agreements of any kind or nature outside the ordinary course of business; (F) made any accrual or arrangement for or payment of bonuses or special compensation of any kind or any severance or  termination pay to any present or former officer or employee; (G) borrowed any money from the Sellers or (H) made any material change to a material contract by which the Company or any of  its assets is bound;

 

  

  

  

 

(d) the Company and its Subsidiary have not: (A) borrowed or agreed to borrow any funds or incurred, or become subject to, any material obligation or liability (absolute or contingent); (B) paid or agreed to pay any material obligations or liabilities (absolute or contingent) other than current liabilities reflected in or shown on the most recent balance sheet and current liabilities incurred since that date in the ordinary course of business and professional and other fees and expenses in connection with the preparation of this Agreement and the consummation of the transactions contemplated hereby; or (C) sold or transferred, or agreed to sell or transfer any of its assets, properties or rights or canceled, or agreed to cancel, any debts or claims; and

 

(e) the Company and its Subsidiary did not become subject to any law or regulation, which materially and adversely affects, or in the future, may adversely affect, the business, operations, properties, assets or condition of the Company as described in its financial statements.

 

Section 3.13 Litigation

 

There are no actions, suits, orders, proceedings or investigations pending or, to the Sellers’ Knowledge threatened by or against the Company or its Subsidiary or affecting the Company, its Subsidiary or their respective properties, at law or in equity, before any court or other governmental authority or instrumentality, domestic or foreign, or before any arbitrator of any kind.  The Company has no knowledge of any default on its part with respect to any judgment, order, writ, injunction, decree, award, rule or regulation of any court, arbitrator, or governmental authority or instrumentality or any circumstance, which after reasonable investigation would result in the discovery of such default.

 

Section 3.14 Product Warranty

 

There are no warranties (express or implied) outstanding with respect to any products currently or formerly manufactured, sold, distributed, provided, shipped or licensed (“Products”), or any services rendered, by the Company or the Subsidiary, beyond that set forth in the standard conditions of sale or service.  Each Product manufactured, sold, distributed, provided, shipped or licensed, or service rendered, by the Company or the Subsidiary has been in conformity with all applicable contractual commitments and warranties. There are no material design, manufacturing or other defects, latent or otherwise, with respect to any Products and such Products are not toxic when used in accordance with their intended use. Each Product that has been manufactured, sold, distributed, provided, shipped or licensed prior to the date hereof contains all warnings required by applicable Law and such warnings are in accordance with reasonable industry practice.

 

  

  

  

 

Section 3.15 Labor and Employment Matters

 

(a) As of the date hereof, the Company is not a party to and has no obligation to perform (absolute or contingent) under any oral or written: (i) profit sharing, bonus, deferred compensation, stock option, severance pay, pension benefit or retirement plan, (ii) agreement, contract, commitment or indenture relating to the borrowing of money, (iii) guaranty of any obligation; (iv) collective bargaining agreement; or (v) agreement with any present or former officer or director of the Company.

 

(b) None of the execution and delivery of this Agreement or the consummation of the transactions contemplated by this Agreement (alone or in conjunction with any other event) will (i) entitle any Company personnel to any material compensation or benefit under any employee or other benefit plan, (ii) accelerate the time of payment or vesting, or trigger any payment or funding, of any material compensation or benefits or trigger any other material obligation under any employee or other benefit plan or (iii) result in any breach or violation of or default under or limit the Company’s right to amend, modify or terminate any material Benefit Plan or material Benefit Agreement.

 

(c) Neither the Company nor the Subsidiary is a party or subject to any labor union or collective bargaining agreement. There have not been since establishment and there are not pending or threatened any labor disputes, work stoppages, requests for representation, pickets, work slow-downs due to labor disagreements or any actions or arbitrations which involve the labor or employment relations of the Company or the Subsidiary. No event has occurred or circumstance exist that may provide the basis of any work stoppage or other labor dispute.

 

Section 3.16 Completeness of Disclosure

 

No representation or warranty by any Seller in this Agreement, and no statement made by any Seller in any certificate or other document furnished or to be furnished to Buyer pursuant hereto, or in connection with the negotiation, execution or performance of this Agreement, contains any untrue statement of a material fact or omits or will omit to state a material fact required to be stated herein or therein or necessary to make any statement herein or therein not misleading.  Except as specifically set forth in this Agreement, there are no facts or circumstances of which any Seller is aware that could be expected to have, individually or in the aggregate, a material adverse effect on the condition (financial or otherwise), operations, prospects or results of operations of the Company and its Subsidiary taken as a whole.

 

 

Article IV.             REPRESENTATIONS AND WARRANTIES OF BUYER

 

Buyer represents and warrants to Sellers that each statement contained in this Article IV is true and correct as of the date:

 

Section 4.01 Organization and Good Standing

 

Buyer is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, and has all requisite corporate power to own, lease and operate its properties and to carry on its business as now being conducted.

 

  

  

  

 

Section 4.02 Authority and Enforceability

 

Buyer has the requisite power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Buyer. This Agreement has been duly executed and delivered by Buyer and, assuming due authorization, execution and delivery by Seller, constitutes the valid and binding obligation of Buyer, enforceable against it in accordance with its terms, except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting or relating to creditors’ rights generally, and (b) the availability of injunctive relief and other equitable remedies.

 

Section 4.03 No Conflicts; Authorizations

 

(a) The execution and delivery of this Agreement by Buyer do not, and the consummation of the transactions contemplated hereby by Buyer will not, (i) violate the provisions of any of the organizational documents of Buyer, (ii) violate any Contract to which Buyer is a party, (iii) to the knowledge of Buyer, violate any Law of any Governmental Entity applicable to Buyer on the date hereof, or (iv) to the knowledge of Buyer, result in the creation of any Liens upon any of the assets owned or used by Buyer, except in each such case where such violation or Lien would not reasonably be expected to impair materially the ability of Buyer to perform its obligations under this Agreement or consummate the transactions contemplated hereby.

 

(b) No Authorization or Order of, registration, declaration or filing with, or notices to any Governmental Entity is required by Buyer in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby.

 

Section 4.04 SEC Filings; Financial Statements. 

 

(a) Buyer has made available to the Management Stockholder a correct and complete copy, or there has been available on EDGAR, copies of each report, registration statement and definitive proxy statement filed by Buyer with the SEC since December 31, 2011 (the “SEC Reports”), which are all the forms, reports and documents required to be filed by Buyer with the SEC since December 31, 2011.  As of their respective dates, the SEC Reports: (i) were prepared in accordance and complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder applicable to such SEC Reports, and (ii) did not at the time they were filed (and if amended or superseded by a filing prior to the date of this Agreement then on the date of such filing and as so amended or superseded) 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.

 

(b)  Included in the SEC Reports are (i) the audited balance sheets of the Company as of December 31, 2013 and December 31, 2012 and the related audited statements of operations, stockholders’ equity and cash flows for December 31, 2013 and December 31, 2012, together with the notes to such statements and the opinion of its independent certified public accountants, with respect thereto; and (ii) the unaudited balance sheet of the Company as of June 30, 2014 and the related unaudited statements of operations, stockholders’ equity and cash flows for the six months and three months ended June 30, 2014 and June 30, 2013, together with the notes to such statements.

 

  

  

  

 

(c) Each set of financial statements (including, in each case, any related notes thereto) contained in the SEC Reports comply as to form in all material respects with the published rules and regulations of the SEC with respect thereto, were prepared in accordance with U.S. GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto) and each fairly presents in all material respects the financial position of Buyer at the respective dates thereof and the results of its operations and cash flows for the periods indicated, except that the unaudited interim financial statements were or are subject to normal adjustments which were not or are not expected to have a  material adverse effect upon the business, prospects, management, properties, operations, condition (financial or otherwise) or results of operations of Buyer, taken as a whole. The balance sheets of Buyer included in the SEC Reports are true and accurate and present fairly as of their respective dates the financial condition of Buyer.  The statements of operations, stockholders’ equity and cash flows reflect fairly the information required to be set forth therein by generally accepted accounting principles.

 

Section 4.05 Capitalization; Stock Consideration.

 

(a) Buyer’s authorized capitalization consists of 50,000,000 shares of common stock, par value $0.001 per share, and is in the process of being increased to 100,000,000 shares of common stock, $0.001 per share.  Except as provided in this Agreement with respect to the Stock Consideration, the outstanding common stock of Buyer  is as set forth in the most recent SEC Report and there are no (i) outstanding options, warrants, puts, calls, convertible securities, preemptive or similar rights, (ii) bonds, debentures, notes or other indebtedness having general voting rights or that are convertible or exchangeable into securities having such rights, or (iii) subscriptions or other rights, agreements, arrangements, or commitments of any character, relating to the issued or unissued capital stock of, or other equity interests in, Buyer or obligating Buyer to issue, transfer, deliver or sell any options or common stock of, or other equity interest in, Buyer or securities convertible into or exchangeable for such shares or equity interests, or obligating Buyer to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment for such equity interest, are all, as of the dates thereof, as described in the SEC Reports.  There are no outstanding obligations of Buyer to repurchase, redeem or otherwise acquire any capital stock of, or other equity interests in, Buyer or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any other entity.

 

(b) The Stock Consideration, when issued, and then released and delivered to any Management Stockholder in accordance with the terms of the Earn Out Payment provisions of this Agreement, will be duly and validly issued, fully paid and non-assessable, free from any Liens (except for any restrictions on transfer under applicable securities and other Laws).  The issuance of the shares of Buyer’s common stock constituting the Stock Consideration pursuant to this Agreement is not subject to any preemptive rights, rights of first refusal or similar rights.

 

Section 4.06 Brokers or Finders

 

No broker, investment banker, financial advisor or other person, is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with this Agreement or the transactions contemplated hereby based upon arrangements made by or on behalf of Buyer.

 

  

  

  

 

Article V.              INDEMNIFICATION

 

Section 5.01 Survival

 

(a) All representations and warranties contained in this Agreement, or in any Schedule, certificate or other document delivered pursuant to this Agreement, shall survive the Closing for a period of 18 months, except for those representations and warranties related to taxes and employee benefit plans, which shall survive the Closing until 60 days after the expiration of the applicable statute of limitations period (after giving effect to any waivers and extensions thereof).

 

(b) The period for which a representation or warranty, covenant or agreement survives the Closing is referred to herein as the “Applicable Survival Period.” In the event a Notice of Claim for indemnification under Section 5.02 is given within the Applicable Survival Period, the representation or warranty, covenant or agreement that is the subject of such indemnification claim (whether or not formal legal action shall have been commenced based upon such claim) shall survive with respect to such claim until such claim is finally resolved. The Indemnitor shall indemnify the Indemnitee for all Losses (subject to the limitations set forth herein, if applicable) that the Indemnitee may incur in respect of such claim, regardless of when incurred.

 

Section 5.02 Indemnification by Seller

 

Sellers shall jointly and severally indemnify and defend Buyer and its Affiliates (including, following the Closing, the Company and the Subsidiary) and their respective members, managers, officers, directors, employees, agents, successors and assigns (the “Buyer Indemnitees”) against, and shall hold them harmless from, any and all losses, damages, claims (including third party claims), charges, interest, penalties, Taxes, diminution in value, costs and expenses (including legal, consultant, accounting and other professional fees; collectively, “Losses”) resulting from, arising out of, or incurred by any Buyer Indemnitee in connection with, or otherwise with respect to:

 

(a) the failure of any representation and warranty or other statement by any Seller contained in this Agreement, or any certificate or other document furnished or to be furnished to Buyer in connection with the transactions contemplated by this Agreement, to be true and correct in all respects as of the date of the Effective Date;

 

(b) any breach of any covenant or agreement of any Seller contained in this Agreement, or any certificate or other document furnished or to be furnished to Buyer in connection with the  transactions contemplated by this Agreement; and

 

(c) any fees, expenses or other payments incurred or owed by any Seller, the Company or the Subsidiary to any agent, broker, investment banker or other firm or person retained or employed by it in connection with the transactions contemplated by this Agreement.

 

  

  

  

 

Section 5.03 Other Rights and Remedies Not Affected

 

The indemnification rights of the parties under this Article V are independent of and in addition to such rights and remedies as the parties may have at Law or in equity or otherwise for any misrepresentation, breach of warranty or failure to fulfill any agreement or covenant hereunder on the part of any party hereto, including the right to seek specific performance, rescission or restitution, none of which rights or remedies shall be affected or diminished hereby.

 

Article VI.              MISCELLANEOUS

 

Section 6.01 Further Assurances

 

Subject to the terms of this Agreement, each of Buyer and the Sellers shall execute such documents and other instruments and take such further actions as may be reasonably required to carry out the provisions hereof and consummate the transactions contemplated hereby.

 

Section 6.02 Entire Agreement.

 

This Agreement embodies the entire agreement and understanding among Buyer, the Company and each of the Sellers with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings relating to the subject matter hereof.   No statement, representation, warranty, covenant or agreement of any kind not expressly set forth in this Agreement shall affect, or be used to interpret, change or restrict, the express terms and provisions of this Agreement.

 

Section 6.03 Amendment; Waiver.

 

(a) The terms and provisions of this Agreement may be modified or amended only by written agreement executed by all parties hereto.

 

(b) The terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by written document executed by the party entitled to the benefits of such terms or provisions.  No such waiver or consent shall be deemed to be or shall constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether or not similar.  Each such waiver or consent shall be effective only in the specific instance and for the purpose for which it was given, and shall not constitute a continuing waiver or consent.

 

Section 6.04 Assignment.

 

The rights and obligations under this Agreement may not be assigned by either party hereto without the prior written consent of the other party.

 

  

  

  

 

Section 6.05 Governing Law.

 

This Agreement (and the schedules hereto) shall be governed by and interpreted and enforced in accordance with the Laws of Hubei Province, P.R.C., without giving effect to any choice of Law or conflict of Laws rules or provisions of Hubei Province that would cause the application of the Laws of any jurisdiction other than those of Hubei Province or the P.R.C.

 

Section 6.06 Binding Effect.

 

This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

 

Section 6.07 Notice.

 

Any notice, request, demand, waiver, consent, approval or other communication which is required or permitted hereunder shall be in writing and shall be deemed given (a) on the date established by the sender as having been delivered personally, (b) on the date delivered by a private courier as established by the sender by evidence obtained from the courier, (c) on the date sent by facsimile, with confirmation of transmission, if sent during normal business hours of the recipient, if not, then on the next business day, or (d) on the fifth day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications, to be valid, must be addressed as follows:

 

	if to Buyer, to: 	Aoxin Tianli Group, Inc. 
Suite K, 12th Floor, Building A, Jiangjing Mansion

228 Yanjiang Ave., Jiangan District, Wuhan City

Hubei Province, China 430010

	 	 
	with a copy to: 	Eaton & Van Winkle LLP 
Attn: Vincent J. McGill

3 Park Avenue, 16th floor

New York, New York 10016

	 	 
	 
if to Seller:

	 
to the address set forth opposite such Seller’s name in Schedule A attached hereto.

 

Section 6.08 Specific Performance.

 

The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of the P.R.C. or Hubei Province, located in Hubei Province, this being in addition to any other remedy to which they are entitled at law or in equity.  In addition, each of the parties hereto (a) consents to submit itself to the personal jurisdiction of any  provincial court sitting in Hubei Province in the event any dispute between the parties hereto arises out of this Agreement solely in connection with such a suit between the parties, (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court and (c) agrees that it will not bring any action relating to this Agreement in any court other than a provincial court sitting in Hubei Province.

 

  

  

  

 

Section 6.09 Severability

 

Each party agrees that, should any court or other competent authority hold any provision of this Agreement or part hereof to be null, void or unenforce­able, or order any party to take any action inconsistent herewith or not to take an action consistent herewith or required hereby, the validity, legality and enforceability of the remaining provisions and obligations contained or set forth herein shall not in any way be affected or impaired thereby, unless the foregoing inconsistent action or the failure to take an action constitutes a material breach of this Agreement or makes the Agreement impossible to perform in which case this Agreement shall terminate.

 

Section 6.10 Headings.

 

The captions appearing in this Agreement are inserted only as a matter of convenience and for reference and in no way define, limit or describe the scope and intent of this Agreement or any of the provisions hereof.

 

Section 6.11 Interpretation

 

The parties have participated jointly in the negotiation and drafting of this Agreement. Any rule of construction or interpretation otherwise requiring this Agreement to be construed or interpreted against any party by virtue of the authorship of this Agreement shall not apply to the construction and interpretation hereof.

 

Section 6.12 Counterparts.

 

This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original and all of which taken together shall constitute a single agreement.  In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

 

[Remainder of Page Intentionally Left Blank]

 

  

  

  

 

[Signature page to Stock Purchase Agreement]

 

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

 

	 
[BUYER]

	 
 
Aoxin Tianli Group, Inc.

	 	 
	 	 
By: /s/ Ping Wang

	 	 
  Ping Wang

	 	 
  Chairman & CEO

	 	 
	[SELLERS]	Hubei Aoxin Science and Technology Group Co., Ltd.

 

	 	By: Ping Wang  	/s/ Guoqiang Wan
	 	
Name: Ping Wang 

Title: Chairman

	Guoqiang Wan
	 	 	 
	 	
/s/ Ting Liu

Ting Liu

	
/s/ Jin Liu

 Jin Liu

	 	 	 
	 	
/s/ Li-Na Deng

Li-Na Deng 

	
/s/ Hai Liu

Hai Liu

 

  

  

  

                                                  

           Schedule A

Sellers List / Purchase Price Table

	
Name of Seller

 

(with address)

	
No. of Company Shares

 

	  	
                        Purchase Price

 

	  	  	  	
Firm Shares

 

	  	
 Escrow Shares

 

	
Hubei Aoxin Science & Technology Group Co., Ltd.

Add.: Room 3M-3, 3rd floor, Zhonghuan Mansion, No.31 Yunlin Street, Jiang’an District, Wuhan City, Hubei Province, China

 

	
22,500,000

	  	
1,075,000

	  	  
	
Ting Liu (shares held of record for Jin Wu)

Add.:  No. 3-1, Unit 1, #4 Building, No. 48 East Road of Huahui Yuan, Yubei District, Chongqing City, China

 

	
 

15,000,000

	  	
 

806,000

	  	  
	
Guoqiang Wan

Add.: No.2401, Power Supply Bureau Building, Wuqinhuayuan, No.21 Wuliercun, Hanyang District, Wuhan City

 

	
 

5,000,000

	  	
 

268,000

	  	
 

 

	
 Li-Na Deng (shares held of record for Hai Liu)

Add.: Building 84, No. 2 West Zone, No. 1037 Luoyu Road, Hongshan District, Wuhan City

 

	
 

7,500,000

	  	  	  	
 

403,000

 

  

  

  

 

Schedule B

 

Earn Out Payment Schedule

	
Fiscal Year Ending December 31,

	  	
Target Net Income

	  	  	  
	
2014

	  	
RMB 2,600,000

	  	  	  
	
2015

	  	
RMB 6,800,000

	  	  	  
	
2016

	  	
RMB 10,500,000

 

  

  

  

 

Schedule C

 

Subsidiaries

 

Wuhan Orange Optical Networking Technology Development Co., Ltd.EXHIBIT 10.1

 

 

 

PROMISSORY
NOTE

 

Dated:
August 11, 2014

 

FOR
VALUE RECEIVED, and subject to the terms and conditions set forth herein, DubLi, Inc., a Nevada corporation (the "Maker"),
hereby unconditionally promises to pay to the order of Michael B. Hansen or his assigns (the "Payee",
and together with the Maker, the "Parties"), the aggregate of such amounts the Payee has disbursed to the Maker
pursuant to Section 2.2 (the "Loan"), together with all accrued interest thereon, as provided in
this Promissory Note (the "Note").

 

SECTION
1.

Definitions.

 

Capitalized
terms used herein shall have the meanings set forth in this Section 1.

 

"Advance"
means each disbursement made by the Payee to the Maker pursuant to Section 2.2.

 

"Applicable
Rate" means the rate equal to six Percent (6%).

 

"Maker"
has the meaning set forth in the introductory paragraph.

 

"Borrowing
Notice" has the meaning set forth in Section 2.2.

 

"Business
Day" means a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized
or required by law to close.

 

"Commitment
Period" means the period from the date hereof to the Maturity Date.

 

"Default"
means any of the events specified in Section 8 which constitutes an Event of Default or which, upon the giving of notice,
the lapse of time, or both pursuant to Section 8 would, unless cured or waived, become an Event of Default.

 

"Default
Rate" means, at any time, the maximum rate of interest that may be contracted for under applicable Law, inclusive of
any fees, costs or other charges required to be included in the calculation of interest by applicable Law.

 

"Event
of Default" has the meaning set forth in Section 8.

 

"GAAP"
means generally accepted accounting principles in the United States of America as in effect from time to time.

 

    	 

    	 

    

 

 

"Governmental
Authority" means the government of any nation or any political subdivision thereof, whether at the national, state, territorial,
provincial, municipal or any other level, and any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulator), or administrative powers or functions of, or pertaining
to, government (including any supranational bodies such as the European Union or the European Central Bank).

 

"Interest
Payment Date" means the first day of each calendar quarter commencing on January 1, 2015.

 

"Law"
as to any Person, means any law (including common law), statute, ordinance, treaty, rule, regulation, policy or requirement
of any Governmental Authority and authoritative interpretations thereon, whether now or hereafter in effect, in each case, applicable
to or binding on such Person or any of its properties or to which such Person or any of its properties is subject.

 

"Loan"
has the meaning set forth in the introductory paragraph.

 

"Material
Adverse Effect" means a material adverse effect on (a) the business, assets, properties, liabilities (actual or contingent),
operations, condition (financial or otherwise) or prospects of the Maker; (b) the validity or enforceability of the Note; (c)
the rights or remedies of the Payee hereunder; or (d) the Maker's ability to perform any of its material payment obligations hereunder.

 

"Maturity
Date" means the earlier of (a) December 31, 2015 and (b) the date on which all amounts under this Note shall become due
and payable pursuant to Section 9.

 

"Note"
has the meaning set forth in the introductory paragraph. 

 

"Payee"
has the meaning set forth in the introductory paragraph.

 

"Order"
as to any Person, means any order, decree, judgment, writ, injunction, settlement agreement, requirement or determination
of an arbitrator or a court or other Governmental Authority, in each case, applicable to or binding on such Person or any of its
properties or to which such Person or any of its properties is subject.

 

"Parties"
has the meaning set forth in the introductory paragraph.

 

"Person"
means any individual, corporation, limited liability company, trust, joint venture, association, company, limited or general
partnership, unincorporated organization, Governmental Authority or other entity.

 

    	2

    	 

    

  

 

SECTION
2.

Loan
Disbursement Mechanics.

 

2.1Commitment.
Subject to Section 2.2, the Payee shall make available to the Maker one or more Advances during the Commitment Period
in an aggregate amount not to exceed three million and 00/100 Dollars ($3,000,000.00).

 

2.2Advances.
As a condition to the disbursement of any Advance, the Maker shall, at least ten Business Days prior to the requested disbursement
date, deliver to the Payee a written notice (the "Borrowing Notice") setting out (a) that no Default has occurred
and is continuing; (b) the amount of the Advance; and (c) the date on which the Advance is to be disbursed. Each Borrowing Notice
shall be deemed to repeat the Maker's representations and warranties in Section 6 hereof as of the date of such Borrowing
Notice. Upon receipt of the Borrowing Notice, the Payee shall make available to the Maker on the disbursement date the amount
set out in the notice in immediately available funds.

 

SECTION
3.

Final
Payment Date; Optional Prepayments.

 

3.1Principal
Payment Dates. Principal shall be due and payable as a balloon payment on the Maturity Date.

 

3.2Final
Payment Date. The aggregate unpaid principal amount of the Loan, all accrued and unpaid interest and all other amounts payable
under this Note shall be due and payable on the Maturity Date.

 

3.3Optional
Prepayment. The Maker may prepay the Loan in whole or in part at any time or from time to time without penalty or premium
by paying the principal amount to be prepaid together with accrued interest thereon to the date of prepayment.

 

SECTION
4.

Interest.

 

4.1Interest
Rate. Except as otherwise provided herein, the outstanding principal amount of all Advances made hereunder shall bear interest
at the Applicable Rate from the date such Advance was made until the Loan is paid in full, whether at stated maturity, upon acceleration,
by prepayment or otherwise.

 

4.2Interest
Payment Dates. Interest shall be payable quarterly in arrears to the Payee on each Interest Payment Date.

 

4.3Default
Interest. If any amount payable hereunder is not paid when due (without regard to any applicable grace periods), whether at
stated maturity, by acceleration or otherwise, such overdue amount shall bear interest at the Default Rate from the date of such
non-payment until such amount is paid in full.

 

    	3

    	 

    

 

4.4Computation
of Interest. All computations of interest shall be made on the basis of a year of 365 days, as the case may be, and the actual
number of days elapsed. Interest shall accrue on each Advance on the day on which such Advance is made, and shall not accrue on
any Advance for the day on which it is paid.

 

4.5Interest
Rate Limitation. If at any time and for any reason whatsoever, the interest rate payable on any Advance shall exceed the maximum
rate of interest permitted to be charged by the Payee to the Maker under applicable Law, such interest rate shall be reduced automatically
to the maximum rate of interest permitted to be charged under applicable Law and that portion of each sum already paid attributable
to that portion of such interest rate that exceeds the maximum rate of interest permitted by applicable Law shall be deemed a
voluntary prepayment of principal.

 

SECTION
5.

Payment
Mechanics.

 

5.1Manner
of Payments. All payments of interest and principal shall be made in lawful money of the United States of America no later
than 5:00 PM (Eastern Time) on the date on which such payment is due by cashier's check, certified check or by wire transfer of
immediately available funds to the Payee's account at a bank specified by the Payee in writing to the Maker from time to time.

 

5.2Application
of Payments. All payments made hereunder shall be applied first to the payment of any fees or charges outstanding hereunder,
second to accrued interest, and third to the payment of the principal amount outstanding under the Note.

 

5.3Business
Day Convention. Whenever any payment to be made hereunder shall be due on a day that is hot a Business Day, such payment shall
be made on the next succeeding Business Day and such extension will be taken into account in calculating the amount of interest
payable under this Note.

 

5.4Evidence
of Debt. The Payee is authorized to record on the grid attached hereto as Exhibit A (or another similar record
maintained by Lender) each Advance made to the Maker and each payment or prepayment thereof. The entries made by the Payee shall,
to the extent permitted by applicable Law, be prima facie evidence of the existence and amounts of the obligations of the Maker
therein recorded; provided, however, that the failure of the Payee to record such payments or prepayments, or any inaccuracy
therein, shall not in any manner affect the obligation of the Maker to repay (with applicable interest) the Loan in accordance
with the terms of this Note.

 

5.5Rescission
of Payments. If at any time any payment made by the Maker under this Note is rescinded or must otherwise be restored or returned
upon the insolvency, bankruptcy or reorganization of the Maker or otherwise, the Maker's obligation to make such payment shall
be reinstated as though such payment had not been made.

 

    	4

    	 

    

  

 

SECTION
6.

Representations
and Warranties.

 

Each
Maker hereby represents and warrants to the Payee on the date hereof as follows:

 

6.1Existence;
Compliance With Laws. The Maker is (a) a corporation duly formed, validly existing and in good standing under the laws of
the state of its jurisdiction of incorporation and has the requisite power and authority, and the legal right, to own, lease and
operate its properties and assets and to conduct its business as it is now being conducted and (b) in compliance with all Laws
and Orders except to the extent that the failure to comply therewith would not, in the aggregate, reasonably be expected to have
a Material Adverse Effect.

 

6.2Power
and Authority. The Maker has the power and authority, and the legal right, to execute and deliver this Note and to perform
its obligations hereunder.

 

6.3Authorization;
Execution and Delivery. The execution and delivery of this Note by the Maker and the performance of its obligations hereunder
have been duly authorized by all necessary corporate action in accordance with all applicable Laws. The Maker has duly executed
and delivered this Note.

 

6.4No
Approvals. No consent or authorization of, filing with, notice to or other act by, or in respect of, any Governmental Authority
or any other Person is required in order for the Maker to execute, deliver, or perform any of its obligations under this Note.

 

6.5No
Violations. The execution and delivery of this Note and the consummation by the Maker of the transactions contemplated hereby
do not and will not (a) violate any provision of the Maker's organizational documents; (b) violate any Law or Order applicable
to the Maker or by which any of its properties or assets may be bound; or (c) constitute a default under any material agreement
or contract by which the Maker may be bound.

 

6.6Enforceability.
Each of the Note is a valid, legal and binding obligation of the Maker, enforceable against the Maker in accordance with its
terms except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law).

 

6.7No
Litigation. No action, suit, litigation, investigation or proceeding of, or before, any arbitrator or Governmental
Authority is pending or, to the knowledge of the Maker, threatened by or against the Maker or any of its property or assets
(a) with respect to the Note or any of the transactions contemplated hereby or (b) that would be expected to materially
adversely affect the Maker's financial condition or the ability of the Maker to perform its obligations under the
Note.

 

    	5

    	 

    

 

SECTION
7.

Affirmative
Covenants.

 

Until
all amounts outstanding in this Note have been paid in full, the Maker shall:

 

7.1Maintenance
of Existence. (a) Preserve, renew and maintain in full force and effect its corporate existence and (b) lake all reasonable
action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business, except,
in each case, where the failure to do so would not reasonably be expected to have a Material Adverse Effect.

 

7.2Compliance.
Comply with (a) all of the terms and provisions of its organizational documents; (b) its obligations under its material contracts
and agreements; and (c) all Laws and Orders applicable to it and its business, except where the failure to do so would not reasonably
be expected to have a Material Adverse Effect.

 

7.3Payment
Obligations. Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be,
all its material obligations of whatever nature, except where the amount or validity thereof is currently being contested in good
faith by appropriate proceedings, and reserves in conformity with GAAP with respect thereto have been provided on its books.

 

7.4Notice
of Events of Default. As soon as possible and in any event within two (2) Business Days after it becomes aware that a Default
or an Event of Default has occurred, notify the Payee in writing of the nature and extent of such Default or Event of Default
and the action, if any, it has taken or proposes to take with respect to such Default or Event of Default.

 

7.5Further
Assurances. Upon the request of the Payee, promptly execute and deliver such further instruments and do or cause to be done
such further acts as may be necessary or advisable to early out the intent and purposes of this Note.

 

SECTION
8.

Events
of Default.

 

The
occurrence and continuance of any of the following shall constitute an Event of Default hereunder:

 

8.1Failure
to Pay. The Maker fails to pay (a) any principal amount of the Loan when due or (b) interest or any other amount owed hereunder
when due and such failure continues for five days after written notice to the Maker.

 

    	6

    	 

    

  

 

8.2Breach
of Representations and Warranties. Any representation or warranty made or deemed made by the Maker to the Payee herein is
incorrect in any material respect on the date as of which such representation or warranty was made or deemed made.

 

8.3Breach
of Covenants. The Maker fails to observe or perform (a) any covenant, condition or agreement contained in Section 7.4 or (b)
any other material covenant, obligation, condition or agreement contained in this Note other than those specified in clause (a)
and Section 8.1 and such failure continues for 30 days after written notice to the Maker.

 

8.4
Bankruptcy.

 

(a)The
Maker commences any case, proceeding or other action (i) under any existing or future Law relating to bankruptcy, insolvency,
reorganization, or other relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate
it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts or (ii) seeking appointment of a receiver, trustee, custodian, conservator or
other similar official for it or for all or any substantial part of its assets, or the Maker makes a general assignment for the
benefit of its creditors;

 

(b)there
is commenced against the Maker any case, proceeding or other action of a nature referred to in Section 8.4(a) above which
(i) results in the entry of an order for relief or any such adjudication or appointment or (ii) remains undismissed, undischarged
or unbonded for a period of 60 days;

 

(c)there
is commenced against the Maker any case, proceeding or other action seeking issuance of a warrant of attachment, execution or
similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which
has not been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof;

 

(d)the Maker takes
any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in Section
8.4(a), Section 8.4(b) or Section 8.4(c) above; or

 

(e)the
Maker is generally not, or shall be unable to, or admits in writing its inability to, pay its debts as they become due at any
tune following the date hereof.

 

8.5Judgments.
One or more judgments or decrees shall be entered against the Maker and all of such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within 90 days from the entry thereof.

 

    	7

    	 

    

  

 

SECTION
9.

Remedies.

 

Upon
the occurrence of any Event of Default and at any time thereafter during the continuance of such Event of Default, the Payee may
at its option, by written notice to the Maker (a) terminate its commitment to make any Advances hereunder; (b) declare the entire
principal amount of this Note, together with all accrued interest thereon and all other amounts payable hereunder, immediately
due and payable; and/or (c) exercise any or all of its rights, powers or remedies under applicable Law; provided, however that,
if an Event of Default described in Section 8.4 shall occur, the principal of and accrued interest on the Loan shall become immediately
due and payable without any notice, declaration or other act on the part of the Payee.

 

SECTION
10.

Miscellaneous.

 

10.1Notices.

 

(a)AR
notices, requests or other communications required or permitted to be delivered hereunder shall be delivered in writing, in each
case to the address specified below or to such other address as such Party may from time to time specify in writing in compliance
with this provision:

 

(i)If
to the Maker, to the address set forth on the signature page hereof:

 

(ii)If
to the Payee, to the address set forth on the signature page hereof:

 

(b)Notices
if (i) mailed by certified or registered mail or sent by hand or overnight courier service shall be deemed to have been given
when received; (ii) sent by facsimile during the recipient's normal business hours shall be deemed to have been given when sent
(and if sent after normal business hours shall be deemed to have been given at the opening of the recipient's business on the
next business day); and (iii) sent by e-mail shall be deemed received upon the sender's receipt of an acknowledgment from the
intended recipient (such as by the "return receipt requested" function, as available, return e-mail or other written
acknowledgment).

 

10.2
Governing Law. This Note and any claim, controversy, dispute or cause of action (whether in contract or tort or otherwise)
based upon, arising out of or relating to this Note and the transactions contemplated hereby shall be governed by the laws of
the State of Florida, without regard to the choice of laws principals thereof.

 

    	8

    	 

    

 

10.3Submission
to Jurisdiction.

 

(a)Each
of the Maker and the Payee hereby irrevocably and unconditionally (i) agrees that any legal action, suit or proceeding arising
out of or relating to this Note may be brought in the courts of the State of Florida or of the United States of America for the
Southern District of Florida; (ii) submits to the jurisdiction of any such court in any such action, suit or proceeding; and (iii)
waives, and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim
that it or he is not subject personally to the jurisdiction of the above-named courts, that its or his property is exempt or immune
from attachment or execution, or that this Note or the subject matter hereof may not be enforced in or by such court. Final judgment
against either of the Parties in any action, suit or proceeding shall be conclusive and may be enforced in any other jurisdiction
by suit on the judgment.

 

(b)Nothing
in this Section 10.3 shall affect the right of the Payee to (i) commence legal proceedings or otherwise sue the Maker in
any other court having jurisdiction over the Maker or (ii) serve process upon the Maker in any manner authorized by the laws of
any such jurisdiction.

 

10.4
Venue. Each of the Maker and the Payee irrevocably and unconditionally waives, to the fullest extent permitted by applicable
law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating
to this Note in any court referred to in Section 10.3 and the defense of an inconvenient forum to the maintenance of such
action or proceeding in any such court.

 

10.5
Waiver of Jury Trial. EACH OF THE MAKER AND THE PAYEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY RELATING TO THIS NOTE OR THE TRANSACTIONS
CONTEMPLATED HEREBY WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY.

 

10.6
Counterparts: Integration: Effectiveness. This Note and any amendments, waivers, consents or supplements hereto may be
executed in counterparts, each of which shall constitute an original, but all taken together shall constitute a single contract.
This Note constitutes the entire contract between the Parties with respect to the subject matter hereof and supersedes all previous
agreements and understandings, oral or written, with respect thereto. Delivery of an executed counterpart of a signature page
to this Note by facsimile or in electronic (i.e., "pdf" or "tif”) format shall be effective as delivery of
a manually executed counterpart of this Note.

 

10.7
Successors and Assigns. This Note may be assigned or transferred by the Payee to any Person. The Maker may not assign or
transfer this Note or any of its rights hereunder without the prior written consent of the Payee. This Note shall inure to the
benefit of, and be binding upon, the Parties and their permitted assigns.

 

    	9

    	 

    

 

 

10.8
Waiver of Notice. The Maker hereby waives demand for payment, presentment for payment, protest, notice of payment, notice
of dishonor, notice of nonpayment, notice of acceleration of maturity and diligence in taking any action to collect sums owing
hereunder.

 

10.9
Interpretation. For purposes of this Note (a) the words "include,” "includes" and "including"
shall be deemed to be followed by the words "without limitation"; (b) the word "or" is not exclusive; and
(c) the words "herein," "hereof," "hereby," "hereto" and "hereunder" refer to
this Note as a whole. The definitions given for any defined terms in this Note shall apply equally to both the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine
and neuter forms. Unless the context otherwise requires, references herein: (x) to Schedules, Exhibits and Sections mean the Schedules,
Exhibits and Sections of this Note; (y) to an agreement, instrument or other document means such agreement, instrument or other
document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof; and (z) to
a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated
thereunder. This Note shall be construed without regard to any presumption or rule requiring construction or interpretation against
the party drafting an instrument or causing any instrument to be drafted.

 

10.10
Amendments and Waivers. No term of this Note may be waived, modified or amended except by an instrument in writing signed
by both of the parties hereto. Any waiver of the terms hereof shall be effective only in the specific instance and for the specific
purpose given.

 

10.11
Headings. The headings of the various Sections and subsections herein are for reference only and shall not define, modify,
expand or limit any of the terms or provisions hereof.

 

10.12
No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising on the part of the Payee, of any right,
remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.

 

10.13
Electronic Execution. The words "execution," "signed," "signature," and words of similar
import in the Note shall be deemed to include electronic or digital signatures or the keeping of records in electronic form, each
of which shall be of the same effect, validity and enforceability as manually executed signatures or a paper-based recordkeeping
system, as the case may be, to the extent and as provided for under applicable law, including the Electronic Signatures in Global
and National Commerce Act of 2000 (15 USC § 7001 et seq.) or any state laws based on the Uniform Electronic Transactions
Act.

 

    	10

    	 

    

 

 

10.14
Severability. If any term or provision of this Note is invalid, illegal or unenforceable in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect any other term or provision of this Note or invalidate or render unenforceable
such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal
or unenforceable, this Note shall be deemed automatically amended so as to effect the original intent of the parties as closely
as possible in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent
possible.

 

{signature
page. Follows}

 

    	11

    	 

    

 

 

IN
WITNESS WHEREOF, the Maker has executed this Note as of the date first set forth above.

 

MAKER:

 

	DubLi,
    Inc.	 	Address
    for Notice:
	 	 	 	 
	By:	/s/
    Eric Nelson	 	 
	Name:	Eric
    Nelson	 	 
	Title:	Chief Financial Officer

	 	Telephone:	 
	 	 	 	Facsimile:	 
	 	 	 	E-mail:	 

  

	By
                                         acceptance of this Note, the Payee acknowledges and agrees to be bound by the provisions of Section 2.2. and Section 10.	 	Address
    for Notice:
	 	 	 

 

	Michael
    B. Hansen	 	 	 
	 	 	 	 
	/s/
    Michael B. Hansen	 	Telephone:	 
	Michael
    B. Hansen	 	Facsimile:	 
	 	 	E-mail:
    	 

 

    	12

    	 

    

 

EXHIBIT
A

 

ADVANCES
AND PAYMENTS ON THE LOAN

 

	Date
    of Advance or Payment:	Amount
    of  Advance:	Amount
    of Principal Paid:	Unpaid
    Principal  Amount of Note as  of Date of Advance  or Payment:	Name
    of Person  Making the  Notation:
					
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

 

 

 

13

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