Document:

Execution
Version

    

    DISCLOSURE
LETTER

    

    Private
& Confidential

    

    Wisetech
Holdings Limited

    12th Floor,
Jinbao Building

    89 Jinbao
Street

    Beijing
China 100005

    

    Attn:
Jianming Yu / Jian Huang

    

    Windtech
Holdings Limited

    12th Floor,
Jinbao Building

    89 Jinbao
Street

    Beijing
China 100005

    

    Attn:
Jianming Yu / Jian Huang

    

    Date:  27
July 2009

    

    Dear
Sirs,

    

    INVESTMENT
AGREEMENT MADE AMONG WINDRACE INTERNATIONAL COMPANY LIMITED, SHUIPAN LIN,
WISETECH HOLDINGS LIMITED AND WINDTECH HOLDINGS LIMITED, DATED JULY 27,
2009

    

    Disclosure
Letter

    

    This is the Windrace Disclosure Letter
(the “Disclosure
Letter”) referred to in the Investment Agreement (the “Agreement”) made among Windrace International
Company Limited (“Windrace”), Shuipan Lin
(“Mr. Lin”), Wisetech
Holdings Limited (“Wisetech”) and Windtech
Holdings Limited (“Windtech”, together with
Wisetech, collectively referred to as the “Investors” and each an “Investor”) dated July 27,
2009.  All words and expressions, including capitalized terms and
references to clause and schedule numbers, used or defined in the Agreement
shall, unless inconsistent with the context or otherwise specified, have the
same respective meanings in this Disclosure Letter. A reference to this
Disclosure Letter shall include a reference to all the schedules and documents
attached to this Disclosure Letter.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    The purpose of this Disclosure Letter
is to disclose matters that could constitute exceptions to the representations
and warranties given by Windrace and/or Mr. Lin (individually referred to as a
“Warranty” and
collectively referred to as the “Warranties”) in favor of the
Investors as contained in the Agreement.  Accordingly, the Warranties
shall be qualified by reference to those matters fully and fairly disclosed
herein and neither Windrace nor Mr. Lin shall be liable for any breach of any
Warranty (and no claim shall lie in respect thereof) in so far as it relates to
the matters fully and fairly disclosed in this Disclosure Letter. Each item
fully and fairly disclosed herein shall be a disclosure in respect of a
particular Warranty or Warranties against which the disclosure is referenced in
the Agreement and shall be limited to the Warranties set out in the schedules
attached to this Disclosure Letter unless it is apparent from such disclosure
that it applies to such other Warranties.

     

    The Investors further acknowledge,
confirm and agree that:

     

    
      	
              (a)

            	
              neither
      Windrace nor Mr. Lin shall be deemed to be in breach of any Warranties in
      respect of the matters or facts fully and fairly disclosed in this
      Disclosure Letter (including the schedules attached to this Disclosure
      Letter) and that the Investors shall have no claim in respect of facts or
      matters fully and fairly disclosed in this Disclosure Letter provided in
      each case that such Warranties when read in conjunction with this
      Disclosure Letter satisfy the standards set forth in the
      Agreement;

            

    

    

    
      	
              (b)

            	
              notwithstanding
      that the matters set out in this Disclosure Letter are disclosed against
      the particular Warranty or Warranties against which they are referenced,
      such specific disclosures have, for convenience, been set out against
      those numbered clauses of the Warranties to which they most obviously
      relate, any such specific disclosure nevertheless shall apply to all the
      Warranties to which it is or may be appropriate and shall constitute
      disclosure for the purposes of any Warranties, and shall not be limited in
      any way to the specific numbered clauses of the Warranties to which it
      refers, provided always that the relevance of such disclosure to any of
      such Warranties should be reasonably apparent on the face of its own;
      and

            

    

    

    
      	
              (c)

            	
              neither
      this Disclosure Letter nor any disclosures made in it shall constitute or
      imply any representation, warranty or undertaking by Windrace or Mr. Lin
      not expressly set out in the Agreement and neither this Disclosure Letter
      nor any such disclosures shall have the effect of, or be construed as,
      adding to or extending the scope of any of the
  Warranties.

            

    

    

    In the event of any inconsistency
between the Agreement and this Disclosure Letter, this Disclosure Letter shall
prevail and shall be deemed to be the relevant disclosure.

    

    This Disclosure Letter shall be
construed, performed and enforced in all respects in accordance with the laws of
Hong Kong, without giving effect to its principles or rules of conflict of laws
to the extent such principles or rules would require or permit the application
of the laws of another jurisdiction.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Please acknowledge receipt of this
Disclosure Letter by signing and returning to us the enclosed duplicate of this
Disclosure Letter; such signature and return will constitute confirmation and
agreement by the Investors that both general and specific disclosures set out in
this Disclosure Letter are accepted by the Investors for the purpose of the
Agreement and on the basis stated in this Disclosure Letter.

    

    Yours
faithfully,

    

    
      
        
          
            
              	
                      SIGNED
      BY SHUIPAN LIN

                    	
                      )

                    
	
                      in
      the presence of :-

                    	
                      )

                    
	 
      	 
      
	
                      SIGNED
      BY

                    	
                      )

                    
	 
      	
                      )

                    
	
                      for
      and on behalf of

                    	
                      )

                    
	
                      WINDRACE
      INTERNATIONAL

                    	
                      )

                    
	
                      COMPANY
      LIMITED

                    	
                      )

                    
	
                      in
      the presence of :-

                    	
                      )

                    

            

          

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    We acknowledge receipt of the
Disclosure Letter of which this is a duplicate. We further confirm our
acceptance of and agreement to the terms of this Disclosure Letter.

    

    
      
        
          
            
              	
                      SIGNED
      BY

                    	
                      )

                    
	 
      	
                      )

                    
	
                      for
      and on behalf of

                    	
                      )

                    
	
                      WISETECH
      HOLDINGS LIMITED

                    	
                      )

                    
	
                      in
      the presence of :-

                    	
                      )

                    
	 
      	 
      
	
                      SIGNED
      BY

                    	
                      )

                    
	 
      	
                      )

                    
	
                      for
      and on behalf of

                    	
                      )

                    
	
                      WINDTECH
      HOLDINGS LIMITED

                    	
                      )

                    
	
                      in
      the presence of :-

                    	
                      )

                    

            

          

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
4 Part B

    

    Windrace issued and allotted 2,500
preferred shares to Elevatech, representing 2.5% of the issued share capital of
Windrace pursuant to a subscription agreement dated March 28, 2008 and last
amended on June 2, 2008. In addition, Mr. Lin Shuipan and RichWise transferred
an aggregate of 5,500 preferred shares to Elevatech representing 5.5% of the
issued share capital of Windrace pursuant to a share transfer agreement dated
March 28, 2008 and last amended on June 2, 2008. Pursuant to the Elevatech
Letter Agreement, all of the preferred shares will be redeemed by Windrace in
exchange for the issue of the promissory note by Windrace to Elevatech, giving
the holder the right to receive from Windrace HK$306,267,580.48 by the earlier
of (i) five Business Days of the date of issue of the promissory note; and (ii)
October 31, 2009, and US$1,000,000 on June 30, 2010.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
4 Part B 5.3 (c), (d) and (e)/8.3/8.5 (c) and (e)

     

    Facilities/No
default by the Windrace Group Companies/Effect of this Agreement

    

    According to a guarantee of maximum
credit facility agreement No. 35905200800002957, a credit up to RMB60,000,000
from November 10, 2008 to November 9, 2010 is secured by the personal guarantees
from Mr. Lin Shuipan and Ms. Chen Xiayu. As of March 31, 2009, a short-term bank
loan of RMB5,000,000 and RMB40,000,000 bills payables under various facilities
agreements are secured by the personal guarantees from Mr. Lin Shuipan and Ms.
Chen Xiayu.

     

    On June 24, 2008, Xidelong (China) Co.
Ltd. (“XDLong China”)
entered into a short-term loan agreement for an amount of RMB20,000,000 with
Jinjiang Qingyang Sub-branch, Industrial Bank Co., Ltd.

     

    Certain existing credit facilities of
Windrace Group Companies require consent from lenders in advancement of a
material change of ownership or change of business operations, including
restructuring, mergers and acquisitions. As at March 31, 2009, an aggregate
outstanding amount of RMB65.0 million consisting of (i) RMB45 million (of which
RMB5 million was short-term bank loan and the remaining RMB40 million was bills
payable) drawn under a RMB60 million credit facility agreement, and (ii) RMB20
million under a short-term loan agreement, require such consent. Jingtian &
Gongcheng, Windrace’s PRC counsel, is of the opinion that these loan agreements
require consent for transactions that occur in the PRC. Therefore, offshore
transactions such as the Acquisition should not require consents from the banks.
In the event that the banks are of a different opinion and consider the
Acquisition constitutes material change of ownership or change of business
operations and therefore require consents in advancement of such changes,
Windrace could be deemed as in breach of these agreements for not having
obtained such consents in advancement of relevant changes. If the banks
accelerate payment obligations under these agreements, Windrace’s liquidity
could be adversely affected.

     

    Pursuant to the Elevatech Letter
Agreement, Mr. Lin and RichWise agreed to enter into a guarantee in respect of
the obligations of Windrace to pay US$1,000,000 and any interest at a rate of
8.25% per annum on the overdue principal under the promissory note issued by
Windrace to Elevatech, provided that (a) any obligation to pay under the
guarantee shall only cover the portion of the amounts on which Windrace has
defaulted; (b) any obligation to pay the unpaid portion of the US$1,000,000
under the guarantee shall be several and not joint and shall be allocated
between Mr.Lin and RichWise at the ratio of 0.5625 to 0.4375; and (c) any
obligation to pay the unpaid interest under the guarantee shall be limited to
Mr.Lin only (and not RichWise).

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
4 Part B 6.2

     

    All
Licenses Held

    

    
      	
               
      

            	
              ■

            	
              The
      2008 annual inspection of Fujian Xidelong Sports Goods Co., Ltd. (“XDLong Fujian”) has not
      been completed.

            

    

     

    
      	
               
      

            	
              ■

            	
              The
      2008 annual inspection of XDLong China has not been
    completed.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
4 Part B 6.3, 6.4, 6.5 and 6.6

     

    No
Breach of Laws/No Investigations/No Disputes/

    Compliance
with Memorandum and Articles

    

    Order
Issued by the High Court in Hong Kong

    

    Windrace was informed by its former
reporting accountants, Ernst & Young, Certified Public Accountants, Hong
Kong, that the financial statements of Hei Dai Lung Group Company Limited
(“XDLong HK”) for the
period from November 5, 2003 (date of incorporation) to December 31, 2006 were
qualified as they covered a period in excess of that permitted by Section 122 of
the Hong Kong Companies Ordinance and no consolidated financial statements of
XDLong HK and its subsidiaries had been prepared as required by Hong Kong
Accounting Standard 27 “Consolidated and Separate Financial Statements”. Section
122(3) of the Companies Ordinance states that if any person being a director of
a company fails to take all reasonable steps to comply with the provisions of
section 122 of the Companies Ordinance, he or she shall, in respect of each
offence, be liable to imprisonment and a fine.

    

    The then directors of XDLong HK were
not aware of such non-compliance. In order to rectify such non-compliance,
XDLong HK applied to the High Court in Hong Kong on June 2, 2008 for a court
order for XDLong HK to hold an annual general meeting where all
the  profit and loss accounts of XDLong HK for the years ended
December 31, 2003, 2004, 2005 and 2006 will be laid before the meeting and
approved.

    

    On June 26, 2008, the High Court in
Hong Kong issued an order which required the XDLong HK to:

    

    (i) call
a general meeting pursuant to Section 111(2) of the Companies
Ordinance;

    

    (ii) lay
its profit and loss accounts for the years ended December 31, 2003, 2004, 2005
and 2006 before the XDLong HK at the general meeting pursuant to Section
122(1B)(a) of the Companies Ordinance; and

    

    (iii)
extend the period of 9 months specified in Section 122(1A) of the Companies
Ordinance to such period as expires on the date of the intended general meeting
to be held pursuant to Section 122(1B)(b) of the Companies
Ordinance.

    

    On June 26, 2008, the shareholder of
XDLong HK called an annual general meeting and passed a resolution which
confirmed the audited accounts of XDLong HK for the period from its date of
incorporation to December 31 2006 had been laid.

    

    The
Tenancy Agreement

    

    On June 3, 2008, XDLong HK entered into
a tenancy agreement with Quality Investment Limited, the landlord, for the lease
of a premise located at Office No. 2 on 29/F, Sino Plaza, Hong Kong. The lease
term provided in the tenancy agreement was two years from May 20, 2008 to May
19, 2010. On February 17, 2009, Sino Real Estate Agency Limited, acting on
behalf of the landlord, and XDLong HK signed a letter permitting an early
termination of the tenancy agreement subject to the conditions set forth
below:

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    (i) The
above tenancy agreements will be terminated on March 1, 2009 subject to the
replacement tenant duly executed a new tenancy agreement based on terms and
conditions to the satisfaction of the landlord;

    

    (ii)
XDLong HK shall deliver possession of vacant premises in a state of good repair
and tenantable and “ as-is” condition to the satisfaction of the landlord on or
before March 1, 2009;

    

    (iii)
XDLong HK shall be responsible to pay rent, management fees, air-conditioning
charges, government rates and other outgoings in respect of the premises up to
March 1, 2009;

    

    (iv) The
balance of rental deposit (if any) will be refunded to XDLong HK after deducting
amounts outstanding;

    

    (v)  XDLong
HK must sign a Surrender Agreement as prepared by the landlord’s solicitor on or
before March 1, 2009. All legal costs, adjudication fees and disbursements
incurred shall be borne by XDLong HK solely;

    

    (vi)  XDLong
HK undertakes and agrees that should the replacement tenant fail to enter into a
new tenancy agreement in respect of the premises with the landlord, the tenancy
agreement between XDLong HK and the landlord will continue to be valid until its
expiration date.

    

    XDLong HK
and Sino Real Estate Agency Limited, acting on behalf of the landlord, signed
the Surrender Agreement on March 7, 2009 to terminate the tenancy agreement. In
addition, the balance of the rental deposit was refunded to XDLong
HK.

    

    Registered
Address of XDLong Fujian

    

    Under PRC law, the registered address
as it appears on the business license must be the same as a company’s actual
business address. Currently, the actual business address of XDLong Fujian is
different from the registered address as it appears on its business license.
XDLong Fujian intends to apply to the relevant authority for a change of its
registered address as it appears on the business license to be consistent with
its actual business address. Before XDLong Fujian effects the change of address
on the business license, it may have difficulties in passing annual
inspections.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
4 Part B 8.1

     

    No
Unusual Agreement

    

    The following is a list of contracts
entered into by Windrace Group Company outside its ordinary course of
business:

    

    Subscription
of Windrace’s Shares and the Redemption of Windrace’s Preferred
Shares

    

    (1)          Subscription
by Elevatech

    

    
      	
               
      

            	
              ·

            	
              The
      Subscription Agreement among Mr. Lin Shuipan, Windrace and Elevatech dated
      March 28, 2008 pursuant to which Elevatech subscribed for 2.5% of the
      issued share capital of Windrace as enlarged by the subscription pursuant
      to the Subscription Agreement at approximately HK$95.71
      million

            

    

     

    
      	
               
      

            	
              ·

            	
              An
      amendment and restatement agreement in relation to the Subscription
      Agreement dated April 30, 2008 pursuant to which certain terms of the
      Subscription Agreement were amended and the Subscription Agreement was
      restated.

            

    

     

    
      	
               
      

            	
              ·

            	
              A
      second amendment agreement in relation to the Subscription Agreement dated
      June 2, 2008 pursuant to which certain terms of the Subscription Agreement
      were amended.

            

    

     

    (2)          Acquisition
by Elevatech

    

    
      	
               
      

            	
              ·

            	
              The
      Share Purchase Agreement among Mr. Lin Shuipan, RichWise, Mr. Shi Jinlei,
      Windrace and Elevatech dated March 28, 2008 pursuant to which Elevatech
      purchased 5.5% of the issued share capital of Windrace as enlarged by the
      subscription pursuant to the Subscription Agreement at approximately
      HK$210.56 million.

            

    

     

    
      	
               
      

            	
              ·

            	
              An
      amendment and restatement agreement in relation to the Share Purchase
      Agreement dated April 30, 2008 pursuant to which certain terms of the
      Share Purchase Agreement were amended and the Share Purchase Agreement was
      restated.

            

    

     

    
      	
               
      

            	
              ·

            	
              A
      second amendment agreement in relation to the Share Purchase Agreement
      dated June 2, 2008 pursuant to which certain terms of the Share Purchase
      Agreement were amended.

            

    

     

    (3)          Shareholders
Agreement

    

    
      	
               
      

            	
              ·

            	
              A
      shareholders’ agreement dated April 30, 2008 entered into among Mr. Lin
      Shuipan, RichWise, Tiancheng, Haima, Eagle Rise, Elevatech and
      Windrace  to govern the rights and obligations between the
      shareholders of Windrace. (“Shareholders
      Agreement”)

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (4)          Elevatech
Letter Agreement

    

    
      	
               
      

            	
              ·

            	
              The
      Elevatech Letter Agreement dated May 8, 2009 among Windrace, Elevatech,
      Mr. Lin and RichWise pursuant to which all of the issued preferred shares
      will be redeemed by Windrace in exchange for the issue of the promissory
      note by Windrace to Elevatech, giving the holder the right to receive from
      Windrace HK$306,267,580.48 within by the earlier of (i) five Business Days
      of the date of issue of the promissory note; and (ii) October 31, 2009,
      and US$1,000,000 on June 30, 2010.

            

    

     

    (5)          Subscription
and Acquisition by Shareholders of XDLong Investment Holding Limited (“XDLong
Investment”)

    

    
      	
               
      

            	
              ·

            	
              A
      share transfer agreement dated April 28, 2008 entered into among Mr. Lin
      Shuipan, Ms. Chen Xiayu, RichWise, Tiancheng, Haima, Eagle Rise and
      Windrace pursuant to which 100 shares in XDLong Investment were
      transferred to Windrace whereby (i) Windrace issued and allotted 97,499
      shares in Windrace to the then shareholders of XDLong Investment and (ii)
      credited as fully paid the one nil paid share in Windrace held by Mr. Lin
      Shuipan

            

    

    

    Subscription
of Shares of XDLong Investment

    

    
      	
               
      

            	
              ·

            	
              The
      Subscription and Shareholders’ Agreement among RichWise, Mr. Lin Shuipan,
      Ms. Chen Xiayu, XDLong HK, XDLong Fujian and XDLong China dated April 18,
      2007 pursuant to which Mr. Lin Shuipan and Ms. Chen Xiayu transferred 100%
      of their interest in XDLong HK in exchange for 80% of the share capital of
      XDLong Investment and RichWise agreed to subscribe for the remaining 20%
      of the share capital of XDLong
Investment.

            

    

     

    
      	
               
      

            	
              ·

            	
              A
      supplemental agreement to the Subscription and Shareholders’ Agreement
      (executed by RichWise, Mr. Lin Shuipan and Ms. Chen Xiayu on March 25,
      2008 and XDLong HK, XDLong China and XDLong Fujian on March 26, 2008)
      dated March 25, 2008 pursuant to which RichWise agreed to pay an
      additional HK$32 million to XDLong Investment if the audited profit after
      tax of XDLong HK for the year ended December 31, 2007 had an increase of
      more than 70%, instead of 100%, when compared to that for the year ended
      December 31, 2006.

            

    

     

    
      	
               
      

            	
              ·

            	
              A
      memorandum supplemental to the Subscription and Shareholders’ Agreement
      dated April 30, 2008 pursuant to which RichWise agreed to pay an
      additional consideration of HK$32 million to XDLong Investment within
      three business days from date of its receipt of an email from XDLong
      Investment’s auditor confirming that the final audited accounts of XDLong
      Investment for the year ended December 31, 2007 will not contain material
      changes.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Transfer
of Shares of XDLong Fujian

    

    
      	
               
      

            	
              ·

            	
              The
      equity interest transfer agreement (‘‘Equity Interest Transfer
      Agreement’’) dated September 26, 2007 entered into by Mr. Chen
      Jinxuan (“Mr.
      Chen”) and XDLong HK pursuant to which Mr. Chen Jinxuan transferred
      the legal title of 100% of the equity interest he held in XDLong Fujian to
      XDLong HK for HK$10 million.

            

    

     

    
      	
               
      

            	
              ·

            	
              A
      side letter dated March 7, 2008 to the Equity Interest Transfer Agreement
      dated September 26, 2007 entered into by Mr. Chen Jinxuan and XDLong HK
      pursuant to which Mr. Chen confirmed that XDLong HK was not required to
      pay him a consideration of HK$10 million for the transfer of 100% equity
      interest held by him in XDLong Fujian to XDLong
  HK.

            

    

     

    Transfer
of Shares of XDLong HK

    

    
      	
               
      

            	
              ·

            	
              Instrument
      of transfer and bought and sold notes dated October 8, 2007 executed by
      Mr. Lin Shuipan as transferor and XDLong Investment as transferee in
      respect of the transfer of 5,000 shares of XDLong HK from Mr. Lin Shuipan
      to XDLong Investment for HK$5,000.

            

    

     

    
      	
               
      

            	
              ·

            	
              Instrument
      of transfer and bought and sold notes dated October 8, 2007 executed by
      Ms. Chen Xiayu as transferor and XDLong Investment as transferee in
      respect of the transfer of 5,000 shares of XDLong HK from Ms. Chen Xiayu
      to XDLong Investment for
HK$5,000.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
4 Part B 8.4

     

    Material
Contracts

    

    Elevatech
Letter Agreement

     

    Capitalised terms used but not defined
in this Schedule 4 Part B 8.4 have meanings attributed to them in the Elevatech
Letter Agreement.

     

    (a)           Elevatech
agreed to Windrace’s entering into the Sale and Purchase Agreement and the
transfer of the ordinary shares held by the Sellers.

     

    (b)           Elevatech
further agreed to issue one or more waivers consenting to Windrace entering into
contracts relating to equity investments in Windrace for cash consideration by
any third party investors; provided that Windrace shall provide written notice
to Elevatech setting out to Elevatech’s satisfaction details of the
transactions.

     

    Elevatech’s waiver and consent is
subject to the following conditions and will be null and void ab initio if the conditions
are not fulfilled:

     

    
      	
              (i)

            	
              the
      delivery by Windrace to Elevatech draft copies of the following
      transaction documents (the “Transaction Documents”)
      within five business days of the date of the Elevatech Letter
      Agreement:

            

    

     

    
      	
               
      

            	
              1)

            	
              a
      redemption agreement providing for the redemption of the preferred
      shares;

            

    

     

    
      	
               
      

            	
              2)

            	
              the
      Promissory Note;

            

    

     

    
      	
               
      

            	
              3)

            	
              board
      resolutions authorising the issuance of the Promissory Note and the
      issuance of any preference shares upon any conversion of the Promissory
      Note (the “Conversion
      Shares”);

            

    

     

    
      	
               
      

            	
              4)

            	
              an
      instruction letter to the Windrace’s registered agent irrevocably
      authorizing registration of Elevatech as a holder of the Conversion Shares
      upon their issuance by Windrace;

            

    

     

    
      	
               
      

            	
              5)

            	
              an
      amendment to the articles of Windrace providing for the potential
      conversion of Promissory Note into the Conversion
  Shares;

            

    

     

    
      	
               
      

            	
              6)

            	
              an
      amendment agreement to the Shareholders Agreement providing for its
      continued effectiveness in the event Elevatech becomes a holder of the
      Conversion Shares (the “Conversion Time”) and
      for the redemption referred to in 8)
below;

            

    

     

    
      	
               
      

            	
              7)

            	
              a
      Deed of Adherence between Windrace and the Purchaser, the form of which is
      set forth Schedule 2 to the Shareholders Agreement, providing for the
      Purchaser’s agreement to become a party to the Shareholders Agreement at
      the Conversion Time; and

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

      

    
      	
               
      

            	
              8)

            	
              a
      deed of covenant from Windrace, Mr. Lin and RichWise in favour of
      Elevatech providing that, in the event that Elevatech holds any preferred
      shares or Conversion Shares after Closing and either Mr. Lin or RichWise
      transfers any shares they hold in the Purchaser prior to December 31,
      2009, then any preferred shares or Conversion Shares held by Elevatech
      shall be immediately redeemable under the terms and conditions of such
      preferred shares or Conversion Shares, as the case may
  be;

            

    

     

    
      	
              (ii)

            	
              the
      Transaction Documents being concluded, executed and delivered in form and
      substance satisfactory to Elevatech prior to or upon
    Closing;

            

    

     

    
      	
              (iii)

            	
              the
      transactions consummated at Closing are in accordance with the terms set
      out in the SPA;

            

    

     

    
      	
              (iv)

            	
              the
      Promissory Note and Personal Guarantees being issued to Elevatech upon
      Closing;

            

    

     

    
      	
              (v)

            	
              except
      with Elevatech’s prior written consent, no variation is made to the
      actions or delivery obligations of (A) the Sellers under Schedule 3,
      Section A, Clause 1.1(c), 1.2, 1.3, 1.4, 1.5, 1.6, 1.7, 1.8 and 2.9; (B)
      the Purchaser under Schedule 3, Section B, Clauses 1.1(e) and 2.7; and (C)
      SPAC under Schedule 3, Section C, Clause 1.1, 1.2, 2.1 and 2.4,
      respectively, of the Sale and Purchase Agreement;
  and

            

    

     

    
      	
              (vi)

            	
              SPAC
      issuing irrevocable payment instructions upon Closing for the payment to
      Elevatech of a sum in full satisfaction of HK$306,267,580.48, representing
      the first installment payment of the Promissory
  Note.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
4 Part B 9.1

     

    No
Related Party Contracts

    

    Appearance
design patents license

    

    Mr. Lin Shuipan applied to the State
Intellectual Property of PRC for registration of 11 appearance design patents
for sports footwear, two appearance design patents for leisure footwear, three
appearance design patents for shoe soles and two appearance design patents for
package boxes, respectively, during the period from April 2001 to February 2003.
The registrations were granted during the period from November 2001 to October
2003. Before such registrations were granted, Mr. Lin granted XDLong Fujian an
exclusive license to use the appearance design patents at nil consideration from
October 1, 2001 to September 30, 2007. XDLong Fujian used these appearance
design patents in the design, manufacture and sale of its footwear during the
license period but do not currently use such patents in its business operations.
XDLong Fujian does not anticipate using these patents in its future business
operations because the relevant appearance designs are out of
fashion.

    

    Financial
assistance

    

    Mr. Lin Shuipan provided financial
assistance to support Windrace’s operations from time to time. The financial
assistance comprised interim financing and personal guarantee. As of December
31, 2006, 2007 and 2008 and the three months ended March 31, 2009, the amount
due to Mr. Lin Shuipan was approximately RMB82.5 million, RMB82.5 million,
RMB0.9 million and RMB0.9 million, respectively. The balance was unsecured,
interest-free and repayable on demand.

    

    Certain bank loans were secured by,
among other securities, the personal guarantee from Mr. Lin Shuipan as of
December 31, 2006 and December 31, 2007 for amounts of RMB30.0 million and
RMB30.0 million, respectively. Certain bank loans were secured by, among other
securities, the personal guarantees from Mr. Lin Shuipan and Ms. Chen Xiayu as
of December 31, 2008 and March 31, 2009 for amounts of RMB60.0 million and
RMB60.0 million, respectively. As of March 31, 2009, a short-term bank loan of
RMB5 million and RMB40 million bills payables under various facilities
agreements are secured by the personal guarantees from Mr. Lin Shuipan and Ms.
Chen Xiayu.

    

    Appointment
of Non-Executive Director as Brand Spokesperson

    

    XDLong China entered into an agreement
with Professor Sun Yining, its non-executive Director, on September 6, 2007,
pursuant to XDLong China appointed Professor Sun as its brand spokesperson for a
term of two years from September 6, 2007. XDLong China is entitled to use the
personal image of Professor Sun to make and publish advertisements for its
products and corporate image. Professor Sun is not allowed to be a spokesperson
or involved in marketing activities of other sports and leisurewear
manufacturers. XDLong China also has the right to renew the term of this
appointment on the basis of the existing terms within 60 days before the expiry
of the agreement.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    The annual remuneration to Professor
Sun as Windrace spokesperson is RMB200,000 (after tax) in cash payable by two
installments and RMB20,000 in kind of Windrace’s products.

    

    Investment
by Elevatech

     

    Windrace issued and allotted 2,500
preferred shares to Elevatech, an indirect wholly-owned subsidiary of The
Goldman Sachs Group, Inc., representing 2.5% of the issued share capital of
Windrace pursuant to a subscription agreement dated March 28, 2008 and last
amended on June 2, 2008. In addition, Mr. Lin Shuipan and RichWise transferred
an aggregate of 5,500 preferred shares to Elevatech representing 5.5% of the
issued share capital of Windrace pursuant to a share transfer agreement dated
March 28, 2008 and last amended on June 2, 2008.

     

    Pursuant to the Elevatech Letter
Agreement, all of the preferred shares will be redeemed by Windrace in exchange
for the issue of the promissory note by Windrace to Elevatech, giving the holder
the right to receive from Windrace HK$306,267,580.48 by the earlier
of  (i) five Business Days of the date of issue of the promissory
note; and (ii) October 31, 2009, and US$1,000,000 on June 30, 2010.

     

    Investment
by Richwise

     

    On April 18, 2007,  XDLong
HK, XDLong Fujian and XDLong China entered into a subscription and shareholders’
agreement with RichWise, Mr. Lin Shuipan and Ms. Chen Xiayu under which RichWise
subscribed for 20% of the issued share capital of  XDLong Investment
for HK$88.0 million and agreed to pay XDLong Investment a premium of HK$32.0
million if XDLong HK’s audited profit after tax of year 2007 increased by at
least 100.0% as compared with year 2006 (the "Minimum Profit Growth Rate").
On March 25, 2008, the same parties entered into a supplementary subscription
and shareholders’ agreement and agreed to lower the Minimum Profit Growth Rate
to 70.0%.  XDLong HK achieved the Minimum Profit Growth Rate on
December 31, 2007 and RichWise is required under the supplementary subscription
and shareholders’ agreement to pay XDLong Investment HK$32.0 million. Such
amount was fully settled by four instalments on February 27, 2008, March 26,
2008, March 28, 2008 and May 8, 2008.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
4 Part B 11.3

    

    No
Other Emoluments

    

    For the year ended December 31, 2006,
Windrace paid year-end bonuses totalling RMB7.3 million to 1,546 employees
meeting performance targets in that year. For the year ended December 31, 2007,
Windrace paid year-end bonuses totalling RMB5.9 million to 559 employees meeting
performance targets in that year. For the year ended December 31, 2008, Windrace
did not pay any year-end bonus to its employees.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
4 Part B 13.3 and 13.6

    

    Title
to Owned Property/Closure or Enforcement Orders

    

    Pursuant to the State-owned Land Use
Right Transfer Contract for the grant of land use rights for the production site
covering an aggregate site area of approximately 15,277 square meters in
Jinjiang, XDLong Fujian is required to commence construction by February 28,
2006. However, XDLong Fujian did not commence construction by such date. XDLong
Fujian is applying to relevant local government agency to postpone construction
on the land. However, it is possible that the local government may repossess the
land before XDLong Fujian obtains an approval to postpone
construction.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
4 Part C 7

    

    Share
Capital

    

    
      	
              1.

            	
              Morgan
      Joseph & Co. Inc., the SPAC’s underwriter in connection with its
      initial public offering of the SPAC Securities (as defined below), holds
      an option to purchase up to 550,000 SPAC Units (as defined below) with an
      exercise price of US$10.00 per SPAC Unit (subject to adjustment) in
      accordance with the terms and provisions of that certain Unit Purchase
      Option, dated November 8, 2007, between SPAC and Morgan Joseph & Co.
      Inc. (the “Unit Purchase
      Option”).

            

    

     

    
      	
              2.

            	
              Win
      Wide International Ltd., a British Virgin Islands Company (“Win Wide”), purchased
      1,860,000 SPAC Warrants (as defined below) (the “Win Wide Warrants”) for
      a purchase price of US$1.00 per SPAC Warrant in accordance with terms and
      provisions of that certain Warrant Purchase Agreement, dated as of
      November 8, 2007 (the “Warrant Purchase
      Agreement”), among SPAC, Win Wide and Surfmax Co-Investment II,
      LLC, a Delaware limited liability company (“Surfmax
      II”).

            

    

     

    
      	
              3.

            	
              Surfmax
      II purchased 405,000 SPAC Warrants (the “Surfmax II Warrants”)
      for a purchase price of US$1.00 per SPAC Warrant in accordance with terms
      and provisions of the Warrant Purchase
  Agreement.

            

    

     

    
      	
              4.

            	
              In
      addition to the SPAC Warrants issuable upon the exercise of the Unit
      Purchase Option, the Win Wide Warrants and the Surfmax II Warrants, SPAC
      issued 8,625,000 SPAC Warrants in connection with its initial public
      offering (the “Public
      Warrants”).

            

    

     

    
      	
              5.

            	
              As
      of the date hereof, 10,890,000 SPAC Warrants are issued and outstanding,
      each entitling the holder thereof to purchase one (1) share of SPAC Common
      Stock at an exercise price of US$5.25 per share of SPAC Common Stock
      (subject to adjustment) in accordance with the terms and provisions of
      that certain Warrant Agreement, dated as of November 8, 2007, between SPAC
      and Continental Stock Transfer & Trust Company, a New York
      corporation.

            

    

     

    
      	
              6.

            	
              SPAC
      has reserved 11,990,000 shares of SPAC Common Stock for issuance upon the
      exercise of the Unit Purchase Option, the SPAC Warrants issuable upon the
      exercise of the Unit Purchase Option, the Win Wide Warrants, the Surfmax
      II Warrants and the Public
Warrants.

            

    

     

    For the
purposes of this Disclosure Letter, the following terms shall have the
respective meanings indicated below:

     

    “SPAC
Securities”

    the SPAC
Common Stock, SPAC Units and the SPAC Warrants;

     

    “SPAC
Unit”

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    the
security issued by SPAC in connection with the initial public offering the
securities of SPAC on the NYSE Amex (formerly the American Stock Exchange)
consisting of one share of SPAC Common Stock and one SPAC Warrant;

     

    “SPAC
Warrant”

    a warrant
to purchase one share of SPAC Common Stock issued in connection with the initial
public offering of the securities of SPAC on the NYSE Amex (formerly the
American Stock Exchange);

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
4 Part C 16

    

    No
Unusual Agreements

     

    See
Schedule 4 Part C 20, which is incorporated herein by
reference.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
4 Part C 17

    

    Non
Arm’s Length Transactions

     

    See
Schedule 4 Part C 20, which is incorporated herein by
reference.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
4 Part C 20

    

    No
Related Party Contracts

     

    
      	
              1.

            	
              That
      certain Preorganization Subscription Agreement, dated August 18, 2006
      between SPAC and G. George Lu regarding the purchase of 100 shares of SPAC
      common stock for a total subscription amount of
  US$100.

            

    

     

    
      	
              2.

            	
              That
      certain Promissory Note, dated December 18, 2006, as amended, by SPAC to
      G. George Lu in the amount of US$50,000.00.  This Promissory
      Note was paid in full in accordance with its terms on March 31,
      2008.

            

    

     

    
      	
              3.

            	
              That
      certain Subscription Agreement, dated January 31, 2007, between SPAC and
      G. George Lu regarding the purchase of 70,212 shares of SPAC common stock
      for a total subscription amount of
US$837.50.

            

    

     

    
      	
              4.

            	
              That
      certain Subscription Agreement, dated January 31, 2007, between SPAC and
      Louis Koo regarding the purchase of 70,312 shares of SPAC common stock for
      a total subscription amount of
US$937.50.

            

    

     

    
      	
              5.

            	
              That
      certain Subscription Agreement, dated January 31, 2007, between SPAC and
      Yuxiao Zhang regarding the purchase of 70,312 shares of SPAC common stock
      for a total subscription amount of
US$937.50.

            

    

     

    
      	
              6.

            	
              That
      certain Subscription Agreement, dated January 31, 2007, between SPAC and
      Jianming Yu regarding the purchase of 70,312 shares of SPAC common stock
      for a total subscription amount of
US$937.50.

            

    

     

    
      	
              7.

            	
              That
      certain Subscription Agreement, dated January 31, 2007, between SPAC and
      William Hsu regarding the purchase of 70,312 shares of SPAC common stock
      for a total subscription amount of
US$937.50.

            

    

     

    
      	
              8.

            	
              That
      certain Subscription Agreement, dated January 31, 2007, between SPAC and
      William Sharp regarding the purchase of 70,312 shares of SPAC common stock
      for a total subscription amount of
US$937.50.

            

    

     

    
      	
              9.

            	
              That
      certain Subscription Agreement, dated January 31, 2007, between SPAC and
      Jun Lei regarding the purchase of 70,312 shares of SPAC common stock for a
      total subscription amount of
US$937.50.

            

    

     

    
      	
              10.

            	
              That
      certain Subscription Agreement, dated January 31, 2007, between SPAC and
      Donald Sull regarding the purchase of 70,312 shares of SPAC common stock
      for a total subscription amount of
US$937.50.

            

    

     

    
      	
              11.

            	
              That
      certain Subscription Agreement, dated January 31, 2007, between SPAC and
      2020 Strategic Investments, LLC, a Nevis limited liability company,
      regarding the purchase of 1,312,504 shares of SPAC common stock for a
      total subscription amount of
US$17,500.00.

            

    

     

    
      	
              12.

            	
              That
      certain Promissory Note, dated April 6, 2007, as amended, by SPAC to 2020
      International Capital Group Limited, a Cayman Islands company (“2020
      Limited”) in the amount of US$80,000.00.  This Promissory Note
      was paid in full in accordance with its terms on March 31,
      2008.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              13.

            	
              That
      certain Promissory Note, dated August 2, 2008, by SPAC to 2020 Limited in
      the aggregate principal amount of US$150,000.00.  The Promissory
      Note is unsecured, non-interest bearing and shall be due and payable on
      demand or August 2, 2009, whichever occurs
  earlier.

            

    

     

    
      	
              14.

            	
              That
      certain Promissory Note, dated December 1, 2008, by SPAC to 2020 Limited
      in the aggregate principal amount of US$150,000.00.  The
      Promissory Note is unsecured, non-interest bearing and shall be due and
      payable on demand or December 1, 2009, whichever occurs
      earlier.

            

    

     

    
      	
              15.

            	
              That
      certain Promissory Note, dated January 16, 2009, by SPAC to 2020 Limited
      in the aggregate principal amount of US$200,000.00.  The
      Promissory Note is unsecured, non-interest bearing and shall be due and
      payable on demand or January 16, 2010, whichever occurs
      earlier.

            

    

     

    
      	
              16.

            	
              That
      certain Promissory Note, dated April 20, 2009, by SPAC to 2020 Limited in
      the aggregate principal amount of US$200,000.00.  The Promissory
      Note is unsecured, non-interest bearing and shall be due and payable on
      demand or January 20, 2010, whichever occurs
  earlier.

            

    

     

    
      	
              17.

            	
              That
      certain Services Agreement, dated November 8, 2007, between SPAC and
      Surfmax regarding the use of Surfmax office space and shared secretarial
      services.

            

    

     

    
      	
              18.

            	
              In
      connection with the initial public offering of SPAC Securities on the NYSE
      Amex (formerly the American Stock Exchange), SPAC executed and delivered a
      Letter Agreement, dated November 8, 2007, with each of the following
      Persons relating to, inter alia, the
      placement of the SPAC Securities held by each Person in escrow and the
      voting of such SPAC Securities:

            

    

     

    
      	
               
      

            	
              a.

            	
              G.
      George Lu and Yanmei May Yang;

            

    

    
      	
               
      

            	
              b.

            	
              Louis
      Koo;

            

    

    
      	
               
      

            	
              c.

            	
              Yuxiao
      Zhang;

            

    

    
      	
               
      

            	
              d.

            	
              Fame
      Mount Limited;

            

    

    
      	
               
      

            	
              e.

            	
              William
      Hsu;

            

    

    
      	
               
      

            	
              f.

            	
              William
      Sharp;

            

    

    
      	
               
      

            	
              g.

            	
              Jun
      Lei;

            

    

    
      	
               
      

            	
              h.

            	
              Donald
      Sull;

            

    

    
      	
               
      

            	
              i.

            	
              2020
      Strategic Investments, LLC;

            

    

    
      	
               
      

            	
              j.

            	
              Win
      Wide International, Ltd.;

            

    

    
      	
               
      

            	
              k.

            	
              2020
      Limited; and

            

    

    
      	
               
      

            	
              l.

            	
              Surfmax
      Co-Investments II, LLC.

            

    

     

    
      	
              19.

            	
              That
      certain Securities Escrow Agreement, dated November 8, 2007, among SPAC,
      G. George Lu, Louis Koo, Yuxiao Zhang, Fame Mount Limited, William Hsu,
      William Sharp, Jun Lei, Donald Sull, 2020 Strategic Investment, LLC, Win
      Wide International, Ltd. and Surfmax Co-Investments II,
    LLC.

            

    

     

    
      	
              20.

            	
              That
      certain Warrant Purchase Agreement, dated November 8, 2007, among SPAC,
      Win Wide International, Ltd. and Surfmax Co-Investments II,
      LLC.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              21.

            	
              That
      certain Registration Rights Agreement, dated November 8, 2007, among SPAC,
      G. George Lu, Louis Koo, Yuxiao Zhang, Fame Mount Limited, William Hsu,
      William Sharp, Jun Lei, Donald Sull, 2020 Strategic Investment, LLC, Win
      Wide International, Ltd. and Surfmax Co-Investments II,
    LLC.

            

    

     

    A copy of
each agreement listed in items 17–21, above, is attached to the SPAC Form S-1
Registration Statement filed with the SEC.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Appendix

     

    SPAC’s
Prospectus dated November 8, 2007Exhibit 10.1
    

    
      AGREEMENT made this 18th day of August, 2009, by and between
      Therinject LLC, whose principal place of business is 10439 Roselle St
      Ste E hereinafter referred to as "Therinject", Steven Josephs, whose
      address is 1129 Rising Hill Way, Escondido, CA 92029 hereinafter
      referred to as “Josephs” and Bio-Matrix Scientific Group, Inc., whose
      principal place of business is 8885 Rehco Road, San Diego, California
      92121, hereinafter referred to as "Company". Collectively, the Company,
      Therinject and Josephs may be referred to as the “Parties” or,
      singularly as “Party”
    

    
      WHEREAS, the Company desires to:
    

    
      (a) Engage in the acquisition, manufacture and sale of medical devices
      utilized for the therapeutic delivery of cells, proteins and/or amino
      acids (“Medical Delivery Devices”):
    

    
      (b) Engage in the operation of a tumor banking facility
    

    
      (c) Engage in the development and marketing of a therapeutic cancer
      vaccine utilizing the medical device of (a) for initial use in
      veterinary applications (“Cancer Vaccine”).  
    

    
      WHEREAS,
    

    
      Therinject and Josephs desire to assist the Company in the
      above-mentioned objectives in accordance with the Terms and Conditions
      of this Agreement
    

    
      THEREFORE, It is Agreed as follows
    

    
      1. Representations and Warranties
    

    
      (a) Company hereby represents and warrants to Therinject and Josephs as
      follows:
    

    
      (i) Corporate Existence of Company. Company (a) is a corporation duly
      formed, validly existing and in good standing under the laws of the
      State of Delaware  and (b) has all requisite power and authority, and
      has all governmental licenses, authorizations, consents and approvals
      necessary to execute and deliver this Agreement and to consummate the
      transactions contemplated by this Agreement.
    

    
      (ii) No Conflicts. None of the execution, delivery and performance of
      this Agreement by Company, or the consummation of the transactions
      contemplated hereby and thereby (a) constitutes or will constitute a
      violation of the organizational documents of Company, (b) constitutes or
      will constitute a breach or violation of, or a default (or an event
      which, with notice or lapse of time or both, would constitute such a
      default) under, any indenture, mortgage, deed of Trust, loan agreement,
      lease or other agreement or instrument to which Company is a party or by
      which Company or any of its properties may be bound, (c) violates or
      will violate any statute, law or regulation or any order, judgment,
      decree or injunction of any court or Governmental Authority directed to
      Company or any of its properties in a proceeding to which its property
      is or was a party.
    

    
      (b) Therinject and Josephs hereby represent and warrant to Company as
      follows:
    

    
      (i) Therinject (a) is a Limited Liability Company duly formed, validly
      existing and in good standing under the laws of the State of California
      and (b) has all requisite power and authority, and has all governmental
      licenses, authorizations, consents and approvals necessary to execute
      and deliver this Agreement and to consummate the transactions
      contemplated by this Agreement.
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
      (i) No Conflicts. None of the execution, delivery and performance of
      this Agreement by Therinject and/or Josephs , or the consummation of the
      transactions contemplated hereby and thereby (a) constitutes or will
      constitute a violation of the organizational documents of Therinject,
      (b) constitutes or will constitute a breach or violation of, or a
      default (or an event which, with notice or lapse of time or both, would
      constitute such a default) under, any indenture, mortgage, deed of
      Trust, loan agreement, lease or other agreement or instrument to which
      Therinject and/or Josephs is a party or by which Therinject and/or
      Josephs may be bound, (b) violates or will violate any statute, law or
      regulation or any order, judgment, decree or injunction of any court or
      Governmental Authority directed to Therinject and/or Josephs.
    

    

    

    
      2. Consulting Fee. Josephs, as an independent consultant and not as an
      employee of Bio-Matrix, shall receive a consulting fee (Exhibit A) to be
      paid by the Company for a period of one year from September 1, 2009.
    

    
      3. Consideration to Therinject.  As consideration for services to be
      rendered by Therinject pursuant to this Agreement, Therinject shall
      receive from the Company
    

    
      (a)  royalty payments from the Company in accordance with Exhibit B
    

    
      (b) 2.5 million common shares of the company in accordance with Exhibit
      C.
    

    
      4. Indemnification.
    

    
    	
          (a)
        	
          The Company hereby agrees to indemnify and hold harmless the other
          Parties against any and all liability, claims, suits, losses, costs
          and legal fees caused by, arising out of, or resulting from any
          negligent act or omission of the Company in the performance and/or
          failure to perform the Company’s duties pursuant to this Agreement.
        
	
          (b)
        	
          Therinject hereby agrees to indemnify and hold harmless the other
          Parties against any and all liability, claims, suits, losses, costs
          and legal fees caused by, arising out of, or resulting from any
          negligent act or omission of Therinject in the performance and/or
          failure to perform Therinject’s duties pursuant to this Agreement.
        
	
          (c)
        	
          Josephs hereby agrees to indemnify and hold harmless the other
          Parties against any and all liability, claims, suits, losses, costs
          and legal fees caused by, arising out of, or resulting from any
          negligent act or omission of Josephs in the performance and/or
          failure to perform Joseph’s duties pursuant to this Agreement.
        

    

    
      5. Intellectual Property.
    

    
    	
          (a)
        	
          Any and all intellectual property (i) resulting from the efforts of
          the Parties pursuant to this agreement and (b) comprising or
          materially related to the Cancer Vaccine shall become the property
          of Entest BioMedical, Inc., a Nevada corporation which is a majority
          owned subsidiary of the Company.
        
	
          (b)
        	
          Any and all intellectual property (i) resulting from the efforts of
          the Parties pursuant to this agreement and (b) not comprising or
          materially related to the Cancer Vaccine shall be owned 50% by
          Therinject and 50% by Entest.
        
	
          (c)
        	
          The Company shall have the right of first refusal in regards to any
          sale or other assignment by any Party of any intellectual property
          described in 5(b)
        
	
          (d)
        	
          Execution of this Agreement shall bestow upon the Company an
          exclusive worldwide license, not subject to any expiration, to
          develop, manufacture, market and sublicense products or services
          based on the intellectual property described in 5(b)
        

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
      6. Expenses. Each Party to this Agreement shall be responsible for their
      own expenses explained in Exhibit D which may be incurred in connection
      with this Agreement and the performance of their respective obligations
      thereunder.  
    

    
      7. Binding Effect and Assignment. This Agreement shall be binding upon
      and inure to the benefit of the Parties hereto and their respective
      permitted successors and assigns. This Agreement shall not be assignable
      by any Party, in whole or in part, without the each other Party’s prior
      consent in that Party’s sole discretion except as follows:
    

    
      The Company may assign its rights and duties pursuant to this Agreement
      to Entest Biomedical, Inc., a Nevada corporation which is currently a
      majority owned subsidiary of the Company, in its sole discretion.
    

    
      8. Entire Agreement. This Agreement represents the full and complete
      agreement between the parties and supersedes all previous agreements
      between the parties. Any supplemental amendments to this Agreement shall
      not be binding upon either party unless executed in writing by the
      parties hereto.
    

    
      9. Invalid by Operation of Law.  If any section or part of this
      Agreement is held to be invalid by operation of law or by any tribunal
      of competent jurisdiction, or if compliance with or enforcement of any
      section or part should be restrained by such tribunal, the remainder of
      the Agreement shall not be affected thereby and the parties shall enter
      into immediate negotiations for the purpose of arriving at a mutually
      satisfactory replacement for such section or part.
    

    
      10.  Arbitration.  Any controversy or claim arising out of or relating
      to this contract, or the breach thereof, shall be settled by arbitration
      in accordance of the rules of the American Arbitration Association, and
      judgment upon the award rendered by the arbitrator(s) shall be entered
      in any court having jurisdiction thereof.  For that purpose, the parties
      hereto consent to the jurisdiction and venue of an appropriate court
      located in San Diego County, State of California.  In the event that
      litigation results from or arises out of this Agreement or the
      performance thereof, the parties agree to reimburse the prevailing
      party's reasonable attorney's fees, court costs, and all other expenses,
      whether or not taxable by the court as costs, in addition to any other
      relief to which the prevailing party may be entitled.  In such event, no
      action shall be entertained by said court or any court of competent
      jurisdiction if filed more than one year subsequent to the date the
      cause(s) of action actually accrued regardless of whether damages were
      otherwise as of said time calculable.
    

    
      IN WITNESS WHEREOF, the parties have hereunto executed this Agreement
    

    
      on the 18th day of August, 2009.
    

    
    	
          /s/David Koos
        	
           
        	
          /s/Stephen Josephs
        
	
          Bio-Matrix Scientific Group Inc.
        	

        	
          Therinject LLC
        
	
          By Its: CEO
        	

        	
          By Its: Executive Manager
        
	
          David R. Koos
        	

        	
          
             Steven Josephs
          

        

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
      EXHIBIT A:
    

    
      Josephs Consideration:
    

    
      Pursuant to this Agreement, Josephs shall receive a consulting fee from
      the Company in the amount of $150,000 to be paid in twelve monthly
      installments of $12,500. (“Fee Installments”)
    

    
      At the Company’s sole discretion, each Fee Installment may be paid in
      either of:
    

    
    	
          (a)
        	
          Cash
        
	
          (b)
        	
          Common shares of the Company’s stock registered under the Securities
          Act of 1933 on Form S-8 valued at closing bid price per share on the
          date of issuance or
        
	
          (c)
        	
          Any combination of the above having a value of $12,500
        

    

    
      Fee Installments to be paid under this Exhibit A may be discontinued by
      the Company in the event of  
    

    
    	
          (a)
        	
          the expiration of a continuous period of 90 calendar days during
          which Josephs is unable to perform his material duties pursuant to
          this Agreement due to physical or mental incapacity
        
	
          (b)
        	
          Josephs’ failure or refusal to perform actions which are consistent
          with the scope and nature of Joseph’s duties and responsibilities as
          set forth in this Agreement which failure or refusal continues after
          notice thereof and a reasonable time to cure; such reasonable time
          to be a period of not more than 90 days.
        
	
          (c)
        	
          any intentional act having the purpose and effect of injuring the
          reputation, business or business relationships of the Company in any
          material respect;
        

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
      Exhibit B.
    

    
      Therinject shall be entitled to receive from the Company yearly royalty
      payments equal to 2.5% of revenues generated by the Company as a result
      of:
    

    
      The Company’s operation of a Tumor Banking facility, provided that such
      Tumor banking activities have occurred as a direct result of
      Therinject’s material  contributions pursuant to this Agreement
    

    
      Sales by the Company of Medical Delivery devices, provided that such
      sales have occurred as a direct result of Therinject’s material
      contributions pursuant to this Agreement
    

    
      Sales by the Company of the Cancer Vaccine, provided that the
      development and marketing of such Cancer Vaccine has occurred as a
      direct result of Therinject’s material contributions pursuant to this
      Agreement.
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
      Exhibit C.
    

    
      2,500,000 shares (“Shares”) are to be paid to Therinject on or before
      October 1, 2009. Therinject shall have full voting, dividend and other
      rights with respect to all of the Shares from the date of grant,
      provided, however, that Therinject agrees to the following restrictions
      on transfer on the Shares .
    

    
      (1) The Shares  may not be sold, transferred, assigned, pledged or
       otherwise encumbered or disposed of by the Therinject (“Share
      Restrictions”) except as follows:
    

    
      (i) Share Restrictions on 250,000 of the Shares will expire upon the
      successful completion, due primarily to the contributions of Therinject
      pursuant to this Agreement , of all of  the following:
    

    
    	
          1.
        	
          Execute agreement from a company that has an immuno isolation device
          the Company can acquire or manufacture for research purposes and
          potentially re-sale purposes
        
	
          2.
        	
          Set to receive or manufacture immuno isolation devices
        

    

    
      (ii) Share Restrictions on 250,000 of the Shares will expire upon the
      successful completion, due primarily to the contributions of Therinject
      pursuant to this Agreement, of all of the following:
    

    
    	
          1.
        	
          Establishment of satisfactory protocols in place for tumor cell
          banking
        
	
          2.
        	
          Storage Facility brought on-line and functional for tumor cell
          storage
        
	
          3.
        	
          Documentation and Patient Database for cell storage
        
	
          4.
        	
          Tumor cell storage and viability testing protocols in place
        
	
          5.
        	
          Procedure for device loading in place.
        
	
          6.
        	
          First shipments of Immuno isolation devices to Bio-Matrix or
          completion of first manufacturing runs of Immuno isolation devices
        

    

    
      (iii) Share Restrictions on 250,000 of the Shares will expire upon the
      successful completion, due primarily to the contributions of Therinject
      pursuant to this Agreement, of all of the following:
    

    
    	
          1.
        	
          Veterinary medicine distributor and/or other large distribution
          agreement – vesting
        
	
          2.
        	
          Setup and formalize contacts with target Veterinarians --
        
	
          3.
        	
          Animal protocol development--
        
	
          4.
        	
          Consent form finalization --
        
	
          5.
        	
          Shipping and Receiving protocols --
        
	
          6.
        	
          Hire and train personnel
        
	
          7.
        	
          Treat 10 dogs for safety
        

    

    
      (iv) Share Restrictions on 500,000 of the Shares will expire upon the
      successful completion, due primarily to the contributions of Therinject
      pursuant to this Agreement, of all of the following:
    

    
      Establish operational containment and storage of tumor cells:
    

    
    	
          1.
        	
          Receipt of orders for Immuno isolation devices for vaccine treatment
        
	
          2.
        	
          Receipt of first Tumor cells for storage and vaccine treatment using
          Immuno isolation devices
        
	
          3.
        	
          Completion of process refinements for cancer treatment and
          finalization of treatment protocols
        

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
      (v) Share Restrictions on 375, 000 of the Shares will expire upon the
      successful completion, due primarily to the contributions of Therinject
      pursuant to this Agreement, of all of the following:
    

    
    	
          1.
        	
          Completion of an efficacy runs in 100 dogs
        
	
          2.
        	
          Completion of GMP manufacturing of Vaccine
        

    

    
      (vi) Share Restrictions on 875, 000 of the Shares will expire upon the
      successful completion, due primarily to the contributions of Therinject
      pursuant to this Agreement, of all of the following:
    

    
    	
          1.
        	
          Shipping of 1,000 devices to veterinarians
        

    

    
      In the event that all of the above events giving effect to expiration of
      share restrictions shall not have occurred by or before September 1
      2010, any and all of the Shares upon which Share Restrictions shall not
      have expired shall be returned by Therinject to the Company for
      cancellation by the Company.
    

    
      Therinject agrees that any Shares to be issued pursuant to this
      Agreement shall contain the following, or a substantially similar,
      restrictive legend:
    

    
      THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
      1933, AS AMENDED (THE “ACT”), OR SECURITIES LAWS OF ANY STATE AND MAY
      NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED, TRANSFERRED OR OTHERWISE
      DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
      THE ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN AVAILABLE
      EXEMPTION FROM REGISTRATION UNDER THE ACT OR SUCH LAWS  AND, IF
      REQUESTED BY THE COMPANY, UPON DELIVERY OF AN OPINION OF COUNSEL
      REASONABLY SATISFACTORY TO THE COMPANY THAT THE PROPOSED TRANSFER IS
      EXEMPT FROM THE ACT OR SUCH LAWS.
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
      Exhibit D
    

    
      Personal travel expenses to the Bio-Matrix and Entest facilities located
      in San Diego will be covered by Steven Josephs through the consulting
      fees paid to him according to Exhibit A.
    

    
      Expenses relating to the facilities, infrastructure (including necessary
      personnel), raw materials, manufacturing, insurances, and all other
      expenses related to the successful completion of Exhibit C shall be the
      responsibility of Bio-Matrix and Entest.
    

    
      Expenses regarding intellectual property including legal fees and patent
      filings related to Section 5 of this Agreement will be the
      responsibility of Entest and Bio-Matrix.

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