Document:

Share Transfer Agreement

EXECUTION COPY

SHARE TRANSFER AGREEMENT

BETWEEN

Stewart Shiang Lor

AND

Transferees

Date: January 16, 2008

THIS SHARE TRANSFER AGREEMENT (this "Agreement") is made on January 16, 2008 by and among Stewart Shiang Lor (the "Transferor") and each of the individuals listed in Schedule A hereto (collectively the "Transferees" and each a "Transferee"). 

The Transferor and the Transferees are collectively referred to as the "Parties" and each of them as a "Party".

Whereas, the Transferor is the sole shareholder of Time Poly Management Ltd. (the “Company”), which is one of the registered shareholders of the Raygere Limited, a British Virgin Islands Company, which intends to complete a business combination with a public shell company, traded on the Over the Counter Bulletin Board (the "Listed Company"), holding 50,000 Ordinary Shares in the Company as of the date of this Agreement.

Whereas, the Transferees have contributed to the wealth growth of the Transferor through the growth of the Company, the Listed Company and its PRC subsidiaries and affiliates (collectively with the Company, the “Group”).  In consideration of the Transferees’ contributions and as an incentive to the Transferees to continue their commitment to the Group, the Transferor has agreed to grant to each of the Transferees, and each Transferee has agreed to accept from the Transferor, an option (the “Option”) to purchase certain number of ordinary shares of the Company currently held by the Transferor (the "Option Shares") as set forth in Schedule A hereto, on the terms and subject to the conditions set out in this Agreement.

NOW, THEREFORE, in consideration of the foregoing recitals, the mutual promises hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

1.

DEFINITIONS

1.1.

Defined Terms : In this Agreement (including the Recitals and the Schedules), unless the context otherwise requires, the following words and expressions shall have the following meanings:

“Alternate Exercise Price” means the exercise price to be paid by a Transferee to the Transferor in respect of the Option Shares issued to such Transferee as set forth opposite his/her name in Schedule A in the event that the Performance Targets (as defined herein) have not been met by the Group; 

	 	"Business Day" means a day (other than Saturdays, Sundays and public holidays) on which banks are generally open for business in China;

           

	 	"China" or "PRC" means the People's Republic of China;

           

	 	"Completion Date" means the date falling seven (7) Business Days after the service of the Exercise Notice by the Transferees on the Company;

           

	 	"Completion" means the completion of the sale to and purchase by the Transferees of the Option Shares under this Agreement, which shall not be later than November 15, 2008;

           

	 	"Distributions" means any cash proceeds arising from or in respect of, or in exchange for, or accruing to or in consequence of the Option Shares from the Effective Date to the Completion Date, including without limitation the Dividends.

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	 	"Dividends" means the dividends declared by the Company and accrued in respect of the Option Shares (whether or not such dividends shall have been paid and received by the Transferees);

           

	 	"Effective Date" means the date of this Agreement;

           

	 	"Exercise" means the exercise by a Transferee or his/her Nominee(s) of the Option pursuant to the terms of this Agreement;

           

	 	"Exercise Notice" means the notice substantially in the form set out in Part I of Schedule B;

           

	 	"Exercise Price" means the exercise price to be paid by a Transferee to the Transferor in respect of the Option Shares issued to such Transferee as set forth opposite his/her name in Schedule A;

           

	 	"Nominee" means such person nominated by a Transferee in the Transfer Notice to be the transferee of the Option or Option Shares;

           

	 	"Option Effective Dates" have the meaning ascribed to them in Clause 2.3;

           

	 	"Performance Targets" have the meaning ascribed to them in Clause 3;

           

	 	"RMB" means the lawful currency of China;

           

	 	“Acquisition” means the transaction wherein the Listed Company will acquire 100% equity interest (whether directly or through its subsidiaries) of the Chengdu Tianyin Pharmaceutical Co., Ltd. (成都天银制药有限公司); 

           

	 	"Transfer Notice" means the notice substantially in the form set out in Part II of Schedule B;

           

	 	"US$" or "United States Dollar" means the lawful currency of the United States of America.

"Euro €" means the lawful currency of the European Union. 

1.2.

Interpretation: Except to the extent that the context requires otherwise:

1.2.1

words denoting the singular shall include the plural and vice versa; words denoting any gender shall include all genders; words denoting persons shall include firms and corporations and vice versa; 

1.2.2

any reference to a statutory provision shall include such provision and any regulations made in pursuance thereof as from time to time modified or re-enacted whether before or after the date of this Agreement and (so far as liability thereunder may exist or can arise) shall include also any past statutory provisions or regulations (as from time to time modified or re-enacted) which such provisions or regulations have directly or indirectly replaced;

1.2.3

the words "written" and "in writing" include any means of visible reproduction; 

1.2.4

any reference to "Clauses", "Recitals" and "Schedules" are to be construed as references to clauses and recitals of, and schedules to, this Agreement; and

1.2.5

any reference to a time of day is a reference to China time unless provided otherwise.

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1.3.

Headings: The headings in this Agreement are inserted for convenience only and shall be ignored in construing this Agreement. 

2.

OPTION

2.1.

Option: In consideration of the contributions which the Transferees have made to the Group and their continuing commitment to the Group, the Transferor hereby irrevocably and unconditionally grants to each of the Transferees the Option for such Transferee to acquire from the Transferor, at the Exercise Price or the Alternative Exercise Price, at any time during the Exercise Period (defined below) any or all of the Option Shares set forth opposite his/her name in Schedule A hereto, free from all claims, liens, charges, pledges, mortgages, trust, equities and other encumbrances, and with all rights attaching thereto on the Completion Date. 

2.2.

Vesting Schedule: Subject to the terms and conditions hereto, the Option may be exercised, in whole or in part, in accordance with the following schedule:

The Option Shares subject to the Option shall vest at the rate of one-third (1/3) per Performance Period (as defined in Exhibit A).  

2.3.

Exercise Period: Once the Acquisition has been completed or abandoned pursuant to the terms of the definitive agreement regarding the Acquisition, the Option shall be exercisable in accordance with and on the dates set forth in Exhibit A (the “Option Effective Dates”). Subject to the vesting schedule set forth in Section 2.2 of this Agreement, the Option may be exercised by any Transferee (or his/her Nominee on behalf of the Transferee) at any time following the Option Effective Date (“Exercise Period”). 

2.4.

Nominees: Each of the Transferees may, at any time during the Exercise Period, at his/her sole discretion, nominate one or more person(s) (each a “Nominee”) to be the transferee(s) of whole or part of his/her Option, who shall hold and/or exercise the transferred Option on behalf of the Transferee.

2.5.

Exercise Notice: The Option may be exercised by any Transferee or his/her Nominee(s), in whole or in part, at any time during the Exercise Period, by serving an Exercise Notice on theTransferor. 

2.6.

Exercise: The Transferor agrees that he shall, upon receipt of the Exercise Notice and payment of either the Exercise Price or the Alternative Exercise Price, depending on whether the Performance Targets have been met, issue to the Transferee(s) (or his/her Nominee(s), as the case may be) any and all of the Option Shares specified in the Exercise Notice, free from all claims, liens, charges, pledges, mortgages, trust, equities and other encumbrances, and with all rights now or hereafter attaching thereto.  The Option shall be exercisable only in compliance with PRC laws and regulations and the Transferee(s) (or his/her Nominee(s), as the case may be) shall complete any and all approval or registration procedures regarding the exercise of his/her Option at PRC competent authorities in accordance with applicable PRC laws and regulations.

2.7.

Transfer Notice: In case that any Transferee transfers any or all of his/her Option to one or more Nominee(s) in accordance with Clause 2.4 above, the Transferee shall serve a Transfer Notice on the Transferor.

2.8.

Transfer to Nominees: The Transferor agrees that he shall, upon receipt of the Transfer Notice, take all actions necessary to allow the Nominee(s) to be entitled to any or all of the Options specified in the Transfer Notice.

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Upon exercise by any Nominee(s) of the transferred Option on behalf of the Transferee, the Transferee shall serve the Exercise Notice on the Transferor in his/her own name for the exercising Nominee(s).  Upon receipt of such Exercise Option, the Transferor shall issue to such Nominee(s) any and all of the relevant Option Shares in the same manner as specified in Clause 2.6.

2.9.

Payment of Exercise Price: Upon Exercise of the Option in whole or in part, the exercising Transferee (or his/her Nominee(s), as the case may be) shall pay the Exercise Price to the Transferor.

  

2.10.

The Transferor’s Obligation upon Exercise: The Transferor agrees that upon the Exercise of any Option by any Transferee (or his/her Nominee(s)), he shall cause and procure the number of Option Shares provided in the Exercise Notice to be transferred to such exercising Transferee (or his/her Nominee(s)) within seven (7) Business Days after the date of the Exercise Notice.

3.

PERFORMANCE TARGET AND CONDITION PRECEDENT

3.1.

The obligation of the Transferor to effect the Option and the transfer of the Option Shares at the Exercise Price to an exercising Transferee upon his/her Exercise of the Option shall be subject to the fulfilment of the following conditions (the “Performance Targets”) set forth in Exhibit A hereto.  In the event that the Group does not achieve the Performance Targets specified in Exhibit A, then the Transferee may exercise the Option at the Alternative Exercise Price on the date at which the Option would have otherwise been exercisable had the Performance Targets been met.  

4.

INFORMATION, DISTRIBUTIONS AND ADJUSTMENTS

4.1.

Information: Each of the Transferees (the "Requesting Transferees") shall be entitled to request from the Transferor at any time before the Completion, a copy of any information received from the Group which may be in the possession of the Transferor and, upon such request, the Transferor shall provide such information to the Requesting Transferee(s).

4.2.

Distributions: The Transferor agrees that each of the Transferees shall be entitled to all the Distributions in respect of his/her Option Shares.  In the event that any such Distributions have been received by the Transferor for any reason, the Transferor shall, at the request of the relevant Transferee, pay an amount equivalent to the Distributions received by him/her to such Transferee at the time of the Option Exercise by the Transferee.

4.3.

Adjustments: If, prior to the Completion, the Company shall effect any adjustment in its share capital (such as share split, share dividend, share combination or other similar acts), then the number of Option Shares to be issued to the Transferee upon Exercise shall be adjusted accordingly to take into account such adjustment.

5.

COMPLETION

5.1.

Time and Venue: Completion of the sale and purchase of the Option Shares pursuant to the Exercise shall take place at such place decided by the exercising Transferee(s) on the Completion Date.

5.2.

Business at Completion: At Completion of each Exercise, all (but not part only) of the following shall be transacted:

5.2.1

the exercising Transferees shall pay the Exercise Price to the Transferor in cash; 

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5.2.2

the Transferor shall cause the Company to within seven (7) Business Days after the date of Exercise Notice, deliver to each of the exercising Transferees (or his/her Nominee(s), same below) the following documents and take all corporate actions necessary to give effect to such delivery:

(a)

a share certificate or share certificates in respect of the number of the Option Shares exercised by such exercising Transferee; 

(b)

a certified true copy of the register of members of the Company updated to show the entry of the exercising Transferee as the holder of the Option Shares so exercised; and

(c)

any other documents as the exercising Transferee may reasonably believe necessary to give effect to the issuance of the exercised Option Shares.

6.

CONFIDENTIALITY

The transaction contemplated hereunder and any information exchanged between the Parties pursuant to this Agreement will be held in complete and strict confidence by the concerned Parties and their respective advisors, and will not be disclosed to any person except: (i) to the Parties’ respective officers, directors, employees, agents, representatives, advisors, counsel and consultants that reasonably require such information and who agree to comply with the obligation of non-disclosure pursuant to this Agreement; (ii) with the express prior written consent of the other Party; or (iii) as may be required to comply with any applicable law, order, regulation or ruling, or an order, request or direction of a government agency; provided, however, that the foregoing shall not apply to information that: (1) was known to the receiving Party prior to its first receipt from the other Party; (2) becomes a matter of public knowledge without the fault of the receiving Party; or (3) is lawfully received by the Party from a third person with no restrictions on its further dissemination.

7.

TRANSFEROR’S UNDERTAKINGS

Without the prior written consent of all the Transferees, the Transferor shall vote his shares in the Company such that the Company shall not, (i) issue or create any new shares, equity, registered capital, ownership interest, or equity-linked securities, or any options or warrants that are directly convertible into, or exercisable or exchangeable for, shares, equity, registered capital, ownership interest, or equity-linked securities of the Company, or other similar equivalent arrangements, (ii) alter the shareholding structure of the Company, (iii) cancel or otherwise alter the Option Shares, (iv) amend the register of members or the memorandum and articles of association of the Company, (v) liquidate or wind up the Company, or (vi) act or omit to act in such a way that would be detrimental to the interest of the Transferees in the Option Shares.  The Transferor shall cause the Company to disclose to the Transferees true copies of all the financial, legal and commercial documents of the Company and the resolutions of the shareholders and the board of directors.

8.

MISCELLANEOUS 

8.1.

Indulgence, Waiver Etc: No failure on the part of any Party to exercise and no delay on the part of such Party in exercising any right hereunder will operate as a release or waiver thereof, nor will any single or partial exercise of any right under this Agreement preclude any other or further exercise of it or any other right or remedy.

8.2.

Effective Date and Continuing Effect of Agreement: This Agreement shall take effect from the Effective Date.  All provisions of this Agreement shall not, so far as they have not been performed at Completion, be in any respect extinguished or affected by Completion or by any 

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other event or matter whatsoever and shall continue in full force and effect so far as they are capable of being performed or observed, except in respect of those matters then already performed.

8.3.

Successors and Assigns: This Agreement shall be binding on and shall ensure for the benefit of each of the Parties' successors and permitted assigns. Any reference in this Agreement to any of the Parties shall be construed accordingly.

8.4.

Further Assurance: At any time after the date of this Agreement, each of the Parties shall, and shall use its best endeavors to procure that any necessary third party shall, execute such documents and do such acts and things as any other Party may reasonably require for the purpose of giving to such other Party the full benefit of all the provisions of this Agreement.

8.5.

Remedies: No remedy conferred by any of the provisions of this Agreement is intended to be exclusive of any other remedy which is otherwise available at law, in equity, by statute or otherwise, and each and every other remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law, in equity, by statute or otherwise. The election of any one or more of such remedies by any Party shall not constitute a waiver by such Party of the right to pursue any other available remedies.

8.6.

Severability of Provisions: If any provision of this Agreement is held to be illegal, invalid or unenforceable in whole or in part in any jurisdiction, this Agreement shall, as to such jurisdiction, continue to be valid as to its other provisions and the remainder of the affected provision; and the legality, validity and enforceability of such provision in any other jurisdiction shall be unaffected.

8.7.

Governing Law: This Agreement shall be governed by, and construed in accordance with, the laws of the British Virgin Islands. 

8.8.

Dispute Resolution: In the event of any dispute, claim or difference (the "Dispute") between any Parties arising out of or in connection with this Agreement, the Dispute shall be resolved in accordance with the following: 

(a)

Negotiation between Parties; Mediations.  The Parties agree to negotiate in good faith to resolve any Dispute.  If the negotiations do not resolve the Dispute to the reasonable satisfaction of all parties within thirty (30) days, subsection (b) below shall apply.

(b)

Arbitration.  In the event the Parties are unable to settle a Dispute in accordance with subsection (a) above, such Dispute shall be referred to and finally settled by arbitration at Hong Kong International Arbitration Centre in accordance with the UNCITRAL Arbitration Rules (the “UNCITRAL Rules”) in effect, which rules are deemed to be incorporated by reference into this subsection (b).  The arbitration tribunal shall consist of three arbitrators to be appointed according to the UNCITRAL Rules.  The language of the arbitration shall be English.

8.9.

Counterparts: This Agreement may be signed in any number of counterparts, all of which taken together shall constitute one and the same instrument.  Any Party hereto may enter into this Agreement by signing any such counterpart.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF the Parties hereto have executed this Agreement on the date first above written.

The Transferor

By: _____________________

Stewart Shiang Lor 

The Transferee

	  

By: ____________________­­­­­­­­­­_______         

Name: Mr. Guoqing Jiang (江国庆)

	 

By: _____________________

Name: Mr. Yong Zhan (詹勇)

	 

By: ___________________________

Name: Mr. Xintao You (游心涛)

	 

By: _____________________

Name: Ms. Li Zhou (周莉)

	 

By: ___________________________

Name: Mr. Daqiao Zhang (张大桥)

	 

By: _____________________

Name: Mr. Hongcai Li (李洪才)

 

[SIGNATURE PAGE TO INCENTIVE OPTION AGREEMENT]

EXHIBIT A

PERFORMANCE TARGETS

A. 

The Group shall have generated a gross revenue of 

(i) at least RMB 26,000,000 for three months commencing from January 1, 2008 to March 31, 2008 (the “March Performance Period”); 

(ii) at least RMB 26,500,000 for three months commencing from April 1, 2008 to June 30, 2008 (the “June Performance Period”); 

(iii) at least RMB 27,000,000 for three months commencing from July 1, 2008 to September 31, 2008 (the “September Performance Period” and together with the March Performance Period and the June Performance Period, the “Performance Period”).

B.

The Option Effective Date for each Performance Period shall be that date that is forty five (45) days following the last day of each such Performance Period. 

SCHEDULE A

Transferees and Option Shares

	Transferees

	ID Card Number

	Number of 

Option Shares

	Exercise Price

	Alternate Exercise Price

	Mr. Guoqing Jiang

江国庆

	321111196703070812

	38,429

	US$330,487 

	US$660,975 

	Mr. Xintao You

游心涛

	510102196203255317

	3,837

	US$32,998

	US$65,996

	Mr. Yong Zhan

詹 勇

	610103196911153610

	3743

	US$32,193

	US$64,387

	Ms. Li Zhou

周 莉

	51011119580915116X

	2714

	US$23,340

	US$46,680

	Mr. Daqiao Zhang

张大桥

	321102680917191

	1126

	US$9,688

	US$19,376

	Mr. Hongcai Li

李洪才

	510213197310083775

	150

	US$1,293

	US$2,586

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SCHEDULE B 

Part I

Form of Exercise Notice

To

:

Stewart Shiang Lor (the “Transferor”)

From

:

[  ] (the “Transferee”)

We refer to the Share Transfer Agreement (the "Share Transfer Agreement") dated December 28, 2007 made between the Transferee and the Company.  Terms defined in the Option Agreement shall have the same meanings as used herein.

We hereby give you notice that we require you to sell to us / [Nominees' names] in accordance with the terms and conditions of the Share Transfer Agreement, the following Option Shares at the Exercise Price set out below, subject to the terms and conditions set out in the Share Transfer Agreement. Completion shall take place at [    ] on [                ] at the office of [    ].

	Transferee

	Option Shares

	Exercise Price/Alternative Exercise Price

	 	 	 

Dated [   ]  

Yours faithfully

___________________________

Name:

Title:

For and on behalf of 

[Transferee]

Party II

Form of Transfer Notice

To

:

Stewart Shiang Lor (the “Transferor”)

From

:

[  ] (the “Transferee”)

We refer to the Share Transfer Agreement (the "Share Transfer Agreement") dated December 28, 2007 made between the Transferee and the Company.  Terms defined in the Option Agreement shall have the same meanings as used herein.

We hereby give you notice that we will transfer to [Nominees' names] the following portion of the Option, expressed in terms of the number of Option Shares represented by the portion of the Option transferred in accordance with the terms and conditions of the Share Transfer Agreement,.

	Transferee

	Nominees

	Option Shares Represented

	Mr. Guoqing Jiang

	 	 
	Mr. Xintao You

	 	 
	Mr. Yong Zhan

	 	 
	Ms. Li Zhou

	 	 
	Mr. Daqiao Zhang

	 	 
	Mr. Hongcai Li

	 	 

Dated [     ] 

Yours faithfully

___________________________

Name:

Title:

For and on behalf of 

[Transferee]Precision Aerospace Components, Inc. Exhibit 10.1

EMPLOYMENT AGREEMENT 

THIS
EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as
of September 1, 2007 (the “Effective Date”) by and between
Precision Aerospace Components, Inc., a Delaware corporation (the “the
Company”), and Andrew S. Prince (the “Executive”).

1.

POSITION

a.

Title;
Office.  Executive has been employed by and served as the President and
Chief Executive Officer of the Company since January 19, 2007 (the
“Employment Date”).  Executive’s office will be located at
the Company’s headquarters at 2200 Arthur Kill Road, Staten Island, New
York.

b.

Duties.
 Executive shall report to the Company’s Board of Directors (the
“Board of Directors”) and shall perform such duties as the Board
of Directors may from time to time require, consistent with the general level
and type of duties and responsibilities customarily associated with the position
of Chief Executive Officer.  For as long as Executive is a member of the
Board of Directors, during the term of this Agreement, Executive shall serve as
a member of the Board of Directors without additional consideration other than
what is provided in this Agreement. 

c.

Other
Obligations.  Executive agrees to the best of Executive’s
ability and experience that he will at all times loyally and conscientiously
perform all of the duties and obligations required of Executive pursuant to the
terms of this Agreement, and will do so to the reasonable satisfaction of the
Board of Directors.  During the term of Executive’s employment, Executive
may engage in other activities while he manages the Company provided that such
activities neither unreasonably interfere with his management of and duties to
the Company nor adversely reflect on the Company’s reputation.  Executive
shall notify the Board of Directors if an outside activity would be expected to
take more than ten hours of normal work time during the month on a regular
basis.

2.

EMPLOYMENT
TERM

The
Company hereby agrees to employ Executive, and Executive hereby agrees to be
employed by the Company, subject to the terms and conditions of this Agreement,
for a term commencing on the Employment Date and continuing until September 1,
2008 unless sooner replaced or terminated as provided in Section 5 below
(the “Employment Term”).  This
Agreement shall be deemed to be renewed for additional one-year terms after its
initial term (or any subsequent renewal term), unless either party delivers
written notice of its intent not to renew this Agreement.   

3.

COMPENSATION

a.

Base
Salary.  During the Employment Term, Executive will be paid an annual
salary of two hundred thousand dollars and no cents ($200,000.00).  

			
	
 
	
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Executive’s
salary will be payable in equal weekly installments pursuant to the Company’s
regular payroll practices (or in the same manner as other employees of the
Company), and shall be subject to the usual, required withholding of income and
employment taxes.  Executive’s annual salary of two hundred thousand
dollars and no cents ($200,000.00), together with any changes thereto, shall be
referred to in this Agreement as “Base Salary.”  Base Salary
will be subject to review by, and change at, the sole discretion of the Board of
Directors, acting or through a Compensation Committee of the Board of Directors
if it so chooses (the “Compensation Committee”).

b.

Incentive
and Past Service Bonus.  During the Employment Term, Executive will be
eligible for incentive bonuses based on the achievement of specified financial
or other performance objectives as determined by the Compensation Committee each
year (or such other period as determined by the Compensation Committee) in its
sole discretion (the “Incentive Bonus”).  The first of these
bonuses shall include elements that result from Executive’s prior actions
enabling the Company to attain its present position.  The initial bonus
elements shall be as follows:

(i)
 Cash bonuses and/or other form of consideration received bonuses not to
exceed 50% of pretax income are to be calculated and paid upon the achievement
of the following:

1.

1%
of net sales from the Freundlich subsidiary greater than 10 Million dollars for
the 12 month period ending on August 30, 2008 (the “Anniversary Date”) payable at the time of filing of the Company’s 10 Q for the
third quarter 2008.

2.

2%
of net equity or 1% of
debt raised by the Company or its subsidiaries; this shall include any such
funding which refinances existing credit obligations of the Company or its
subsidiaries, but shall not include the extension of existing obligations or
lines of credit; payable at the time of first funding from the financing.
(Recognizing the unique role Mr. Prince is presently playing within the
Company.)

3.

3%
of net pretax consolidated profits in excess of prior year pretax consolidated
profits for the 12 month period ending on the Anniversary Date payable at the
time of filing of the Company’s 10 Q for the third quarter 2008.

4.

2%
of any sale price of a major asset of the Company payable in form of
consideration received for sale of asset – e.g. if either the Freundlich
operation or any other direct subsidiary or subsidiary of a subsidiary or the
Company as a whole is sold either in one or more asset sales, stock sales or
mergers.

5.

In
any event total cash bonus or form of consideration received not to exceed 50%
of pretax income.

ii)
Stock Options that will be calculated, valued and vest as follows:

1.

Options
to acquire seven percent (7%) of the fully diluted shares of the company’s
common stock if all presently existing convertible debt and equity securities
and warrants and options were converted (all such post 150:1 reverse split
shares being 59,993,397).  The options shall be issued in two tranches.
 One tranche shall be exercisable through the 60th day 

			
	
 
	
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after
the 150:1 reverse split and its exercise price shall be the price of the stock
on its date of issuance; the other tranche shall be exercisable, if the first
tranche has not been exercised, upon the 60th day after the 150:1
reverse split and its price shall be the price of the company’s common stock on
the 60th day subsequent to the 150:1 reverse split.  The options
shall have a duration of 7 years subsequent to their vesting date.

2.

The
per share exercise price of the options shall be share price  of the
Company’s common stock 60 business days subsequent to the commencement of
trading of the shares of the company’s common stock after the effectiveness of
the150:1 reverse split 

3.

The
options shall vest as follows, even if the issuance date is delayed to
accommodate the occurrence of the 150:1 reverse split:

a.

28%
immediately upon the earlier of the signing of this agreement or September 1,
2007; plus.

b.

6%
per month on the last day of each of the successive 12 months commencing with
September 30, 2007; or 

c.

Immediately
in the event of a change of control of the Company. "Change in Control" means
the occurrence during the Term of any of the following: (i) the sale, lease,
transfer, conveyance, or other disposition (other than by way of merger or
consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Subsidiaries taken as a
whole to any "person" (as such term is used in Section 13(d)(3) of the Exchange
Act) other than a principal owner of the Company or a related party of a
principal; (ii) the adoption of a plan relating to the liquidation or
dissolution of the Company; (iii) the consummation of any transaction
(including, without limitation, any merger or consolidation) the result of which
is that any "person" (as defined above), other than the Principals and their
Related Parties, becomes the "beneficial owner" (as such term is defined in Rule
13(d)(3) and Rule 13(d)(5) under the Exchange Act of the Company. 

c.

Employee
Benefits

During
the Employment Term, Executive shall be eligible to participate in the employee
benefits plans currently and hereafter maintained from time to time by the
Company  in its sole discretion, including family group health insurance
and a 401(k) savings plan, provided the Company in its sole discretion elects to
adopt such plans.  In the event Executive does not avail himself of such
health insurance, he shall be paid the premiums which would have been paid by
the Company had he and his spouse participated in the plan  Executive shall
be entitled to 20 days of vacation per calendar year accrued at the rate of 1.67
days per month in addition to Company paid holidays.  Executive may, at his
election, carry over or be paid for all or any portion of his unused vacation.
 Additionally, if Executive obtains a disability insurance policy at a cost
that is 

			
	
 
	
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acceptable
to the Company, the Company shall reimburse the Executive for the associated
disability insurance premiums incurred by the Executive during the Employment
Term. The Company reserves the right, at its discretion, to cancel or change the
employee benefit plans and programs it offers to its employees and consequently
to Executive at any time.  Executive will be given a copy of, and must
abide by, the Company’s employee handbook and employee benefit plan documents
which will describe more fully these and other benefits of Executive’s
employment, as well as the personal policies and procedures which apply to
employment with the Company.

4.

EXPENSE
REIMBURSEMENT

Executive
will be authorized to incur ordinary, necessary and reasonable travel,
entertainment and other business expenses in connection with Executive’s duties
and in accordance with the Company policy.  The Company shall also
reimburse Executive for reasonable out-of-pocket travel and living expenses
incurred by Executive to commute to and work from the Company’s headquarters, up
to a maximum amount of $2,750 per month.  Executive shall receive
reimbursement for out-of-pocket continuing professional education fees and
expenses required to maintain Executive’s CLE requirements for the New York Bar
and for out-of-pocket Bar licensing fees.  Executive shall also be entitled
to receive reimbursement for attorney’s fees for services incurred for review
and advice regarding this Agreement, up to a maximum amount of one thousand
dollars ($1,000.00).  All expenses subject to reimbursement shall require
Executive to present appropriate supporting documentation and receipts in
accordance with the Company’s standard reimbursement policy.  

5.

TERMINATION
OF EMPLOYMENT

Notwithstanding
Section 2, the Employment Term may be terminated, at any time, by either the
Company or Executive upon 30 days prior written notice to the other party.
 Upon any such termination, this Agreement shall terminate without further
obligations of the Company to Executive or his legal representatives under this
Agreement, other than the Company’s obligations for accrued salary and vacation,
bonuses earned and options vested but un-issued through the date of
termination.

6.

CONFIDENTIAL
INFORMATION

a.

Executive
agrees that during the Employment Term or at any time thereafter, (i) Executive
shall not use for any purpose other than the duly authorized business of the
Company, or disclose to any third party, any information relating to the
Company, or any of the Company’s affiliated companies which is non-public
information (“Confidential Information”), including any trade secret or any
written (including in any electronic form) or oral communication incorporating
Confidential Information in any way (except as may be required by law or in the
performance of Executive’s duties under this Agreement consistent with the
Company’s policies); and (ii) Executive will comply with any and all
confidentiality obligations of the Company to a third party, whether arising
under a written agreement or otherwise.  Information shall not be deemed
Confidential Information which (x) is or becomes generally available to
the public other 

			
	
 
	
4
	
 

 

than
as a result of a disclosure by Executive or at his direction or by any other
person who directly or indirectly receives such information from Executive, or
(y) is or becomes available to Executive on a non-confidential basis from
a source which is entitled to disclose it to Executive.

b.

Upon
the termination of this Agreement, or upon the Company's earlier request,
Executive will deliver to the Company all of the Company's property or
Confidential Information that Executive may have in his possession or control,
including, but not limited to, all electronically stored information and
passwords to access such property and any and all copies of such property,
material or databases.

7.

CERTAIN
RESTRICTIONS

a.

Competitive
Activity.  Executive agrees that, during the Employment Term and
continuing until the expiration of one year following the termination of
Executive’s employment with the Company for any reason, Executive will not,
without the prior written consent of the Board of Directors, directly or
indirectly, as an employee, agent, consultant, advisor, owner, manager, lender,
officer, director, partner, stockholder, or otherwise, engage in any Competitive
Activity, or have any such relationship with any person or entity that engages
in any Competitive Activity; provided, however, that nothing in this Agreement
will prohibit Executive from owning a passive investment of less than one
percent of the outstanding equity securities of any the Company listed on any
national securities exchange so long as Executive has no other relationship with
such the Company in violation of this Agreement.  “Competitive
Activity” means being engaged in any business engaged in the aerospace
fastener distribution business or any other business which is competitive with
the existing or planned business of the Company or planned business of the
Company which it had taken action to implement and had not abandoned at any time
during the Employment Term.

b.

Agreement
Not to Solicit Employees.  Executive agrees that, during the Employment
Term and continuing until the expiration of one year following the termination
of Executive’s employment with the Company for any reason, Executive will not,
either directly or indirectly, on Executive’s own behalf or in the service or on
the behalf of others solicit, divert, or hire away, or attempt to solicit,
divert, or hire away any person then employed by the Company, nor encourage
anyone to leave the Company’s employ. 

c.

Agreement
Not to Solicit Customers.  Executive agrees that, during the Employment
Term and continuing until the expiration of one year following the termination
of Executive’s employment with the Company for any reason, Executive will not,
either directly or indirectly, on Executive’s own behalf or in the service or on
behalf of others, solicit, divert, or appropriate, or attempt to solicit,
divert, or appropriate, to any business that engages in Competitive Activity (i)
any person or entity whose account with the Company was sold or serviced by or
under Executive’s supervision during the twelve months preceding the termination
of such employment, or (ii) any person or entity whose account with the Company
has been directly solicited by the Company within the year preceding the
termination of employment.

			
	
 
	
5
	
 

 

 

d.

Reasonableness.
 Executive and the Company agree that the covenants set forth in this
Agreement are appropriate and reasonable when considered in light of the nature
and extent of the Company’s business.  Executive further acknowledges and
agrees that (i) the Company has a legitimate interest in protecting the
Company’s business activities and its current, pending, and potential trade
secrets; (ii) the covenants set forth herein are not oppressive and contain
reasonable limitations as to time, scope, and activity; (iii) the covenants do
not harm in any manner whatsoever the public interest; (iv) Executive’s chosen
profession, trade, or business is in finance and executive management (the
“Profession”) (v) the Competitive Activity is only a very small or
limited part of the Profession, and Executive can work in many different jobs in
Executive’s Profession besides the Competitive Activity; (vi) the covenants set
forth herein do not completely restrain Executive from working in Executive’s
Profession, and Executive can earn a livelihood in Executive’s Profession
without violating any of the covenants set forth herein; (vii) Executive has
received and will receive substantial consideration for agreeing to such
covenants, including without limitation the consideration to be received by
Executive under this Agreement; (viii) if Executive were to work for a competing
the Company that engages in Competitive Activity, there would be a substantial
risk that Executive would inevitably disclose trade secrets to that the Company;
(ix) the Company competes with other companies that engage in Competitive
Activity, and if Executive were to engage in prohibited activities, it would
harm the Company; (x) the Company expends considerable resources on hiring,
training, and retaining its Executives and if Executive were to engage in
prohibited activities during the restricted period, it would harm the Company;
and (xi) the Company expends considerable resources acquiring, servicing, and
retaining its customers, vendors, investors, lenders and other key business
relationships and if Executive were to engage in prohibited activities during
the restricted period, it would harm the Company.

8.

INDEMNIFICATION

As
an officer and director of the Company, Executive shall be entitled to be
indemnified by the Company to the extent provided under the Company’s bylaws,
subject to applicable law, and to receive the benefits of any director and
officer liability insurance obtained by the Company from time to time, subject
to the terms, provisions and conditions of any such insurance.

9.

APPLICABLE
LAW; SEVERABILITY

This
Agreement shall be governed by the laws of the State of New York, without
reference to rules relating to conflicts of law.  In the event that any
provision of this Agreement becomes or is declared by a court of competent
jurisdiction or arbitrator to be illegal, unenforceable, or void, this Agreement
shall continue in full force and effect without said provision.

10.

DISPUTE
RESOLUTION

Executive
and the Company agree to arbitrate any dispute, claim, or controversy arising
out of this Agreement or Executive’s employment.  The arbitration shall be

			
	
 
	
6
	
 

 

 

conducted
by a single neutral arbitrator in accordance with the rules issued by JAMS for
resolution of employment disputes. The arbitration shall take place in New York
City.  The Company will pay the fee for the arbitration proceeding, as well
as any other charges by JAMS.  Executive shall be entitled to
indemnification against attorneys’ fees and costs to the extent provided in the
Delaware General Corporation Law Subchapter IV, Section 145.  The
arbitrator shall issue a written decision or award.  The decision or award
of the arbitrator shall be final and binding upon the Company and
Executive.  The arbitrator shall have the power to award any type of relief
that would be available in a court of competent jurisdiction.  Any
award may thereafter be entered as a judgment in any court of competent
jurisdiction.  Executive agrees that any relief to which he is entitled
arising out of said arbitration shall be limited to that awarded by the
arbitrator.  Executive agrees to file any demand for arbitration within the
time limit established by the applicable statute of limitations for the asserted
claims.  Failure to demand arbitration within the prescribed time period
shall result in waiver of any claims.  Executive agrees to waive any right
he may have to a jury trial with respect to any dispute or claim against the
Company relating to this Agreement, his employment, his termination from
employment, or any terms and conditions of his employment with the Company.

11.

SUCCESSORS
AND ASSIGNS

This
Agreement shall be binding upon the Company’s successors and assigns and upon
Executive’s heirs, executors, administrators, estate, successors and assigns.
 For all purposes under this Agreement, the term “the Company” shall
include any successor to the Company’s business and/or assets, which becomes
bound by this Agreement.  Executive may not assign this Agreement,
provided, however, this shall not preclude Executive from assigning certain
rights or property granted to him pursuant to this agreement.

12.

NO
INCONSISTENT OBLIGATIONS

By
signing this Agreement and accepting this offer of employment, Executive
represents and warrants to the Company that Executive is under no obligations or
commitments, whether contractual or that otherwise, that are inconsistent with
Executive’s obligations set forth in this Agreement or otherwise restrict
Executive’s ability to enter into this Agreement or fully perform the services
required hereunder.  Executive also represents and warrants that Executive
will not use or disclose, in connection with Executive’s employment by the
Company, any trade secrets or other proprietary information or intellectual
property in which Executive or any other person has any right, title, or
interest and that Executive’s employment by the Company as contemplated by this
Agreement will not infringe upon or violate the rights of any other person or
entity.  Executive represents and warrants to the Company that Executive
has returned all property and confidential information belonging to any prior
employers. 

13.

ENTIRE
AGREEMENT

This
Agreement and the Exhibits set forth the full and complete agreement between the
Company and Executive regarding the subject matter hereof and supersede 

			
	
 
	
7
	
 

 

any
and all prior representations or agreements between Executive and the Company,
if any, whether written or oral, except for the stock option agreements
referenced above.  This Agreement may not be modified or amended except by
a written agreement, signed by Executive and a member of the Board of Directors.
 No failure on the part of the Company or Executive to exercise any power,
right or privilege or remedy under this Agreement, and no delay on the part of
the Company or Executive in such exercise shall operate as a waiver of such
power, right, privilege or remedy; and no single or partial exercise of any such
power, right, privilege or remedy shall preclude any other further exercise
thereof or any other power, right, privilege or remedy.  Any waiver must be
in writing and executed by the parties.  The captions contained in this
Agreement are for convenience only and shall not be considered part of this
Agreement.  All definitions used in this Agreement shall apply to the
Exhibits to this Agreement and other related documentation signed
simultaneously.

IN
WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as
of the date written above.

			
	
DATED:
 
	
 
	
 

	
 
	
 
	
ANDREW
S. PRINCE

	
DATED:
	
 
	
 

	
 
	
 
	
PRECISION
AEROSPACE COMPONENTS, INC.

	
 
	
 
	
 

	
 
	
By: 
	
 

	
 
	
 
	
DAVID
WALTERS, Director

			
	
 
	
8

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