Document:

Unassociated Document

    Exhibit
10.6

    

    EXCHANGE
AND ACQUISITION AGREEMENT

    

    BY AND
AMONG

    

    ROYAL
STYLE DESIGN, INC.

    

    AND

    

    KUECHEN
SCHILLING GMBH.

    

    Dated
DECEMBER 31, 2009

     

    THIS
EXCHANGE AGREEMENT (the "Agreement"), is made and entered into as of December
31, 2009, by and among Royal Style Design, Inc., a Florida corporation ("RSD"),
and Kuechen Schilling, a GmbH formed under the laws of
Germany  ("SCHILLING”), and the owners of SCHILLING set forth on the
signature pages to this Agreement (collectively, the "Owners" or "SCHILLING
Owners"), with respect to the following facts:

    

    RECITALS

    

    A.           The
SCHILLING Owners own 100% of the issued and outstanding ownership interests
(“Interests”) in SCHILLING as set forth opposite their respective names on
Schedule I to this Agreement.

    

    B.          
 RSD desires to acquire from the SCHILLING Owners, and the SCHILLING Owners
desire to sell and transfer to RSD, all of the SCHILLING Interests owned by them
on the Closing Date in exchange for the issuance and delivery by RSD of shares
of Common Stock,  par value $.001 per share, of RSD ("Common Stock"),
as set forth in Schedule I hereto, on the terms and conditions set forth below
(the "Exchange"); and

     

    C.           The
Exchange shall qualify as a transaction in securities exempt from registration
or qualification under the Securities Act and under the applicable securities
laws of each state or jurisdiction where Owners of the Company
reside.

     

    NOW,
THEREFORE, in consideration of the foregoing premises and representations,
warranties, covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
hereby agree as follows:

    

    

    ARTICLE
I

     

    EXCHANGE
OF SECURITIES

    Section
1.1 The Exchange.

    

    On the
terms and subject to the conditions of this Agreement, on the Closing Date, RSD
shall issue and deliver to each of the SCHILLING Owners such number of shares of
Common Stock as is set forth opposite such SCHILLING Owner name on Schedule I
hereto, and each such SCHILLING Owner shall sell, transfer and deliver to RSD,
the number of issued and outstanding SCHILLING Interests set forth opposite such
SCHILLING Owner’s name on Schedule I hereto along with a duly executed
assignment endorsed in favor of RSD or the SCHILLING Acquisition Subsidiary, as
specified by RSD.

    

    
      
         

      

      
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    ARTICLE
II

     

    THE
CLOSING

     

    Section
2.1 Closing Date.

    

    The
closing of the Exchange and the other transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of SCHILLING at 11:00
AM on  December  31, 2009, or at such other location, date
and time as RSD and SCHILLING may agree. The time and date upon which the
Closing actually occurs being referred to herein as the "Closing
Date".

    

    Section
2.2 Transactions at Closing.

    

    At the
Closing, the following transactions shall take place and no transaction shall be
deemed to have been completed or any document delivered until all such
transactions have been completed and all required documents
delivered:

    

    (a) RSD
shall deliver the following documents:

    

    (i)
Validly executed stock certificates corresponding to the Common Stock issued in
the name of the SCHILLING Owners in the amounts set forth in Schedule
I;

    

    (ii)
Certificate of good standing from the Secretary of State of the State of
Florida, dated at or about the Closing Date, to the effect that RSD is in good
standing under the laws of said state;

    

    (iii)
Certified copy of the Certificate of Incorporation of RSD, as certified by the
Secretary of State of the State of Florida at or about the Closing
Date;

    

    (iv) An
officer's certificate duly executed by RSD's chief executive officer to the
effect that the conditions set forth in Section 7.1(a) below have been
satisfied, dated as of the date of the Closing; and

    

    (v) Such
other documents and instruments as SCHILLING may reasonably
request.

    

    (b)
SCHILLING shall deliver or cause to be delivered the following documents and/or
shall take the following actions:

    

    (i)
SCHILLING shall deliver to RSD Interest certificates in the name of, or assigned
to, RSD or the SCHILLING Acquisition Subsidiary, as specified by RSD, in respect
of all SCHILLING Interests and shall register SCHILLING Interests in the name of
RSD or the SCHILLING Acquisition Subsidiary, as the case may be, in the Owners
register of SCHILLING;

    

    (ii)
Certificate of good standing from the Secretary of German Corporations, dated at
or about the Closing Date, to the effect that SCHILLING is a corporation
organized and in good standing under the laws of said jurisdiction;

    

    (iii)
Certified copy of the Certificate of Incorporation of SCHILLING, as amended to
the Closing Date;

    

    (iv) An
officer's certificate duly executed by SCHILLING 's chief executive officer to
the effect that the conditions set forth in Section7.2(a) below have been
satisfied, dated as of the date of the Closing;

    

    (v) An
officer's certificate duly executed by SCHILLING 's Chief Executive Officer and
Secretary certifying that the attached ownership register of SCHILLING is an
accurate and complete ownership register of SCHILLING as of the Closing Date;
and

    

    (vi) Such
other documents and instruments as RSD may reasonably request, including
documents evidencing such resignations from and appointments to the governing
body of SCHILLING, effective the Closing Date, as are set forth in Schedule II
hereto.

    

    (c) The
SCHILLING Owners shall deliver the following documents:

    

    (i) to
RSD, duly executed assignments effecting the immediate and unconditional sale,
assignment and irrevocable transfer of SCHILLING Interests to RSD or the
SCHILLING Acquisition Subsidiary, as specified by RSD, free and clear of any
liens, or any other third party rights of any kind and nature, whether
voluntarily incurred or arising by operation of law; and

    

    (ii) to
SCHILLING, as agent for RSD, all certificates in respect of SCHILLING
Interests.

    

    
      
         

      

      
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    ARTICLE
III

     

    REPRESENTATIONS
AND WARRANTIES OF RSD

     

    RSD
hereby makes the following representations and warranties to SCHILLING and each
SCHILLING Owner:

    

    Section
3.1 Organization and Qualification.

    

    RSD is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization, with the corporate power and authority to own and
operate its business as presently conducted, except where the failure to be or
have any of the foregoing would not have a Material Adverse Effect. RSD is duly
qualified as a foreign corporation to do business and is in good standing in
each jurisdiction where the character of its properties owned or held under
lease or the nature of its activities makes such qualification necessary, except
for such failures to be so qualified or in good standing as would not have a
Material Adverse Effect. RSD has no subsidiaries and is not a participant in any
joint venture, partnership, or similar arrangement.

    

    Section
3.2 Authorization.

    

    RSD has
the requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement and to consummate the Exchange.

    

    Section
3.3 Validity and Effect of Agreement.

    

    This
Agreement has been duly and validly executed and delivered by RSD and, assuming
that it has been duly authorized, executed and delivered by the other parties
hereto, constitutes a legal, valid and binding obligation of RSD in accordance
with its terms except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally.

    

    Section
3.4 No Conflict.

    

    Neither
the execution and delivery of this Agreement by RSD nor the performance by such
parties of their respective obligations hereunder, nor the consummation of the
Exchange, will: (i) conflict with RSD's Certificate of Incorporation or Bylaws;
(ii) violate any statute, law, ordinance, rule or regulation, applicable to RSD
or any of the properties or assets of RSD; or (iii) violate, breach, be in
conflict with or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or permit the termination of
any provision of, or result in the termination of, the acceleration of the
maturity of, or the acceleration of the performance of any obligation of RSD
and/or affect any of the obligations hereunder, or result in the creation or
imposition of any Lien upon any properties, assets or business of RSD under, any
Contract or any order, judgment or decree to which RSD is a party or by which it
or any of its

    assets or
properties is bound or encumbered except, in the case of clauses (ii) and (iii),
for such violations, breaches, conflicts, defaults or other occurrences which,
individually or in the aggregate, would not have a material adverse effect on
its obligation to perform its covenants under this Agreement.

    

    Section
3.5 Required Filings and Consents.

    

    The
execution and delivery of this Agreement by RSD does not, and the performance of
this Agreement by RSD will not, require any consent, approval, authorization or
permit of, or filing with or notification to, Governmental Authority with
respect to RSD except: (i) compliance with applicable requirements of the
Securities Act, the Exchange Act and state securities laws ("Blue Sky Laws");
and (ii) where the failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on RSD,
or would not prevent or materially delay consummation of the Exchange or
otherwise prevent the parties hereto from performing their respective
obligations under this Agreement.

    

    Section
3.6 Capitalization.

    

    The
authorized capital stock of RSD consists of 100,000,000 shares of Common Stock,
par value $.001 per share, of which 92,735,800 shares are issued and
outstanding, and 10,000,000 shares of Preferred Stock, par value $.001 per
share, of which no shares are outstanding. Except for the transactions
contemplated by this Agreement, there are no other share capital, pre-emptive
rights, convertible securities, outstanding warrants, options or other rights to
subscribe for, purchase or acquire from RSD any shares of capital stock of RSD
and there are no contracts or commitments providing for the issuance of, or the
granting of rights to acquire, any shares of capital stock of RSD or under which
RSD is, or may become, obligated to issue any of its securities. All shares of
capital stock of RSD outstanding as of the date of this Agreement have been duly
authorized and validly issued, are fully paid and non­assessable, and are
free of pre-emptive rights. As of the Closing Date (as defined herein), there
will be no more than 92,735,800 shares of Common Stock issued or outstanding
prior to the Exchange.

     

    
      
         

      

      
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    Section
3.7 Status of Common Stock.

    

    The
Common Stock, when issued and allotted at the Closing in exchange for SCHILLING
Interests, will be duly authorized, validly issued, fully paid, non-assessable,
and free of any pre-emptive rights, will be issued in compliance with all
applicable laws concerning the issuance of securities, and will have the rights,
preferences, privileges, and restrictions set forth in RSD's charter and bylaws,
and will be free and clear of any Liens of any kind and duly registered in the
name of the SCHILLING Owners, in RSD's stockholders ledger.

    

    Section
3.8 Litigation.

    

    There is
no Action pending or threatened against RSD that, individually or in the
aggregate, directly or indirectly, would be reasonably likely to have a Material
Adverse Effect, nor is there any outstanding judgment, decree or injunction, in
each case against RSD, that, individually or in the aggregate, has or would be
reasonably likely to have a Material Adverse Effect.

    

    Section
3.9 Books and Records.

    

    The books
and records, financial and others, of RSD are in all material respects complete
and correct and have been maintained in accordance with good business accounting
practices.

    

    Section
3.10 Insurance.

    

    RSD has
no insurable properties and RSD does not maintain any insurance covering its
assets, business, equipment, properties, operations, employees, officers, or
directors. To RSD's knowledge since inception there has not been any damage,
destruction or loss, which could have been deemed as an "Insurance
Event".

    

    Section
3.11 Compliance.

    

    RSD is in
compliance with all foreign, federal, state and local laws and regulations of
any Governmental Authority, except to the extent that failure to comply would
not, individually or in the aggregate, have a Material Adverse Effect. RSD has
not received any notice asserting a failure, or possible failure, to comply with
any such law or regulation, the subject of which notice has not been resolved as
required thereby or otherwise to the satisfaction of the party sending the
notice, except for such failure as would not, individually or in the aggregate,
have a Material Adverse Effect. RSD does not, and is not require to, hold any
permits, licenses or franchises from Governmental Authorities.

    

    Section
3.12 Absence of Certain Changes.

    

    Since
December 1, 2009, except as expressly permitted or required by this Agreement or
with the consent of SCHILLING, RSD has not:

    

    (a) sold
or otherwise issued any shares of capital stock;

     

    (b)
acquired any assets or incurred any Liabilities;

    

    (c)
amended its certificate of incorporation or bylaws;

    

    (d)
waived any rights of value which in the aggregate are extraordinary or material
considering the business of RSD;

    

    (e) made
any material change in its method of management, operation or
accounting;

    

    (f) made
any accrual or arrangement for or payment of bonuses or special compensation of
any kind or any severance or termination pay to any present or former officer or
employee;

    

    (g)
granted or agreed to grant any options, warrants or other rights for its stocks,
bonds or other corporate securities calling for the issuance thereof, which
option, warrant or other right has not been cancelled as of the Closing
Date;

    

    (h)
borrowed or agreed to borrow any funds or incurred or become subject to, any
material obligation or liability (absolute or contingent) except liabilities
incurred in the ordinary course of business;

    

    
      
         

      

      
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    (i)
become subject to any law or regulation which materially and adversely affects,
or in the future may adversely affect, the business, operations, properties,
assets or condition of RSD or become subject to any change or development in, or
effect on, RSD that has or could reasonably be expected to have a Material
Adverse Effect; or

    

    (j)
entered into any agreement to take any action described in clauses (a) through
(i) above

    

    Section
3.13 Previous Sales of Securities.

    

    Since
inception, RSD has sold Common Stock to investors only in reliance upon
applicable exemptions from the registration requirements under any applicable
law including the laws of the United States and any applicable states and all
such sales were made in accordance with the laws of said
jurisdictions.

    

    Section
3.14 Principals of RSD.

    

    During
the past five years, no officer or director of RSD has been:

    

    (a) the
subject of any bankruptcy petition filed by or against any business of which
such person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time;

    

    (b) the
subject of any conviction in a criminal proceeding or being subject to a pending
criminal proceeding (excluding traffic violations and other minor
offenses);

    

    (c) the
subject of any order, judgment, or decree, not subsequently reversed, suspended
or vacated, of any court of competent jurisdiction, permanently or temporarily
enjoining, barring, suspending or otherwise limiting his involvement in any type
of business, securities or banking activities; or

    

    (d) found
by a court of competent jurisdiction (in a civil action), the Commission or the
Commodity Futures Trading Commission to have violated a federal or state
securities or commodities law, and the judgment has not been reversed,
suspended, or vacated.

     

    Section
3.15 Brokers and Finders.

    

    Neither
RSD, nor any of its respective officers, directors, employees or managers, has
employed any broker, finder, advisor or consultant, or incurred any liability
for any investment banking fees, brokerage fees, commissions or finders' fees,
advisory fees or consulting fees in connection with the Exchange for which RSD
has or could have any liability.

    

    Section
3.16 Disclosure.

    

    As of the
Closing Date, there is no known material fact or information relating to the
business, condition (financial or otherwise), affairs, operations or assets of
RSD and/or its subsidiaries that has not been disclosed in writing to SCHILLING
and/or the SCHILLING Owners by RSD. No representation or warranty of RSD in this
Agreement or any statement or document delivered in connection herewith or
therewith, contained or will contain any untrue statement of a material fact or
fail to state any material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not
misleading.

    

    

    ARTICLE
IV

    

    REPRESENTATIONS
AND WARRANTIES OF SCHILLING

    

    SCHILLING
hereby makes the following representations and warranties to RSD:

     

    Section
4.1 Organization and Qualification.

     

    SCHILLING
is duly organized and validly existing under the laws of the Country of Germany,
with the corporate power and authority to own and operate its business as
presently conducted, except where the failure to be or have any of the foregoing
would not have a Material Adverse Effect. SCHILLING is duly qualified as a
foreign corporation to do business in each jurisdiction where the character of
its properties owned or held under lease or the nature of its activities makes
such qualification necessary, except for such failures to be so qualified as
would not have a Material Adverse Effect.

    

    
      
         

      

      
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    Section
4.2 Authorization; Validity and Effect of Agreement.

    

    SCHILLING
has the requisite corporate power and authority to execute, deliver and perform
its obligations under this Agreement and to consummate the Exchange. This
Agreement has been duly and validly executed and delivered by SCHILLING and,
assuming that it has been duly authorized, executed and delivered by the other
parties hereto, constitutes a legal, valid and binding obligation of SCHILLING,
in accordance with its terms except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws of general application
affecting enforcement of creditors' rights generally.

    

    Section
4.3 No Conflict.

    

    Neither
the execution and delivery of this Agreement by SCHILLING nor the performance by
SCHILLING of its obligations hereunder, nor the consummation of the Exchange,
will: (i) conflict with SCHILLING 's organization or governing documents; (ii)
violate any statute, law, ordinance, rule or regulation, applicable to SCHILLING
or any of its properties or assets; or (iii) violate, breach, be in conflict
with or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or permit the termination of any
provision of, or result in the termination of, the acceleration of the maturity
of, or the acceleration of the performance of any obligation of SCHILLING, or
result in the creation or imposition of any Lien upon any properties, assets or
business of SCHILLING under, any Material Contract or any order, judgment or
decree to which SCHILLING is a party or by which it or any of its assets or
Properties is bound or encumbered except, in the case of clauses (ii) or (iii),
for such violations, breaches, conflicts, defaults or other occurrences which,
individually or in the aggregate, would not have a Material Adverse Effect on
its obligation to perform its covenants under this Agreement.

    

    Section
4.4 Required Filings and Consents.

    

    The
execution and delivery of this Agreement by SCHILLING do not, and the
performance of this Agreement by SCHILLING will not require any consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Authority, with respect to SCHILLING, except: (i) compliance with
applicable requirements of the Securities Act, the Exchange Act, and Blue Sky
Laws; and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on SCHILLING, or materially delay consummation of the Exchange or
otherwise prevent the parties hereto from performing their obligations under
this Agreement.

     

    Section
4.5 Capitalization.

    

    All
SCHILLING Interests outstanding as of the date of this Agreement have been duly
authorized and validly issued, are fully paid and non-assessable, and are free
of pre-emptive rights.

    

    Section
4.6 Financial Statements.

    

    SCHILLING
has previously furnished to RSD true and complete copies of its balance sheets
as of September 30, 2009 and December 31, 2008, and its related statements of
operations for the periods ended September 30, 2009, and December 31, 2008 (all
of such financial statements of SCHILLING collectively, the “SCHILLING Financial
Statements"). The SCHILLING Financial Statements (including the notes thereto)
present fairly in all material respects the financial position and results of
operations and cash flows of SCHILLING at the date or for the period set forth
therein, in each case in accordance with GAAP applied on a consistent basis
throughout the periods involved (except as otherwise indicated therein). The
SCHILLING Financial Statements have been prepared from and in accordance with
the books and records of SCHILLING and its subsidiaries, as
applicable.

    

    Section
4.7 No Undisclosed Liabilities.

    

    Except as
disclosed in the SCHILLING Financial Statements, SCHILLING has no material
liabilities, indebtedness or obligations, except those that have been incurred
in the ordinary course of business, whether absolute, accrued, contingent or
otherwise, and whether due or to become due, and to the Knowledge of SCHILLING,
there is no existing condition, situation or set of circumstances that could
reasonably be expected to result in such a liability, indebtedness or
obligation.

     

    
      
         

      

      
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    Section
4.8 Properties and Assets.

    

    SCHILLING
has good and marketable title to, valid leasehold interests in, or the legal
right to use, all of the assets, properties and leasehold interests reflected in
the most recent SCHILLING Financial Statements, except for those sold or
otherwise disposed of since the date of such SCHILLING Financial Statements in
the ordinary course of business consistent with past practice.

    

    Section
4.9 Litigation.

    

    There is
no Action pending or threatened against SCHILLING that, individually or in the
aggregate, directly or indirectly, would be reasonably likely to have a Material
Adverse Effect, nor is there any outstanding judgment, decree or injunction, in
each case against SCHILLING, that, individually or in the aggregate, has or
would be reasonably likely to have a Material Adverse Effect.

     

    Section
4.10 Taxes.

    

    SCHILLING
has timely filed (or has had timely filed on its behalf) with the appropriate
tax authorities all tax returns required to be filed by it or on behalf of it,
and each such tax return was complete and accurate in all material respects, and
SCHILLING has timely paid (or has had paid on its behalf) all material Taxes due
and owing by it, regardless of whether required to be shown or reported on a tax
return, including Taxes required to be withheld by it. No deficiency for a
material Tax has been asserted in writing or otherwise, to SCHILLING 's
Knowledge, against SCHILLING or with respect to any of its assets, except for
asserted deficiencies that either (i) have been resolved and paid in full or
(ii) are being contested in good faith. There are no material Liens for Taxes
upon SCHILLING 's assets.

    

    Section
4.11 Compliance.

    

    To
SCHILLING 's Knowledge, SCHILLING is in compliance with all federal, state and
local laws and regulations of any Governmental Authority applicable to its
operations or with respect to which compliance is a condition of engaging in the
business thereof, except to the extent that failure to comply would not,
individually or in the aggregate, have a Material Adverse Effect. SCHILLING has
not received any notice asserting a failure, or possible failure, to comply with
any such law or regulation, the subject of which notice has not been resolved as
required thereby or otherwise to the satisfaction of the party sending the
notice, except for such failure as would not, individually or in the aggregate,
have a Material Adverse Effect. To SCHILLING 's Knowledge, SCHILLING holds all
permits, licenses and franchises from Governmental Authorities required to
conduct its business as it is now being conducted, except for such failures to
have such permits, licenses and franchises that would not, individually or in
the aggregate, have a Material Adverse Effect.

    

    Section
4.12 Absence of Certain Changes.

    

    Since the
date of the most recent SCHILLING Financial Statements,

    (a)           there
has been no change or development in, or effect on, SCHILLING that has or could
reasonably be expected to have a Material Adverse Effect,

    (b)           SCHILLING
has not sold, transferred, disposed of, or agreed to sell, transfer or dispose
of, any material amount of its assets other than in the ordinary course of
business,

    (c)           SCHILLING
has not paid any dividends or distributed any of its assets to any of its
Owners,

    (d)          
SCHILLING has not acquired any material amount of assets except in the ordinary
course of business, nor acquired or merged with any other business,

    (e)           SCHILLING
has not waived or amended any of its respective material contractual rights
except in the ordinary course of business, and

    (f)          
 SCHILLING has not entered into any agreement to take any action described
in clauses (a) through (e) above.

    

    

    Section
4.13 Principals of SCHILLING.

    

    During
the past five years, no officer or director of SCHILLING has been:

    

    (a) the
subject of any bankruptcy petition filed by or against any business of which
such person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time;

    

    (b) the
subject of any conviction in a criminal proceeding or being subject to a pending
criminal proceeding (excluding traffic violations and other minor
offences);

    

    
      
         

      

      
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    (c) the
subject of any order, judgment, or decree, not subsequently reversed, suspended
or vacated, of any court of competent jurisdiction, or temporarily enjoining,
barring, suspending or otherwise limiting his involvement in any type of
business, securities or banking activities; or

    

    (d) found
by a court of competent jurisdiction (in a civil action) to have violated a
federal or state securities or commodities law, and the judgment has not been
reversed, suspended, or vacated.

    

    
      ARTICLE
V

       

    

    REPRESENTATIONS
AND WARRANTIES OF SCHILLING OWNERS

    

    Each
SCHILLING Owner, severally and not jointly, hereby make the following
representations and warranties to SCHILLING and RSD:

    

    Section
5.1 Authority and Validity.

    

    Each
SCHILLING Owner has all requisite power to execute and deliver, to perform its
obligations under, and to consummate the transactions contemplated by, this
Agreement.

     

    Section
5.2 Validity.

    

    Upon the
execution and delivery of each other document to which each SCHILLING Owner is a
party (assuming due execution and delivery by each other party thereto) each
such other document will be the legal, valid and binding obligations of such
SCHILLING Owner, enforceable against such SCHILLING Owner in accordance with
their respective terms except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally.

     

    Section
5.3 No Breach or Violation.

    

    The
execution, delivery and performance by each SCHILLING Owner of this Agreement
and each other document to which it is a party, and the consummation of the
transactions contemplated hereby and thereby in accordance with the terms and
conditions hereof and thereof, do not and will not conflict with (i) the
certificate of incorporation or bylaws of such SCHILLING Owner, if applicable,
or (ii) any agreement to which such SCHILLING Owner is a party, or by which such
SCHILLING Owner or such SCHILLING Owner’s Assets are bound or
affected.

    

    Section
5.4 Consents and Approvals.

    

    No
consent, approval, authorization or order of, registration or filing with, or
notice to, any Government Authority or any other Person is necessary to be
obtained, made or given by each SCHILLING Owner in connection with the
execution, delivery and performance by such SCHILLING Owner of this Agreement or
any other document to which it is a party or for the consummation by such
SCHILLING Owner of the transactions contemplated hereby or thereby.

     

    Section
5.5 Title.

    

    SCHILLING
Interests to be delivered by each SCHILLING Owner in connection with the
transactions contemplated herein are, and at the Closing will be owned, of
record and beneficially, solely by such SCHILLING Owner, free and clear of any
Lien and represent such SCHILLING Owner’s entire ownership interest in
SCHILLING.

    

    Section
5.6 Investor Status.

    

    No
SCHILLING Owner is a U.S. Person and nor is acquiring the RSD Common Stock for
the account of any U.S. Person, (ii) if a corporation, it is not organized or
incorporated under the laws of the United States; (iii) if a corporation, no
director or executive officer is a national or citizen of the United States; and
(iv) it is not otherwise deemed to be a "U.S. Person" within the meaning of
Regulation S. If a resident of the United States, the SCHILLING Owner represents
that he or she is an “accredited investor” as defined in Rule 501 promulgated
under the Securities Act.  Each SCHILLING Owner represents and
warrants that he or she has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of his or
her investment in RSD.  Each SCHILLING Owner has the financial ability
to bear the economic risks of his or her entire investment in RSD for an
indefinite period, would be able to sustain a complete loss of his or her
investment, and has no need for liquidity with respect to his or her investment
in RSD.

     

    
      
         

      

      
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    Section
5.7 Investment Intent.

    

    The
shares of Common Stock are being acquired by each SCHILLING Owner for each
SCHILLING Owner’s own account for investment purposes only, not as a nominee or
agent and not with a view to the resale or distribution of any part thereof, and
each SCHILLING Owner has no present intention of selling, granting any
participation in or otherwise distributing the same. Each SCHILLING Owner
further represents that the SCHILLING Owner does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participation to such person or third person with respect to any of SCHILLING
Interests.

     

    Section
5.8 Restrictions on Transfer.

    

    Each
SCHILLING Owner understands that the shares of Common Stock have not been
registered under the Securities Act or registered or qualified under any foreign
or state securities law, and may not be, directly or indirectly, sold,
transferred, offered for sale, pledged, hypothecated or otherwise disposed of
without registration under the Securities Act and registration or qualification
under applicable state securities laws or the availability of an exemption
therefrom. In any case where such an exemption is relied upon by each SCHILLING
Owner from the registration requirements of the Securities Act and the
registration or qualification requirements of such state securities laws, each
SCHILLING Owner shall furnish RSD with an opinion of counsel stating that the
proposed sale or other disposition of such securities may be effected without
registration under the Securities Act and will not result in any violation of
any applicable state securities laws relating to the registration or
qualification of securities for sale, such counsel and opinion to be
satisfactory to RSD. Each SCHILLING Owner acknowledges that it is able to bear
the economic risks of an investment in the Common Stock for an indefinite period
of time, and that its overall commitment to investments that are not readily
marketable is not disproportionate to its net worth.

    

    Section
5.9 Informed Investment.

    

    Each
SCHILLING Owner has made such investigations in connection herewith as it deemed
necessary or desirable so as to make an informed investment decision without
relying upon SCHILLING for legal or tax advice related to this investment. In
making its decision to acquire the Common Stock, each SCHILLING Owner has not
relied upon any information other than information contained in this Agreement
and in the other Offering Documents.

     

    Section
5.10 Access to Information.

    

    Each
SCHILLING Owner acknowledges that it has had access to and has reviewed all
documents and records relating to RSD, including, but not limited to, the RSD
SEC Documents, that it has deemed necessary in order to make an informed
investment decision with respect to an investment in RSD; that it has had the
opportunity to ask representatives of RSD certain questions and request certain
additional information regarding the terms and conditions of such investment and
the finances, operations, business and prospects of RSD and has had any and all
such questions and requests answered to its satisfaction; and that based on the
foregoing it understands the risks and other considerations relating to an
investment in RSD.

    

    Section
5.11 Reliance on Representations.

    

    Each
SCHILLING Owner understands that the shares of Common Stock are being offered
and sold to it in reliance on specific exemptions from the registration and/or
public offering requirements of the U.S. federal and state securities laws and
that RSD and SCHILLING is relying in part upon the truth and accuracy of, and
such SCHILLING Owner’s compliance with, the representations, warranties,
agreements, acknowledgments and understandings of such SCHILLING Owner set forth
herein in order to determine the availability of such exemptions and the
eligibility of such SCHILLING Owner to acquire the Common Stock. Each SCHILLING
Owner represents and warrants to RSD and SCHILLING that any information the
SCHILLING Owner has heretofore furnished or furnishes herewith to RSD and
SCHILLING is complete and accurate, and further represents and warrants that it
will notify and supply corrective information to RSD and SCHILLING immediately
upon the occurrence of any change therein occurring prior to SCHILLING's
issuance of the Common Stock. Within five (5) days after receipt of a request
from SCHILLING, each SCHILLING Owner will provide such information and such
documents as may reasonably be necessary to comply with any and all laws and
regulations to which SCHILLING is subject.

    

    
      
         

      

      
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    Section
5.12 No General Solicitation.

    

    Each
SCHILLING Owner is unaware of, and in deciding to participate in the
transactions contemplated hereby is in no way relying upon, and did not become
aware of the transactions contemplated hereby through or as a result of, any
form of general solicitation or general advertising including, without
limitation, any article, notice, advertisement or other communication published
in any newspaper, magazine or similar media, or broadcast over television or
radio or the internet, in connection with the transactions contemplated
hereby.

     

    Section
5.13 Representation by Counsel.

    

    Each
SCHILLING Owner represents that it is represented by their own counsel in this
transaction and that such counsel has carefully reviewed with it the terms and
legal consequences of the Exchange and, in particular, the Tax consequences of
the Exchange to such SCHILLING Owner. SCHILLING and each SCHILLING Owner
acknowledges and understands that Michael Paige PLLC, Counsel to Jackson &
Campbell, P.C., Washington, D.C., acts as counsel to RSD. SCHILLING and each
SCHILLING Owner also acknowledges and understands that, in connection with the
Exchange contemplated by this Agreement and subsequent advice to and legal
services performed for RSD, Michael Paige PLLC and Jackson & Campbell, P.C.
and will not be representing SCHILLING or the SCHILLING Owners, but will be
representing RSD.

    

    

    ARTICLE
VI

     

    CERTAIN
COVENANTS

     

    Section
6.1 Conduct of Businesses by Parties.

     

    RSD and
SCHILLING agree that, between the date of this Agreement and the Closing Date,
except as contemplated by any other provision of this Agreement, or unless the
other party shall otherwise consent in writing:

    

    (e) the
businesses of RSD and SCHILLING shall be conducted only in, and such parties
shall not take any action except in, the ordinary course of business and in a
manner consistent with past practice; and

    

    (f) RSD and
SCHILLING shall use their reasonable best efforts to preserve substantially
intact their respective business organizations, to keep available the services
of their current officers, employees and consultants and to preserve the current
relationships of RSD and SCHILLING with customers, suppliers and other persons
with which RSD or SCHILLING, as the case may be, has significant business
relations.

    

    Section
6.2 Access to Information.

    

    At all
times prior to the Closing or the earlier termination of this Agreement in
accordance with the provisions of Article IX, and in each case subject to
Section 6.3 below, each party hereto shall provide to the other party (and the
other party's authorized representatives) reasonable access during normal
business hours and upon reasonable prior notice to the premises, properties,
books, records, assets, liabilities, operations, contracts, personnel, financial
information and other data and information of or relating to such party
(including without limitation all written proprietary and trade secret
information and documents, and other written information and documents relating
to intellectual property rights and matters), and will cooperate with the other
party in conducting its due diligence investigation of such party, provided that
the party granted such access shall not interfere unreasonably with the
operation of the business conducted by the party granting access, and provided
that no such access need be granted to privileged information or any agreements
or documents subject to confidentiality agreements.

     

    Section
6.3 Confidentiality.

    

    Each
party shall hold, and shall cause its respective Affiliates and representatives
to hold, all Confidential Information made available to it in connection with
the Exchange in strict confidence, shall not use such information except for the
sole purpose of evaluating the Exchange and shall not disseminate or disclose
any of such information other than to its directors, officers, managers,
employees, shareholders, interest holders, Affiliates, agents and
representatives, as applicable, who need to know such information for the sole
purpose of evaluating the Exchange (each of whom shall be informed in writing by
the disclosing party of the confidential nature of such information and directed
by such party in writing to treat such information confidentially). The above
limitations on use, dissemination and disclosure shall not apply to Confidential
Information that (i) is learned by the disclosing party from a third party
entitled to disclose it; (ii) becomes known publicly other than through the
disclosing party or any third party who received the same from the disclosing
party, provided that the disclosing party had no Knowledge that the disclosing
party was subject to an obligation of confidentiality; (iii) is required by law
or court order to be disclosed by the parties; or (iv) is disclosed with the
express prior written consent thereto of the other party. The parties shall
undertake all necessary steps to ensure that the secrecy and confidentiality of
such information will be maintained. In the event a party is required by court
order or subpoena to disclose information which is otherwise deemed to be
confidential or subject to the confidentiality obligations hereunder, prior to
such disclosure, the disclosing party shall: (i) promptly notify the
non-disclosing party and, if having received a court order or subpoena, deliver
a copy of the same to the non-disclosing party; (ii) cooperate with the
non-disclosing party, at the expense of the non-disclosing party, in obtaining a
protective or similar order with respect to such information; and (iii) provide
only that amount of information as the disclosing party is advised by its
counsel is necessary to strictly comply with such court order or
subpoena.

     

    
      
         

      

      
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    Section
6.4 Further Assurances.

    

    Each of
the parties hereto agrees to use its best efforts before and after the Closing
Date to take or cause to be taken all action, to do or cause to be done, and to
assist and cooperate with the other party hereto in doing, all things necessary,
proper or advisable under applicable laws to consummate and make effective, in
the most expeditious manner practicable, the Exchange, including, but not
limited to: (i) satisfying the conditions precedent to the obligations of any of
the parties hereto; (ii) obtaining all waivers, consents and approvals from
other parties necessary for the consummation of the Exchange, (iii) making all
filings with, and obtain all consents, approvals and authorizations that are
required to be obtained from, Governmental Authorities, (iv) defending of any
lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the performance of the obligations hereunder; and
(v) executing and delivering such instruments, and taking such other actions, as
the other party hereto may reasonably require in order to carry out the intent
of this Agreement.

     

    Section
6.5 Public Announcements.

    

    RSD, the
SCHILLING Owners and SCHILLING shall consult with each other before issuing any
press release or otherwise making any public statements with respect to the
Exchange or this Agreement, and shall not issue any other press release or make
any other public statement without prior consent of the other parties, except as
may be required by law or, with respect to RSD, by obligations pursuant to rule
or regulation of the Exchange Act, the Securities Act, any rule or regulation
promulgated thereunder or any rule or regulation of the National Association of
Securities Dealers.

    

    Section
6.6 Notification of Certain Matters.

    

    Each
party hereto shall promptly notify the other party in writing of any events,
facts or occurrences that would result in any breach of any representation or
warranty or breach of any covenant by such party contained in this
Agreement.

    

    Section
6.7 Prohibition on Trading in RSD Securities.

    

    All
parties acknowledge that information concerning the matters that are the subject
matter of this Agreement may constitute material non-public information under
United States federal securities laws, and
that United States federal securities laws prohibit any person who has received
material non-public information relating to RSD from purchasing or selling
securities of RSD, or from communicating such information to any person under
circumstances in which it is reasonably foreseeable that such person is likely
to purchase or sell securities of RSD. Accordingly, until such time as any such
non-public information has been adequately disseminated to the public, the
parties to this Agreement shall not purchase or sell any securities of
RSD.

    

    Section
6.8 Capital for RSD.

    

    Immediately
following the Closing Date, in conjunction with the Exchange, the SCHILLING
Owners shall cause SCHILLING to contribute the sum of US$________________ to the
capital of RSD.

    

    Section
6.9 SCHILLING Owners Right to Require “Spin-Off” by RSD of Formerly Owned
Companies.

     

    
      
         

      

      
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    Following
the Closing, Victor Schilling shall have the right, on or before the third
anniversary of the Closing Date, to require RSD to take the following actions:
on thirty (30) days notice to the Board of Directors of RSD by such former RSD
Shareholder, RSD shall initiate the regulatory filing process for clearance by
the SEC of the spin-off ("Spin-Off") to its shareholders of the shares of its
SCHILLING subsidiary as specified by one or more of such former SCHILLING
Owners, such distribution to be made being pro-rata as a dividend to the
shareholders of RSD.   Upon SEC clearance, RSD shall proceed
promptly with the Spin-Off, and from the date of the Spin-Off distribution, the
business of the subsidiary or subsidiaries so spun off shall be operated as a
separate reporting company under the Exchange Act by its
management.  The management and former owners of SCHILLING shall
provide full cooperation to RSD in the SEC clearance process.  All
expenses of the Spin-Off shall be borne equally by RSD and the subsidiary or
subsidiaries to be spun off.

    

    Section
6.10 SCHILLING Owners Right to Repurchase Ownership of Formerly Owned
Company.

    

    Following
the Closing Date, Victor Schilling shall have the right to
repurchase  ownership of the particular company each such SCHILLING
Owner sold to SCHILLING, i.e., KUECHEN SCHILLING as follows: the Interests of
SCHILLING held by RSD may be repurchased by the SCHILLING Owner that is the
former owner of that subsidiary at any time in the first year following the
Closing Date, at the option of such SCHILLING Owner and on ninety (90) days
notice to RSD, by the SCHILLING Owner paying to RSD the value of that
subsidiary, as such value is determined by the Board of Directors of RSD (RSD
Common Stock may be retransfered to RSD by the SCHILLING Owners as part of the
consideration to repurchase the subsidiary, and any shares of Common Stock so
retransferred shall be valued at market at the time of the
repurchase).

     

     

    ARTICLE
VII

     

    CONDITIONS
TO CONSUMMATION OF THE EXCHANGE

     

    Section
7.1 Conditions to Obligations of SCHILLING and SCHILLING Owners.

    

    The
obligations of SCHILLING and SCHILLING Owners to consummate the Exchange shall
be subject to the fulfillment, or written waiver by SCHILLING, at or prior to
the Closing, of each of the following conditions:

    

    (a) RSD
shall have delivered to SCHILLING each of the documents required by Section
2.2(a) of this Agreement;

    

    (b) The
representations and warranties of RSD set out in this Agreement shall be true
and correct in all material respects at and as of the time of the Closing as
though such representations and warranties were made at and as of such
time;

    

    (c) RSD
shall have performed and complied in all material respects with all covenants,
conditions, obligations and agreements required by this Agreement to be
performed or complied with by such parties on or prior to the Closing
Date;

    

    (d) All
consents, approvals, permits, authorizations and orders required to be obtained
from, and all registrations, filings and notices required to be made with or
given to, any Governmental Authority or Person as provided herein shall have
been obtained;

    

    (e)
SCHILLING shall have completed a due diligence review of the business,
operations, financial condition and prospects of RSD and shall have been
satisfied with the results of its due diligence review in its sole and absolute
discretion;

    

    (f) There
has been no Material Adverse Effect on the business, condition or prospects of
RSD until the Closing Date;

    

    (g) RSD
shall file if applicable with the SEC a Schedule 14(f)-l with respect to any
change of control transactions described in this Agreement, and shall have
caused the Schedule 14(f)01 to be mailed to each registered holder of its Common
Stock;

    

    (h)
Holders of all of the SCHILLING Interests shall have become party to the
Exchange; and

    

    (i) The
outstanding shares of Common Stock of RSD prior to the Closing shall not exceed
92,735,800 shares.

    

    
      
         

      

      
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    Section
7.2 Conditions to Obligations of RSD.

    

    The
obligations of RSD to consummate the Exchange shall be subject to the
fulfillment, or written waiver by RSD, at or prior to the Closing of each of the
following conditions:

    

    (a)
SCHILLING shall have delivered to RSD each of the documents required by Section
2.2(b) of this Agreement;

    

    (b) The
SCHILLING Owners shall have delivered to RSD the documents required by Section
2.2(c) of this Agreement;

    

    (c) The
representations and warranties of SCHILLING and the SCHILLING Owners set out in
this Agreement shall be true and correct in all material respects at and as of
the time of the Closing as though such representations and warranties were made
at and as of such time;

    

     

    (d)
SCHILLING shall have performed and complied in all material respects with all
covenants, conditions, obligations and agreements required by this Agreement to
be performed or complied with by SCHILLING on or prior to the Closing
Date;

     

    (e) All
consents, approvals, permits, authorizations and orders required to be obtained
from, and all registrations, filings and notices required to be made with or
given to, any Governmental Authority or Person as provided herein shall have
been obtained;

    

    (f) RSD
shall have completed a due diligence review of the business, operations,
financial condition and prospects of SCHILLING and shall have been satisfied
with the results of its due diligence review in its sole and absolute
discretion;

    

    (g) There
has been no Material Adverse Effect on the business, condition or prospects of
SCHILLING until the Closing Date;

    

    (h)
SCHILLING shall have paid all of the costs and expenses of SCHILLING associated
with the transactions contemplated herein;

    

    (i)
Holders of at least 100% of SCHILLING Interests shall have become party to the
Exchange; and

    

    (j) RSD,
at its option, shall have received such opinions from SCHILLING’s attorneys and
auditors as may be reasonably required by RSD and its counsel.

    

    ARTICLE
VIII

     

    INDEMNIFICATION

     

    Section
8.1 Indemnification by RSD.

    

    (a)
Notwithstanding any other indemnification provision hereunder, RSD (the
"Indemnifying Party") shall indemnify and hold harmless SCHILLING and its
officers, directors and employees and each of the SCHILLING Owners (each an
"Indemnified Party"), from and against any and all demands, claims, actions or
causes of action, judgments, assessments, losses, liabilities, damages or
penalties and reasonable attorneys' fees and related disbursements
(collectively, "Claims") suffered by such Indemnified Party resulting from or
arising out of (i) any inaccuracy in or breach of any of the representations or
warranties made by the Indemnifying Party at the time they were made, and,
except for representations and warranties that speak as of a specific date or
time (which need only be true and correct as of such date or time), on and as of
the Closing Date, (ii) any breach or nonfulfillment of any covenants or
agreements made by the Indemnifying Party, (iii) any misrepresentation made by
the Indemnifying Party, in each case as made herein or in the Schedules or
Exhibits annexed hereto or in any closing certificate, schedule or any ancillary
certificates or other documents or instruments furnished by the Indemnifying
Party pursuant hereto or in connection with the Exchange, and (v) the operations
and liabilities of RSD and/or any of its subsidiaries, whether known or unknown,
arising out of any action, omission and/or period of time preceding the Closing
Date, including but not limited to any taxes levied with respect to
same.

    

    Section
8.2 Indemnification by SCHILLING.

     

    (a)
Notwithstanding any other indemnification provision hereunder,
SCHILLING  and the SCHILLING  Owners (each, the
"Indemnifying Party") shall, severally and jointly, indemnify and hold harmless
RSD, its officers, directors, attorneys, accountants and employees (each an
"Indemnified Party"), from and against any and all demands, claims, actions or
causes of action, judgments, assessments, losses, liabilities, damages or
penalties and reasonable attorneys' fees and related disbursements
(collectively, "Claims") suffered by such Indemnified Party resulting from or
arising out of (i) any inaccuracy in or breach of any of the representations or
warranties made by the Indemnifying Party at the time they were made, and,
except for representations and warranties that speak as of a specific date or
time (which need only be true and correct as of such date or time), on and as of
the Closing Date, (ii) any breach or nonfulfillment of any covenants or
agreements made by the Indemnifying Party, or (iii) any misrepresentation made
by the Indemnifying Party, in each case as made herein or in the Schedules or
Exhibits annexed hereto or in any closing certificate, schedule or any ancillary
certificates or other documents or instruments furnished by the Indemnifying
Party pursuant hereto or in connection with the Exchange.

    

    
      
         

      

      
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    Section
8.3 Indemnification Procedures.

    

    (a) Upon
obtaining knowledge of any Claim by a third party which has given rise to, or is
expected to give rise to, a claim for indemnification hereunder, the Indemnified
Party shall give written notice ("Notice of Claim") of such claim or demand to
the Indemnifying Party, specifying in reasonable detail such information as the
Indemnified Party may have with respect to such indemnification claim (including
copies of any summons, complaint or other pleading which may have been served on
it and any written claim, demand, invoice, billing or other document evidencing
or asserting the same). No failure or delay by the Indemnified Party in the
performance of the foregoing shall reduce or otherwise affect the obligation of
the Indemnifying Party to indemnify and hold the Indemnified Party harmless,
except to the extent that such failure or delay shall have actually adversely
affected the Indemnifying Party's ability to defend against, settle or satisfy
any Claims for which the Indemnified Party entitled to indemnification
hereunder.

    

    (b) If
the claim or demand set forth in the Notice of Claim given by an Indemnified
Party pursuant to Section 8.1 hereof is a claim or demand asserted by a third
party, the Indemnifying Party shall have fifteen (15) days after the date on
which Notice of Claim is given to notify Indemnified Party in writing of their
election to defend such third party claim or demand on behalf of the Indemnified
Party. If the Indemnifying Party elects to defend such third party claim or
demand, Indemnified Party shall make available to the Indemnifying Party and its
agents and representatives all records and other materials that are reasonably
required in the defense of such third party claim or demand and shall otherwise
cooperate with, and assist the Indemnifying Party in the defense of, such third
party claim or demand. So long as the Indemnifying Party is defending such third
party claim in good faith, the Indemnified Party shall not pay, settle or
compromise such third party claim or demand. If the Indemnifying Party elects to
defend such third party claim or demand, the Indemnified Party shall have the
right to participate in the defense of such third party claim or demand, at such
Indemnified Party's own expense. In the event, however, that such Indemnified
Party reasonably determines that representation by counsel to the Indemnifying
Party of both the Indemnifying Party and such Indemnified Party could reasonably
be expected to present counsel with a conflict of interest, then the Indemnified
Party may employ separate counsel to represent or defend it in any such action
or proceeding and the Indemnifying Party will pay the fees and expenses of such
counsel. If the Indemnifying Party does not elect to defend such third party
claim or demand or does not defend such third party claim or demand in good
faith, the Indemnified Party shall have the right, in addition to any other
right or remedy it may have hereunder, at the Indemnifying Party's expense, to
defend such third party claim or demand; provided, however, that (i) such
Indemnified Party shall not have any obligation to participate in the defense
of, or defend, any such third party claim or demand; (ii) such Indemnified
Party's defense of or its participation in the defense of any such third party
claim or demand shall not in any way diminish or lessen the obligations of the
Indemnifying Party under the agreements of indemnification set forth in this
Article VIII; and (iii) such Indemnified Party may not settle any claim without
the consent of the Indemnifying Party, which consent shall not be unreasonably
withheld or delayed.

    

    (c) The
Indemnifying Party and the other Indemnified Parties, if any, shall cooperate
fully in all aspects of any investigation, defense, pre-trial in respect of
which indemnity is sought pursuant to this Article VIII, including, but not
limited to, by providing the other party with reasonable access to employees and
officers (including as witnesses) and other information.

    

    (d)
Except for third party claims being defended in good faith, the Indemnifying
Party shall satisfy its obligations under this Article VIII in respect of a
valid claim for indemnification hereunder that is not contested by SCHILLING in
good faith in cash within thirty (30) days after the date on which Notice of
Claim is given.

    
 

    Section
8.4 Indemnification Procedures for Non-Third Party Claims.

    

    In the
event any Indemnified Party should have an indemnification claim against the
Indemnifying Party under this Agreement that does not involve a claim by a third
party, the Indemnified Party shall promptly deliver notice of such claim to the
Indemnifying Party in writing
and in reasonable detail. The failure by any Indemnified Party to so notify the
Indemnifying Party shall not relieve the Indemnifying Party from any liability
that it may have to such Indemnified Party, except to the extent that the
Indemnifying Party has been actually prejudiced by such failure. If the
Indemnifying Party does not notify the Indemnified Party within fifteen
(15) Business Days following its receipt of such notice that the Indemnifying
Party disputes such claim, such claim specified by the Indemnifying Party in
such notice shall be conclusively deemed a liability of the Indemnifying Party
under this Article VIII and the Indemnifying Party shall pay the amount of such
liability to the Indemnified Party on demand, or in the case of any notice in
which the amount of the claim is estimated, on such later date when the amount
of such claim is finally determined. If the Indemnifying Party disputes its
liability with respect to such claim in a timely manner, SCHILLING and the
Indemnified Party shall proceed in good faith to negotiate a resolution of such
dispute and, if not resolved through negotiations, such dispute shall be
resolved pursuant to Section 10.11.

    

    
      
         

      

      
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    Section
8.5 Limitations on Indemnification.

    

    No claim
for indemnification under this Article VIII shall be asserted by, and no
liability for such indemnify shall be enforced against, the Indemnifying Party
to the extent the Indemnified Party has theretofore received indemnification or
otherwise been compensated for such Claim. In the event that an Indemnified
Party shall later collect any such amounts recovered under insurance policies
with respect to any Claim for which it has previously received payments under
this Article VIII from the Indemnifying Party, such Indemnified Party shall
promptly repay to the Indemnifying Party such amount recovered.

    

    

    ARTICLE
IX

     

    TERMINATION

    Section
9.1 Termination.

    

    This
Agreement may be terminated at any time prior to the Closing:

    

    (a) by
mutual consent of RSD and SCHILLING;

    

    (b) by
SCHILLING, if the Closing shall not have occurred on or before December 31,
2009, or if any of the conditions to the Closing set forth in Section 10.1 shall
have become incapable of fulfillment by December 31, 2009 and shall not have
been waived in writing by SCHILLING; provided, however, that the right to
terminate this Agreement under this Section 9.1(b) shall not be available to
SCHILLING  if its action or failure to act has been a principal cause
of or resulted in the failure of the Exchange to occur on or before such date
and such action or failure to act constitutes a breach of this
Agreement;

    

    (c) by
RSD, if the Closing shall not have occurred on or before December 31, 2009 or if
any of the conditions to the Closing set forth in Section 7.2 shall have become
incapable of fulfillment by December 31, 2009 and shall not have been waived in
writing by RSD; provided, however, that the right to terminate this Agreement
under this Section 9.1(c) shall not be available to RSD if its action or failure
to act has been a principal cause of or resulted in the failure of the Exchange
to occur on or before such date and such action or failure to act constitutes a
breach of this Agreement;

    

    (d) by
RSD or SCHILLING  if any Governmental or judicial Authority shall have
issued an injunction, order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting any material portion of the
Exchange and such injunction, order, decree, ruling or other action shall have
become final and nonappealable;

    

    Section
9.2 Procedure and Effect of Termination.

    

    In the
event of termination of this Agreement pursuant to Section 9.1 hereof, written
notice thereof shall forthwith be given by the terminating party to the other
party, and, except as set forth below, this Agreement shall terminate and be
void and have no effect and the Exchange shall be abandoned without any further
action by the parties hereto; provided that, if such termination shall result
from the failure of or agreement in this of any representation a party to
perform a covenant, obligation Agreement or from the breach by RSD, or
SCHILLING  or warranty contained herein, such party shall be fully
liable for any and all damages incurred or suffered by the other party as a
result of such failure or breach. The provisions of Section 9.3, Section 9.5,
Section 9.2, and Article 8 hereof and Article X shall survive the termination of
this Agreement for any reason whatsoever.

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    

    ARTICLE
X

     

    MISCELLANEOUS

     

    Section
10.1 Entire Agreement.

    

    This
Agreement and the Schedules and Exhibits hereto contain the entire agreement
between the parties and supersedes all prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter
hereof.

    

    Section
10.2 Amendment and Modifications.

    

    This
Agreement may not be amended, modified or supplemented except by an instrument
or instruments in writing signed by the party against whom enforcement of any
such amendment, modification or supplement is sought.

    

    Section
10.3 Extensions and Waivers.

    

    At any
time prior to the Closing, the parties hereto entitled to the benefits of a term
or provision may (a) extend the time for the performance of any of the
obligations or other acts of the parties hereto, (b) waive any inaccuracies in
the representations and warranties contained herein or in any document,
certificate or writing delivered pursuant hereto, or (c) waive compliance with
any obligation, covenant, agreement or condition contained herein. Any agreement
on the part of a party to any such extension or waiver shall be valid only if
set forth in an instrument or instruments in writing signed by the party against
whom enforcement of any such extension or waiver is sought. No failure or delay
on the part of any party hereto in the exercise of any right hereunder shall
impair such right or be construed to be a waiver of, or acquiescence in, any
breach of any representation, warranty, covenant or agreement.

    

    Section
10.4 Successors and Assigns.

    

    This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, provided, however, that no party
hereto may assign its rights or delegate its obligations under this Agreement
without the express prior written consent of the other party hereto. Except as
provided in Article VIII, nothing in this Agreement is intended to confer upon
any person not a party hereto (and their successors and assigns) any rights,
remedies, obligations or liabilities under or by reason of this
Agreement.

    

    Section
10.5 Survival of Representations, Warranties and Covenants.

     

    The
representations and warranties contained herein shall survive the Closing and
shall thereupon terminate June 30, 2010. All covenants and agreements contained
herein which by their terms contemplate actions following the Closing shall
survive the Closing and remain in full force and effect in accordance with their
terms.

    

    Section
10.6 Headings; Definitions.

    

    The
Section and Article headings contained in this Agreement are inserted for
convenience of reference only and will not affect the meaning or interpretation
of this Agreement. All references to Sections or Articles contained herein mean
Sections or Articles of this Agreement unless otherwise stated. All capitalized
terms defined herein are equally applicable to both the singular and plural
forms of such terms.

    

    Section
10.7 Severability.

    

    If any
provision of this Agreement or the application thereof to any Person or
circumstance is held to be invalid or unenforceable to any extent, the remainder
of this Agreement shall remain in full force and effect and shall be reformed to
render the Agreement valid and enforceable while reflecting to the greatest
extent permissible the intent of the parties.

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    Section
10.8 Specific Performance.

    

    The
parties hereto agree that in the event that any party fails to consummate the
Exchange in accordance with the terms of this Agreement, irreparable damage
would occur, no adequate remedy at law would exist and damages would be
difficult to determine. It is accordingly agreed that the parties shall be
entitled to specific performance in such event, without the necessity of proving
the inadequacy of money damages as a remedy, in addition to any other remedy at
law or in equity.

     

    Section
10.9 Notices.

    

    All
notices hereunder shall be sufficiently given for all purposes hereunder if in
writing and delivered personally, sent by documented overnight delivery service
or, to the extent receipt is confirmed, telecopy, telefax, email or other
electronic transmission service to the appropriate address or number as set
forth below (or any other address duly notified by a party hereto pursuant to
the provisions of this Section 10.9).

    

    If to
RSD:

    Royal
Style Design, Inc.

    2561
Forsythe Road, Unit D

    Orlando,
FL 32807

    Attn:
Chief Executive Officer

    Facsimile:
407-553-0064

    

    

    

    If to
SCHILLING:

    Kuechen
Schilling Gmbh

    Rennerskamp
16 32289

    Rodinghausen-Bruchmuhlen,
Germany

    Phone:
05226 59 22 82

    Attn:
Chief Executive Officer

    Facsimile:
05226 592276

    

    Section
10.10 Governing Law.

    

    This
Agreement shall be governed by and construed in accordance with the laws of the
State of Florida, without regard to the conflicts of laws
principles.

    

    Section
10.11 Consent to Jurisdiction.

    

    The
parties shall in good faith attempt to resolve all disputes arising under this
Agreement or by reason of the Exchange by discussion or mediation resulting in
mutual agreement as to the manner of resolution of the particular dispute.
Failing such resolution, the Federal courts of competent jurisdiction in the
State of Florida shall have sole jurisdiction to resolve any disputes arising
under this Agreement or by reason of the Exchange.  Any action, suit
or other legal proceeding which is commenced to resolve any matter arising under
or relating to any provision of this Agreement shall be commenced only in a
federal court of competent jurisdiction the State of Florida and the parties
hereto each consents to the jurisdiction of such a court.

    

    Section
10.12 Counterparts.

    

    This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one and the
same agreement.

    

    Section
10.13 Certain Definitions. As used herein:

     

    (a)
"Affiliate" shall have the meanings ascribed to such term in Rule 12b-2 of the
Exchange Act;

    

    (b)
"Business Day" shall mean any day other than a Saturday, Sunday or a day on
which federally chartered financial institutions are not open for
business.

    

    (c)
"Confidential Information" shall mean the existence and contents of this
Agreement and the Schedules and Exhibits hereto, and all proprietary technical,
economic, environmental, operational, financial and/or business information or
material of one party which, prior to or following the Closing Date, has been
disclosed by SCHILLING, on the one hand, or RSD, on the other hand, in written,
oral (including by recording), electronic, or visual form to, or otherwise has
come into the possession of, the other;

    

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    (d)
"Contract" shall mean any oral, written or implied contracts, agreements,
licenses, instruments, indentures leases, powers of attorney, guaranties, surety
arrangements or other commitments of any kind;

    

    (e)
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder;

    

    (f)
"GAAP" shall mean generally accepted accounting principles in the United States
as in effect on the date or for the period with respect to which such principles
are applied;

    

    (g)
"Governmental Authority" shall mean any nation or government, any state,
municipality or other political subdivision thereof and any entity, body,
agency, commission or court, whether

    domestic,
foreign or multinational, exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government and any
executive official thereof;

    

    (h)
"Knowledge" shall mean (i) with respect to an individual, knowledge of a
particular fact or other matter, if such individual is aware of such fact or
other matter, and (ii) with respect to a Person that is not an individual,
knowledge of a particular fact or other matter if any individual who is serving,
or who has at any time served, as a director, officer, partner, executor, or
trustee of such Person (or in any similar capacity) has, or at any time had,
knowledge of such fact or other matter;

    

    (i)
"Lien" shall mean any security or other property interest or right, claim, lien,
pledge, option, charge, security interest, contingent or conditional sale, or
proxy, pre-emptive rights, first refusal rights, participation rights, or other
title claim or retention agreement, interest or other right or claim of third
parties, whether perfected or not perfected, voluntarily incurred or arising by
operation of law, and including any agreement (other than this Agreement) to
grant or submit to any of the foregoing in the future;

    

    (j)
"Material Adverse Effect" shall mean any adverse effect on the business,
condition (financial or otherwise) or results of operation of the applicable
entity;

    

    (k)
"Material Contract" shall mean any Contract, other than automotive loans and
equipment and furniture leases entered into in the ordinary course of business,
the liabilities or commitments associated therewith exceed, in the case of
SCHILLING, $50,000 individually or $100,000 in the aggregate;

    

    (1)
"Person" shall mean any individual, corporation, partnership, association, trust
or other entity or organization, including a governmental or political
subdivision or any agency or institution thereof;

    

    (m) “RSD
SEC Documents” shall mean all reports filed by RSD with the SEC under the
Exchange Act.

    

    (n) "SEC"
shall mean the Securities and Exchange Commission;

    

    (o)
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder; and

    

    (p)
“SCHILLING Acquisition Subsidiary” shall mean a 100% owned subsidiary
corporation of RSD formed for the purpose of holding the SCHILLING
Interests.

    

    (q)
"Taxes" shall mean all taxes (whether U.S. federal, state, local or other
non-U.S.) based upon or measured by income or gains from the sale
of  property and any other tax whatsoever, including, without
limitation, gross receipts, profits, sales, levies, imposts, deductions,
charges, rates, duties, use, occupation, value added, ad valorem, transfer,
franchise, withholding, payroll and social security, employment, excise, stamp
duty or property taxes, together with any interest, penalties, charges or fees
imposed with respect thereto.

    

    

    (BALANCE
OF PAGE LEFT INTENTIONALLY BLANK]

     

     

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

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

    

    ROYAL
STYLE DESIGN, INC.

    

    
      	
              By:
      /s/ Richard Lloyd

            	 
      	 
      
	
               

              Name:
      Richard Lloyd

            	 
      	 
      
	
               

              Title:
      CEO

            	 
      	 
      

    

     

     

    

    KUECHEN
SCHILLING, GMBH.

    

    
      	
              By:
      /s/ Victor Schilling

            	 
      	 
      
	
               

              Name:
      Victor Schilling

            	 
      	 
      
	
               

              Title:

            	 
      	 
      

    

    

    

    

    SCHILLING
OWNERS’ COUNTERPART SIGNATURE PAGE [Signature page must be executed by each
SCHILLING Owner]

    
      

      
        	
                /s/
      Victor Schilling

              	 
      	 
      
	
                Victor
      Schilling

              	 
      	 
      
	 	 	 
	 	 	 

      

      
 

    

    

    SCHEDULE
I

                                                                   

    
      	Name
      of Owner    	
              No.
      of Interests of SCHILLING

              to
      be Exchanged   

            	
              No.
      of  Shares of RSD

              to
      be Received in Exchange

            	 
      
	 
      	 
      	 
      	 
      
	Victor
      Schilling        	100%   	635,780	 
      

    

     

     

    19ex10_1.htm

     

    
      

       

      SECURITIES PURCHASE
AGREEMENT

       

      THIS SECURITIES PURCHASE AGREEMENT
(this “Agreement”), dated as
of January 4, 2010, by and among Man Shing Agricultural Holdings,
Inc., a Nevada corporation, with headquarters located at Unit 1005, 10/F,
Tower B, Hunghom Commercial Centre, 37 Ma Tau Wai Road, Hunghom, Kowloon, Hong
Kong (the “Company”), and China Angel Assets Management
Limited, a British Virgin Islands company (the “Buyer”).

       

       

      WITNESSETH:

       

      WHEREAS, the Company and the
Buyer are executing and delivering this Agreement in reliance upon an exemption
from securities registration pursuant to Section 4(2) and/or Rule 506 of
Regulation D (“Regulation D”) as
promulgated by the U.S. Securities and Exchange Commission (the “SEC”) under the
Securities Act of 1933, as amended (the “1933
Act”);

       

      WHEREAS, the parties desire
that, upon the terms and subject to the conditions contained herein, the Company
shall issue and sell to the Buyer(s), as provided herein, and the Buyer(s) shall
purchase up to One Million Dollars ($1,000,000) of investment units (the “Units”) each Unit
consisting of a secured convertible redeemable debenture (the “Debentures”) in the
amount of $100,000, along with 80,000 shares (the “Shares”) of Company
Common Stock, and one right (the “Right”) to buy an
additional Unit for up to three years.  The One Million Dollars
($1,000,000) (the “Purchase Price”) shall be funded on January 4, 2010 (the
“Closing”);
and

       

      WHEREAS, contemporaneously
with the execution and delivery of this Agreement, the parties hereto are
executing and delivering a
Registration Rights Agreement substantially in the form attached hereto as Exhibit A (the “Registration Rights
Agreement”) pursuant to which the Company has agreed to provide certain
registration rights under the 1933 Act and the rules and regulations promulgated
there under, and applicable state securities laws; and

       

      WHEREAS, contemporaneously
with the execution and delivery of this Agreement, the parties hereto are
executing and delivering Irrevocable Transfer Agent Instructions substantially
in the form attached hereto as Exhibit B (the “Irrevocable Transfer Agent
Instructions”); and

       

      WHEREAS, contemporaneously
with the execution and delivery of this Agreement, the parties hereto are
executing and delivering a Security Agreement substantially in the form attached
hereto as Exhibit
C, (the “Security Agreement”)
pursuant to which the Company has agreed to provide the Buyer a security
interest in Pledged Property (as this term is defined in the Security Agreement
dated the date hereof) to secure Company’s obligations under this Agreement, the
Debenture, the Registration Rights Agreement, the Security Agreement and the
Irrevocable Transfer Agent Instructions and the Right (as defined herein)
(collectively, the “Transaction Documents”) or any other obligations of the
Company to the Buyer;

       

      NOW, THEREFORE, in
consideration of the mutual covenants and other agreements contained in this
Agreement the Company and the Buyer hereby agree as follows:

       

      1. PURCHASE AND SALE OF
UNITS.

       

      (a) Purchase
of Units.  Subject to the satisfaction (or waiver) of the terms and
conditions of this Agreement, the Buyer agrees to purchase at the Closing (as
defined herein) and the Company agrees to sell and issue to the Buyer, at
Closing, Units in
amounts corresponding to the Purchase Price at Closing.   The
Debentures purchased by Buyer shall have a maturity date of one (3) years from
the Closing.  Upon execution hereof by Buyer, the Buyer shall wire
transfer the portion of the Purchase Price necessary to purchase the Units to be
acquired in the Closing to: “Greentree
Financial Group, Inc. as Escrow Agent for Angel Assets Management Limited  and Man
Shing Agricultural.” (“Escrow Agent”).

       

      (b) Closing
Date.  The Closing of the purchase and sale of the Units shall take
place on the 4th day
of January, 2010 subject to notification of satisfaction of the conditions to
the Closing set forth herein and in Sections 6 and 7 below (or such later date
as is mutually agreed to by the Company and the Buyer(s)) (the “Closing Date”). The
Closing shall occur on the respective Closing Date at the offices of Greentree
Financial Group, Inc. 7951 S.W. 6th
Street, Suite 216, Plantation, FL 33324 (or such other place as is mutually
agreed to by the Company and the Buyer(s).

       

      (c)           Escrow
Arrangements; Form of Payment.  Upon execution hereof by Buyer and
pending the Closing and disbursement, the Purchase Price for the Units to be purchased at the Closing
shall be deposited in an escrow account (the “Escrow Account”) with
Greentree Financial Group, Inc. as escrow agent (the “Escrow Agent”), pursuant
to the terms of the Escrow Agreement.  Subject to the satisfaction of
the terms and conditions of this Agreement, on the Closing Date, (i) the Escrow
Agent shall deliver to the Company in accordance with the terms of the Escrow
Agreement that portion of the
Escrow Funds (as that term is defined in the Escrow Agreement) equal to the
gross amount of the Units being
purchased by the Buyer on the Closing Date as set forth on  Schedule I
(minus the fees and expenses as set forth herein which shall be paid
directly from the Escrow
Funds at such Closing)
by wire transfer of immediately available funds and (ii) the Company shall
deliver to the Buyer, Units which the Buyer is purchasing duly executed on
behalf of the Company.

       

      2. BUYER’S REPRESENTATIONS AND
WARRANTIES.

       

      The Buyer
represents and warrants that:

       

      (a) Investment
Purpose.  The Buyer is acquiring the Units for its own account
for investment only and not with a view towards, or for resale in connection
with, the public sale or distribution thereof, except pursuant to sales
registered or exempted under the 1933 Act.

       

      (b) Regulation
S.  The Buyer
represents and warrants:

       

      (i) The offer
to purchase the Units was made to it outside of the United States, while it was,
at that time and at the time the Agreement was executed and delivered, and is
now, outside the United States;

       

      (ii) It is not
a U.S. Person (as such term is defined in Section 902(a) of Regulation S
promulgated under the United States Securities Act of 1933; and it has purchased
the Units for its own account and not for the account or benefit of any U.S.
person;

       

      (iii) All
offers and sales by the Buyer of the Units acquired pursuant to the Agreement
shall be made pursuant to an effective registration statement under the
Securities Act or pursuant to an exemption from, or in a transaction not subject
to, the registration requirements of the Securities Act;

       

      (iv) It is
familiar with and understands the terms and conditions and requirements
contained in Regulation S;

       

      (v) The Buyer
has not engaged in any "directed selling efforts" (as such term is defined in
Regulation S) with respect to the Units; and

       

      (vi) The Buyer
purchased the Units with investment intent and at present does not have the
intent to sell, dispose of, or otherwise transfer, the Units.

       

      (c) Reliance on
Exemptions.  The Buyer understands that the Units are being
offered and sold to it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and that the
Company is relying in part upon the truth and accuracy of, and such Buyer’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such Buyer set forth herein in order to determine the
availability of such exemptions and the eligibility of such Buyer to acquire
such securities.

       

      (d) Information.  The
Buyer and its advisors (and his or, its counsel), if any, have been furnished
with all materials relating to the business, finances and operations of the
Company and information he deemed material to making an informed investment
decision regarding his purchase of the Units, which have been requested by such
Buyer.  The Buyer and its advisors, if any, have been afforded the
opportunity to ask questions of the Company and its
management.  Neither such inquiries nor any other due diligence
investigations conducted by such Buyer or its advisors, if any, or its
representatives shall modify, amend or affect such Buyer’s right to rely on the
Company’s representations and warranties contained in Section 3
below.  The Buyer understands that its investment in the Units
involves a high degree of risk.  The Buyer is in a position regarding
the Company, which, based upon employment, family relationship or economic
bargaining power, enabled and enables such Buyer to obtain information from the
Company in order to evaluate the merits and risks of this
investment.  The Buyer has sought such accounting, legal and tax
advice, as it has considered necessary to make an informed investment decision
with respect to its acquisition of the Units.

       

      (e) No Governmental
Review.  The Buyer understands that no United States federal or
state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Units, or the fairness or
suitability of the investment in the Units, nor have such authorities passed
upon or endorsed the merits of the offering of the Units.

       

      (f) Transfer or
Resale.  The Buyer understands that: (i) the Units, Rights, and
Debentures have not been and are not being registered under the 1933 Act or any
state securities laws, and may not be offered for sale, sold, assigned or
transferred unless (A) subsequently registered thereunder, or (B) such Buyer
shall have delivered to the Company an opinion of counsel, in a generally
acceptable form, to the effect that such securities to be sold, assigned or
transferred may be sold, assigned or transferred pursuant to an exemption from
such registration requirements; (ii) any sale of such securities made in
reliance on Rule 144 under the 1933 Act (or a successor rule
thereto) (“Rule 144”) may
be made only in accordance with the terms of Rule 144 and further, if Rule 144
is not applicable, any resale of such securities under circumstances in which
the seller (or the person through whom the sale is made) may be deemed to
be an underwriter (as that term is defined in the 1933 Act) may require
compliance with some other exemption under the 1933 Act or the rules and
regulations of the SEC thereunder; and (iii) neither the Company nor any other
person is under any obligation to register such securities under the 1933 Act or
any state securities laws or to comply with the terms and conditions of any
exemption thereunder.

       

      (g) Legends.  The
Buyer understands that the certificates or other instruments representing the
Debentures, Rights, Shares and all certificates or other instruments
representing the shares of the Company’s common stock into which the Debentures
and Rights are converted shall bear a restrictive legend in substantially the
following form (and a stop ­transfer order may be placed against transfer of
such certificates):

       

      THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, GENERALLY ACCEPTABLE
TO COMPANY’S COUNSEL, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS.

       

      The
legend set forth above shall be removed and the Company within five (5) business
days shall issue a certificate without such legend to the holder of the security
upon which it is stamped, if, unless otherwise required by state securities
laws, (i) in connection with a sale transaction, provided the securities are
registered under the 1933 Act or (ii) in connection with a sale transaction,
after such holder provides the Company with an opinion of counsel, which opinion
shall be in form, substance and scope reasonably acceptable to counsel for the
Company, to the effect that a public sale, assignment or transfer of the
securities may be made without registration under the 1933 Act.

       

      (h) Authorization,
Enforcement.  This Agreement has been duly and validly
authorized, executed and delivered on behalf of such Buyer and is a valid and
binding agreement of such Buyer enforceable in accordance with its terms, except
as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies.

       

      (i) Receipt of
Documents.  The Buyer and his or its counsel has received and
read in their entirety:  (i) this Agreement and each representation,
warranty and covenant set forth herein, and the Transaction Documents; (ii) all
due diligence and other information necessary to verify the accuracy and
completeness of such representations, warranties and covenants; and (iii)
answers to all questions the Buyer submitted to the Company regarding an
investment in the Company; and the Buyer has relied on the information contained
therein and has not been furnished any other documents, literature, memorandum
or prospectus.

       

      (j) Due Formation
Buyer.  If the Buyer is a corporation, trust, partnership or
other entity that is not an individual person, it has been formed and validly
exists and has not been organized for the specific purpose of purchasing the
Units and is not prohibited from doing so.

       

      (k) No Legal Advice From the
Company.  The Buyer acknowledges, that it had the opportunity
to review this Agreement and the transactions contemplated by this Agreement
with his or its own legal counsel and investment and tax
advisors.  The Buyer is relying solely on such counsel and advisors
and not on any statements or representations of the Company or any of its
representatives or agents for legal, tax or investment advice with respect to
this investment, the transactions contemplated by this Agreement or the
securities laws of any jurisdiction.

       

      (l) Disclosure.  The
Company has not provided the Buyer or their agents or counsel with any
information that constitutes or might constitute material, nonpublic information
concerning the Company. The Buyer understands and confirms that the Company will
rely on the foregoing representations in effecting transactions in securities of
the Company.

       

      3. REPRESENTATIONS AND
WARRANTIES OF THE COMPANY.

       

      Except as
otherwise provided in the Company Disclosure Schedule delivered herewith, the
Company represents and warrants as of the date hereof and as of the Closing Date
to the Buyer that:

       

      (a) Organization and
Qualification.  The Company and its subsidiaries are
corporations duly organized and validly existing in good standing under the laws
of the jurisdiction in which they are incorporated, and have the requisite
corporate power to own their properties and to carry on their business as now
being conducted.  Each of the Company and its subsidiaries is duly
qualified as a foreign corporation to do business and is in good standing in
every jurisdiction in which the nature of the business conducted by it makes
such qualification necessary, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
Company and its subsidiaries taken as a whole.

       

      (b) Authorization, Enforcement,
Compliance with Other Instruments.  (i) The Company has
the requisite corporate power and authority to enter into and perform this
Agreement, the Transaction Documents, and any related agreements, and to issue
the Debentures, Rights and Shares in accordance with the terms hereof and
thereof, (ii) the execution and delivery of this Agreement, the Transaction
Documents and any related agreements by the Company and the consummation by it
of the transactions contemplated hereby and thereby, including, without
limitation, the issuance of the Units, have been duly authorized by the
Company’s Board of Directors and no further consent or authorization is required
by the Company, its Board of Directors or its stockholders, (iii) this
Agreement, the Transaction Documents and any related agreements have been duly
executed and delivered by the Company, (iv) this Agreement, the Transaction
Documents and any related agreements constitute the valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms, except as such enforceability may be limited by general principles
of equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the enforcement
of creditors’ rights and remedies.  The Company knows of no reason why
the Company cannot perform any of the Company’s obligations under this Agreement
or the Transaction Documents.

       

      (c) Capitalization.  The
authorized capital stock of the Company consists of 175,000,000 shares of Common
Stock, par value $0.001 per share and shares 25,000,000 shares of preferred
stock, par value $0.001 per share.  As of the date hereof (not
including any shares issued pursuant to this transaction), the Company has
34,001,963 shares of Common Stock issued and outstanding and 3,600,000 shares of
preferred stock issued and outstanding.  All of such outstanding
shares have been validly issued and are fully paid and
nonassessable.  No shares of Common Stock are subject to preemptive
rights or any other similar rights or any liens or encumbrances suffered or
permitted by the Company.  As of the date of
this Agreement, other than as disclosed in the attached schedule 3(c), (i) there
are no outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
subsidiaries, or contracts, commitments, understandings or arrangements by which
the Company or any of its subsidiaries is or may become bound to issue
additional shares of capital stock of the Company or any of its subsidiaries or
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company or any of its subsidiaries, (ii) there
are no outstanding debt securities and (iii) there are no agreements or
arrangements under which the Company or any of its subsidiaries is obligated to
register the sale of any of their securities under the 1933 Act and (iv) there
are no outstanding registration statements and there are no outstanding comment
letters from the SEC or any other regulatory agency.  There are no
securities or instruments containing anti-dilution or similar provisions that
will be triggered by the issuance of the Units as described in this
Agreement.  The Company has furnished to the Buyer true and correct
copies of the Company’s Articles of Incorporation, as amended and as in effect
on the date hereof (the “Articles of
Incorporation”), and the Company’s By-laws, as in effect on the date
hereof (the “By-laws”), and the
terms of all securities convertible into or exercisable for Common Stock and the
material rights of the holders thereof in respect thereto other than stock
options issued to employees and consultants.

       

      (d) Issuance of
Securities.  The Units are duly authorized and, upon issuance
in accordance with the terms hereof, shall be duly issued, fully paid and
nonassessable, are free from all taxes, liens and charges with respect to the
issue thereof.

       

      (e) No
Conflicts.  The execution, delivery and performance of this
Agreement, the Transaction Documents and any related agreements by the Company
and the consummation by the Company of the transactions contemplated hereby and
thereby will not (i) result in a violation of the Articles of Incorporation or
the By-laws or (ii), to the best knowledge of the Company, conflict with or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Company or any of its subsidiaries is a party, or result
in a violation of any law, rule, regulation, order, judgment or decree
(including United States federal and state securities laws and regulations and
the rules and regulations of the Over-The-Counter Bulletin Board on which the
Common Shares are quoted) applicable to the Company or any of its subsidiaries
or by which any property or asset of the Company or any of its subsidiaries is
bound or affected.  To the best knowledge of the Company, neither the
Company nor its subsidiaries is in violation of any term of or in default under
its Articles of Incorporation or By-laws or their organizational charter or
by-laws, respectively, or, any material contract,
agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or
order or any statute, rule or regulation applicable to the Company or its
subsidiaries.  The business of the Company and its subsidiaries is not
being conducted, and shall not be conducted in violation of any material law,
ordinance, or regulation of any governmental entity.  Except as
specifically contemplated by this Agreement and as required under the 1933 Act
and any applicable state securities laws, the Company is not required to obtain
any consent, authorization or order of, or make any filing or registration with,
any court or governmental agency in order for it to execute, deliver or perform
any of its obligations under or contemplated by this Agreement in accordance
with the terms hereof.  All consents, authorizations, orders, filings
and registrations which the Company is required to obtain pursuant to the
preceding sentence have been obtained or effected on or prior to the date
hereof, except for any required post-Closing notice filings under applicable
United States federal or state securities laws, if any.

       

      (f) SEC
Documents: Financial Statements.  The Company has filed, or furnished,
as applicable, all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC under the Exchange Act (the
foregoing materials, including the exhibits
and schedules thereto, and such
financial statements and documents incorporated by reference
therein, being hereinafter referred to as the “SEC Documents”).  The
Company has delivered to the Buyer or its representatives, or made available
through the SEC’s website at http://www.sec.gov, true and complete copies of the
SEC Documents.  As of their respective dates, the financial statements
of the Company included in the SEC
Documents (the “Financial Statements”) complied as to form in all material
respects with the published rules and regulations of the SEC with respect
thereto as in effect at the time of
filing.  Such financial statements have been prepared in
accordance with U.S. generally accepted accounting principles, consistently
applied, during the periods involved (except (i) as may be otherwise indicated
in such Financial Statements or the notes thereto, or (ii) in the case of
unaudited interim statements, to the extent they may exclude footnotes or may be
condensed or summary statements) and, fairly present in all material respects
the financial position of the Company as of the dates thereof and the results of
its operations and cash flows for the periods then ended (subject, in the case
of unaudited statements, to normal year-end audit adjustments).

       

      (g)  No Material
Misstatement or Omission.  None of the Company’s SEC Documents
at the time of filing, none of the materials provided to the Buyer by the
Company and none of the representation and warranties made in this Agreement or
any of the other  Transaction Documents include any untrue statements
of material fact, nor do the Company’s SEC Documents at the time of filing and
none of the representations and warranties made in this Agreement or any of the
other Transaction Documents omit to state any material fact required to be
stated therein necessary to make the statements made, in light of the
circumstances under which they were made, not misleading.

       

      (h) Absence of
Litigation.  There is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government agency,
self-regulatory organization or body pending against or affecting the Company,
the Common Stock or any of the Company’s subsidiaries, wherein an unfavorable
decision, ruling or finding would (i) have a material adverse effect on the
transactions contemplated hereby or (ii) adversely affect the validity or
enforceability of, or the authority or ability of the Company to perform its
obligations under, this Agreement or any of the Transaction Documents have a
material adverse effect on the business, operations, properties, financial
condition or results of  operations of the Company and its
subsidiaries taken as a whole.

       

      (i) Acknowledgment Regarding
Buyer’s Purchase of the Units.  The Company acknowledges and
agrees that the Buyer is acting solely in the capacity of an arm’s length
purchaser with respect to this Agreement and the transactions contemplated
hereby.  The Company further acknowledges that the Buyer is not acting
as a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to this Agreement and the transactions contemplated hereby and any
advice given by the Buyer or any of their respective representatives or agents
in connection with this Agreement and the transactions contemplated hereby is
merely incidental to such Buyer’s purchase of the Units.  The Company
further represents to the Buyer that the Company’s decision to enter into this
Agreement has been based solely on the independent evaluation by the Company and
its representatives.

       

      (j) No General
Solicitation.  Neither the Company, nor any of its affiliates,
nor any person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D under
the 1933 Act) in connection with the offer or sale of the Units.

       

      (k) No Integrated
Offering.  Neither the Company, nor any of its affiliates, nor
any person acting on its or their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security,
under circumstances that would require registration of the Units under the 1933
Act or cause this offering of the Units to be integrated with prior offerings by
the Company for purposes of the 1933 Act.

       

      (l) Employee
Relations.  Neither the Company nor any of its subsidiaries is
involved in any labor dispute nor, to the knowledge of the Company or any of its
subsidiaries, is any such dispute threatened.  None of the Company’s
or its subsidiaries’ employees is a member of a union and the Company and its
subsidiaries believe that their relations with their employees are
good.

       

      (m) Intellectual Property
Rights.  The Company and its subsidiaries own or possess
adequate rights or licenses to use all trademarks, trade names, service marks,
service mark registrations, service names, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets and
rights necessary to conduct their respective businesses as now
conducted.  The Company and its subsidiaries do not have any knowledge
of any infringement by the Company or its subsidiaries of trademark, trade name
rights, patents, patent rights, copyrights, inventions, licenses, service names,
service marks, service mark registrations, trade secret or other similar rights
of others, and, to the knowledge of the Company there is no claim, action or
proceeding being made or brought against, or to the Company’s knowledge, being
threatened against, the Company or its subsidiaries regarding trademark, trade
name, patents, patent rights, invention, copyright, license, service names,
service marks, service mark registrations, trade secret or other infringement;
and the Company and its subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing.

       

      (n) Environmental
Laws.  The Company and its subsidiaries are (i) in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants (“Environmental Laws”),
(ii) have received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses and
(iii) are in compliance with all terms and conditions of any such permit,
license or approval.

       

      (o) Title.  Any
real property and facilities held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company and its
subsidiaries.

       

      (p) Insurance.  The
Company and each of its current and future acquired subsidiaries are or will be
upon acquisition by the Company insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as management
of the Company believes to be prudent and customary in the businesses in which
the Company and its subsidiaries are engaged.  Neither the Company nor
any such subsidiary has been refused any insurance coverage sought or applied
for and neither the Company nor any such subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business at a cost that would not materially and
adversely affect the condition, financial or otherwise, or the earnings,
business or operations of the Company and its subsidiaries, taken as a
whole.

       

      (q) Regulatory
Permits.  The Company and its subsidiaries possess all material
certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective
businesses, and neither the Company nor any such subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit.

       

      (r) Internal Accounting
Controls.  The Company and each of its subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management’s
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability, and (iii)
the recorded amounts for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

       

      (s) No Material Adverse
Breaches, etc.  Neither the Company nor any of its subsidiaries
is subject to any charter, corporate or other legal restriction, or any
judgment, decree, order, rule or regulation which in the judgment of the
Company’s officers has or is expected in the future to have a material adverse
effect on the business, properties, operations, financial condition, results of
operations or prospects of the Company or its subsidiaries.  Neither
the Company nor any of its subsidiaries is in breach of any contract or
agreement which breach, in the judgment of the Company’s officers, has or is
expected to have a material adverse effect on the business, properties,
operations, financial condition, results of operations or prospects of the
Company or its subsidiaries.

       

      (t) Tax
Status.  The Company and each of its subsidiaries has made and
filed all federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject and (unless and
only to the extent that the Company and each of its subsidiaries has set aside
on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and has set aside on its books provision reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply.  There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the
officers of the Company know of no basis for any such claim.

       

      (u) Certain
Transactions.  Except for arm’s length transactions pursuant to
which the Company makes payments in the ordinary course of business upon terms
no less favorable than the Company could obtain from third parties and other
than the grant of stock options or stock grants disclosed to the Buyer, none of
the officers, directors, or employees of the Company is presently a party to any
transaction with the Company (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.

       

      (v) Fees and Rights of First
Refusal.  The Company is not obligated to offer the securities
offered hereunder on a right of first refusal basis or otherwise to any third
parties including, but not limited to, current or former shareholders of the
Company, underwriters, brokers, agents or other third parties.

       

      (w) Registration with the State
Administration of Foreign Exchange.  The Company will take all
required action to register the transfer of the proceeds from the Units that are
used in the Peoples’ Republic of China with the State Administration of Foreign
Exchange as an external debt and pursuant to the “Interim Measures on
Administration of External Debts” and reserve sufficient amounts of investment
and registered capital to provide for repayment of the proceeds and interest due
on the Debenture.  The Company will arrange a suitable opinion,
indicating that the proceeds used in the Peoples’ Republic of China and the
related interest may be paid outside of the Peoples’ Republic of
China.  Additionally, the Company will provide a copy of the State
Administration of Foreign Exchange registration of the external debt to the
Buyer at Closing or shortly thereafter.

       

      4. COVENANTS.

       

      (a) Best
Efforts.  Each party shall use its best efforts timely to
satisfy each of the conditions to be satisfied by it as provided in Sections 6
and 7 of this Agreement.

       

      (b) Reporting
Status.  Until the date on which none of the Debentures or
Rights are outstanding (the “Registration
Period”), the Company shall file in a timely manner all reports required
to be filed with the SEC pursuant to the 1934 Act and the regulations of the SEC
thereunder, and the Company shall not terminate its status as an issuer required
to file reports under the 1934 Act even if the 1934 Act or the rules and
regulations thereunder would otherwise permit such termination.

       

      (c) Use of
Proceeds.  The Company will use the net proceeds from the sale
of the Units for general working capital purposes.

       

      (d) Reservation of
Shares.  The Company shall take all action reasonably necessary
to at all times have authorized, and reserved for the purpose of issuance, such
number of shares of Common Stock as shall be necessary to effect the issuance of
the shares upon conversion of the Debentures.  If at any time the
Company does not have available such shares of Common Stock as shall from time
to time be sufficient to effect the issuance of all shares upon conversion of
the Debentures, the Company shall file a preliminary proxy statement with the
Securities and Exchange Commission within ten (10) business day and shall call
and hold a special meeting of the shareholders as soon as practicable after such
occurrence, for the sole purpose of increasing the number of shares
authorized.  The Company’s management shall recommend to the
shareholders to vote in favor of increasing the number of shares of Common Stock
authorized.  Management shall also vote all of its shares in favor of
increasing the number of authorized shares of Common Stock.

       

      (e) Fees and
Expenses.

       

      (i) Each of
the Company and the Buyer shall pay all costs and expenses incurred by such
party in connection with the negotiation, investigation, preparation, execution
and delivery of this Agreement the Transaction Documents and any other documents
relating to this transaction.

       

      (ii) The
Company has agreed to pay a legal services fee to JPF Securities Law, LLC of
$8,333 which shall be paid directly from the proceeds of the
Closing.

       

      (iii) The
Company shall pay a cash fee of $100,000 along with 366,664 Shares and 1 Right
to Benchmark, Inc. for service fees relating to this offering.

       

      (f) Debt
Restructure.

       

      (i) The
Company and Buyer have agreed to use a portion of the gross proceeds from the
sale of the Units to restructure the existing debt of $450,000 in the Company’s
subsidiary Hero Capital Profits Limited evidenced by that certain Series 2009
Secured Note dated September 9, 2009.  $200,000 of the outstanding
balance of $450,000 shall be exchanged for 2 Units and a cash payment of $75,000
which shall be disbursed from the US escrow account of Greentree Financial
Group, Inc. on January 4, 2010.  The balance of $175,000 shall remain
on the books of the Company’s subsidiary Hero Capital Profits Limited and the
Series 2009 Secured Note dated September 9, 2009, the Guaranty, Stock Pledge
Agreement, Affidavits and Irrevocable Transfer Instructions shall all remain in
effect.  After Closing the balance of the Series 2009 Secured Note
shall be $175,000 and the terms including interest and maturity date shall
remain unchanged.

       

      (g) Corporate Existence.
So long as any of the Debentures remain outstanding, the Company and its
subsidiaries shall not directly or indirectly consummate any merger,
reorganization, restructuring, reverse stock split consolidation, sale of all or
substantially all of the Company’s assets or any similar transaction or related
transactions (each such transaction, an “Organizational
Change”) unless, prior to the consummation an Organizational Change, the
Company obtains the written consent of the Buyer.  In the case of any
Organizational Change, the Company will make appropriate provision with respect
to such holders’ rights and interests to insure that the provisions of this
Section 4(g) will thereafter be applicable to the Debentures.

       

      (h) Transactions With
Affiliates. So long as any Debentures are outstanding, the Company shall
not, and shall cause each of its subsidiaries not to, enter into, amend, modify
or supplement, or permit any subsidiary to enter into, amend, modify or
supplement any agreement, transaction, commitment, or arrangement with any of
its or any subsidiary’s officers, directors, persons who were officers or
directors at any time during the previous two (2) years, stockholders who
beneficially own five percent (5%) or more of the Common Stock, or Affiliates
(as defined below) or with any individual related by blood, marriage, or
adoption to any such individual or with any entity in which any such entity or
individual owns a five percent (5%) or more beneficial interest (each a “Related Party”),
except for (a) customary employment arrangements and benefit programs on
reasonable terms, (b) any investment in an Affiliate of the
Company,  (c) any agreement, transaction, commitment, or arrangement
on an arms-length basis on terms no less favorable than terms which would have
been obtainable from a person other than such Related Party, (d) any agreement
transaction, commitment, or arrangement which is approved by a majority of the
disinterested directors of the Company, for purposes hereof, any director who is
also an officer of the Company or any subsidiary of the Company shall not be a
disinterested director with respect to any such agreement, transaction,
commitment, or arrangement.  “Affiliate” for
purposes hereof means, with respect to any person or entity, another person or
entity that, directly or indirectly, (i) has a ten percent (10%) or more equity
interest in that person or entity, (ii) has ten percent (10%) or more common
ownership with that person or entity, (iii) controls that person or entity, or
(iv) shares common control with that person or entity.  “Control” or “controls” for
purposes hereof means that a person or entity has the power, direct or indirect,
to conduct or govern the policies of another person or entity.

       

      (i) Transfer
Agent.  The Company covenants and agrees that, in the event
that the Company’s agency relationship with the transfer agent should be
terminated for any reason prior to a date which is three (3) years after the
Closing Date, the Company shall immediately appoint a new transfer
agent.

       

      (j)           Restriction on Issuance of
the Capital Stock. So long as any of the principal of or interest on the
Debenture remains unpaid, the Company shall not, without the prior written
consent of a majority of the Buyers in this transaction, (i) issue or sell
shares of Common Stock or Preferred Stock without consideration or for a
consideration per share less than the bid price of the Common Stock determined
immediately prior to its issuance, (ii) issue or sell any warrant, option,
right, contract, call, or other security instrument granting the holder thereof,
the right to acquire Common Stock without consideration or for a consideration
less than such Common Stock’s bid price value determined immediately prior to
it’s issuance, (iii) enter into any security instrument granting the holder a
security interest in any and all assets of the Company or any subsidiary of the
Company (whether now owned or acquired in the future while the Debentures are
outstanding) unless such security interest is junior to the security interest
held by the Holder hereunder and under the Security Agreement and in no way or
manner diminishes Holder’s rights hereunder or under the Security Agreement,
(iv) permit any subsidiary of the Company (whether now owned or acquired in the
future while the Debentures are outstanding) to enter into any security
instrument granting the holder a security interest in any and all assets of such
subsidiary or (v) file any registration statement on Form S-8

       

      (k)           Restriction on “Short”
Position.  Neither the Buyer nor any of its affiliates have an
open short position in the Common Stock of the Company, and the Buyer agrees
that it shall not, and that it will cause its affiliates not to, engage in any
short sales with respect to the Common Stock as long as any Debentures shall
remain outstanding.

       

      (l)           TRANSFER AGENT
INSTRUCTIONS.

       

      The
Company shall enter into irrevocable transfer agent instructions in
substantially the form attached hereto as Exhibit C (the “Irrevocable Transfer
Agent Instructions”) and shall pay Greentree Financial Group, Inc. a cash fee of
One Hundred Dollars ($100) for every occasion they act pursuant to the
Irrevocable Transfer Agent Instructions.

       

      5. CONDITIONS TO THE COMPANY’S
OBLIGATION TO SELL.

       

      The
obligation of the Company hereunder to issue and sell the Units to the Buyer
at  Closing is subject to the satisfaction of each of the following
conditions, provided that these conditions are for the Company’s sole benefit
and may be waived by the Company at any time in its sole
discretion:

       

      (a) The Buyer
shall have executed this Agreement and the Transaction Documents and delivered
the same to the Company.

       

      (b) The Buyer
shall have delivered to the Company the Purchase Price for Units to be purchased
at Closing (minus the fees and expenses
as set forth herein which shall be paid directly at the Closing)
by wire transfer of immediately available U.S. funds pursuant to the wire
instructions provided by the Company.

       

      (c) The
representations and warranties of the Buyer shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as of a
specific date), and the Buyer shall have performed, satisfied and complied in
all material respects with the covenants, agreements and conditions required by
this Agreement to be performed, satisfied or complied with by the Buyer at or
prior to the Closing Date.

       

      (d) The
Company shall have filed a form UCC-1 with regard to the Pledged Property and
Pledged Collateral as detailed in the Security Agreement dated the date hereof
and provided proof of such filing to the Buyer.

       

      (e) The
Company shall arrange for an intercompany loan of the proceeds of the Units to
its wholly owned subsidiary Weifang Xinsheng Food Co., Ltd. in
China.  The intercompany loan and its repayment along with interest
shall be registered with China’s State Administration of Foreign Exchange by the
Company and its subsidiary prior to Closing or shortly thereafter.

       

      (f) The
Company shall have executed such other documents as are reasonably required by
the Buyer.

       

      6. CONDITIONS TO THE BUYER’S
OBLIGATION TO PURCHASE.

       

      The
obligation of the Buyer hereunder to disburse to the Company the net proceeds of
the Purchase Price at Closing is subject to the satisfaction, of each of the
following conditions, provided that these conditions are for the Buyer’s sole
benefit and may be waived by the Buyer at any time in its sole
discretion:

       

      (a) The
Company shall have executed this Agreement the Transaction Documents and any
other documents relating to this transaction and delivered the same to the
Buyer.

       

      (b) The
trading in the Common Shares on the over-the-counter bulletin board shall not
have been suspended for any reason.

       

      (c) The
representations and warranties of the Company in this Agreement, the Debentures
and the Transaction Documents shall be true and correct in all material respects
(except to the extent that any of such representations and warranties is already
qualified as to materiality in Section 3 above, in which case, such
representations and warranties shall be true and correct without further
qualification) as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as of a
specific date) and the Company shall have performed, satisfied and complied in
all material respects with the covenants, agreements and conditions required by
this Agreement to be performed, satisfied or complied with by the Company at or
prior to the Closing Date.  If requested by the Buyer, the Buyer shall
have received a certificate, executed by the President of the Company, dated as
of the Closing Date, to the foregoing effect and as to such other matters as may
be reasonably requested by the Buyer.

       

      (d) The
Company shall have executed and delivered to the Buyer all Debentures, Shares,
Rights and Fees associated with this transaction.

       

      (e) The Buyer
shall have received an opinion of counsel from counsel to the Company in a form
satisfactory to the Buyer(s).

       

      (f) The
Company shall have provided to the Buyer a certificate of good standing from the
secretary of state from the state in which the company and its subsidiaries are
incorporated.

       

      (g) As of the
Closing Date, the Company shall have reserved out of its authorized and unissued
Common Stock, solely for the purpose of issuing shares of Common Stock upon
conversion of the Debenture and exercise of the Rights, shares of Common Stock
to effect the issuance of the shares of Common Stock: (1) upon conversion of the
Debenture in accordance with the Conversion Price and (2) upon exercise of the
Rights.

       

      (h) The
Irrevocable Transfer Agent Instructions, in form and substance satisfactory to
Buyer, shall have been
delivered to and acknowledged in writing by the Company’s transfer
agent.

       

      (i) The
Company shall provide to the Buyer an acknowledgement, to the satisfaction of
the Buyer, from the Company’s independent certified public accountants as to its
ability to provide all consents required in order to file a registration
statement in connection with this transaction.

       

      (j) The
Company shall file a form UCC-1 or such other forms as may be required to
perfect the Buyer’s interest in the Pledged Collateral as detailed in the
Security Agreement dated the date hereof, providing the Buyer with a senior lien
on all of the Company’s assets and intellectual property and provided proof of
such filing to the Buyer.

       

      (k) The
Company shall arrange for an intercompany loan of the proceeds of the Units to
its wholly owned subsidiary Weifang Xinsheng Food Co., Ltd. in
China.  The intercompany loan and its repayment along with interest
shall be registered with China’s State Administration of Foreign Exchange by the
Company and its subsidiary prior to Closing.

       

      7. INDEMNIFICATION.

       

      (a) In
consideration of the Buyer’s execution and delivery of this Agreement and
acquiring the Units hereunder, and in addition to all of the Company’s other
obligations under this Agreement, the Company shall defend, protect, indemnify
and hold harmless the Buyer and each other holder of the Units, and all of their
officers, directors, employees and agents (including, without limitation,
those retained in connection with the transactions contemplated by this
Agreement) (collectively, the “Buyer Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages, and expenses in connection
therewith (irrespective of whether any such Buyer Indemnitee is a party to the
action for which indemnification hereunder is sought), and including reasonable
attorneys’ fees and disbursements (the “Indemnified
Liabilities”), incurred by the Buyer Indemnitees or any of them as a
result of, or arising out of, or relating to (a) any misrepresentation or breach
of any representation or warranty made by the Company in this Agreement, the
Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby, (b) any breach of any covenant, agreement or
obligation of the Company contained in this Agreement, or the Transaction
Documents or any other certificate, instrument or document contemplated hereby
or thereby, or (c) any cause of action, suit or claim brought or made against
such Buyer Indemnitee by a third party and arising out of or resulting from a
material misrepresentations  by the Company under this Agreement or
due to a material breach by the Company of its obligations under this Agreement
and the execution, delivery, performance or enforcement of this Agreement or any
other instrument, document or agreement executed pursuant hereto by any of the
Indemnities, any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of the issuance of the Units or the
status of the Buyer or holder of the Debentures,  as a Buyer of Units
in the Company.  To the extent that the foregoing undertaking by the
Company may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities, which is permissible under applicable law.

       

      (b) In
consideration of the Company’s execution and delivery of this Agreement, and in
addition to all of the Buyer’s other obligations under this Agreement, the Buyer
shall defend, protect, indemnify and hold harmless the Company and all of its
officers, directors, employees and agents (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement)
(collectively, the “Company Indemnitees”)
from and against any and all Indemnified Liabilities incurred by the Indemnitees
or any of them as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the Buyer
in this Agreement, the Transaction Documents or any other certificate,
instrument or document contemplated hereby or thereby executed by the Buyer, (b)
any breach of any covenant, agreement or obligation of the Buyer contained in
this Agreement, the Transaction Documents or any other certificate, instrument
or document contemplated hereby or thereby executed by the Buyer, or (c) any
cause of action, suit or claim brought or made against such Company Indemnitee
based on material misrepresentations or due to a material breach and arising out
of or resulting from the execution, delivery, performance or enforcement of this
Agreement, the Transaction Documents or any other certificate instrument,
document or agreement executed pursuant hereto by any of the Company
Indemnities.  To the extent that the foregoing undertaking by the
Buyer may be unenforceable for any reason, the Buyer shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities, which is permissible under applicable law.

       

      8. GOVERNING LAW:
MISCELLANEOUS.

       

      (a) Governing
Law.  This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Nevada without regard to the principles
of conflict of laws.  The parties further agree that any action
between them shall be heard in Clark County, Nevada and expressly consent to the
jurisdiction and venue of the State Court sitting in Clark County, Nevada and
the United States District Court for the District of Nevada for the adjudication
of any civil action asserted pursuant to this Paragraph.

       

      (b) Counterparts.  This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other
party.

       

      (c) Headings.  The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.

       

      (d) Severability.  If
any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction.

       

      (e) Entire Agreement,
Amendments.  This Agreement supersedes all other prior oral or
written agreements between the Buyer, the Company, their affiliates and persons
acting on their behalf with respect to the matters discussed herein, and this
Agreement and the instruments referenced herein contain the entire understanding
of the parties with respect to the matters covered herein and therein and,
except as specifically set forth herein or therein, neither the Company nor any
Buyer makes any representation, warranty, covenant or undertaking with respect
to such matters.  No provision of this Agreement may be waived or
amended other than by an instrument in writing signed by the party to be charged
with enforcement.

       

      (f) Notices.  Any
notices, consents, waivers, or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been delivered (i) upon receipt, when delivered personally; (ii) upon
confirmation of receipt, when sent by facsimile; (iii) three (3) days after
being sent by U.S. certified mail, return receipt requested, or (iv) one (1) day
after deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same.  The
addresses and facsimile numbers for such communications shall be:

       

      If to the
Company,
to:                           Man
Shing Agricultural Holdings, Inc.

          Unit 1005, 10/F,
Tower

      Hunghom
Commercial Centre

      37 Ma Tau
Wai Road, Hunghom

      Kowloon, Hong
Kong

      Attention:  Mr.
Eddie Cheung, CEO

                                                                    
 Telephone  (86)
536-4644888

                                                                     
Facsimile:  (86) 536-4643777

      

      With a
copy
to:                                      Jared
P. Febbroriello, Esq. LL.M. 

      JPF
Securities Law, LLC

      19720
Jetton Road

      3rd
Floor

      Cornelius,
NC 28031

      Phone:
(704) 897-8334

      Fax:
(704) 897-8349

      

      Mr.
Patrick Mak

      Tai, Mak
and Partners

      Room 905
- 907, 9/F.

      Nan Fung
Tower

      173 Des
Voeux Road Central

      Hong
Kong

          Telephone: (852)
2850 6336

          Facsimile: (852)
2850 6086

      

      

        If
to the
Buyer:                                    China
Angel Assets Management Limited

      P.O. Box
957

      Offshore
Incorporations Centre

      Road
Town

      Tortola

      British
Virgin Islands

       
 

      
        	 
      

      

      If to the
Buyer, to its address and facsimile number on Schedule I, with copies to the
Buyer’s counsel as set forth on Schedule I.  Each party shall provide
five (5) days’ prior written notice to the other party of any change in address
or facsimile number.

       

      (g) Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and
assigns.  Neither the Company nor any Buyer shall assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the other party hereto.

       

      (h) No Third Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
person.

       

      (i) Survival.  Unless
this Agreement is terminated under Section 9(l), the representations and
warranties of the Company and the Buyer contained in Sections 2 and 3, the
agreements and covenants set forth in Sections 4, 5 and 9, and the
indemnification provisions set forth in Section 8, shall survive the Closing for
a period of two (2) years following the date on which the Debentures are
redeemed in full.  The Buyer shall be responsible only for its own
representations, warranties, agreements and covenants hereunder.

       

      (j) Publicity.  The
Company and the Buyer shall have the right to approve, before issuance any press
release or any other public statement with respect to the transactions
contemplated hereby made by any party; provided, however, that the Company shall
be entitled, without the prior approval of the Buyer, to issue any press release
or other public disclosure with respect to such transactions required under
applicable securities or other laws or regulations (the Company shall use its
best efforts to consult the Buyer in connection with any such press release or
other public disclosure prior to its release and Buyer shall be provided with a
copy thereof upon release thereof).

       

      (k) Further
Assurances.  Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.  Furthermore, the Company agrees to
execute such other documents as are reasonably required by the
Buyer.  It shall be deemed a default of this Agreement and the
Transaction Documents if the Company or the referenced shareholders fail to sign
such agreements within one business day of the date of request by the
Buyer.

       

      (l) Termination.  In
the event that the Closing shall not have occurred with respect to the Buyer on
or before thirty (30) business days from the date hereof due to the Company’s or
the Buyer’s failure to satisfy the conditions set forth in Sections 6 and 7
above (and the non-breaching party’s failure to waive such unsatisfied
condition(s)), the non-breaching party shall have the option to terminate this
Agreement with respect to such breaching party at the close of business on such
date without liability of any party to any other party; provided, however, that
if this Agreement is terminated by the Company pursuant to this Section 9(l),
the Company shall remain obligated to pay the Buyer for the legal and
documentation review fee described in Section 4(f) above.

       

      (m) No Strict
Construction.  The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any
party.

       

      

      [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

      

      IN WITNESS WHEREOF, the Buyer and the Company
have caused this Securities Purchase Agreement to be duly executed as of the
date first written above.

       

      

       

      COMPANY:

      MAN SHING
AGRICULTURAL HOLDINGS, INC.

      

      By: /s/ Eddie Cheung

      Name: Eddie Cheung

      Title:   CEO

      

      CHINA
ANGEL ASSETS MANAGEMENT LIMITED (“Buyer”)

      

      By: /s/ Jiang Qi Hang

      Name: Jiang Qi Hang

      Title:   CEO

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