Document:

Exhibit 10.1

 

SHARE
EXCHANGE AND REORGANIZATION AGREEMENT, dated as of September 30,
2005 (the “Agreement”), between GOLDEN HEALTH HOLDINGS, INC., a Nevada corporation (“Golden Health”); and JOY POWER INTERNATIONAL HOLDINGS LIMITED, a Hong Kong (“HK”) corporation (“Joy Power”), and THE SHAREHOLDERS OF JOY POWER, each of which is identified
in Schedule A hereto (the “Joy Power Shareholders”).

 

INTRODUCTION

 

Golden Health desires to
acquire all of the issued and outstanding shares of Joy Power capital stock solely
in exchange for an aggregate of 54,000,000 shares of authorized, but
theretofore unissued, shares of common stock, par value $0.001 per share (the “Golden Health Common Stock”), of
Golden Health, pursuant to the applicable laws of the State of Nevada and HK.  The Joy Power Shareholders signatory hereto
each desires to exchange all of their respective shares of Joy Power capital
stock solely for shares of Golden Health Common Stock in the respective amounts
set forth herein.

 

Prior to the date hereof,
the respective board of directors or analogous governing body of each of Golden
Health and Joy Power have approved and adopted this Agreement, and it is the
intent of the parties hereto that the transactions contemplated hereby be
structured so as to qualify as a tax-free exchange under Subchapter C of the
Internal Revenue Code of 1986, as amended (the “IRC”),
and the provisions of this Agreement will be interpreted in a manner consistent
with this intent.

 

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

 

ARTICLE I

 

ACQUISITION
AND EXCHANGE OF SHARES

 

Section 1.01         The Agreement.  The parties hereto hereby agree that
Golden Health shall acquire all of the issued and outstanding shares of capital
stock of Joy Power and/or other securities representing equity ownership
interests in Joy Power (the “Joy Power Capital Stock”)
solely in exchange for an aggregate of 54,000,000 shares of authorized, but
theretofore unissued, shares of Golden Health Common Stock. The parties hereto
agree that at the closing of the transactions contemplated by this Agreement
(the “Closing”): (i) Joy Power will
become a wholly-owned subsidiary of Golden Health subject to the conditions and
provisions of Section 1.06 hereof; and (ii) the management and
business operations of Golden Health will be reorganized.

 

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Section 1.02         Exchange of Shares.

 

(a)           At the Closing, Golden Health will cause to
be issued and held for delivery to the Joy Power Shareholders or their
designees, stock certificates representing an aggregate of 54,000,000 shares of
Golden Health Common Stock, in exchange for all of the issued and outstanding
shares of Joy Power Capital Stock or other equity interests in Joy Power, which
shares or other interests will be delivered to Golden Health at the Closing.

 

(b)           The shares of Golden Health Common Stock to be issued pursuant to
paragraph (a) of this Section 1.02 will be authorized, but
theretofore unissued, shares of Golden Health Common Stock.  Such shares of Golden Health Common Stock
will be issued to the Joy Power Shareholders in the respective amounts set
forth in Schedule A hereto and, by this reference, made a part hereof.

 

(c)           All shares of Golden Health Common Stock to
be issued hereunder shall be deemed “restricted securities”
as defined in paragraph (a) of Rule 144 under the Securities Act of
1933, as amended (the “Securities Act”),
and each recipient will represent in writing that he or she is acquiring said
shares for investment purposes only and without the intent to make a further
distribution of the shares.  All shares
of Golden Health Common Stock to be issued under the terms of this Agreement
shall be issued pursuant to an exemption from the registration requirements of
the Securities Act, under Section 4(2) of the Securities Act and the rules and
regulations promulgated thereunder. 
Certificates representing the shares of Golden Health Common Stock to be
issued hereunder will bear a restrictive legend in substantially the following
form:

 

The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended, and may not be offered for sale, sold, or otherwise disposed of, except in compliance with the registration provisions of such Act or pursuant to an exemption from such registration provisions, the availability of which is to be established to the satisfaction of the Company.
 

Section 1.03         Closing.  The Closing will take place at a date and
time (the “Closing Date”) and place to
be mutually agreed upon by the parties hereto, and will be subject to the
provisions of Articles IV and V
of this Agreement.  At the Closing:

 

(a)           Joy
Power will deliver to Golden Health stock certificates representing all of the
issued and outstanding shares of Joy Power Capital Stock, duly endorsed, so as
to make Golden Health the holder thereof, free and clear of all claims and
encumbrances;

 

(b)           Golden
Health will deliver to the Joy Power Shareholders or their designees, stock
certificates representing an aggregate of 54,000,000 shares of Golden Health
Common Stock,

 

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which certificates will
bear a standard restrictive legend in the form customarily used with restricted
securities and as set forth in Section 1.02(c) above and which shares
shall represent approximately 33.3% of the outstanding Golden Health Common
Stock giving effect to the issuance thereof;

 

(c)           Golden Health will deliver the officer’s
certificates described in Sections 4.02(a),
4.02(b), and 4.02(c) hereof, dated the Closing Date, that, among
other things, all representations, warranties, covenants, and conditions set
forth herein by Golden Health are true and correct as of, or have been fully
performed and complied with by, the Closing Date; and

 

(d)           Joy
Power and the Joy Power Shareholders will deliver the officer’s certificates
described in Sections 4.01(a), 4.01(b),
4.01(c), and 4.01(d) hereof, dated the Closing Date, that, among
other things, all representations, warranties, covenants, and conditions set
forth herein by Joy Power are true and correct as of, or have been fully
performed and complied with by, the Closing Date.

 

Section 1.04         Ratification
by Board of Directors and by Written Consent of Shareholders.  In anticipation of this Agreement, Golden
Health has taken all necessary and requisite corporate and other action,
including without limitation, actions of the Board of Directors and
stockholders of Golden Health, in order to:

 

(a)           ratify
this Agreement and all transactions contemplated hereby; and

 

(b)                                 ratify
the proposed amendment to Golden Health’s Articles of Incorporation to change
the corporate name to Joy Power Holdings, Inc. and increase the authorized
capitalization of Golden Health to 300,000,000 shares of common stock.

 

Section 1.05         Consummation
of Transaction.  If at the
Closing, no condition exists which would permit any of the parties to terminate
this Agreement, or a condition then exists and the party entitled to terminate
because of that condition elects not to do so, then the transactions herein
contemplated shall be consummated upon such date, and then and thereupon,
Golden Health will file any additional necessary documents that may be required
by the State of Nevada, the United States of America, HK, or otherwise.

 

ARTICLE II

 

REPRESENTATIONS
AND WARRANTIES

 

Section 2.01         Representations and Warranties of Golden Health. 
Golden Health hereby represents and warrants to, and agrees with, Joy Power
and the Joy Power Shareholders:

 

(a)           Organization and Qualification. 
Golden Health has no subsidiaries or affiliated corporation or owns any
interest in any other enterprise (whether or not such enterprise is a

 

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corporation).  Golden Health is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Nevada, with all requisite power and authority, and all necessary consents,
authorizations, approvals, orders, licenses, certificates, and permits of and
from, and declarations and filings with, all federal, state, local, and other
governmental authorities and all courts and other tribunals, to own, lease,
license, and use its properties and assets and to carry on the businesses in
which it is now engaged and the businesses in which it contemplates
engaging.  Golden Health is duly
qualified to transact the businesses in which it is engaged and is in good
standing as a foreign corporation in every jurisdiction in which its ownership,
leasing, licensing, or use of property or assets or the conduct of its
businesses makes such qualification necessary.

 

(b)           Capitalization.  The
authorized capital stock of Golden Health consists of 50,000,000 shares of
Golden Health Common Stock, of which 45,800,000 shares are outstanding.  Each of such outstanding shares of Golden
Health Common Stock is validly authorized, validly issued, fully paid, and
nonassessable, has not been issued and is not owned or held in violation of any
preemptive or similar right of stockholders and is owed by the owner set forth
in Section A of the letter, of even date herewith, from Golden Health to
Joy Power and the Joy Power Shareholders (the “Golden
Health Disclosure Letter”), which letter shall be completed and
delivered to Joy Power and the Joy Power Shareholders on or prior to October 15,
2005 (the “Due Diligence Date”)
in each case free and clear of all liens, security interests, pledges, charges,
encumbrances, stockholders’ agreements, and voting trusts.  Except as described in Section A of the
Golden Health Disclosure Letter, there is no commitment, plan, or arrangement
to issue, and no outstanding option, warrant, or other right calling for the
issuance of, any share of capital stock of Golden Health or any security or
other instrument convertible into, exercisable for, or exchangeable for capital
stock of Golden Health.  Except as
described in Section A of the Golden Health Disclosure Letter, there is
outstanding no security or other instrument convertible into or exchangeable
for capital stock of Golden Health.

 

(c)           Financial
Condition.  Golden Health has
delivered, or on or prior to the Due Diligence Date shall deliver, to Joy Power
and the Joy Power Shareholders true and correct copies of the following:  audited balance sheet of Golden Health as of September 30,
2002; unaudited balance sheet of Golden Health as of March 31, 2002 and
2003; audited statements of income, statements of stockholders’ equity, and
statements of cash flows of Golden Health for the period from February 12,
2002 (the “Bankruptcy Termination Date”)
through September 30, 2002; and the unaudited statement of income,
statement of stockholders’ equity, and statement of cash flows of Golden Health
for the six months ended March 31, 2002 and 2003.  Each such balance sheet presents fairly the
financial condition, assets, liabilities, and stockholders’ equity of Golden
Health as of its respective date; each such statement of income and statement
of stockholders’ equity presents fairly the results of operations of Golden
Health for the period indicated; and each such statement of cash flows presents
fairly the information purported to be shown therein.  The financial statements referred to in this Section 2.01(c) have
been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved and are in accordance with
the books and records of Golden Health. 
Since March 31, 2003:

 

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(i)            There has at no time
been a material adverse change in the financial condition, results of
operations, businesses, properties, assets, liabilities, or future prospects of
Golden Health.

 

(ii)           Golden
Health has not authorized, declared, paid, or effected any dividend or
liquidating or other distribution in respect of its capital stock or any direct
or indirect redemption, purchase, or other acquisition of any stock of Golden
Health.

 

(iii)          The
operations and businesses of Golden Health have been conducted in all respects
only in the ordinary course.

 

There is no fact known to
Golden Health which materially adversely affects or in the future (as far as
Golden Health can reasonably foresee) may materially adversely affect the
financial condition, results of operations, businesses, properties, assets,
liabilities, or future prospects of Golden Health; provided, however, that
Golden Health expresses no opinion as to political or economic matters of
general applicability.  Golden Health has
made known, or caused to be made known, to the accountants or auditors who have
prepared, reviewed, or audited the aforementioned consolidated financial
statements all material facts and circumstances which could affect the
preparation, presentation, accuracy, or completeness thereof.

 

(d)           Tax and Other Liabilities.  Golden
Health does not have any material liability of any nature, accrued or
contingent, including, without limitation, liabilities for federal, state,
local, or foreign taxes and penalties, interest, and additions to tax (“Taxes”), and liabilities to
customers or suppliers, other than the following:

 

(i)            Liabilities
for which full provision has been made on the consolidated balance sheet and
the notes thereto (the “Last Golden Health Balance
Sheet”) as of March 31, 2003 (the “Last
Golden Health Balance Sheet Date”) referred to in Section 2.03;
and

 

(ii)           Other
liabilities arising since the Last Golden Health Balance Sheet Date and prior
to Closing in the ordinary course of business (which shall not include
liabilities to customers on account of defective products or services) which
are not inconsistent with the representations and warranties of Golden Health
or any other provision of this Agreement.

 

Without limiting the
generality of the foregoing, the amounts set up as provisions for Taxes on the
Last Golden Health Balance Sheet are sufficient for all known accrued and
unpaid Taxes of Golden Health, whether or not due and payable and whether or
not disputed, under tax laws, as in effect on the Last Golden Health Balance Sheet
Date or now in effect, for the period ended on such date and for all fiscal
periods prior thereto.  The execution,
delivery, and performance of this Agreement by Golden Health will not cause any
Taxes to be payable other than by the Joy Power Shareholders or cause any lien,
charge, or encumbrance to secure any Taxes to be created either immediately or
upon the nonpayment of any Taxes other than on the properties or assets of the
Joy Power Shareholders.  Since the Bankruptcy
Termination Date, a copy of the order (the

 

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“Bankruptcy
Termination Order”) relating to which has been, or on or prior
to the Due Diligence Date will be, delivered to Joy Power and the Joy Power
Shareholders, Golden Health has filed all federal, state, local, and foreign
tax returns required to be filed by it; has delivered or, on or prior to the
Due Diligence Date, will deliver to the Joy Power Shareholders a true and
correct copy of each such returns which was filed since the Bankruptcy
Termination Date; has paid (or has established on the Last Golden Health
Balance Sheet a reserve for) all Taxes, assessments, and other governmental
charges payable or remittable by it or levied upon it or its properties,
assets, income, or franchises which are due and payable; and has delivered or,
on or prior to the Due Diligence Date, will deliver to the Joy Power
Shareholders a true and correct copy of any report as to adjustments received
by it from any taxing authority since the Bankruptcy Termination Date and a
statement as to any litigation, governmental or other proceeding (formal or
informal), or investigation pending, threatened, or in prospect with respect to
any such report or the subject matter of such report.

 

(e)           Litigation and Claims. 
Except as described in Section G of the Golden Health Disclosure
Letter, there is no litigation, arbitration, claim, governmental or other
proceeding (formal or informal), or investigation pending, to the best of
Golden Health’s knowledge, threatened, or in prospect (or any basis therefor
known to Golden Health) with respect to Golden Health or any of its businesses,
properties, or assets.  Golden Health is
not affected by any present or threatened strike or other labor disturbance nor
to the knowledge of Golden Health, is any union attempting to represent any
employee of Golden Health as collective bargaining agent.  Golden Health is not in violation of, or in
default with respect to, any law, rule, regulation, order, judgment, or decree
which violation or default would have a material adverse effect on Golden
Health; nor is Golden Health required to take any action in order to avoid such
violation or default.

 

(f)            Properties.

 

(i)            Golden
Health owns no real property.  Golden
Health has good title to all personal properties and assets material to Golden
Health and used in its businesses or owned by it (except real and other
properties and assets material to Golden Health as are held pursuant to leases
or licenses described in Section B or C of the Golden Health Disclosure
Letter), free and clear of all liens, mortgages, security interests, pledges,
charges, and encumbrances (except such as are listed in Section H of the
Golden Health Disclosure Letter).

 

(ii)           Set
forth in Section B of the Golden Health Disclosure Letter is a true and
complete list of all tangible properties and assets owned by Golden Health or
leased or licensed by Golden Health from or to a third party (including
inventory but not including Intangibles (as hereinafter defined)), and with
respect to such properties and assets leased or licensed by Golden Health from
or to a third party, a description of such lease or license.  All such properties and assets (including
Intangibles) owned by Golden Health are reflected on the Last Golden Health Balance
Sheet (except for acquisitions subsequent to the Last Golden Health Balance
Sheet Date and prior to the Closing Date, which are

 

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either noted in Section B
or C of the Golden Health Disclosure Letter or are approved in writing by Joy
Power).  All tangible properties and
assets owned by Golden Health or leased or licensed by Golden Health from or to
a third party are in good and usable condition (reasonable wear and tear which
is not such as to affect adversely the operation of the businesses of Golden
Health excepted).

 

(iii)          To
the best of Golden Health’s knowledge, no real property leased or licensed by
Golden Health from or to a third party lies in an area which is, or will be,
subject to zoning, use, or building code restrictions which would prohibit,
and, to the best of Golden Health’s knowledge, no state of facts relating to
the actions or inaction of another person or entity or his or its ownership,
leasing, or licensing of any real or personal property exists or will exist
which would prevent, the continued effective ownership, leasing, or licensing
of such real property in the businesses in which Golden Health is now engaged
or the businesses in which it contemplates engaging.

 

(iv)          The
properties and assets (including Intangibles) owned by Golden Health (other
than those leased or licensed by Golden Health to a third party) or leased or
licensed by Golden Health from a third party constitute all such properties and
assets which are necessary to the businesses of Golden Health as presently
conducted.

 

(v)           To the
best knowledge of Golden Health, Golden Health has not caused or permitted its
businesses properties, or assets to be used to generate, manufacture, refine,
transport, treat, store, handle, dispose of, transfer, produce, or process any
Hazardous Substance (as such term is defined in this Section 2.01(f)(v)),
except in compliance with all applicable laws, rules, regulations, orders,
judgments, and decrees, and has not caused or permitted the Release (as such
term is defined in this Section 2.01(f)(v)) of any Hazardous Substance on
or off the site of any property of Golden Health.  The term “Hazardous Substance”
shall mean any hazardous waste, as defined by 42 U.S.C. §6903(5), any hazardous
substance, as defined by 42 U.S.C. §9601(14), any pollutant or contaminant, as
defined by 42 U.S.C. §9601(33), and all toxic substances, hazardous materials,
or other chemical substances regulated by any other law, rule, or regulation.  The term “Release”
shall have the meaning set forth in 42 U.S.C. §9601(22).

 

(g)           Contracts and Other Instruments.  Section D of the Golden Health
Disclosure Letter contains a true and correct statement of the information
required to be contained therein regarding material contracts, agreements,
instruments, leases, licenses, arrangements, or understandings with respect to
Golden Health.  Golden Health has
furnished, or on or prior to the Due Diligence Date will furnish, to the Joy
Power Shareholders (i) the certificate of incorporation (or other charter
document) and by-laws of Golden Health and all amendments thereto, as presently
in effect, and (ii) the following:  (A) true
and correct copies of all material contracts, agreements, and instruments
referred to in Section D of the Golden Health Disclosure Letter; (B) true
and correct copies of all material leases and licenses referred to in Section B
or C of the Golden Health Disclosure Letter hereto; and (C) true and
correct written descriptions of all material supply, distribution, agency,
financing, or other arrangements or understandings referred

 

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to in Section B or C
of the Golden Health Disclosure Letter. 
To the best of Golden Health’s knowledge, neither Golden Health nor (to the
knowledge of Golden Health) any other party to any such material contract,
agreement, instrument, lease, or license is now or expects in the future to be
in violation or breach of, or in default with respect to complying with, any
term thereof, and each such material contract, agreement, instrument, lease, or
license is in full force and is (to the best of Golden Health’s knowledge in
the case of third parties) the legal, valid, and binding obligation of the
parties thereto and (subject to applicable bankruptcy, insolvency, and other
laws affecting the enforceability of creditors’ rights generally) is
enforceable as to them in accordance with its respective terms.  Each such material supply, distribution,
agency, financing, or other arrangement or understanding is a valid and
continuing arrangement or understanding; neither Golden Health nor any other
party to any such arrangement or understanding has given notice of termination
or taken any action inconsistent with the continuance of such arrangement or understanding;
and the execution, delivery, and performance of this Agreement will not
prejudice any such arrangement or understanding in any way.  Golden Health enjoys peaceful and undisturbed
possession under all material leases and licenses under which it is
operating.  Golden Health is not party to
or bound by any contract, agreement, instrument, lease, license, arrangement,
or understanding, or subject to any charter or other restriction, which has had
or (to the knowledge of Golden Health) may in the future have a material
adverse effect on the financial condition, results of operations, businesses,
properties, assets, liabilities, or future prospects of Golden Health.  Golden Health has not engaged since the Bankruptcy
Termination Date, is not engaging in, and does not intend to engage in any
transaction with, and has not had, does not now have, and does not intend to
have any material contract, agreement, instrument, lease, license, arrangement,
or understanding with, any stockholder of Golden Health, any director, officer,
or employee of Golden Health (except for employment agreements listed in Section D
of the Golden Health Disclosure Letter and employment and compensation
arrangements described in Section E of the Golden Health Disclosure
Letter), any relative or affiliate of any stockholder of Golden Health or of
any such director, officer, or employee, or any other corporation or enterprise
in which any stockholder of Golden Health, any such director, officer, or
employee, or any such relative or affiliate then had or now has a 5% or greater
equity or voting or other substantial interest, other than those listed and so
specified in Section D of the Golden Health Disclosure Letter.  The stock ledgers and stock transfer books
relating to all issuances and transfers of stock by Golden Health and the
minute book records of Golden Health and all proceedings of the stockholders
and the Board of Directors and committees thereof of Golden Health since their
respective incorporation made available to counsel to Joy Power and the Joy
Power Shareholders are the original stock ledgers and stock transfer books and
minute book records of Golden Health or exact copies thereof.  Golden Health is not in violation or breach
of, or in default with respect to, any term of its certificate of incorporation
(or other charter document) or by-laws.

 

(h)           Employees.

 

(i)            Golden
Health does not have, or contribute to, and, since the Bankruptcy Termination
Date, has not had and has not contributed to, any pension, profit-sharing, option,
other incentive plan, or any other type of Employee Benefit Plan (as defined in

 

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Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)), or has any obligation to
or customary arrangement with employees for bonuses, incentive compensation,
vacations, severance pay, sick pay, sick leave, insurance, service award,
relocation, disability, tuition refund, or other benefits, whether oral or
written, except as set forth in Section E of the Golden Health Disclosure
Letter.  Golden Health has furnished to
Joy Power and the Joy Power Shareholders: 
(A) true and correct copies of all documents evidencing plans,
obligations, or arrangements referred to in Section E of the Golden Health
Disclosure Letter (or true and correct written summaries, so initialed, of such
plans, obligations, or arrangements to the extent not evidenced by documents)
and true and correct copies, so initialed, of all documents evidencing trusts,
summary plan descriptions, and any other summaries or descriptions relating to
any such plans; (B) the two most recent annual reports (Form 5500’s),
if any, including all schedules thereto and the most recent annual and periodic
accounting of related plan assets with respect to each Employee Benefit Plan; (C) the
two most recent actuarial valuations with respect to each Pension Plan (as
defined in Section 3(2) of ERISA) subject to Title IV of ERISA; and (D) the
most recent determination letter issued by the Internal Revenue Service with
respect to each Pension Plan.

 

(ii)           If
any Employee Benefit Plan of Golden Health were to be terminated on the day
prior to Closing Date, (A) no liability under Title IV of ERISA would be
incurred by Golden Health or Joy Power and (B) all Accrued Benefits (as
defined in this Section 2.01(h)(ii)) to such day prior to the Closing Date
(whether or not vested) would be fully funded in accordance with the
assumptions contained in the regulations of the Pension Benefit Guaranty
Corporation governing the funding of terminated defined benefit plans.  For purposes hereof, “Accrued
Benefits” shall include the value of disability, pre-retirement,
death benefits, and all supplements, subsidized, ancillary, and optional forms
of benefits.  All Accrued Liabilities
(for contributions or otherwise) (as defined in this Section 2.01(h)(ii))
of Golden Health as of the Closing Date to each Employee Benefit Plan and with
respect to each obligation to, or customary arrangement with, employees for
bonuses, incentive compensation, vacations, severance pay, sick pay, sick
leave, insurance, service award, relocation, disability, tuition refund, or
other benefits, whether oral or written, have been paid or accrued for all
periods ending prior to the Closing Date and no payment to any Employee Benefit
Plan or with respect to any such obligation or arrangement since the Last
Golden Health Balance Sheet Date has been disproportionately large compared to
prior payments.  For purposes hereof, “Accrued Liabilities” shall include a
pro rata contribution to each Employee Benefit Plan or with respect to each
such obligation or arrangement for that portion of a plan year or other
applicable period which commences prior to, and ends after, the Closing Date,
and Accrued Liabilities for any portion of a plan year or other applicable
period shall be determined by multiplying the liability for the entire such
year or period by a fraction, the numerator of which is the number of days
preceding the Closing Date in such year or period and the denominator of which
is the number of days in such year or period, as the case may be.

 

9

 

(iii)          There
has been no violation of the reporting and disclosure requirements imposed
either under ERISA or the Code for which a penalty has been or may be imposed
with respect to any Employee Benefit Plan of Golden Health.  There has been no breach of fiduciary duty or
responsibility with respect to any Employee Benefit Plan of Golden Health.  No Employee Benefit Plan of Golden Health or
related trust has any liability of any nature, accrued or contingent, including
without limitation liabilities for Taxes, other than for routine payments to be
made in due course to participants and beneficiaries, except as set forth in Section E
of the Golden Health Disclosure Letter. 
Golden Health does not have any formal plan or commitment, whether or
not legally binding, to create any additional or modify any existing Employee
Benefit Plan or benefit obligation or arrangement described in Section 2.01(h)(i)).  Each Employee Benefit Plan of Golden Health
which is a group health plan within the meaning of Section 5000(b)(1) of
the Code is and has been maintained in full compliance with the applicable
requirements of Section 4980B of the Code. 
Other than the health care continuation requirements of Section 4980B
of the Code, Golden Health does not have any obligation to provide
post-retirement medical benefits or life insurance coverage or any deferred
compensation benefits to any present or former employees.  There is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal), or investigation
pending, threatened, or (to the best of Golden Health’s knowledge) in prospect
(or any basis therefor known to Golden Health) with respect to any Employee
Benefit Plan of Golden Health or related trust or with respect to any
fiduciary, administrator, or sponsor (in its capacity as such) of any Employee
Benefit Plan.  No Employee Benefit Plan
of Golden Health or related trust and no such obligation or arrangement is in
violation of, or in default with respect to, any law, rule, regulation, order,
judgment, which violation or default would have a material adverse effect
thereon or decree nor is Golden Health, any Employee Benefit Plan of Golden
Health, or any related trust required to take any action in order to avoid any
such violation or default.  No event has
occurred, or is (to the best of Golden Health’s knowledge) threatened or about
to occur, which would constitute a prohibited transaction under Section 406
of ERISA.

 

(iv)          Each
Pension Plan maintained for the employees of Golden Health has been qualified,
from its inception, under Section 401(a) of the Code and any related
trust has been an exempt trust for such period under Section 501 of the
Code.  Each Pension Plan has been
operated in accordance with its terms. 
No Pension Plan which is subject to Title IV of ERISA has an accumulated
or waived funding deficiency within the meaning of Section 412 of the Code.
No investigation or review by the Internal Revenue Service is currently pending
or (to the knowledge of Golden Health) is contemplated in which the Internal
Revenue Service has asserted or may assert that any Pension Plan is not
qualified under Section 401(a) of the Code or that any related trust
is not exempt under Section 501 of the Code.  Neither Golden Health, nor any organization
to which Golden Health is a successor or parent corporation, within the meaning
of Section 4069(b) of ERISA, has divested itself of any entity
maintaining or with an obligation to contribute to any Pension Plan which had
an “amount of unfunded benefit liabilities,”
as defined in Section 4001(a)(18) of ERISA, at the time of such
divestiture.  No assessment of any
federal 

 

10

 

taxes with respect to any
Employee Benefit Plan of Golden Health has been made or (to the knowledge of
Golden Health) is contemplated against Golden Health, or any related trust of
any Pension Plan of Golden Health, and nothing has occurred which would result
in the assessment of unrelated business taxable income under the Code with
respect to any Employee Benefit Plan of Golden Health.  Form 5500s have been timely filed with
respect to all Pension Plans of Golden Health. 
No event has occurred or (to the knowledge of Golden Health) is
threatened or about to occur which would constitute a reportable event within
the meaning of Section 4043(b) of ERISA.  No notice of termination has been filed by
the plan administrator pursuant to Section 4041 of ERISA or issued by the
Pension Benefit Guaranty Corporation pursuant to Section 4042 of ERISA
with respect to any Pension Plan of Golden Health.

 

(v)           Golden
Health does not currently contribute to and since September 16, 1980 has
not effectuated either a complete or partial withdrawal from any multiemployer
Pension Plan within the meaning of Section 3(37) of ERISA.

 

(vi)          Section E
of the Golden Health Disclosure Letter contains a true and correct statement of
the names, relationship with Golden Health, present rates of compensation
(whether in the form of salary, bonuses, commissions, or other supplemental
compensation now or hereafter payable), and aggregate compensation for the
fiscal year ended December 31, 2002 of (A) each director, officer, or
other employee of Golden Health whose aggregate compensation for the fiscal
year ended December 31, 2002 exceeded US$25,000 or whose aggregate
compensation presently exceeds the rate of US$25,000 per annum and (B) all
sales agents, dealers, or distributors of Golden Health.  Since December 31, 2002, Golden Health
has not changed the rate of compensation of any of its directors, officers,
employees, agents, dealers, or distributors, nor has any Employee Benefit Plan
or program of Golden Health been instituted or amended to increase benefits
thereunder.  There is no contract,
agreement, plan, arrangement, or understanding covering any person that,
individually or collectively, could give rise to the payment of any amount that
would not be deductible by Golden Health by reason of Section 280G of the
Code.

 

(i)            Patents, Trademarks, Et Cetera.  Golden Health does not own or have pending,
and is not licensed or otherwise permitted to use, any material patent, patent
application, trademark, trademark application, service mark, copyright,
copyright application, franchise, trade secret, computer program (in object or
source code or otherwise), or other intangible property or asset (collectively,
“Intangibles”), other than as
described in Section C of the Golden Health Disclosure Letter.  Each Intangible is validly issued and is
currently in force and uncontested in all jurisdictions in which it is used or
in which such use is contemplated.  Section C
of the Golden Health Disclosure Letter contains a true and correct listing of: (i) all
Intangibles which are owned (either in whole or in part), used by, or licensed
to Golden Health or which otherwise relate to the businesses of Golden Health,
and a description of each such Intangible which identifies its owner,
registrant, or applicant; (ii) all contracts, agreements, instruments,
leases, and licenses and identification of all parties thereto under which
Golden Health owns or uses any

 

11

 

Intangible (whether or
not under license from third parties), together with the identification of the
owner, registrant, or applicant of each such Intangible; (iii) all
contracts, agreements, instruments, leases, and licenses and identification of
all parties thereto under which Golden Health grants the right to use any
Intangible; (iv) all validity, infringement, right-to-use, or other
opinions of counsel (whether in-house or outside) which concern the validity,
infringement, or enforceability of any Intangible owned or controlled by a
party other than Golden Health which relates to the businesses, properties, or
assets of Golden Health.  Except as
specified in Section C of the Golden Health Disclosure Letter, to the
knowledge of Golden Health:  (v) Golden
Health is the sole and exclusive owner or licensee of, and (other than those
exclusively licensed by Golden Health to a third party) has the right to use,
all Intangibles; (vi) no Intangible is subject to any order, judgment,
decree, contract, agreement, instrument, lease, or license restricting the
scope of the use thereof; (vii) during the last five years, Golden Health
has not been charged with, and has not charged others with, unfair competition,
infringement of any Intangible, or wrongful use of confidential information,
trade secrets, or secret processes; and (viii) Golden Health is not using
any patentable invention, confidential information, trade secret, or secret
process of others.  There is no right
under any Intangible necessary to the businesses of Golden Health as presently
conducted or as it contemplates conducting, except such as are so designated in
Section C of the Golden Health Disclosure Letter.  Except as described in Section C of the
Golden Health Disclosure Letter, Golden Health has not infringed, is not
infringing, and has not received notice of infringement in respect of the
Intangibles or asserted Intangibles of others, nor has Golden Health been
advised by counsel or others that it is infringing or may infringe the
Intangibles or asserted Intangibles of others if any currently contemplated
business activity is effectuated.  To the
knowledge of Golden Health, there is no infringement by others of Intangibles
of Golden Health.  As far as Golden
Health can reasonably foresee, there is no Intangible or asserted Intangible of
others that may materially adversely affect the financial condition, results of
operations, businesses, properties, assets, liabilities, or future prospects of
Golden Health.  All material contracts,
agreements, instruments, leases, and licenses pertaining to Intangibles to
which Golden Health is a party, or to which any of its businesses, properties,
or assets are subject, are in compliance in all material respects with all
laws, rules, regulations, orders, judgments, and decrees binding on Golden
Health or to which any of its businesses, properties, or assets are
subject.  Golden Health has no mark, design, or name used by Golden Health
to identify, respectively, its products, businesses, or services.  Neither any stockholder of Golden Health, any
director, officer, or employee of Golden Health, any relative or affiliate of
any stockholder of Golden Health, any such director, officer, or employee, nor
any other corporation or enterprise in which any stockholder of Golden Health,
any such director, officer, or employee, or any such relative or affiliate had
or now has a 5% or greater equity or voting or other substantial interest,
possesses any Intangible which relates to the businesses of Golden Health.

 

(j)            Questionable Payments. 
Since the Bankruptcy Termination Date, neither Golden Health, nor any
director, officer, agent, employee, or other person associated with, or acting
on behalf of, Golden Health, nor any stockholder of Golden Health has, directly
or indirectly:  used any corporate funds
for unlawful contributions, gifts, entertainment, or other unlawful expenses
relating to political activity; made any unlawful payment to foreign or
domestic government

 

12

 

officials or employees or
to foreign or domestic political parties or campaigns from corporate funds;
violated any provision of the Foreign Corrupt Practices Act of 1977, as
amended; or made any bribe, rebate, payoff, influence payment, kickback, or
other unlawful payment.

 

(k)           Authority.  Golden
Health has all requisite power and authority to execute, deliver, and perform
this Agreement.  All necessary corporate
proceedings of Golden Health have been duly taken to authorize the execution,
delivery, and performance of this Agreement thereby.  This Agreement has been duly authorized,
executed, and delivered by Golden Health, constitutes the legal, valid, and
binding obligation of Golden Health, and is enforceable as to Golden Health in
accordance with its terms.  Except as otherwise
set forth in this Agreement, no consent, authorization, approval, order,
license, certificate, or permit of or from, or declaration or filing with, any
federal, state, local, or other governmental authority or any court or other
tribunal is required by Golden Health for the execution, delivery, or
performance of this Agreement by Golden Health. 
No consent of any party to any material contract, agreement, instrument,
lease, license, arrangement, or understanding to which Golden Health is a
party, or to which it or any of its businesses, properties, or assets are
subject, is required for the execution, delivery, or performance of this
Agreement (except such consents referred to in Section D of the Golden
Health Disclosure Letter); and the execution, delivery, and performance of this
Agreement will not (if the consents referred to in Section D of the Golden
Health Disclosure Letter are obtained prior to the Closing) violate, result in
a breach of, conflict with, or (with or without the giving of notice or the
passage of time or both) entitle any party to terminate or call a default
under, entitle any party to receive rights or privileges that such party was
not entitled to receive before this Agreement was executed under, or create any
obligation on the part of Golden Health to which it was not subject immediately
before this Agreement was executed under, any term of any such material
contract, agreement, instrument, lease, license, arrangement, or understanding,
or violate or result in a breach of any term of the certificate of
incorporation (or other charter document) or by-laws of Golden Health, or (if
the provisions of this Agreement are satisfied) violate, result in a breach of,
or conflict with any law, rule, regulation, order, judgment, or decree binding
on Golden Health or to which any of its businesses, properties, or assets are
subject, which violation or breach would have a material adverse effect on
Golden Health.  Neither Golden Health,
nor any of its officers, directors, employees, or agents has employed any
broker or finder or incurred any liability for any fee, commission, or other
compensation payable by any person on account of alleged employment as a broker
or finder, or alleged performance of services as a broker or finder, in
connection with or as a result of this Agreement or the transactions
contemplated hereby and in connection herewith.

 

(l)            Status of Golden Health Common Stock To Be Issued.  Assuming without investigation that the
shares of Joy Power Capital Stock outstanding on the Closing Date are validly
authorized, validly issued, fully paid, and nonassessable, the shares of Golden
Health Common Stock to be issued pursuant to Section 1.02(a) hereof
are validly authorized and, when the such shares of Golden Health Common Stock
have been duly delivered pursuant to the terms of this Agreement, such shares
of Golden Health Common Stock will be validly issued, fully paid, and
nonassessable and will not have been issued, owned or held in relation of any
preemptive or similar right of stockholder.

 

13

 

(m)          Insurance.  All
policies of fire and other insurance against casualty and other losses and
public liability insurance carried by Golden Health are described in Section F
of the Golden Health Disclosure Letter (including the risks covered and limits
of such policies) and are in full force and effect.  A full and complete copy of enclosed
insurance policy has been, or on or prior to the Due Diligence Date will be,
provided to Joy Power and the Joy Power Shareholders, and such policies are
summarized in Section F of the Golden Health Disclosure Letter.  All premiums in respect of such policies for
which premium notices have been received have been paid in full as the same
become due and payable. Golden Health have not failed to give any notice or
present any claim under any insurance policy in due and timely fashion.  There are no actual claims or claims
threatened in writing against Golden Health which could come within the scope
of such coverage nor are any such policies currently threatened with
cancellation.  There are no outstanding
requirements or recommendations by any insurance company that issued a policy
with respect to any of the respective assets, the businesses, or operations of
Golden Health or by any Board of Fire Underwriters or other body exercising
similar functions or by any governmental authority requiring or recommending
any repairs or other work to be done on, or with respect to, any of the assets
of Golden Health or requiring or recommending any equipment or facilities to be
installed on any premises from which the businesses of Golden Health is
conducted or in connection with any of the respective assets thereof.  Golden Health does not have any knowledge of
any material proposed increase in applicable insurance rates or of any
conditions or circumstances applicable to the businesses thereof that might
result in such increases.  No such policy
is terminable by virtue of the transactions contemplated by this Agreement.

 

(o)           Trading Matters.  At
the date hereof and at the Closing Date:

 

(i)            the Golden
Health Common Stock is traded and quoted in the over-the-counter market;

 

(ii)           Golden
Health has and shall have performed or satisfied all of its undertakings to,
and of its obligations and requirements with, the SEC, provided, however, that
the Golden Health Common Stock has not been registered under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”),
since at least the Bankruptcy Termination Date;

 

(iii)          Golden Health
has not, and shall not have taken any action that would preclude, or otherwise
jeopardize, the inclusion of the Golden Health Common Stock for quotation on
the OTC Bulletin Board.

 

(p)           Reorganization.

 

(i)            Golden Health has not
taken and has not agreed to take any action (other than actions contemplated by
this Agreement) that could reasonably be expected to prevent the transactions
contemplated by this Agreement from constituting a “reorganization” under section 368(b) of
the Code or as an acquisition of in excess of

 

14

 

80% of the stock of a corporation in exchange for
property under Section 351 of the Code. 
Golden Health is not aware of any agreement, plan or other circumstance
that could reasonably be expected to prevent the transactions contemplated by
this Agreement from so qualifying.

 

(ii)           Golden Health has no plan
or intention to reacquire, and, to Golden Health’s knowledge, no person related
to Golden Health within the meaning of Treasury Regulations Section 1.368-1
has a plan or intention to acquire, any of the Golden Health Common Stock
pursuant to Section 1.02(a) hereof.

 

(q)           Completeness of Disclosure.  No
representation or warranty by Golden Health in this Agreement contains or, and
at the Closing Date will contain, an untrue statement of material fact or omits
or, at the Closing Date, will omit to state a material fact required to be
stated therein or necessary to make the statements made not misleading.

 

(r)            Periodic Reporting. 
Golden Health is not required to register the Golden Health Common Stock
under Section 12 of the Exchange Act and Golden Health is not subject to
the periodic reporting requirements of Section 13 of the Exchange Act.

 

(s)           Compliance with Law and Government Regulations.  Golden Health is in compliance with and is
not in violation of applicable federal, state, local or foreign statutes, laws
and regulations (including without limitation, any applicable building, zoning
or other law, ordinance or regulation) affecting its properties or the
operation of its business.  Golden Health
is not subject to any order, decree, judgment or other sanction of any court,
administrative agency or other tribunal.

 

(t)            Legal Proceedings and History.  Golden Health hereby represents that, unless
otherwise disclosed herein, no officer, director or affiliate of Golden Health,
has been, within the five years ending on the Closing Date, a party to any
bankruptcy petition against such person or against any business of which such
person was affiliated; convicted in a criminal proceeding or subject to a
pending criminal proceeding (excluding traffic violations and other minor
offenses; subject to 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 their
involvement in any type of business, securities or banking activities; or found
by a court of competent jurisdiction in a civil action, by the SEC 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 2.02         Representations
and Warranties of Joy Power.  Joy
Power hereby represents and warrants to, and agrees with, Golden Health:

 

(a)           Organization
and Qualification.  Joy Power
owns no subsidiary or affiliate corporation or owns any interest in any other
enterprise (whether or not such enterprise is a corporation).  Section A of the letter, dated even date
herewith, from Joy Power to Golden Health (the “Joy Power
Disclosure Letter”), which letter shall be completed and
delivered to Golden

 

15

 

Health on or prior to the
Due Diligence Date, correctly sets forth as to Joy Power its place of
incorporation, principal place of business, jurisdictions in which it is
qualified to do business, and the businesses which it presently conducts and
which it contemplates conducting.  Joy
Power is a corporation duly organized, validly existing, and in good standing
under the laws of the People’s Republic of China, with all requisite power and
authority, and all necessary consents, authorizations, approvals, orders,
licenses, certificates, and permits of and from, and declarations and filings
with, all federal, state, local, and other governmental authorities and all
courts and other tribunals, to own, lease, license, and use its properties and
assets and to carry on the businesses in which it is now engaged and the
businesses in which it contemplates engaging. 
Joy Power is duly qualified to transact the businesses in which it is
engaged and is in good standing as a foreign corporation in every jurisdiction
in which its ownership, leasing, licensing, or use of property or assets or the
conduct of its businesses makes such qualification necessary.

 

(b)           Capitalization.  The authorized capital stock of Joy Power
consists of 10,000 shares of HK$1.00 each, of which 10,000 shares are
outstanding (the “Joy Power Capital Stock”).  Each of the outstanding stock of Joy Power
Capital Stock is validly authorized, validly issued, fully paid, and
nonassessable, has not been issued and is not owned or held in violation of any
preemptive right of stockholders and by the owner set forth in Section A
of the Joy Power Disclosure Letter, in each case free and clear of all liens,
security interests, pledges, charges, encumbrances, stockholders’ agreements,
and voting trusts.  There is no
commitment, plan, or arrangement to issue, and no outstanding option, warrant,
or other right calling for the issuance of, any share of Joy Power Capital
Stock or any security or other instrument convertible into, exercisable for, or
exchangeable for Joy Power Capital Stock. 
There is outstanding no security or other instrument convertible into or
exercisable or exchangeable for Joy Power Capital Stock.

 

(c)           Financial
Condition.  Joy Power has
delivered, or on or prior to the Due Diligence Date will deliver, to Golden
Health true and correct copies of the following:  unaudited balance sheet of Joy Power as of August 31,
2005; and unaudited statements of income, statements of stockholders’ equity,
and statements of cash flows of Joy Power for the period from February 25,
2005 (date of incorporation) to August 31, 2005.  Each such balance sheet presents fairly the
financial condition, assets, liabilities, and stockholders’ equity of Joy Power
as of its date; each such statement of income and consolidated statement of
stockholders’ equity presents fairly the results of operations of Joy Power for
the period indicated; and each such statement of cash flows presents fairly the
information purported to be shown therein. 
The financial statements referred to in this Section 2.02(c) have
been prepared in accordance with generally accepted accounting principles in
the United States consistently applied throughout the periods involved and are
in accordance with the books and records of Joy Power.  Since August 31, 2005:

 

(i)            There has
at no time been a material adverse change in the financial condition, results
of operations, business, properties, assets, liabilities, or future prospects
of Joy Power.

 

16

 

(ii)           Joy
Power has not authorized, declared, paid, or effected any dividend or
liquidating or other distribution in respect of its capital stock or any direct
or indirect redemption, purchase, or other acquisition of any stock of Joy
Power.

 

(iii)          The
operations and businesses of Joy Power have been conducted in all respects only
in the ordinary course, except for the transactions contemplated hereby and in
connection herewith.

 

(iv)          There
has been no accepted purchase order or quotation, arrangement, or understanding
for future sale of the products or services of Joy Power that Joy Power expects
will not be profitable.

 

(v)           Joy
Power has not suffered an extraordinary loss (whether or not covered by
insurance) or waived any right of substantial value.

 

There is no fact known to
Joy Power which materially adversely affects or in the future (as far as Joy
Power can foresee) may materially adversely affect the financial condition,
results of operations, business, properties, assets, liabilities, or future
prospects of Joy Power; provided, however, that Joy Power expresses no opinion
as to political or economic matters of general applicability.  Joy Power has made known, or caused to be
made known, to the accountants or auditors who have prepared, reviewed, or
audited the aforementioned consolidated financial statements all material facts
and circumstances which could affect the preparation, presentation, accuracy or
completeness thereof.

 

(d)           Tax and
Other Liabilities.  Joy Power
does not have any material liability of any nature, accrued or contingent,
including, without limitation, liabilities for Taxes, and liabilities to
customers or suppliers, other than the following:

 

(i)            Liabilities
for which full provision has been made on the balance sheet and the notes
thereto (the “Last Joy Power Balance Sheet”)
as of August 31, 2005 (the “Last Joy Power Balance
Sheet Date”) referred to in Section 2.02(c); and

 

(ii)           Other
liabilities arising since the Last Joy Power Balance Sheet Date and prior to
the Closing Date in the ordinary course of business (which shall not include
liabilities to customers on account of defective products or services) or in
connection with the transactions contemplated hereby or in connection herewith
which are not inconsistent with the representations and warranties of Joy Power
or any other provision of this Agreement.

 

Without limiting the
generality of the foregoing, the amounts set up as provisions for Taxes on the
Last Joy Power Balance Sheet are sufficient for all accrued and unpaid Taxes of
Joy Power, whether or not due and payable and whether or not disputed, under
tax laws, as in effect on the Last Joy Power Balance Sheet Date or now in
effect, for the period ended on such date and for all fiscal periods prior
thereto.  The execution, delivery, and
performance of this Agreement by Joy Power will not cause any Taxes to be
payable other than by the stockholders of Joy Power or

 

17

 

cause any lien, charge,
or encumbrance to secure any Taxes to be created either immediately or upon the
nonpayment of any Taxes other than on the properties or assets of the
stockholders of Joy Power.  The Inland
Revenue Department has not yet commenced the assessment of profits tax or
issued any income tax returns to Joy Power for the year of assessment 2005/2006.

 

(e)           Litigation
and Claims.  Except as set
forth in Section G of the Joy Power Disclosure Letter, there is no
litigation, arbitration, claim, governmental or other proceeding (formal or
informal), or investigation pending, threatened, or, to the best of Joy Power’s
knowledge, in prospect (or any basis therefor known to Joy Power), with respect
to Joy Power or any of its businesses, properties, or assets.  Joy Power is not affected by any present or
threatened strike or other labor disturbance nor to the knowledge of Joy Power
is any union attempting to represent any employee of Joy Power as collective
bargaining agent.  Joy Power is not in
violation of, or in default with respect to, any law, rule, regulation, order,
judgment, or decree which violation or default would have a material adverse
effect upon Joy Power; nor is Joy Power required to take any action in order to
avoid such violation or default.

 

(f)            Properties.

 

(i)            Joy
Power does not own any legal or equitable interest in any real property.  Joy Power has good title to all other
properties and assets material to Joy Power, used in its business or owned by
it (except real and other properties and assets as are held pursuant to leases
or licenses described in Section B or C of the Joy Power Disclosure
Letter), free and clear of all liens, mortgages, security interests, pledges,
charges, and encumbrances (except such as are listed in Section H of the
Joy Power Disclosure Letter).

 

(ii)           All
accounts and notes receivable reflected on the Last Joy Power Balance Sheet, or
arising since the Last Joy Power Balance Sheet Date, have been collected, or
are and will be good and collectible, in each case at the aggregate recorded
amounts thereof without right of recourse, defense, deduction, return of goods,
counterclaim, offset, or set off on the part of the obligor, and, if not
collected, can reasonably be anticipated to be paid within 180 days of the date
incurred.

 

(iii)          All
inventory of raw materials and work in process of Joy Power is usable, and all
inventory of finished goods is good and marketable, on a normal basis in the
existing product lines of Joy Power.  All
inventory is merchantable and fit for the particular purpose for which it is
intended.

 

(iv)          Attached
as Section B of the Joy Power Disclosure Letter is a true and complete
list of the classes of all tangible properties and assets owned by Joy Power or
leased or licensed by Joy Power from or to a third party (including inventory
but not including Intangibles, as defined in Section 2.02(i)), and with
respect to such properties and assets leased or licensed by Joy Power from or
to a third party, a description of such lease or license.  All such properties and assets (including
Intangibles) owned by Joy

 

18

 

Power are reflected on
the Last Joy Power Balance Sheet (except for acquisitions subsequent to the
Last Joy Power Balance Sheet Date and prior to the Closing Date which are
either noted in Section B or C of the Joy Power Disclosure Letter or are
approved in writing by Golden Health). 
All real and other tangible properties and assets owned by Joy Power or
leased or licensed by Joy Power from or to a third party are in good and usable
condition (reasonable wear and tear which is not such as to affect adversely
the operation of the business of Joy Power excepted).

 

(v)           To
the best of Joy Power’s knowledge, no real property owned by Joy Power or
leased or licensed by Joy Power from or to a third party lies in an area which
is, or will be, subject to zoning, use, or building code restrictions which
would prohibit, and, to the best of Joy Power’s knowledge, no state of facts
relating to the actions or inaction of another person or entity or his or its
ownership, leasing, or licensing of any real or personal property exists or
will exist which would prevent, the continued effective ownership, leasing, or
licensing of such real property in the businesses in which Joy Power is now
engaged or the businesses in which it contemplates engaging.

 

(vi)          The
properties and assets (including Intangibles) owned by Joy Power (other than
those leased or licensed by Joy Power to a third party) or leased or licensed
by Joy Power from a third party constitute all such properties and assets which
are necessary to the business of Joy Power as presently conducted or as it
contemplates conducting.

 

(vii)         Joy
Power has not caused or permitted its businesses properties, or assets to be
used to generate, manufacture, refine, transport, treat, store, handle, dispose
of, transfer, produce, or process any Hazardous Substance (as such term is
defined in this Section 2.01(f)(v)) except in compliance with all
applicable laws, rules, regulations, orders, judgments, and decrees, and has
not caused or permitted the Release (as such term is defined in this Section 2.01(f)(v))
of any Hazardous Substance on or off the site of any property of Joy Power.

 

(g)           Contracts
and Other Instruments.  Section D
of the Joy Power Disclosure Letter contains a true and correct statement of the
information required to be contained therein regarding material contracts,
agreements, instruments, leases, licenses, arrangements, or understandings with
respect to Joy Power.  Joy Power has
furnished, or on or prior to the Due Diligence Date will furnish, to Golden
Health: (i) the certificate of incorporation and by-laws of Joy Power (or,
in each case, the comparable charter documents, if any, under applicable law)
and all amendments thereto, as presently in effect, certified by the Secretary
or an authorized signatory of Joy Power and (ii) the following:  (A) true and correct copies of all
material contracts, agreements, and instruments referred to in Section D
of the Joy Power Disclosure Letter; (B) true and correct copies of all
material leases and licenses referred to in Section B or C of the Joy
Power Disclosure Letter; and (C) true and correct written descriptions of
all material supply, distribution, agency, financing, or other arrangements or
understandings referred to in Section D of the Joy Power Disclosure
Letter.  Except as set forth in Section D
of the Joy Power Disclosure Letter, Joy Power is not party to any employment
agreement with any employee

 

19

 

thereof.  To the best of Joy Power’s knowledge, none of
Joy Power or any other party to any such contract, agreement, instrument,
lease, or license is now or expects in the future to be in violation or breach
of, or in default with respect to complying with, any term thereof, and each
such material contract, agreement, instrument, lease, or license is in full
force and is (to the best of Joy Power’s knowledge in the case of third
parties) the legal, valid, and binding obligation of the parties thereto and
(subject to applicable bankruptcy, insolvency, and other laws affecting the
enforceability of creditors’ rights generally) is enforceable as to them in
accordance with its terms. Each such material supply, distribution, agency,
financing, or other arrangement or understanding is a valid and continuing
arrangement or understanding; none of Joy Power or any other party to any such
arrangement or understanding has given notice of termination or taken any
action inconsistent with the continuance of such arrangement or understanding;
and the execution, delivery, and performance of this Agreement will not
prejudice any such arrangement or understanding in any way.  Joy Power enjoys peaceful and undisturbed
possession under all leases and licenses under which it is operating.  Joy Power is not party to or bound by any
contract, agreement, instrument, lease, license, arrangement, or understanding,
or subject to any charter or other restriction, which has had or, to the best
of Joy Power’s knowledge, may in the future have a material adverse effect on
the financial condition, results of operations, businesses, properties, assets,
liabilities, or future prospects of Joy Power and, following the consummation
of the transactions contemplated hereby, Golden Health.  Joy Power has not engaged within the last
five years in, is engaging in, or intends to engage in any transaction with, or
has had within the last five years, now has, or intends to have any contract,
agreement, instrument, lease, license, arrangement, or understanding with, any
stockholder of Joy Power, any director, officer, or employee of Joy Power
(except for employment agreements listed in Section D of the Joy Power
Disclosure Letter and employment and compensation arrangements described in Section E
of the Joy Power Disclosure Letter), any relative or affiliate of any
stockholder of Joy Power, any such director, officer, or employee, or any other
corporation or enterprise in which any stockholder of Joy Power, any such
director, officer, or employee, or any such relative or affiliate then had or
now has a 5% or greater equity or voting or other substantial interest, other
than those listed and so specified in Section D of the Joy Power
Disclosure Letter.  The stock ledgers and
stock transfer books and the minute book records of Joy Power relating to all
issuances and transfers of stock by Joy Power and all proceedings of the
stockholders and the Board of Directors and committees thereof of Joy Power
since their respective incorporations made available to Golden Health are the
original stock ledgers and stock transfer books and minute book records of Joy
Power or exact copies thereof.  Joy Power
is not in violation or breach of, or in default with respect to, any term of
its certificate of incorporation or by-laws (or, in each case, the comparable
charter document, if any, under applicable law).

 

(h)           Employees.

 

(i)            Joy
Power does not have, or contribute to, and has not had and has not contributed
to, any pension, profit-sharing, option, other incentive plan, or any other
type of Employee Benefit Plan or has any obligation to or customary arrangement
with employees for bonuses, incentive compensation, vacations, severance pay,
sick pay, sick leave, insurance, service award, relocation, disability, tuition
refund, or other benefits, whether oral or written.

 

20

 

(ii)           Section E
of the Joy Power Disclosure Letter contains a true and correct statement of the
names, relationship with Joy Power, present rates of compensation (whether in
the form of salary, bonuses, commissions, or other supplemental compensation
now or hereafter payable), and aggregate compensation for the period from February 25,
2005 (date of incorporation) to August 31, 2005 of (A) each director,
officer, or other employee of Joy Power whose aggregate compensation for the period
from February 25, 2005 (date of incorporation) to August 31, 2005
exceeded US$50,000 or whose aggregate compensation presently exceeds the rate
of US$50,000 per annum and (B) all sales agents, dealers, or distributors
of Joy Power.  Since August 31, 2005,
Joy Power has not changed the rate of compensation of any of its directors,
officers, employees, agents, dealers, or distributors, nor has any Employee
Benefit Plan or program of Joy Power been instituted or amended to increase
benefits thereunder.

 

(i)            Patents, Trademarks,
Et Cetera.  Joy Power does not
own or have pending, and is not licensed or otherwise permitted to use, any
Intangibles, other than as described in Section C of the Joy Power
Disclosure Letter.  Each Intangible is
validly issued and is currently in force and uncontested in all jurisdictions
in which it is used or in which such use is contemplated.  Section C of the Joy Power Disclosure
Letter contains a true and correct listing of: (i) all Intangibles which
are owned (either in whole or in part), used by, or licensed to Joy Power or
which otherwise relate to the businesses of Joy Power, and a description of
each such Intangible which identifies its owner, registrant, or applicant; (ii) all
contracts, agreements, instruments, leases, and licenses and identification of
all parties thereto under which Joy Power owns or uses any Intangible (whether
or not under license from third parties), together with the identification of
the owner, registrant, or applicant of each such Intangible; (iii) all
contracts, agreements, instruments, leases, and licenses and identification of
all parties thereto under which Joy Power grants the right to use any
Intangible; and (iv) all validity, infringement, right-to-use, or other
opinions of counsel (whether in-house or outside) which concern the validity,
infringement, or enforceability of any Intangible owned or controlled by a
party other than Joy Power which relates to the businesses, properties, or
assets of Joy Power.  Except as specified
in Section C of the Joy Power Disclosure Letter:  (v) Joy Power is the sole and exclusive
owner or licensee of, and (other than those licensed by Joy Power to a third
party) has the right to use, all Intangibles; (vi) no Intangible is
subject to any order, judgment, decree, contract, agreement, instrument, lease,
or license restricting the scope of the use thereof; (vii) during the last
five years, Joy Power has not been charged with, and has not charged others
with, unfair competition, infringement of any Intangible, or wrongful use of
confidential information, trade secrets, or secret processes; and (viii) Joy
Power is not using any patentable invention, confidential information, trade
secret, or secret process of others. 
There is no right under any Intangible necessary to the businesses of
Joy Power as presently conducted or as it contemplates conducting, except such
as are so designated in Section C of the Joy Power Disclosure Letter.  Joy Power has not infringed, is not
infringing, and has not received notice of infringement in respect of the
Intangibles or asserted Intangibles of others, nor has Joy Power been advised
by counsel or others that it is infringing or may infringe

 

21

 

the Intangibles or
asserted Intangibles of others if any currently contemplated business activity
is effectuated.  To the knowledge of Joy
Power, there is no infringement by others of Intangibles of Joy Power.  As far as Joy Power can foresee, there is no
Intangible or asserted Intangible of others that may materially adversely
affect the financial condition, results of operations, businesses, properties,
assets, liabilities, or future prospects of Joy Power.  All contracts, agreements, instruments,
leases, and licenses pertaining to Intangibles to which Joy Power is a party,
or to which any of its businesses, properties, or assets are subject, are in
compliance with all laws, rules, regulations, orders, judgments, and decrees
binding on Joy Power or to which any of its businesses, properties, or assets
are subject.  Neither any stockholder of
Joy Power, any director, officer, or employee of Joy Power, any relative or
affiliate of any stockholder of Joy Power or any such director, officer, or
employee, nor any other corporation or enterprise in which any stockholder of
Joy Power, any such director, officer, or employee, or any such relative or
affiliate had or now has a 5% or greater equity or voting or other substantial
interest, possesses any Intangible which relates to the businesses of Joy
Power.

 

(j)            Questionable
Payments.  Neither Joy Power,
nor any director, officer, agent, employee, or other person associated with, or
acting on behalf of, Joy Power, nor any stockholder of Joy Power, has, directly
or indirectly:  used any corporate funds
for unlawful contributions, gifts, entertainment, or other unlawful expenses
relating to political activity; made any unlawful payment to foreign or
domestic government officials or employees or to foreign or domestic political
parties or campaigns from corporate funds; violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or made any bribe, rebate,
payoff, influence payment, kickback, or other unlawful payment.

 

(k)           Authority.  Joy Power has all requisite power and
authority to execute, deliver, and perform this Agreement.  All necessary corporate proceedings of Joy
Power have been duly taken to authorize the execution, delivery, and
performance of this Agreement by Joy Power. 
This Agreement has been duly authorized, executed, and delivered by Joy
Power, constitutes the legal, valid, and binding obligation of Joy Power, and
is enforceable as to Joy Power in accordance with its terms.  Except as otherwise set forth in this
Agreement, no consent, authorization, approval, order, license, certificate, or
permit of or from, or declaration or filing with, any federal, state, local, or
other governmental authority or any court or other tribunal is required by Joy
Power for the execution, delivery, or performance of this Agreement by Joy
Power.  No consent of any party to any
material contract, agreement, instrument, lease, license, arrangement, or
understanding to which Joy Power is a party, or to which its or any of its
businesses, properties, or assets are subject, is required for the execution,
delivery, or performance of this Agreement (except such consents referred to in
Section D of the Joy Power Disclosure Letter); and the execution,
delivery, and performance of this Agreement will not (if the consents referred
to in Section D of the Joy Power Disclosure Letter are obtained prior to
the Closing) violate, result in a breach of, conflict with, or (with or without
the giving of notice or the passage of time or both) entitle any party to
terminate or call a default under, entitle any party to receive rights or
privileges that such party was not entitled to receive immediately before this
Agreement was executed under, or create any obligation on the part of Joy Power
or Golden Health to which it was not subject immediately before this Agreement
was executed under, any

 

22

 

term of any such material
contract, agreement, instrument, lease, license, arrangement, or understanding,
or violate or result in a breach of any term of the certificate of
incorporation or by-laws of Joy Power (or, in each case, the comparable charter
documents, if any, under applicable law), or (if the provisions of this
Agreement are satisfied) violate, result in a breach of, or conflict with any
law, rule, regulation, order, judgment, or decree binding on Joy Power or to
which any of its businesses, properties, or assets are subject.  Except as set forth in Section I of the
Joy Power Disclosure Letter, neither Joy Power nor any of its officers,
directors, employees, or agents has employed any broker or finder or incurred
any liability for any fee, commission, or other compensation payable by any
person on account of alleged employment as a broker or finder, or alleged
performance of services as a broker or finder, in connection with or as a
result of this Agreement or the other transactions contemplated hereby and in
connection herewith.

 

(l)            Insurance.  All policies of fire and other insurance
against casualty and other losses and public liability insurance carried by Joy
Power are described in Section F of the Joy Power Disclosure Letter
(including the risks covered and limits of such policies) and are in full force
and effect.  A full and complete copy of
each such insurance policy has been, or on or prior to the Due Diligence Date
will be, provided to Golden Health, and such policies are summarized in Section F
of the Joy Power Disclosure Letter.  All
premiums in respect of such policies for which premium notices have been
received have been paid in full as the same become due and payable.  Joy Power have not failed to give any notice
or present any claim under any insurance policy in due and timely fashion.  There are no actual claims or claims
threatened in writing against Joy Power which could come within the scope of
such coverage nor are any such policies currently threatened with
cancellation.  There are no outstanding
requirements or recommendations by any insurance company that issued a policy
with respect to any of the respective assets, the businesses, or operations of
Joy Power or by any Board of Fire Underwriters or other body exercising similar
functions or by any governmental authority requiring or recommending any
repairs or other work to be done on, or with respect to, any of the respective
assets of Joy Power or requiring or recommending any equipment or facilities to
be installed on any premises from which the respective businesses of Joy Power
is conducted or in connection with any of the respective assets thereof.  Joy Power does not have any knowledge of any
material proposed increase in applicable insurance rates or of any conditions
or circumstances applicable to the respective businesses thereof that might
result in such increases.  No such policy
is terminable by virtue of the transactions contemplated by this Agreement.

 

(m)          Business
Conducted in No Other Name. 
Subject to the next sentence, all business of Joy Power has been
conducted in its and for their benefit and there are no parties related or
affiliated with Joy Power, either directly or indirectly, which are competing
for the business of Joy Power.  Joy Power
conducts business in the following names: 
Guangzhou Joy Power Technology Development Co., Ltd.

 

(n)           Customers
and Suppliers.  There has been
no termination or cancellation of any relationship between Joy Power and any
material supplier, or any customer or group of customers which, individually or
in the aggregate, represented more than five percent of the gross revenues of
Joy Power taken as a whole during the fiscal year ended December 31, 2002,
nor is there any reason to believe that any such terminations of such
magnitudes are pending or threatened.

 

23

 

(o)           Completeness
of Disclosure.  No
representation or warranty by Joy Power in this Agreement contains, or at the
Closing Date will contain, an untrue statement of material fact or omits or at
the Closing Date will omit to state a material fact required to be stated
therein or necessary to make the statements made not misleading.

 

Section 2.03         Representations
and Warranties of the Joy Power Shareholders.  Each of the Joy Power Shareholders,
severally, but not jointly, hereby represents and warrants to, and agrees with,
Golden Health as follows:

 

(a)           Representations and Warranties of Joy Power.  To the knowledge of such Joy Power
Shareholder, the representations and warranties of Joy Power set forth in Section 2.02
hereof are true and correct in all material respects.  Nothing has come to the attention of such Joy
Power Shareholder that would lead such Joy Power Shareholder to believe that
any representation or warranty of Joy Power set forth on Section 2.02
hereof is untrue or incorrect in any material respect.

 

(b)           Authority.  Joy Power
and Joy Power Shareholders holding of record and beneficially representing all
of the issued and outstanding Joy Power Capital Stock have approved this
Agreement and duly authorized the execution and delivery hereof.  Each of the Joy Power Shareholders is an
individual residing in the People’s Republic of China with full power and
authority under the laws thereof to execute, deliver, and perform this
Agreement and the transactions contemplated hereby and in connection herewith.
Such Joy Power Shareholder has reached the age of majority under applicable
law.

 

(c)           Ownership of Shares. 
Such Joy Power Shareholder owns beneficially and of record the Joy Power
Capital Stock set forth opposite his or her respective name in Schedule A
hereto.  Such Joy Power Shareholder has
full power and authority to transfer such Joy Power Capital Stock to Golden
Health under, pursuant to, and in accordance with, this Agreement, have full
power and authority to transfer such shares of Joy Power capital stock to
Golden Health hereunder, and such shares are free and clear of any liens,
charges, mortgages, pledges or encumbrances and such shares are not subject to
any claims as to the ownership thereof, or any rights, powers or interest
therein, by any third party and are not subject to any preemptive or similar
rights of stockholders.

 

(d)           Investment Representations and Covenants.

 

(i)            Such
Joy Power Shareholder represents that he or she is acquiring the shares of
Common Stock to be issued pursuant to Section 1.02(a) hereof for his
or her own account and for investment only and not with a view to distribution
or resale thereof within the meaning of such phrase as defined under the
Securities Act.  Such Joy Power
Shareholder shall not dispose of any part or all of such shares of Golden
Health Common

 

24

 

Stock in violation of the
provisions of the Securities Act and the rules and regulations promulgated
under the Securities Act by the SEC and all applicable provisions of State
securities laws and regulations.

 

(ii)           The
certificate or certificates representing the Golden Health Shares shall bear a
legend in substantially the form set forth in Section 1.02(c) hereof.

 

(iii)          Such
Joy Power Shareholder acknowledges being informed that the shares of Golden
Health Common Stock to be issued pursuant to Section 1.02(a) hereof
shall be unregistered, shall be “restricted
securities” as defined in paragraph (a) of Rule 144 under
the Securities Act, and must be held indefinitely unless they (a) are
subsequently registered under the Securities Act, or (b) an exemption from
such registration is available, and (c) Golden Health will not have an
obligation to currently register such securities for the account of Joy Power
Shareholders.

 

(iv)          Such
Joy Power Shareholder acknowledges that he or she has been afforded access to
all material information which they have requested relevant to such Joy Power
Shareholder’s decision to acquire the shares of Golden Health Common Stock and
to ask questions of Golden Health’s management and that, except as set forth
herein, neither Golden Health nor anyone acting on behalf of Golden Health has
made any representations or warranties to such Joy Power Shareholder which have
induced, persuaded, or stimulated such Joy Power Shareholder to acquire such
shares of Golden Health Common Stock.

 

(v)           Either
alone, or together with their investment advisor(s), such Joy Power Shareholder
has the knowledge and experience in financial and business matters to be
capable of evaluating the merits and risks of the prospective investment in the
shares of Golden Health Common Stock, and such Joy Power Shareholder is and
will be able to bear the economic risk of the investment in such shares of
Golden Health Common Stock.

 

ARTICLE III

 

COVENANTS

 

Section 3.01         Covenants
of Golden Health.  Golden Health
covenants and agrees that, after the date hereof and through the earlier of the
Closing or the date of the termination of this Agreement pursuant to Article IV
or V hereof (the earlier of such times, the “Release
Time”), unless Joy Power will otherwise approve in writing,
which approval will not be unreasonably withheld:

 

(a)           (i)            Until
the Release Time, no dividend or liquidating or other distribution or stock
split shall be authorized, declared, paid, or effected by Golden Health in
respect of the outstanding shares of Golden Health Common Stock.

 

25

 

(ii)           Until
the Release Time, no share of capital stock of Golden Health or warrant for any
such share, right to subscribe to or purchase any such share, or security
convertible into, or exchangeable or exercisable for, any such share (other
than stock options), shall be issued or sold by Golden Health.

 

(b)           Until the Release Time,
Golden Health will afford the officers, directors, employees, counsel, agents,
investment bankers, accountants, and other representatives of Joy Power and the
Joy Power Shareholders free and full access to the plants, properties, books,
and records of Golden Health.  Golden
Health will permit them to make extracts from and copies of such books and
records, and will from time to time furnish Joy Power and the Joy Power
Shareholders with such additional financial and operating data and other
information as to the financial condition, results of operations, businesses,
properties, assets, liabilities, or future prospects of Golden Health as Joy
Power or the Joy Power Shareholders from time to time may request.  Until the Release Time, Golden Health will
cause the independent certified public accountants of Golden Health to make
available to Joy Power, its independent certified public accountants, and the
Joy Power Shareholders, the work papers relating to the audits of Golden Health
referred to in Section 2.01(c) of this Agreement.

 

(c)           Until the Release Time,
Golden Health will conduct its affairs, so that on the Closing Date no
representation or warranty of Golden Health will be inaccurate, no covenant or
agreement of Golden Health will be breached, and no condition in this Agreement
will remain unfulfilled by reason of the actions or omissions of Golden
Health.  Except as otherwise consented to
by Joy Power in writing, until the Release Time, Golden Health will conduct its
affairs in all respects only in the ordinary course.

 

(d)           Until the Release Time,
Golden Health will immediately advise Joy Power in a detailed written notice of
any material fact or occurrence or any pending or threatened material
occurrence of which it obtains knowledge and which (if existing and known at
the date of the execution of this Agreement) would have been required to be set
forth or disclosed in or pursuant to this Agreement or in the Golden Health
Disclosure Letter, which (if existing and known at any time prior to or at the
Closing) would make the performance by any party of a covenant contained in
this Agreement impossible or make such performance materially more difficult
than in the absence of such fact or occurrence, or which (if existing and known
at the time of the Closing) would cause a condition to any party’s obligations
under this Agreement not to be fully satisfied.

 

(e)           Golden Health shall use
its commercially reasonable efforts to insure that all confidential information
which Golden Health or any of its officers, directors, employees, counsel,
agents, investment bankers, or accountants may now possess or may hereafter
create or obtain relating to the financial condition, results of operations,
businesses, properties, assets, liabilities, or future prospects of Joy Power,
any affiliate of Joy Power, or any customer or supplier of or any such
affiliate shall not be published, disclosed, or made accessible by any of them
to any other person or entity without the prior written consent of Joy Power,
which written consent shall not be unreasonably withheld; provided, however,
that the restrictions of this

 

26

 

sentence shall not apply (i) after
the Closing, (ii) as may otherwise be required by law, (iii) as may
be necessary or appropriate in connection with the enforcement of this
Agreement, or (iv) to the extent the information shall have otherwise
become publicly available.  Golden Health
shall, and shall cause all other such persons and entities to, deliver to Joy
Power all tangible evidence of the confidential information relating to Joy
Power, any affiliate of Joy Power, or (insofar as such confidential information
was provided by, or on behalf of, Joy Power, or any such affiliate of Joy
Power) any customer or supplier of any of them or any such affiliate to which
the restrictions of the foregoing sentence apply immediately after the
termination of this Agreement pursuant to Article IV or V hereof.

 

(f)            Before Golden Health
releases any information concerning this Agreement or any of the other
transactions contemplated hereby or in connection herewith which is intended
for or may result in public dissemination thereof, Golden Health shall
cooperate with Joy Power, shall furnish drafts of all documents or proposed
oral statements to Joy Power for comment, and shall not release any such
information without the written consent of Joy Power.  Nothing contained herein shall prevent Golden
Health from releasing any information if required to do so by law.

 

(g)           Golden Health shall not
make any agreement or reach any understanding not approved in writing by Joy
Power as a condition for obtaining any consent, authorization, approval, order,
license, certificate, or permit required for the consummation of the
transactions contemplated by this Agreement.

 

(h)           Golden Health shall
promptly prepare all required or, in the reasonable opinion of the parties
hereto, appropriate periodic reports and applications under the Exchange Act (“Periodic Reports”) and other
regulatory filings relating to this Agreement and the transactions contemplated
hereby and in connection herewith. 
Golden Health shall furnish or cause to be furnished, for inclusion in
the Periodic Reports, such information about Golden Health, and Golden Health’s
security holders as may be required or as may be reasonably requested by Joy
Power, and shall continue to furnish or cause to be furnished such information
as is necessary to keep such information correct and complete in all material
respect until the Release Time.  Golden
Health represents and warrants that the information that it has furnished to
date, taken as a whole, does not now, and will not at any time prior to the
Release Time, (i) contain an untrue statement of a material fact or (ii) omit
to state a material fact required to be stated therein or necessary to make the
statements therein not false or misleading. 
Golden Health shall take any action required to be taken by it under
state “blue-sky,” securities, or take-over laws in connection with the issuance
of Golden Health Common Stock pursuant to the transactions contemplated hereby
and in connection herewith.

 

(i)            If, prior to the
Release Time, Golden Health Common Stock shall be recapitalized or reclassified
or Golden Health shall effect any stock dividend, stock split, or reverse stock
split of Golden Health Common Stock, then the shares of Golden Health Common
Stock to be delivered under this Agreement or upon exercise, conversion, or
exchange of any security to be delivered under this Agreement or assumed by
Golden Health as contemplated by this Agreement shall be appropriately and
equitably adjusted to the kind and amount of shares of stock and other

 

27

 

securities and property
to which the holders of such shares of Golden Health Common Stock or such other
security would have been entitled to receive had such stock or such other
security been issued and outstanding as of the record date for determining
stockholders entitled to participate in such corporate event.

 

(j)            Golden Health shall
timely prepare and file any declaration or filing necessary to comply with any
transfer tax statutes that require any such filing before the Closing.

 

(k)           Until the
Release Time, Golden Health shall not, and shall not authorize or permit any
officer, director, employee, counsel, agent, investment banker, accountant, or
other representative of Golden Health, directly or indirectly, to contemplate
or enter into any transaction the effect of which may be to prohibit, restrict,
or delay the consummation of the transactions contemplated by this Agreement or
impair the contemplated benefits to Golden Health’s stockholders of the
transactions contemplated by this Agreement.

 

(l)            (i)            Following
the consummation of the transactions contemplated hereby and in connection
herewith, Golden Health will cause Joy Power to continue its historic business
or to use a significant portion of Joy Power’s historic business assets in a
business, in each case within the meaning of section 1.368-1(d) of
the Treasury Regulations, assuming that the assets of, and the business
conducted by, Joy Power at the Closing Date constitute Joy Power’s historic
business assets and historic business, respectively.

 

(ii)           Following
the consummation of the transactions contemplated hereby and in connection
herewith, Golden Health will not permit Joy Power to issue additional shares
that would result in Golden Health losing control of Joy Power within the
meaning of section 368(c) of the Code.

 

(m)          Golden
Health shall use best efforts to file, within 30 days following the Effective Time,
with the National Association of Securities Dealers, Inc., or its
affiliates, all information required by Rule 15c2-11 under the Exchange
Act.

 

(n)           Effective at the Closing,
each member of the Board of Directors of Golden Health shall tender his or her
respective resignation therefrom and shall appoint the following individuals as
the sole directors of Golden Health:  Ms. Hoi
Ho Kiu, Mr. Yu Fai Yip and Ms. Maggie Kwok.  Effective at the Closing, each officer of
Golden Health shall tender his or her respective resignation therefrom.

 

(o)           On or prior to the Due
Diligence Date, Golden Health shall deliver to Joy Power and the Joy Power
Shareholders the completed Golden Health Disclosure Letter, which letter shall
be correct and complete in all material respects.

 

(p)           In addition to the shares
of Golden Health Common Stock to be delivered pursuant to Sections 1.02(a) and
1.03(a) hereof, 62,200,000 newly issued shares of Golden Health Common
Stock shall be issued and delivered in certificated form at the Closing to, or
to the order of Ms. Shuk Wah Kwok.

 

28

 

Section 3.02         Covenants
of Joy Power.  Joy Power
covenants and agrees that, after the date hereof and through the Release Time,
unless Golden Health will otherwise approve in writing, which approval will not
be unreasonably withheld:

 

(a)           Until the earlier of
the Release Time, no amendment will be made in the certificate of incorporation
or by-laws (or, in each case, the comparable charter documents, if any, under
applicable law) of Joy Power.

 

(b)           Until the Release Time,
no share of capital stock of Joy Power, option or warrant for any such share,
right to subscribe to or purchase any such share, or security convertible into,
or exchangeable or exercisable for, any such share, shall be issued or sold by
Joy Power, otherwise than as contemplated by, or in connection with, this
Agreement.

 

(c)           Until the Release Time,
no dividend or liquidating or other distribution or stock split shall be
authorized, declared, paid, or effected by Joy Power in respect of the
outstanding Joy Power Capital Stock. 
Until the Release Time, no direct or indirect redemption, purchase, or
other acquisition shall be made by Joy Power of Joy Power Capital Stock.

 

(d)           Until the Release Time,
Joy Power shall not borrow money, guarantee the borrowing of money, engage in
any transaction, or enter into any material agreement other than in connection
with the transactions contemplated hereby or in connection herewith or
otherwise pursuant to any currently outstanding credit line of Joy Power.  For purposes of this Agreement, references to
“material”, as well as correlative
terms (e.g., materially,
materiality, etc.) shall be deemed
to refer to amounts of US$100,000 or more or effects or consequences of US$100,000
or more.

 

(e)           Until the Release Time,
Joy Power will afford the officers, directors, employees, counsel, agents,
investment bankers, accountants, and other representatives of Golden Health and
lenders, investors, and prospective lenders and investors free and full access
to the plants, properties, books, and records of Joy Power, will permit them to
make extracts from and copies of such books and records, and will from time to
time furnish Golden Health with such additional financial and operating data
and other information as to the financial condition, results of operations,
businesses, properties, assets, liabilities, or future prospects of Joy Power
as Golden Health from time to time may request. 
Until the Release Time, Joy Power will cause the independent certified
public accountants of Joy Power to make available to Golden Health and its
independent certified public accountants the work papers relating to the audits
of Joy Power referred to in Section 2.02(c) of this Agreement.

 

(f)            Until the Release
Time, Joy Power will conduct its affairs so that at the Closing no
representation or warranty of Joy Power will be inaccurate in any material
respect, no covenant or agreement of Joy Power will be breached, and no
condition in this Agreement will remain unfulfilled by reason of the actions or
omissions of Joy Power.  Except as
otherwise consented to by Golden Health in writing, until the Release Time, Joy
Power will use its best efforts to preserve the business operations of Joy
Power intact, to keep available the services of

 

29

 

its present personnel, to
preserve in full force and effect the contracts, agreements, instruments,
leases, licenses, arrangements, and understandings of Joy Power, and to
preserve the good will of its suppliers, customers, and others having business
relations with any of them.  Until the
Release Time, Joy Power will conduct its affairs in all respects only in the
ordinary course, other than in connection with the matters referenced herein.

 

(g)           Until the Release Time,
Joy Power will immediately advise Golden Health in a detailed written notice of
any material fact or occurrence or any pending or threatened material
occurrence of which it obtains knowledge and which (if existing and known at
the date of the execution of this Agreement) would have been required to be set
forth or disclosed in or pursuant to this Agreement or the Joy Power Disclosure
Letter, which (if existing and known at any time prior to or at the Closing)
would make the performance by any party of a covenant contained in this
Agreement impossible or make such performance materially more difficult than in
the absence of such fact or occurrence, or which (if existing and known at the
time of the Closing) would cause a condition to any party’s obligations under
this Agreement not to be fully satisfied.

 

(h)           Joy Power shall use its
commercially reasonable efforts to insure that all confidential information
which Joy Power or any of its respective officers, directors, employees,
counsel, agents, investment bankers, or accountants may now possess or may
hereafter create or obtain relating to the financial condition, results of
operations, businesses, properties, assets, liabilities, or future prospects of
Golden Health, any affiliate thereof, or any customer or supplier thereof or of
any such affiliate shall not be published, disclosed, or made accessible by any
of them to any other person or entity at any time or used by any of them except
in the ordinary course of business and for the benefit of Joy Power; provided,
however, that the restrictions of this sentence shall not apply (A) after
this Agreement is terminated pursuant to Article IV or V hereof or
otherwise, (B) as may otherwise be required by law, (C) as may be
necessary or appropriate in connection with the enforcement of this Agreement,
or (D) to the extent the information shall have otherwise become publicly
available.

 

(i)            Before Joy Power
releases any information concerning this Agreement or any of the transactions
contemplated by this Agreement which is intended for, or may result in, public
dissemination thereof, Joy Power shall cooperate with Golden Health, shall
furnish drafts of all documents or proposed oral statements to Golden Health
for comment, and shall not release any such information without the written
consent of Golden Health, which consent shall not be unreasonably
withheld.  Nothing contained herein shall
prevent Joy Power from releasing any information if required to do so by law.

 

(j)            Joy
Power shall not make any agreement or reach any understanding not approved in
writing by Golden Health as a condition for obtaining any consent,
authorization, approval, order, license, certificate, or permit required for
the consummation of the transactions contemplated by this Agreement.

 

(k)           Joy Power
shall furnish, or cause to be furnished, for inclusion in the Periodic Reports
to be filed pursuant to the Exchange Act in connection with the transactions
contemplated by this Agreement, or for inclusion in Golden Health’s filings
under state “blue-sky,”

 

30

 

securities, or take-over laws, such
information about Joy Power or the Joy Power Shareholders as may be required or
as may be reasonably requested by Golden Health, and shall continue to furnish
or cause to be furnished such information as is necessary to keep such
information correct and complete in all material respect until the Release
Time.  Joy Power represents and warrants
that the information that it has furnished to date, taken as a whole, does not
now, and will not at any time prior to the Release Time, (i) contain an
untrue statement of a material fact or (ii) omit to state a material fact
required to be stated therein or necessary to make the statements therein not
false or misleading.

 

(l)            Transfer Taxes.  Joy
Power shall timely prepare and file any declaration or filing necessary to
comply with any transfer tax statutes that require any such filing before the
Closing.

 

(m)          On
or prior to the Due Diligence Date, Joy Power shall deliver to Golden Health
the Joy Power Disclosure Letter, which letter shall be correct and complete in
all material respects.

 

Section 3.02         Covenants
of the Joy Power Shareholders.  Each
Joy Power Shareholder, severally, but not jointly, covenants and agrees that,
after the date hereof and through the Release Time, unless Golden Health will
otherwise approve in writing, which approval will not be unreasonably withheld,
as follows:

 

(a)           Such Joy Power
Shareholder will use best efforts to cause Joy Power to perform each covenant
thereof set forth herein on a timely basis.

 

(b)           Until
the earlier of the Release Time, such Joy Power Shareholder shall take no
action the result of which shall be to cause Joy Power to make any amendment in
the certificate of incorporation or by-laws (or, in each case, the comparable
charter documents, if any, under applicable law) thereof.

 

(c)           Before
such Joy Power Shareholder releases any information concerning this Agreement
or any of the transactions contemplated by this Agreement which is intended
for, or may result in, public dissemination thereof, such Joy Power Shareholder
shall cooperate with Golden Health, shall furnish drafts of all documents or
proposed oral statements to Golden Health for comment, and shall not release
any such information without the written consent of Golden Health, which
consent shall not be unreasonably withheld. 
Nothing contained herein shall prevent such Joy Power Shareholder from
releasing any information if required to do so by law.

 

(d)           Such
Joy Power Shareholder shall furnish, or cause to be furnished, for inclusion in
the Periodic Reports to be filed pursuant to the Exchange Act in connection
with the transactions contemplated by this Agreement, or for inclusion in
Golden Health’s filings under state “blue-sky,” securities, or take-over laws,
such information about Joy Power or the Joy Power Shareholders as may be
required or as may be reasonably requested by Golden Health, and shall continue
to furnish or cause to be furnished such information as is necessary to keep
such information correct and complete in all material respect until the Release
Time.  Such Joy Power

 

31

 

Shareholder represents
and warrants that the information in writing that it has furnished to date
regarding himself or herself, taken as a whole, does not now, and will not at
any time prior to the Release Time, (i) contain an untrue statement of a
material fact or (ii) omit to state a material fact required to be stated
therein or necessary to make the statements therein not false or misleading.

 

ARTICLE IV

 

CONDITIONS;
ABANDONMENT AND TERMINATION

 

Section 4.01         Right of
Golden Health to Abandon.  Golden
Health’s Board of Directors shall have the right to abandon or terminate this
Agreement if any of the following conditions shall not be true or shall not
have occurred, as the case may be, as of the specified date or dates:

 

(a)           All representations and
warranties of Joy Power and each Joy Power Shareholder contained in this
Agreement shall be accurate when made and, in addition, shall be accurate as of
the Closing Date as though such representations and warranties were then made
in exactly the same language by Joy Power or the Joy Power Shareholders, as
applicable, and regardless of knowledge or lack thereof on the part of Joy
Power or the Joy Power Shareholders (as applicable) or changes beyond its
control; as of the Closing Date, Joy Power and each Joy Power Shareholder shall
have performed and complied with all covenants and agreements and satisfied all
conditions required to be performed and complied with by it at or before the
Closing Date, respectively, by this Agreement; and Golden Health shall have
received a certificate executed by the chief executive officer and the chief
financial officer of Joy Power and each Joy Power Shareholder, dated the
Closing Date, to that effect.

 

(b)           Golden Health shall
have received at the Closing Date certificates executed by the chief executive
officer and the chief financial officer of Joy Power and of each Joy Power
Shareholder as of such dates, to the effect that they have carefully examined
the financial statements of Joy Power delivered to Golden Health pursuant
hereto, as well as the Joy Power Disclosure Letter, and, to the best of their
knowledge, (i) neither such financial statements, nor the Joy Power
Disclosure Letter (A) contains an untrue statement of a material fact or (B) omits
to state a material fact required to be stated therein or necessary to make the
statements therein not false or misleading, provided in each case that such
untrue statement or omission relates to information furnished by or on behalf
of, or pertaining to, Joy Power or any Joy Power security holder, (ii) since
the date hereof, no event with respect to Joy Power or any Joy Power security
holder has occurred which should have been set forth in an amendment to either
such financial statements or the Joy Power Disclosure Letter, which has not
been set forth in such an amendment or supplement, and (iii) any contract,
agreement, instrument, lease, or license regarding Joy Power required to be
included in the Joy Power Disclosure Letter.

 

(c)           Joy
Power and each Joy Power Shareholder shall have delivered to Golden Health at
or prior to the Closing Date such other documents (including certificates of
officers of Joy Power) as Golden Health may reasonably request in order to
enable Golden Health to determine whether the conditions to their obligations
under this Agreement have been met and otherwise to carry out the provisions of
this Agreement.

 

32

 

(d)           All
actions, proceedings, instruments, and documents required by Joy Power and the
Joy Power Shareholders to carry out this Agreement or incidental thereto and
all other related legal matters shall be subject to the reasonable approval of
counsel to Golden Health, and Joy Power and the Joy Power Shareholders shall
have furnished such counsel such documents as such counsel may have reasonably
requested for the purpose of enabling them to pass upon such matters.

 

(e)           At
the Closing, there shall not be pending any legal proceeding relating to, or
seeking to prohibit or otherwise challenge the consummation of, the
transactions contemplated by this Agreement, or to obtain substantial damages
with respect thereto.

 

(f)            There
shall not have been any action taken, or any law, rule, regulation, order,
judgment, or decree proposed, promulgated, enacted, entered, enforced, or
deemed applicable to the transactions contemplated by this Agreement by any
federal, state, local, or other governmental authority or by any court or other
tribunal, including the entry of a preliminary or permanent injunction, which,
in the reasonable judgment of Golden Health, (i) makes this Agreement or
any of the transactions contemplated by this Agreement illegal, (ii) results
in a delay in the ability of Joy Power or Golden Health to consummate the
transactions contemplated by this Agreement beyond October 15, 2005 (the “Drop Dead Date”), (iii) requires
the divestiture by Golden Health of a material portion of the business of
either Golden Health or of Joy Power, (iv) imposes material limitations on
the ability of Golden Health effectively to exercise full rights of ownership
of shares of Joy Power including the right to vote such shares on all matters
properly presented to the stockholders of Joy Power, or (v) otherwise
prohibits, restricts, or delays consummation of the transactions contemplated
by this Agreement or impairs the contemplated benefits to Golden Health of this
Agreement or any of the other transactions contemplated by this Agreement.

 

(g)           The
parties to this Agreement shall have obtained at or prior to the Closing Date
all unconditional written approval to this Agreement and to the execution,
delivery, and performance of this Agreement by each of them of relevant
governmental authorities having jurisdiction over Golden Health or Joy Power or
the subject matter of this Agreement.

 

(h)           At
or prior to the Closing Date, Golden Health shall have made all filings, and
taken all actions, necessary to comply with all applicable “blue-sky” laws with
regard to the issuance of Golden Health Common Stock as contemplated by this
Agreement other than the filing of Form D up to 15 days following the
Closing.  Without limiting the generality
of the foregoing, any prescribed periods within which a “blue-sky” or
securities law administrator may disallow Golden Health’s notice of reliance on
an exemption from such state’s requirements, shall have elapsed at or prior to
the Closing.

 

33

 

(i)            The
parties to this Agreement shall have obtained at or prior to the Closing Date
all consents required for the consummation of the transactions contemplated by
this Agreement from any unrelated third party to any contract, agreement,
instrument, lease, license, arrangement, or understanding to which any of them
is a party, or to which any of them or any of their respective businesses,
properties, or assets are subject.

 

(j)            There
shall not have been any material adverse change in the condition (financial or
otherwise), operations, business, assets, liabilities, earnings or prospects of
Joy Power since the date hereof.

 

(k)           Golden
Health shall conduct a due diligence review of Joy Power and the Joy Power
Shareholders, including, without limitation, a review of the Joy Power
Disclosure Letter and the documents referenced therein delivered prior to the
Closing Date, and shall be reasonably satisfied with the result of such review.

 

Section 4.02         Right
of Joy Power and the Joy Power Shareholders to Abandon.  By the election of a majority in interest
in Joy Power held by the Joy Power Shareholders (the “Majority
Joy Power Shareholders”), the Joy Power Shareholders or,
otherwise, Joy Power’s Board of
Directors shall have the right to abandon or terminate this Agreement if any of
the following conditions shall not be true or shall not have occurred, as the
case may be, as of the specified date or dates:

 

(a)           All representations and
warranties of Golden Health contained in this Agreement shall be accurate when
made and, in addition, shall be accurate as of the Closing Date as though such
representations and warranties were then made in exactly the same language by
Golden Health and regardless of knowledge or lack thereof on the part of Golden
Health or changes beyond its control; as of the Closing Date, Golden Health
shall have performed and complied with all covenants and agreements and
satisfied all conditions required to be performed and complied with by them at
or before the Closing Date by this Agreement; and Joy Power shall have received
certificates executed by the chief executive officer and the chief financial
officer of Golden Health, dated the Closing Date, to that effect.

 

(b)           Golden Health shall
have delivered to Joy Power and the Joy Power Shareholders at or prior to the
Closing such documents (including certificates of officers of Golden Health) as
Joy Power and the Joy Power Shareholders may reasonably request in order to
enable Joy Power and the Joy Power Shareholders to determine whether the
conditions to Golden Health’s obligations under this Agreement have been met
and otherwise to carry out the provisions of this Agreement.

 

(c)           All
actions, proceedings, instruments, and documents required by Golden Health to
carry out this Agreement or incidental thereto and all other related legal
matters shall be subject to the reasonable approval of counsel to Joy Power and
the Joy Power Shareholders, and Golden Health shall have furnished such counsel
such documents as such counsel may have reasonably requested for the purpose of
enabling them to pass upon such matters.

 

34

 

(d)           At
the Closing Date, there shall not be pending any legal proceeding relating to,
or seeking to prohibit or otherwise challenge the consummation of, the
transactions contemplated by this Agreement, or to obtain substantial damages
with respect thereto.

 

(e)           There
shall not have been any action taken, or any law, rule, regulation, order,
judgment, or decree proposed, promulgated, enacted, entered, enforced, or
deemed applicable to the transactions contemplated by this Agreement by any
federal, state, local, or other governmental authority or by any court or other
tribunal, including the entry of a preliminary or permanent injunction, which,
in the reasonable judgment of Joy Power or the Joy Power Shareholders, (i) makes
this Agreement or any of the transactions contemplated by this Agreement
illegal, (ii) results in a delay in the ability of Golden Health or Joy
Power to consummate any of the transactions contemplated by this Agreement
beyond the Drop Dead Date, or (iii) otherwise prohibits, restricts, or
delays consummation of the other transactions contemplated by this Agreement or
impairs the contemplated benefits to the Joy Power Shareholders of this
Agreement or any of the transactions contemplated by this Agreement.

 

(f)            The
parties to this Agreement shall have obtained at or prior to the Closing Date
all unconditional written approval to this Agreement and to the execution,
delivery, and performance of this Agreement by each of them of relevant
governmental authorities having jurisdiction over Golden Health or Joy Power or
the subject matter of this Agreement.

 

(g)           At
or prior to the Closing Date, Golden Health shall have made all filings, and
taken all actions, necessary to comply with all applicable “blue-sky” laws with
regard to the issuance of Golden Health Common Stock as contemplated by this
Agreement other than the filing of Form D up to 15 days following the
Closing.  Without limiting the generality
of the foregoing, any prescribed periods within which a “blue sky” or
securities law administrator may disallow Golden Health’s notice of reliance on
an exemption from such state’s requirements, shall have elapsed at or prior to
the Closing Date.

 

(h)           The
parties to this Agreement shall have obtained at or prior to the Closing Date
all consents required for the consummation of the transactions contemplated by
this Agreement from any unrelated third party to any contract, agreement,
instrument, lease, license, arrangement, or understanding to which any of them
is a party, or to which any of them or any of their respective businesses,
properties, or assets are subject.

 

(i)            Joy
Power and the Joy Power Shareholders shall conduct a due diligence review of
Golden Health, including, without limitation, a review of the Golden Health
Disclosure Letter and the documents referenced therein delivered prior to the
Closing Date, and same shall be satisfactory in the reasonable opinion of Joy
Power and the Joy Power Shareholders.

 

35

 

ARTICLE V

 

ADDITIONAL
TERMS OF ABANDONMENT

 

Section 5.01         Optional
Abandonment.  In addition to the
provisions of Article IV, the transactions contemplated by this Agreement
may be abandoned or terminated at or before the Closing notwithstanding
adoption and approval of this Agreement and the transactions contemplated
hereby by the stockholders of the parties hereto:

 

(a)           by mutual agreement of
the Boards of Directors of Golden Health and Joy Power;

 

(b)           at the option of Golden
Health’s Board of Directors or Joy Power’s Board of Directors, if the Closing
Date shall not have occurred on or before the Drop Dead Date;

 

(c)           at the option of Golden
Health’s Board of Directors, if facts exist which render impossible compliance
with one or more of the conditions set forth in Section 4.01 and such are
not waived by Golden Health; and

 

(d)           at the option of Joy
Power’s Board of Directors or by the election of the Majority Joy Power
Shareholders if facts exist which render impossible compliance with one or more
of the conditions set forth in Section 4.02 and such are not waived by Joy
Power.

 

Section 5.02         Effect
of Abandonment.       If the transactions
contemplated by this Agreement are abandoned or terminated as provided for in Article IV
or in this Article V, except for Sections 3.01(e), 3.02(h) and Article VI,
this Agreement shall forthwith become wholly void and of no further force or
effect without liability on the part of either party to this Agreement or on
the part of any officer, director, controlling person (if any), employee,
counsel, agent, or stockholder thereof; provided, however, that nothing in this
Section 5.02 shall release Golden Health or Joy Power or any officer,
director, controlling person (if any), employee, counsel, agent, or stockholder
thereof from liability for a willful failure to carry out its respective
obligations under this Agreement

 

ARTICLE VI

 

MISCELLANEOUS

 

Section 6.01         Expenses.  Whether or not the transactions
contemplated in this Agreement are consummated, all costs and expenses incurred
in connection with this Agreement and the transactions contemplated hereby,
will be paid by the party incurring such expense or as otherwise agreed to
herein.

 

Section 6.02         Brokers
and Finders.  Each of the parties
hereto represents, as to itself, that no agent, broker, investment banker or
firm or person is or will be entitled to any broker’s or finder’s fee or any
other commission or similar fee in connection with any of the transactions contemplated
by this Agreement, except as may be otherwise set forth herein or by separate
document.

 

36

 

Section 6.03         Necessary
Actions.  Subject to the terms
and conditions herein provided, each of the parties hereto agrees to use all
reasonable efforts to take, or cause to be taken, all action and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement.  In the
event at any time after the Closing, any further action is necessary or desirable
to carry out the purposes of this Agreement, the proper executive officers
and/or directors of Golden Health or Joy Power, as the case may be, or the
relevant Joy Power Shareholder or Joy Power Shareholders will take all such
necessary action.

 

Section 6.04         Extension
of Time; Waivers.  At any time
prior to the Closing Date:

 

(a)           Golden
Health may (i) extend the time for the performance of any of the
obligations or other acts of Joy Power or any Joy Power Shareholder or Joy
Power Shareholders, (ii) waive any inaccuracies in the representations and
warranties of Joy Power or any Joy Power Shareholder or Joy Power Shareholders,
or contained herein or in any document delivered pursuant hereto by Joy Power
or any Joy Power Shareholder or Joy Power Shareholders, and (iii) waive
compliance with any of the agreements or conditions contained herein to be
performed by  Joy Power or any Joy Power
Shareholder or Joy Power Shareholders. 
Any agreement on the part of Golden Health to any such extension or
waiver will be valid only if set forth in an instrument, in writing, signed on
behalf of Golden Health.

 

(b)           Joy
Power and the Joy Power Shareholder (by action of the Majority Joy Power
Shareholders), may (i) extend the time for the performance of any of the
obligations or other acts of Golden Health, (ii) waive any inaccuracies in
the representations and warranties of Golden Health contained herein or in any
document delivered pursuant hereto by Golden Health and (iii) waive
compliance with any of the agreements or conditions contained herein to be
performed by Golden Health.  Any
agreement on the part of Joy Power and to any such extension or waiver will be
valid only if set forth in an instrument, in writing, signed on behalf of Joy
Power.

 

Section 6.05         Notices.  Any notice to any party hereto pursuant
to this Agreement will be in writing and given by Certified or Registered Mail
or by facsimile, addressed as follows:

 

	
  GOLDEN HEALTH HOLDINGS,
  INC.

  	
   

  	
  Joy Power International
  Holdings Ltd.

  
	
  No. 1509, Hangyun
  Building

  	
   

  	
  Room 03, 17/F,

  
	
  48, 2 Road, Ba Qi

  	
   

  	
  Fee Tat Commercial Centre,

  
	
  Guangzhou, PRC

  	
   

  	
  613 Nathan Road, Mong Kok,

  
	
  Fax: +86 (20) 8329-5339

  	
   

  	
  Kowloon, Hong Kong

  
	
   

  	
   

  	
  Fax: +852 3580-0107

  

 

Additional notices are to
be given as to each party, at such other address as should be designated in
writing complying as to delivery with the terms of this Section 6.05.  All such notices will be effective when
received.

 

37

 

Section 6.06         Parties
in Interest.  This Agreement will
inure to the benefit of and be binding upon the parties hereto and the
respective successors and assigns. 
Nothing in this Agreement is intended to confer, expressly or by
implication, upon any other person any rights or remedies under or by reason of
this Agreement.

 

Section 6.07         Counterpart.  This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all together will
constitute one document.  The delivery by
facsimile of an executed counterpart of this Agreement will be deemed to be an
original and will have the full force and effect of an original executed copy.

 

Section 6.08         Severability.  The provisions of this Agreement will be
deemed severable and the invalidity or unenforceability of any provision hereof
will not affect the validity or enforceability of any of the other provisions
hereof.  If any provisions of this
Agreement, or the application thereof to any person or any circumstance, is
illegal, invalid or unenforceable, (a) a suitable and equitable provision
will be substituted therefor in order to carry out, so far as may be valid and
enforceable, the intent and purpose of such invalid or unenforceable provision,
and (b) the remainder of this Agreement and the application of such
provision to other persons or circumstances will not be affected by such
invalidity or unenforceability, nor will such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.

 

Section 6.09         Headings.  The Article and Section headings
are provided herein for convenience of reference only and do not constitute a
part of this Agreement and will not be deemed to limit or otherwise affect any
of the provisions hereof.

 

Section 6.10         Governing Law.  This Agreement will be deemed to be made
in and in all respects will be interpreted, construed and governed by and in
accordance with the law of the State of New York, without regard to the
conflict of law principles thereof.

 

Section 6.11         Survival
of Representations and Warranties.  All
terms, conditions, representations and warranties set forth in this Agreement
or in any instrument, certificate, opinion, or other writing providing for in
it, will survive the Closing and the delivery of the shares of Golden Health
Common Stock to be issued hereunder at the Closing for a period of two years
after Closing, regardless of any investigation made by or on behalf of any of
the parties hereto.

 

Section 6.12         Assignability.  This Agreement will not be assignable by
operation of law or otherwise and any attempted assignment of this Agreement in
violation of this subsection will be void ab initio.

 

38

 

Section 6.13         Amendment.  This Agreement may be amended with the
approval of the Majority Joy Power Shareholders and the boards of directors of
each of Golden Health and Joy Power at any time.  This Agreement may not be amended except by
an instrument, in writing, signed on behalf of each of the parties hereto.

 

[REMAINDER
OF PAGE INTENTIONALLY BLANK]

 

39

 

IN
WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement in a manner legally binding upon them as of the date
first above written.

 

	
   

  	
  GOLDEN HEALTH HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Hongzhong Hu

  	
   

  
	
   

  	
   

  	
  Name: Hongzhong Hu

  
	
   

  	
   

  	
  Title:   Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JOY POWER INTERNATIONAL

  
	
   

  	
   HOLDINGS LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Yu Fai Yip

  	
   

  
	
   

  	
   

  	
  Name:  Yu Fai Yip

  
	
   

  	
   

  	
  Title:   Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  JOY POWER SHAREHOLDERS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Yu Fai Yip

  	
   

  
	
   

  	
   

  	
  Name:  Yu Fai Yip

  
						

 

40

 

SCHEDULE A

 

	
  Name
  and Address

  	
   

  	
  Percentage of Joy

  Power Held

  	
   

  	
  Shares of Golden

  Health Common

  Stock

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Yu Fai Yip
Room 03, 17/F, Fee Tat
  Commercial Centre,
613 Nathan Road, Mong Kok, Kowloon,
Hong Kong

  	
   

  	
  100

  	
  %

  	
  54,000,000

  	
   

  

 

41Exhibit 10(c)

 

EXHIBIT 10(c)  — 
BEMIS COMPANY, INC. FORM OF MANAGEMENT CONTRACT

 

MANAGEMENT AGREEMENT

 

THIS MANAGEMENT AGREEMENT (the “Agreement”) is entered into effective
October 26, 2005, by and between Bemis Company, Inc., a Missouri corporation
(the “Company”) and
                                         
(the “Executive”).

 

WHEREAS,
the Executive is a key member of the management of the Company and has devoted
substantial skill and effort to the affairs of the Company; and

 

WHEREAS,
the Company and its shareholders wish to continue to obtain the benefits of the
Executive’s services and attention to the affairs of the Company; and

 

WHEREAS,
the Company recognizes that, as a publicly-held corporation, it is subject to
the ongoing risk of a change of control, and that the adverse personal
consequences of a change of control may distract Executive or encourage
Executive’s premature termination of employment to the detriment of the Company
and its shareholders; and

 

WHEREAS, it is desirable and in the best interests of
the Company and its shareholders to take steps that will allow the Executive to
make judgments and advise the Company with respect to proposed changes of
control without regard to the possible adverse personal consequences of such
events, and to provide an inducement for the Executive to remain in the service
of the Company prior to any proposed or anticipated change of control, and to
remain in the service of the Company after any change of control to the extent
necessary to facilitate an orderly transition; and

 

WHEREAS,
the Executive desires to obtain appropriate protection in the event of an
actual or anticipated change of control; and

 

WHEREAS,
the Company recognizes that it is important to Executive to receive prompt and
certain payment of any amounts which become due under this Agreement;

 

NOW THEREFORE, in consideration of the foregoing and
the mutual covenants and agreements contained herein, the Company and the
Executive hereby agree as follows:

 

1.         Defined Terms. 
Capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in Appendix A.

 

2.         Duration.  This
Agreement establishes certain rights and obligations in the event Executive has
a Qualifying Event (as defined in Section 5 below).  Unless earlier terminated or modified, which
in either case can be done only by mutual written consent of the parties, this
Agreement shall continue in effect until either (i) the benefits due and
payable under this Agreement have been paid in full or (ii) the Executive’s
employment with Company terminates under circumstances that do not entitle
Executive to any benefits under this Agreement.

 

3.         Prior Agreements.  Any
prior agreement entered into by and between Executive and the Company that was
titled “Management Agreement” and that, among other things, provided
compensation upon the occurrence of a “Change in Control Event,” is hereby
terminated.  Except as otherwise provided
herein, this Agreement supercedes any such “Management Agreement” and the
portion or portions of any and all other agreements entered into prior to the
effective date of this Agreement relating to severance pay and post-employment
welfare benefits due to Executive in the event Executive has a Qualifying
Event.  Nothing in this Agreement shall
adversely affect any rights Executive may have to equity-based compensation
(including but not limited to stock options, equity units, and restricted
stock), long-term incentive compensation, supplemental retirement benefits,
deferred compensation that is not severance pay, and benefits under any
employee benefit plan (within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended), all of which shall be
administered after a Qualifying Event in accordance with the terms of the applicable
plan documents and agreements and without regard to this Agreement.

 

4.         No Employment Contract.  This
Agreement shall not be construed as creating an express or implied contract of
employment.  Except as otherwise agreed
in writing between the Executive and the Company, the Executive’s employment
shall be “at will” and Executive shall not have any right to be retained in the
employ of the Company and its affiliates.

 

5.         Qualifying Event.  The
Executive shall be deemed to have had a “Qualifying Event” if prior to
attaining age 65:

 

(a)          the Executive has an Involuntary Termination
or Constructive Involuntary Termination on, or within 36 months after, the date
of a Change of Control Event;

 

(b)         the Executive has an Involuntary Termination
or Constructive Involuntary Termination within three months prior to the date
of a Change of Control Event; or

 

(c)          the Executive has an Involuntary Termination
or Constructive Involuntary Termination (i) less than twelve months prior to
the date of a Change of Control Event or (ii) while a Change of Control Event
is under serious consideration (whether or not it actually occurs), unless (in
either case) the Company can establish that the Executive’s Involuntary
Termination or Constructive Involuntary 

 

1

 

Termination was for reasons
unrelated to such Change of Control Event.

 

Whether a Qualifying Event has occurred shall be determined separately
with respect to each Change of Control Event and each event constituting a Constructive
Involuntary Termination or Involuntary Termination.  If the event constituting a Constructive
Involuntary Termination is a failure by the Company to obtain assumption of
this Agreement by any successor as contemplated by Section 12 of this Agreement,
the date on which the succession became effective shall be deemed the date of
the Qualifying Event.  Amounts shall not
be paid under Sections 6 and 7 of this Agreement for more than one Qualifying
Event.

 

For
purposes of subsection (c) above, a Change of Control Event shall be deemed to
be “under serious consideration” at any time after negotiations with respect to
the possible Change of Control Event have commenced (including, but not limited
to, negotiations prior to the execution of a non-binding letter of intent) and
at any time after the Company receives direct or indirect notice of a Person’s
intent to cause an event that would, if it occurred, result in a Change of
Control Event.  Serious consideration as
described in the preceding sentence shall be deemed to end on the earliest of
the date on which such negotiations are abandoned, the Company receives direct
or indirect notice that such Person has abandoned efforts to cause the event
that would be a Change of Control Event, or the relevant Change of Control
Event actually occurs.

 

6.         Compensation and Benefits
Through Date of Termination.  If the Executive has a Qualifying Event,
Company shall immediately pay Executive (a) the full amount of Executive’s
salary through the date of Executive’s Qualifying Event to the extent not
previously paid, and (b) the product of (i) an amount equal to Executive’s
target annual bonus for the fiscal year of the Company in which the Qualifying
Event occurs and (ii) a fraction, the numerator of which is the number of days
in the current fiscal year through and including the date of the Executive’s
Qualifying Event and the denominator of which is 365.  In addition, in the event of Executive’s
Qualifying Event, Company shall also, to the extent not previously paid or provided,
pay or provide Executive with all other amounts and benefits that Executive has
accrued or is eligible to receive through the date of such Qualifying Event
under any plan, program, policy, practice or arrangement of the Company and/or
its affiliates (including but not limited to welfare benefits and perquisites).

 

7.         Change of Control Severance
Payments.  If the Executive has a Qualifying Event, the
Executive also shall be entitled:

 

(a)          to immediately receive from the Company a cash
payment in an amount equal to three times the sum of (i) the Executive’s salary
for the calendar year last preceding the date of Executive’s Qualifying Event
or, if higher, the Executive’s annual salary rate in effect immediately prior
to such Qualifying Event, (ii) the Executive’s target annual bonus for the
fiscal year of the Company in which the Qualifying Event occurs or, if higher,
the Executive’s highest annual bonus for the five-year period ending with the
full calendar year (or if such bonuses are determined on the basis of a fiscal
year, the full fiscal year) last preceding the date of Executive’s Qualifying
Event, and (iii) 30 percent of the annual salary used in (i) above, which
amount is intended to serve as an estimate of the annual value of the fringe
benefits and other perquisites to which Executive was entitled immediately
prior to the Qualifying Event; and

 

(b)         to immediately receive from the Company a cash
payment in an amount equal to the product of (i) the number of Equity Units
granted to the Executive in his most recent regular annual Equity Unit grant;
and (ii) the Fair Market Value of a share of the Company’s stock immediately
prior to the effective date of the Change of Control Event, or if the Change of
Control Event has not occurred within ten calendar days after payment pursuant
to this Section 7 is due, the Fair Market Value of a share on the date of the
Executive’s Qualifying Event; and

 

(c)          for thirty-six months after the Qualifying Event, to participate in any
health, disability and life insurance plan or program in which Executive was
entitled to participate immediately prior to the Qualifying Event as if he were
an employee of the Company during such thirty-six month period; provided,
however, that in the event that Executive cannot participate in any such
health, disability or life insurance plan or program, the Company, at its sole
cost and expense, shall arrange to provide the Executive with benefits no less
favorable to Executive than those which Executive would have been entitled to
receive if Executive had continued to participate in such plan or program.

 

The compensation and benefits described above in this Section 7 shall be
subject to the following:

 

(1)          For purposes of subsection (a) above, the
Executive’s salary, annual salary rate, target annual bonus and highest annual
bonus shall be the gross amounts of such compensation determined without regard
to any deductions, deferrals or withholding.

 

(2)          If Executive’s Qualifying Event occurs after
the month in which the Executive attains age 62, the amount in subsection (a)
above shall be determined by substituting for “three” a fraction, the numerator
of which is the number of whole and partial calendar months in the period
beginning with the month in which the Executive’s Qualifying Event occurs and
ending with the month in which the Executive attains age 65, and the
denominator of which is 12.

 

(3)          If Executive’s Qualifying Event occurs after
the month in which the Executive attains age 62, the number of months referred
to in subsection (c) above shall be determined by substituting for “thirty-six”
the number of whole and partial calendar months in the period beginning with
the month in which the Executive’s Qualifying Event occurs and ending with the
month in which the Executive attains age 65.

 

(4)          The sum of the amounts payable under
subsections (a) and (b) above shall be reduced by any severance pay which the
Executive receives from the Company under any other policy or agreement of the
Company on account of Executive’s Qualifying Event.

 

2

 

(5)          For purposes of subsection (b) above, the
Executive’s most recent regular annual Equity Unit grant shall be the number of
Equity Units granted to the Executive in the last regular grant made prior to
the Executive’s Qualifying Event.  For
this purpose, any grant of Equity Units which the Board of Directors of the
Company or the Board’s Compensation Committee designates at the time of grant
as a special grant is not a regular annual Equity Unit grant and shall be
disregarded.

 

(6)          For purposes of subsection (c) above, a health
plan or program shall include any separate dental, vision, prescription drug,
or other health-related benefit.

 

(7)          If immediate payment of any amounts payable
pursuant to subsections (a) and (b) above would violate Section 409A of the
Code, payment of those amounts shall be delayed until the earliest time at
which payment of those amounts can be made without violating Section 409A.

 

8.         Excise Tax Adjustment.  If it
shall be determined that a Payment would make the Executive liable for any
Excise Tax, the Executive shall be entitled to receive a Gross-Up Payment.  Notwithstanding the preceding sentence, if it
shall be determined that the total “parachute payments” (within the meaning of
Section 280G of the Code) made to Executive in connection with Executive’s
Qualifying Event, including those made pursuant to this Agreement, exceed by
10% or less the maximum amount of the total parachute payments that could be
paid to the Executive without incurring any Excise Tax, then no Gross-Up
Payment shall be made to the Executive and the Payments in the aggregate shall
be reduced by the amount of such excess. 
Executive shall have at least 10 calendar days after receiving notice
from the Accounting Firm that such a reduction is necessary to specify what
components of the Payment shall not be paid in order to achieve the required
reduction.  If Executive fails to give
timely instructions regarding such reduction, reductions shall be taken first from
Executive’s cash compensation under this Agreement.

 

9.         Late Payment.  Any
amount payable under this Agreement that is not paid within ten calendar days
after it becomes due shall bear interest from the date it became due through
the date of payment at the “prime rate” (the base annual lending rate used by a
plurality of the nation’s largest banks) as reported in the Wall St. Journal
for the date on which the payment was due (or if that is not a date on which
the prime rate is so reported, the then current prime rate as most recently
reported) plus 5%, compounded monthly.

 

10.   Legal Fees.  The
Company shall pay all legal fees and expenses (including but not limited to
attorneys’ fees and court costs) reasonably incurred by the Executive in
connection with efforts by or on behalf of the Executive to obtain or enforce
any right or benefit provided by or claimed under this Agreement, regardless of
the ultimate outcome or resolution of such claims.  Such legal fees and expenses shall be paid
within ten calendar days after Executive’s written request for payment.  Payments made after such tenth day shall
incur interest at the rate set forth in Section 9 above.  Company’s payment of Executive’s legal fees
and expenses shall not give Company any right to select or to approve counsel
retained by Executive.  No dispute
regarding the reasonableness of such fees and expenses shall authorize or
excuse their late payment.

 

11.   Mitigation Not Required.  Executive shall not be required
to mitigate the amount of any payment or other benefit provided for in this
Agreement by seeking other employment or otherwise, nor shall the amount of any
payment or other benefit provided for in this Agreement be reduced by any
compensation earned by the Executive as the result of employment by another
employer after termination, or otherwise.

 

12.   Successors and Assigns.  This Agreement shall be binding
upon and inure to the benefit of the successors, legal representatives and
assigns of the parties hereto; provided, however, that the Executive shall not
have any right to assign, pledge or otherwise dispose of or transfer any
interest in this Agreement or any payments hereunder, whether directly or
indirectly or in whole or in part, without the written consent of the Company.  The Company will require any successor
(whether direct or indirect, by purchase of a majority of the outstanding
voting stock of the Company or all or substantially all of the assets of the
Company, or by merger, consolidation or otherwise), by agreement in form and substance
satisfactory to the Executive, to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place.  Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall be a breach
of this Agreement, shall constitute a Constructive Involuntary Termination, and
shall be treated as a Qualifying Event entitling the Executive to the
compensation and benefits described in Sections 6 and 7 of this Agreement
unless such failure is remedied within 10 calendar days after Company receives
written notice thereof.  As used in this
Agreement, Company shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which is required to
execute and deliver the Agreement provided for in this Section 12 or which
otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law.

 

13.   Governing Law.  This Agreement shall be construed in
accordance with the laws of the State of Minnesota, applied without giving
effect to any choice of law provisions thereof.

 

14.   Notices.  All
notices, requests and demands given to or made pursuant hereto shall be in writing
and shall be delivered or mailed to any such party at its address which:

 

(a)          In the case of the Company shall be:

Bemis
Company, Inc.

2300
Campbell Mithun Tower

222
South 9th Street

Minneapolis,
Minnesota  55402

Attention:  General Counsel

 

3

 

(b)         In the case of the Executive shall be:

[
ADDRESS of Executive ]

 

 

Either party may, by notice hereunder, designate a changed address.  Any notice, if mailed properly addressed,
postage prepaid, registered or certified mail, shall be deemed to have been
given on the registered date or that date stamped on the certified mail
receipt.

 

15.   Severability.  In
the event that any portion of this Agreement is held to be invalid or
unenforceable for any reason, it is hereby agreed that such invalidity or
unenforceability shall not affect the other portions of this Agreement and that
the remaining covenants, terms and conditions or portions hereof shall remain
in full force and effect, and any court of competent jurisdiction may so modify
the objectionable provision as to make it valid, reasonable and
enforceable.  In the event that any
benefits to the Executive provided in this Agreement are held to be unavailable
to the Executive as a matter of law, the Executive shall be entitled after a
Qualifying Event to the remaining benefits available under this Agreement, or
if better, severance benefits at least as favorable to Executive (when
aggregated with the benefits under this Agreement that are actually received by
the Executive) as the most advantageous severance benefits made available by
the Company to employees of comparable position and seniority to the Executive
during the five-year period prior to Executive’s Qualifying Event or the Change
of Control Event, whichever happens first.

 

16.   Effect of Code §409A.  The
parties agree to cooperate to amend this Agreement on or before December 31,
2006 to the extent needed to comply with Code §409A.  Prior to such amendment, this Agreement shall
be construed in accordance with any applicable requirements of Code §409A.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

 

 

	
  EXECUTIVE

  	
   

  	
  BEMIS COMPANY, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [ Name of Executive ]

  	
   

  	
  By:

  	
  Jeffrey H. Curler

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
  President, Chief Executive Officer and

  	
   

  
	
   

  	
   

  	
   

  	
  Chairman of the Board

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
							

 

APPENDIX A

TO MANAGEMENT AGREEMENT

 

DEFINITIONS

 

As
used in this Agreement the capitalized terms not otherwise defined shall have
the meanings ascribed to them below.

 

Accounting Firm

 

The
term “Accounting Firm” shall mean a nationally recognized certified public
accounting firm designated by the Executive.

 

Cause

 

“Cause” shall mean, and be limited to, (i) willful and gross neglect of
duties by the Executive that has not been substantially corrected within 30
days after Executive’s receipt from Company of written notice describing the
neglect and the steps necessary to substantially correct it, or (ii) an act or
acts committed by the Executive constituting a felony and substantially
detrimental to the Company or its reputation.

 

Change of Control Event

 

A “Change of Control Event” shall be deemed to have occurred if any of
the following occur:

 

(1)   Any “Person”
(as defined in Section 13(d) of the Securities Exchange Act of 1934, as
amended, or any successor statute thereto (the Exchange Act) acquires or
becomes a beneficial owner (as defined in Rule 13d-3 or any successor rule
under the Exchange Act), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the Company’s then
outstanding securities entitled to vote generally in the election of directors
(“Voting Securities”) or 20% or more of the outstanding shares of common stock
of the Company (“Common Stock”), provided, however, that the following shall
not constitute a “Change of Control Event.”

 

4

 

(a)          any acquisition or beneficial ownership by the
Company or a subsidiary of the Company;

 

(b)   any
acquisition or beneficial ownership by any employee benefit plan (or related
trust) sponsored or maintained by the Company or one or more of its
subsidiaries;

 

(c)   any
transaction with respect to which, immediately following such acquisition, more
than 80% respectively, of (i) the combined voting power of the Company’s then
outstanding Securities and (ii) the Common Stock is then beneficially owned,
directly or indirectly, by all or substantially all of the persons who
beneficially owned Voting Securities and Common Stock respectively, of the
Company immediately prior to such transaction in substantially the same
proportions as their ownership prior to such acquisition;

 

(2)   Continuing
Directors shall not constitute a majority of the members of the Board of
Directors of the Company.  Continuing
Directors shall mean:  (a) individuals
who, on the date hereof, are directors of the Company, (b) individuals elected
as directors of the Company subsequent to the date hereof for whose election
proxies shall have been solicited by the Board of Directors of the Company, or
(c) any individual elected or appointed by the Board of Directors of the
Company to fill vacancies on the Board of Directors of the Company caused by
death or resignation (but not by removal) or to fill newly-created directorships,
provided that a Continuing Director shall not include an individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the threatened election or removal of
directors (or other actual or threatened solicitation of proxies or consents)
by or on behalf of any person other than the Board of Directors of the Company;

 

(3)   Consummation of a reorganization, merger or consolidation of the
Company (other than a merger or consolidation with a subsidiary of the
Company), unless immediately following such reorganization, merger or
consolidation, all or substantially all of the persons who were the beneficial
owners, respectively, of Voting Securities and Common Stock immediately prior
to such reorganization, merger or consolidation beneficially own, directly or
indirectly, more than 80% respectively of (i) the combined voting power of the
then outstanding Voting Securities entitled to vote generally in the election
of directors, and (ii) the then outstanding shares of Common Stock of the
corporation resulting from such reorganization, merger or consolidation in
substantially the same proportions as their ownership of the Voting Securities
and Common Stock, as the case may be, immediately prior to such reorganization,
merger or consolidation;

 

(4)   Approval by the shareholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) the sale or other disposition
of all or substantially all of the assets of the Company (in one or a series of
transactions), other than to a corporation with respect to which, immediately
following such a sale or other disposition, more than 80%, respectively, of (i)
the combined voting power of the then outstanding Voting Securities of such
corporation entitled to vote generally in the election of directors, and (ii)
the then outstanding shares of Common Stock of such corporation is then
beneficially owned, directly or indirectly, by all or substantially all of the
persons who were the beneficial owners respectively of the Voting Securities
and Common Stock immediately prior to such sale or other disposition in
substantially the same proportions as their ownership of the Voting Securities
and Common Stock, as the case may be, immediately prior to such sale or other
disposition;

 

(5)   The Company enters into a letter of intent, an agreement in
principle or a definitive agreement relating to a “Change of Control Event”
described in Subparagraphs (1), (2), (3) or (4) hereof that ultimately results
in such a “Change of Control Event”, or a tender or exchange offer or proxy
contest is commenced which ultimately results in such a “Change of Control of
Event”.

 

Notwithstanding anything stated above, a “Change
of Control Event” shall not be deemed to occur with respect to the Executive if
the acquisition or beneficial ownership of the 20% or greater interest referred
to in Subparagraph (1) is by the Executive or by a group, acting in concert,
that includes the Executive.

 

Code

 

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

 

Constructive Involuntary Termination

 

Any of the six occurrences below shall constitute a “Constructive
Involuntary Termination”:

 

(1)   Reduction of the Executive’s title, duties, responsibilities or
authority, other than for “Cause” or on account of “Disability”;

 

(2)          Reduction
of the Executive’s annual base salary;

 

(3)   Reduction
of the aggregate benefits under the Company’s pension, profit sharing,
retirement, life insurance, medical, health and accident, disability, bonus and
incentive plans and other employee benefit plans and arrangements or reduction
of the number of paid vacation days to which the Executive is entitled;

 

(4)   Company fails to obtain assumption of this Agreement by any
successor as contemplated by Section 12 of the Agreement;

 

(5)     Company requires Executive to perform his primary duties at a
location that is more than 25 miles further from Executive’s primary residence
than the location at which the Executive performs his primary duties on the
effective date of this Agreement (or, if Executive changes his primary
residence, that is more than 25 miles further from Executive’s primary
residence after such change than the location at which the

 

5

 

Executive
performed his primary duties at the time of such change); or

 

(6)     A termination of employment with the Company by the Executive
after any of the occurrences in Subparagraphs (1) through (5) above.

 

The foregoing definition of Constructive Involuntary Termination shall
be subject to the following:

 

(i)    Notwithstanding the above, “Constructive Involuntary Termination”
shall not include an inadvertent failure to obtain assumption of this Agreement
that is remedied by the Company within 10 calendar days after its receipt of
notice thereof.

 

(ii)   If the Executive’s duties, responsibilities or authority prior to
a Change in Control Event relate to the Company as a whole, rather than to a
specific business or operating unit (e.g., as in the case of the Company’s
Chief Executive Officer, Chief Operating Officer, Chief Financial Officer,
General Counsel or a Vice President with authority for an aspect of the Company’s
business that is not limited to any particular business or operational unit,
such as the Vice President of Human Resources), then a reduction described in
subparagraph (1) above shall be deemed to occur if such duties,
responsibilities or authority do not extend after the Change in Control Event
to the entire successor organization.  If
the Executive’s duties, responsibilities or authority prior to a Change in
Control Event relate exclusively to a specific business or operating unit of
the Company, then a reduction described in subparagraph (1) shall be deemed to
occur if such duties, responsibilities or authority after the Change in Control
Event do not extend after the Change in Control Event to all or substantially
all of the same business or operating unit.

 

Disability

 

“Disability” shall be a condition entitling the Executive to benefits
under Bemis’ Long Term Disability Plan.

 

Equity Unit

 

“Equity Unit” shall mean a unit awarded under a long-term incentive
compensation plan maintained by the Company, such as the Bemis Company, Inc.
2001 Stock Incentive Plan, that is, or entitles the award recipient to receive,
a share of common stock of the Company (regardless of whether such unit is
subject to a risk of forfeiture).

 

Excise Tax

 

“Excise Tax” shall mean the excise tax imposed on Executive by Section
4999 of the Code or any successor provision thereto, and any interest and
penalties incurred by the Executive with respect to such excise tax.

 

Fair Market Value

 

“Fair Market Value” of a share of the Company’s common stock as of a
particular day shall mean the closing price of a share of the Company’s common
stock on the New York Stock Exchange on such day, or if no sale has been made
on such exchange on such day, on the last preceding day on which any such sale
was made.

 

Gross-Up Payment

 

(1)   “Gross-Up Payment” shall mean an amount sufficient to enable the
Executive to pay all of the following amounts: (i) any income or employment
taxes payable by the Executive on the Gross-Up Payment, (ii) any excise taxes
imposed by Section 4999 of the Code on any Payments to the Executive (including
any imposed on the Gross-Up Payment), (iii) any interest and penalties on the
taxes in (i) and (ii).

 

(2)   Subject to the provisions of
Subparagraph (3) below, all determinations required to be made under Section 8
of the Agreement, including whether and when a Gross-Up Payment is required and
the amount of such Gross-Up Payment, the assumptions to be utilized in arriving
at such determination, and the determination regarding whether Payments need to
be reduced, shall be made by the Accounting Firm, which shall provide detailed
supporting calculations both to the Company and the Executive within 15
business days after the receipt of notice from the Executive that there has
been a Payment, or such earlier time as is requested by the Company.  All fees and expenses of the Accounting Firm
shall be borne solely by the Company. 
Any Gross-Up Payment, as determined pursuant to this Agreement, shall be
paid by the Company to the Executive within five days after the receipt of the
Accounting firm’s determination.  If the
Accounting Firm determines that no Excise Tax is payable by the Executive, it
shall furnish the Executive with a written opinion that failure to report the
Excise Tax on the Executive’s applicable federal income tax return would not
result in the imposition of a negligence or similar penalty.  Any determination by the Accounting Firm
shall be binding upon the Company and the Executive.  As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made (“Underpayment”),
consistent with the calculations required to be made hereunder.  In the event that the Company exhausts its
remedies pursuant to this Agreement and the Executive thereafter is required to
make a payment of any Excise Tax, the Accounting Firm shall determine the
amount of the Underpayment that has occurred and any such Underpayment (plus
any additional interest and penalties attributable to the Underpayment) shall
be promptly paid by the Company to or for the benefit of the Executive.

 

(3)   The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the

 

6

 

payment by the Company of a Gross-Up Payment.  Such notification shall be given as soon as
practicable but not later than ten business days after the Executive is
informed in writing of such claim (provided that any delay in so informing the
Company within such ten business day period shall not affect the obligations of
the Company under this Agreement except to the extent that such delay
materially and adversely affects the Company) and shall apprise the Company of
the nature of such claim and the date on which such claim is requested to be
paid.  The Executive shall not pay such
claim prior to the expiration of the 30-day period following the date on which
it gives such notice to the Company (or such shorter period ending on the date
that any payment of taxes with respect to such claim is due).  If the Company notifies the Executive in
writing prior to the expiration of such period that it desires to contest such
claim, the Executive shall:

 

(a)          give the Company any information reasonably requested by the Company
relating to such claim,

 

(b)         take such action in connection with contesting
such claim as the Company shall reasonably request in writing from time to
time, including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the Company,

 

(c)          cooperate with the Company in good faith in
order to effectively contest such claim, and

 

(d)         permit the Company to participate in any
proceedings relating to such claim;

 

provided, however, that the Company shall bear and
pay directly all costs and expenses (including attorneys fees, additional
interest and penalties) incurred in connection with such contest and shall
indemnify and hold the Executive harmless, on an after-tax basis, for any
Excise Tax or other tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and
expenses.  Without limitation on the foregoing
provisions of this Paragraph, the Company shall control all proceedings taken
in connection with such contest and, at its sole option, may pursue or forgo
any and all administrative appeals, proceedings, hearings and conferences with
the taxing authority in respect of such claim and may, at its sole option,
either direct the Executive to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner, and the Executive agrees to
prosecute such contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, however, that if the Company directs the
Executive to pay such claim and sue for a refund, the Company shall advance the
amount of such payment to the Executive, on an interest-free basis, and shall
indemnify and hold the Executive harmless, on an after-tax basis, from any
Excise Tax or other tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with
respect to such advance; and further provided that any extension of the statute
of limitations relating to payment of taxes for the taxable year of the
Executive with respect to which such contested amount is claimed to be due is limited
solely to such contested amount. 
Furthermore, the Company’s control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.

 

(4)   If, after
the receipt by the Executive of an amount advanced by the Company pursuant to
Subparagraph (3) above, the Executive becomes entitled to receive any refund
with respect to such claim, the Executive shall (subject to the Company’s
complying with the requirements of this Subparagraph (4)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). 
If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Subparagraph (3) above, a determination is made that the
Executive shall not be entitled to any refund with respect to such claim and
the Company does not notify the Executive in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.

 

Involuntary Termination

 

“Involuntary Termination” shall mean a termination by
the Company of the Executive’s employment that is not a termination for “Cause”
and that is not on account of the death or “Disability” of the Executive.

 

Payment(s)

 

A “Payment” is any payment or distribution by the Company to or for the
benefit of the Executive whether  paid or
payable or distributed or distributable pursuant to the terms of this
Agreement, any stock option, equity unit, restricted stock agreement or
otherwise, but determined without regard to any Gross-Up Payments.

 

7

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