SHARE EXCHANGE AGREEMENT
EXHIBIT
10.1
THIS
SHARE EXCHANGE AGREEMENT, dated as of the 30th day of June, 2006 (the
"Agreement"), by and among SRKP 8, Inc. a Delaware corporation (the "Company");
Lan’s Int’l Medicine Investment Co., Limited, a Hong Kong corporation (the
"Seller"); and Kunming Shenghuo Pharmaceutical (Group) Co., Ltd., a company
formed under the laws of the People's Republic of China ("Kunming"). The
Company, the Seller and Kunming are collectively referred to herein as the
"Parties".
W
I T N E
S S E T H:
WHEREAS,
the Seller owns 93.75% all of the shares of the capital of Kunming (the “Kunming
Shares”) which in turn is the parent of three companies organized under the laws
of the People’s Republic of China (the “Subsidiaries”).
WHEREAS,
the Company desires to acquire from Seller, and Seller desires to sell to the
Company, the Kunming Shares in exchange (the “Exchange”) for the issuance by the
Company of an aggregate of 16,823,950 shares (the “Company Shares”) of Company
Common Stock to the Seller and/or its designees on the terms and conditions
set
forth herein.
WHEREAS,
after giving effect to the Exchange, the share cancellation, and Equity
Financing as described herein, there will be approximately 18,603,950 shares
of
Company Common Stock issued and outstanding.
WHEREAS,
the parties intend, by executing this Agreement, to implement a tax-deferred
exchange of property governed by Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Internal
Revenue Code of 1986, as amended (the “Code”).
NOW,
THEREFORE, in consideration, of the promises and of the mutual representations,
warranties and agreements set forth herein, the parties hereto agree as
follows:
ARTICLE
I
THE
EXCHANGE
1.1 The
Exchange.
Subject
to the terms and conditions of this Agreement, on the Closing Date (as
hereinafter defined):
(a) the
Company shall issue and deliver to the Seller and/or their designees the number
of authorized but unissued shares of Company Common Stock set forth opposite
their and/or their designee’s names set forth on Schedule
I
hereto
or pursuant to separate instructions to be delivered prior to Closing,
and
(b) the
Seller agrees to deliver to the Company duly endorsed certificates representing
the Kunming Shares.
1.2 Time
and Place of Closing.
The
closing of the transactions contemplated hereby (the “Closing”) shall take place
at the offices of Xxxxxxxxxxx & Xxxxxxxx Xxxxxxxxx Xxxxxx LLP on or before
August 15, 2006 (the “Closing Date”) at 6:00 p.m. Pacific Time, or at such place
and time as mutually agreed upon by the parties hereto.
1.3 Effective
Time.
The
Exchange shall become effective (the “Effective Time”) at such time as all of
the conditions to set forth in Article VII hereof have been satisfied or waived
by the Parties hereto.
1.4 Tax
Consequences.
It is
intended by the parties hereto that for United States income tax purposes,
the
contribution and transfer of the Kunming Shares by the Seller to the Company
in
exchange for Company Shares constitutes a tax-deferred exchange within the
meaning of Section 351 of the Code.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF THE
COMPANY
The
Company represents and warrants to Kunming and the Seller that now and/or as
of
the Closing:
2.1 Due
Organization and Qualification; Due Authorization.
(a) The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, with full corporate power
and
authority to own, lease and operate its respective business and properties
and
to carry on its business in the places and in the manner as presently conducted
or proposed to be conducted. The Company is in good standing as a foreign
corporation in each jurisdiction in which the properties owned, leased or
operated, or the business conducted, by it requires such qualification except
for any such failure, which when taken together with all other failures, is
not
likely to have a material adverse effect on the business of the
Company.
(b) The
Company does not own, directly or indirectly, any capital stock, equity or
interest in any corporation, firm, partnership, joint venture or other
entity.
(c) The
Company has all requisite corporate power and authority to execute and deliver
this Agreement, and to consummate the transactions contemplated hereby and
thereby. The Company has taken all corporate action necessary for the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby, and this Agreement constitutes the valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except as may be affected by bankruptcy, insolvency, moratoria or
other similar laws affecting the enforcement of creditors’ rights generally and
subject to the qualification that the availability of equitable remedies is
subject to the discretion of the court before which any proceeding therefore
may
be brought, equitable remedies is subject to the discretion of the court before
which any proceeding therefore may be brought.
2.2 No
Conflicts or Defaults.
The
execution and delivery of this Agreement by the Company and the consummation
of
the transactions contemplated hereby do not and shall not (a) contravene the
Certificate of Incorporation or By-laws of the Company or (b) with or without
the giving of notice or the passage of time (i) violate, conflict with, or
result in a breach of, or a default or loss of rights under, any material
covenant, agreement, mortgage, indenture, lease, instrument, permit or license
to which the Company is a party or by which the Company is bound, or any
judgment, order or decree, or any law, rule or regulation to which the Company
is subject, (ii) result in the creation of, or give any party the right to
create, any lien, charge, encumbrance or any other right or adverse interest
(“Liens”) upon any of the assets of the Company, (iii) terminate or give any
party the right to terminate, amend, abandon or refuse to perform, any material
agreement, arrangement or commitment to which the Company is a party or by
which
the Company’s assets are bound, or (iv) accelerate or modify, or give any party
the right to accelerate or modify, the time within which, or the terms under
which, the Company is to perform any duties or obligations or receive any rights
or benefits under any material agreement, arrangement or commitment to which
it
is a party.
2.3 Capitalization.
The
authorized capital stock of the Company immediately prior to giving effect
to
the transactions contemplated hereby consists of 110,000,000 shares of which
100,000,000 have been designated as Company Common Stock $.0001 par value and
10,000,000 shares have been designed as preferred stock, $.0001 par value
(“Preferred Stock”). As of the date hereof, there are 2,700,000, shares of
Company Common Stock issued and outstanding and no shares of Preferred Stock
outstanding. All of the outstanding shares of Company Common Stock are, and
the
Company Shares when issued in accordance with the terms hereof, will be, duly
authorized, validly issued, fully paid and nonassessable, and have not been
or,
with respect to the Company Shares will not be issued in violation of any
preemptive right of stockholders. There is no outstanding voting trust agreement
or other contract, agreement, arrangement, option, warrant, call, commitment
or
other right of any character obligating or entitling the Company to issue,
sell,
redeem or repurchase any of its securities, and there is no outstanding security
of any kind convertible into or exchangeable for Company Common Stock. The
Company has not granted registration rights to any person.
2.4 Financial
Statements.
Item
2.4 of the Disclosure Schedule to this Agreement, includes copies the (i)
balance sheet of the Company at December 31, 2005, and the related statements
of
operations, stockholders’ equity (deficit) and cash flows for the fiscal year
then ended from the inception date of May 24, 2005, including the notes thereto,
as audited by AJ. Xxxxxxx, P.C., independent registered public accounting firm
and (ii) balance sheet of the Company at March 31, 2006, and the related
statements of operations, and cash flows for the three month period then ended
(the “Financial Statements”). The Financial Statements, together with the notes
thereto, have been prepared in accordance with U.S. generally accepted
accounting principles applied on a basis consistent throughout all periods
presented. The Financial Statements present fairly the financial position of
the
Company as of the dates and for the periods indicated. The books of account
and
other
financial
records of the Company have been maintained in accordance with good business
practices.
2.5 No
Assets or Liabilities.
Except
as set forth on the Financial Statements, the Company does not have any (a)
assets of any kind or (b) liabilities or obligations, whether secured or
unsecured, accrued, determined, absolute or contingent, asserted or unasserted
or otherwise.
2.6 Taxes.
The
Company has filed all United States federal, state, county and local returns
and
reports which were required to be filed on or prior to the date hereof in
respect of all income, withholding, franchise, payroll, excise, property, sales,
use, value-added or other taxes or levies, imposts, duties, license and
registration fees, charges, assessments or withholdings of any nature whatsoever
(together, “Taxes”), and has paid all Taxes (and any related penalties, fines
and interest) which have become due pursuant to such returns or reports or
pursuant to any assessment which has become payable, or, to the extent its
liability for any Taxes (and any related penalties, fines and interest) has
not
been fully discharged, the same have been properly reflected as a liability
on
the books and records of the Company and adequate reserves therefore have been
established.
2.7 Indebtedness;
Contracts; No Defaults.
The
Company has no material instruments, agreements, indentures, mortgages,
guarantees, notes, commitments, accommodations, letters of credit or other
arrangements or understandings, whether written or oral, to which the Company
is
a parry.
2.8 Real.
Property.
The
Company does not own or lease any real property.
2.9 Compliance
with Law.
The
Company is in compliance with all applicable federal, state, local and foreign
laws and regulations relating to the protection of the environment and human
health. There are no claims, notices, actions, suits, hearings, investigations,
inquiries or proceedings pending or, to the knowledge of the Company, threatened
against the Company that are based on or related to any environmental matters
or
the failure to have any required environmental permits, and there are no past
or
present conditions that the Company has reason to believe are likely to give
rise to any material liability or other obligations of the Company under any
environmental laws.
2.10 Permits
and Licenses.
The
Company has all certificates of occupancy, rights, permits, certificates,
licenses, franchises, approvals and other authorizations as are reasonably
necessary to conduct its respective business and to own, lease, use, operate
and
occupy its assets, at the places and in the manner now
conducted
and operated, except those the absence of which would not materially adversely
affect its respective business.
2.11 Litigation.
There
is no claim, dispute, action, suit, proceeding or investigation pending or,
to
the knowledge of the Company, threatened, against or affecting the business
of
the Company, or challenging the validity or propriety of the transactions
contemplated by this Agreement, at law or in equity or admiralty or before
any
federal, state, local, foreign or other governmental authority, board, agency,
commission or instrumentality, nor to the knowledge of the Company, has any
such
claim, dispute, action, suit, proceeding or investigation been pending or
threatened, during the twelve month period preceding the date hereof. There
is
no outstanding judgment, order, writ, ruling, injunction, stipulation or decree
of any court, arbitrator or federal, state, local, foreign or other governmental
authority, board, agency, commission or instrumentality, against or materially
affecting the business of the Company. The Company has not received any written
or verbal inquiry from any federal, state, local, foreign or other governmental
authority, board, agency, commission or instrumentality concerning the possible
violation of any law, rule or regulation or any matter disclosed in respect
of
its business.
2.12 Insurance.
The
Company does not currently maintain any form of insurance.
2.13 Patents;
Trademarks and Intellectual Property Rights.
The
Company does not own or possesses any patents, trademarks, service marks, trade
names, copyrights, trade secrets, licenses, information, Internet web site(s)
or
proprietary rights of any nature.
2.14 Securities
Law Compliance.
The
Company has complied with all of the applicable requirements of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) and the Securities Act of
1933, as amended (the “Securities Act”), and has complied with all applicable
blue sky laws.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF KUNMING
Kunming
and the Seller severally represent and warrant to the Company that now and/or
as
of the Closing:
3.1 Due
Organization and Qualification; Subsidiaries, Due Authorization.
(a) Kunming
is a company duly organized, validly existing and in good standing under the
laws of the People's Republic of China, with full corporate power and authority
to own, lease and operate its business and properties and to carry on its
business in the places and in the manner as presently conducted or proposed
to
be conducted. Kunming is in good standing as a foreign corporation in each
jurisdiction in which the properties owned, leased
or
operated, or the business conducted, by it requires such qualification except
for any such failure, which when taken together with all other failures, is
not
likely to have a material adverse effect on the business of
Kunming.
(b) Kunming
does not own, directly or indirectly, any capital stock, equity or interest
in
any corporation, firm, partnership, joint venture or other entity, other than
the Subsidiaries as set forth in Item 3.1 of the Disclosure Schedule. Each
Subsidiary is owned by Kunming in the amounts as set forth in Item 3.1 of the
Disclosure Schedule and the outstanding equity interest owned by Kunming in
each
Subsidiary is owned free and clear of all liens. There is no contract,
agreement, arrangement, option, warrant, call, commitment or other right of
any
character obligating or entitling Kunming to issue, sell, redeem or repurchase
any of its securities, and there is no outstanding security of any kind
convertible into or exchangeable for securities of Kunming or the
Subsidiaries.
(c) Kunming
has all requisite power and authority to execute and deliver this Agreement,
and
to consummate the transactions contemplated hereby and thereby. Kunming has
taken all corporate action necessary for the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby, and
this
Agreement constitutes the valid and binding obligation of Kunming, enforceable
against Kunming in accordance with its terms, except as may be affected by
bankruptcy, insolvency, moratoria or other similar laws affecting the
enforcement of creditors’ rights generally and subject to the qualification that
the availability of equitable remedies is subject to the discretion of the
court
before which any proceeding therefore may be brought.
3.2 No
Conflicts or Defaults.
The
execution and delivery of this Agreement by Kunming and the consummation of
the
transactions contemplated hereby do not and shall not (a) contravene the
governing documents of Kunming or any of the Subsidiaries, or (b) with or
without the giving of notice or the passage of time, (i) violate, conflict
with,
or result in a breach of, or a default or loss of rights under, any material
covenant, agreement, mortgage, indenture, lease, instrument, permit or license
to which Kunming or any of the Subsidiaries is a party or by which Kunming
or
any of the Subsidiaries or any of their respective assets are bound, or any
judgment, order or decree, or any law, rule or regulation to which their assets
are subject, (ii) result in the creation of, or give any party the right to
create, any lien upon any of the assets of Kunming or any of the Subsidiaries,
(iii) terminate or give any parry the right to terminate, amend, abandon or
refuse to perform any material agreement, arrangement or commitment to which
Kunming is a party or by which Kunming or any of its assets are bound, or (iv)
accelerate or modify, or give any party the right to accelerate or modify,
the
time within which, or the terms under which Kunming is to perform any duties
or
obligations or receive any rights or benefits under any material agreement,
arrangement or commitment to which it is a party.
3.3 Capitalization.
Except
as set forth herein, all of the outstanding shares of Kunming are duly
authorized, validly issued, fully paid and nonassessable, and have not been
or,
with respect to Kunming Shares, will not be transferred in violation of any
rights of third parties. The Kunming Shares are not subject
to
any
preemptive or subscription right, any voting trust agreement or other contract,
agreement, arrangement, option, warrant, call, commitment or other right of
any
character obligating or entitling Kunming to issue, sell, redeem or repurchase
any of its securities, and there is no outstanding security of any kind
convertible into or exchangeable for Common Stock. All of the Kunming Shares
are
owned of record and beneficially by the Seller free and clear of any liens,
claims, encumbrances, or restrictions of any kind.
3.4 Taxes.
Kunming
has filed all returns and reports which were required to be filed on or prior
to
the date hereof, and has paid all Taxes (and any related penalties, fines and
interest) which have become due pursuant to such returns or reports or pursuant
to any assessment which has become payable, or, to the extent its liability
for
any Taxes (and any related penalties, fines and interest) has not been fully
discharged, the same have been properly reflected as a liability on the books
and records of Kunming and adequate reserves therefore have been established.
All such returns and reports filed on or prior to the date hereof have been.
properly prepared and are true, correct (and to the extent such returns reflect
judgments made by Kunming such judgments were reasonable under the
circumstances) and complete in all material respects. Except as indicated in
3.4
of the Disclosure Schedule, no extension for the filing of any such return
or
report is currently in effect. Except as indicated in Item 3.4 of the Disclosure
Schedule, no tax return or tax return liability of Kunming has been audited
or,
presently under audit. All taxes and any penalties, fines and interest which
have been asserted to be payable as a result of any audits have been paid.
Except as indicated in Item 3.4 of the Disclosure Schedule, Kunming has not
given or been requested to give waivers of any statute of limitations relating
to the payment of any Taxes (or any related penalties, fines and interest).
There are no claims pending for past due Taxes. Except as indicated in Item
3.4
of the Disclosure Statement, all payments for withholding taxes, unemployment
insurance and other amounts required to be paid for periods prior to the date
hereof to any governmental authority in respect of employment obligations of
Kunming have been paid or shall be paid prior to the Closing and have been
duly
provided for on the books and records of Kunming and in the Kunming Financial
Statements.
3.5 Compliance
with Law.
Kunming
and the Subsidiaries are conducting their respective businesses in material
compliance with all applicable law, ordinance, rule, regulation, court or
administrative order, decree or process, or any requirement of insurance
carriers material to its business. Neither Kunming nor any Subsidiary has
received any notice of violation or claimed violation of any such law,
ordinance, rule, regulation, order, decree, process or requirement.
3.6 Litigation.
(a) There
is
no claim, dispute, action, suit, proceeding or investigation pending or
threatened, against or affecting Kunming or any of the Subsidiaries or
challenging the validity or propriety of the transactions contemplated by this
Agreement, at law or in equity or admiralty or before any federal, state, local,
foreign or other governmental authority, board, agency, commission or
instrumentality, has any such claim, dispute, action, suit, proceeding or
investigation been pending or threatened, during the 12 month period preceding
the date hereof;
(b) there
is
no outstanding judgment, order, writ, ruling, injunction, stipulation or decree
of any court, arbitrator or federal, state, local, foreign or other governmental
authority, board, agency, commission or instrumentality, against or materially
affecting Kunming or any of the Subsidiaries; and
(c) neither
Kunming nor any of the Subsidiaries has received any written or verbal inquiry
from any federal, state, local, foreign or other governmental authority, board,
agency, commission or instrumentality concerning the possible violation of
any
law, rule or regulation or any matter disclosed in respect of its
business.
ARTICLE
IV
REPRESENTATION
AND WARRANTIES OF THE SELLER
Seller
represents and warrants to the Company that now and/or as of the
Closing:
4.1 Title
to Shares.
Seller
is the legal and beneficial owner of the Kunming Shares to be transferred to
the
Company by such Seller, and upon consummation of the exchange contemplated
herein, the Company will acquire from Seller good and marketable title to the
Kunming Shares, free and clear of all liens excepting only such restrictions
upon future transfers by the Company, if any, as maybe imposed by applicable
law.
4.2 Due
Authorization.
Seller
has all requisite power and authority to execute and deliver this Agreement,
and
to consummate the transactions contemplated hereby and thereby. This Agreement
constitutes the valid and binding obligation of Seller, enforceable against
Seller in accordance with its terms, except as may be affected by bankruptcy,
insolvency, moratoria or other similar laws affecting the enforcement of
creditors’ rights generally and subject to the qualification that the
availability of equitable remedies is subject to the discretion of the court
before which any proceeding therefore may be brought.
4.3 Purchase
for Investment.
(a) Seller
is
acquiring the Company Shares for investment for Seller’s own account and not as
a nominee or agent, and not with a view to the resale or distribution of any
part thereof, and such Seller has no present intention of selling, granting
any
participation in, or otherwise distributing the same. Each Seller further
represents that he does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to such
person or to any third person, with respect to any of the Company
Shares.
(b) Seller
understands that the Company Shares are not registered under the Securities
Exchange Act of 1933, as amended (the “Act”) on the ground that the sale and the
issuance of securities hereunder is exempt from registration under the Act
pursuant to Section 4(2) thereof, and that the Company’s reliance on such
exemption is predicated on Seller’s representations set forth herein. Seller is
an “accredited investor” as that term is defined in Rule 501(a) of Regulation D
under the Act.
4.4 Investment
Experience.
Seller
acknowledges that it can bear the economic risk of its investment, and has
such
knowledge and experience in financial and business matters that it is capable
of
evaluating the merits and risks of the investment in the Company
Shares.
4.5 Information.
The
Seller has carefully reviewed such information as the Seller deemed necessary
to
evaluate an investment in the Company Shares. To the full satisfaction of the
Seller, it has been furnished all materials that it has requested relating
to
the Company and the issuance of the Company Shares hereunder, and each Seller
has been afforded the opportunity to ask questions of representatives of the
Company to obtain any information necessary to verify the accuracy of any
representations or information made or given to the Seller. Notwithstanding
the
foregoing, nothing herein shall derogate from or otherwise modify the
representations and warranties of the Company set forth in this Agreement,
on
which the Seller has relied in making an exchange of the Kunming Shares for
the
Company Shares.
4.6 Restricted
Securities.
Seller
understands that the Company Shares may not be sold, transferred, or otherwise
disposed of without registration under the Act or an exemption there from,
and
that in the absence of an effective registration statement covering the Company
Shares or any available exemption from registration under the Act, the Company
Shares must be held indefinitely. Seller is aware that the Company Shares may
not be sold pursuant to Rule 144 promulgated under the Act unless all of the
conditions of that Rule are met. Among the conditions for use of Rule 144 may
be
the availability of current information to the public about the
Company.
ARTICLE
V
COVENANTS
5.1 Further
Assurances.
Each of
the Parties shall use its reasonable commercial efforts to proceed promptly
with
the transactions contemplated herein, to fulfill the conditions precedent for
such parry’s benefit or to cause the same to be fulfilled and to execute such
further documents and other papers and perform such further acts as may be
reasonably required or desirable to carry out the provisions of this Agreement
and to consummate the transactions contemplated herein.
ARTICLE
VI
DELIVERIES
6.1 Items
to
be delivered to the Seller prior to or at Closing by the Company.
(a) Certificate
of Incorporation and amendments thereto, By-laws and amendments thereto,
certificate of good standing in the Company’s state of
incorporation;
(b) all
applicable schedules hereto;
(c) all
minutes and resolutions of board of director and shareholder meetings in
possession of the Company;
(d) shareholder
list;
(e) all
financial statements and all tax returns in possession of the
Company;
(f) resolution
from the Company’s Board appointing the designees of the Seller to the Company’s
Board of Directors;
(g) resolution
from the Company’s Board, and if applicable, shareholder resolutions approving
this transaction and authorizing the issuances of the shares
hereto;
(h) letters
of resignation from the Company’s current officers and directors to be effective
upon Closing and after the appointments described in this section;
(i) certificates
representing shares of the Company Shares issued in the denominations as set
forth opposite the name of the Seller and/or its designees on Schedule
I
to this
Agreement;
(j) any
other
document reasonably requested by the Seller that it deems necessary for the
consummation of this transaction.
6.2 Items
to
be delivered to the Company prior to or at Closing by Kunming and the
Seller.
(a) all
applicable schedules hereto;
(b) instructions
from Kunming appointing its designees to the Company’s Board of
Directors;
(c) share
certificates and duly executed stock powers from the Seller transferring the
Kunming Shares to the Company;
(d) resolutions
from the Board of Directors of Kunming, if applicable, and shareholder
resolutions approving the transactions contemplated hereby; and
(e) any
other
document reasonably requested by the Company that it deems necessary for the
consummation of this transaction.
ARTICLE
VII
CONDITIONS
PRECEDENT
7.1 Conditions
Precedent to Closing.
The
obligations of the Parties under this Agreement shall be and are subject to
fulfillment, prior to or at the Closing, of each of the following
conditions:
(a) That
each
of the representations and warranties of the Parties contained herein shall
be
true and correct at the time of the Closing date as if such representations
and
warranties were made at such time except for changes permitted or contemplated
by this Agreement.
(b) That
the
Parties shall have performed or complied with all agreements, terms and
conditions required by this Agreement to be performed or complied with by them
prior to or at the time of the Closing;
(c) The
Company shall have cancelled 2,040,000 shares of Common Stock owned by the
certain of its shareholders;
(d) That
the
Company shall have engaged a public relations firm prior to Closing that is
mutually acceptable to the Company and Kunming, and
(e) The
Company shall have concluded an equity financing of at least $1,000,000 at
the
time of Closing (the “Equity Financing”).
7.2 Conditions
to Obligations of Seller.
The
obligations of Seller shall be subject to fulfillment prior to or at the
Closing, of each of the following conditions:
(a) The
Company shall have received all of the regulatory, shareholder and other third
party consents, permits, approvals and authorizations necessary to consummate
the transactions contemplated by this Agreement; and
(b) The
Company shall have complied with Rule 14(f)(1) of the Exchange Act, if
required.
7.3 Conditions
to Obligations of the Company.
The
obligations of the Company shall be subject to fulfillment at or prior to or
at
the Closing, of each of the following conditions:
(a) Kunming
and the Seller shall have received all of the regulatory, shareholder and other
third party consents, permits, approvals and authorizations necessary to
consummate the transactions contemplated by this Agreement; and
(b) The
Seller shall have delivered to the Company the share certificates and duly
executed stock powers from the Seller transferring the Kunming Shares to the
Company;
ARTICLE
VIII
INDEMNIFICATION
8.1 Indemnity
of the Company.
The
Company agrees as to defend, indemnify and hold harmless the Seller from and
against, and to reimburse the Seller with respect to, all liabilities, losses,
costs and expenses, including, without limitation, reasonable attorneys' fees
and disbursements (collectively the "Losses") asserted against or incurred
by
the Seller by reason of, arising out of, or in connection with any material
breach of any representation or warranty contained in this Agreement made by
the
Company or in any document or certificate delivered by the Company pursuant
to
the provisions of this Agreement or in connection with the transactions
contemplated thereby.
8.2 Indemnity
of the Seller.
The
Seller agrees to defend, indemnify and hold harmless the Company from and
against, and to reimburse the Company with respect to, all losses, including,
without limitation, reasonable attorneys' fees and disbursements, asserted
against or incurred by the Company by reason of, arising out of, or in
connection with any material breach of any representation or warranty contained
in this Agreement and made by the Seller or in any document or certificate
delivered by the Seller pursuant to the provisions of this Agreement or in
connection with the transactions contemplated thereby, it being understood
that
the Seller shall have responsibility hereunder only for the representations
and
warranties made by the Seller.
8.3 Indemnification
Procedure.
A party
(an “Indemnified Party”) seeking indemnification shall give prompt notice to the
other party (the “Indemnifying Party”) of any claim for indemnification arising
under this Article VIII. The Indemnifying Party shall have the right to assume
and to control the defense of any such claim with counsel reasonably acceptable
to such Indemnified Party, at the Indemnifying Party’s own cost and expense,
including the cost and expense of reasonable attorneys’ fees and disbursements
in connection with such defense, in which event the Indemnifying Party shall
not
be obligated to pay the fees and disbursements of separate counsel for such
in
such action. In the event, however, that such Indemnified Party’s legal counsel
shall determine that defenses may be available to such Indemnified Party that
are different from or in addition to those available to the Indemnifying Party,
in that there could reasonably be expected to be a conflict of interest if
such
Indemnifying Party and the Indemnified Party have common counsel in any such
proceeding, or if the Indemnified Party has not assumed the defense of the
action or proceedings, then such Indemnifying Party may employ separate counsel
to represent or defend such Indemnified Party, and the Indemnifying Party shall
pay the reasonable fees and disbursements of counsel for such Indemnified Party.
No settlement of any such claim or payment in connection with any such
settlement shall be made without the prior consent of the Indemnifying Parry
which consent shall not be unreasonably withheld.
ARTICLE
IX
TERMINATION
9.1 Termination.
This
Agreement may be terminated at any time before or, at Closing, by:
(a) The
mutual agreement of the Parties;
(b) Any
party
if-
(i) Any
provision of this Agreement applicable to a party shall be materially untrue
or
fail to be accomplished; or
(ii) Any
legal
proceeding shall have been instituted or shall be imminently threatening to
delay, restrain or prevent the consummation of this Agreement;
(c) Upon
termination of this Agreement for any reason, in accordance with the terms
and
conditions set forth in this paragraph, each said party shall bear all costs
and
expenses as each party has incurred.
ARTICLE
X
COVENANTS
SUBSEQUENT TO CLOSING
10.1 Registration
Rights.
The
Company shall file, within thirty (30) days after the Closing and at its
expense, with the U.S. Securities and Exchange Commission (the “Commission”) a
registration statement (the “Initial Registration Statement”) covering the
resale of Common Shares held by those persons (and/or their designees) that
are
shareholders of the Company immediately prior to the Closing (“Pre-Existing
Shareholders”), provided
that,
however, the Company shall not be required to register the Common Shares held
by
such shareholders who are affiliates of Westpark Capital (“Westpark
Affiliates”), as specified in Item 10.1 of the Disclosure Schedules, who shall
instead receive registration rights to require the Company to file a
registration statement (the “Second Registration Statement”) to register their
Common Shares within ten (10) days following to the end of the six (6) month
period that immediately follows the date on which the Company files Initial
Registration Statement with the Commission. The Company shall enter into a
Registration Rights Agreement acceptable to the Westpark Affiliates with respect
to rights described in this Section 10.1. The Company shall also
enter
into a Registration Rights Agreement (which is subject to underwriter lock-ups)
acceptable to FirstAlliance Financial Group, Inc. and Marvel International
Limited with respect to rights described in this Section 10.1. In the event
the
Second Registration Statement is not timely filed to register the shares held
by
the Westpark Affiliates, FirstAlliance Financial Group, Inc. and Marvel
International Limited, or if the Second Registration Statement is not timely
declared effective by the Commission, as described in the Registration Rights
Agreement, the Company shall issue to such holders penalty shares (the “Penalty
Shares”) equal to one percent (1%) of the shares on a monthly basis until the
Second Registration Statement is filed with or declared effective by the
Commission, as applicable. However, no Penalty Shares shall be due to the
Westpark Affiliates, FirstAlliance Financial Group, Inc. and Marvel
International Limited if the Company is using best efforts to cause the Second
Registration Statement to be filed and declared effective in a timely
manner.
10.2 AMEX
Listing.
The
Company shall take reasonable efforts to cause the Company’s securities to be
listed on the American Stock Exchange as soon as practicable after the
Closing.
ARTICLE
XI
MISCELLANEOUS
11.1 Survival
of Representations, Warranties and Agreements.
Each of
the parties hereto is executing and carrying out the provisions of this
Agreement in reliance upon the representations, warranties and covenants and
agreements contained in this agreement or at the closing of the transactions
herein provided for and not upon any investigation which it might have made
or
any representations, warranty, agreement, promise or information, written or
oral, made by the other party or any other person other than as specifically
set
forth herein. Except as specifically set forth in this Agreement,
representations and warranties and statements made by a party to in this
Agreement or in any document or certificate delivered pursuant hereto shall
not
survive the Closing Date, and no claims made by virtue of such representations,
warranties, agreements and covenants shall be made or commenced by any party
hereto from and after the Closing Date.
11.2 Access
to Books and Records.
During
the course of this transaction through Closing, each party agrees to make
available for inspection all corporate books, records and assets, and otherwise
afford to each other and their respective representatives, reasonable access
to
all documentation and other information concerning the business, financial
and
legal conditions of each other for the purpose of conducting a due diligence
investigation thereof. Such due diligence investigation shall be for the purpose
of satisfying each party as to the business, financial and legal condition
of
each other for the purpose of determining the desirability of consummating
the
proposed transaction. The Parties further agree to keep confidential and not
use
for their own benefit, except in accordance with this Agreement any information
or documentation obtained in connection with any such
investigation.
11.3 Further
Assurances.
If, at
any time after the Closing, the parties shall consider or be advised that any
further deeds, assignments or assurances in law or that any other things are
necessary, desirable or proper to complete the merger in accordance with the
terms of this agreement or to vest, perfect or confirm, of record or otherwise,
the title to any property or rights of the parties hereto, the Parties agree
that their proper officers and directors shall execute and deliver all such
proper deeds, assignments and assurances in law and do all things necessary,
desirable or proper to vest, perfect or confirm title to such property or rights
and otherwise to carry out the purpose of this Agreement, and that the proper
officers and directors the parties are fully authorized to take any and all
such
action.
11.4 Notice.
All
communications, notices, requests, consents or demands given or required under
this Agreement shall be in writing and shall be deemed to have been duly given
when delivered to, or received by prepaid registered or certified mail or
recognized. overnight courier addressed to, or upon receipt of a facsimile
sent
to, the party for whom intended, as follows, or to such other
address
or facsimile number as may be furnished by such party by notice in the
manner
provided herein:
Attention:
If
to the
Seller and Kunming:
Kungming
Shenghuo Pharmaceutical (Group) Co., Ltd.
No.
2,
Jing You Road
Kungming
National Economy & Technology Developing District
P.R.C.
Attn:
Mr.
Lan Gui Hua
Telecopy
No.: 0000-000-0000
With
a
copy to:
Xxxxxxxxxxx
& Xxxxxxxx Xxxxxxxxx Xxxxxx LLP
00000
Xxxxx Xxxxxx Xxxx., Xxxxxxx Xxxxx
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn:
Xxxxxx X. Xxxxxxx, Esq.
Telecopy
No.: (000) 000-0000
If
to the
Company:
SRKP
8,
Inc.
0000
Xxxxxx xx xxx Xxxxx, Xxxxx 000
Xxx
Xxxxxxx, XX 00000
Attention:
Xxxxxxx Xxxxxxxxx
Telecopy
No.: (000) 000-0000
11.5 Entire
Agreement.
This
Agreement, the Disclosure Schedules and any instruments and agreements to be
executed pursuant to this Agreement, sets forth the entire understanding of
the
parties hereto with respect to its subject matter, merges and supersedes all
prior and contemporaneous understandings with respect to its subject matter
and
may not be waived or modified, in whole or in part, except by a writing signed
by each of the parties hereto. No waiver of any provision of this Agreement
in
any instance shall be deemed to be a waiver of the same or any other provision
in any other instance. Failure of any party to enforce any provision of this
Agreement shall not be construed as a waiver of its rights under such
provision.
11.6 Successors
and Assigns.
This
Agreement shall be binding upon, enforceable against and inure to the benefit
of, the parties hereto and their respective heirs, administrators, executors,
personal representatives, successors and assigns, and nothing herein is intended
to confer any right, remedy or benefit
upon
any
other person. This Agreement may not be assigned by any party hereto except
with
the prior written consent of the other parties, which consent shall not be
unreasonably withheld.
11.7 Governing
Law.
This
Agreement shall in all respects be governed by and construed in accordance
with
the laws of the State of Delaware are applicable to agreements made and fully
to
be performed in such state, without giving effect to conflicts of law
principles.
11.8 Counterparts.
This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the
same
instrument.
11.9 Construction.
Headings contained in this Agreement are for convenience only and shall not
be
used in the interpretation of this Agreement. References herein to Articles,
Sections and Exhibits are to the articles, sections and exhibits, respectively,
of this Agreement. The Disclosure Schedule is hereby incorporated herein by
reference and made a part of this Agreement. As used herein, the singular
includes the plural, and the masculine, feminine and neuter gender each includes
the others where the context so indicates.
11.10 Severability.
If any
provision of this Agreement is held to be invalid or unenforceable by a court
of
competent jurisdiction, this Agreement shall be interpreted and enforceable
as
if such provision were severed or limited, but only to the extent necessary
to
render such provision and this Agreement enforceable.
[SIGNATURE
PAGE TO FOLLOW]
IN
WITNESS WHEREOF, each of the parties hereto has executed this Agreement as
of
the date first set forth above.
SRKP
8, INC.
By:
/s/
Xxxxxxx Xxxxxxxxx
Name:
Xxxxxxx Xxxxxxxxx
Title:
President
KUNMING
SHENGHUO PHARMACEUTICAL (GROUP) CO., LTD.
By:
/s/
Lan Gui Hua
Name:
Lan
Gui Hua
Title:
Chairman of Director
LAN’S
INT’L MEDICINE INVESTMENT CO., LIMITED
By:
/s/
Lan Gui Hua
Name:
Lan
Gui Hua
Title:
President
Witness:
|
First
Alliance Financial Group, Inc.
By:_____________________________
Name:
Title:
|
WestPark
Capital Inc.
By:
/s/
Xxxxxxx Xxxxxxxxx
Name:
Xxxxxxx Xxxxxxxxx
Title:
Chief Executive Officer
|
SCHEDULE
I
|
Name
|
Number
of
Company
Shares
|
|||
|
Lan’s
Int’l Medicine Investment Co., Limited
|
15,801,500
|
|||
|
FirstAlliance
Financial Group, Inc.
|
464,750
|
|||
|
Marvel
International Limited
|
557,700
|
|||
|
Total:
|
16,823,950
|
|||
ITEM 3.1
SUBSIDIARIES
|
Subsidiary
Name
|
Percentage
Owned by Kunming
|
Other
Shareholders and Holdings
|
Total
Percentage
|
ITEM
10
WESTPARK
AFFILIATES
Xxxxxxx
Xxxxxxxxx
Xxxxxxx
X. Xxxxxxxxxxxx
TABLE OF CONTENTS
Page
|
ARTICLE
I THE EXCHANGE
|
1
|
|
|
1.1
|
The
Exchange
|
1
|
|
1.2
|
Time
and Place of Closing
|
1
|
|
1.3
|
Effective
Time
|
2
|
|
1.4
|
Tax
Consequences
|
2
|
|
ARTICLE
II REPRESENTATIONS AND WARRANTIES OF THE COMPANY
|
2
|
|
|
2.1
|
Due
Organization and Qualification; Due Authorization.
|
2
|
|
2.2
|
No
Conflicts or Defaults
|
2
|
|
2.3
|
Capitalization
|
3
|
|
2.4
|
Financial
Statements
|
3
|
|
2.5
|
No
Assets or Liabilities
|
3
|
|
2.6
|
Taxes
|
3
|
|
2.7
|
Indebtedness;
Contracts; No Defaults
|
4
|
|
2.8
|
Real.
Property
|
4
|
|
2.9
|
Compliance
with Law
|
4
|
|
2.10
|
Permits
and Licenses
|
4
|
|
2.11
|
Litigation
|
4
|
|
2.12
|
Insurance
|
4
|
|
2.13
|
Patents;
Trademarks and Intellectual Property Rights
|
5
|
|
2.14
|
Securities
Law Compliance
|
5
|
|
ARTICLE
III REPRESENTATIONS AND WARRANTIES OF KUNMING
|
5
|
|
|
3.1
|
Due
Organization and Qualification; Subsidiaries, Due
Authorization.
|
5
|
|
3.2
|
No
Conflicts or Defaults
|
5
|
|
3.3
|
Capitalization
|
6
|
|
3.4
|
Taxes
|
6
|
|
3.5
|
Compliance
with Law
|
7
|
|
3.6
|
Litigation.
|
7
|
|
ARTICLE
IV REPRESENTATION AND WARRANTIES OF THE SELLER
|
7
|
|
|
4.1
|
Title
to Shares
|
7
|
|
4.2
|
Due
Authorization
|
7
|
|
4.3
|
Purchase
for Investment.
|
7
|
|
4.4
|
Investment
Experience
|
8
|
|
4.5
|
Information
|
8
|
|
4.6
|
Restricted
Securities
|
8
|
|
ARTICLE
V COVENANTS
|
8
|
|
|
5.1
|
Further
Assurances
|
8
|
|
|
||
|
ARTICLE
VI DELIVERIES
|
9
|
|
|
6.1
|
Items
to be delivered to the Seller prior to or at Closing by the
Company.
|
9
|
|
6.2
|
Items
to be delivered to the Company prior to or at Closing by Kunming
and the
Seller.
|
9
|
|
ARTICLE
VII CONDITIONS PRECEDENT
|
10
|
|
|
7.1
|
Conditions
Precedent to Closing
|
10
|
|
7.2
|
Conditions
to Obligations of Seller
|
10
|
|
7.3
|
Conditions
to Obligations of the Company
|
10
|
|
ARTICLE
VIII INDEMNIFICATION
|
11
|
|
|
8.1
|
Indemnity
of the Company
|
11
|
|
8.2
|
Indemnity
of the Seller
|
11
|
|
8.3
|
Indemnification
Procedure
|
11
|
|
ARTICLE
IX TERMINATION
|
11
|
|
|
9.1
|
Termination
|
11
|
|
ARTICLE
X COVENANTS SUBSEQUENT TO CLOSING
|
12
|
|
|
10.1
|
Registration
Rights
|
12
|
|
10.2
|
AMEX
Listing
|
12
|
|
ARTICLE
XI MISCELLANEOUS
|
12
|
|
|
11.1
|
Survival
of Representations, Warranties and Agreements
|
13
|
|
11.2
|
Access
to Books and Records
|
13
|
|
11.3
|
Further
Assurances
|
13
|
|
11.4
|
Notice
|
13
|
|
11.5
|
Entire
Agreement
|
14
|
|
11.6
|
Successors
and Assigns
|
14
|
|
11.7
|
Governing
Law
|
14
|
|
11.8
|
Counterparts
|
14
|
|
11.9
|
Construction
|
14
|
|
11.10
|
Severability
|
15
|
