THIS AGREEMENT
RELATES TO AN OFFERING
OF SECURITIES IN AN OFFSHORE TRANSACTION
TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED IN
REGULATION S UNDER THE
1933
ACT) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS
AMENDED (THE "1933 ACT"). NONE OF THE SECURITIES TO WHICH THIS
AGREEMENT RELATES
HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE
SECURITIES LAWS, AND,
UNLESS SO REGISTERED,
NONE MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY,
IN
THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT IN ACCORDANCE
WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO
AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN
AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
1933 ACT AND IN EACH
CASE ONLY IN
ACCORDANCE WITH ALL
APPLICABLE
SECURITIES
LAWS. IN ADDITION,
HEDGING TRANSACTIONS
INVOLVING THE
SECURITIES
MAY NOT BE
CONDUCTED UNLESS IN ACCORDANCE WITH THE 1933 ACT.
CHINA HEALTH HOLDING, INC.
(NASDAQ OTCBB; CHHH)
ACQUISITION DEFINITIVE AGREEMENT
THIS AGREEMENT is made as of the 3rd day of September, 2006
AMONG:
CHINA HEALTH HOLDINGS, INC., a corporation formed pursuant to the
laws
of the State of Nevada
and having a business
address located
at101
Convention Center
Drive, Suite 700, Las
Vegas, NV 89107-2001 USA and
mailing address at
Suite 600-666 Burrard
St. Park Place,
Vancouver,
British Columbia, Canada V6C 2X8.
("China Health")
AND:
Shaanxi Meichen Pharmaceuticals Co. Ltd., a company formed pursuant
to
the laws of the
People's Republic
of China , having
an office for
business located at D Chuangye Building, West District, Xian High and
New Technology
Development Zone,
Xian City Shaanxi
Province, P.R.
China
("Shaanxi Meichen Pharmaceuticals ")
AND: Chen
Meiyinggg
The President/CEO of Shaanxi Meichen Pharmaceuticals Co. Ltd.,
And as controlled holding Shareholder and And as authorized total
100%
holding shareholders of Shaanxi Meichen Pharmaceuticals,
each of whom
are set forth on the signa ture page of this Agreement
(the "Shaanxi Meichen Pharmaceuticals Shareholders")
<PAGE>
WHEREAS:
A. The
Shaanxi Meichen
Pharmaceuticals
Shareholders own 100 %
registered
shares of Shaanxi Meichen Pharmaceuticals, constituting 100% of the presently
issued and outstanding Shaanxi Meichen Pharmaceuticals Shares;
B. China
Health is a USA public trading and reporting company whose common
stock is quoted on the OTCBB NASDAQ As trading symbol: CHHH;
and
C. The
respective Boards of Directors of China Health, and Shaanxi Meichen
Pharmaceuticals deem
it advisable and in the best interests of China Health and
Shaanxi Meichen Pharmaceuticals that China Health acquire 100% of
the authorized
and outstanding shares of Shaanxi Meichen Pharmaceuticals (the "Acquisition")
pursuant to this Agreement. Shaanxi Meichen Pharmaceuticals and Shareholders
also legally offer to
China Health with
exclusive right and
1st refusal right
for further closing and completion for this acquisitions
transaction.
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises
and the mutual covenants, agreements, representations and warranties
contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
Definitions
1.1 In this Agreement
the following terms will have the following meanings:
(a)
"Acquisition"
means the Acquisition, at the Closing, of Shaanxi
Meichen Pharmaceuticals by China Health pursuant to this
Agreement;
(b)
"Acquisition Shares"
means the China Health Common Shares to be issued
to the Shaanxi Meichen Pharmaceuticals Shareholders at Closing
pursuant to the terms of the Acquisition.
(c)
"Agreement"
means this share
purchase agreement
among China
Health,
Shaanxi Meichen
Pharmaceuticals, and the Shaanxi Meichen
Pharmaceuticals Shareholders;
(d)
"Closing" means the completion, on the Closing Date, of the
transactions contemplated hereby in accordance with Article 10
hereof;
(e)
"Closing Date" means
the day on which all conditions precedent to the
completion of
the transaction as contemplated hereby have been
satisfied or waived;
<PAGE>
(f)
"China Health
Business" means all aspects of any business conducted by
China Health;
(g)
"China Health
Common Shares" means the shares of common
stock in the
capital of China Health;
(h)
"China Health
Financial Statements" means, collectively, the audited
consolidated financial
statements of China
Health for the two fiscal
years ended
2Q, 2006 (Ending Jun30 2006), together with the
unqualified auditors'
report thereon, true copies of which are
attached as Schedule "A" hereto;
(i)
"China Health Goodwill" means the goodwill of the China Health
Business including
the right to all
corporate,
operating and
trade
names associated with the China Health Business, or any variations of
such names as part of or in connection with the China Health
Business,
all books and records
and other information relating to the China
Health Business, all
necessary licenses and
authorizations
and any
other rights used in connection with the China Health Business;
(k)
"Place of Closing" means the offices of Shaanxi Meichen
Pharmaceuticals at D Chuangye Building, West District, Xian High and
New Technology
Development Zone,
Xian City Shaanxi
Province, P.R.
China or such
other place as China Health and Shaanxi Meichen
Pharmaceuticals may mutually agree upon;
(j)
"Shaanxi Meichen Pharmaceuticals Accounts Payable and Liabilities"
means all accounts payable and liabilities of Shaanxi Meichen
Pharmaceuticals, due
and owing or otherwise
constituting
a binding
obligation of Shaanxi
Meichen
Pharmaceuticals (other
than a Shaanxi
Meichen
Pharmaceuticals
Material Contract)
as of 2Q, 2006
(Ending
Jun30 2006 as set forth in Schedule "K" hereto;
(k)
"Shaanxi Meichen Pharmaceuticals Accounts Receivable" means all
accounts
receivable and
other debts owing to Shaanxi Meichen
Pharmaceuticals , as
of 2Q, 2006 (Ending
Jun30 2006 as set
forth in
Schedule "L" hereto;
(l)
"Shaanxi Meichen
Pharmaceuticals Assets" means the undertaking and all
the property
and assets of the Shaanxi Meichen Pharmaceuticals
Business of every kind and description wheresoever situated
including,
without limitation, Shaanxi Meichen Pharmaceuticals Equipment,
Shaanxi
Meichen
Pharmaceuticals
Inventory, Shaanxi
Meichen
Pharmaceuticals
Material
Contracts,
Shaanxi Meichen
Pharmaceuticals
Accounts
Receivable, Shaanxi
Meichen Pharmaceuticals Cash, Shaanxi Meichen
Pharmaceuticals
Tangible and
Intangible Assets and
Shaanxi Meichen
Pharmaceuticals
Goodwill, and all
credit cards, charge cards and
banking cards issued to Shaanxi Meichen Pharmaceuticals;
(m)
"Shaanxi Meichen
Pharmaceuticals Bank
Accounts" means all of the bank
accounts, lock boxes
and safety
deposit boxes of Shaanxi Meichen
Pharmaceuticals or
relating to the
Shaanxi Meichen
Pharmaceuticals
Business as set forth in Schedule "M" hereto;
(n)
"Shaanxi Meichen Pharmaceuticals Business" means all aspects of
the
business conducted by Shaanxi Meichen Pharmaceuticals;
<PAGE>
(o)
"Shaanxi Meichen Pharmaceuticals Cash" means all cash on hand or
on
deposit to the
credit of Shaanxi Meichen Pharmaceuticals on the
Closing Date;
(p)
"Shaanxi Meichen Pharmaceuticals Debt to Related Parties" means
the
debts owed by Shaanxi Meichen Pharmaceuticals and its
subsidiaries to
the Shaanxi
Meichen Pharmaceuticals Shareholders or to any family
member thereof,
or to any affiliate,
director or officer of
Shaanxi
Meichen
Pharmaceuticals or
the Shaanxi Meichen Pharmaceuticals
Shareholders as described in Schedule "N";
(q)
"Shaanxi Meichen Pharmaceuticals Equipment" means all machinery,
equipment, furniture,
and furnishings used in the Shaanxi Meichen
Pharmaceuticals
Business, including,
without limitation,
the items
more particularly described in Schedule "O" hereto;
(r)
"Shaanxi Meichen Pharmaceuticals Financial Statements" means
collectively, the audited consolidated financial statements of
Shaanxi
Meichen
Pharmaceuticals for
two year period
ended 2Q 2006
(ending
Jun30 2006) , true
copies of which are attached as Schedule "J"
hereto;
(s)
"Shaanxi Meichen
Pharmaceuticals
Goodwill" means the
goodwill of the
Shaanxi Meichen
Pharmaceuticals
Business together with the exclusive
right of China Health to represent itself as carrying on the
Shaanxi
Meichen
Pharmaceuticals
Business in succession
of Shaanxi
Meichen
Pharmaceuticals
subject to the terms hereof, and the right to use any
words indicating that the Shaanxi Meichen Pharmaceuticals
Business is
so carried on
including the right to
use the name " Shaanxi
Meichen
Pharmaceuticals" or "Shaanxi Meichen Pharmaceuticals International"
or
any variation thereof as part of the name of or in connection with
the
Shaanxi Meichen
Pharmaceuticals
Business or any part thereof carried
on or to be carried on by Shaanxi Meichen Pharmaceuticals, the right
to all corporate,
operating and trade names associated with the
Shaanxi Meichen
Pharmaceuticals
Business, or any
variations of such
names as part of or in connection with the Shaanxi Meichen
Pharmaceuticals
Business, all
telephone listings and telephone
advertising contracts,
all lists of customers, books and records and
other information
relating to the Shaanxi Meichen Pharmaceuticals
Business, all
necessary licenses and authorizations and any other
rights used in
connection with the
Shaanxi Meichen
Pharmaceuticals
Business;
(t)
"Shaanxi Meichen
Pharmaceuticals
Insurance Policies" means the public
liability insurance
and insurance
against loss or damage
to Shaanxi
Meichen Pharmaceuticals Assets and the Shaanxi Meichen
Pharmaceuticals
Business as described in Schedule "P" hereto;
(u)
"Shaanxi Meichen
Pharmaceuticals
Intangible Assets"
means all of the
intangible assets
of Shaanxi Meichen Pharmaceuticals, including,
without limitation,
Shaanxi Meichen
Pharmaceuticals
Goodwill, all
trademarks, logos,
copyrights,
designs, and other intellectual and
industrial property
of Shaanxi Meichen Pharmaceuticals and its
subsidiaries;
(v)
"Shaanxi Meichen Pharmaceuticals Inventory" means all inventory
and
supplies of the
Shaanxi Meichen
Pharmaceuticals
Business as of 2 Q
2006 (ending Jun 30 2006) as set forth in Schedule "Q" hereto;
(w)
"Shaanxi Meichen
Pharmaceuticals
Material Contracts" means the burden
and benefit of and the right, title and interest of Shaanxi Meichen
Pharmaceuticals in, to
and under all trade and non-trade contracts,
<PAGE>
engagements or commitments, whether written or oral, to which
Shaanxi
Meichen
Pharmaceuticals is
entitled in connection
with the Shaanxi
Meichen
Pharmaceuticals Business whereunder Shaanxi Meichen
Pharmaceuticals is
obligated to pay or entitled to receive the sum of
$10,000 or more
including, without
limitation,
any pension
plans,
profit sharing
plans, bonus plans, loan agreements, security
agreements, indemnities and guarantees, any agreements with
employees,
lessees, licensees,
managers,
accountants,
suppliers,
agents,
distributors, officers, directors, attorneys or others which cannot
be
terminated without
liability on not more than one month's notice, and
those contracts listed in Schedule "R" hereto;
(x)
"Shaanxi Meichen
Pharmaceuticals
Related Party Debts" means the debts
owed by the Shaanxi
Meichen
Pharmaceuticals
Shareholders or by
any
family member thereof,
or by any affiliate, director or officer of
Shaanxi Meichen Pharmaceuticals or the Shaanxi Meichen
Pharmaceuticals
Shareholders, to
Shaanxi Meichen
Pharmaceuticals
as described in
Schedule "S"; and
(y)
"Shaanxi Meichen
Pharmaceuticals
Shares" means all of
the issued and
outstanding shares of Shaanxi Meichen Pharmaceuticals 's equity
stock.
Any other terms defined within the text of this Agreement will have
the meanings
so ascribed to them.
Captions and Section Numbers
1.2 The
headings and section references in this Agreement are for
convenience of
reference only and do
not form a part of this Agreement and are
not intended to interpret, define or limit the scope,
extent or intent of
this
Agreement or any provision thereof.
Section References and Schedules
1.3 Any
reference to a particular "Article", "section", "paragraph",
"clause" or other subdivision is to the particular Article,
section, clause or
other subdivision
of this Agreement and any reference to a
Schedule by letter
will mean the
appropriate
Schedule attached to this Agreement and by such
reference the appropriate Schedule is incorporated into and made part of this
Agreement. The Schedules to this Agreement are as follows:
Information concerning China Health
Schedule "A" China Health Financial Statements 2Q 2006 (Ending
Jun30 2006)
Information concerning Shaanxi Meichen Pharmaceuticals
Schedule "J" Shaanxi
Meichen Pharmaceuticals Audited Financial Statements
(2004, 2005 and 2Q 2006 (Ending Jun30 2006)
Schedule "K" Shaanxi
Meichen Pharmaceuticals Accounts Payable and Liabilities
Schedule "L" Shaanxi
Meichen Pharmaceuticals Accounts Receivable
Schedule "M" Shaanxi
Meichen Pharmaceuticals Bank Accounts and Total Assets
Schedule "N" Shaanxi
Meichen Pharmaceuticals Debts to Related Parties
Schedule "O" Shaanxi
Meichen Pharmaceuticals Total Assets and List of Equipment
Schedule "P" Shaanxi
Meichen Pharmaceuticals Insurance Policies
Schedule "Q" Shaanxi
Meichen Pharmaceuticals Inventory
<PAGE>
Schedule "R" Shaanxi
Meichen Pharmaceuticals Material Contracts
Schedule "S" Shaanxi
Meichen Pharmaceuticals Related Party Debts
Severability of Clauses
1.4 If any
part of this Agreement is declared or held to be invalid for
any
reason, such invalidity will not affect the validity of the
remainder which will
continue in full force and effect and be construed as if this
Agreement had been
executed without the invalid portion, and it is hereby declared the
intention of
the parties that this Agreement would have been executed
without reference to
any portion which may,
for any reason, be hereafter declared or held to be
invalid.
ARTICLE 2
THE ACQUISITION
Sale of Shares and Total Purchasing Prices
The Shaanxi
Meichen Pharmaceuticals and Shaanxi Meichen Pharmaceuticals
Shareholders hereby agree to sell to China Health, the 100% total
authorized and
outstanding shares and interest of Shaanxi Meichen Pharmaceuticals,
with a total
assets 31,
618, 770 RMB and a total of 35 MU ( 15
mu to a hecter)
lands, a
China-FDA Licensed GMP Pharmaceutical Drug Manufacturing Facility,
a total of 27
China-FDA Licensed
Pharmaceutical
Drugs Pipeline,
and with a total bank
loan
7,500,000 RMB
approxiamately
(according to financial valuation completed and
approved by Shaanxi ZhengYuan Certified Public Accountants Ltd. On Sep12
2005)
in exchange for a total purchasing price as 24,800,000.RMB. China Health and
Shaanxi Meichen Pharmaceuticals and Shaanxi Meichen Pharmaceuticals
Shareholders
agreed that THE TOTAL ACQUISITIONS PAYMENTS will be a combination as
following:
1.st part: 80% of total purchasing prices ( equal to a total of
19,840,000. RMB)
will be paid as the CHHH (OTCBB NASDAQ)'s Acquisition Shares as CHHH OTCBB
NASDAQ's common
stocks, at a price of per share which
represents the
average
closing price of China
Health's common stock as reported on the
OTCBB for the
five (5) day period
commencing/prior to the " Acquisition Transaction" Closing
and Completion Date to be paid on the transaction Closing day; 2nd part: 20% of
total purchasing
prices as the "Cash
Payment" as 4,960,000.
RMB to be paid to
Shaanxi Meichen
Pharmaceuticals
Shareholders in approximately 30 business days
after the ACQUISITION TRANSACTION CLOSING AND COMPLETION DAY.
Allocation and Schedules of Payments Consideration
<PAGE>
2.2 The
Acquisition
Shares and the Cash
Payment shall be allocated to the
Shaanxi Meichen
Pharmaceuticals
Shareholders,
as set forth on
Schedule 2.2
attached hereto and made a part hereof.
2.2.1. After signing
and agreeing and consenting this Acquisitions Definitive
Agreement legally
mutually, immediately China Health's specialist team will
conduct a full legal and financial Due Diligence Processing on Shaanxi Meichen
Pharmaceutical Co. Ltd. as the terms set in this agreement.
2.2.2. Upon China
Health's further
completion and
satisfactions of full legal
financial DUE
DILLIGENCE on Shaanxi
Meichen Pharmaceuticals Pharmaceutical,
prior to final
transaction CLOSING
DATE, both China Health and Shaanxi Meichen
Pharmaceutical and
Shareholders
legally agree to setup
a LEGAL
TRUST(ESCROW)
accounts with both China Health and Shaanxi Meichen Pharmaceutical's attorneys
law firms,
according to both USA Laws and PR
China Laws for further legal
acquisitions
transactions. China
Health Agree to
transfer for "
ACQUISITION
SHARES CERTIFICATES/
CHHH OTCBB NASDAQ'S COMMON STOCKS CERTIFICATES" AS FOR THE
TOTAL OF 80% of the total acquisitions purchase prices as defined and agreed
mutually as above (AS 80% OF Acquisitions Purchasing Prices) for further legal
completion for
exchange and
transactions
IN EXCHANGE ON THE
SAME DAY FOR the
TOTAL OF 100% UNDIVIDED SHARES AND INTERESTS AND assets
and titles from Shaanxi
Meichen
Pharmaceuticals
Pharmaceutical and Shareholders legally, free from all
liens, mortgages,
charges, pledges, encumbrances or other burdens with all
rights now or thereafter attached thereto.
2.2.3. Shaanxi
Meichen Pharmaceuticals and Shaanxi Meichen Pharmaceuticals
Shareholders agreed
that China
Health will pay for
20% "Cash Payment"
which
equal to a total of a total of 4,960,000. RMB to Shaanxi Meichen
Pharmaceuticals
Shareholders in approximately 30 business days after the
ACQUISITION TRANSACTION
CLOSING AND COMPLETION DAY.
2.2.4. Any further
details and concerns,
both China Health and Shaanxi Meichen
Pharmaceutical and
Shareholders
agree to set up AMENDMENTS PRIOR TO THE
TRANSACTION CLOSING DATE.
Adherence with Applicable Securities Laws
2.3 The
Shaanxi Meichen
Pharmaceuticals
Shareholders agree
that they are
acquiring the
Acquisition Shares for
investment
purposes and will not
offer,
sell or otherwise transfer, pledge or hypothecate any of the
Acquisition Shares
issued to them (other than pursuant to an effective Registration
Statement under
the Securities Act of 1933, as amended) directly or indirectly
unless:
<PAGE>
(a)
the sale is to China
Health;
(b)
the sale is made
pursuant to the exemption from registration under the
Securities Act of 1933, as amended, provided by Rule 144 thereunder;
or
(c)
the Acquisition Shares
are sold in a transaction that does not require
registration under the
Securities
Act of 1933,
as amended,
or any
applicable United
States state laws and
regulations
governing the
offer and sale of
securities, and the
vendor has furnished
to China
Health an opinion of
counsel to that effect or such other written
opinion as may be reasonably required by China Health.
The
Shaanxi Meichen Pharmaceuticals Shareholders acknowledge that the
certificates
representing the
Acquisition
Shares shall bear the following
legend:
"THESE
SECURITIES
WERE ISSUED IN AN OFFSHORE TRANSACTION TO
PERSONS
WHO ARE NOT U.S.
PERSONS (AS DEFINED HEREIN) PURSUANT TO
REGULATION
S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED
(THE "1933 ACT"). ACCORDINGLY, NONE OF THE SECURITIES TO
WHICH THIS
CERTIFICATE
RELATES HAVE BEEN
REGISTERED
UNDER THE
1933 ACT,
OR ANY U.S.
STATE SECURITIES LAWS, AND, UNLESS SO
REGISTERED, NONE MAY
BE OFFERED OR SOLD IN THE UNITED STATES OR,
DIRECTLY
OR INDIRECTLY,
TO U.S. PERSONS (AS DEFINED HEREIN)
EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
PURSUANT
TO AN EXEMPTION FROM,
OR IN A TRANSACTION
NOT SUBJECT
TO,
THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH
CASE ONLY
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN
ADDITION,
HEDGING TRANSACTIONS
INVOLVING THE
SECURITIES MAY NOT
BE
CONDUCTED UNLESS IN ACCORDANCE WITH THE 1933 ACT."
The
Shaanxi Meichen
Pharmaceuticals
Shareholders
further represent and
acknowledge that:
(a)
The Shaanxi Meichen
Pharmaceuticals
Shareholders are
located outside
the United States;
(b)
The Shaanxi Meichen
Pharmaceuticals
Shareholders are not aware of any
advertisement of any of the shares be issued hereunder;
(c)
The Shaanxi Meichen
Pharmaceuticals
Shareholders will not acquire the
shares as a result of,
and will not itself
engage in, any
"directed selling
efforts" (as defined in Regulation S under the 1933 Act) in the
United States in
respect of the shares
which would include
any activities
undertaken
for the
purpose of,
or that could reasonably be expected to have the effect of,
conditioning the
market in the United
States for the resale of the shares;
provided, however,
that the Shaanxi
Meichen
Pharmaceuticals
Shareholders may
sell or otherwise
dispose of the shares
pursuant to registration of the shares
<PAGE>
pursuant to the 1933 Act and any applicable state and provincial
securities laws
or under an exemption
from such registration requirements and as otherwise
provided herein;
(d)
The Shaanxi
Meichen Pharmaceuticals Shareholders agree that China
Health will refuse to register any transfer of the shares not made
in accordance
with the provisions
of Regulation S, pursuant to an effective
registration
statement under the
1933 Act or pursuant
to an available
exemption from the
registration
requirements of the
1933 Act and in
accordance with
applicable
state and provincial securities laws; and
(e)
The Shaanxi Meichen
Pharmaceuticals
Shareholders understand and agree
that offers and sales of any of the shares, prior to the expiration of a
period
of one year
after the date of transfer of the shares (the "Distribution
Compliance Period"),
shall only be made in compliance with the safe harbor
provisions set forth in Regulation S, pursuant to the registration
provisions of
the 1933 Act or an exemption therefrom, and that all offers and sales
after the
Distribution
Compliance Period
shall be made only in compliance with the
registration
provisions of the 1933
Act or an exemption
therefrom and in each
case only in accordance with all applicable securities laws;
(f)
The Shaanxi Meichen
Pharmaceuticals
Shareholders understand and agree
not to engage in any hedging transactions involving the Acquisition
Shares prior
to the end of the Distribution Compliance Period unless such
transactions are in
compliance with the provisions of the 1933 Act;
(g)
The Shaanxi Meichen Pharmaceuticals Shareholders hereby acknowledge
and
agree to China Health making a notation on its records or giving
instructions to
the registrar
and transfer
agent of China
Health in order to
implement the
restrictions on transfer set forth and described herein.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF CHINA HEALTH
Representations and Warranties
3.1 China
Health hereby represents and warrants in all material respects
to
Shaanxi Meichen
Pharmaceuticals
and the Shaanxi Meichen Pharmaceuticals
Shareholders, with the
intent that
Shaanxi Meichen Pharmaceuticals and the
Shaanxi Meichen Pharmaceuticals Shareholders will rely thereon in
entering into
this Agreement and in
approving and completing the transactions contemplated
hereby, that:
China Health - Corporate Status and Capacity
(a)
Incorporation.
China Health is a
corporation duly
incorporated
and
validly subsisting
under the laws of the
State of Nevada, and
is in
good standing with the
office of the Secretary of State for the State
of Nevada;
(b)
Carrying on Business.
China Health conducts
the business described in
its filings with the Securities and Exchange Commission and does not
conduct any other
business. China Health
is duly authorized to carry
on such business in British Columbia, Canada. The nature of the
China
Health Business does not require China Health to register or
otherwise
be qualified to carry on business in any other jurisdictions;
<PAGE>
(c)
Corporate Capacity.
China Health has the corporate power, capacity and
authority to own the
China Health Assets and to enter into and
complete this Agreement;
(d)
Reporting Status; Listing. China Health is a reporting issuer
under
Section 15(d) of the Securities Exchange Act of 1934, the China
Health
Common Shares are quoted on the NASD "Bulletin Board", and all
reports
required to be filed by China Health with the Securities and Exchange
Commission or NASD have been timely filed;
China Health - Capitalization
Authorized Capital.
The authorized capital of China Health consists of
320,000,000 of capital stock of which 300,000,000 are common
shares, $0.001 par
value, of which As of August 11, 2006, there were 62,414,551
shares of issuer's
common stock issued and outstanding China Health Common Shares are presently
issued and outstanding
and 20,000,000 are
preferred stock par
value $.001 and
and 1,250,000 Series A Preferred Shares issued and
(e)
No Option, Warrant or Other Right. Except as disclosed in China
Health's filings with
the Securities
and Exchange
Commission
(the
"China Health SEC Filings"), no person, firm or corporation has any
agreement, option,
warrant, preemptive right or any other right
capable of becoming an
agreement,
option, warrant or right for the
acquisition of
China Health Common Shares or for the purchase,
subscription or
issuance of any of the unissued shares in the capital
of China Health;
China Health - Records and Financial Statements
(f)
Charter Documents. The
charter documents of China Health have not been
altered since its
incorporation, except
as filed in the record books
of China Health;
(g)
Corporate Minute Books. The corporate records of China Health are
complete and each of the minutes accurately reflect the actions that
were taken at a duly called and held meeting or by consent without a
meeting. All
actions by China
Health which required director or
shareholder approval
are reflected in the corporate records of China
Health. China
Health is not in
violation or breach of, or in default
with respect
to, any term of their respective Certificates of
Incorporation (or other charter documents) or by-laws.
(h)
China Health Financial Statements. The China Health Financial
Statements present
fairly, in all material respects, the assets and
liabilities (whether
accrued, absolute,
contingent or
otherwise) of
China Health, on a
consolidated basis,
as of the respective dates
thereof, and the sales
and earnings
of the China Health Business
during the periods covered thereby, in all material respects and
have
been prepared
in substantial accordance with generally accepted
accounting principles consistently applied;
(i)
No Debt to
Related Parties. Except as disclosed in Schedule "E"
hereto, China Health
is not, and on Closing will not be, indebted to
any affiliate,
director or officer of
China Health except
accounts
payable on account of bona fide business transactions of China Health
incurred in normal
course of the China
Health Business, including
employment agreements, none of which are more than 30 days in
arrears;
<PAGE>
(j)
No Related Party Debt to China Health. No director or officer or
affiliate of China
Health is now indebted
to or under any
financial
obligation to China
Health on any
account whatsoever, except for
advances on account of travel and other expenses not exceeding
$1,000
in total;
(k)
Dividends.
Except as disclosed in China Health SEC Filings, no
dividends or other distributions on any shares in the capital of
China
Health have been made,
declared or authorized since the date of China
Health Financial Statements;
(l)
No Payments. No payments of any kind have been made or
authorized
since the date of the
China Health Financial Statements to or on
behalf of officers,
directors,
shareholders
or employees of China
Health or under any management agreements with China Health, except
payments made in the
ordinary course of business and at the
regular
rates of salary or other remuneration payable to them;
(m)
No Pension Plans. There are no pension, profit sharing, group
insurance or
similar plans or other deferred compensation plans
affecting China Health;
(n)
No Adverse Events. Since the date of the China Health Financial
Statements
(i) there
has not been any material adverse change in the
consolidated financial
position or condition
of China Health,
its liabilities or the
China Health Assets or any damage, loss
or other change in
circumstances
materially
affecting China
Health, the China
Health Business or the China Health Assets or
China Health' right to carry on the China Health Business,
other
than
changes in the ordinary course of business,
(ii) there has not
been any damage, destruction, loss or other event
(whether or not covered by insurance) materially and adversely
affecting China
Health, the China
Health Business or the China
Health Assets,
(iii) there has not been any material increase in the compensation
payable or to become
payable by China Health to any of China
Health' officers,
employees or agents or any bonus, payment or
arrangement made to or with any of them,
(iv) the China Health
Business has been and
continues to be
carried
on in the ordinary course,
(v) China Health
has not waived or surrendered any right of material
value,
(vi) China Health has
not discharged or satisfied or paid any lien or
encumbrance or
obligation
or liability other than current
liabilities in the ordinary course of business, and
(vii) no capital
expenditures in excess
of $10,000
individually or
$30,000 in total have been authorized or made.
<PAGE>
China Health - Income Tax Matters
(o) Tax Returns. All tax returns and reports of
China Health required
by
law to be filed have been filed and are true, complete and correct,
and any taxes payable
in accordance
with any return
filed by China
Health or in accordance with any notice of assessment or
reassessment
issued by any taxing authority have been so paid;
(p)
Current Taxes.
Adequate provisions have been made for taxes
payable
for the current period
for which tax returns are not yet required to
be filed and there are no agreements, waivers, or other arrangements
providing for an
extension of time with
respect to the filing of any
tax return
by, or payment of, any tax, governmental charge or
deficiency by
China Health. China Health is not aware of any
contingent tax
liabilities
or any grounds which would prompt a
reassessment including
aggressive treatment of income and expenses in
filing earlier tax returns;
China Health - Applicable Laws and Legal Matters
(q)
Licenses. China Health does not require any
licenses for carrying on
the China Health
Business in the manner in which it has
heretofore
been carried on;
(r)
Applicable
Laws. China Health has not been charged with
or received
notice of breach of any laws, ordinances, statutes, regulations,
by-laws, orders or decrees to which they are subject or which apply
to
them the violation of
which would have a material adverse effect on
the China Health
Business, and to China Health' knowledge, China
Health is not in breach of any laws, ordinances, statutes,
regulations, bylaws,
orders or decrees
the contravention of which
would result
in a material adverse impact on the China Health
Business;
(s)
Pending or Threatened
Litigation.
There is no material
litigation or
administrative or
governmental
proceeding
pending or threatened
against or relating to China Health, the China Health Business, or
any
of the China Health Assets nor does China Health have any knowledge
of
any deliberate
act or omission
of China Health that would form any
material basis for any such action or proceeding;
(t)
No Bankruptcy.
China Health has not
made any voluntary
assignment or
proposal under
applicable laws
relating to insolvency and bankruptcy
and no bankruptcy
petition has been filed or presented against China
Health and no order
has been made or a resolution passed for the
winding-up, dissolution or liquidation of China Health;
(u)
Labor Matters.
China Health is not
party to any collective agreement
relating to the China
Health Business
with any labor union
or other
association of employees and no part of the China Health
Business has
been certified as a unit appropriate for collective bargaining or, to
the knowledge of China Health, has made any attempt in that
regard;
(v)
Finder's Fees. China Health is not party to any agreement which
provides for the
payment of finder's fees, brokerage fees, commissions
or other fees or amounts which are or may become payable to any third
party in connection
with the execution and delivery of this Agreement
and the transactions contemplated herein;
<PAGE>
Execution and Performance of Agreement
(w)
Authorization and
Enforceability.
The execution and
delivery of this
Agreement, and the completion of the transactions contemplated
hereby,
have been duly and
validly authorized by all necessary corporate
action on the part of China Health;
(x)
No Violation or Breach. The execution and performance of this
Agreement will not:
(i) violate the
charter documents
of China Health or
result in any
breach of, or default under, any loan agreement, mortgage, deed
of trust, or any other agreement to which China Health is
party,
(ii) give any person
any right to terminate
or cancel any
agreement
including,
without limitation,
the China Health Material
Contracts, or any right or rights enjoyed by China Health,
(iii) result in any alteration of China Health's obligations under
any
agreement to which
China Health is party including, without
limitation, the China Health Material Contracts,
(iv) result in the
creation or imposition of any lien, encumbrance or
restriction of any
nature whatsoever in
favor of a third party
upon or against the China Health Assets,
(v) result in
the imposition
of any tax
liability to China
Health
relating to the China Health Assets, or
(vi) violate
any court order or decree to which China Health is
subject;
The China Health Assets - Ownership and Condition
(y)
Business Assets.
The China Health
Assets comprise all of the property
and
assets of the China Health Business, and no other person, firm or
corporation owns any
assets used by China
Health in operating the
China Health Business,
whether under a lease, rental agreement or
other arrangement,
other than as
disclosed in Schedules
"F" or "I"
hereto;
(z)
Title. China Health is the legal and
beneficial
owner of the China
Health Assets,
free and clear of all mortgages, liens, charges,
pledges, security interests, encumbrances or other claims
whatsoever,
save and except as disclosed in Schedules "F" or "I" hereto;
(aa)
No Option. No person,
firm or corporation has any agreement or option
or a right capable of becoming an agreement for the purchase of any
of
the China Health Assets;
(bb)
China Health Insurance
Policies. China Health maintains the public
liability insurance
and insurance against loss or damage to the China
Health Assets and the
China Health Business
as described in Schedule
"G" hereto;
(cc)
China Health Material
Contracts. The China
Health Material Contracts
listed in Schedule "I"
constitute all of the
material contracts of
China Health;
<PAGE>
(dd)
No Default. There has
not been any default in any material obligation
of China Health or any
other party to be
performed under any of
the
China Health Material Contracts, each of which is in good standing
and
in full force and
effect and unamended (except as disclosed in
Schedule "I" hereto),
and China Health is not aware of any default in
the obligations of any other party to any of the China Health
Material
Contracts;
(ee)
No Compensation on Termination. There are no agreements,
commitments
or understandings
relating to severance pay or separation allowances
on termination
of employment of any
employee of China Health. China
Health is not
obliged to pay benefits or share profits with any
employee after termination of employment except as required by
law;
China Health Assets - China Health Equipment
(ff)
China Health Equipment. The China Health Equipment has been
maintained
in a manner consistent
with that of a
reasonably prudent
owner and
such equipment is in good working condition;
China Health Assets - China Health Goodwill and Other Assets
(gg)
China Health Goodwill. China Health does not carry on the China
Health
Business under any
other business or
trade names. China
Health does
not have any knowledge
of any infringement by China Health of any
patent, trademarks, copyright or trade secret;
The China Health Business
(hh)
Maintenance of Business. Since the date of the China Health
Financial
Statements, China
Health has not entered into any material agreement
or commitment
except in the ordinary
course and except as
disclosed
herein;
(ii)
Subsidiaries. China
Health currently has two subsidiaries, China
Health World Trade
Corporation and China Health World Pharmaceutical
Corporation and does
not otherwise own,
directly or indirectly, any
shares or interest in any other corporation, partnership, joint
venture or firm; and
China Health - Acquisition Shares
(jj)
Acquisition Shares.
The Acquisition Shares when delivered to the
Shaanxi Meichen
Pharmaceuticals
Shareholders
pursuant
to the
Acquisition shall be
validly issued and outstanding as fully paid and
non-assessable shares and the Acquisition Shares shall be
transferable
upon the books of China Health, in all cases subject to the
provisions
and restrictions of all applicable securities laws.
Non-Merger and Survival
3.2 The
representations
and warranties of
China Health contained
herein
will be true at and as of Closing in all material respects as though such
representations and
warranties were made as of such time. Notwithstanding the
completion of the transactions contemplated hereby, the waiver of
any condition
contained herein
(unless such waiver
expressly releases a
party from any such
representation or
warranty) or any investigation made by Shaanxi Meichen
Pharmaceuticals or
the Shaanxi Meichen Pharmaceuticals Shareholders, the
representations and warranties of China Health shall survive the
Closing.
<PAGE>
Indemnity
3.3 China
Health agrees to
indemnify and save
harmless Shaanxi Meichen
Pharmaceutical
