SHAREHOLDERS AGREEMENT

Exhibit 2.01

(c)      “Board” means the board of directors of the Company;

(d)      “Business” means the Business of the Company being the development and commercialization of GlucoTel ^TM , the glucose measurement device originally developed by Safe-Com, and any other Business which the Company may engage in accordance with this Agreement and the Articles;

(e)      “Business Day” means any day except Saturday, Sunday or statutory holidays in British Columbia;

(f)      “Company” means Glucotel Scientific Inc.;

(g)      “Control” and the related terms “Controlling” and “Controlled by” , where used in connection with a corporation, means:

(i)     the right to exercise a majority of the votes which may be voted at a general meeting of such corporation; or

(ii)     the right to elect or appoint directly or indirectly a majority of the directors of such corporation or other persons who have the right to manage or supervise the management of the affairs and business of the corporation;

(h)      “Default” means an event where a Shareholder:

(i)     fails to observe, perform or carry out any of its obligations hereunder and such failure continues for days after the non-defaulting Shareholder has in writing demanded that such failure be cured;

(ii)     fails to take reasonable actions to prevent or defend assiduously any action or proceeding in relation to any of its Interest for seizure, execution or attachment or which claims possession, sale, foreclosure, the appointment of a receiver or receiver-manager of its assets, or forfeiture or termination, of or against any of the Interest of the Defaulting Shareholder and such failure continues for days after the non-defaulting Shareholder has in writing demanded that the same be taken or the Defaulting Shareholder fails to defend successfully any such action or proceeding;

(iii)     becomes a bankrupt or commits an act of bankruptcy or if a receiver or a receiver-manager of his, her or its assets is appointed or makes a proposal or an assignment for the benefit of creditors or otherwise; or

(iv)     fails to maintain in good standing with the Registrar of Companies and such failure continues for 10 days after the non-defaulting Shareholder has in writing demanded that such failure be cured;

(i)      “Defaulting Shareholder” means any Shareholder who is in Default;

(j)      “Encumbrance” means, whether or not registered or recorded, any and all:

(i)     mortgages, assignments of rent, liens, licenses, leases, charges, security interests, hypothecs, and pledges whether fixed or floating against property (whether real, personal, mixed, tangible or intangible), or conditional sales contracts or title retention agreements or equipment trusts or financing leases relating thereto, or any subordination to any right or claim of others in respect thereof;

(ii)     adverse claims existing, pending or, to the knowledge of the applicable Person, threatened;

(iii)     claims, interests and estates against or in property (whether real, personal, mixed, tangible or intangible) including easements, rights-of-way, servitudes or other similar rights in property granted to or reserved or taken by any Person or any Governmental Authority;

(iv)     any option or other right to acquire, or acquire any interest in, any property; and

(v)     any other security interest, lien, charge or encumbrance of whatsoever nature and kind and whether known or unknown;

(k)      “Governmental Authority” means any domestic or foreign government, whether federal, provincial, state, territorial, local, regional, municipal or other political jurisdiction, and any agency or authority, instrumentality, court, tribunal, board, commission, bureau, arbitrator, arbitration tribunal or other tribunal, or any quasi-governmental or other entity, insofar as it exercises a legislative, judicial, regulatory, administrative, expropriation or taxing power or function of or pertaining to government;

(l)     “ Holdco ” has the meaning ascribed to such term by Section 4.2;

(m)     “ Indemnitor ” has the meaning ascribed to such term by Section 3.6;

(n)      “Interest” means all the right, title and interest of a Shareholder in and to any of the Shares, any Shareholder Loans and any accrued interest thereon, any other right or claim a Shareholder may have against the Company as a shareholder and the Shareholder’s Interest in and to this Agreement;

(o)     “ notice ” has the meaning ascribed to such term by Section 9.1;

(p)      “Person” means an individual, corporation, limited liability company, firm, unincorporated organization, general or limited partnership, joint venture, trust, Governmental Authority or other entity or organization, whether or not recognized as a legal entity;

(q)      “Prime Rate” means that certain annual variable rate of interest published or declared by the Company’s main bank, or such other bank as may be appointed by the Shareholders from time to time as the Company’s main bank from time to

time, at its main branch in Las Vegas which is used to determine the interest rate it will charge for United States dollar loans made in the United States, and is designated by the Company’s main bank, or such other bank as may be appointed by the Shareholders from time to time as the Company’s main bank, as its Prime Rate;

(r)      “Pro Rata” means in accordance with the percentage Share ownership of each Shareholder determined by dividing the number of Shares held by each Shareholder respectively, by the total number of Shares held by all Shareholders;

(s)     “ Safe-Com ” means Safe-com GmbH & Co. KG;

(t)     “ SellCell ” means SELLCELL.NET;

(u)      “Shareholders” , at any time, means the Persons who are, at that time, the registered owners of one or more Shares as indicated in the Company’s central securities register and have become a party to this Agreement, and “ Shareholder ” means any one of them;

(v)      “Shareholder Loans” means at the relevant time any amounts advanced by a Shareholder together with any accrued but unpaid interest on an amount to the Company and which remains outstanding at such time;

(w)      “Shares” means the shares set out in Schedule A, together with all Shares issued by the Company in exchange or substitution therefor or in addition thereto;

(x)     “ Subscription Price ” means US$1,250,000.00;

(y)      “Subsidiary” means a corporation that a parent corporation Controls;

(z)     “ Technology Transfer Agreement ” has the meaning ascribed to such term by Recital B;

(aa)     “Third Party” means any Person other than those parties to this Agreement; and

(bb)     “Transfer” includes:

(i)     any direct or indirect sale, exchange, assignment, gift, bequest, disposition or other arrangement by which possession, legal title or beneficial ownership passes from one Person to another, or to the same Person in a different capacity other than a disposition by way of Encumbrance, or

(ii)     any disposition by way of option, right or privilege capable of becoming an agreement or option,

whether or not voluntarily and whether or not for value, and any agreement to effect any of the foregoing, and the words “Transferred” , “Transferring” and similar words have corresponding meanings.

1.2          The terms “this Agreement”, “hereof”, “herein”, “hereby”, “hereto”, and similar terms refer to this Agreement, including the Schedules hereto and any amendments hereto, and not to any particular Section, or other part of this Agreement.  References to particular Sections are to Sections of this Agreement unless another document is specified.

1.3          Unless otherwise provided, all dollar amounts referred to in this Agreement are in lawful money of the United States.

1.4          All accounting terms not defined in this Agreement will have those meanings generally ascribed to them in accordance with generally accepted accounting principles, consistently applied.

1.5          The headings appearing in this Agreement have been inserted for convenience of reference only and in no way define, limit, or enlarge the scope or meaning of the provisions of this Agreement.  All references to any party, whether a party to this Agreement or not, will be read with such changes in number and gender as the context or reference requires.

2.             CONDUCT OF THE AFFAIRS OF THE COMPANY

2.1          The Shareholders will vote their Shares so that the Board will be comprised of two directors and so that one nominee of each of the Shareholders is a director of the Company.  Subject to Section 2.2, if a position on the Board is open for any reason whatsoever, the Shareholder whose nominee formerly occupied such position will be entitled to nominate a new director to fill such vacancy. 

2.2          If a Shareholder is a Defaulting Shareholder or a Shareholder’s director nominee fails to vote and act as a director to ensure that the Company carries out its obligations under this Agreement, then the Shareholders will exercise their right as shareholders of the Company in accordance with the Articles and applicable laws and regulations to remove such Shareholder’s nominee from the Board and, at the option of the remaining directors, will either:

(a)     appoint or elect another individual in his or her place and such individual need not be a nominee of the Shareholder whose director nominee was removed in accordance with this Section 2.2; or

(b)     reduce the number of directors by one position and reduce the quorum required for a meeting of directors by one director.

2.3          Each Shareholder will vote or cause to be voted the Shares held or Controlled by it so as to give full effect to the provisions of this Agreement.

2.4          Unless otherwise provided herein, the conduct of the affairs of the Company will be governed in accordance with the Articles.  A quorum required for the transaction of Business at a meeting of the Board will be two directors.  If a quorum of directors is not present at a meeting of the Board, such meeting will be adjourned until the same time the following week and such number of directors who attend the succeeding meeting will constitute a quorum for the purposes of such meeting.

2.5          The officers will hold office at the pleasure of the directors.

2.6          The Shareholders agree that any major decisions involving the Company will be decided by consultation and unanimous resolution of all the directors of the Company.  Where a Shareholder is required by law to pass a resolution to give effect to a major decision of the directors, the Shareholders will consent to such written resolutions or vote their Shares in favor of such resolution in meetings of shareholders, as the case may be, to give effect to the decision of the directors on such major decisions. For the purposes of this Section 2.6, major decisions are:

(a)     the winding up or liquidation of the Company or any of its Subsidiaries;

(b)     the Transfer or other disposition of the undertaking of the Company, or any substantial part thereof, or any of its Subsidiaries;

(c)     any increase or reduction in the authorized share structure or the issued capital of the Company;

(d)     the consolidation, merger or amalgamation of the Company or any of its Subsidiaries with any other company, undertaking, association, partnership or entity;

(e)     the approval of the Company’s budget, a review of which will undertaken on a quarterly basis;

(f)     any material deviation from the Company’s budget;

(g)     any single capital expenditure of the Company or any of its Subsidiaries which is not included in the Company’s budget in excess of US$6,250.00;

(h)     any borrowing in excess of US$10,000.00 by the Company or any of its Subsidiaries;

(i)     any loan in excess of US$10,000.00 by the Company or any of its Subsidiaries to any Person;

(j)     any transaction out of the ordinary course of the Business of the Company;

(k)     any contract, or amendment thereof, between the Company and any Shareholder or the spouse and/or children of such Shareholder and any other Person with whom the Shareholder does not deal with at “arm’s length” as that term is defined by applicable laws and regulations;

(l)     any agreement by the Company which restricts or purports to restrict, or which permits any other party to accelerate or demand the payment of any indebtedness of the Company upon, the sale, Transfer or other disposition by a Shareholder of any of its Interest;

(m)     the requirement of any further capital contributions from the Shareholders beyond those set out in Section 3.1;

(n)     the requirement of any Shareholder Loans pursuant to Section 3.4 ;

(o)     the appointment and removal of Auditors;

(p)     any material change in the Business;

(q)     the creation of a Subsidiary;

(r)     any payment to the Shareholders, except as otherwise provided for in this Agreement; and

(s)     any other decision as may be designated as a major decision by the Shareholders by special resolution from time to time,

provided that nothing in this Section 2.6 will be construed so as to fetter the discretion of the Board or require any director to act in a particular manner with respect to any of the foregoing matters.

2.7          The Shareholders will cause the Company to keep complete and accurate books of account and other records of the Company showing assets, liabilities, costs, expenditures, receipts, profits and losses of the Company, all in accordance with generally accepted accounting principles, consistently applied, which books and records will include and provide such other matters as the Shareholders may determine or as the Auditors may deem reason