SHARE EXCHANGE
AGREEMENT
AGREEMENT dated as of January 12, 2009 by and among
Econometrics Inc., a Delaware corporation
(“Econometrics”) and Wang Shuxiang, Zhen Yilin, Yang
An, and Kong Ruifen (collectively, the
“Shareholders”).
WHEREAS , the Shareholders own all of the issued and
outstanding capital stock of Tibet Medicine, Inc., a Delaware
corporation (“Tibet Medicine”); and
WHEREAS , Tibet Medicine is the registered owner of the
registered capital of Beijing Tibet Health Consulting Co., Ltd.
(“Tibet Health Consulting”), a Wholly Foreign
Owned Entity organized under the laws of the People’s
Republic of China; and
WHEREAS, Tibet Health Consulting has control over the
business of Leling Jinzanghuang Biotech Co. Ltd., a limited
liability company organized under the laws of The People’s
Republic of China (“Jinzanghuang”), the relationship
between them being generally identified as “entrusted
management”; and
WHEREAS , the Shareholders desire to transfer the capital
stock of Tibet Medicine to Econometrics, and Econometrics desires
to acquire said shares.
NOW, THEREFORE , it is agreed:
1.
Definitions . As used herein, the following terms shall
have the meanings set forth below:
a.
“Applicable Law” means any
domestic or foreign law, statute, regulation, rule, policy,
guideline or ordinance applicable to the businesses or corporate
existence of Econometrics, Tibet Medicine, Tibet Health Consulting
or Jinzanghuang.
b.
“GAAP” means generally
accepted accounting principles in the United States of America as
promulgated by the American Institute of Certified Public
Accountants and the Financial Accounting Standards Board or any
successor institutes concerning the treatment of any accounting
matter.
c.
“Lien” means, with respect to
any property or asset, any mortgage, Lien, pledge, charge, security
interest, claim, encumbrance, royalty interest, any other adverse
claim of any kind in respect of such property or asset, or any
other restrictions or limitations of any nature
whatsoever.
d.
“Tax” (and, with correlative
meaning, “Taxes” and “Taxable”)
means:
(i) any income,
alternative or add-on minimum tax, gross receipts tax, sales tax,
use tax, ad valorem tax, transfer tax, franchise tax, profits
tax, license tax, withholding tax, payroll tax,
employment tax, excise tax, severance tax,
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stamp tax, occupation tax, property tax,
environmental or windfall profit tax, custom, duty or other tax,
impost, levy, governmental fee or other like assessment or charge
of any kind whatsoever together with any interest or any penalty,
addition to tax or additional amount imposed with respect thereto
by any governmental or Tax authority responsible for the imposition
of any such tax (domestic or foreign), and
(ii) any liability for the payment
of any amounts of the type described in clause (i) above as a
result of being a member of an affiliated, consolidated, combined
or unitary group for any Taxable period, and
(iii) any liability for the payment
of any amounts of the type described in clauses (i) or
(ii) above as a result of any express or implied obligation to
indemnify any other person.
e.
“Tax Return” means any
return, declaration, form, claim for refund or information return
or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
2.
Share Exchange .
a.
On the Closing Date (defined herein), the
Shareholders shall transfer and assign to Econometrics all of the
issued and outstanding capital stock of Tibet Medicine .
The Shareholders represent and warrant that upon
delivery to Econometrics of certificates for said shares, duly
endorsed for transfer, all right, title and interest in said shares
will be transferred to Econometrics free of Liens, claims and
encumbrances.
b.
On the Closing Date, Econometrics shall
deliver certificates for a total of 36,401,462 shares of its common
stock (the “Exchange Shares”) as follows:
·
36,250,462 shares to Wang Shuxiang or his
assignees;
·
50,500 shares to Zhen Yilin or his
assignees
·
50,500 shares to Yang An or his
assignees; and
·
50,000 shares to Kong Ruifen or his
assignees.
Econometrics warrants that the Exchange
Shares, when so issued, will be duly authorized, fully paid and
non-assessable.
c.
The parties intend that the
exchange of shares described above shall qualify as a tax-free
exchange under Section 351 of the United States Internal Revenue
Code. The parties further intend that the issuance of the
common stock by Econometrics to the Shareholders shall be exempt
from the provisions of Section 5 of the Securities Act of 1933
pursuant to Section 4(2) of said Act.
3.
Closing . The Closing of the transactions contemplated
by this Agreement ("Closing") shall take place at the offices of
Robert Brantl, counsel for Econometrics, simultaneously with the
execution of this Agreement (the “Closing
Date”).
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4.
Warranties and Representations of the
Shareholders. In
order to induce Econometrics to enter into this Agreement and to
complete the transaction contemplated hereby, the Shareholders,
jointly and severally, warrant and represent to Econometrics
that:
a.
Organization and Standing –
Tibet Medicine . Tibet
Medicine is a corporation duly organized, validly existing and in
good standing under the laws of the Delaware and has full power and
authority to carry on its business as now conducted. The copies of
the Certificate of Incorporation and Bylaws of Tibet Medicine
previously delivered to Econometrics are true and complete as of
the date hereof.
b.
Capitalization – Tibet
Medicine . Tibet
Medicine’ entire authorized capital stock consists of ten
million (10,000,000) shares of common stock, $.0001 par value, of
which 3,465 shares are issued and outstanding. There are no
other voting or equity securities authorized or issued, nor any
authorized or issued securities convertible into equity securities,
and no outstanding subscriptions, warrants, calls, options, rights,
commitments or agreements by which Tibet Medicine or the
Shareholders are bound, calling for the issuance of any additional
equity securities of Tibet Medicine. All of the outstanding
shares of Tibet Medicine have been duly authorized and validly
issued and are fully paid and non-assessable and were not issued in
violation of any preemptive rights or any Applicable Law.
c.
Ownership of Tibet Medicine
Shares . The Shareholders are
the sole owners of the outstanding shares of Tibet Medicine common
stock. By the transfer of the shares of Tibet Medicine common
stock to Econometrics pursuant to this Agreement, Econometrics will
acquire good and marketable title to 100% of the capital stock of
Tibet Medicine, free and clear of all Liens, encumbrances and
restrictions of any nature whatsoever, except by reason of the fact
that the Tibet Medicine Ordinary Shares will not have been
registered under the Securities Act of 1933, or any applicable
state securities laws.
d.
Business Operations and Liabilities
– Tibet Medicine . Tibet
Medicine has conducted no business operations other than the
acquisition of 100% ownership of the registered capital of Tibet
Health Consulting. Tibet Medicine has no liabilities other
than liabilities incurred in the ordinary course that do not exceed
$ 1,000 on the Closing Date.
e.
Business Operations and Liabilities
– Tibet Health Consulting . Prior to January 4, 2009, Tibet Health
Consulting had conducted no business operations. Since January 4,
2009, Tibet Medicine has conducted business operations described in
the Entrustment Management Agreements between Tibet Health
Consulting and Jinzanghuang.
f.
Organization and Standing –
Jinzanghuang .
Jinzanghuang is a corporation duly organized, validly
existing and in good standing under the laws of the People’s
Republic of China. Jinzanghuang has all of the government
licenses and permits necessary to carry on its business as now
conducted, to own and operate its assets, properties and business,
and to carry out the transactions contemplated by this agreement.
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g.
Entrusted Management Agreements
between Tibet Health Consulting and Jinzanghuang
. On January 4, 2009 Tibet Health
Consulting, Jinzanghuang and the registered equity holders in
Jinzanghuang signed four agreements, including Exclusive Technical
Service and Business Consulting Agreement, Share Pledge Agreement,
Call Option Agreement, and Proxy Agreement (the “Entrusted
Management Agreements”). The purpose of these agreements is
to transfer to Tibet Health Consulting full responsibility for the
management of Jinzanghuang, as well as the financial benefits and
liabilities that arise from the business of Jinzanghuang.
Each of the Entrusted Management Agreements is and will be
effective with no term limitation unless both parties to the
agreement unanimously agree in writing to terminate it in advance.
Neither Jinzanghuang nor Tibet Health Consulting has defaulted in
any of the agreements, and all of the agreements remain in full
force and effect.
h.
Financial Statements
. The Shareholders have delivered
to Econometrics (i) the financial statement of Jinzanghuang from
inception to November 30, 2008 (the “Jinzanghuang Financial
Statements”), and (ii) the financial statement of Tibet
Medicine for the period from inception to November 30, 2008 (the
“Tibet Medicine Financial Statements”). The
Jinzanghuang Financial Statement and the Tibet Medicine Financial
Statements have been prepared i
