-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WORBxXrXVYlyfEIqqTlwo/F3pcxRfVPRte3nUCTpoi+i8bCg6M7TlbqzZEW3Y9/B SQ7iLIT0nmqDeuOt872zgQ== 0001121781-08-000095.txt : 20080303 0001121781-08-000095.hdr.sgml : 20080303 20080303115443 ACCESSION NUMBER: 0001121781-08-000095 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20080303 DATE AS OF CHANGE: 20080303 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Lor Stewart Shiang CENTRAL INDEX KEY: 0001408933 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: BUSINESS PHONE: 532-8463-0577 MAIL ADDRESS: STREET 1: JPAK GROUP,INC.QINGDAO RENMIN PRINTING STREET 2: NO. 15, XINGHUA ROAD CITY: QINGDAO, SHANDONG PROVINCE STATE: F4 ZIP: 266401 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: VISCORP, INC. CENTRAL INDEX KEY: 0001362718 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 204857782 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-83507 FILM NUMBER: 08658509 BUSINESS ADDRESS: STREET 1: 11TH FLOOR, S. TOWER, JINJIANG TIMES STREET 2: GARDEN,107 JIN LI ROAD WEST CITY: CHENGDU, P.R. STATE: F4 ZIP: 610072 BUSINESS PHONE: 0086-028-86154737 MAIL ADDRESS: STREET 1: 11TH FLOOR, S. TOWER, JINJIANG TIMES STREET 2: GARDEN,107 JIN LI ROAD WEST CITY: CHENGDU, P.R. STATE: F4 ZIP: 610072 SC 13D 1 stewartlor13d3308.htm STEWART LOR Stewart Lor SC 13D 3/3/08

SCHEDULE 13D


Under the Securities Exchange Act of 1934

(Amendment No._____)


VISCORP, INC.

 (Name of Issuer)

Common Stock, $.001 par value
(Title of Class of Securities)

92832T107
(CUSIP Number)


Stewart Shiang Lor

11th Floor, South Tower, Jinjiang Times Garden, 107 Jin Li Road West, Chengdu, Sichuan Province, the People’s Republic of China.

Telephone: (852) 3583 3340; Fax: (852) 3585 6021

______

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)


March 3, 2008

 (Date of Event which Requires Filing of this Statement)



If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ] .


CUSIP Number __________
-----------------------------------------------------------------------------------------------

(1)

Name of Reporting Persons:    Stewart Shiang Lor

S.S. or I.R.S. Identification Nos. of above persons:

-----------------------------------------------------------------------------------------------

(2)

Check the Appropriate Box if a Member of a Group (See Instructions)

(a)  

(b)

-----------------------------------------------------------------------------------------------

(3)  SEC Use Only


-----------------------------------------------------------------------------------------------(4)  Source of Funds (See Instructions)  OO

-----------------------------------------------------------------------------------------------

(5)

Check if Disclosure of Legal Proceedings

is required Pursuant to Items 2(d) or 2(e)




-----------------------------------------------------------------------------------------------

(6)  Citizenship or Place of Organization:  United States


-----------------------------------------------------------------------------------------------

Number of Shares

(7)  Sole Voting Power: 83.24%

Beneficially Owned

By Each Reporting

(8)  Shared Voting Power:

Person With

(9) Sole Dispositive Power:  83.24%


(10) Shared Dispositive Power:

-----------------------------------------------------------------------------------------------

(11) Aggregate Amount Beneficially Owned by

       Each Reporting Person:  12,142,327

-----------------------------------------------------------------------------------------------

(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (see

        Instructions).

-----------------------------------------------------------------------------------------------

(13) Percent of Class Represented by Amount in Row (11): 83.24%


-----------------------------------------------------------------------------------------------

(14) Type of Reporting Person (See Instructions): IN



Item 1.  Security and Issuer.


This statement relates to the common stock, $0.001 par value per share (the "Common Stock"), of Viscorp, Inc., a Delaware corporation (the “Company”).


The Company's . principal offices are located at 11th Floor, South Tower, Jinjiang Times Garden, 107 Jin Li Road West, Chengdu, Sichuan Province, the People’s Republic of China.




Item 2.  Identity and Background.


 

(a)

This statement (this "Statement") is being filed by Stewart Shiang Lor, (referred to herein as Stewart Lor or Mr. Lor), the sole shareholder and director of Time Poly Management, Ltd., a British Virgins Islands company (“Time Poly”) and Cmark Capital Co., Ltd., an exempted company organized under the laws of the Cayman Islands (“Cmark”).  Time Poly owns 9,976,824 shares of Viscorp’s voting stock and Cmark owns 2,165,503 shares of Viscorp’s voting stock. Mr. Lor however, has sole voting and dispositive power with respect to such shares.  

(b)

Stewart Lor’s principal place of business is located at 11th Floor, South Tower, Jinjiang Times Garden, 107 Jin Li Road West, Chengdu, Sichuan Province, the People’s Republic of China

(c)

Stewart Lor’s principal occupation is as an investment consultant, which he conducts at the following companies: Cmark Capital Co., Ltd. and Time Poly Management, Ltd.

(d)

During the past five years, Mr. Lor has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e)

 During the past five years, Mr. Lor has not  been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was the subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal and state securities laws of findings any violation with respect to such laws.

(f)

Stewart Lor is a citizen of the United States of America.


Item 3.  Source and Amount of Funds or Other Consideration.


The securities disclosed herein were acquired through a share exchange transaction between the Issuer, Raygere Limited, a company organized under the laws of the British Virgin Islands (“Raygere”), and Time Poly, Happyvale Limited and Fartop Management Limited, each a BVI company, and Cmark (collectively, the “Raygere Stockholders”), pursuant to which all the shares of Raygere were transferred to the Issuer and Raygere became the Issuer’s wholly-owned subsidiary (the “Share Exchange”).  


Item 4. Purpose of Transaction




Time Poly and Cmark received the shares disclosed herein to affect the Share Exchange.  Prior to the Share Exchange, Time Poly and Cmark owned 78% and 16.93%, respectively of Raygere’s equity.    



Item 5.  Interest in Securities of the Issuer


(a)

Stewart Lor beneficially owns 12,142,327 (the “Shares”) of the 14,587,200  outstanding shares of the Company.

(b)

Mr. Lor has sole power to vote or to direct the vote and sole power to dispose or direct the disposition of the Shares.

(c)

No transactions in the class of securities reported were effected during the past sixty days or since the most recent filing of a Schedule 13(D).

(d)

No other person is known to the filer to have the right to receive or the power to direct the receipt of dividends from, or proceeds from the sale of, such securities.  However, all of the shares Mr. Lor holds in Time Poly, which represents 100% of the equity interest in Time Poly, are subject to that certain Share Transfer Agreement dated January 16, 2008, with certain members of management of our subsidiary, Chengdu Tianyin Pharmaceutical Co., Ltd., a corporation organized and existing under the laws of the People’s Republic of China, after which such persons will have the voting, dispositive and investment power over Time Poly.

(e)

n/a


Item 6.  Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.


On January 16, 2008, pursuant to a Share Transfer Agreement, Mr. Lor issued stock options to the executives officers and management team of Chengdu Tianyin Pharmaceutical Co., Ltd., (the “Executives”) the Issuer’s subsidiary located in Chengdu, Sichuan Province of the People’s Republic of China that operates the Issuer’s business.  Pursuant to the agreement, Mr. Lor granted to the Executives the option to acquire all of his shares of Time Poly.  Under the terms of the Share Transfer Agreement, the Executives will have the right and the option to purchase 100% of the outstanding shares of capital stock of Time Poly at any time through November 15, 2008.  Although the Executives may exercise their options at any time during the term of the option, the exercise price of the options depends upon the fulfilment of certain performance targets based on the future revenues of Chengdu Tianyin , as set forth in the Share Transfer Agreement.  The exercise prices of the options for these shares range from $1,293 to $660,975.  The options vest on a one-third basis per quarter for three specified quarters and may be exercised in whole or in part after Chengdu Tianyin’s revenues for such quarter is determined, which shall not be later than 45 days following the applicable fiscal quarter.  


As part of the Share Exchange, Time Poly and Cmark entered into a Share Escrow Agreement pursuant to which they placed 1,880,021 and 408,061 shares, respectively of Common Stock they own (the “Escrowed Shares”) into escrow for the



benefit of the investors of the private financing the Issuer completed on January 25, 2008, in the event the Issuer fails to achieve certain net income levels in the next two fiscal years.  Depending upon the level of achievement, Time Poly and Cmark may not get back any of the Escrowed Shares.





Item 7.  Material to Be Filed as Exhibits.


(1)

Share Transfer Agreement between Stewart Shiang Lor and Transferees dated January 16, 2008.

(2)

Share Escrow Agreement dated January 25, 2008.

(3)

Share Exchange Agreement dated January 16, 2008.




Signature


After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.


Date:  March 3, 2008



Signature: /s/  Stewart Lor



Name/Title: Stewart Lor, Director




 EX-10.3 2 shareexchange.htm SHARE EXCHANGE AGREEMENT Viscorp, Inc. Share Exchange Agreement







SHARE EXCHANGE AGREEMENT



by and among


Raygere Limited,

a British Virgin Islands company


and


the Shareholders of

Raygere Limited,


on the one hand;


and


Viscorp Inc.,

a Delaware corporation,


and


the Majority Shareholders of Viscorp, Inc.,


on the other hand



January   16, 2008





SHARE EXCHANGE AGREEMENT


This Share Exchange Agreement ("Agreement"), dated as of January 16, 2008, is made and entered into among VisCorp, Inc., a Delaware corporation (“VSCO”), Raygere Limited ("Tianyin"), a British Virgin Islands corporation, the owners of record of all of the issued and outstanding stock of Tianyin as listed in Exhibit A (the “Shareholders”) and Charles Driscoll (the "Shell Indemnifying Shareholder").


RECITALS


WHEREAS, the Board of Directors of VSCO has adopted resolutions approving VSCO’s acquisition of shares of Tianyin (the “Acquisition”) upon the terms and conditions hereinafter set forth in this Agreement;


WHEREAS, each Shareholder owns that number of shares of common stock of Tianyin as set forth opposite such Shareholder’s name in Column I on Schedule 1.1(a) attached hereto (collectively, the “Tianyin Shares”);


WHEREAS, the Shareholders own, collectively, an amount of shares of common stock of Tianyin, constituting 100% of the issued and outstanding capital stock of Tianyin, and the Shareholders desire to sell their respective portion of the Tianyin Shares pursuant to the terms and conditions of this Agreement;


 

WHEREAS, the VSCO Shareholders hold an amount of shares of VSCO common stock which represents at least a majority of the issued and outstanding capital stock of VSCO;


WHEREAS, the VSCO Shareholders will enter into this Agreement for the purpose of making certain representations, warranties, covenants, indemnifications and agreements;


WHEREAS, simultaneously with the consummation of the transactions contemplated hereby, VSCO shall enter into a Securities Purchase Agreement with the investors named therein pursuant to which the investors agree to purchase Units (the “Securities Purchase Agreement”) consisting of (a) 10% Convertible Notes, convertible into shares of VSCO’s preferred stock; (b) five (5) year warrants to purchase shares of VSCO’s common stock; and (c) seven (7) year warrants to purchase shares of VSCO’s common stock (the “Financing”);


WHEREAS, it is intended that the terms and conditions of this Agreement comply in all respects with Section 351 of the United States Internal Revenue Code (the “Code”) and the regulations corresponding thereto, so that the Acquisition shall qualify as a tax free reorganization under the Code;


NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:


ARTICLE 1

THE ACQUISITION


1.1

The Acquisition. Upon the terms and subject to the conditions hereof, at the Closing (as hereinafter defined) the Shareholders will sell, convey, assign, transfer and deliver to VSCO one or more stock certificates representing the Tianyin  Shares, and as consideration for the acquisition of the Tianyin Shares, VSCO will issue to each Shareholder, in exchange for such Shareholder’s pro rata portion of the Tianyin Shares one or more stock certificates representing the number of shares of VSCO Common Stock set forth opposite such Shareholder’s name on Schedule 1.1(a) attached hereto (collectively, the “VSCO Shares”).  The VSCO Shares issued shall equal 87.68% of the outstanding shares of VSCO common stock





at the time of Closing.     


1.2

Closing. The closing of the Acquisition (the “Closing”) shall take place on or before January 30, 2008, or on such other date as may be mutually agreed upon by the parties.  Such date is referred to herein as the “Closing Date.”  With the exception of any stock certificates which must be in their original form, any copy, fax, e-mail or other reliable reproduction of the writing or transmission required by this Agreement or any signature required thereon may be used in lieu of an original writing or transmission or signature for any and all purposes for which the original could be used, provided that such copy, fax, e-mail or other reproduction is a complete reproduction of the entire original writing or transmission or original signature, and the originals are promptly delivered thereafter.  


1.3

Taking of Necessary Action; Further Action.   If, at any time after the Closing, any further action is necessary or desirable to carry out the purposes of this Agreement, the Shareholders, Tianyin, VSCO Shareholders, and/or VSCO will take all such lawful and necessary action.



ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF TIANYIN


Tianyin hereby represents and warrants to VSCO as follows:


2.1

Organization. Tianyin has been duly incorporated, validly existing as a company in the British Virgin Islands, respectively, and is good standing under the laws of its jurisdiction of incorporation, and have the requisite power to carry on its business as now conducted.


2.2

Capitalization. The authorized capital stock of Tianyin consists of 50,000 shares of common stock, $1.00 par value, of which at the Closing, 50,000 shares have been issued and outstanding. All of the issued and outstanding shares of capital stock of Tianyin, as of the Closing, are duly authorized, validly issued, fully paid, non-assessable and free of preemptive rights.  There are no voting trusts or any other agreements or understandings with respect to the voting of Tianyin’s capital stock.  Except as set forth on Schedule 2.2, there are no agreements purporting to restrict the transfer of the Tianyin Shares, nor any other voting agreements, voting trusts or other arrangements restricting or affecting the voting of the Tianyin Shares.  


2.3

Certain Corporate Matters. Tianyin is duly qualified to do business as a corporation and is in good standing in each jurisdiction in which the ownership of its properties, the employment of its personnel or the conduct of its business requires it to be so qualified, except where the failure to be so qualified would not have a material adverse effect on its financial condition, results of operations or business. Tianyin has full corporate power and authority and all authorizations, licenses and permits necessary to carry on the business in which it is engaged and to own and use the properties owned and used by it.


2.4

Authority Relative to this Agreement.  Tianyin has the requisite power and authority to enter into this Agreement and to carry out its obligations hereunder.  The execution, delivery and performance of this Agreement by Tianyin and the consummation by Tianyin of the transactions contemplated hereby have been duly authorized by the Board of Directors of Tianyin and no other actions on the part of Tianyin is necessary to authorize this Agreement or the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Tianyin and constitutes a valid and binding agreement of Tianyin, enforceable against Tianyin in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity.




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2.5

Consents and Approvals; No Violations.  Except for applicable requirements of federal securities laws and state securities or blue-sky laws, no filing with, and no permit, authorization, consent or approval of, any third party, public body or authority is necessary for the consummation by Tianyin of the transactions contemplated by this Agreement.  Neither the execution and delivery of this Agreement by Tianyin nor the consummation by Tianyin of the transactions contemplated hereby, nor compliance by Tianyin with any of the provisions hereof, will (a) conflict with or result in any breach of any provisions of Tianyin’s charter or Bylaws, (b) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under, any of the terms, conditions or provisions of any note , bond, mortgage, indenture, license, contract, agreement or other instrument or obligation to which Tianyin or any Subsidiary (as hereinafter defined)  is a party or by which they any of their respective properties or assets may be bound or (c) violate any order, writ, injunction, decree, statute, rule or regulation applicable to Tianyin or any Subsidiary, or any of their respective properties or assets, except in the case of clauses (b) and (c) for violations, breaches or defaults which are not in the aggregate material to Tianyin or any Subsidiary taken as a whole.  For purposes of this Agreement the term “material” shall mean $10,000 or more greater.


2.6

Books and Records. The books and records of Tianyin delivered to the VSCO Shareholders prior to the Closing fully and fairly reflect the transactions to which Tianyin is a party or by which it or its properties are bound and there shall be no material difference between the unaudited financials of Tianyin given to VSCO and the actual reviewed US GAAP results of Tianyin for the fiscal year ended June 30, 2006.


2.7

Intellectual Property.  Tianyin does not have any knowledge of any claim that, or inquiry as to whether, any product, activity or operation of Tianyin infringes upon or involves, or has resulted in the infringement of, any trademarks, trade-names, service marks, patents, copyrights or other proprietary rights of any other person, corporation or other entity; and no proceedings have been instituted, are pending or are threatened.


2.8

Litigation.  Neither Tianyin nor any of their subsidiaries are subject to any judgment or order of any court or quasi-judicial or administrative agency of any jurisdiction, domestic or foreign, nor is there any charge, complaint, lawsuit or governmental investigation pending against Tianyin. Neither Tianyin nor any of itssubsidiaries is a plaintiff in any action, domestic or foreign, judicial or administrative.  There are no existing actions, suits, proceedings against or investigations of Tianyin nor any of their subsidiaries, and neither company knows of no basis for such actions, suits, proceedings or investigations. There are no unsatisfied judgments, orders, decrees or stipulations affecting either Tianyin or any of their subsidiaries or to which Tianyin or any of their subsidiaries is a party.


2.9

Legal Compliance. To the best knowledge of Tianyin, after due investigation, no claim has been filed against Tianyin alleging a violation of any applicable laws and regulations of foreign, federal, state and local governments and all agencies thereof. Tianyin holds all of the material permits, licenses, certificates or other authorizations of foreign, federal, state or local governmental agencies required for the conduct of their respective businesses as presently conducted.


2.10

Contracts.  Tianyin will have delivered to VSCO prior to the Closing copies of each and every material agreements of Tianyin not made in the ordinary course of business.  All of the foregoing are referred to as the “Contracts.”   The copies of each of the Contracts delivered are accurate and complete.  Each Contract is in full force and effect and constitutes a legal, valid and binding obligation of, and is legally enforceable against, the respective parties thereto.  There is no material default with respect to any such contract which will give rise to liability in respect thereof on the part of Tianyin or the other parties thereto.  No notice of default or similar notice has been given or received by Tianyin under any of such contracts.  



4






2.11

Disclosure. The representations and warranties and statements of fact made by Tianyin in this Agreement are, as applicable, accurate, correct and complete, and will remain so at the time of Closing, and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained herein not false or misleading.


2.12

Due Diligence.  Tianyin has had the opportunity to perform all due diligence investigations of VSCO and its business as Tianyin has deemed necessary or appropriate and to ask all questions of the officers and directors of VSCO that Tianyin wished to ask, and Tianyin has received satisfactory answers to all of its questions regarding VSCO.  Tianyin has had access to all documents and information about VSCO and has reviewed sufficient information to allow it to make the satisfactory evaluation on the merits and risks of the transactions contemplated by this Agreement.  Notwithstanding the foregoing, nothing herein shall derogate from or otherwise modify the representations and warranties of VSCO set forth in this Agreement, on which each of the Tianyin Shareholders have relied in making an exchange of his Shares of Tianyin for the shares of VSCO Common Stock.


2.13.

Outstanding Obligations.  There are no outstanding obligations of Tianyin or its Subsidiaries to repurchase, redeem or otherwise acquire any of their respective shares, and no party has the right to acquire any shares of Tianyin except for the shareholders identified in Schedule 1.1(a), and only to the extent set forth such Schedule.  


2.14

Adverse Effects.  Since September 30, 2007, Tianyin has not experienced or suffered any Material Adverse Effect.


2.15.

Liabilities.  Except as indicated in the financial statements and those incurred in the ordinary business hereto, neither Tianyin nor any of its Subsidiaries has incurred any external liabilities, obligations, claims or losses (whether liquidated or unliquidated, secured or unsecured, absolute, accrued, contingent or otherwise) which, individually or in the aggregate, are not reasonably likely to have a Material Adverse Effect.


2.16.

Material Events.  Except as set forth on Schedule 2.16, starting from September 30, 2007 and ending on the date this Agreement is executed, no material event exists with respect to Tianyin or its Subsidiaries or their respective businesses, properties, operations or financial condition, which has not been disclosed to in writing as of the date of this Agreement.


2.17

Indebtedness.  Schedule 2.17 sets forth as of a recent date all outstanding secured and unsecured Indebtedness of Tianyin or any subsidiary, or for which Tianyin or any subsidiary has commitments.  For the purposes of this Agreement, “Indebtedness” shall mean (a) any liabilities for borrowed money or amounts owed in excess of $100,000 (other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of Indebtedness of others, whether or not the same are or should be reflected in Tianyin’s balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (c) the present value of any lease payments in excess of $25,000 due under leases required to be capitalized in accordance with GAAP.  Except as set forth in Schedule 2.17, neither Tianyin nor any subsidiary is in default with respect to any Indebtedness.


2.18.  Property.  Tianyin and each Subsidiary has the right to use all of its real property and the personal property reflected in the Financial Statements, free and clear of any mortgages, pledges, charges, liens, security interests or other encumbrances, except to the extent that such mortgages, pledges, charges, liens, security interests or other encumbrances, individually or in the aggregate, do not cause a Material Adverse Effect.  All said leases of Tianyin and each of its Subsidiaries are valid and subsisting and in full force and effect.    



5






2.19

Regulations.  Except as set forth on Schedule 2.19, the business of Tianyin and its Subsidiaries has been and is presently being conducted in accordance with all applicable governmental laws, rules, regulations and ordinances. Tianyin and each of its Subsidiaries have all permits, licenses, consents and the authorizations and approvals in its country required in the governmental regulations necessary for the conduct of its business as now being conducted by it.


2.20

Environmental Compliance.  Except as set forth on Schedule 2.20, Tianyin  and each of its Subsidiaries are in material compliance with applicable environmental requirements in the operation of their respective business, except to the extent that any non-compliance, individually or in the aggregate, does not cause a Material Adverse Effect.  


2.21

Adverse Interest.  No current officer, director, affiliate or person known to Tianyin to be the record or beneficial owner in excess of 5% of Tianyin’s common stock, respectively, or any person known to be an associate of any of the foregoing is a party adverse to Tianyin or has a material interest adverse to Tianyin in any material pending legal proceeding.


2.22

Subsidiaries and Investments.  


(a)

Except as set forth in Schedule 2.22(a), Tianyin does not own any capital stock, has any interest of any kind nor has any agreement or commitment to purchase any interest, whatsoever in any corporation, partnership, or other form of business organization (any such organization is referred to as a “Subsidiary”).


(b)

2.22(b) sets forth true and complete copies of the charter of each Subsidiary, as well as any limited liability company agreement, operating agreement or shareholder agreement relating to such Subsidiary, and any acquisition agreement relating to any Subsidiary.  All corporate or other action that has been taken by any Subsidiary has been duly authorized and does not conflict with or violate any provision of its charter, bylaws or other organizational documents.


(c)

Each Subsidiary (i) is duly organized and validly existing under the laws of its jurisdiction of organization, (ii) has all requisite and necessary power and authority to own, operate or lease those assets or properties which are owned, operated or leased by it and to conduct its business as it has been and currently is being conducted, (iii) is qualified to do business in all jurisdictions where the failure to be so qualified would have a material adverse effect on its business.


(d)

Except as set forth in Schedule 2.22(d), all outstanding shares of capital stock or other ownership interests of each Subsidiary are validly issued, fully paid, nonassessable and free of preemptive rights and are owned (either directly or indirectly) by Tianyin without any encumbrances.


(e)

Except as set forth in Schedule 2.22(e), there are no outstanding securities convertible into or exchangeable for the capital stock of or other equity interests in any Subsidiary and no outstanding options, rights, subscriptions, calls commitments, warrants or rights of any character for Tianyin or any Subsidiary or any other person or entity to purchase, subscribe for or to otherwise acquire any shares of such stock or other securities of any Subsidiary.  


(f)

Except as set forth in Schedule 2.22(f), there are no outstanding agreements affecting or relating to the voting, issuance, purchase, redemption, repurchase or transfer of any capital stock of or other equity interests in any Subsidiary.


(g)

Each Subsidiary’s stock register or similar register of ownership has complete and



6





accurate records indicating the following: (i) the name and address of each person or entity owning shares of capital stock or other equity interest of the Subsidiary and (ii) the certificate number of each certificate evidencing shares of capital stock or other equity interest issued by the Subsidiary, the number of shares or other equity interests evidenced by each such certificate, the date of issuance of such certificate, and, if applicable, the date of cancellation.  Copies of same have been made available to VSCO.



2.23

Material Adverse Effect.  For the purposes of Tianyin of this Agreement, "Material Adverse Effect" means any adverse effect on the business, operations, properties, prospects, or financial condition of either Tianyin or either of their Subsidiaries (if any) and/or on any condition, circumstance, or situation that could result in litigation, claims, disputes or property loss in excess of US$250,000 in the future, or that would prohibit or otherwise materially interfere with the ability of any other party to this Agreement to perform any of its obligations under this Agreement in any material respect.  


ARTICLE 3

REPRESENTATIONS AND WARRANTIES

OF THE SHAREHOLDERS


The Shareholders hereby represent and warrant to VSCO as follows:


3.1

Ownership of the Tianyin Shares.  Each Shareholder owns, beneficially and of record, good and marketable title to the Tianyin Shares set forth opposite such Shareholder’s name in Column I on Schedule 1.1(a) attached hereto, free and clear of all security interests, liens, adverse claims, encumbrances, equities, proxies, options or shareholders’ agreements. Each Shareholder represents that such person has no right or claims whatsoever to any shares of capital stock, other than shares listed across such Shareholder on Schedule 1.1(a) and does not have any options, warrants or any other instruments entitling such Shareholder to exercise to purchase or convert into shares of capital stock.  The Shareholders have full right, power and authority to sell, transfer and deliver the Tianyin Shares, and at the Closing, the Shareholders will convey to VSCO good and marketable title to the Tia nyin Shares, free and clear of any security interests, liens, adverse claims, encumbrances, equities, proxies, options, shareholders’ agreements or restrictions.  


3.2

Authority Relative to this Agreement.  This Agreement has been duly and validly executed and delivered by each Shareholder and constitutes a valid and binding agreement of each Shareholder, enforceable against each Shareholder in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity.  


3.3

Restricted Securities. Each Shareholder is acquiring the VSCO Shares for his/her own account (and not for the account of others) for investment and not with a view to the distribution therefor.  Each Shareholder acknowledges that the VSCO Shares will not be registered pursuant to the Securities Act of 1933, as amended (the “Securities Act”) or any applicable state securities laws, that the VSCO Shares will be characterized as “restricted securities” under federal securities laws, and that under such laws and applicable regulations the VSCO Shares cannot be sold or otherwise disposed of without registration under the Securities Act or an exemption therefrom.  In this regard, each Shareholder is familiar with Rule 144 promulgated under the Securities Act, as currently in effect, and understands the resale limitations imposed thereby and by the Securities Act; and, each Sha reholder agrees not to sell or otherwise dispose of his/her VSCO Shares without such registration or an exemption therefrom.  


3.4

Accredited Investor.  Each Shareholder is an “Accredited Investor” as that term is defined in Rule 501 of Regulation D promulgated under the Securities Act.  Each Shareholder is able to bear the



7





economic risk of acquiring the VSCO Shares pursuant to the terms of this Agreement, including a complete loss of such Shareholder’s investment in the VSCO Shares.


3.5

Legend. Each Shareholder acknowledges that the certificate(s) representing such Shareholder’s pro rata portion of the VSCO Shares shall each conspicuously set forth on the face or back thereof a legend in substantially the following form:


THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

3.6

Independent Nature of Shareholders.  Each Shareholder is acquiring the VSCO Shares for his/her own account (and not for the account of others) for investment and not with a view to the distribution therefor.


3.7

Address.  The communication address of the Shareholders is as listed on the signature pages hereto.  



ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF

VSCO AND THE VSCO SHAREHOLDERS


VSCO and the VSCO Shareholders hereby represent and warrant, jointly and severally, to Tianyin and the Shareholders as follows:


4.1

Organization. VSCO is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation, and has the requisite corporate power to carry on its business as now conducted.


4.2

Capitalization.  VSCO’s authorized capital stock consists of 50,000,000 shares of capital stock, all of which are designated as Common Stock, of which 5,106,400 shares are issued and outstanding.  When issued, the VSCO Shares will be duly authorized, validly issued, fully paid, non-assessable and free of preemptive rights.  Except as set forth on Schedule 4.2, no VSCO shares are entitled to preemptive rights or registration rights and there are no outstanding or authorized options, rights, warrants, calls, convertible securities, rights to subscribe, conversion rights or other agreements or commitments to which VSCO is a party or which are binding upon VSCO providing for the issuance by VSCO or transfer by VSCO of additional shares of VSCO’s capital stock and VSCO has not reserved any shares of its capital stock for issuance, nor are there any outstanding stock option rights, phantom equity or similar rights, contracts, arrangements or commitments to issue capital stock of VSCO.  There are no voting trusts or any other agreements or understandings with respect to the voting of VSCO’s capital stock.  There are no obligations of VSCO to repurchase, redeem or otherwise require any shares of its capital stock as of the Closing.  


4.3

Certain Corporate Matters. VSCO is duly licensed or qualified to do business and is in good standing as a foreign corporation in every jurisdiction in which the character of VSCO’s properties or nature of VSCO’s business requires it to be so licensed or qualified other than such jurisdictions in which the failure to be so licensed or qualified does not, or insofar as can reasonably be foreseen, in the future



8





will not, have a material adverse effect on its financial condition, results of operations or business. VSCO has full corporate power and authority and all authorizations, licenses and permits necessary to carry on the business in which it is engaged or in which it proposes presently to engage and to own and use the properties owned and used by it.  VSCO has delivered to Tianyin true, accurate and complete copies of its certificate or articles of incorporation and bylaws, which reflect all restatements of and amendments made thereto at any time prior to the date of this Agreement. The records of meetings of the Shareholders and Board of Directors of VSCO are complete and correct in all material respects. The stock records of VSCO and the Shareholder lists of VSCO that VSCO has previously furnished to Tianyin are complete and correct in all material respects and accurately refl ect the record ownership and the beneficial ownership of all the outstanding shares of VSCO’s capital stock and any other outstanding securities issued by VSCO.  VSCO is not in default under or in violation of any provision of its certificate or articles of incorporation or bylaws in any material respect.  VSCO is not in any material default or in violation of any restriction, lien, encumbrance, indenture, contract, lease, sublease, loan agreement, note or other obligation or liability by which it is bound or to which any of its assets is subject.


4.4

Authority Relative to this Agreement.  Each of VSCO and the VSCO Shareholders has the requisite power and authority to enter into this Agreement and carry out its or his obligations hereunder.  The execution, delivery and performance of this Agreement by VSCO and the consummation of the transactions contemplated hereby have been duly authorized by the Board of Directors of VSCO and no other actions on the part of VSCO are necessary to authorize this Agreement or the transactions contemplated hereby.  This Agreement has been duly and validly executed and delivered by VSCO and the VSCO Shareholders and constitutes a valid and binding obligation of VSCO and each VSCO Shareholder, enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights generally or by general prin ciples of equity.


4.5

Consents and Approvals; No Violations. Except for applicable requirements of federal securities laws and state securities or blue-sky laws, no filing with, and no permit, authorization, consent or approval of, any third party, public body or authority is necessary for the consummation by VSCO of the transactions contemplated by this Agreement.  Neither the execution and delivery of this Agreement by VSCO nor the consummation by VSCO of the transactions contemplated hereby, nor compliance by VSCO with any of the provisions hereof, will (a) conflict with or result in any breach of any provisions of the charter or Bylaws of VSCO, (b) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under, any of the terms, conditions or provisions of any note, bond, mortgage, ind enture, license, contract, agreement or other instrument or obligation to which VSCO or any Subsidiary (as hereinafter defined)  is a party or by which they any of their respective properties or assets may be bound or (c) violate any order, writ, injunction, decree, statute, rule or regulation applicable to VSCO or any Subsidiary, or any of their respective properties or assets, except in the case of clauses (b) and (c) for violations, breaches or defaults which are not in the aggregate material to VSCO or any Subsidiary taken as a whole.


4.6

SEC Documents.  The Common Stock of VSCO is registered pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by it with the Commission pursuant to the reporting requirements of the Exchange Act, including material filed pursuant to Section 13(a) or 15(d) of the Exchange Act (all of the foregoing including filings incorporated by reference therein being referred to herein as the “SEC Documents”).  True and complete copies of all of the Commission Documents are available to the Purchasers through the Commission’s EDGAR database on www.sec.gov.  As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Securities Act and/or the Exchange Act, as the case may require, and the rules and



9





regulations promulgated thereunder and none of the SEC Documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The consolidated financial statements of VSCO included in the SEC Documents comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with generally accepted accounting principles in the United States (except, in the case of unaudited statements, as permitted by the applicable form under the Securities Act and/or the Exchange Act) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly present the financial position of VSCO as of the dates thereof and its consolidated statements of operations, Shareholders’ equity and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal and recurring year-end audit adjustments which were and are not expected to have a material adverse effect on VSCO, its business, financial condition or results of operations).  Except as and to the extent set forth on the consolidated balance sheet of VSCO as of December 31, 2006, including the notes thereto, or otherwise included in the schedules hereto, VSCO has no liability or obligation of any nature (whether accrued, absolute, contingent or otherwise and whether required to be reflected on a balance sheet or not).


4.7

Financial Statements.  VSCO’s Audited Financials and VSCO’s Interim Financials (collectively “VSCO’s Financial Statements”) are (i) in accordance with the books and records of VSCO, (ii) correct and complete, (iii) fairly present the financial position and results of operations of VSCO and each Subsidiary as of the dates indicated, and (iv) prepared in accordance with U.S. GAAP (except that (x) unaudited financial statements may not be in accordance with GAAP because of the absence of footnotes normally contained therein, and (y) interim (unaudited) financials are subject to normal year-end audit adjustments that in the aggregate will not have a material adverse effect on VSCO or any Subsidiary, their respective businesses, financial conditions or results of operations).


4.8

Events Subsequent to Financial Statements. Except as disclosed in Schedule 4.8, since September 30, 2007, there has not been:


(a)

Any sale, lease, transfer, license or assignment of any assets, tangible or intangible, of VSCO or any Subsidiary;


(b)

Any damage, destruction or property loss, whether or not covered by insurance, affecting adversely the properties or business of VSCO or any Subsidiary;


(c)

Any declaration or setting aside or payment of any dividend or distribution with respect to the shares of capital stock of VSCO or any Subsidiary or any redemption, purchase or other acquisition of any such shares;


(d)

Any subjection to any lien on any of the assets, tangible or intangible, of VSCO or any Subsidiary;


(e)

Any incurrence of indebtedness or liability or assumption of obligations by VSCO or any Subsidiary;


(f)

Any waiver or release by VSCO or any Subsidiary of any right of any material value;


(g)

Any compensation or benefits paid to officers or directors of VSCO or any Subsidiary;




10





(h)

Any change made or authorized in the Articles of Incorporation or Bylaws of VSCO or any Subsidiary;


(i)

Any loan to or other transaction with any officer, director or Shareholder of VSCO or any Subsidiary giving rise to any claim or right of VSCO or any Subsidiary against any such person or of such person against VSCO or any Subsidiary; or


(j)

Any material adverse change in the condition (financial or otherwise) of the respective properties, assets, liabilities or business of VSCO or any Subsidiary.


4.9

Liabilities. Except as otherwise disclosed in VSCO’s Financial Statements, neither VSCO nor any Subsidiary has any liability or obligation whatsoever, either direct or indirect, matured or unmatured, accrued, absolute, contingent or otherwise.  In addition, except as disclosed in Schedule 4.9, VSCO and the VSCO Shareholders represent that upon Closing, neither VSCO nor any Subsidiary will have any liability or obligation whatsoever, either direct or indirect, matured or unmatured, accrued, absolute, contingent or otherwise.


4.10

Tax Matters. Except as disclosed in Schedule 4.10:


(a)

VSCO and each Subsidiary have duly filed all material federal, state, local and foreign tax returns required to be filed by or with respect to them with the Internal Revenue Service or other applicable taxing authority, and no extensions with respect to such tax returns have been requested or granted;


(b)

VSCO and each Subsidiary have paid, or adequately reserved against in VSCO’s Financial Statements, all material taxes due, or claimed by any taxing authority to be due, from or with respect to them;


(c)

To the best knowledge of VSCO, there has been no material issue raised or material adjustment proposed (and none is pending) by the Internal Revenue Service or any other taxing authority in connection with any of VSCO’s or any Subsidiary’s tax returns;


(d)

No waiver or extension of any statute of limitations as to any material federal, state, local or foreign tax matter has been given by or requested from VSCO or any Subsidiary; and


For the purposes of this Section 4.10, a tax is due (and must therefore either be paid or adequately reserved against in VSCO’s Financial Statements) only on the last date payment of such tax can be made without interest or penalties, whether such payment is due in respect of estimated taxes, withholding taxes, required tax credits or any other tax.


4.11

Real Property.  Except as set forth on Schedule 4.11, neither VSCO nor any Subsidiary owns or leases any real property.


4.12

Books and Records. The books and records of VSCO and each Subsidiary delivered to the Tianyin Shareholders prior to the Closing fully and fairly reflect the transactions to which VSCO each Subsidiary is a party or by which they or their properties are bound.


4.13

Questionable Payments. Neither VSCO or any Subsidiary, nor any employee, agent or representative of VSCO or any Subsidiary has, directly or indirectly, made any bribes, kickbacks, illegal payments or illegal political contributions using Company funds or made any payments from VSCO’s or



11





any Subsidiary’s funds to governmental officials for improper purposes or made any illegal payments from VSCO’s or any Subsidiary’s funds to obtain or retain business.


4.14

Intellectual Property. Neither VSCO nor any Subsidiary owns or uses any trademarks, trade names, service marks, patents, copyrights or any applications with respect thereto. VSCO and the VSCO Shareholders have no knowledge of any claim that, or inquiry as to whether, any product, activity or operation of VSCO or any Subsidiary infringes upon or involves, or has resulted in the infringement of, any trademarks, trade-names, service marks, patents, copyrights or other proprietary rights of any other person, corporation or other entity; and no proceedings have been instituted, are pending or are threatened.


4.15

Insurance. Neither VSCO nor any Subsidiary has any insurance policies in effect.


4.16

Contracts. Except as set forth on Schedule 4.16, neither VSCO nor any Subsidiary has any material contracts, leases, arrangements or commitments (whether oral or written). Neither VSCO nor any Subsidiary is a party to or bound by or affected by any contract, lease, arrangement or commitment (whether oral or written) relating to: (a) the employment of any person; (b) collective bargaining with, or any representation of any employees by, any labor union or association; (c) the acquisition of services, supplies, equipment or other personal property; (d) the purchase or sale of real property; (e) distribution, agency or construction; (f) lease of real or personal property as lessor or lessee or sublessor or sublessee; (g) lending or advancing of funds; (h) borrowing of funds or receipt of credit; (i) incurring any obligation or liability; or (j) the sale of personal property.


4.17

Litigation. Neither VSCO nor any Subsidiary is subject to any judgment or order of any court or quasijudicial or administrative agency of any jurisdiction, domestic or foreign, nor is there any charge, complaint, lawsuit or governmental investigation pending against VSCO or any Subsidiary. Neither VSCO nor any Subsidiary is a plaintiff in any action, domestic or foreign, judicial or administrative.  There are no existing actions, suits, proceedings against or investigations of VSCO or any Subsidiary, and VSCO knows of no basis for such actions, suits, proceedings or investigations.  There are no unsatisfied judgments, orders, decrees or stipulations affecting VSCO or any Subsidiary or to which VSCO or any Subsidiary is a party.


4.18

Employees. Other than Charles Driscoll, neither VSCO nor any Subsidiary has any employees.  Neither VSCO nor any Subsidiary owes any compensation of any kind, deferred or otherwise, to any current or previous employees.  Neither VSCO nor any Subsidiary has a written or oral employment agreement with any officer or director of VSCO or any Subsidiary.  Neither VSCO nor any Subsidiary is a party to or bound by any collective bargaining agreement.  Except as set forth on Schedule 4.18, there are no loans or other obligations payable or owing by VSCO or any Subsidiary to any Shareholder, officer, director or employee of VSCO or any Subsidiary, nor are there any loans or debts payable or owing by any of such persons to VSCO or any Subsidiary or any guarantees by VSCO or any Subsidiary of any loan or obligation of any nature to which any such person is a party.


4.19

Employee Benefit Plans. Neither VSCO nor any Subsidiary has any (a) non-qualified deferred or incentive compensation or retirement plans or arrangements, (b) qualified retirement plans or arrangements, (c) other employee compensation, severance or termination pay or welfare benefit plans, programs or arrangements or (d) any related trusts, insurance contracts or other funding arrangements maintained, established or contributed to by VSCO or any Subsidiary.

 

4.20

Legal Compliance. To the best knowledge of VSCO, after due investigation, no claim has been filed against VSCO or any Subsidiary alleging a violation of any applicable laws and regulations of foreign, federal, state and local governments and all agencies thereof.  VSCO and each Subsidiary hold all of the material permits, licenses, certificates or other authorizations of foreign, federal, state or local



12





governmental agencies required for the conduct of their respective businesses as presently conducted.


4.21

Subsidiaries and Investments.  


(a)

Except as set forth in Schedule 4.21(a), VSCO neither owns any capital stock, has any interest of any kind nor has any agreement or commitment to purchase any interest, whatsoever in any corporation, partnership, or other form of business organization (any such organization is referred to as a “Subsidiary”).


(b)

4.21(b) sets forth true and complete copies of the charter of each Subsidiary, as well as any limited liability company agreement, operating agreement or shareholder agreement relating to such Subsidiary, and any acquisition agreement relating to any Subsidiary.  All corporate or other action that has been taken by any Subsidiary has been duly authorized and does not conflict with or violate any provision of its charter, bylaws or other organizational documents.


(c)

Each Subsidiary (i) is duly organized and validly existing under the laws of its jurisdiction of organization, (ii) has all requisite and necessary power and authority to own, operate or lease those assets or properties which are owned, operated or leased by it and to conduct its business as it has been and currently is being conducted, (iii) is qualified to do business in all jurisdictions where the failure to be so qualified would have a material adverse effect on its business.


(d)

Except as set forth in Schedule 4.21(d), all outstanding shares of capital stock or other ownership interests of each Subsidiary are validly issued, fully paid, nonassessable and free of preemptive rights and are owned (either directly or indirectly) by VSCO without any encumbrances.


(e)

Except as set forth in Schedule 4.21(e), there are no outstanding securities convertible into or exchangeable for the capital stock of or other equity interests in any Subsidiary and no outstanding options, rights, subscriptions, calls commitments, warrants or rights of any character for VSCO, any Subsidiary or any other person or entity to purchase, subscribe for or to otherwise acquire any shares of such stock or other securities of any Subsidiary.  


(f)

Except as set forth in Schedule 4.21(f), there are no outstanding agreements affecting or relating to the voting, issuance, purchase, redemption, repurchase or transfer of any capital stock of or other equity interests in any Subsidiary.


(g)

Each Subsidiary’s stock register or similar register of ownership has complete and accurate records indicating the following: (i) the name and address of each person or entity owning shares of capital stock or other equity interest of the Subsidiary and (ii) the certificate number of each certificate evidencing shares of capital stock or other equity interest issued by the Subsidiary, the number of shares or other equity interests evidenced by each such certificate, the date of issuance of such certificate, and, if applicable, the date of cancellation.  Copies of same have been made available to Tianyin.


4.22

Broker’s Fees. Except as disclosed on Schedule 4.22, neither VSCO, nor anyone on its behalf has any liability to any broker, finder, investment banker or agent, or has agreed to pay any brokerage fees, finder’s fees or commissions, or to reimburse any expenses of any broker, finder, investment banker or agent in connection with this Agreement.


4.23

Internal Accounting Controls.  VSCO maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with U.S. GAAP and to maintain asset accountability,



13





(iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.  VSCO has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for VSCO and designed such disclosure controls and procedures to ensure that material information relating to VSCO is made known to the certifying officers by others within those entities, particularly during the period in which the VSCO’s Form 10-KSB or 10-QSB, as the case may be, is being prepared.  VSCO’s certifying officers have evaluated the effectiveness of VSCO’s controls and procedures as of the end of the filing period prior to the filing date of the Fo rm 10-QSB for the quarter ended September 30, 2007 (such date, the “Evaluation Date”).  VSCO presented in its most recently filed Form 10-QSB the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date.  Since the Evaluation Date, there have been no significant changes in VSCO’s internal controls (as such term is defined in Item 307(b) of Regulation S-K under the Exchange Act) or, to VSCO’s knowledge, in other factors that could significantly affect VSCO’s internal controls.


4.24

Intentionally Left Blank.  

4.25

Application of Takeover Protections.  VSCO and its board of directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under VSCO’s certificate or articles of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to Tianyin or the Shareholders as a result of the Acquisition or the exercise of any rights by Tianyin or the Shareholders pursuant to this Agreement.


4.26

No SEC or NASD Inquiries.  Neither VSCO nor any of its past or present officers or directors is, or has ever been, the subject of any formal or informal inquiry or investigation by the SEC or NASD.  


4.27

Restrictions on Business Activities.  Except as disclosed on Schedule 4.27 hereto, there is no agreement, commitment, judgment, injunction, order or decree binding upon VSCO or to which VSCO is a party which has or could reasonably be expected to have the effect of prohibiting or materially impairing any business practice of VSCO, any acquisition of property by VSCO or the conduct of business by Tianyin or VSCO as currently conducted, other than such effects, individually or in the aggregate, which have not had and could not reasonably be expected to have a Material Adverse Effect on VSCO.


4.28

Interested Party Transactions.

Except as set forth in the Schedule 4.28 hereto or as reflected in the financial statements to be delivered hereunder, no employee, officer, director or shareholder of VSCO or a member of his or her immediate family is indebted to VSCO, nor are VSCO indebted (or committed to make loans or extend or guarantee credit) to any of them, other than (i) for payment of salary for services rendered, (ii) reimbursement for reasonable expenses incurred on behalf of VSCO, and (iii) for other employee benefits made generally available to all employees.  Except as set forth in Schedule 4.28, to the knowledge of VSCO, no employee, officer, director or shareholder or any member of their immediate families is, directly or indirectly, interested in any material contract with VSCO (other than such contracts as relate to any such individual ownership of interests in or securities of VSCO).    


4.29

Disclosure. The representations and warranties and statements of fact made by VSCO in this Agreement are, as applicable, accurate, correct and complete and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained herein not false or misleading.




14





4.30

Material Adverse Effect.  For the purposes of VSCO and its Subsidiary for this Agreement, "Material Adverse Effect" means any adverse effect on the business, operations, properties, prospects, or financial condition of either VSCO or its Subsidiaries on any condition, circumstance, or situation that could result in litigation, claims, disputes or property loss in excess of US $10,000 in the future, or that would prohibit or otherwise materially interfere with the ability of any party to this Agreement to perform any of its obligations under this Agreement in any material respect.  


4.31

Due Diligence.  VSCO has had the opportunity to perform all due diligence investigations of Tianyin and its business as VSCO as deemed necessary or appropriate and to ask all questions of the officers and directors of Tianyin that VSCO wished to ask, and VSCO has received satisfactory answers to all of its questions regarding Tianyin.  VSCO has had access to all documents and information about Tianyin and has reviewed sufficient information to allow it to make the satisfactory evaluation on the merits and risks of the transactions contemplated by this Agreement. Notwithstanding the foregoing, nothing herein shall derogate from or otherwise modify the representations and warranties of Tianyin set forth in this Agreement, on which VSCO has relied in making an exchange of newly issued VSCO Shares for shares of Tianyin Common Stock held by Tianyin Shareholders.


ARTICLE 5

INDEMNIFICATION


5.1

VSCO Indemnification.  For a period of one year after the Closing, the Shell Indemnifying Shareholder agrees to indemnify Tianyin, the Shareholders and each of the officers, agents and directors of Tianyin or the Shareholders against any loss, liability, claim, damage or expense (including, but not limited to, any and all expenses whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever) (each an “Indemnified Party”) to which it or they may become subject arising out of or based on either (i) any breach of or inaccuracy in any of the representations and warranties or covenants or conditions made by VSCO and/or the VSCO Shareholders in this Agreement; or (ii) any and all liabilities arising out of or in connection with: (A) any of the assets of VSCO or any Subsidiary prior to the Closing; or (B) the operations of VSCO prior to the Closing (the “VSCO Shareholders Indemnification”), except to the extent that such breach or liability does not result in a Material Adverse Effect (as defined in Section 4.30).  Notwithstanding anything provided for herein, the Indemnifying Party’s total obligation under this Section 5.1 shall be limited to and shall not under any circumstances exceed US $200,000.  


5.2

Indemnification Procedures.  If any action shall be brought against any Indemnified Party in respect of which indemnity may be sought pursuant to this Agreement, such Indemnified Party shall promptly notify the Indemnifying Party in writing, and the Indemnifying Party shall have the right to assume the defense thereof with counsel of its own choosing.  Any Indemnified Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party except to the extent that the employment thereof has been specifically authorized by the Indemnifying Party in writing, the Indemnifying Party has failed after a reasonable period of time to assume such defense and to employ counsel or in such action there is, in the reasonable opinion of such separate counsel, a material c onflict on any material issue between the position of the Indemnifying Party and the position of such Indemnified Party.  The Indemnifying Party will not be liable to any Indemnified Party under this Article 5 for any settlement by an Indemnified Party effected without the Indemnifying Party’s prior written consent, which shall not be unreasonably withheld or delayed; or to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Indemnified Party’s indemnification pursuant to this Article 5.  



ARTICLE 6



15





COVENANTS AND AGREEMENTS OF THE PARTIES

EFFECTIVE PRIOR TO CLOSING


6.1    Corporate Examinations and Investigations.  Prior to the Closing, each party shall be entitled, through its employees and representatives, to make such investigations and examinations of the books, records and financial condition of Tianyin and VSCO (and any Subsidiary) as each party may request.  In order that each party may have the full opportunity to do so, Tianyin and VSCO, the Shareholders and the VSCO Shareholders shall furnish each party and its representatives during such period with all such information concerning the affairs of Tianyin or VSCO or any Subsidiary as each party or its representatives may reasonably request and cause Tianyin or VSCO and their respective officers, employees, consultants, agents, accountants and attorneys to cooperate fully with each party’s representatives in connection with such review and examination and to make full discl osure of all information and documents requested by each party and/or its representatives.  Any such investigations and examinations shall be conducted at reasonable times and under reasonable circumstances, it being agreed that any examination of original documents will be at each party’s premises, with copies thereof to be provided to each party and/or its representatives upon request.


6.2

Cooperation; Consents.  Prior to the Closing, each party shall cooperate with the other parties to the end that the parties shall (i) in a timely manner make all necessary filings with, and conduct negotiations with, all authorities and other persons the consent or approval of which, or the license or permit from which is required for the consummation of the Acquisition and (ii) provide to each other party such information as the other party may reasonably request in order to enable it to prepare such filings and to conduct such negotiations.


6.3

Conduct of Business.  Subject to the provisions hereof, from the date hereof through the Closing, each party hereto shall (i) conduct its business in the ordinary course and in such a manner so that the representations and warranties contained herein shall continue to be true and correct in all material respects as of the Closing as if made at and as of the Closing and (ii) not enter into any material transactions or incur any material liability not required or specifically contemplated hereby, without first obtaining the written consent of Tianyin and the holders of a majority of voting stock of Tianyin on the one hand and VSCO and the holders of a majority of voting stock of VSCO common stock on the other hand.  Without the prior written consent of Tianyin, the Shareholders, VSCO or the VSCO Shareholders, except as required or specifically contemplated hereby, each party shall not underta ke or fail to undertake any action if such action or failure would render any of said warranties and representations untrue in any material respect as of the Closing.


               6.4

Litigation.    From the date hereof through the Closing, each party hereto shall promptly notify the representative of the other parties of any lawsuits, claims, proceedings or investigations which after the date hereof are threatened or commenced against such party or any of its affiliates or any officer, director, employee, consultant, agent or shareholder thereof, in their capacities as such, which, if decided adversely, could reasonably be expected to have a material adverse effect upon the condition (financial or otherwise), assets, liabilities, business, operations or prospects of such party or any of its subsidiaries.


               6.5

Notice of Default.  From the date hereof through the Closing, each party hereto shall give to the representative of the other parties prompt written notice of the occurrence or existence of any event, condition or circumstance occurring which would constitute a violation or breach of this Agreement by such party or which would render inaccurate in any material respect any of such party’s representations or warranties herein.


               6.6

Share Cancellation.  Immediately prior to the Closing, Charles Driscoll shall cancel 3,310,000 of his 4,000,000 VSCO Shares (the “Share Cancellation”).    



16






               6.7

Bylaws.  If necessary, VSCO shall amend its Bylaws to permit the election and/or appointment of two new directors to VSCO’s Board of Directors as set forth in Section 7.1(a) below.


               6.8

Confidentiality; Access to Information.


Any confidentiality agreement or letter of intent previously executed by the parties shall be superseded in its entirety by the provisions of this Agreement.  Each party agrees to maintain in confidence any non-public information received from the other party, and to use such non-public information only for purposes of consummating the transactions contemplated by this Agreement.  Such confidentiality obligations will not apply to (i) information which was known to the one party or their respective agents prior to receipt from the other party; (ii) information which is or becomes generally known; (iii) information acquired by a party or their respective agents from a third party who was not bound to an obligation of confidentiality; and (iv) disclosure required by law.   In the event this Agreement is terminated as provided in Article 8 hereof, each party will return or cause to be retur ned to the other all documents and other material obtained from the other in connection with the Transaction contemplated hereby.


6.9     Public Disclosure.  Except to the extent previously disclosed or to the extent the parties believe that they are required by applicable law or regulation to make disclosure, prior to Closing, no party shall issue any statement or communication to the public regarding the transaction contemplated herein without the consent of the other party, which consent shall not be unreasonably withheld.  To the extent a party hereto believes it is required by law or regulation to make disclosure regarding the Transaction, it shall, if possible, immediately notify the other party prior to such disclosure.    


6.10

Assistance with Post-Closing SEC Reports and Inquiries.  Upon the reasonable request of Tianyin, after the Closing Date, each VSCO Shareholder shall use his reasonable best efforts to  provide such information available to it, including information, filings, reports, financial statements or other circumstances of VSCO occurring, reported or filed prior to the Closing, as may be necessary or required by VSCO for the preparation of the post-Closing Date reports that VSCO is required to file with the SEC to remain in compliance and current with its reporting requirements under the Exchange Act, or filings required to address and resolve matters as may relate to the period prior to the Closing and any SEC comments relating thereto or any SEC inquiry thereof.


6.11

Transfers.  Except for the shares listed in Schedule 1.1(a), none of the VSCO and Tianyin Shareholders will sell, transfer, assign, hypothecate, lien, or otherwise dispose or encumber the Shares owned by them.




ARTICLE 7

CONDITIONS TO CLOSING


7.1

Conditions to Obligations of Tianyin and the Tianyin Shareholders.  The obligations of Tianyin and the Shareholders under this Agreement shall be subject to each of the following conditions:


(a)

Closing Deliveries.  At the Closing, VSCO and/or the VSCO Shareholders shall have delivered or caused to be delivered to Tianyin and the Shareholders the following:


(i)  

resolutions duly adopted by the Board of Directors of VSCO authorizing and approving the Acquisition and the execution, delivery and performance of this



17





Agreement;


(ii)  

a certificate of good standing for VSCO and each Subsidiary from their respective jurisdictions of incorporation, dated not earlier than five days prior to the Closing Date;


(iii)  

written resignations of all officers and directors of VSCO and each Subsidiary in office immediately prior to the Closing, and board resolutions electing the following individuals to the positions with VSCO and each Subsidiary listed opposite their names below:


Name

 

Position

Guoqing Jiang   

 

CEO and Chairman of the Board of Directors

Stewart Shiang Lor

 

Director


(iv)

stock certificates representing the VSCO Shares to be delivered pursuant to this Agreement registered with the names set forth in Schedule 1.1(a);


(v)

this Agreement duly executed by VSCO and the VSCO Shareholders;


(vi)

all corporate records, agreements, seals and any other information reasonably requested by Tianyin’s representatives with respect to VSCO;


(vii)

a certificate executed by an officer of Tianyin, certifying the satisfaction of Sections 7.1(b);


(viii)

executed Bill of Sale between Charles Driscoll and VSCO regarding VSCO’s software products;


(ix)

fully executed agreement by and among the Shell Indemnifying Shareholder and Tianyin, in form and substance satisfactory to Tianyin and the Shareholders; and


(vii)

such other documents as Tianyin and/or the Shareholders may reasonably request in connection with the transactions contemplated hereby.


(b)

Representations and Warranties to be True.    The representations and warranties of VSCO and the VSCO Shareholders herein contained shall be true in all material respects at the Closing with the same effect as though made at such time.  VSCO and the VSCO Shareholders shall have performed in all material respects all obligations and complied in all material respects with all covenants and conditions required by this Agreement to be performed or complied with by them at or prior to the Closing.  


(c)

Assets and Liabilities.

At the Closing, except for the liabilities set forth on Schedule 4.9 which shall be paid by Tianyin at Closing, neither VSCO nor any Subsidiary shall have any liabilities, contingent or otherwise, or any tax obligations or any material changes to its business or financial condition, or any material assets.  


(d)

SEC Filings.  At the Closing, VSCO will be current in all SEC filings required by it to be filed.     



18





(e)

Due Diligence.  At the Closing, Tianyin shall have completed a due diligence review of VSCO, and such due diligence review shall be acceptable and satisfactory to Tianyin in its complete discretion.


(f)

Outstanding Common Stock.  VSCO shall have at least 50,000,000 shares of its common stock authorized and shall have no more than 5,106,400 shares of its common stock issued and outstanding, and 1,796,400 after cancellation of the 3,310,000 shares by Charles Driscoll.


(g)

Business Records; Resignation Letter.  VSCO shall have delivered to Tianyin’s counsel all of its books and records (including without limitation, charter documents, corporate records, stock records, electronic files containing any financial information and records, and all other documents associated used in or associated with VSCO) and the resignation letters of all of its directors and officers.


(h)

No Adverse Effect.  The business and operations of VSCO will not have suffered any Material Adverse Effect.  


(j)

Termination of Arrangements.  All contingent obligations of VSCO shall be terminated, including without limitation, any lease and line of credit arrangement.  Each creditor of VSCO, other than the creditors set forth in Schedule 4.9 (and only up to the amounts set forth therein) shall cancel or waive all debts of VSCO.  All subsidiaries of VSCO shall have been assigned or otherwise liquidated.


(k)

Consummation of Financing.  Prior to the Closing Date,  definitive documentation with respect to the sale of securities of VSCO resulting in gross proceeds of up to $15,000,000 shall have been submitted to Tianyin.  


(l)

No Claim Regarding Stock Ownership or Consideration.  There must not have been made or threatened by any Person, other than persons listed on Schedule I hereto, any claim asserting that such Person (a) is the holder of, or has the right to acquire or to obtain beneficial ownership of the VSCO Shares or any other stock, voting, equity, or ownership interest in VSCO or (b) is entitled to all or any portion of the VSCO Shares.


               

7.2

Conditions to Obligations of VSCO and the VSCO Shareholders. The obligations of VSCO and the VSCO Shareholders under this Agreement shall be subject to each of the following conditions:


(a)

Closing Deliveries.    On the Closing Date, Tianyin and/or the Shareholders shall have delivered to VSCO the following:


(i)

this Agreement duly executed by Tianyin and the Shareholders;


(ii)

resolutions duly adopted by the Board of Directors of Tianyin authorizing and approving the execution, delivery and performance of this Agreement;


(iii)

stock certificates representing the Tianyin Shares to be delivered pursuant to this Agreement duly endorsed or accompanied by duly executed stock powers;

(iv)

a certificate of good standing for Tianyin and any of their subsidiaries from its respective jurisdictions of incorporation, dated not earlier than



19





five days prior to the Closing Date;  


(v)

a certificate executed by an officer of Tianyin, certifying the satisfaction of Sections 7.2(b); and,


(vi)

such other documents as VSCO may reasonably request in connection with the transactions contemplated hereby.



(b)

Representations and Warranties to be True.    The representations and warranties of Tianyin and the Shareholders herein contained shall be true in all material respects at the Closing with the same effect as though made at such time.  Tianyin and the Shareholders shall have performed in all material respects all obligations and complied in all material respects with all covenants and conditions required by this Agreement to be performed or complied with by them at or prior to the Closing.


(c)

No Adverse Effect.  The business and operations of Tianyin and its Subsidiaries will not have suffered any Material Adverse Effect


(d)

Financial Statements and other information.  Tianyin shall have prepared at Closing the financial statements and other information necessary to be filed in order to comply with Item 2.01(f) of Form 8-K.


(e)

No Claim Regarding Stock Ownership or Consideration.  There must not have been made or threatened by any Person, other than persons listed on Schedule I hereto, any claim asserting that such Person (a) is the holder of, or has the right to acquire or to obtain beneficial ownership of the Tianyin Shares or any other stock, voting, equity, or ownership interest in, the Company, or (b) is entitled to all or any portion of the VSCO Shares.



ARTICLE 8

SEC FILING; TERMINATION


8.1

Prior to Closing, VSCO shall prepare the information statement required by Rule 14f-1 promulgated under the Exchange Act ("14f-1 Information Statement"); no later than 5 business days after the Closing, VSCO shall file the 14f-1 Information Statement with the SEC and mail the same to each of VSCO’s shareholders of record.  


8.2

This Agreement may be terminated at any time prior to the Closing:  


(a)

by mutual written agreement of VSCO and Tianyin;


(b)

by either VSCO or Tianyin if the Transaction shall not have been consummated for any reason by January 31, 2008; provided, however, that the right to terminate this Agreement under this Section 8.2(b) shall not be available to any party whose action or failure to act has been a principal cause of or resulted in the failure of the Transaction to occur on or before such date and such action or failure to act constitutes a breach of this Agreement;


(c)

by either VSCO or Tianyin if a governmental entity shall have issued an order, decree or ruling or taken any other action, in any case having the effect of permanently restraining, enjoining or otherwise prohibiting the Transaction, which order, decree, ruling or other action is final and nonappealable;



20






(d)

by Tianyin, upon a material breach of any representation, warranty, covenant or agreement on the part of VSCO set forth in this Agreement, or if any representation or warranty of VSCO shall have become materially untrue, in either case such that the conditions set forth in Section 7.1 would not be satisfied as of the time of such breach or as of the time such representation or warranty shall have become untrue, provided, that if such inaccuracy in VSCO’s representations and warranties or breach by VSCO is curable by VSCO, then Tianyin may not terminate this Agreement under this Section 8.2(d) unless VSCO does not cure such breach within thirty (30) days after delivery of written notice from Tianyin to VSCO of such breach, provided VSCO continues to exercise commercially reasonable efforts to cure such breach (it being understood that Tianyin may not terminate this Agreement pursuant to this Section 8. 2(d) if it shall have materially breached this Agreement or if such breach by VSCO is cured during such thirty (30)-day period); or


(e)

by VSCO, upon a material breach of any representation, warranty, covenant or agreement on the part of Tianyin or the Shareholders set forth in this Agreement, or if any representation or warranty of Tianyin or the Shareholders shall have become materially untrue, in either case such that the conditions set forth in Section 7.2 would not be satisfied as of the time of such breach or as of the time such representation or warranty shall have become untrue, provided, that if such inaccuracy in Tianyin’s or the Shareholders' representations and warranties or breach by Tianyin or the Shareholders is curable by Tianyin or the Shareholders, then VSCO may not terminate this Agreement under this Section 8.2(e) unless Tianyin or the Shareholders do not cure such breach within thirty (30) days after delivery of written notice from VSCO to Tianyin and/or the Shareholders of such breach, provided Tianyin and the Sh areholders continue to exercise commercially reasonable efforts to cure such breach (it being understood that VSCO may not terminate this Agreement pursuant to this Section 8.2(e) if it shall have materially breached this Agreement or if such breach by Tianyin or the Shareholders is cured during such thirty (30)-day period).


8.3

Notice of Termination; Effect of Termination.  Any termination of this Agreement under Section 8.2 above will be effective immediately upon (or, if the termination is pursuant to Section 8.2(d) or Section 8.2(e) and the proviso therein is applicable, after the thirty (30) day provided referenced therein) the delivery of written notice of the terminating party to the other parties hereto.  In the event of the termination of this Agreement as provided in Section 8.2, this Agreement shall be of no further force or effect and the Transaction shall be abandoned, except as set forth in this Section 8.2, Section 8.3 and Article 9 (General Provisions), each of which shall survive the termination of this Agreement.   


8.4

Expenses.  If this Transaction does not close or is terminated, each party to this Agreement will pay its respective costs and expenses in connection with the negotiation, preparation and the Closing of this Agreement.


8.5

Schedule 14C.  Prior to Closing, VSCO shall prepare an information statement under Rule 14c-1 promulgated under the Exchange Act ("Schedule 14C") regarding: (i) the change of the corporate name to Chengdu Tianyin Pharmaceutical Co. and (ii) the authorization of a class of blank check preferred stock.  No later than 5 business days after the Closing, VSCO shall file the Preliminary Schedule 14C with the SEC; VSCO shall file and mail the Definitive Schedule 14C with the SEC 11 calendar days thereafter, or as soon as practicable after the comment period, to each of VSCO’s shareholders.   



ARTICLE 9

GENERAL PROVISIONS


9.1

Notices. Any notice, demand, request, waiver or other communication required or



21





permitted to be given hereunder shall be in writing and shall be effective (a) upon hand delivery by telex (with correct answer back received), telecopy, e-mail or facsimile at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur at addresses set forth on the signature page hereof (or at such other address for a party as shall be specified by like notice).


9.2

Public Announcements.  VSCO shall promptly, but no later than three (3) days following the effective date of this Agreement, issue a press release disclosing the transactions contemplated hereby.  VSCO shall also file with the Commission a Form 8-K describing the material terms of the transactions contemplated hereby (and attaching as exhibits thereto this Agreement, the Press Release and all of the agreements and documents governing the Financing) as soon as practicable following the Closing Date but in no event more than four (4) business days following the Closing Date.  Prior to the Closing Date, VSCO and Tianyin shall consult with each other in issuing the Form 8-K, the press release and any other press releases or otherwise making public statements or filings and other communications with the Commission or any regulatory agency or stock market or trading facility with respect to the transactions contemplated hereby and neither party shall issue any such press release or otherwise make any such public statement, filings or other communications without the prior written consent of the other, which consent shall not be unreasonably withheld or delayed, except that no prior consent shall be required if such disclosure is required by law, in which case the disclosing party shall provide the other party with prior notice, of no less than three (3) calendar days, of such public statement, filing or other communication and shall incorporate into such public statement, filing or other communication the reasonable comments of the other party.


9.3

Board of Directors.  Following the notice period required by the 14f-1 Information Statement, the Company’s board of directors shall consist of 2 persons, as stated in Section 7.1 above.  Upon the Company’s application for listing with the American Stock Exchange, three (3) additional persons shall be appointed to the Company’s board of directors, 2 of whom shall be outside Chinese directors and one of whom shall be an outside U.S. director recommended by TriPoint Capital Advisors.  The initial term of each director shall be for a period of 18 months.  At least three of the directors will qualify as “independent” under NASDAQ criteria, and at least one will qualify as a financial expert.    


9.4

Interpretation. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. References to Sections and Articles refer to sections and articles of this Agreement unless otherwise stated.


9.5

Severability.  If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated and the parties shall negotiate in good faith to modify this Agreement to preserve each party’s anticipated benefits under this Agreement.


9.6

Miscellaneous. This Agreement (together with all other documents and instruments referred to herein): (a) constitutes the entire agreement and supersedes all other prior agreements and undertakings, both written and oral, among the parties with respect to the subject matter hereof; (b) except as expressly set forth herein, is not intended to confer upon any other person any rights or remedies hereunder and (c) shall not be assigned by operation of law or otherwise, except as may be mutually agreed upon by the parties hereto.




22





9.7

Separate Counsel.  Each party hereby expressly acknowledges that it has been advised to seek its own separate legal counsel for advice with respect to this Agreement, and that no counsel to any party hereto has acted or is acting as counsel to any other party hereto in connection with this Agreement.


9.8

Governing Law; Venue. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York.  Any and all actions brought under this Agreement shall be brought in the state and/or federal courts of the United States sitting in the City of new York and each party hereby waives any right to object to the convenience of such venue.


9.9

Counterparts and Facsimile Signatures. This Agreement may be executed in two or more counterparts, which together shall constitute a single agreement.  This Agreement and any documents relating to it may be executed and transmitted to any other party by facsimile, which facsimile shall be deemed to be, and utilized in all respects as, an original, wet-inked document.  


9.10

Amendment. This Agreement may be amended, modified or supplemented only by an instrument in writing executed by Tianyin, VSCO, and holders of a majority of outstanding voting stock of Tianyin and the holders of a majority of outstanding voting stock of VSCO; provided that, the consent of any Tianyin or VSCO shareholder that is a party to this Agreement shall be required if the amendment or modification would disproportionately affect such shareholder (other than by virtue of their ownership of Tianyin or VSCO shares, as applicable).


9.11

Parties In Interest: No Third Party Beneficiaries. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective heirs, legal representatives, successors and assigns of the parties hereto. This Agreement shall not be deemed to confer upon any person not a party hereto any rights or remedies hereunder.


9.12

Waiver. No waiver by any party of any default or breach by another party of any representation, warranty, covenant or condition contained in this Agreement shall be deemed to be a waiver of any subsequent default or breach by such party of the same or any other representation, warranty, covenant or condition. No act, delay, omission or course of dealing on the part of any party in exercising any right, power or remedy under this Agreement or at law or in equity shall operate as a waiver thereof or otherwise prejudice any of such party’s rights, powers and remedies. All remedies, whether at law or in equity, shall be cumulative and the election of any one or more shall not constitute a waiver of the right to pursue other available remedies.



9.13

Expenses.  At or prior to the Closing, the parties hereto shall pay all of their own expenses relating to the transactions contemplated by this Agreement, including, without limitation, the fees and expenses of their respective counsel and financial advisers.




[SIGNATURES FOLLOW]





23





IN WITNESS WHEREOF, the parties have executed this Share Exchange Agreement as of the date first written above.




Raygere Limited,

a British Virgin Islands company



By:  __________________________

Name:  

Dr. Guoqing Jiang

Title:  

Director

Address:




By:  __________________________

Name:  

Stewart Shiang Lor,

Title:  

Director

Address:

 











[SIGNATURE PAGES OF SHAREHOLDERS,

VSCO AND VSCO SHAREHOLDERS FOLLOW]



24





[SIGNATURE PAGE OF SHAREHOLDERS]


SHAREHOLDERS:


Shareholder Name (First Name and Last Name)

Shareholder Address:

Shareholder Signatures:

Time Poly Management, by Stewart Shiang Lor

  

Cmark Holdings, Co., Ltd., by Stewart Shiang Lor

  

Happyvale Limited, by Brian Pak Lun Mok

  

Fartop Management Limited, by Yinzi Tang

  
   
   


[SIGNATURE PAGE OF VSCO AND VSCO SHAREHOLDERS FOLLOWS]



25








VISCORP, Inc.,

a Delaware corporation


By:  __________________________

Name:  Charles Driscoll

Title:  Chief Executive Officer

Address:

 

__________________________________

__________________________________

__________________________________


VSCO Shareholders:



___________________________

Charles Driscoll

Address:

 

__________________________________

__________________________________

__________________________________









26





Schedule 1.1(a)



 

Column I

Column II

Shareholder Name (First Name and Last Name) /Address

Tianyin Shares

VSCO Shares

Time Poly Management, Ltd.

39,000 (78%)

9,976,824

Fartop Management Limited

790 (1.58%)

    202,564

Cmark Holdings, Co., Ltd.

8,465 (16.93%)

2,165,503

Happyvale Limited

1,745 (3.49%)

   445,909

   
   

TOTAL

50,000 (100%)

12,790,800








27





Exhibit B

Certificate of Amendment to Articles of Incorporation

for

VISCORP, INC.


Pursuant to the provisions of Delaware’s General Corporate Law, Section 242, the undersigned hereby adopts the following Articles of Amendment for VISCORP, INC. (the “Company”):




1.

Name of the Corporation is VISCORP, INC.  

2.

The articles have been amended as follows:


Article 1


       Name of the Corporation is TIANYIN PHARMACEUTICAL CO. , INC.  


Article 4


“ The authorized capital is made up of two classes:


(i)

50,000,000 shares of Common Stock of USD.001 par value; and,

(ii)

25,000,000 shares Preferred Stock with $.001 par value per share (“Blank Check Preferred Stock”).*

 

*The shares of Preferred Stock may be issued from time to time in one or more series, in any manner permitted by law, as determined from time to time by the Board of Directors, and stated in the resolution or resolutions providing for the issuance of such shares adopted by the Board of Directors pursuant to authority hereby vested in it.  Without limiting the generality of the foregoing, shares in such series shall have such voting powers, powers, full or limited, or no voting powers, and shall have such designations, preferences, and relative, participating optional, or other special rights, and qualifications, limitations, or restrictions thereof, permitted by law, as shall be stated in the resolution or resolutions providing for the issuance of such shares adopted by the Board of Directors pursuant to authority hereby vested in it.  The number of shares of any such series so set forth in such resolution or resolutions may be increased (but not above the total number of authorized shares of Preferred Stock) or decreased (but not below the number of shares thereof then outstanding) by further resolution or resolutions adopted by the Board of Directors pursuant to authority hereby vested in it.  



Signatures




President & CEO






28



 EX-10.4 3 shareescrowagrmt.htm SHARE ESCROW AGREEMENT <B>Share Escrow Agreement

ESCROW AGREEMENT


THIS ESCROW AGREEMENT (“Agreement”) is made as of December 15, 2007 by and between Viscorp, Inc. (the “Company”); Time Poly Management Limited, a British Virgin Islands corporation (“Time Poly”); Happyvale Limited, a British Virgin Islands corporation (“Happyvale”); Fartop Management Limited, a British Virgin Islands corporation (“Fartop”); Cmark Holdings Co., Ltd., a corporation organized under the laws of the Cayman Islands (“Cmark”); the investors listed on Schedule A (the “Investors” and together with Cmark, Time Poly, Happyvale and Fartop, the “Management Team” and together with the Company, the “Parties”); and Leser, Hunter, Taubman & Taubman, with offices at 17 State Street, Suite 1610, New York, NY 10004 (the  “Escrow Agent”).


RECITALS:


(1)

Pursuant to that certain Securities Purchase Agreement, dated as of December 15, 2007, by and among the Company, the Investors set forth on the signature pages thereto, Charles Driscoll, Raygere Limited and Grandway Group Holdings Limited (the “Purchase Agreement”), a copy of which is attached hereto as Exhibit B and incorporated herein by reference, the Investors purchased an aggregate of $15,225,000 of  10% Notes, convertible into 9,515,625 shares of the Company’s Series A Convertible Preferred Stock (“Preferred Stock”), which is convertible, based on the $15,225,000 aggregate stated value of the Preferred Stock, at a conversion price of $1.60 per share, into an aggregate of 9,515,625  shares of the Company’s Common Stock subject to adjustment pursuant to the Certificate of Designation of the Relative Rights and Preferences of the Series A Conv ertible Preferred Stock. Capitalized terms used in this Agreement without definition, have the meaning assigned to those terms in the Purchase Agreement;


(2)

To induce the Investors to enter into the Purchase Agreement, the Management Team, which are the sole shareholders of the Company’s subsidiary - Raygere Limited, a British Virgin Islands company, has agreed to deposit that number of shares of Common Stock that they own equal to 10% of the sum of (A) the issued and outstanding shares of Common Stock as at the Closing Date, and (B) the aggregate number of the Conversion Shares under the Notes and/or the Series A Preferred Stock (collectively, the “Escrowed Shares”), as set forth in Exhibit A, in an escrow account immediately prior to the Closing, to be held by the Escrow Agent  for disbursement in accordance with the terms and conditions set forth herein, if the Company meets the specified Performance Thresholds, as hereinafter defined.  For purposes only of the calculations under this Section 2, it is ass umed that there shall be 2,208,720 Escrowed Shares;


(3)

This Agreement constitutes the share escrow agreement alluded to in the Purchase Agreement pursuant to which the Escrow Agent shall receive and disburse the Escrowed Shares.  








NOW, THEREFORE, in consideration of the covenants and mutual promises contained herein and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged and intending to be legally bound hereby, the parties agree as follows:


ARTICLE 1

TERMS OF THE ESCROW


1.1

 Appointment of Escrow Holder.  The parties hereby agree to have Leser Hunter Taubman & Taubman act as Escrow Agent whereby the Escrow Agent shall receive the Escrow Shares in escrow and distribute the same as set forth in this Agreement.  



1.2

Escrow Deposit


(a)

In accordance with the terms of the Purchase Agreement, immediately prior to the Closing, the Management Team shall deliver the Escrowed Shares to the Escrow Agent;

(b)

The Escrow Agent shall hold the Escrowed Shares in the Escrow Account at all times until such Escrowed Shares are disbursed in accordance herewith.


1.3

Performance Threshold


If the Company does not achieve the specified percentage, which is based on a scale of 100%, of the following Performance Thresholds, the Escrowed Shares shall be disbursed to the Investors as set forth herein:


(a)

Fiscal Year 2008 Performance Threshold – the Lessor of: Reported Net Income of at least $5.6 million or fully diluted EPS (share count includes all outstanding common shares, preferred shares, warrants and options) of $0.16 per share (the “2008 PT”);

(b)

Fiscal Year 2009 Performance Threshold – the Lessor of: Reported Net Income of at least $7.2 million or fully EPS (share count includes all outstanding common shares, preferred shares, warrants and options) of $0.20 per share (the “2009 PT”).

(c)

Each Performance Threshold shall be determined as of the date the Company’s audited financial statements for the corresponding fiscal year are required to be filed with the Securities and Exchange Commission pursuant to the reporting requirements of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended (each such date for each of the applicable fiscal years being hereinafter referred to as the “Audit Date”); and, if the Company is not required to file reports pursuant to Section 13(a) or 15(d) of the Exchange Act, and therefore prepares and furnishes the documents required by Section 6 of the Registration Rights Agreement, the



2





Performance Threshold shall be determined in accordance with such prepared documents and at such time.


1.4

Escrow Release


The Company shall remit written instructions to the Escrow Agent and the Investors two (2) business days after the Audit Date, in the form of Exhibit C attached hereto and made a part hereof, or in a form and substance satisfactory to the Escrow Agent, directing the Escrow Agent to release the Escrowed Shares within five (5) business days of the Audit Date for each fiscal year, as specified therein and in accordance with the following guidelines (the “Release Notice”):


(a)

One half of the Escrowed Shares (1,104,360) shall be allocated for each fiscal year (the “Yearly Shares”); any Escrowed Shares not distributed pursuant to the Release Notice regarding fiscal 2008, shall be held in Escrow and distributed in accordance herewith.


(b)

If the Company achieves 92% or less of the 2008 PT, then the Escrowed Shares shall be delivered as follows:  (i) the Investors shall receive 73,624 shares for each percentage by which such threshold was not achieved (pro rata based on the number of shares of Preferred Stock owned by such Investor at such date) up to a maximum of 1,104,360 shares; (ii) if less than 500,000 shares are distributed pursuant to the calculation set forth in Section 1.4(b)(i) above, then the Management Team shall receive a total of 500,000 shares less the number of shares distributed pursuant Section 1.4(b), to be distributed pro rata among the Management Team based upon the percentages set forth in Exhibit A.  


(c)

If the Company achieves 92% or less of the 2009 PT, then the Escrowed Shares shall be delivered as follows:  (i) the Investors shall receive 73,624 shares for each percentage by which such threshold was not achieved (pro rata based on the number of shares of Preferred Stock owned by such Investor at such date) up to a maximum of 1,104,360 shares, plus any additional shares not distributed pursuant to Section 1.4(b)


(d)

If any Escrowed Shares remain in the Escrow Account after all of the disbursements are made pursuant to the 2009 Release Notice, the Escrow Agent shall return such remaining shares to the Management Team.


(e)

In the event that the Closing does not occur and written notice of same, signed by all of the parties hereto, is delivered to the Escrow Agent or upon the written instructions of all of the parties hereto, the



3





Escrowed Agent shall return the Escrowed Shares to the Management Team.


(f)

Upon the Escrow Agent’s completion of its obligations under Section 1.4, this Agreement shall terminate and the Escrow Agent shall have no further liability hereunder.  


1.5

This Agreement may be altered or amended only with the written consent of all of the parties hereto.  Should any of the Parties attempt to change this Agreement in a manner, which, in the Escrow Agent’s discretion, shall be undesirable, the Escrow Agent may resign as Escrow Agent by notifying the Parties in writing five days in advance.  In the case of the Escrow Agent’s resignation or removal pursuant to the foregoing, his only duty, until receipt of notice from the Parties that a successor escrow agent has been appointed, shall be to hold and preserve the Escrow Shares that are in his possession.  Upon receipt by the Escrow Agent of said notice from the Parties of the appointment of a successor escrow agent, the name of a successor escrow account and a direction to transfer the Escrowed Shares, the Escrow Agent shall promptly thereafter transfer all of the Escrowed S hares that it is still holding in escrow, to said successor escrow agent.  Immediately after said transfer of the Escrowed Shares, the Escrow Agent shall furnish the Parties with proof of such transfer.  The Escrow Agent is authorized to disregard any notices, requests, instructions or demands received by it from the Parties after the Escrow Agent promptly transfers all of the Escrowed Shares that it is still holding in escrow, to the above said successor escrow agent.


1.5   The Escrow Agent shall be reimbursed by the Parties for any reasonable expenses incurred in the event there is a conflict between the parties and the Escrow Agent shall deem it necessary to retain counsel, upon whose advice the Escrow Agent may rely. The Escrow Agent shall not be liable for any action taken or omitted by him in good faith and in no event shall the Escrow Agent be liable or responsible except for the Escrow Agent’s own gross negligence or willful misconduct.  The Escrow Agent has made no representations or warranties to the Parties in connection with this transaction. The Escrow Agent has no liability hereunder to either party other than to hold the Escrowed Shares and to deliver them under the terms hereof.  Each party hereto agrees to indemnify and hold harmless the Escrow Agent from and with respect to any suits, claims, actions or liabilities arising in any way out of this transaction including the obligation to defend any legal action brought which in any way arises out of or is related to this Agreement or the investment being made by Purchaser. The Parties, with the exception of the Company, acknowledge and represent that they are not being represented in a legal capacity by Leser Hunter Taubman & Taubman and have had the opportunity to consult with their own legal advisors prior to the signing of this Agreement. The Parties, with the exception of the Company, acknowledge that the Escrow Agent is not rendering securities advice to them with respect to this transaction or otherwise.  The Parties consent to the Escrow Agent acting in such capacity as legal counsel for the Company and waive any claim that such representation represents a conflict of interest on the part of the Escrow Agent.  The Parties understand that the Escrow Agent and the Company are relying explicitly on the foregoing provisions contained in this Section 1. 5 in entering into this Agreement.




4





1.6

The Escrow Agent shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall be protected in relying or refraining from acting on any instrument reasonably believed by the Escrow Agent to be genuine and to have been signed or presented by the proper party or parties.  The Escrow Agent shall not be personally liable for any act the Escrow Agent may do or omit to do hereunder as the Escrow Agent while acting in good faith, and any act done or omitted by the Escrow Agent pursuant to the advice of the Escrow Agent's attorneys-at-law shall be conclusive evidence of such good faith.


1.7

The Escrow Agent is hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or process of courts of law and is hereby expressly authorized to comply with and obey orders, judgments or decrees of any court.  In case the Escrow Agent obeys or complies with any such order, judgment or decree, the Escrow Agent shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction.


1.8

The Escrow Agent shall not be liable in any respect on account of the identity, authorities or rights of the parties executing or delivering or purporting to execute or deliver the Agreement or any documents or papers deposited or called for hereunder.


1.9

If the Escrow Agent reasonably requires other or further documents in connection with this Agreement, the necessary parties hereto shall join in furnishing such documents.


1.10

It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the documents, the Escrowed Shares held by the Escrow Agent hereunder, the Escrow Agent is authorized and directed in the Escrow Agent's sole discretion (a) to retain in the Escrow Agent's possession without liability to anyone all or any part of said documents, the Escrowed Shares until such disputes shall have been settled either by mutual written agreement of the parties concerned or by a final order, decree or judgment of a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but the Escrow Agent shall be under no duty whatsoever to institute or defend any such proceedings or (b) to deliver the Escrowed Shares and any other property and documents held by the Escrow Agent hereunder to a state or federal court hav ing competent subject matter jurisdiction and located in the State of New York in accordance with the applicable procedure therefor.




5





ARTICLE 2

MISCELLANEOUS


2.1  

No waiver of any breach of any covenant or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof, or of any other covenant or provision herein contained.  No extension of time for performance of any obligation or act shall be deemed any extension of the time for performance of any other obligation or act.


2.2

This Agreement shall be binding upon and shall inure to the benefit of the permitted successors and assigns of the parties hereto.


2.3

This Agreement is the final expression of, and contains the entire agreement between, the parties with respect to the subject matter hereof and supersedes all prior understandings with respect thereto.  This Agreement may not be modified, changed, supplemented or terminated, nor may any obligations hereunder be waived, except by written instrument signed by the parties to be charged or by its agent duly authorized in writing or as otherwise expressly permitted herein.


2.4

Whenever required by the context of this Agreement, the singular shall include the plural and masculine shall include the feminine.  This Agreement may be executed in two or more counterparts, all of which taken together shall constitute one instrument.  Execution and delivery of this Agreement by exchange of facsimile copies bearing the facsimile signature of a party shall constitute a valid and binding execution and delivery of this Agreement by such party.  Such facsimile copies shall constitute enforceable original documents.


2.5

The parties hereto expressly agree that this Agreement shall be governed by, interpreted under, and construed and enforced in accordance of the laws of the State of New York. The parties agree that any dispute arising under or with respect to or in connection with this Agreement, whether during the term of this Agreement or at any subsequent time, shall be resolved fully and exclusively in the federal or state courts resident in New York County, New York.

   

2.6

Any notice required or permitted hereunder shall be given in a manner provided in the Notice Section contained in the Purchase Agreement to the address or contact information for the Parties set forth therein or, in the case of notice to the Escrow Agent, shall be sent by commercial overnight courier such as UPS or Fedex to the Escrow Agent at the address first written above.  


2.7

By signing this Agreement, the Escrow Agent becomes a party hereto only for the purpose of this Agreement; the Escrow Agent does not become a party to the Purchase Agreement or any related agreements.


2.8

Each party acknowledges and agrees that this Agreement shall not be deemed prepared or drafted by any one party.  In the event of any dispute between the Parties concerning this Agreement, the Parties agree that any rule of construction, to the effect that



6





any ambiguity in the language of the Agreement is to be resolved against the drafting party, shall not apply.





(Signature Page to Follow)



7





IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first set forth above.


Executed:


THE COMPANY


Viscorp, Inc.



By: _______________________________
Name:

Guoqing Jiang
Title:  

Chief Executive Officer


THE MANAGEMENT TEAM


TIME POLY MANAGEMENT LIMITED



By: ______________________________________

Name: Stewart Shiang Lor,

Title: Director



CMARK HOLDINGS CO. LTD.



By: ______________________________________

Name: Stewart Shiang Lor,

Title: Director


Happyvale Limited



By: ______________________________________

Name: Brian Pak Lun Mok,

Title: Director



Fartop Management Limited



By: ______________________________________

Name: Yinzi Tang,

Title: Director




8






Escrow Agent


Leser, Hunter, Taubman & Taubman



________________________________

Name: Louis Taubman

Title: Partner



9






INVESTOR SIGNATURE PAGE:




[PRINT NAME OR NAME OF ENTITY]





X____________________________________________


By:

______________________________________


Name:

______________________________________


Title:

______________________________________




10





Exhibit A


   

Shareholder Name

 

VSCO Shares

Time Poly Management, Ltd.

 

1,880,021 (78%)

Fartop Management Limited

 

38,082 (1.58%)

 

Cmark Holdings, Co., Ltd.

 

408,061 (16.93%)

Happyvale Limited

 

84,119 (3.49%)  

 

   
   

TOTAL

 

2,410,283




11





Exhibit C


FORM OF ESCROW RELEASE NOTICE


Date:


Leser, Hunter, Taubman & Taubman

17  State Street, Floor 16

New York, New York 10004


Dear Escrow Agent:


In accordance with the terms of Article 1 of the Escrow Agreement dated as of January __, 2008, (the “Escrow Agreement"), by and among Viscorp, Inc. (the “Company”); Time Poly Management Limited, a British Virgin Islands corporation (“Time Poly”); Happyvale Limited, a British Virgin Islands corporation (“Happyvale”); Fartop Management Limited, a British Virgin Islands corporation (“Fartop”); Cmark Holdings Co., Ltd., a corporation organized under the laws of the Cayman Islands (“Cmark” and together with Time Poly, Happyvale and Fartop, the “Management Team” and together with the Company, the “Parties”), and the Company hereby notifies the Escrow Agent of the following:

1.

The Audit Date was ___________ __, 200__; and

2.

The Company achieved __% of the Performance Threshold.  


Accordingly, please distribute the Escrowed Shares as follows:


Recipient Information

 

Amount of Escrowed Shares to be delivered

   
   
   
   



Very truly yours,


VISCORP, INC.

By:_____________

Name:__________

Title:____________





12



 EX-10.5 4 sharetransferagreemt.htm SHARE TRANSFER AGREEMENT Share Transfer Agreement

EXECUTION COPY








SHARE TRANSFER AGREEMENT





BETWEEN



Stewart Shiang Lor



AND



Transferees







Date: January 16, 2008






THIS SHARE TRANSFER AGREEMENT (this "Agreement") is made on January 16, 2008 by and among Stewart Shiang Lor (the "Transferor") and each of the individuals listed in Schedule A hereto (collectively the "Transferees" and each a "Transferee").

The Transferor and the Transferees are collectively referred to as the "Parties" and each of them as a "Party".

Whereas, the Transferor is the sole shareholder of Time Poly Management Ltd. (the “Company”), which is one of the registered shareholders of the Raygere Limited, a British Virgin Islands Company, which intends to complete a business combination with a public shell company, traded on the Over the Counter Bulletin Board (the "Listed Company"), holding 50,000 Ordinary Shares in the Company as of the date of this Agreement.

Whereas, the Transferees have contributed to the wealth growth of the Transferor through the growth of the Company, the Listed Company and its PRC subsidiaries and affiliates (collectively with the Company, the “Group”).  In consideration of the Transferees’ contributions and as an incentive to the Transferees to continue their commitment to the Group, the Transferor has agreed to grant to each of the Transferees, and each Transferee has agreed to accept from the Transferor, an option (the “Option”) to purchase certain number of ordinary shares of the Company currently held by the Transferor (the "Option Shares") as set forth in Schedule A hereto, on the terms and subject to the conditions set out in this Agreement.

NOW, THEREFORE, in consideration of the foregoing recitals, the mutual promises hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

1.

DEFINITIONS


1.1.

Defined Terms : In this Agreement (including the Recitals and the Schedules), unless the context otherwise requires, the following words and expressions shall have the following meanings:


“Alternate Exercise Price” means the exercise price to be paid by a Transferee to the Transferor in respect of the Option Shares issued to such Transferee as set forth opposite his/her name in Schedule A in the event that the Performance Targets (as defined herein) have not been met by the Group;


 

"Business Day" means a day (other than Saturdays, Sundays and public holidays) on which banks are generally open for business in China;

 

 

"China" or "PRC" means the People's Republic of China;

 

 

"Completion Date" means the date falling seven (7) Business Days after the service of the Exercise Notice by the Transferees on the Company;

 

 

"Completion" means the completion of the sale to and purchase by the Transferees of the Option Shares under this Agreement, which shall not be later than November 15, 2008;

 

 

"Distributions" means any cash proceeds arising from or in respect of, or in exchange for, or accruing to or in consequence of the Option Shares from the Effective Date to the Completion Date, including without limitation the Dividends.



1





 

"Dividends" means the dividends declared by the Company and accrued in respect of the Option Shares (whether or not such dividends shall have been paid and received by the Transferees);

 

 

"Effective Date" means the date of this Agreement;

 

 

"Exercise" means the exercise by a Transferee or his/her Nominee(s) of the Option pursuant to the terms of this Agreement;

 

 

"Exercise Notice" means the notice substantially in the form set out in Part I of Schedule B;

 

 

"Exercise Price" means the exercise price to be paid by a Transferee to the Transferor in respect of the Option Shares issued to such Transferee as set forth opposite his/her name in Schedule A;

 

 

"Nominee" means such person nominated by a Transferee in the Transfer Notice to be the transferee of the Option or Option Shares;

 

 

"Option Effective Dates" have the meaning ascribed to them in Clause 2.3;

 

 

"Performance Targets" have the meaning ascribed to them in Clause 3;

 

 

"RMB" means the lawful currency of China;

 

 

“Acquisition” means the transaction wherein the Listed Company will acquire 100% equity interest (whether directly or through its subsidiaries) of the Chengdu Tianyin Pharmaceutical Co., Ltd. (成都天银制药有限公司);

 

 

"Transfer Notice" means the notice substantially in the form set out in Part II of Schedule B;

 

 

"US$" or "United States Dollar" means the lawful currency of the United States of America.


"Euro €" means the lawful currency of the European Union.


1.2.

Interpretation: Except to the extent that the context requires otherwise:


1.2.1

words denoting the singular shall include the plural and vice versa; words denoting any gender shall include all genders; words denoting persons shall include firms and corporations and vice versa;


1.2.2

any reference to a statutory provision shall include such provision and any regulations made in pursuance thereof as from time to time modified or re-enacted whether before or after the date of this Agreement and (so far as liability thereunder may exist or can arise) shall include also any past statutory provisions or regulations (as from time to time modified or re-enacted) which such provisions or regulations have directly or indirectly replaced;


1.2.3

the words "written" and "in writing" include any means of visible reproduction;


1.2.4

any reference to "Clauses", "Recitals" and "Schedules" are to be construed as references to clauses and recitals of, and schedules to, this Agreement; and


1.2.5

any reference to a time of day is a reference to China time unless provided otherwise.




2





1.3.

Headings: The headings in this Agreement are inserted for convenience only and shall be ignored in construing this Agreement.


2.

OPTION


2.1.

Option: In consideration of the contributions which the Transferees have made to the Group and their continuing commitment to the Group, the Transferor hereby irrevocably and unconditionally grants to each of the Transferees the Option for such Transferee to acquire from the Transferor, at the Exercise Price or the Alternative Exercise Price, at any time during the Exercise Period (defined below) any or all of the Option Shares set forth opposite his/her name in Schedule A hereto, free from all claims, liens, charges, pledges, mortgages, trust, equities and other encumbrances, and with all rights attaching thereto on the Completion Date.


2.2.

Vesting Schedule: Subject to the terms and conditions hereto, the Option may be exercised, in whole or in part, in accordance with the following schedule:


The Option Shares subject to the Option shall vest at the rate of one-third (1/3) per Performance Period (as defined in Exhibit A).  


2.3.

Exercise Period: Once the Acquisition has been completed or abandoned pursuant to the terms of the definitive agreement regarding the Acquisition, the Option shall be exercisable in accordance with and on the dates set forth in Exhibit A (the “Option Effective Dates”). Subject to the vesting schedule set forth in Section 2.2 of this Agreement, the Option may be exercised by any Transferee (or his/her Nominee on behalf of the Transferee) at any time following the Option Effective Date (“Exercise Period”).


2.4.

Nominees: Each of the Transferees may, at any time during the Exercise Period, at his/her sole discretion, nominate one or more person(s) (each a “Nominee”) to be the transferee(s) of whole or part of his/her Option, who shall hold and/or exercise the transferred Option on behalf of the Transferee.


2.5.

Exercise Notice: The Option may be exercised by any Transferee or his/her Nominee(s), in whole or in part, at any time during the Exercise Period, by serving an Exercise Notice on theTransferor.


2.6.

Exercise: The Transferor agrees that he shall, upon receipt of the Exercise Notice and payment of either the Exercise Price or the Alternative Exercise Price, depending on whether the Performance Targets have been met, issue to the Transferee(s) (or his/her Nominee(s), as the case may be) any and all of the Option Shares specified in the Exercise Notice, free from all claims, liens, charges, pledges, mortgages, trust, equities and other encumbrances, and with all rights now or hereafter attaching thereto.  The Option shall be exercisable only in compliance with PRC laws and regulations and the Transferee(s) (or his/her Nominee(s), as the case may be) shall complete any and all approval or registration procedures regarding the exercise of his/her Option at PRC competent authorities in accordance with applicable PRC laws and regulations.


2.7.

Transfer Notice: In case that any Transferee transfers any or all of his/her Option to one or more Nominee(s) in accordance with Clause 2.4 above, the Transferee shall serve a Transfer Notice on the Transferor.


2.8.

Transfer to Nominees: The Transferor agrees that he shall, upon receipt of the Transfer Notice, take all actions necessary to allow the Nominee(s) to be entitled to any or all of the Options specified in the Transfer Notice.




3





Upon exercise by any Nominee(s) of the transferred Option on behalf of the Transferee, the Transferee shall serve the Exercise Notice on the Transferor in his/her own name for the exercising Nominee(s).  Upon receipt of such Exercise Option, the Transferor shall issue to such Nominee(s) any and all of the relevant Option Shares in the same manner as specified in Clause 2.6.


2.9.

Payment of Exercise Price: Upon Exercise of the Option in whole or in part, the exercising Transferee (or his/her Nominee(s), as the case may be) shall pay the Exercise Price to the Transferor.

  

2.10.

The Transferor’s Obligation upon Exercise: The Transferor agrees that upon the Exercise of any Option by any Transferee (or his/her Nominee(s)), he shall cause and procure the number of Option Shares provided in the Exercise Notice to be transferred to such exercising Transferee (or his/her Nominee(s)) within seven (7) Business Days after the date of the Exercise Notice.


3.

PERFORMANCE TARGET AND CONDITION PRECEDENT


3.1.

The obligation of the Transferor to effect the Option and the transfer of the Option Shares at the Exercise Price to an exercising Transferee upon his/her Exercise of the Option shall be subject to the fulfilment of the following conditions (the “Performance Targets”) set forth in Exhibit A hereto.  In the event that the Group does not achieve the Performance Targets specified in Exhibit A, then the Transferee may exercise the Option at the Alternative Exercise Price on the date at which the Option would have otherwise been exercisable had the Performance Targets been met.  


4.

INFORMATION, DISTRIBUTIONS AND ADJUSTMENTS


4.1.

Information: Each of the Transferees (the "Requesting Transferees") shall be entitled to request from the Transferor at any time before the Completion, a copy of any information received from the Group which may be in the possession of the Transferor and, upon such request, the Transferor shall provide such information to the Requesting Transferee(s).


4.2.

Distributions: The Transferor agrees that each of the Transferees shall be entitled to all the Distributions in respect of his/her Option Shares.  In the event that any such Distributions have been received by the Transferor for any reason, the Transferor shall, at the request of the relevant Transferee, pay an amount equivalent to the Distributions received by him/her to such Transferee at the time of the Option Exercise by the Transferee.


4.3.

Adjustments: If, prior to the Completion, the Company shall effect any adjustment in its share capital (such as share split, share dividend, share combination or other similar acts), then the number of Option Shares to be issued to the Transferee upon Exercise shall be adjusted accordingly to take into account such adjustment.


5.

COMPLETION


5.1.

Time and Venue: Completion of the sale and purchase of the Option Shares pursuant to the Exercise shall take place at such place decided by the exercising Transferee(s) on the Completion Date.


5.2.

Business at Completion: At Completion of each Exercise, all (but not part only) of the following shall be transacted:


5.2.1

the exercising Transferees shall pay the Exercise Price to the Transferor in cash;




4





5.2.2

the Transferor shall cause the Company to within seven (7) Business Days after the date of Exercise Notice, deliver to each of the exercising Transferees (or his/her Nominee(s), same below) the following documents and take all corporate actions necessary to give effect to such delivery:


(a)

a share certificate or share certificates in respect of the number of the Option Shares exercised by such exercising Transferee;


(b)

a certified true copy of the register of members of the Company updated to show the entry of the exercising Transferee as the holder of the Option Shares so exercised; and


(c)

any other documents as the exercising Transferee may reasonably believe necessary to give effect to the issuance of the exercised Option Shares.


6.

CONFIDENTIALITY


The transaction contemplated hereunder and any information exchanged between the Parties pursuant to this Agreement will be held in complete and strict confidence by the concerned Parties and their respective advisors, and will not be disclosed to any person except: (i) to the Parties’ respective officers, directors, employees, agents, representatives, advisors, counsel and consultants that reasonably require such information and who agree to comply with the obligation of non-disclosure pursuant to this Agreement; (ii) with the express prior written consent of the other Party; or (iii) as may be required to comply with any applicable law, order, regulation or ruling, or an order, request or direction of a government agency; provided, however, that the foregoing shall not apply to information that: (1) was known to the receiving Party prior to its first receipt from the other Party; (2) b ecomes a matter of public knowledge without the fault of the receiving Party; or (3) is lawfully received by the Party from a third person with no restrictions on its further dissemination.


7.

TRANSFEROR’S UNDERTAKINGS


Without the prior written consent of all the Transferees, the Transferor shall vote his shares in the Company such that the Company shall not, (i) issue or create any new shares, equity, registered capital, ownership interest, or equity-linked securities, or any options or warrants that are directly convertible into, or exercisable or exchangeable for, shares, equity, registered capital, ownership interest, or equity-linked securities of the Company, or other similar equivalent arrangements, (ii) alter the shareholding structure of the Company, (iii) cancel or otherwise alter the Option Shares, (iv) amend the register of members or the memorandum and articles of association of the Company, (v) liquidate or wind up the Company, or (vi) act or omit to act in such a way that would be detrimental to the interest of the Transferees in the Option Shares.  The Transferor shall cause the Company to disclose to the Transferees true copies of all the financial, legal and commercial documents of the Company and the resolutions of the shareholders and the board of directors.


8.

MISCELLANEOUS


8.1.

Indulgence, Waiver Etc: No failure on the part of any Party to exercise and no delay on the part of such Party in exercising any right hereunder will operate as a release or waiver thereof, nor will any single or partial exercise of any right under this Agreement preclude any other or further exercise of it or any other right or remedy.


8.2.

Effective Date and Continuing Effect of Agreement: This Agreement shall take effect from the Effective Date.  All provisions of this Agreement shall not, so far as they have not been performed at Completion, be in any respect extinguished or affected by Completion or by any



5





other event or matter whatsoever and shall continue in full force and effect so far as they are capable of being performed or observed, except in respect of those matters then already performed.


8.3.

Successors and Assigns: This Agreement shall be binding on and shall ensure for the benefit of each of the Parties' successors and permitted assigns. Any reference in this Agreement to any of the Parties shall be construed accordingly.


8.4.

Further Assurance: At any time after the date of this Agreement, each of the Parties shall, and shall use its best endeavors to procure that any necessary third party shall, execute such documents and do such acts and things as any other Party may reasonably require for the purpose of giving to such other Party the full benefit of all the provisions of this Agreement.


8.5.

Remedies: No remedy conferred by any of the provisions of this Agreement is intended to be exclusive of any other remedy which is otherwise available at law, in equity, by statute or otherwise, and each and every other remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law, in equity, by statute or otherwise. The election of any one or more of such remedies by any Party shall not constitute a waiver by such Party of the right to pursue any other available remedies.


8.6.

Severability of Provisions: If any provision of this Agreement is held to be illegal, invalid or unenforceable in whole or in part in any jurisdiction, this Agreement shall, as to such jurisdiction, continue to be valid as to its other provisions and the remainder of the affected provision; and the legality, validity and enforceability of such provision in any other jurisdiction shall be unaffected.


8.7.

Governing Law: This Agreement shall be governed by, and construed in accordance with, the laws of the British Virgin Islands.


8.8.

Dispute Resolution: In the event of any dispute, claim or difference (the "Dispute") between any Parties arising out of or in connection with this Agreement, the Dispute shall be resolved in accordance with the following:

(a)

Negotiation between Parties; Mediations.  The Parties agree to negotiate in good faith to resolve any Dispute.  If the negotiations do not resolve the Dispute to the reasonable satisfaction of all parties within thirty (30) days, subsection (b) below shall apply.

(b)

Arbitration.  In the event the Parties are unable to settle a Dispute in accordance with subsection (a) above, such Dispute shall be referred to and finally settled by arbitration at Hong Kong International Arbitration Centre in accordance with the UNCITRAL Arbitration Rules (the “UNCITRAL Rules”) in effect, which rules are deemed to be incorporated by reference into this subsection (b).  The arbitration tribunal shall consist of three arbitrators to be appointed according to the UNCITRAL Rules.  The language of the arbitration shall be English.


8.9.

Counterparts: This Agreement may be signed in any number of counterparts, all of which taken together shall constitute one and the same instrument.  Any Party hereto may enter into this Agreement by signing any such counterpart.


[SIGNATURE PAGE FOLLOWS]




6





IN WITNESS WHEREOF the Parties hereto have executed this Agreement on the date first above written.


The Transferor




By: _____________________

Stewart Shiang Lor



The Transferee


  

By: ____________________­­­­­­­­­­_______         

Name: Mr. Guoqing Jiang (江国庆)

 

By: _____________________

Name: Mr. Yong Zhan (詹勇)

 

By: ___________________________

Name: Mr. Xintao You (游心涛)

 

By: _____________________

Name: Ms. Li Zhou (周莉)

 

By: ___________________________

Name: Mr. Daqiao Zhang (张大桥)

 

By: _____________________

Name: Mr. Hongcai Li (李洪才)


 




[SIGNATURE PAGE TO INCENTIVE OPTION AGREEMENT]




EXHIBIT A


PERFORMANCE TARGETS


A.

The Group shall have generated a gross revenue of

(i) at least RMB 26,000,000 for three months commencing from January 1, 2008 to March 31, 2008 (the “March Performance Period”);

(ii) at least RMB 26,500,000 for three months commencing from April 1, 2008 to June 30, 2008 (the “June Performance Period”);

(iii) at least RMB 27,000,000 for three months commencing from July 1, 2008 to September 31, 2008 (the “September Performance Period” and together with the March Performance Period and the June Performance Period, the “Performance Period”).



B.

The Option Effective Date for each Performance Period shall be that date that is forty five (45) days following the last day of each such Performance Period.









SCHEDULE A


Transferees and Option Shares



Transferees

ID Card Number

Number of
Option Shares

Exercise Price

Alternate Exercise Price

Mr. Guoqing Jiang

江国庆

321111196703070812

38,429

US$330,487

US$660,975

Mr. Xintao You

游心涛

510102196203255317

3,837

US$32,998

US$65,996

Mr. Yong Zhan

詹　勇

610103196911153610

3743

US$32,193

US$64,387

Ms. Li Zhou

周　莉

51011119580915116X

2714

US$23,340

US$46,680

Mr. Daqiao Zhang

张大桥

321102680917191

1126

US$9,688

US$19,376

Mr. Hongcai Li

李洪才

510213197310083775

150

US$1,293

US$2,586





1







SCHEDULE B


Part I


Form of Exercise Notice





To

:

Stewart Shiang Lor (the “Transferor”)


From

:

[  ] (the “Transferee”)



We refer to the Share Transfer Agreement (the "Share Transfer Agreement") dated December 28, 2007 made between the Transferee and the Company.  Terms defined in the Option Agreement shall have the same meanings as used herein.


We hereby give you notice that we require you to sell to us / [Nominees' names] in accordance with the terms and conditions of the Share Transfer Agreement, the following Option Shares at the Exercise Price set out below, subject to the terms and conditions set out in the Share Transfer Agreement. Completion shall take place at [    ] on [                ] at the office of [    ].



Transferee

Option Shares

Exercise Price/Alternative Exercise Price

   



Dated [   ]  



Yours faithfully



___________________________

Name:

Title:

For and on behalf of

[Transferee]








Party II


Form of Transfer Notice




To

:

Stewart Shiang Lor (the “Transferor”)


From

:

[  ] (the “Transferee”)



We refer to the Share Transfer Agreement (the "Share Transfer Agreement") dated December 28, 2007 made between the Transferee and the Company.  Terms defined in the Option Agreement shall have the same meanings as used herein.


We hereby give you notice that we will transfer to [Nominees' names] the following portion of the Option, expressed in terms of the number of Option Shares represented by the portion of the Option transferred in accordance with the terms and conditions of the Share Transfer Agreement,.



Transferee

Nominees

Option Shares Represented

Mr. Guoqing Jiang

  

Mr. Xintao You

  

Mr. Yong Zhan

  

Ms. Li Zhou

  

Mr. Daqiao Zhang

  

Mr. Hongcai Li

  



Dated [     ]



Yours faithfully



___________________________

Name:

Title:

For and on behalf of

[Transferee]

 







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