Agreement and Plan of Reorganization among Echelon Acquisition Corp., Asia Biotechnology Group Inc., Far Grand Investments Limited, Harbin OT Pharmaceutical Co., Limited, and Shareholders
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Summary
This agreement, dated May 8, 2006, is between Echelon Acquisition Corp. (EAC), Asia Biotechnology Group Inc. (ABG), Far Grand Investments Limited (as ABG shareholder), Harbin OT Pharmaceutical Co., Limited (OT Samoa), and the shareholders of OT Samoa. It sets out the terms for reorganizing the companies by exchanging all shares of ABG and OT Samoa for newly issued shares of EAC, resulting in a change of control. The agreement includes conditions for closing, share transfers, and the appointment of new directors and officers, with the transaction effective upon SEC filing.
EX-2.1 2 exhibit21_8k.txt AGREEMENT AND PLAN OF REORGANIZATION EXHIBIT 2.1 AGREEMENT AND PLAN OF REORGANIZATION THIS AGREEMENT AND PLAN OF REORGANIZATION (the "AGREEMENT") is made as of May 8, 2006, by and among Echelon Acquisition Corp., a corporation organized under the laws of the State of Delaware (the "EAC"); Asia Biotechnology Group Inc., a corporation organized under the laws of British Virgin Islands (the "ABG"); Far Grand Investments Limited, a corporation organized under the laws of Cayman Islands, acting as the shareholder of ABG, (the "ABG SHAREHOLDER"); Harbin OT Pharmaceutical Co., Limited, a company organized under the laws of Samoa (the "OT SAMOA"); and shareholders of OT Samoa, each of whom is identified on EXHIBIT "A" to this agreement ( collectively the "OT SAMOA SHAREHOLDERS"). WITNESSETH: RECITALS WHEREAS, the respective Boards of Directors of EAC, ABG and OT Samoa have adopted resolutions pursuant to which all of the issued and outstanding shares of the common stock of ABG (the "ABG SHARE") and all of the issued and outstanding shares of OT Samoa (the "OT SAMOA SHARES") will be converted into the right to receive a specified number of shares of the common stock of EAC (the "EAC SHARES"); and WHERAS, the sole consideration for the exchange of the ABG Share shall be the receipt by the ABG Shareholder of 23,296,000 EAC Shares, $0.001 par value per share; and the sole consideration for the exchange of the OT Samoa Shares shall be the receipt by the OT Samoa Shareholders of 23,296,000 EAC Shares, $0.001 par value per share, as more particularly set forth in EXHIBIT "A" hereto. The EAC Shares shall be deemed "restricted securities" as defined under Rule 144 of the Securities Act of 1933, as amended (the "ACT"); and WHEREAS, the ABG Shareholder and the OT Samoa Shareholders shall acquire in exchange such "restricted securities" of EAC in a reorganization within the meaning of Section 368(a) (1) (B) of the Internal Revenue Code of 1986, as amended, and/or any other "tax free" exemptions thereunder that may be available for this exchange, if and only to the extent that the Internal Revenue Code applies to this Agreement and the transactions contemplated thereby. NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, it is agreed: SECTION 1 EXCHANGE OF STOCK 1.1 Transfer and Number of Shares. The ABG Shareholder and the OT Samoa Shareholders individually agrees to transfer to EAC at the closing (the "CLOSING") the ABG Share and OT Samoa Shares, in exchange for newly issued and restricted shares of common stock of EAC. In connection with the acquisition of the ABG Share and the OT Samoa Shares, EAC shall issue to the ABG Shareholder an aggregate of Twenty Three Million Two Hundred and Ninety Six Thousand (23,296,000) shares of EAC common stock, and shall simultaneously issue to the OT Samoa Shareholders an aggregate of Twenty Three Million Two Hundred and Ninety Six Thousand (23,296,000) shares of EAC common stock. Such shares at the Closing shall equal eighty percent (80%) of the issued and outstanding shares of EAC. After the Closing, there will be 58,240,000 outstanding shares of common stock of the reorganized EAC. 1.2 Exchange of Certificates by the ABG Shareholder and the OT Samoa Shareholders. The transfer of the ABG Share and OT Samoa Shares shall be effected by the delivery to EAC at the Closing of stock certificates duly endorsed in blank or accompanied by stock powers executed in blank with all signatures witnessed or guaranteed to the satisfaction of EAC and with all necessary transfer taxes and other revenue stamps affixed and acquired at the ABG Shareholder and the OT Samoa Shareholders' expense. 1.3 Further Assurances. At the Closing and from time to time thereafter, the ABG Shareholder and OT Samoa Shareholders shall execute such additional instruments and take such other action as EAC may request in order to exchange and transfer clear title and ownership in the ABG share and the OT Samoa Shares to EAC. 1.4 Closing. The Closing shall be deemed to have occurred on the Effective Date (as hereinafter defined). As used in this Agreement, the term Closing Date shall be defined to be the same as the Effective Date. 1.5 Effective Date. The transactions contemplated by this Agreement shall be deemed consummated at such time as EAC shall have filed with the US Securities and Exchange Commission ("SEC") a Current Report on Form 8-K which reports the change in control transaction effected by this Agreement and includes therein, all required audited financial information of ABG, its controlled subsidiary, and OT Samoa (the "Current Report"). If the Current Report is not filed on or before May 15, 2006, EAC shall have the right, in its sole discretion, to either deem this Agreement terminated or provide ABG and OT Samoa with an extension for filing the Current Report. The effective date (the "Effective Date") of this Agreement shall thus be the date the Company files the Current Report with the SEC. In addition, for the Closing to be deemed to have occurred as of the Effective Date, all of the other conditions precedent to the obligations of each of the parties hereto as hereinafter set forth shall have been satisfied or shall have been waived. 1.6 Resignations of Present Executive Officers and Designation of New Directors and Executive Officers. On the Closing Date, the present directors and executive officers of EAC shall designate the directors and executive officers nominated by the ABG Shareholder to serve in their place and stead, until the next respective annual meeting of the shareholders and the Board of Directors of the reorganized EAC, and until their respective successors shall be elected and qualified or until their respective prior resignations or terminations. The following shall be appointed directors and officers of EAC upon the closing of the transactions contemplated herein: Xueliang Qiu, Director/Chairman of the Board/President/Chief Executive Officer; Lei Zhu, Director/Chief Operation Officer; and Feng Yang, Director/Chief financial Officer. The current director and executive officer shall resign, in seriatim, on the Closing Date. SECTION 2 CLOSING The Closing shall be effected by telephone and facsimile on the Closing Date unless another place or time is agreed upon in writing by the parties. The Closing may also be accomplished by wire, express mail or other courier service, conference telephone communications or as otherwise agreed by the respective parties or their duly authorized representatives. SECTION 3 REPRESENTATIONS AND WARRANTIES OF EAC EAC represents and warrants to, and covenants with, ABG, ABG Shareholder, OT Samoa and OT Samoa Shareholders as follows: 3.1 Corporate Status; Compliance with Securities Laws. EAC is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and is licensed or qualified as a foreign corporation in all jurisdictions in which the nature of its business or the character or ownership of its properties makes such licensing or qualification necessary. EAC is a reporting company on the OTCBB, and is not in violation of any applicable federal or state securities laws, rules or regulations. Except as set forth above, there is at present no established trading market for EAC's securities. 3.2 Capitalization. The authorized capital stock of EAC at Closing will consist of 20,000,000 shares of preferred stock, of which none has been issued and outstanding; and 100,000,000 shares of common voting stock, of which 11,648,000 shares are issued and outstanding, all fully paid and non- assessable. There are no subscriptions, warrants, rights or calls or other commitments or agreements to which EAC is a party or by which it is bound, pursuant to which EAC is or may be required to issue or deliver securities of any class. There are no outstanding securities convertible or exchangeable, actually or contingently, into common stock or any other securities of EAC. After the Closing, there will be 58,240,000 outstanding shares of common stock, on a fully diluted basis, of EAC. 3.3 Financial Statements. The financial statements of EAC furnished to the ABG Shareholder and the OT Samoa Shareholders consisting of audited financial statements for the years ended December 31, 2005 and 2004, as filed with the SEC and incorporated herein by reference, are correct and fairly present the financial condition of EAC at such dates and for the periods involved; such statements were prepared in accordance with generally accepted accounting principles consistently applied, and no material change has occurred in the matters disclosed therein. Such financial statements do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading. 3.4 Undisclosed Liabilities. EAC has no liabilities of any nature except to the extent reflected or reserved against in its balance sheets, whether accrued, absolute, contingent or otherwise, including, without limitation, tax liabilities and interest due or to become due. 3.5 Interim Changes. Since December 31, 2005, there have been no (i) changes in financial condition, assets, liabilities or business of EAC which, in the aggregate, have been materially adverse; (ii) damages, destruction or losses of or to property of EAC, payments of any dividend or other distribution in respect of any class of stock of EAC, or any direct or indirect redemption, purchase or other acquisition of any class of any such stock; or (iii) increases paid or agreed to in the compensation, retirement benefits or other commitments to its employees. 3.6 Title to Property. EAC has good and marketable title to all properties and assets, real and personal, reflected in its balance sheets, and the properties and assets of EAC are not subject to any mortgage, pledge, lien or encumbrance, with respect to which no default exists. 3.7 Litigation. There is no litigation or proceeding pending, or to the knowledge of EAC, threatened, against or relating to EAC, its properties or business. Further, no officer, director or person who may be deemed to be an "affiliate" of EAC is party to any material legal proceeding which could have an adverse effect on EAC (financial or otherwise), and none is party to any action or proceeding wherein any has an interest adverse to EAC. 3.8 Books and Records. The books and records of EAC have been, and are being, maintained in all material respects in accordance with United States generally accepted accounting principles and any other applicable legal and accounting requirements and reflect only actual transaction. 3.9 Tax Returns. EAC has duly filed all tax returns required to be filed by it other than tax returns (individually and in the aggregate) where the failure to file would have no material adverse effect on the business or prospects of EAC. All such tax returns were, when filed, and to the knowledge of EAC are, accurate and complete in all material respects and were prepared in conformity with applicable laws and regulations. EAC has paid or will pay in full or has adequately reserved against all taxes otherwise assessed against it through the Closing Date. EAC is not a party to any pending action or proceeding by any governmental authority for the assessment of any tax, and, to the knowledge of EAC, no claim for assessment or collection of any tax related to EAC has been asserted against EAC that has not been paid. There are no tax liens upon the assets of EAC. There is no valid basis, to EAC's knowledge, for any assessment, deficiency, notice, 30-day letter or similar intention to assess any tax to be issued to EAC by any governmental authority. 3.10 Confidentiality. EAC's current directors and officers and their representatives will keep confidential any information which they obtain from ABG, OT China (as hereinafter defined) and OT Samoa concerning their respective properties, assets and business. 3.11 Corporate Authority. EAC has full corporate power and authority to enter into this Agreement and to carry out its obligations hereunder and will deliver to both the ABG Shareholder and the OT Samoa Shareholders at the Closing a certified copy of resolutions of its Board of Directors authorizing execution of this Agreement by EAC's officers and performance thereunder, and that the directors adopting and delivering such resolutions are the duly elected and incumbent directors of EAC. 3.12 Due Authorization. At closing, the execution of this Agreement and performance by EAC hereunder will have been duly authorized by all requisite corporate action on the part of EAC, and this Agreement will constitute a valid and binding obligation of EAC and performance hereunder will not violate any provision of the Articles of Incorporation or other documents, Bylaws, agreements, mortgages or other commitments of EAC, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application now or hereafter in effect relating to or affecting the enforcement of creditors' right generally and the application of general equitable principles in any action, legal or equitable. 3.13 Environmental Matters. EAC has no knowledge of any assertion by any governmental agency or other regulatory authority of any environmental lien, action or proceeding, or of any cause for any such lien, action or proceeding related to the business operations of EAC or its predecessors. In addition, to the best knowledge of EAC, there are no substances or conditions which may support a claim or cause of action against EAC or any of its current or former officers, directors, agents, employees or predecessors, whether by a governmental agency or body, private party or individual, under the Laws of Delaware. 3.14 Access to Information Regarding ABG. EAC acknowledges that it has been delivered copies of documentation containing all material information respecting ABG, its 60% owned subsidiary, Harbin OT Pharmaceutical Co., Ltd., a company organized under the laws of the People's Republic of China (the "OT CHINA"), and ABG's present and contemplated business operations, potential acquisitions, and management; that it has had a reasonable opportunity to review such documentation and discuss it, to the extent desired, with its legal counsel, directors and executive officers; that it has had, to the extent desired, the opportunity to ask questions of and receive responses from the directors and executive officers of ABG, and with the legal and accounting firms of ABG, with respect to such documentation; and that to the extent requested, all questions raised have been answered to EAC's complete satisfaction. 3.15 Access to Information Regarding OT Samoa. EAC acknowledges that it has been delivered copies of documentation containing all material information respecting OT Samoa and OT Samoa's potential acquisitions, and management; that it has had a reasonable opportunity to review such documentation and discuss it, to the extent desired, with its legal counsel, directors and executive officers; that it has had, to the extent desired, the opportunity to ask questions of and receive responses from the directors and executive officers of OT Samoa, and with the legal firms of OT Samoa, with respect to such documentation; and that to the extent requested, all questions raised have been answered to EAC's complete satisfaction. 3.16 Assets and Liabilities of EAC at Closing. EAC shall have no assets and no liabilities on the Closing Date. EAC has good and marketable title to all of the assets and properties as reflected on its most recent balance sheet. 3.17 Rule 144. To the best knowledge of EAC, the shares of EAC issued in exchange for the ABG Share to the ABG Shareholder and in exchange for the OT Shares to the OT Shareholders shall be eligible for resale pursuant to Rule 144, without registration under the Act, after satisfaction by the ABG Shareholder, OT Samoa Shareholders and EAC of the provisions established by Rule 144, generally, and the Securities Exchange Act of 1934. 3.18 Contracts and Other Commitments. Except as set forth in EAC's public filings, EAC is not a party to any contracts or agreements. 3.19 Compliance with Laws and Regulations. EAC has complied and is presently complying, in all material respects, with all laws, rules, regulations, orders and requirements (federal, state and local and foreign) applicable to it in all jurisdictions where the business of EAC is conducted or to which EAC is subject. 3.20 No Omissions or Untrue Statements. To the best of EAC's knowledge, no representation or warranty made by EAC in this Agreement, or in any certificate of EAC officer required to be delivered pursuant to the terms of this Agreement, contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading as of the date hereof and as of the Closing Date. SECTION 4 REPRESENTATIONS, WARRANTIES AND COVENANTS OF ABG AND ABG SHAREHOLDER ABG and the ABG Shareholder represent and warrant to, and covenant with, EAC, OT Samoa and the OT Samoa Shareholders as follows: 4.1 Corporate Status of ABG. ABG is a corporation duly organized, validly existing and in good standing under the laws of British Virgin Islands, and is licensed or qualified as a foreign corporation in all jurisdictions or foreign countries and provinces in which the nature of ABG's business or the character or ownership of ABG's properties makes such licensing or qualification necessary. 4.2 Capitalization of ABG. The authorized common stock of ABG consists of 50,000 shares of common stock, $1.00 par value per share, of which 1 share is issued and outstanding, and which are fully paid and non-assessable. There are no outstanding options, warrants or calls pursuant to which any person has the right to purchase any authorized and unissued common or other securities of ABG. 4.3 Ownership of ABG. The ABG Shareholder owns the ABG Shares free and clear of any liens or encumbrances of any type or nature whatsoever, and has all right, power and authority to convey all issued and outstanding ABG share, free and clear of any liens or encumbrances of any type of nature whatsoever. 4.4 Corporate Status of OT China OT China is an Equity Joint Venture Enterprise duly organized, validly existing and in good standing under the laws of the People's Republic of China, and is licensed or qualified as a foreign corporation in all states of the United States or foreign countries and provinces in which the nature of its business or the character or ownership of its properties makes such licensing or qualification necessary. 4.5 Ownership of OT China. ABG owns 60% of equity interests of OT China free and clear of any liens or encumbrances of any type or nature whatsoever, and has full right, power and authority to convey the OT China ownership that it owns without qualification. 4.6 Capitalization of OT China. The paid-in capital of OT China is RMB30,000,000 (US$3,712,871), which is fully paid and non-assessable. There are no outstanding options, warrants or calls pursuant to which any person has the right to purchase any authorized and unissued common or other equities of OT China. 4.7 Financial Statements. The financial statements of ABG, which includes the financial statements of OT China, furnished to EAC, consisting of an audited compiled balance sheet and income statement for the year ended December 31, 2005, and incorporated herein by reference, are correct and fairly present the combined financial condition of ABG and OT China as of these dates and for the periods involved; such statements were prepared in accordance with US generally accepted accounting principles consistently applied, and no material change has occurred in the matters disclosed therein. These financial statements do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading. 4.8 Undisclosed Liabilities of ABG. ABG has no material liabilities of any nature except to the extent reflected or reserved against in its balance sheet, whether accrued, absolute, contingent or otherwise, including, without limitation, tax liabilities and interest due or to become due. 4.9 Undisclosed Liabilities of OT China. OT China has no material liabilities of any nature except to the extent reflected or reserved against in its balance sheet, whether accrued, absolute, contingent or otherwise, including, without limitation, tax liabilities and interest due or to become due. 4.10 Interim Changes of ABG. Since December 31,2005, there have been no (i) changes in the financial condition, assets, liabilities or business of ABG, which in the aggregate, have been materially adverse; (ii) damages, destruction or loss of or to the property of ABG, payment of any dividend or other distribution in respect of the capital stock of ABG, or any direct or indirect redemption, purchase or other acquisition of any such stock; or (iii) increases paid or agreed to in the compensation, retirement benefits or other commitments to their employees. 4.11 Interim Changes of OT China. Since December 31, 2005, there have been no (i) changes in the financial condition, assets, liabilities or business of OT China, which in the aggregate, have been materially adverse; (ii) damages, destruction or loss of or to the property of OT China, payment of any dividend or other distribution in respect of the capital stock of OT China, or any direct or indirect redemption, purchase or other acquisition of any such stock; or (iii) increases paid or agreed to in the compensation, retirement benefits or other commitments to their employees. 4.12 Title to Property of ABG. ABG has good and marketable title to all properties and assets, real and personal, proprietary or otherwise, reflected in the ABG balance sheet. 4.13 Title to Property of OT China. OT China has good and marketable title to all properties and assets, real and personal, proprietary or otherwise, reflected in its balance sheet. 4.14 Litigation of ABG. There is no litigation or proceeding pending, or to the knowledge of ABG, threatened, against or relating to ABG or its properties or business. Further, no officer, director or person who may be deemed to be an affiliate of ABG is party to any material legal proceeding which could have an adverse effect on ABG (financial or otherwise), and none is party to any action or proceeding wherein any has an interest adverse to ABG. 4.15 Litigation of OT China. There is no litigation or proceeding pending, or to the knowledge of OT China, threatened, against or relating to OT China or its properties or business. Further, no officer, director or person who may be deemed to be an affiliate of OT China is party to any material legal proceeding which could have an adverse effect on OT China (financial or otherwise), and none is party to any action or proceeding wherein any has an interest adverse to OT China. 4.16 Books and Records of ABG. ABG has (i) given to EAC and its representatives full access to all of ABG and OT China's offices, books, records, contracts and other corporate documents and properties so that EAC could inspect and audit them; and (ii) furnished such information concerning the properties and affairs of ABG as EAC has requested. 4.17 Tax Returns of OT China. OT China has filed all income or other tax returns required to be filed in China or has received currently effective extensions of the required filing dates. 4.18 Investment Intent. The ABG Shareholder is acquiring the securities to be exchanged and delivered to it under this Agreement for investment and not with a view to the sale or distribution thereof, and it has no commitment or present intention to sell or distribute the EAC securities to be received hereunder. 4.19 Corporate Authority of ABG. ABG has full corporate power and authority to enter into this Agreement and to carry out their obligations hereunder and will deliver to EAC or its representative at the Closing certified copies of resolutions of ABG's Board of Directors authorizing execution of this Agreement by its officers and performance thereunder. 4.20 Due Authorization. Execution of this Agreement and performance by ABG hereunder has been duly authorized by all requisite corporate action on the part of ABG, and this Agreement constitutes a valid and binding obligation of ABG and performance hereunder will not violate any provision of the Articles of Association or other Charter documents, Bylaws, agreements, mortgages or other commitments of ABG, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application now or hereafter in effect relating to or affecting the enforcement of creditors' rights generally and the application of general equitable principles in any action, legal or equitable. 4.21 Environmental Matters. ABG and OT China have no knowledge of any assertion by any governmental agency or other regulatory authority of any environmental lien, action or proceeding, or of any cause for any such lien, action or proceeding related to the business operations of ABG or its predecessors. In addition, to the best knowledge of ABG and OT China, there are no substances or conditions which may support a claim or cause of action against ABG and OT China or any of its current or former officers, directors, agents, employees or predecessors, whether by a governmental agency or body, private party or individual, under the current Chinese laws. 4.22 Access to Information Regarding EAC. ABG and the ABG Shareholder acknowledge that they have been delivered copies of what has been represented to be documentation containing all material information respecting EAC and its present and contemplated business operations, potential acquisitions, management and other factors, by delivery to them and/or by access to such information in the EDGAR Archives of the Securities and Exchange Commission at www.sec.gov; that they have had a reasonable opportunity to review such documentation and to discuss it, to the extent desired, with their legal counsel, directors and executive officers; that they have had, to the extent desired, the opportunity to ask questions of and receive responses from the directors and executive officers of EAC, and with the legal and accounting firms of EAC, with respect to such documentation; and that to the extent requested, all questions raised have been answered to their complete satisfaction. 1.1 Residency of ABG Shareholder. The ABG Shareholder is a non- resident of the United States. SECTION 5 REPRESENTATIONS, WARRANTIES AND COVENANTS OF OT SAMOA AND OT SAMOA SHAREHOLDERS OT Samoa and the OT Shareholders represent and warrant to, and covenant with, EAC, ABG and the ABG Shareholder as follows: 5.1 Ownership of OT Samoa. The OT Shareholders own the OT Samoa Shares free and clear of any liens or encumbrances of any type or nature whatsoever, and have full right, power and authority to convey the OT Samoa Shares that are settled by them without qualification. 5.2 Corporate Status of OT Samoa. OT Samoa is a corporation duly organized, validly existing and in good standing under the laws of Samoa, and is licensed or qualified as a foreign corporation in all jurisdictions or foreign countries and provinces in which the nature of OT Samoa's business or the character or ownership of OT Samoa's properties makes such licensing or qualification necessary. 5.3 Capitalization of OT Samoa. The authorized capital stock of OT Samoa consists of 100,000,000 shares of common stock, $0.01 par value per share, of which 20,000,000 shares are issued and outstanding, and which are fully paid and non-assessable. There are no outstanding options, warrants or calls pursuant to which any person has the right to purchase any authorized and unissued common or other securities of OT Samoa. 5.4 Financial Statements. The financial statements of OT Samoa furnished to EAC, consisting of an unaudited compiled balance sheet and income statement for the year ended December 31, 2005 and incorporated herein by reference, are correct and fairly present the financial condition of OT Samoa as of these dates and for the periods involved; such statements were prepared in accordance with US generally accepted accounting principles consistently applied, and no material change has occurred in the matters disclosed therein. These financial statements do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading. 5.5 Undisclosed Liabilities of OT Samoa. OT Samoa has no material liabilities of any nature except to the extent reflected or reserved against in its balance sheet, whether accrued, absolute, contingent or otherwise, including, without limitation, tax liabilities and interest due or to become due. 5.6 Interim Changes of OT Samoa. Since December 31,2005, there have been no (i) changes in the financial condition, assets, liabilities or business of OT Samoa, which in the aggregate, have been materially adverse; (ii) damages, destruction or loss of or to the property of ABG, payment of any dividend or other distribution in respect of the capital stock of OT SAMOA, or any direct or indirect redemption, purchase or other acquisition of any such stock; or (iii) increases paid or agreed to in the compensation, retirement benefits or other commitments to their employees. 5.7 Title to Property of OT Samoa. OT Samoa has good and marketable title to all properties and assets, real and personal, proprietary or otherwise, reflected in the OT Samoa balance sheet. 5.8 Litigation of OT Samoa. There is no litigation or proceeding pending, or to the knowledge of OT Samoa, threatened, against or relating to OT Samoa or its properties or business. Further, no officer, director or person who may be deemed to be an affiliate of OT Samoa is party to any material legal proceeding which could have an adverse effect on OT Samoa (financial or otherwise), and none is party to any action or proceeding wherein any has an interest adverse to OT Samoa. 5.9 Books and Records of OT Samoa. OT Samoa has (i) given to EAC and its representatives full access to all of its offices, books, records, contracts and other corporate documents and properties so that EAC could inspect and audit them; and (ii) furnished such information concerning the properties and affairs of OT Samoa as EAC has requested. 5.10 Investment Intent. The OT Samoa Shareholders are acquiring the securities to be exchanged and delivered to them under this Agreement for investment and not with a view to the sale or distribution thereof, and they have no commitment or present intention to sell or distribute the EAC securities to be received hereunder. 5.11 Corporate Authority of OT Samoa. OT Samoa has full corporate power and authority to enter into this Agreement and to carry out their obligations hereunder and will deliver to EAC or its representative at the Closing certified copies of resolutions of OT Samoa's Board of Directors authorizing execution of this Agreement by its officers and performance thereunder. 5.12 Due Authorization. Execution of this Agreement and performance by OT Samoa hereunder has been duly authorized by all requisite corporate action on the part of OT Samoa, and this Agreement constitutes a valid and binding obligation of OT Samoa and the OT Samoa Shareholders and performance hereunder will not violate any provision of the Articles of Association or other Charter documents, Bylaws, agreements, mortgages or other commitments of OT Samoa, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application now or hereafter in effect relating to or affecting the enforcement of creditors' rights generally and the application of general equitable principles in any action, legal or equitable. 5.13 Environmental Matters. OT Samoa has no knowledge of any assertion by any governmental agency or other regulatory authority of any environmental lien, action or proceeding, or of any cause for any such lien, action or proceeding related to the business operations of OT Samoa or its predecessors. In addition, to the best knowledge of OT Samoa, there are no substances or conditions which may support a claim or cause of action against OT Samoa or any of its current or former officers, directors, agents, employees or predecessors, whether by a governmental agency or body, private party or individual, under the current Samoa laws. 5.14 Access to Information Regarding EAC. OT Samoa and the OT Samoa Shareholders acknowledge that they have been delivered copies of what has been represented to be documentation containing all material information respecting EAC and its present and contemplated business operations, potential acquisitions, management and other factors, by delivery to them and/or by access to such information in the EDGAR Archives of the Securities and Exchange Commission at www.sec.gov; that they have had a reasonable opportunity to review such documentation and to discuss it, to the extent desired, with their legal counsel, directors and executive officers; that they have had, to the extent desired, the opportunity to ask questions of and receive responses from the directors and executive officers of EAC, and with the legal and accounting firms of EAC, with respect to such documentation; and that to the extent requested, all questions raised have been answered to their complete satisfaction. 5.15 Residency of OT Samoa Shareholders. Each of the OT Samoa Shareholders is a non-resident of the United States. SECTION 6 CONDITIONS PRECEDENT TO OBLIGATIONS OF ABG AND OT SAMOA All obligations of ABG and OT Samoa under this Agreement are subject, at their option, to the fulfillment, before or at the Closing, of each of the following conditions: 6.1 Representations and Warranties True at Closing. The representations and warranties of EAC contained in this Agreement shall be deemed to have been made again at and as of the Closing and shall then be true in all material respects and shall survive the Closing. 6.2 Due Performance. EAC shall have performed and complied with all of the terms and conditions required by this Agreement to be performed or complied with by it before the Closing. 6.3 Officers' Certificate. ABG and OT Samoa shall have been furnished with a certificate signed by the President of EAC, in such capacity, attached hereto as EXHIBIT "B" and incorporated herein by reference, dated as of the date hereof, and updated as necessary as of the Closing, certifying (i) that all representations and warranties of EAC contained herein are true and correct; and (ii) that since the date of the financial statements as described in Section 3.3, 3.4, 3.6, and 3.7 of this Agreement, there has been no material adverse change in the financial condition, business or properties of EAC, taken as a whole. 6.4 Assets and Liabilities of EAC. EAC shall have no assets and no liabilities at Closing, and all costs, expenses and fees incident to the Agreement shall have been paid. 6.5 Documents. All documents and instruments required hereunder to be delivered by EAC at the Closing shall be delivered in form and substance reasonably satisfactory to ABG, ABG Shareholder, OT Samoa and OT Samoa Shareholders and their counsel. 6.6 Litigation. No litigation seeking to enjoin the transactions contemplated by this Agreement or to obtain damages on account hereof shall be pending or threatened. 6.7 Material Adverse Change. Except for operations in the ordinary course of business, no material adverse change shall have occurred subsequent to December 31,2005 in the financial position, results of operations, assets, or liabilities of EAC, nor shall any event or circumstance have occurred which would result in a material adverse change in the financial position, results of operations, assets, or liabilities of EAC. 6.8 Approval Board of Directors. The board of directors of EAC shall have approved this Agreement and the transactions contemplated hereby. 6.9 Satisfaction with Due Diligence. ABG and OT Samoa shall have been satisfied with its due diligence review of EAC, its subsidiaries and their operations. 6.10 Resignations of Present Executive Officers and Designation of New Directors and Executive Officers. On the Closing Date, the present director and executive officers of EAC shall resign and the following individuals shall be appointed the director and executive officers of EAC: Xueliang Qiu, Director/Chairman of the Board/President/Chief Executive Officer, Lei Zhu, Director/ Chief Operation Officer, and Feng Yang, Director/Chief Financial Officer. 6.11 Regulatory Compliance. EAC shall have received any and all regulatory approvals and consents required to complete the transactions contemplated hereby. SECTION 7 CONDITIONS PRECEDENT TO OBLIGATIONS OF EAC In addition to the filing of the Current Report, all obligations of EAC under this Agreement are subject, at EAC's option, to the fulfillment, before or at the Closing, of each of the following conditions: 7.1 Representations and Warranties True at Closing. The representations and warranties of ABG, the ABG Shareholder, OT Samoa and the OT Samoa Shareholders contained in this Agreement shall be deemed to have been made again at and as of the Closing and shall then be true in all material respects and shall survive the Closing. 7.2 Due Performance. ABG and OT Samoa shall have performed and complied with all of the terms and conditions required by this Agreement to be performed or complied with by them before the Closing. 7.3 Officers' Certificate of ABG. EAC shall have been furnished with a certificate signed by the President of ABG , in such capacity, attached hereto as EXHIBIT "C" and incorporated herein by reference, dated as of the date hereof, and updated as necessary as of the Closing, certifying (i) that all representations and warranties of ABG and ABG Shareholder contained herein are true and correct; and (ii) that all representations and warranties of ABG and ABG Shareholder contained herein are true and correct; and (*)that since the date of the financial statements, there has been no material adverse change in the financial condition, business or properties of ABG, taken as a whole. 7.4 Officers' Certificate of OT Samoa. EAC shall have been furnished with a certificate signed by the President of OT Samoa , in such capacity, attached hereto as EXHIBIT "D" and incorporated herein by reference, dated as of the date hereof, and updated as necessary as of the Closing, certifying (i) that all representations and warranties of OT Samoa and OT Samoa Shareholders contained herein are true and correct; and (ii) that since the date of the financial statements, there has been no material adverse change in the financial condition, business or properties of OT Samoa, taken as a whole. SECTION 8 GENERAL PROVISIONS 8.1 Further Assurances. At any time, and from time to time, after the Closing, the parties will execute such additional instruments and take such action as may be reasonably requested by the other party to confirm or perfect title to any property transferred hereunder or otherwise to carry out the intent and purposes of this Agreement. 8.2 Waiver. Any failure on the part of any party hereto to comply with any its or their obligations, agreements or conditions hereunder may only be waived in writing by the party to whom such compliance is owed. 8.3 Brokers. Each party represents to the other parties hereunder that there are no brokers or finders are retained in connection with this Agreement, each party agrees to indemnify and hold harmless the other parties against any fee, loss or expense arising out of claims by brokers or finders employed or alleged to have been employed by he/she/it. 8.4 Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been given if delivered in person or sent by prepaid first-class registered or certified mail, return receipt requested, as follows: If to EAC's Management Prior to Closing: Hui Wang 2-103/105 World Trade Mission No.16B Dongsanhuanzhong Road, Chaoyang District Beijing, China 100022 If to ABG or ABG Shareholder: Charles Law King and Wood LLP 39365 Paseo Padre Parkway, #2100 Fremont, CA 94538 ###-###-#### ###-###-#### fax If to OT Samoa or OT Samoa Shareholders: Charles Law King and Wood LLP 39365 Paseo Padre Parkway, #2100 Fremont, CA 94538 ###-###-#### ###-###-#### fax 8.5 Entire Agreement. This Agreement constitutes the entire agreement between the parties and supersedes and cancels any other agreement, representation or communication, whether oral or written, between the parties hereto relating to the transactions contemplated herein or the subject matter hereof. 8.6 Headings. The section and subsection headings in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. 8.7 Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware. Any actions permitted hereunder shall be brought in the State of Delaware. 8.8 Assignment. This Agreement shall inure to the benefit of, and be binding upon, the parties hereto and their successors and assigns. 8.9 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 8.10 Default. In the event of any default hereunder, the prevailing party in any action to enforce the terms and provisions hereof shall be entitled to recover reasonable attorney's fees and related costs. 8.11 Expenses. Each party shall each pay its own expenses incident to the negotiation, preparation, and carrying out of this Agreement, including legal and accounting and audit fees. EAC's expenses shall be paid prior to the Closing. IN WITNESS WHEREOF, the parties have executed this Agreement and Plan of Reorganization effective the latest date hereof. ECHELON ACQUISITION CORP. ___/s/__ Hui Wang ____________________ By , Hui Wang, President Date: May 8,2006 ASIA BIOTECHNOLOGY GROUP INC. ___/s/__ Yingjie Fu ____________________ By Yingjie Fu Director Date: May 8,2006 FAR GRAND INVESTMENTS LIMITED ____/s/___ Wensheng Wang __________________ By Wensheng Wang Director Date: May 8,2006 HARBIN OT PHARMACEUTICAL CO., LTD. ( OT Samoa) __/s/____ Lei Zhu __________________ By Lei Zhu Director Date: May 8,2006 OT SAMOA SHAREHOLDERS ___/s/_______Chen RuFa___Representative__ By Representative of OT Samoa Shareholders Date: May 8, 2006 EXHIBIT A LIST OF THE OT SAMOA SHAREHOLDERS, OT SAMOA SHARES, AND EXCHANGED EAC SHARES
LIST OF ABG SHAREHOLDERS, ABG SHARES AND EXCHANGED EAC SHARES
EXHIBIT B PRESIDENT'S CERTIFICATE OF ECHELON ACQUISITION CORP. The undersigned hereby certifies that she is the duly elected, qualified and acting President of ECHELON ACQUISITION CORP., a Delaware corporation (the "Company"), and that she is authorized to execute this Certificate on behalf of the Company in connection with Section 6.3 of that certain Agreement and Plan of Reorganization (the "Agreement") dated May 8, 2006, among the Company, Asia Biotechnology Group Inc.("ABG"); the sole shareholder of ABG, Harbin OT Pharmaceutical Co., Ltd.("OT Samoa") and the shareholders of OT Samoa and other documents relating to the Agreement. All terms used but not defined herein shall have the meanings set forth in the Agreement. The undersigned hereby further certifies to the following: 1. Each of the representations and warranties of the Company contained in the Agreement or in any Schedule attached thereto were true and correct on and as of the Closing. 2. Since the date of the financial statements as described in Sections 3.3, 3.4, 3.6 and 3.7 of the Agreement, there has been no material adverse change in the financial condition, business or properties of the Company, taken as a whole. EXECUTED as of May 8, 2006. ECHELON ACQUISITION CORP. By: ____/s/__ Hui Wang ________ Hui Wang, its President EXHIBIT C PRESIDENT'S CERTIFICATE OF ASIA BIOTECHNOLOGY GROUP INC. The undersigned hereby certifies that she is the duly elected, qualified and acting President of ASIA BIOTECHNOLOGY GROUP INC., a British Virgin Islands corporation (the "Company"), and that she is authorized to execute this Certificate on behalf of the Company in connection with Section 7.3 of that certain Agreement and Plan of Reorganization (the "Agreement") dated May 8, 2006, among the Company, Echelon Acquisition Corp.("EAC"), Harbin OT Pharmaceutical Co., Ltd.("OT Samoa") and the shareholders of OT Samoa and other documents relating to the Agreement. All terms used but not defined herein shall have the meanings set forth in the Agreement. The undersigned hereby further certifies to the following: 1. Each of the representations and warranties of the Company contained in the Agreement or in any Schedule attached thereto were true and correct on and as of the Closing. 2. Since the date of the financial statements as described in Sections 4.7, 4.10, and 4.11 of the Agreement, there has been no material adverse change in the financial condition, business or properties of the Company, taken as a whole. EXECUTED as of May 8 2006. ASIA BIOTECHNOLOGY GROUP INC.By: __ Yingjie Fu _______ Yingjie Fu, its President EXHIBIT D PRESIDENT'S CERTIFICATE OF HARBIN OT PHARMACEUTICAL CO., LTD. The undersigned hereby certifies that he is the duly elected, qualified and acting President of HARBIN OT PHARMACEUTICAL CO.,LTD., a Samoa corporation (the "Company"), and that he is authorized to execute this Certificate on behalf of the Company in connection with Section 7.4 of that certain Agreement and Plan of Reorganization (the "Agreement") dated May 8, 2006, among the Company, Echelon Acquisition Corp.("EAC") and Asia Biotechnology Group Inc.("ABG"); the sole shareholder of ABG, and other documents relating to the Agreement. All terms used but not defined herein shall have the meanings set forth in the Agreement. The undersigned hereby further certifies to the following: 1. Each of the representations and warranties of the Company contained in the Agreement or in any Schedule attached thereto were true and correct on and as of the Closing. 2. Since the date of the financial statements as described in Sections 5.4 and 5.6 of the Agreement, there has been no material adverse change in the financial condition, business or properties of the Company, taken as a whole. EXECUTED as of May 8, 2006. HARBIN OT PHARMACEUTICAL CO., LTD. By: __/s/_ Lei Zhu ----------------------------- Lei Zhu, its President