278178.001(B&F)
AMENDMENT
This Amendment ("Amendment") dated October 23, 1996 by and among Mr.
Sun Shou Yi ("Sun"), Mr. Ou Yang An ("Ou"), Mr. Gao Yu Wen ("Gao") (collectively
the "Gao Group") and Cheung Laboratories, Inc., a Maryland corporation ("CLI"),
amends that certain Redemption Agreement dated June 6, 1996 between Sun as Gao's
representative and CLI (the "Redemption Agreement"); that certain Letter of
Intent dated May 27, 1996 between Sun as Gao's representative and CLI (the
"Letter); that certain Escrow Agreement dated June __, 1996 by and among Sun as
Gao's representative, CLI and Ms. Leung To Kwan, Solicitor, S.H. Leung & Company
("Leung") (the "Escrow"); that certain Agreement to Settle Investment Account
dated June 8, 1996 between Ou and CLI ("Agreement to Settle"); and that
Irrevocable Proxy dated June 6, 1996 from Gao ("Proxy"). The Redemption
Agreement, the Letter, the Escrow, the Agreement to Settle and the Proxy are
collectively referred to as the "Settlement Agreements."
Witnesseth:
Whereas, various members of the Gao Group entered into the Settlement
Agreements with CLI; and
Whereas, CLI and the Gao Group desire to clarify that all parties in
the Gao Group agree to the terms and conditions of the Settlement Agreements and
this Amendment; and
Whereas, the parties desire to amend the Settlement Agreements as set
forth below.
Now Therefore, in exchange for ten dollars ($10) and other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged the Gao Group and CLI agree as follows:
1. Contemporaneous with the execution of this Amendment, Leung
as the Escrow Agent pursuant to this Amendment is instructed to deliver
certificates representing 16,000,000 shares of CLI ("Amended Shares") to Verle
Blaha, President of CLI without any restrictions, liens or encumbrances. The Gao
Group represents and warrants to CLI that the Amended Shares are free and clear
of all encumbrances and restrictions.
2. The Proxy is amended to cover only the 4,000,000 shares of
CLI remaining in escrow ("Common Shares") and the period of the Proxy is
extended to the time at which the Common Shares are released to CLI or March 31,
1997 whichever event occurs first.
3. The amount payable to the Gao Group for the Common Shares
is reduced from $2,200,000 to $2,160,000 which reflects the agreed on credit for
funds remaining in the Agreement to Settle ("Cash Amount"). Notwithstanding the
Settlement Agreements, the period of time to pay the Cash Amount is extended to
December 31, 1996 and may be extended for an additional 3 month period upon the
payment of 3/4% per month interest for the period January 1, 1997 through March
31, 1997.
4. The Cash Amount shall be wired or hand delivered to Leung's
trust account. The Escrow Agent shall release such Cash Amount to Ou as the Gao
Group's representative contemporaneous with sending the Common Shares to CLI by
hand delivery or DHL as follows:
Verle Blaha
Cheung Laboratories, Inc.
10220-I Old Columbia Road
Columbia, Maryland 21046-1705
5. Other than the Settlement Agreements as modified by this
Amendment, all agreements (whether written or oral), understandings and
covenants between the parties are null and void. Other than as modified in this
Amendment all of the terms and conditions of the Settlement Agreements shall
remain in full force and effect.
6. This Amendment is not and shall not in any way be construed
as an admission by any party, or any of their respective affiliates,
subsidiaries, shareholders, directors, partners, agents, officers, employees,
representatives, or attorneys of any illegal acts whatsoever, but constitutes
the good faith settlement of all potential claims against the parties, or their
respective affiliates, subsidiaries, successors, shareholders, directors,
partners, agents, officers, employees, representatives or attorneys. The parties
have entered into this Amendment in order to bring the relationship between CLI
and the Gao Group to a final conclusion, to resolve all potential claims which
might be brought by any of the respective affiliates, subsidiaries, successors,
shareholders, directors, partners, agents, officers, employees, representatives
or attorneys, and in order to avoid the burden, expense, delay, and
uncertainties of litigation.
7. The Gao Group irrevocably and unconditionally remises,
releases and forever discharges CLI and each of its past, present, and future
affiliates, subsidiaries, shareholders, partners, agents, directors, officers,
employees, representatives, attorneys, successors, heirs, executors,
administrators, and assigns, and all persons acting by, through, under or in
concert with any of them (collectively "Assigns"), or any of them, of and from
any and all actions, causes of actions, suits, charges, complaints, claims,
liabilities, obligations, promises, agreements, controversies, demands, damages,
judgments, and expenses (including attorney's fees and costs actually incurred)
and all other liabilities of any nature whatsoever, in law or equity, which
either party ever had, now has or their respective heirs, executors,
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administrators, successors, or assigns hereafter may have, particularly, against
each or any of the Assigns, arising from or related in any way to any dealings
the parties have had through the date of this Amendment and each party does
hereby covenant not to file a lawsuit to assert any such claims.
8. CLI irrevocably and unconditionally remises, releases, and
forever discharges the Gao Group and each of their respective heirs, executors
and administrators (collectively "Assigns"), or any of them, of and from any and
all actions, causes of actions, suits, charges, complaints, claims, liabilities,
obligations, promises, agreements, controversies, demands, damages, judgments,
and expenses (including attorney's fees and costs actually incurred) and all
other liabilities of any nature whatsoever, in law or equity, which either party
ever had, now has or their respective heirs, executors, administrators,
successors, or assigns hereafter may have, particularly, against each or any of
the Assigns, arising from or related in any way to any dealings the parties have
had through the date of this Amendment and each party does hereby covenant not
to file a lawsuit to assert any such claims.
9. The parties expressly acknowledge that this Amendment is
intended to include in its effect, without limitation, all claims which have
arisen and of which the parties know or do not know, should have known, had
reason to know or suspect to exist in their respective favor at the time of
execution hereof, and that this Amendment contemplates the extinguishment of any
such claim or claims.
10. The parties represent and certify that each is voluntarily
entering into this Amendment; that the other parties and their respective
agents, representatives, and attorneys have made no representations concerning
the terms or effects of this Amendment other than those contained herein; and
they have reviewed the Amendment with legal counsel of choice.
11. The parties represent and certify that they have not
assigned or otherwise conveyed any rights or obligations that they have in
connection with transactions contemplated by or within the scope of the
Settlement Agreements or this Amendment.
12. Notwithstanding the releases set forth above, each party
agrees that it will cooperate fully with all reasonable requests by the other
party, or any of their respective successors, subsidiaries or affiliates, to
participate in the preparation for, responses to, or prosecution or defense of
any pending or threatened litigation or governmental proceeding or investigation
by or against or involving CLI, or any of their successors, subsidiaries, or
affiliates, relating to any events which occurred during or as a result of the
relationship of the parties. Furthermore, in the event governmental or third
parties assert claims against CLI which involve any relationship between CLI and
the Gao Group, CLI may assert cross claims and other claims against the Gao
Group. In the event such claims are successful, the Gao Group agrees to
indemnify and hold harmless CLI and its affiliates.
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13. This Amendment is made and entered into in the State of
Maryland, and shall in all respects be interpreted, enforced and governed under
the laws of said State. The federal district court of Baltimore, Maryland shall
have jurisdiction over the parties. The language of all parts of this Amendment
shall in all cases be construed as a whole, according to its fair meaning.
14. The parties acknowledge the termination of all previous
agreements other than the Settlement Agreements and this Amendment between them
by their mutual consent.
15. Should any provision of this Amendment be declared or
determined by a court of competent jurisdiction to be illegal or invalid, the
validity of the remaining parts, terms and provisions shall not be affected
thereby, and said illegal or invalid part, term, or provision shall be deemed
not to be a part of the Settlement Agreements and this Amendment.
16. The Settlement Agreements and this Amendment set forth the
entire agreement between the parties hereto, and fully supersedes any and all
prior agreements or understandings between the parties hereto pertaining to the
subject matter hereof.
17. CLI shall file its Form 10-K for the period ended
September 30, 1996 with the United States Securities and Exchange Commission
disclosing this Amendment and the release of any interest in the Aestar shares.
18. CLI covenants that it will utilize a portion of theuse of
proceeds on a first priority basis from a public or private offering to be
conducted for the purpose of purchasing the Common Shares or in the alternative
will assign its right to repurchase the Common Shares to private investors to
purchase such shares directly from the Gao Group.
IN WITNESS WHEREOF, and intending to be legally bound hereby,
the Gao Group and CLI have executed the foregoing Amendment.
CHEUNG LABORATORIES, INC.
By:________________________________
Name:
Title:
278178.001(B&F) 12/11/96
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________________________________________
Gao Yu Wen, by and through his attorney
in fact, Ou Yang An
________________________________________
Sun Shou Yi, in his
individual capacity and as
representative of Gao Yu
Wen by and through his
attorney in fact, Ou Yang
An
________________________________________
Ou Yang An, in his individual capacity
and as representative of Gao Yu Wen
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