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CHINA HEALTH HOLDING, INC.
(CHHH: OTCBB NASDAQ)
ACQUISITION DEFINITIVEAGREEMENT
THIS ACQUISITION DEFINITIVE AGREEMENT (this "Agreement") is
dated as of JANUARY
19th, 2007.
BY AND AMONG:
CHINA HEALTH HOLDING, INC. (Or/and Its' Nominee) , a
corporations formed
pursuant to the laws of the State of Nevada and having a
business address
located at101 Convention Center Drive, Suite 700, Las Vegas, NV
89107-2001 USA
and mailing address at PO Box #48610 - 595 Burrard St.
Vancouver, British
Columbia, Canada V6C 2X8.
(Hereinafter called the "Purchasers", "CHINA HEALTH", or "
CHHH", or the
"Company")
AND:
Beijing Boran Pharmaceuticals Co. Ltd. (Or/and It's Nominee), a
company formed
pursuant to the laws of the People's Republic of China and
having an office for
business located at Beijing CuanPinYuanLieoCuan Industry
District, ZhongGuanCuan
Technology Zone, Beijing, P.R. China
(Hereinafter called "Beijing Boran" or the "Acquiree")
RECITALS:
CHINA HEALTH and Beijing Boran desire to complete an acquisition
transaction
pursuant to which CHINA HEALTH, through its wholly owned
subsidiaries (China
Health World Trade Corporation, or/and Its Wholly Owned BVI
(British Virgin
Island) Subsidiary) , shall acquire 65% ownership or/and 65% of
the outstanding
capital stocks of Beijing Boran for the total purchasing price
of $3,000,000 USD
in cash (the "Cash Component") in exchange for a consideration
based on Beijing
Boran's total (pound)*32,000,000 RMB ("Yuan", "China Currency")
revenue as for
the year ended 2006 (" 2006") audited according to US General
Accepted
Accounting Principles ("US GAAP"); or based on Beijing Boran's
total
(pound)*58,511,000 RMB assets for the year ended 2006 audited
according to US
General Accepted Accounting Principles ("US GAAP").
The Board of Directors of CHINA HEALTH and the Board of
Directors of Beijing
Boran have each approved the proposed transaction, contingent
upon satisfaction
prior to closing of all of the terms and conditions of this
Agreement; and
THE SHAREHOLDER are the owners of 65% ownership or/and 65% of
the outstanding
capital stockholders of Beijing Boran; and THE PARTIES desire to
make certain
representations, warranties and agreements in connection with
completion of the
proposed acquisition transaction.
The respective Boards of Directors of China Health, and Beijing
Boran
Pharmaceutical deem it advisable and in the best interests of
China Health and
Beijing Boran Pharmaceutical and Shareholders that China Health
acquire 65% of
the total outstanding shares/ownership of Beijing Boran
Pharmaceutical (the
"Acquisition") pursuant to this Agreement with Exclusive Right
and First Refusal
Right until/prior to the closing date of the transaction legally
fully.
NOW, THEREFORE, in consideration of the foregoing recitals,
which shall be
considered an integral part of this Agreement, and the
covenants, conditions,
representations and warranties hereinafter set forth, the
parties hereby agree
as follows:
<PAGE>
ARTICLE I
THE ACQUISITION
1.1 THE ACQUISITION. At the Closing (as hereinafter defined),
CHINA HEALTH,
through its wholly owned subsidiaries (China Health World
Trade
Corporation, or/and Its Wholly Owned BVI (British Virgin
Island)
Subsidiary) , shall acquire 65% of the ownership or/and 65% of
the
outstanding capital stocks of Beijing Boran from the SHAREHOLDER
for the
total purchasing price of $3,000,000 USD in cash (the "Cash
Component").
Consideration to be paid by CHINA HEALTH shall be calculated
based on
Beijing Boran's total (pound)*32,000,000 RMB Revenue for the
year ended
2006 and total of (pound)*30,000,000 RMB Revenue for the year
ended 2005,
audited according to US GAAP; or based on Beijing Boran's
total
(pound)*58,511,000 RMB Assets for the year ended 2006 audited
according to
US General Accepted Accounting Principles ("US GAAP"). The
consideration
should compose of a total $3,000,000 USD in cash (the "Cash
Component") as
the total purchasing price, depends on the finalized total
Revenue of
Beijing Boran for year ended 2006 audited under US GAAP
("Consideration").
In addition, the Company shall have reserved a total $800,000
USD as
security deposit. Such total $800,000 USD will be released to
the
SHAREHOLDER upon the completion of the audited and it is
determined that
the Consideration is not sufficient to cover the total audited
revenue of
Beijing Boran, or/and is not sufficient to cover the total
audited assets
of Beijing Boran.
1.2 Beijing Boran was established in 2002 as a private
pharmaceutical company
in Beijing, PR China under Chinese Government Laws and
Regulations. Beijing
Boran engages in the businesses of developing, manufacturing and
marketing
of various kinds of herbal - based pharmaceuticals drugs.
Currently Beijing
Boran has approximately 260 employees. As un-audited Chinese
GAAP for the
year ended of 2006, Beijing Boran has annual sales revenue
of
(pound)*32,000,000 RMB (China Currency), owns a total assets
of
(pound)*58,511,000 RMB, and a total net assets of
(pound)*28,800,000 RMB,
and a China-SFDA Certificated GMP Pharmaceutical Drugs
Manufacturing
Facilities, and a total of Thirty-One (31) China -SFDA
Certified
Herbal-Based Pharmaceutical Drugs Pipeline, and owns a total of
24,726
square meters lands/industry real estate property in Beijing PR
China, and
also owns a total of 10,950 square meters buildings/real estate
property.
Beijing Boran owns two (2) PATENTS approved by PR China
Government as
Patents No.: CN1660403 and CN1833675A, AND Beijing Boran also
has a total
of 12 pharmaceutical new drugs which are on the legal processing
for
further China -SFDA approval as NEW PHARMACEUTICAL DRUGS and a
new patent
as application No. 2006100729322. Beijing Boran also has the
exclusive and
first refusal rights for exclusively using and further
exclusively
purchasing a total of approximately 46,600 square meters
lands/industry
real estate property and 9188 square meters buildings/industry
real estate
property ownership at fixed prices from Government of Beijing PR
China.
Beijing Boran also owns and controls of 80% of ownership or/and
80% the
outstanding capital stocks of Beijing Xiangwei Herbal Medicinal
Co. Ltd.
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<PAGE>
The Acquisition shall take place upon the terms and conditions
provided for in
this Agreement and in accordance with applicable law.
1.3 COMPLETION OR ACQUISITION OF ASSETS
1.4 Pursuant to the Agreement, At the Closing (as hereinafter
defined), CHINA
HEALTH shall acquire 65% of the ownership or/and 65% of the
outstanding capital
stocks of Beijing Boran from the SHAREHOLDER, in consideration
for 65% ownership
or/and the outstanding capital stock of Beijing Boran, and the
65% stockholders
of Beijing Boran is entitled to receive from CHINA HEALTH an
aggregate total
purchase price of a total of $3,000,000 USD in cash, which
calculated and based
on the years ended of 2005, and 2006 of Beijing Boran's
Financial Statement as
un-Audited Chinese GAAP Financial Statement of Beijing Boran,
that Beijing Boran
has a total (pound)* 32,000,000 RMB (China Currency) revenues
and a total assets
(pound)*58,511,000 RMB for the year ended December 31 2006 and a
total (pound)*
30,000,000 RMB revenues for the year ended December 31 2005.
Consisting of cash
in the aggregate amount of $3,000,000 USD in Cash(China
Currency) (the "Cash
Component"). CHINA HEALTH will pay the Cash Component of the
purchase price,
with the exception of US$800,000 to be retained by CHINA HEALTH
(the "Retained
Amount") pending the completion of an audit of Beijing Boran's
financial
statements for the years ended 2005 and 2006 ( " 2005", " 2006")
audited
according to US General Accepted Accounting Principles ("US
GAAP"). To the
extent Beijing Boran's audited revenues for years ended 2005 and
2006 are less
than (pound)*30,000,000 RMB ( "2005" ) and (pound)*32,000,000
RMB ( "2006")
(China Currency), there will be a proportional reduction in the
Cash Component
of the purchase price, in an amount to be agreed upon by CHINA
HEALTH and
Beijing Boran at such time. If the Cash Component of the
purchase price has been
reduced, CHINA HEALTH will debit such amounts from the Retained
Amount prior to
releasing it upon conclusion of such audit. Beijing Boran has
annual sales
revenue of (pound)*32,000,000 RMB (China Currency) as year ended
2006 and annual
sales revenue of (pound)*30,000,000 RMB (China Currency) as year
ended 2005,
owns a total assets of (pound)* 58,511,000 RMB, and a total net
assets of
28,800,000 RMB, and a China-SFDA Certificated GMP Pharmaceutical
Drugs
Manufacturing Facilities, and a total of Thirty-One (31) China
-SFDA Certified
Herbal-Based Pharmaceutical Drugs Pipeline, and owns a total of
24,726 square
meters industry real estate property in Beijing PR China, and
also owns a total
of 10,950 square meters buildings/real estate property. Beijing
Boran also owns
two (2) PATENTS approved by PR China Government as Patents No.:
CN1660403 and
CN1833675A. Beijing Boran also has a total of 12 pharmaceutical
new drugs which
are on the legal processing for further China -SFDA approval as
NEW
PHARMACEUTICAL DRUGS and a new patent as application No.
2006100729322. Beijing
Boran also has the exclusive and first refusal rights for
exclusively using and
further exclusively purchasing a total of approximately 46,600
square meters
lands/industry real estate property and 9188 square meters
buildings/industry
real estate property ownership at fixed prices from Government
of Beijing PR
China. Beijing Boran also owns and controls of 80% of ownership
or/and 80% the
outstanding capital stocks of its subsidiary: Beijing Xiangwei
Herbal Medicinal
Co. Ltd.
The Agreement is governed by the laws of China and reflects
customary business
practices in China. As such, it does not contain all of the
customary
representations and warranties, indemnification and other
applicable provisions
that are generally included in an acquisition agreement
contemplating the
purchase of all outstanding capital shares of a company.
1.5 CLOSING AND EFFECTIVE TIME. Subject to the provisions of
this Agreement, the
parties shall hold a closing (the "Closing") on (i) the first
business day on
which each and all of the conditions set forth in Article V to
be fulfilled
prior to the Closing is fulfilled or waived or (ii) on a date
mutually agreed
(the "Effective Time").
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<PAGE>
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF CHINA HEALTH. CHINA HEALTH
represents and
warrants to Beijing Boran and the SHAREHOLDERS as follows:
(a) ORGANIZATION, STANDING AND POWER. CHINA HEALTH owns and
operates subsidiary
that is corporation duly organized, validly existing and in good
standing under
the laws of China and has all requisite power and authority to
own, lease and
operate its properties and to carry on its business as now being
conducted, and
is duly qualified and in good standing to do business in each
jurisdiction in
which the nature of its business or the ownership or leasing of
its properties
makes such qualification necessary.
(b) CERTIFICATE OF INCORPORATION, BYLAWS, AND MINUTE BOOKS. The
copies of the
Articles of Incorporation and of the Bylaws of CHINA HEALTH
which have been
delivered to Beijing Boran are true, correct and complete copies
thereof. The
minute book of CHINA HEALTH, which has been made available for
inspection,
contains accurate minutes of all meetings and accurate consents
in lieu of
meetings of the Board of Directors (and any committee thereof)
and of the
shareholders of CHINA HEALTH since the date of incorporation and
accurately
reflects all transactions referred to in such minutes and
consents in lieu of
meetings.
(c) AUTHORITY. CHINA HEALTH has all requisite power and
authority to enter into
this Agreement and to consummate the transactions contemplated
hereby. The
execution and delivery of this Agreement and the consummation of
the
transactions contemplated hereby have been duly authorized by
the Board of
Directors of CHINA HEALTH. No other corporate or shareholder
proceedings on the
part of CHINA HEALTH are necessary to authorize the Acquisition,
or the other
transactions contemplated hereby
(d) CONFLICT WITH OTHER AGREEMENTS; APPROVALS. The execution and
delivery of
this Agreement does not, and the consummation of the
transactions contemplated
hereby will not result in any violation of, or default (with or
without notice
or lapse of time, or both) under, or give rise to a right of
termination,
cancellation or acceleration of any obligation or the loss of a
material benefit
under, or the creation of a lien, pledge, security interest or
other encumbrance
on assets (any such conflict, violation, default, right of
termination,
cancellation or acceleration, loss or creation, a "violation")
pursuant to any
provision of the Articles of Incorporation or Bylaws or any
organizational
document of CHINA HEALTH or, result in any violation of any loan
or credit
agreement, note, mortgage, indenture, lease, benefit plan or
other agreement,
obligation, instrument, permit, concession, franchise, license,
judgment, order,
decree, statute, law, ordinance, rule or regulation applicable
to CHINA HEALTH
which violation would have a material adverse effect on CHINA
HEALTH taken as a
whole. No consent, approval, order or authorization of, or
registration,
declaration or filing with, any court, administrative agency or
commission or
other governmental authority or instrumentality, domestic or
foreign (a
"Governmental Entity") is required by or with respect to CHINA
HEALTH in
connection with the execution and delivery of this Agreement by
CHINA HEALTH or
the consummation by CHINA HEALTH of the transactions
contemplated hereby.
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<PAGE>
(e) BOOKS AND RECORDS. CHINA HEALTH has made and will make
available for
inspection by Beijing Boran upon reasonable request all the
books of CHINA
HEALTH relating to the business of CHINA HEALTH. Such books of
CHINA HEALTH have
been maintained in the ordinary course of business. All
documents furnished or
caused to be furnished to Beijing Boran by CHINA HEALTH are true
and correct
copies, and there are no amendments or modifications thereto
except as set forth
in such documents.
(f) COMPLIANCE WITH LAWS. CHINA HEALTH is and has been in
compliance in all
material respects with all laws, regulations, rules, orders,
judgments, decrees
and other requirements and policies imposed by any Governmental
Entity
applicable to it, its properties or the operation of its
businesses.
(g) SEC FILINGS. CHINA HEALTH has filed all periodic reports
required to be
filed with the Securities and Exchange Commission and as of the
date hereof, is
current in its filing obligations.
(h) FINANCIAL STATEMENTS AND TAX RETURNS. Copies of CHINA
HEALTH's audited
financial statements for the fiscal year ended December 31, 2005
and December
31, 2006 and of its tax return for the fiscal year 2004 have
been delivered to
Beijing Boran.
(i) LITIGATION. There is no suit, action or proceeding pending,
or, to the
knowledge of CHINA HEALTH, threatened against or affecting CHINA
HEALTH which is
reasonably likely to have a material adverse effect on CHINA
HEALTH, nor is
there any judgment, decree, injunction, rule or order of any
Governmental Entity
or arbitrator outstanding against CHINA HEALTH having, or which,
in so far as
reasonably can be foreseen, in the future could have, any such
effect.
(j) TAX RETURNS. CHINA HEALTH has duly filed any tax reports and
returns
required to be filed by it and has fully paid all taxes and
other charges
claimed to be due from it by any federal, state or local taxing
authorities.
There are not now any pending questions relating to or claims
asserted for,
taxes or assessments asserted upon CHINA HEALTH.
(k) Indemnity CHINA HEALTH agree to indemnify and save harmless
Beijing Boran
from and against any and all claims, demands, actions, suits,
proceedings,
assessments, judgments, damages, costs, losses and expenses,
including any
payment made in good
faith in settlement of any claim (subject to the right of the
CHINA
Pharmaceutical Shareholders to defend any such claim), resulting
from the breach
by any of them of any representation or warranty of such party
made under this
Agreement or from any misrepresentation in or omission from any
certificate or
other instrument furnished or to be furnished by Beijing Boran
or the CHINA
HEALTH to Beijing Boran and shareholders hereunder.
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<PAGE>
2.2 REPRESENTATIONS AND WARRANTIES OF BEIJING BORAN. Beijing
Boran represents
and warrants to CHINA HEALTH as follows:
(a) ORGANIZATION, STANDING AND POWER. Beijing Boran is a
corporation duly
organized, validly existing and in good standing under the laws
of China, has
all requisite power and authority to own, lease and operate its
properties and
to carry on its business as now being conducted, and is duly
qualified and in
good standing to do business in each jurisdiction in which the
nature of its
business or the ownership or leasing of its properties makes
such qualification
necessary.
(b) CERTIFICATE OF INCORPORATION, BYLAWS AND MINUTE BOOKS. The
copies of the
Certificate of Incorporation and of the other corporate
documents of Beijing
Boran which have been delivered to CHINA HEALTH are true,
correct and complete
copies thereof. The minute
books of Beijing Boran which have been made available for
inspection contain
accurate minutes of all meetings and accurate consents in lieu
of meetings of
the Board of Directors (and any committee thereof) and of the
shareholders of
Beijing Boran since the date of incorporation and accurately
reflect all
transactions referred to in such minutes and consents in lieu of
meetings.
(c) AUTHORITY. Beijing Boran has all requisite power to enter
into this
Agreement and, subject to approval of the proposed transaction
by the
shareholders of 100% of its ownership which are entitled to vote
to approve the
proposed transaction, has the requisite power and authority to
consummate the
transactions contemplated hereby. Except as specified herein, no
other corporate
or shareholder proceedings on the part of Beijing Boran are
necessary to
authorize the Acquisition and the other transactions
contemplated hereby.
(d) CONFLICT WITH AGREEMENTS; APPROVALS. The execution and
delivery of this
Agreement does not, and the consummation of the transactions
contemplated hereby
will not, conflict with, or result in any violation of any
provision of the
Certificate of Incorporation or Bylaws of Beijing Boran or of
any loan or credit
agreement, note, mortgage, indenture, lease, benefit plan or
other agreement,
obli
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