PURCHASE
OPTION AND COOPERATION AGREEMENT
Among
Yan
Tinghe,
Shandong
Yong Chun Tang Bioengineering Co. Ltd.
and
Shandong
Spring Pharmaceutical Co., Ltd.,
Effective
as of April 1, 2008
This Purchase Option and
Cooperation Agreement ("this Agreement") is entered into in
Shandong, People's Republic of China (the "PRC") on 4
th
day of April, 2008 by and among:
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Party
A:
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Shandong
Spring Pharmaceutical Co., Ltd. is a wholly-foreign owned
enterprise registered in Shandong, PRC, the registration number of
its legal and valid Business License is 074939,
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Party
B:
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Yan
Tinghe, a citizen of PRC with ID Card number 210105681115317, who
owns 100% of Shandong Yong Chun Tang Bioengineering Co.
Ltd.
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Party
C:
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Shandong
Yong Chun Tang Bioengineering Co. Ltd., an enterprise incorporated
and existing within the territory of China in accordance with the
law of the People's Republic of China, the registration number of
its legal and valid Business License is 370831228000622, and the
legal registered address is Gucheng West Road Sihe Office, Sishui
County, Shandong
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WHEREAS,
The Parties hereto wish to
grant Party A the exclusive purchase option to acquire, at
any time upon satisfaction of the requirements under the PRC
law, the entire or a portion of Party B's share of the
equity/assets owned by Party C.
NOW AND THEREFORE, in
accordance with the principle of sincere cooperation, mutual
benefit and joint development and after friendly
negotiations, the Parties hereby enter into the following
agreements pursuant to the provisions of relevant laws and
regulations of the PRC
ARTICLE
1: THE GRANT AND EXERCISE OF PURCHASE
OPTION
1.1 The
Parties hereto agree that Party A shall be granted an
exclusive purchase option to acquire, at any time upon
satisfaction of the requirements under applicable laws and
conditions as agreed in this Agreement (including, without
limitation, as under applicable laws, when Party B ceases to
be Party C's director, or Party B attempts to transfer his
share equity in Party C to any person, the entire or a
portion of Party C's share equity owned by Party B, or the
entire or portion of assets owned by Party C. The purchase
option granted hereby shall be irrevocable during the term of
this Agreement and may be exercised by Party A or any
eligible entity designated by Party A.
1.2 Party
A may exercise the aforesaid purchase option by delivering a
written notice to Party B or Party C (the "Exercise
Notice").
1.3 Within
thirty (30) days of the receipt of the Exercise Notice, Party
B or Party C (as the case may be) shall execute a share/asset
transfer contract and other documents necessary to effect the
respective transfer of share equity or assets with Party A
(or any eligible Party designated by Party A).
1.4 When
applicable laws permit the exercise of the purchase option
provided hereunder and Party A elects to exercise such
purchase option, Party B and Party C shall unconditionally
assist Party A to obtain all approvals, permits,
registrations, filings and other procedures necessary to
effect the transfer of relevant share equity or
assets.
ARTICLE
2: REPRESENTATIONS AND
WARRANTIES
Each party hereto
represents to the other parties that:
2.1 Each
party hereto represents to the other parties that: (1) it has
all the necessary rights, powers and authorizations to enter
into this Agreement and perform its duties and obligations
hereunder; and (2) the execution or performance of this
Agreement shall not violate any significant contract or
agreement to which it is a party or by which it or its assets
are bounded.
2.2
Party B represents to Party A that: (1) he is the legally
registered shareholder of party C and has paid Party C the
full amount of Party C's registered capital required under
Chinese law; (2) Party B has not created any mortgage,
pledge, secured interests or other form of debt liabilities
over the Share Equity; and (3) Party B has not sold nor will
he sell to any third party his Share Equity in Party
C.
ARTICLE
3: EXERCISE PRICE
3.1 When
it is permitted by applicable laws, Party A (or any eligible
Party designated by Party A) shall have the right to acquire,
at any time, all of Party C's assets or its share equity
owned by Party B at a to be determined fair value
price If Party A (or any eligible Party designated
by Party A) elects to purchase a portion of Party C's share
equity or assets, then the exercise price for such purpose
shall be adjusted accordingly based on the percentage of such
share equity or assets to be purchased over the total share
equity or assets. When Party A (or a qualified entity
designated by party A) is to acquire all or a portion of
Party C's equity share or assets from Party B pursuant to
this Agreement, Party A has the right to offset any principal
amounts Party C owes Party A against the purchase
price payable to Party B. When acquiring share equity or
assets from Party B or Party C pursuant to this Agreement,
Party A shall pay an actual purchase price based on the
purchase price under applicable Chinese laws or requirements
of relevant authorities, if the purchase price under
applicable laws or requirements of relevant authorities is
higher than the purchase price under this
Agreement.
3.2 In
satisfaction of all or part of the purchase price
pa
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