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EXCLUSIVE PURCHASE OPTION AGREEMENT

Option Agreement

EXCLUSIVE PURCHASE OPTION AGREEMENT | Document Parties: NEOSTEM, INC. | Beijing Ruijieao Bio-Technology Ltd | NeoStem (China), Inc You are currently viewing:
This Option Agreement involves

NEOSTEM, INC. | Beijing Ruijieao Bio-Technology Ltd | NeoStem (China), Inc

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Title: EXCLUSIVE PURCHASE OPTION AGREEMENT
Date: 7/13/2009
Industry: Healthcare Facilities     Sector: Healthcare

EXCLUSIVE PURCHASE OPTION AGREEMENT, Parties: neostem  inc. , beijing ruijieao bio-technology ltd , neostem (china)  inc
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Exhibit 10.7

 

EXCLUSIVE PURCHASE OPTION AGREEMENT

 

by and among

 

NEOSTEM (CHINA), INC.

 

BEIJING RUIJIEAO BIO-TECHNOLOGY LTD.

 

and

 

THE SHAREHOLDER OF BEIJING RUIJIEAO BIO-TECHNOLOGY LTD.

 

June 1, 2009

 

 

 


 

 

Exclusive Purchase Option Agreement


 

EXCLUSIVE PURCHASE OPTION AGREEMENT

 

This Exclusive Option Purchase Agreement (the “Agreement”) is executed by the following parties on June 1, 2009 in Qingdao City, the People’s Republic of China.

 

(1)   NeoStem (China), Inc. (“Party A”)

 

Registered Address: Room 0425A, Building C, No.6 XiangGangZhong Road, Shinan District, Qingdao City

 

Legal representative: Robin Smith

 

(2) Beijing Ruijieao Bio-Technology Ltd. (“Party B”)

 

Registered Address: Room 2007 20/F, Qingyundangdai Building, No.9 Mantingfangyuan Community, Qingyun Li, Haidian District, Beijing City

 

Legal representative: Fu Wenyuan

 

(3) Sole shareholder of Beijing Ruijieao Bio-Technology Ltd.

    (hereinafter called the “Shareholder”)

 

Name of the
Shareholder

 

Shareholding
Ratio
%

 

ID Card No.

 

Contact Address

Fu Wenyuan

 

100

 

 

 

No.27 Shandabei Road, Licheng District, Ji’nan City

 

Party A, Party B, and the Shareholder of Party B are hereinafter from time to time, collectively, referred to as the “ Parties ”, and each of them is hereinafter from time to time referred to as a “ Party ”.  The equity interests in Party B held by the Shareholder now existing or hereafter acquired is hereinafter from time to time referred to as the “ Equity Interests ” or “ Equity ”.

 

WHEREAS:

 

1.

Party A, a wholly foreign-owned enterprise incorporated under the laws of the People’s Republic of China (the “ PRC ”), which engages the research & development, transfer and technological consultation service of biotech technology, regenerative medical technology and anti-aging technology (excluding the development or application of human stem cell, gene diagnosis and treatment technologies); consultation of economic information; import, export and sales of machines and equipments (the import and export do not involve the goods specifically stipulated in/by state-operated trade, import & export quota license, export quota bidding, export permit, etc.) (The aforesaid business scope should be operated with relevant permits if such permits are required).

 

 

 


 

 

Exclusive Purchase Option Agreement  


 

2.

Party B, as a domestic limited liability company, incorporated under PRC laws in Beijing, and licensed by Beijing Administration for Industry and Commerce, it engages in technology development, technology transfer, technology consultation and technology service.

 

3.

As of the date of this Agreement, the percentage ownership of the Equity Interests in Party B held by the Shareholder shall be set forth as described above.

 

4.

To secure the performance of the obligations assumed by Party B and the Shareholder under this Agreement, the Shareholder agrees to pledge all their equity in Party B to Party A, and has executed Equity Pledge Agreement on June 1, 2009 with respect thereto (the “ Equity Pledge Agreement ”).

 

NOW, THEREFORE , the Parties through mutual negotiations hereby enter into this Agreement with respect of the exclusive purchase option right:

 

1.

THE GRANT AND EXERCISE OF PURCHASE OPTION

 

 

1.1

The Shareholder hereby irrevocably grants to Party A an exclusive purchase right at any time, or designate any third party to purchase all or part of the Shareholder’ Equity Interests in Party B, provided permitted under the PRC laws and regulations and Party B agrees to such grant by the Shareholder to Party A. Apart from Party A or any third party designated by Party A, no other person shall have the right to purchase such Equity Interests. The Shareholder shall transfer his Equity Interests in Party B to Party A provided Party A selects to purchase the Shareholder’ Equity Interests.

 

 

 

 

1.2

Party B hereby irrevocably grants to Party A an exclusive purchase option, at any time to acquire all or a substantial part of Party B’s assets, provided permitted under the PRC laws and regulations and the Shareholder agrees to such grant by Party B to Party A.

 

 

 

 

1.3

For the purpose of this Agreement, a “third party” or a “person” may be a natural person, company, partnership, enterprise, trust agency or other non-corporate entity.

 

 

1.4

To the extent permitted under the PRC laws and regulations, Party A shall determine at any time and at its own option to exercise such exclusive right to (i) purchase the Equity Interests as provided in Section 1.1 by written notice to the applicable Shareholder(s) specifying the amount of equity to be purchased and the identity of the purchaser (hereinafter referred to as “ Equity Transfer ”) or (ii) purchase all or substantially all of Party B’s assets as provided in Section 1.2 (hereinafter referred to as “ Assets Transfer ”) by written notice to Party B (each an " Exercise Notice "). Each Exercise Notice shall be signed by either the sole shareholder, or the Executive Director, of Party A.

 

 

1


 

 

Exclusive Purchase Option Agreement  


 

 

1.5

Within thirty (30) days of the receipt of the Exercise Notice, the applicable Shareholder and Party B shall execute a share/asset transfer agreement and other documents (collectively, the " Transfer Documents ") necessary to effect the respective transfer of equity or assets to Party A (or any eligible party designated by Party A), and shall unconditionally assist Party A to obtain all approvals, permits, registrations, filings and other procedures necessary to effect the Equity or Assets Transfer.

 

 

1.6

Unless otherwise required under the PRC laws and regulations, the transaction price for the Equity Transfer or the Assets Transfer hereunder, as applicable, shall be the lowest price permitted under the PRC laws and regulations.

 

 

 

 

1.7

The consideration after tax payment (the “Consideration of Equity Transfer”) obtained by the Shareholder from Equity Transfer in Party B hereunder shall be used to satisfy their repayment obligations under the Loan Agreement dated as of June 1, 2009, signed by and among, Party A and the Shareholder (the “Loan Agreement”);

 

The consideration after tax payment (the “Consideration of Assets Transfer”) by the  Party B, if as applicable, from Assets Transfer hereunder shall be allocated to the Shareholder, to the largest extent as permitted by PRC laws and regulations, through profit allocation proposal and fulfill their payment obligations under the Loan Agreement, and Party B shall give full cooperation;

 

And if the Consideration of Equity Transfer or Assets Transfer is higher than the total principal under the Loan Agreement due to the requirement by the applicable law or any other reasons, the excess shall be deemed as loan interests and/or utilizing fees of the Loan to the largest extent being permitted by PRC Laws, and be paid to Party A by the Shareholder together with loan principal.

 

2.

REPRESENTATIONS AND WARRANTIES

 

 

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 or conflict with the terms of any other contracts or agreements to which it is a party.

 

 

2.2

The Shareholder hereby represents to Party A that: (1) the Shareholder is the legally registered shareholder of party B and has paid full amount of registered capital in Party B as required to be contributed by the Shareholder under the PRC laws and regulations; (2)except for the Equity Pledge Agreement executed among the Parties, the Shareholder has not created any other mortgage, pledge, secured interests or other form of debt liabilities over the Equity Interests held by the Shareholder; and (3) the Shareholder has not transfer to any third party (and entered into any agreement in respect of)  such Equity Interests.

 

 

2


 

 

Exclusive Purchase Option Agreement  


 

 

2.3

Party B hereto represents to Party A that: (1) it is a limited liability company duly registered and validly existing under the PRC laws and regulations; and (2) its business operations are in compliance with applicable laws and regulations of the PRC in all material respects.

 

3.

 OBLIGATIONS OF PARTY B AND ALL SHAREHOLDER

 

The Parties further agree as follows:

 

 

3.1

Before Party A has acquired all the equity/assets of Party B by exercising the purchase option provided hereunder, Party B:

 

 

a.

without Party A’s prior written consent, shall not supplement or amend the articles of association or rules of Party B in any manner, nor shall it increase or decrease the registered capital or change the shareholding structure of aforesaid entities in any manner;

 

b.

shall prudently and effectively maintain its business operations according to good financial and business standards so as to maint


 
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