Exhibit 10.3
EXCLUSIVE PURCHASE OPTION AGREEMENT
by and among
NEOSTEM (CHINA), INC.
QINGDAO NIAO BIO-TECHNOLOGY LTD.
and
THE SHAREHOLDER OF QINGDAO NIAO 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) Qingdao Niao Bio-Technology Ltd.
(“Party B”)
Registered
Address: Room 501, Unit 2 Building 1, No.17 YinChuanDong Road,
Laoshan District, Qingdao City
Legal
representative: Liu Hongbing
(3) Sole
shareholder of Qingdao Niao Bio-Technology Ltd.
(hereinafter called the “Shareholder”)
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Name of the
Shareholder
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Shareholding
Ratio （
% ）
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ID Card No.
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Contact Address
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Liu Hongbing
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100
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Room 102, Unit
4 Building 6,
No.138 Huaneng
Road,
Licheng
District, Ji’nan City
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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 ”.
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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).
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Exclusive
Purchase Option Agreement
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Party B, as a
domestic limited liability company, incorporated under PRC laws in
Qingdao, and licensed by Qingdao Administration for Industry and
Commerce, it engages in the research & development, transfer
and consultation of biological cell technology, gene technology and
regenerative medical technology (The aforesaid business scope
should be operated with relevant permits if such permits are
required.).
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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.
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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 ”).
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NOW,
THEREFORE , the Parties
through mutual negotiations hereby enter into this Agreement with
respect of the exclusive purchase option right:
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THE GRANT
AND EXERCISE OF PURCHASE OPTION
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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.
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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.
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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.
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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.
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Exclusive
Purchase Option Agreement
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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.
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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.
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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 between, 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.
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REPRESENTATIONS AND WARRANTIES
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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.
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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.
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Exclusive
Purchase Option Agreement
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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.
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OBLIGATIONS OF PARTY B AND ALL
SHAREHOLDER
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The Parties
further agree as follows:
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Before Party A
has acquired all the equity/assets of Party B by exercising the
purchase option provided hereunder, Party B:
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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;
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shall prudently
and effect
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