EXCLUSIVE OPTION AGREEMENT
EX-10.4 5 v127624_ex10-4.htm
EXCLUSIVE OPTION AGREEMENT
This Exclusive Option Agreement (the “Agreement”) is entered into as of 25th September, 2008 between the following parties in Xi’an, P.R.China.
| Party A: | | Xi’an Huifeng Bio-Technic Inc. | |
| | | Registered Address: 16B/F, Ruixin Bldg, No.25 Gaoxin RD, Xi’an China | |
| | |||
| Party B: | | Pu Jun, A citizen of P.R.C., | |
| | | Identity Card Number: 610113197307152133 | |
| Zhang Yong, A citizen of P.R.C. | |||
| Identity Card Number: 610404196907211075 | |||
| Party C: | | Xi’an Qinba Xintong Medical Ltd., | |
| | | Registered Address: 906F/A, Zhengxin Bldg, No.5 Gaoxin Road, Xi’an China. | |
WHEREAS:
| 1. | Party A is a wholly foreign-owned enterprise incorporated under the laws of the People’s Republic of China (the “P.R.C.”), which was registered at Administration of Industry and Commerce Bureau of Xi’an (City), in P.R.C., and the registered number is 002469 Shaanxi. It legally exists to date. |
| 2. | Party C is an enterprise which was registered at Administration of Industry and Commerce Bureau of Xi’an (City), in P.R.C., and the registered number is6101001401713. It legally exists to date. |
| 3. | As of the date of this Agreement Party B is the only shareholder of Party C, and Pu Jun legally holds the 50% equity interest of Party C, Zhang Yong legally holds 50% equity interest of Party C.. |
NOW, THEREFORE, the Parties through mutual negotiations hereby enter into this Agreement according to the following terms and conditions:
| 1. | THE GRANT AND EXERCISE OF PURCHASE OPTION |
| 1.1 | Grant: Party B and Party C hereby grants Party A an irrevocable exclusive purchase option (the “Purchase Option”) to purchase all or part of the shares of Party C currently owned by Party B (the “Object Shares”), or to purchase the object assets which are currently owned by Party C (the “Object Assets”), or increase the investment until Party A holds 49% of the issued and outstanding shares (when laws, regulations or policies of P.R.C permitted, the investment would be increased up to 100%) of Party C (the “Increasing Investment”). This Purchase Option is irrevocable and shall be exercised only by Party A (or the qualified persons appointed by Party A). The term “person” used herein shall include any entity, corporation, partnership, joint venture and non-corporate organizations. |
| 1.2 | Exercise Procedures: |
| 1.2.1 | Party A shall notify Parties B and C in writing prior to exercising its Purchase Option (the “Option Notice” hereinafter). |
| 1.2.2 | One day following the receipt of the Option Notice, Parties B and C together with party A (or the qualified person appointed by Party A), shall promptly compile all necessary documents (the “Transfer Documents”) to submit to the government bodies for approving the object shares or object assets transfer or increasing investment in connection with the Purchase Option exercise so that the shares or assets transfer can be transferred or investment can be increased, in whole or in part. |
| 1.2.3 | Upon the completion of the compilation of all the Transfer Documents and the Transfer Documents being confirmed by Party A, Parties B and C shall promptly and unconditionally obtain, together with Party A (or the qualified person appointed by Party A), all approvals, permissions, registrations, documents and other necessary approvals to effectuate the transfer of the object shares and object assets or increasing investment in connection with the Purchase Option exercise. |
| 1.3 | Exercise Condition: Party A could exercise the optional purchase right to purchase object shares and object assets or increase investment, at any time when Party A considers it is necessary and feasible. |
| 2 | Price of Option |
Party A shall purchase the Object Shares and Object Assets or Increase Investment at a price agreed by all parties. When laws, regulations or policies of P.R.C require these assets to be appraised, the purchase or Increasing Investment price shall be the appraisal price. Any consideration obtained by Party B and Party C shall be: (1) returned to Party A for operation in accordance with the Entrusted Agreement, or (2) paid back to Party A in any other way permittable. Parties B and C shall execute any related agreements or letters of undertaking that is necessary to pay back such consideration. Party A has the discretion to decide the time and arrangement of the acquisition, provided that the acquisition will not violate any P.R.C. laws or regulations then in effect.
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| 3. | REPRESENTATIONS AND WARRANTIES |
| | 3.1 | 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. |
| | 3.2 | Party B hereto represent to Party A that: (1) she is the legally registered sole shareholder of Party C with full ownership of all of the issued and outstanding shares of Party C and has paid Party C the full amount of Party C's registered capital required under the PRC laws; (2) Party B has not mortgaged or pledged their shares of Party C, nor has granted any security interest or borrow against their shares of Party C in any form except as set forth in the Shares Pledge Agreement by and between Parties A and B dated 25th September, 2008; and (3) Party B has not sold or will sell to any third party any of its equity interests in Party C. |
| | 3.3 | Party C hereto represents to Party A that: (1) it is a limited liability company duly registered and validly existing under the P.R.C. law; and (2) its business operations are in compliance with applicable laws of the P.R.C. in all material respects. |
| 4. | COVENANTS |
The Parties further agree as follows:
| | 4.1 | Before Party A has acquired all the equity/assets of Party C or increased investment by exercising the purchase option provided hereunder, Party C shall not: |
| | 4.1.1 | sell, assign, mortgage or otherwise dispose of, or create any encumbrance on, any of its assets, operations or any legal or beneficiary interests with respect to its revenues (unless such sale, assignment, mortgage, disposal or encumbrance is relating to its daily operation or has been disclosed to and agreed upon by Party A in writing); |
| | 4.1.2 | enter into any transaction which may materially affect its assets, liability, operation, shareholders’ equity or other legal rights (unless such transaction is relating to its daily operation or has been disclosed to and agreed upon by Party A in writing); and |
| | 4.1.3 | Distribute any dividend to Party B in any manner. |
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| | 4.2 | Before Party A has acquired all the equity/assets of Party C or increased investment by exercising the purchase option provided hereunder, Party B shall not individually or collectively: |
| | 4.2.1 | supplement, alter or amend the articles of association of Party C in any manner to the extent that such supplement, alteration or amendment may have a material effect on Party C's assets, liability, operation, shareholders’ equity or other legal rights; |
| | 4.2.2 | cause Party C to enter into any transaction to the extent such transaction may have a material effect on Party C's assets, liability, operation, shareholders’ equity or other legal rights (unless such transaction is relating to Party C's daily operation or has been disclosed to and agreed upon by Party A in writing); and | |
| | 4.3 | Party B shall entrust Party C to Party A for management in accordance with Management Entrustment Agreement by and between the Parties herein dated 25th September, 2008. | |
| 5. | ASSIGNMENT OF AGREEMENT |
| | 5.1 | Each of Party B and Party C shall not transfer their rights and obligations under this Agreement to any third party without the prior written consent of the Party A. |
| | 5.2 | Each of Party B and Party C hereby agrees that Party A shall have the right to transfer all of its rights and obligation under this Agreement to any third party whenever it desires. Any such transfer shall only be subject to a written notice sent to Party B and Party C by Party A, and no any further consent from Party B and Party C will be required. |
| 6. | CONFIDENTIALITY |
The Parties acknowledge and confirm that any oral or written materials exchanged by the Parties in connection with this Agreement are confidential. The Parties shall maintain the secrecy and confidentiality of all such materials. Without the written approval by the other Parties, any Party shall not disclose to any third party any relevant materials, but the following circumstances shall be excluded:
| | a. | The materials are known by the public (except for any materials disclosed to the public by the Party who receives such materials); |
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| | b. | The materials are required to be disclosed under the applicable laws or the rules or provisions of stock exchange; or |
| | c. | The materials disclosed by each Party to its legal or financial consultant relate to the transaction contemplated under this Agreement, and such legal or financial consultant shall comply with the confidentiality set forth in this Section. The disclosure of the confidential materials by an employee of any Party shall be deemed disclosure of such materials by such Party, and such Party shall be liable for breaching the contract. This Article 6 shall survive this Agreement even if this Agreement is invalid, amended, revoked, terminated or unenforceable by any reason. |
| 7. | BREACH OF CONTRACT |
| | Any violation of any provision hereof, any incomplete or mistaken performance of any obligation provided hereunder, any misrepresentation made hereunder, any material nondisclosure or omission of any material fact, or any failure to perform any covenants provided hereunder by any Party shall constitute a breach of this Agreement. The breaching Party shall be liable for any such breach pursuant to the applicable laws. |
| 8. | APPLICABLE LAW AND DISPUTE RESOLUTION |
| | 8.1 | Applicable Law |
The execution, validity, interpretation and performance of this Agreement and the disputes resolution under this Agreement shall be governed by the laws of PRC.
| | 8.2 | Dispute Resolution |
The parties shall strive to settle any dispute arising from the interpretation or performance of this Agreement through friendly consultation. In case no settlement can be reached through consultation within thirty (30) days after such dispute arises, each party can submit such matter to China International Economic and Trade Arbitration Commission (the “CIETAC”) in accordance with its rules. The arbitration shall take place in Beijing. The arbitration award shall be final, conclusive and binding upon both parties.
| 9. | EFFECTIVENESS AND TERMINATION |
| | 9.1 | This Agreement shall be effective upon the execution hereof by all Parties hereto and shall remain effective thereafter. |
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| | 9.2 | This Agreement may not be terminated without the unanimous consent of all the Parties except that Party A may, by giving a thirty (30) days prior notice to the other Parties hereto, terminate this Agreement. |
| 10. | MISCELLANEOUS |
| | 10.1 | Amendment, Modification and Supplement |
Any amendment and supplement to this Agreement shall be made by the Parties in writing. The amendment and supplement duly executed by each Party shall be deemed an integral part of this Agreement and shall have the same legal effect as this Agreement.
| | 10.2 | Entire Agreement |
The Parties acknowledge that this Agreement constitutes the entire agreement of the Parties with respect to the subject matters therein and supersedes and replaces all prior or contemporaneous agreements and understandings in oral or written form.
| | 10.3 | Severability |
If any provision of this Agreement is adjudicated to be invalid or non-enforceable according to relevant laws of the PRC, such a provision shall be deemed invalid only to the extent the PRC laws are applicable in China, and the validity, legality and enforceability of the other provisions hereof shall not be affected or impaired in any way. The Parties shall, through consultation based on the principal of fairness, replace such invalid, illegal or non-enforceable provision with a valid provision so that any substituted provision may bring the similar economic effects as those intended by the invalid, illegal or non-enforceable provision.
| | 10.4 | Headings |
The headings contained in this Agreement are for the convenience of reference only and shall not in any way affect the interpretation, explanation or the meaning of the provisions of this Agreement.
| | 10.5 | Language and Copies |
This Agreement is executed in Chinese and English in Three copies; each of Party A and Party B and Party C holds one copy of each language, and each original copy has the same legal effect. In the event of any conflict between the two versions, the Chinese version shall prevail.
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| | 10.6 | Successor |
This Agreement shall bind and benefit the successor or the transferee of each Party.
IN WITNESS THEREFORE, the parties hereof have caused this Agreement to be executed by their duly authorized representatives as of the date first written above.
PARTY A: Xi’an Huifeng Bio-Technic Inc. (seal)
Legal Representative(Signature): /s/ Jing’an Wang
| PARTY B: | /s/ Pu Jun | (Attached with ID copy) |
| /s/ Zhang Yong | (Attached with ID copy) |
PARTY C: Xi’an Qinba Xintong Medical Ltd., (Seal)
| /s/ Pu Jun |
Legal Representative (Signature):
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