Acquisition Framework Agreement
[English translation of Mandarin original]
This Acquisition Framework Agreement was signed in Beijing on May 10, 2006
between the following parties:
Party A: Beijing Huasheng Pharmaceutical Co., Ltd., which is a limited liability
company established in accordance with Chinese law.
Legal address: Xxxxxxxxx Xxxxxxx, Xxxxxxx Xxxx, Xxxxxxxx Xxxxxxxx, Xxxxxxx City
Tel: (000) 00000000
Fax: (000) 00000000
Party B: Kiwa Bio-Tech Products Group Corporation, which is public company
listed in American NASDAQ stock market and established in accordance with
American law.
Legal address: 000Xxxx Xxxxxxxx Xxxx, Xxxxx000 Xxxxxxxxx, Xxxxxxxxxx, U.S.A
Tel: 000-000-000-0000, (0000)00000000/83
Fax: (0000)00000000
The Acquisition Framework Agreement is for the purpose of:
1. As a production and sales enterprise of veterinary drug, approved by
board of directors and general meeting of stockholders, Party A
wishes to increase its equity capital and extend its shares by
attracting Party B's fund, so as to further develop its business
scope, expand market as well as develop new technologies and
products.
2. As a public company listed abroad, Party B specializes in investing
in Chinese agricultural industry and has sound fund-raising and
financing channel. Moreover, Party B's condition coincides with its
desired investment circle and direction. Party B wishes to put its
investment into Party A and transforms Party A into a new-type and
advanced company with high competitiveness.
Through mutual consultation, the both parties reached the following
intents and framework principles:
0.Xxxxx A agrees to Party B's investment and acquisition of stock-holding
rights. Through evaluation and confirmed by Party B, the assets owned by the
original shareholders of Party A will be deemed as their investment in the new
joint venture. Both parties agreed that their respective commercial reputation,
products, licenses as well as other invisible assets, will be deemed as
investment in the new company after value evaluation.
0.Xx view of respective resources advantage and current situation, the
both parties will adopt the following cooperation mode: Party B will invest with
cash and technology of AF-01 anti-virus blocker (technological value agreed upon
by both parties). The shares of Party B will be no less than 60%. Party A agrees
to invest its whole assets and business into newly-founded joint venture. Both
parties shall not engage in business which may pose competition with the joint
venture.
2
3. Both parties agree to formulate complete company regulations,
management system and etc after establishment of the joint venture. The new
company will bring the role of Party A's existing management team into full play
and support them in continuously producing Party A's existing products and
integrating the existing sales network. Meanwhile, the joint venture will
produce AF-01 anti-virus blocker.
4.The joint venture's board of directors is the supreme power organ of
the new company. It's made up of three persons, among which one will be
designated from Party A's existing shareholders and two designated from party B.
The general manager will be designated by Party A. And board chairman and CFO
will be designated by Party B.
5. Both parties agreed that Party A shall provide Party B with materials
regarding its industrial & commercial and financial conditions, company
development program, business management specifications, as well as relevant
resolutions made by board of directors and general meetings of shareholders,
within short period after signature of this Acquisition Framework Agreement.
Party B is obligated to keep secrets on materials supplied by Party A.
0.Xxxxx B shall designate relevant personnel to carry out due diligence
investigation on Party A, and assist party A in perfecting company development
program and etc.
3
7. After fulfillment of evaluation and investigation, both parties will
begin discussion and drafting of documents regarding the joint venture, and try
to found the joint venture before June, 2006.
Party A: Beijing Huasheng Pharmaceutical Co., Ltd.
Authorized representative:
Date:
Party B: Kiwa Bio-Tech Products Group Corporation
Authorized representative:
Date:
4
