Acquisition Agreement
China
Ginseng Holdings, Inc.
Address:
64 Xxx Xxxx Da Road, Xx Xx Building A, Room 1208
Xxxxx
Xxxx City, China
Legal
Representative: Liu, Changzhen
Meihekou
City Ginseng Company, Ltd.
Address:
Xxxx Xxx Road, Meihekou City, China
Legal
Representative: Zhang, Yuxiang
This
Acquisition Agreement is entered among China Ginseng Holdings, Inc. (“CGH”) and
Meihekou City Ginseng Company, Ltd. (“MCGC”) after thorough consideration and
negotiation:
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A.
|
Parties
of Acquisition.
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CGH
will
acquire MCGC.
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B.
|
Method
of Acquisition.
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After
acquisition, MCGC will withdraw its registration as a juristic corporation
and
become Zhonghwa Beverage Company, Ltd. under CGH. CGH will become the juristic
party. Shareholders of MCGC will be become the ones of CGH. The assets and
stocks of MCGC will be merged to CGH.
|
C.
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Evaluation
of assets and verification of the stocks of the
shareholders.
|
The
assets and the number of shares of CGH is based on the data provided by
company’s department of finance and department of securities and will not be
reevaluated.
The
assets of MCGC will be assessed by an accounting firm or the department of
finance of CGH. Shareholders from MCGC will be able to hold shares half their
investment amount. For example, if Xx. Xxxxx invested $70,000, he will be able
to hold 35,000 shares of CGH. If Xx. Xxx invested $230,000, he will be able
to
hold 115,000 shares of CGH. Withdrawing shareholders will receive CNY$0.7 refund
per share sold to CGH by September. Refund will be handled by MCGC.
|
D.
|
Relationship
and Management after
Acquisition.
|
MCGC
will
become CGH’s subsidiary after acquisition. Management including production,
finance, and human resources will be under CGH. Plans of production management
and financial assessment in two years will be re-outlined after
acquisition.
|
E.
|
Process.
|
|
1.
|
Issues
regarding acquisition need to be decided through the board of directors
and assembly of shareholders.
|
|
2.
|
Assets
evaluation. Shareholders, capital stock, and asset belongingness
have to
be done completely and legally. No existing assets pledge, hypothecation,
guarantee, leases and disputes. No existing lawsuits, arbitration
and
debts disputes.
|
|
3.
|
Changes
of relating registrations need to be pursuant to the corporate laws
and
regulations.
|
|
4.
|
After
this agreement is signed, a payment of CNY$600,000 for the refund
to
shareholders should be made to MCGC by CGH by the end of September.
Based
on the expenses MCGC disburse for moving and Food & Beverage
Administration registration, a payment of approximately CNY$400,000
should
be made to MCGC after this agreement is
signed.
|
|
F.
|
Responsibilities
of Violation.
|
After
the
Agreement is signed, party violating the Agreement has to indemnify the other
for the loss during the time of acquisition and penalty of CNY
$30,000.
|
G.
|
Conflict.
|
To
the
extent there is any conflict during acquisition, the two parties shall settle
it
by themselves or through a local arbitration agency.
|
H.
|
Addition
or Modification.
|
The
addition or modification of the Agreement should be in written form and signed
by both parties. Modified agreement without authorized signatures is
invalid.
|
I.
|
Four
copies of the Agreement are provided. Each party holds two copies.
The
Agreement will be effective after being
signed.
|
|
China Ginseng Holdings, Inc.
Legal Representative:
|
Meihekou City Ginseng Company, Ltd.
Legal
Representative:
|
||
| S/S Liu Changzhen | S/S Xxxxx Xxxxxxx | ||
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