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
Exhibit
10.7
by
and among
NEOSTEM
(CHINA), INC.
BEIJING
RUIJIEAO BIO-TECHNOLOGY LTD.
and
THE
SHAREHOLDER OF BEIJING RUIJIEAO BIO-TECHNOLOGY
LTD.
June
1, 2009
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: Xxxx 0000X, Xxxxxxxx X, Xx.0 XxxxxXxxxXxxxx Xxxx, Shinan District,
Qingdao City
Legal
representative: Xxxxx Xxxxx
(2) Beijing Ruijieao Bio-Technology Ltd.
(“Party B”)
Registered
Address: Room 2007 00/X, Xxxxxxxxxxxxxx Xxxxxxxx, Xx.0 Mantingfangyuan
Community, Xxxxxxx Xx, Haidian District, Beijing City
Legal
representative: Fu Wenyuan
(3)
Sole shareholder of Beijing Ruijieao Bio-Technology Ltd.
(hereinafter called the “Shareholder”)
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Name of the
Shareholder |
Shareholding
Ratio （%） |
ID Card No.
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Contact Address
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|||
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Fu
Wenyuan
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100
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No.27
Shandabei 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”.
WHEREAS:
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1.
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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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2.
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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.
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3.
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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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4.
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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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1.
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THE
GRANT AND EXERCISE OF PURCHASE
OPTION
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1.1
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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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1.2
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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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1.3
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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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1.4
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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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1
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1.5
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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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1.6
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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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1.7
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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 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.
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2.
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REPRESENTATIONS
AND WARRANTIES
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2.1
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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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2.2
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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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2
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2.3
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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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3.
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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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3.1
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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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a.
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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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b.
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shall
prudently and effectively maintain its business operations according to
good financial and business standards so as to maintain or increase the
value of its assets;
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c.
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shall
not transfer, mortgage or otherwise dispose of the lawful rights and
interests to and in its assets or incomes, nor shall it encumber its
assets and income in any way that would affect Party A’s security
interests unless as required necessary for the business operation of Party
B or upon prior written consent by Party A
;
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d.
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shall
not incur or succeed to any debts or liabilities without Party A’s prior
written consent;
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e.
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without
Party A’s prior written consent, shall not enter into or materially amend
any material contract (exceeding RMB 100,000 in value) except for the
routine business contracts;
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f.
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without
Party A’s prior written consent, shall not provide any loans or guaranty
to any third party;
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g.
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at
Party A’s request, it shall provide Party A with all information regarding
Party B’s business operation and financial
condition;
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3
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h.
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shall
purchase insurance from insurance companies acceptable to Party A in such
amounts and of such kinds as are customary in the region among companies
doing similar business and having similar
assets;
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i.
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without
Party A’s prior written consent, shall not acquire or
consolidate with any third party, nor shall they invest in any third
party;
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j.
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shall
promptly notify Party A of any pending or threatened lawsuit, arbitration
or administrative dispute which involve Party B’s assets, business or
incomes, and take positive measures against aforesaid lawsuits,
arbitrations or administrative
dispute;
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k.
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without
Party A’s prior written consent, shall not distribute any dividends to the
Shareholder in any manner, and, at Party A’s request, shall promptly
distribute all distributable dividends to the Shareholder of Party
B;
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l.
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without
Party A’s prior written consent, shall not commit any act or omission that
would materially affect Party B’s assets, business or
liabilities;
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m
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at
Party A’s request, shall promptly and unconditionally transfer its assets
to Party A or its designated third party as permitted by PRC laws and
regulations;
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n
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shall
strictly comply with the provisions of this Agreement, and effectively
perform its obligations hereunder, and shall be prohibited from committing
any act or omission which may affect the validity or enforceability of
this
Agreement.
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3.2
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Before
Party A has acquired all the equity/assets of Party B by exercising the
purchase option provided hereunder, the
Shareholder:
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a.
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apart
from relevant provisions in each of the Equity Pledge Agreements, without
Party A’s prior written consent, shall not transfer, sell, mortgage or
otherwise dispose of the Equity Interests in Party B; nor shall the
Shareholder places encumbrances on the Equity Interests that would affect
Party A’s interest hereunder and thereunder;
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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 its registered capital or change the shareholding
structure in any manner;
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c.
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without
Party A’s prior written consent, shall not approve for the resolutions
on the dissolution, liquidation and change of legal form of
Party B;
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4
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d.
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shall
not approve for any Profit Distribution Proposal, nor shall accept such
distributed dividend without Party A’s written consent; At Party A’s
request, he shall promptly approve for the Profit Distribution Proposal,
and accept such distributed
dividend.
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e.
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at
Party A’s request, shall provide Party A with all information regarding
Party B’s business operation and financial
condition;
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f.
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shall
not incur or succeed to any debts or liabilities which may adversely
affect its Equity Interests in Party B without Party A’s prior written
consent;
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g.
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shall
appoint, and appoint only, the candidates nominated by Party A to be the
executive director of Party B, and shall not replace such candidates
without Party A’s prior written
consent;
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h.
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shall
not approve any acquisition of, any consolidation with, or any investment
in any third party without Party A’s prior written
consent;
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i.
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shall
promptly notify Party A of any pending or threatened lawsuit, arbitration
or administrative dispute which involve Party B’s assets, business or
incomes, and take positive measures against aforesaid lawsuits,
arbitrations or administrative
dispute;
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j.
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without
Party A’s prior written consent, shall not commit any act or omission that
would materially affect Party B’s assets, business or
liabilities;
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k.
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to
the extent permitted by the PRC laws and regulations, and at any time upon
Party A’s request, shall promptly and unconditionally transfer their
Equity Interests in Party B to Party A or a third party designated by
Party A;
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l.
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shall
approve for the resolution in respect of the Equity Transfer or Assets
Transfer hereunder within the extent permitted by the PRC
laws;
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m.
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shall
make every efforts to cause Party B perform the obligations of
Section 3.1 hereunder;
and
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n.
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shall
strictly comply with the provisions of this Agreement, and effectively
perform its obligations hereunder, and shall be prohibited from committing
any act or omission which may affect the validity or enforceability of
this Agreement.
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5
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3.3
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The
Shareholder shall, to the extent permitted by applicable laws, cause Party
B's
operational term (including the circumstance of change of business terms)
to be extended to equal the operational term of Party A (including the
circumstance of change of business
terms).
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4.
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GUARANTY
OF THIS AGREEMENT
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4.1
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To
secure the performance of the obligations assumed by the Shareholder and
Party B hereunder, the Parties agree to execute the Equity Pledge
Agreement with respect thereto.
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5.
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TAXES
AND FEES
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5.1
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The
Parties shall pay, in accordance with relevant PRC laws and regulations,
their respective taxes arising from Equity or Assets transfer and related
registration formalities and other charges during the transactions
contemplated herein and therein.
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6.
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ASSIGNMENT
OF AGREEMENT
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6.1
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Party
B and the Shareholder shall not transfer the Shareholder’s rights and
obligations under this Agreement to any third party without the prior
written consent of Party A.
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6.2
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The
Shareholder and Party B agree that Party A shall have the right to
transfer any or all of its rights and obligations under this Agreement to
any third party upon a six(6)–day written notice to the Shareholder and
Party B without approval by the Shareholder and Party
B.
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7.
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EVENTS
OF DEFAULT
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7.1
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Any
violation of any provision hereof, incomplete performance of any
obligation provided hereunder, any misrepresentation made hereunder,
material concealment or omission of any material fact or failure to
perform any covenants provided hereunder by any Party shall constitute an
event of default. The defaulting Party shall assume all the legal
liabilities pursuant to the applicable PRC laws and
regulations.
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7.2
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In
the event of default by Party B or the Shareholder, Party A shall be
entitled to exercise the Pledgee’s right under the Equity Pledge
Agreement in the event that Party B and Shareholder
commit an event of default and fail to redress such default within sixty
(60) business days upon receipt of written notification from Party
A.
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6
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8.
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EFFECTIVEMESS,
MODIFICATION AND CANCELLATION
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8.1
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This
Agreement shall be effective upon the execution hereof by all Parties
hereto.
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8.2
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The
modification of this Agreement shall not be effective without written
agreement through negotiation. If the Parties could not reach an
agreement, this Agreement remains
effective.
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8.3
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This
Agreement shall not be discharged or canceled without written
agreement through negotiation, provided Party A may, by giving a thirty
(30) days prior notice to the other Parties hereto, terminate this
Agreement.
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9.
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CONFIDENTIALITY
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9.1
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Any
information, documents, data and all other materials (herein “confidential
information”) arising out of the negotiation, signing, and implement of
this Agreement, shall be kept in strict confidence by the Parties. 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:
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a.
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The
materials that is known by the Public (but not include the materials
disclosed by each Party receiving the
materials);
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b.
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The
materials required to be disclosed subject to the applicable laws or the
rules or provisions of stock exchange;
or
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c.
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The
materials disclosed by each Party to its legal or financial consultant
relating the transaction of this Agreement, and this legal or financial
consultant shall comply with the confidentiality set forth in this
Section. The disclosure of the confidential materials by staff or employed
institution of any Party shall be deemed as the disclosure of such
materials by such Party, and such Party shall bear the liabilities for
breaching the contract.
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9.2
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If
this Agreement is terminated or becomes invalid or unenforceable, the
validity and enforceability of Article 9 shall not be affected or
impaired.
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10.
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FORCE
MAJEURE
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10.1
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An
event of force majeure means an event that could not be foreseen, and
could not be avoided and overcome, which includes among other things, but
without limitation, acts of nature (such as earthquake, flood or fire),
government acts, strikes or riots;
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10.2
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If
an event of force majeure occurs, any of the Parties who is prevented from
performing its obligations under this Agreement by an event of force
majeure shall notify the other Parties without delay and within fifteen
(15) days of the event provide detailed information about and notarized
documents evidencing the event and take appropriate means to minimize or
remove the negative effects of force majeure on the other Parties, and
shall not assume the liabilities for breaching this
Agreement. The Parties shall keep on performing this Agreement
after the event of force majeure
disappears.
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7
Exclusive
Purchase Option Agreement
|
11.
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APPLICABLE
LAW AND DISPUTE RESOLUTION
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11.1
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Applicable Law
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The
execution, validity, construing and performance of this Agreement and the
disputes resolution under this Agreement shall be governed by the laws and
regulations of the PRC.
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11.2
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Dispute Resolution
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The
Parties shall strive to settle any dispute arising from or in connection
with this Agreement through friendly consultation. In case no settlement
can be reached through consultation within thirty (30) days after such
dispute is raised, each party can submit such matter to Qingdao
Arbitration Commission for arbitration in accordance with its rules. The
arbitration shall take place in Qingdao. The arbitration award shall be
final conclusive and binding upon the
Parties.
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12.
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MISCELLANEOUS
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12.1
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Entire Agreement
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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 oral or written agreements and
understandings.
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12.2
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Successor
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This
Agreement shall bind and benefit the successor of each Party and the
transferee permitted hereunder with the same rights and obligations as if
the original parties hereof.
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12.3
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Notice
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Any
notice required to be given or delivered to the Parties hereunder shall be
in writing and delivered to the address as indicated below or such other
address or as such party may designate, in writing, from time to time. All
notices shall be deemed to have been given or delivered upon by personal
delivery, fax and registered mail. It shall be deemed to be delivered
upon: (1) registered air mail: 5 business days after deposit in the mail;
(2) personal delivery: the next business day after transmission. If the
notice is delivered by fax, it should be confirmed by original through
registered air mail or personal
delivery.
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8
Exclusive
Purchase Option Agreement
Party
A
Contact
person: Xxxxx Xxxxx
Address:
Tel:
Fax:
Party
B
Contact
person: Fu Wenyuan
Address:
Room 2007 20/F, Qingyundangdai Building,
Xx.0
Xxxxxxxxxxxxxxx Xxxxxxxxx, Xxxxxxx Xx, Xxxxxxx Xxxxxxxx,
Xxxxxxx Xxxx
Xxxxxxxxxxxxxxx Xxxxxxxxx, Xxxxxxx Xx, Xxxxxxx Xxxxxxxx,
Xxxxxxx Xxxx
Tel:
Fax:
The
Shareholder
Contact
person: Fu Wenyuan
Address:
Xx.00 Xxxxxxxxx Xxxx, Xxxxxxx Xxxxxxxx, Ji’nan City
Tel:
Fax:
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12.4
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Copies
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This
Agreement is executed in three (3) originals with each of the person for
signing this Agreement holding one original, and each of the originals
shall be equally valid and
authentic.
|
.
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12.5
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Whenever
the consent of Party A is required under this Agreement, such consent
shall not be effective unless such consent is also provided by either the
sole shareholder, or the Executive Director, or Party
A.
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[Signature page
follows]
9
Exclusive
Purchase Option Agreement
IN WITNESS THEREFORE, the
parties hereof have caused this Agreement to be executed and delivered as of the
date first written above.
Party A NeoStem (China), Inc.
(Seal)
Legal
Representative (or Authorized Representative):
/s/ Xxxxx
Xxxxx
Party
B Beijing Ruijieao Bio-Technology Ltd. (Seal)
Legal
Representative (or Authorized Representative):
/s/ Fu
Wenyuan
The
Shareholder
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Name of the
Shareholder
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Signature
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Fu
Wenyuan
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/s/
Fu Wenyuan
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10
