Exclusive Option Agreement (English Version) This Exclusive Option Agreement (the "Agreement") is entered into as of December 20, 2006, among the following three parties: PARTY A: Longdan International Inc. Legal Address: Renaissance Trust Ltd,...
(English Version)
This Exclusive Option Agreement (the "Agreement") is entered into as of
December 20, 2006, among the following three parties:
PARTY A: Longdan International Inc.
Legal Address: Renaissance Trust Ltd, Solomon Building, P. O. Xxx 000,
Xxxx Xxxxxx, Xxxxxxxxxxx, Xxxxx.
PARTY B: Hubei Longdan Biological Medicine Technology Co. Ltd.
Legal Address: Floor 21, Jiangtian Building, No. 586 Wuluo Road,
Wuchang District, Wuhan, Hubei, China, 430070
PARTY C: Xxxxxx Xxxxx, Chairman and an authorized person to represent
shareholders of Party B, who collectively own more than 50% of the
outstanding equity interests in Party B.
Legal Address: No.1, 2nd Floor, 308 Xxxx Xxx Road, Hanyang, Wuhan,
Hubei China
WHEREAS, Party A is a business company incorporated under the laws of
Nevis;
WHEREAS, Party B is a company with exclusively domestic capital
registered in the People's Republic of China, and is engaged in the
business of Chinese medicine development, manufacturing, sale and
pharmacy management distribution network;
WHEREAS, Part A has entered a series of agreements, collectively the
"Main Agreements", which include "Exclusive Consult and Services
Agreement", "Operating Agreement" and "Equity Pledge Agreement", and
"Proxy Agreement", with Part B, or Part B and Part B's shareholders
together, concurrently with this Agreement;
WHEREAS, Party C represents more than 50% equity interest of Party B
and agrees to provide security of pledge over the equity interests for
the performance of payment obligations of Party B under the Main
Agreements, and Party A agrees to accept such security of pledge, as
specified in an Equity Pledge Agreement;
WHEREAS, "Agreement Letter for Exclusive Option Agreement" as showed in
the appendix is an integral part of this Agreement and has the same
legal effects as the other parts of the Agreement. Part C will legally
represent any shareholder of Part B, who signs the "Agreement Letter
for Exclusive Option Agreement", in this Agreement.
NOW THEREFORE, Party A, Part B and Part C through negotiations hereby
agree as follows through mutual negotiations:
1. Stock Option Grant
Part C hereby irrevocably grant to Party A, or one or more
persons (each, a "Designee") designated by Part A, an option (the
"Stock Option") to purchase, up to the maximum permitted by the laws of
The People's Republic of China (the "PRC"), all of the registered
capital of Party B now or hereafter owned and held by Party C at any
time, in part or in whole, at Party A's sole instruction and at the
price described in Article 3 herein. Such Stock Option shall not be
entitled to any other person except for Party A and its Designee. Party
B hereby agrees to the grant by Party C of the Stock Option to Party A.
All the rights of the Stock Option of Party A under this Agreement
shall be exclusive and irrevocable.
2. Exercise Stock Option
2.1 When signing this Agreement, Party B and Part C shall also
execute the "Agreement Letter for Exclusive Option Agreement" according
to Appendix attached hereto, and submits all signed documents to Party
A for safekeeping.
2.2 If Party A decides to exercise the Stock Option pursuant to
Article 1 hereinabove, it shall send written notice to Party B, which
specifies the quantity of the registered capital of Part B to be
acquired and identifies the transferee. Party B and Party C shall
furnish all materials and documents necessary for the registration of
said registered capital transfer within 10 business days after the date
of Party A's notice.
3. Price
The total purchasing price for the Stock Option shall be the
lowest price allowable under the PRC Laws at the time of said
purchasing. All the taxes, and other expenses arising from the excising
of the Stock Option shall be the sole responsibility of the Party in
accordance with the PRC Laws
4. Confidentiality
The Agreement itself and relevant materials of this Agreement shall
be held confidential by all the Parties and shall not be disclosed to any
third party excluding senior officers, directors, shareholders, agents
and professional consultants. If any Party is required by PRC Laws or
other jurisdictional laws to disclose any information in connection with
this Agreement to the public or shareholders, or to file this Agreement
with the regulatory authorities involved, that Party shall not be subject
to this Article.
This Article shall survive any amendment, supplementary or
termination of this Agreement.
5. Effective Date And Term
This Agreement shall come into effect as of the date first present
above. The term of this Agreement is ten (10) years, and shall be
automatically renewed for additional ten (10) year period upon the
initial expiration of the initial term hereof or any renewal term, except
earlier termination happens any time as set forth in Article 6 of this
Agreement.
6.
Termination
During the initial or any renewal term of this Agreement, Party B
and Part C shall not elect to terminate this Agreement. Notwithstanding
the above stipulation, Party A shall have the right to terminate this
Agreement with or without any reason at any time by definitely giving
Party B and Part C a written notice thirty days prior to the termination.
7. Transfer
7.1 Party B and Part C shall not have the right to transfer any
rights and obligations to any third party under this Agreement unless
with Party A's prior written consent;
7.2 This Agreement shall be binding upon Party C and its successors,
and also binding upon Party A and its successors.
7.3 Party A, at any time, may assign all or any of its rights and
obligations under this Agreement, to any third party. Where Party A
transfers its rights and obligations under the this Agreement, Party B
and Part C shall, upon Party A's request, execute agreements concerning
said transfer.
8. Language
This Agreement is written in both Chinese and English, and executed
in Chinese only, and the executed Chinese language Agreement shall
prevail in all cases. This Agreement is executed in three originals and
each Party holds one original. Each original has the same legal effect.
9. Amendments and Supplementary Agreements
Parties may negotiate and enter any amendments of this Agreement, or
supplementary agreements on matters not agreed upon herein. Any
amendments of this Agreement, or supplementary agreements shall be valid
only when made in writing and signed by all parties. Any amendments of
this Agreement, or supplementary contracts have equal effect as this
Agreement.
10. This Agreement shall be governed by, and construed in accordance
with the laws of the People's Republic of China.
11. Settlement of Dispute
The parties shall strive to settle any dispute arising from, out of
or in connection with the interpretation or performance of this Agreement
through friendly negotiation. In case no settlement can be reached
through negotiation within six months, each party can submit such matter
to China International Economic and Trade Arbitration Commission (the
"CIETAC"). The arbitration shall follow the current rules of CIETAC. The
arbitration award shall be final and binding upon the parties and shall
be enforceable in accordance with its terms.
12. Force Majeure
Force Majeure means any event that is beyond the party's reasonable
control and cannot be prevented with reasonable care, such as the acts of
nature: earthquake, flood, typhoon, fire, explosion, and acts of
governments, war, and acts of terrorism or other civil unrest means. If a
Force Majeure event exists and affects the performance of this Agreement,
the affected party shall immediately notify the other party by means of
telegraph, e-mail or other electronic forms, and shall furnish sufficient
evidence in writing of the occurrence of the Force Majeure event within
twenty (20) calendar days thereafter. According to the impact of the
Force Majeure on the performance of this Agreement, the Parties determine
whether to release this Agreement. After the event of Force Majeure is
removed, both parties agree to resume performance of this Agreement with
their best efforts.
13. Capable of Severing
Any of the provisions of this Agreement will be deemed as capable of
severing in the jurisdiction where it conflicts with the laws in such
jurisdiction. The invalid or unenforceable effect of such provision in
one jurisdiction should not be affected that in other jurisdictions.
(A Signature Page Follows)
Signature Page
IN WITNESS WHEREOF the Part A, Part B and Part C hereto have caused this
Agreement to be duly executed on their behalf by a duly authorized
representative as of the date first written above.
Party A: Longdan International Inc.
By: /s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
Chairman
Party B: Hubei Longdan Biological Medicine Technology Co. Ltd.
By: /s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
Chairman
Party C: Shareholders of Part B
By: /s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
An authorized representative of the majority shareholders
(An Appendix Page Follows)
Appendix: Form of Agreement Letter for Exclusive Option Agreement
Agreement Letter for Exclusive Option Agreement
( English Version, for Reference only )
To:
Hubei Longdan Biological Medicine Technology Co. Ltd. and Longdan
International Inc.
I, as the shareholder of Hubei Longdan Biological Medicine
Technology Co. Ltd., hereby agree and confirm as follows:
1. I have read the full text of Option Agreement, and I fully
agree to all contents of this agreement.
2. I assign Xxxxxx Xxxxx, Chairman of Hubei Longdan Biological
Medicine Technology Co. Ltd. to represent me with the Common stock
shares specified at the bottom of this agreement, together with Hubei
Longdan Biological Medicine Technology Co. Ltd. to sign the Exclusive
Option Agreement with Longdan International Inc.
3. I agree that other shareholders of Hubei Longdan Biological
Medicine Technology Co. Ltd. ("other shareholders") transfer equity
interests of Hubei Longdan Biological Medicine Technology Co. Ltd. held
by them to Longdan International Inc. or the third party prescribed by
Longdan International Inc.
4. I agree to waive my preemptive right when the other
shareholders transfer their equity interests to Longdan International
Inc. or a third party designated by Longdan International Inc.
5. I agree to sign or provide necessary documents for the purpose
of going through the registration of said transfer when the other
shareholders transfer their equity interests to Longdan International
Inc. or the third party prescribed by Longdan International Inc.
This Agreement Letter shall be effective from the signing date.
Signature:
Print Name:
Identity Card Number:
Information of Possession of Common Stocks of Hubei Longdan Biological
Medicine Technology Co. Ltd. :
Class of Common Stocks: Number of Shares:
Percentage of Voting Power:
Date: December 20, 2006
