CONSOLIDATION AND REORGANIZATION AGREEMENT
EXHIBIT
10.3
PARTY
A:
YANGLING DAIYING BIOTECH & PHARMACEUTICAL GROUP CO., LTD.
Registration
Place: Xx. 00 Xxxxxxxx Xxxxx Xx., Xxxxxxxx Hi-tech Demonstration Zone,
Shaanxi
PARTY
B:
XXXXX XXXX
Number
of
ID Card: 430321195801030012
Home
Address: Yingbin West Rd., Yu Hu District, Xxxxx Xxx City
PARTY
C:
ZHUOBIN LI
Number
of
ID Card: 430721197702180192
Home
Address: Chanling Rd, Group 1, Xxxxx Xxxx Town, An Xiang County, Hunan
Province;
Whereas:
Party
A,
Party B and Party C are shareholders of Hunan Xxx Xxxx Pharmaceutical Co.,
Ltd.,
Party A holds 51% of the total shares, Party B and C hold 49% of total shares
together through Hong Kong Hua Tai Agent Co., Ltd, (including 17% of shares
holding by Party B and 32% of shares holding by Party C).
Whereas,
Party
A,
Party B and Xxxxxxx Xx are shareholders of Hunan Ze An Pharmaceutical Co.,
Ltd.,
Party A holds 65% of total shares, Party B holds 20% of total shares and Xxxxxxx
Xx holds 15% of total share. On Dec. 5, 2005, Xxxxxxx Xx sales his 15% of shares
to Party B and Party B owes 1.2 million RMB to Xxxxxxx Xx to obtain these
shares. Xxxxxxx Xx is no longer shareholder of Hunan Ze An Pharmaceutical Co.,
Ltd.
Whereas:
Party
B
proposed and Party A agreed to pay Xxxxxxx Xx and Party B agrees to transfer
this 15% of shares from Zhongyu to Party A. Party A will pay Xxxxxxx Xx two
year
later started from the date of execution of this agreement.
In
order
to optimize the capital and resources and cut down operation cost and management
cost, with the agreement of shareholders of the two companies, the Parties
will
reorganize Hunan Xxx Xxxx Pharmaceutical Co., Ltd. and Hunan Ze An
Pharmaceutical Co., Ltd. The three parties reached the following terms about
the
consolidation:
| 1. |
SUPPORTING
FINANCIALS FOR CONSOLIDATIONS:
|
The
terms
of this consolidation is based on the Balance Sheet ended on December 31, 2005
of Hunan Xxx Xxxx Pharmaceutical Co., Ltd. and Balance Sheet ended on December
31, 2005 of Hunan Ze An Pharmaceutical Co., Ltd..
| 2. |
BENEFICIAL
OWNERSHIP
|
Base
on
previous ownership of this two companies and the financials ended on December
31
of 2005, both of the parties agrees the registered capital for the company
after
consolidation, Hunan Xxx Xxxx Pharmaceutical Co., Ltd., is 38,670,000 RMB,
among
this, Yangling Daiying Biotech & Pharmaceutical Co., Ltd. controls capital
of 26,043,700 RMB which equals to 67.3486% of total shares of the consolidated
company; Shareholder, Xxxxx Xxxx, controls capital of 7,227,900 RMB which equals
to 18.6912% of total shares of the consolidated company; Shareholder, Zuobin
Li,
controls capital of 5,398,400 RMB which equals to 13.9602% of total shares
of
the consolidated company.
| 3. |
THE
COMPANY AFTER THE CONSOLICATION:
|
Name
of
the new company: Hunan Xxx Xxxx Pharmaceutical Co., Ltd.;
English
Name: Hunan Xxx Xxxx Pharmaceutical Co., Ltd.;
Registration
Place: An Xiang Industrial Park, Xx Xxx Province
| 4. |
CAPITAL,
BENEFICIAL OWNERSHIP AND DEBT BEFORE THE
CONSOLIDATION
|
All
of
the existing capital, beneficial ownership of Hunan Xxx Xxxx Pharmaceutical
Co.,
Ltd and Hunan Ze An Pharmaceutical Co., Ltd. will belong to Hunan Xxx Xxxx
Pharmaceutical Co., Ltd after the consolidation. All of the existing debts
and
will be taken over by the shareholders of Hunan Xxx Xxxx Pharmaceutical Co.,
Ltd.
| 5. |
MANAGEMENT
STRUCTURE OF THE CONSOLIDATED COMPANY:
|
The
new
company will set up the Board of Directors, including five directors; the
Chairman will be nominated by Party A. It will also set up Governance Committee
with three governance officers. Chief Executive Officers and financial officers
will be appointed by the Board of Directors. The company will owns independent
accounting department.
| 6. |
Started
from the executive date of the agreement, Party A and Party B shall
co-operate with each other, and assign somebody to do the registration
for
Business, Land, Real Estate, Tax, Production Certificates of Medicines,
Trademark and other registration process with State Food and Drug
Administration, Intellectual Property Bureau, and any other necessary
legal processes for consolidation.
|
| 7. |
Both
parties should try to resolve disputes through negotiation after execution
of the agreement. If the dispute could not be resolved, both parties
have
the right to go through the legal process.
|
| 8. |
Any
material matters not included in this agreement can be negotiated between
two parties.
|
| 9. |
The
Agreement is executed in six of counterparts, each party hold two copies
and the other two copies were back up at the related
authorities.
|
Party
A:
Yangling Daiying Biotech & Pharmaceutical Group Co., Ltd.
Legal
Representative:
Signature:
Party
B:
Xxxxx Xxxx
Signature:
Party
C:
Zhuobin Li
Signature:
Date:
December 18, 2006
