Exhibit 10.1
The Agreement ("Agreement") is entered into December 31, 2005 by the following
parties:
Party A: 4 persons including and represented by Jiang Guoqing
Address: Flat 11, S. Bldg, Jinjiang Shidai Garden, No. 107, Jinli W.
Rd., Chengdu, Suzhuan, China
Tel: 86-28-86158586
Fascimile: 86-28-86136592
Representative: JIANG, Guoqing
Nationality: Chinese
Party B: China Biopharmaceuticals Corporation.
Address: Palm Grove House, P.O. Box 438, Road Town, Tortola, British
Virgin Islands
Mailing address: 1601-8 Shanxi Rd., Bldg A, Jinshan Tower, Nanjing,
Jiangsu, China
Tel: 86-20-83205758
Fascimile: 86-20-83205759
Representative: MAO, Peng
Nationality: Canada
(1) Party A (consisting of 4 persons) is all the shareholders (For details
of shareholders, please see attached List of Shareholders) of Chengdu
Tianyin Pharmaceutical Limited Company (Referred to as "Tianyin"
hereafter), a legally registered limited liability company established
according to the laws of the People's Republic of China ("China")
laws, who authorizes its representative Jiang Guoqing to represent all
the shareholders to sign this agreement (For details, please see the
Trust Deed); Party B is a legally registered limited liability company
according to Law of British Virgin Islands..
(2) In Accordance with The Company Law of China, The Contract Law of China
as well as other prevailing laws and regulations, Party A and Party B
hereby agree to allow Party B assume operation control over Tianyin
effective the date of this Agreement and to make investment in Tianyin
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so that Tianyin will become a foreign-invested company according to
Chinese laws (Referred to as the "Joint Venture" hereafter).
(3) The Joint Venture will maintain its original business scope of Tianyin
(4) If the remaining issues regarding the operation and development of the
Joint Venture related to this cooperation are not fully provided for
in detail in this agreement, the both parties will make supplementary
provisions and conduct negotiations to resolve the issues according to
the relevant regulations and specified principles stipulated within
this agreement.
1 Representations and Warranties
1.1 The representations and warranties jointly made by the both parties
are listed as follows:
(1) The both parties have all the relevant legal right and capacity and
are qualified for signing and implementation of this Agreement, and at
the same time, the sign and implementation of this Agreement will not
violate any or all the legal documents such as regulations on the
Company Regulation, Contract and Agreement which imposes certain
restrictions on it.
(2) The both parties have already carried out all the required actions or
will do so, to obtain the consent, approval, authorization and permit
required by signing and implementation of this Agreement.
(3) In keeping with the principles of reliability and creditability and
responsibility, both parties will make utmost efforts to work in close
cooperation to promote the smooth implementation of this Agreement.
The parties will follow the principles set forth within this
Agreement, and will not impede the implementation of this Agreement.
The representations and warranties of Party A
1.2 The representations and warranties that Party A makes to Party B are
listed as follows:
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(1) All the materials having been or to be provided by Party A are
authentic, complete, accurate with no misleading information.
(2) The registered capital of Tianyin has been fully contributed; Tianyin
owns the legal ownership and use rights of the total assets.
(3) Tianyin has obtained necessary rights and permits, authorizations,
approvals and consent required for pharmaceutical content production
and business operation. The business scope of Tianyin does not go
beyond the operational scope approved as well as the rules of its
articles.
(4) Its financials statements as audited by its auditing firm according to
the US GAAP are true and correct and fairly represent the operation
results of Tianyin..
(5) Party A shall disclose all the mortgage of assets, sponsor and related
lawsuits and arbitration as well as administrative penalties to which
Party A is subject.
(6) Additional Representations and Warranties:
i. There will be no material change in the contributed assets and
debt of Tianyin and Party A will maintain normal cash flow for
the operational activities;
1.3 The representations and warranties that Party B makes to Party A are
listed as follows:
(1) All the materials having been or to be provided to party A are
authentic, timely and complete.
(2) Party B recognizes all the contracts entered into before this
Agreement, and will cause the Joint Venture to duly fulfill the
implementation of this Agreement.
2 Operation Control and Investment
2.1 The scope of the capital assets of this cooperation refers to the
total assets appearing on the financials of Tianyin.
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2.2. As of the date of this Agrement, Party B shall assume the full
operation control of Party A, including wothout limitation all aspects of
Tianyin's business operation, production, distribution and sale of products
and shall have the complete power to appoint and change Tianyin's top
management staff and executives. Party B shall also nominate majority of
Party A's board members including its chairman.
2.3. The total consideration for the operation control and the 51% of
Tianyin shall be 3,000,000 shares of common stock of Party B's parent,
China Biopharmaceuticals Holdings, Inc. valued at US$1.00 per share payable
immediately to Party A and an additional investment into Tianyin to the
amount of US$2,000,000 as additional capital contribution into Tianyin.
Such additional capital contribution shall be treated as additional
registered capital. After the completion of investment from Party B,
Tianyin will become a foreign-invested company with Party A holding 49% of
the total shares and Party B holds 51 % of the total shares of the
foreign-invested Company.
3 Arrangement of the transaction
3.1 Party B shall pay US$2,000,000 in cash to the Joint Venture. Party B
hereby agrees with Party A that within 30 working days after the auditing
result is completed Party B will remit US$ 1,000, 000 in cash to the
Foreign Currency Bank Account of the Joint Venture, and will remit the
remaining US$1, 000, 000 in cash to the Foreign Currency Bank Account of
the Joint Venture within 60 working days after obtaining the business
license of the Joint Venture.
3.3 Within 30 working days after this agreement is signed, Party B shall
distribute 3,000,000 shares of common stock of China Biopharmaceuticals
Holdings Inc. to Party A or its designated parties.
3.4 Arrangement of rewards
(1) Under the precondition that the Joint Venture accomplishes the
performance requirements by generating audited after tax profit of no
less than US$3,000,000 at the year ended December 31, 2006. Party B
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shall distribute 300,000 shares of its common stock to Party A or its
assigned natural person or legal representative after filing the year
2006's annual report.
4 Repayment of Shareholders' loan
The Joint Venture undertakes USD$ 2,000,000 liability owes to Party A, and
Joint Venture will distribute USD$1,000,000 to Party A within 45 working days
after obtaining the business license of the Joint Venture to eliminate the
liability. The remaining USD$1,000,000 will distribute to Party A from the net
profit after income tax of Joint Venture within 3 year period after obtaining
the business license of the Joint Venture to eliminate the liability.
5 The board of directors of the Joint Venture
5.1 The board of directors of the Joint Venture consists of five or seven
persons, two or three of whom are appointed by Party A and three or four of
whom are appointed by Party B. The chief financial officer shall be
appointed by party B.
5.2 The important events of the Joint Venture shall be voted and approved
by 75% of the total directors of the board, and the important events shall
mainly include but not limited to the followings:
(1) Modification of article of the Joint Venture.
(2) Disposal of all the key assets of the Joint Venture.
(3) Change of structure of managerial level.
(4) External sponsorship, mortgages, hypothecation and loans.
(5) Determine the operational plan and investment plan of the Joint
Venture.
(6) Others related to the key development plans and orientations of the
Joint Venture.
(7) The insider transactions among the company, shareholders and other
relevant parties.
6 Others
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6.1 This agreement is not allowed to be terminated by one side without
breach, and shall be governed by Chinese laws.
6.2 If any of the parties breaches the agreement, the non-breaching party
has rights to ask the breaching party for compensations due to breach of
agreement.
6.3 If the proposal, contracts and articles having been signed between
Party A and Party B and having been delivered to the relevant governmental
organizations for inspection and approval and this agreement signed is
found to have different interpretation, this agreement shall take effect.
6.4 If any dispute arises between the two parties, the dispute shall be
negotiated and settled within 30 working days. If the negotiation fails,
the two parties can go to the Chinese International Economic and Trade
Arbitration Committee to have arbitration.
6.5 For issues fails to be mentioned in this agreement, the two parties
may sign supplementary agreement or attachment, which forms effective
components of this agreement with the same legal effect.
6.6 This agreement is in quadruplicate, with two copies held by each
party.
Party A: 4 persons including and represented by Jiang Guoqing
Authorized representative:
Party B: China Biopharmaceuticals Holdings Inc.
Authorized representative:
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