Exhibit 10.11

 
Equity Acquisition Option Agreement
 
 
This Equity Acquisition Option Agreement (“this Agreement”) is concluded by
Parties in Beijing on Nov. 16, 2010.
 
 
Party A: Detian Yu Biotechnology (Beijing) Co. Limited
 
Address: A-807 North Star Century Center, 8 Beichen West Road, Chaoyang
District, Beijing
 
 
Party B: Zhao Jing
 
Identity Card No.: 142401198203010928
 
Domicile: No. 8, Department 1, Building 2, No.29, Jinlun East Street, Yuci
District, Jinzhong City, Shanxi Province
 
 
Party C: Zhao Peilin
 
Identity Card No.: 42401197408022717
 
Domicile: Room 23, Row 1, No.42, Qingyuan Alley, Yuci City, Shanxi Province
 

In view of
 
1.
Jinzhong Longyue Investment Consulting Co., Ltd. (hereinafter referred to as
"Jinzhong Longyue ") is a limited liability company established under the law of
the People’s Republic of China, whose registered address is: No 19 Zhuanyao
Street, Yuci District, Jinzhong City)

 
2.
Party B and Party C respectively own 60% and 40% of the equity intrests
(“underlying equity interest”) in Jinzhong Longyue as of the signing date of
this Agreement.

 
3.
Party B and Party C intend to grant a right to make Party A or its designated
third party to purchase part of or all the equity interests in Jinzhong Longyue
from Party B or Party C (“Equity Acquisition Option”) permitted by applicable
laws of the People’s Republic of China as it deems appropriate.
 
For this purpose, the Parties to this Agreement achieved the following agreement
through friendly consultation:

 
1
Granting Equity Acquisition Option
 
Party B and Party C hereby irrevocably grant Party A the following rights:

 
1.1
At any time within 10 years from the effective date of this Agreement (hereafter
referred as to Exercise Period) and on the premise that the following activities
are permitted by applicable PRC laws and regulations, Party A or the third party
designated by Party A has an option to purchase part of or all the equity
interests in Jinzhong Longyue from Party B and/or Party C in the exercise price
or corresponding ratio of exercise price subject to the provisions and
conditions in this Agreement. Party B and Party C agree to sign equity transfer
agreements (“Equity Transfer Agreement”) in the format listed in annex I of this
Agreement with Party A or the third party designated by Party A at that time.
When the Chinese law or the competent authority makes modification and/or
supplement for Equity Transfer Agreement, the Parties will use all reasonable
efforts to promote the achievement, execution and performance of the Equity
Transfer Agreement to achieve the purpose of this Agreement, including but not
limited to modification and/or supplement consistent with the premise of this
Agreement.

 
 
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1.2
At any time within the vesting period and on the premise that the following
activities are permitted by applicable laws of the People’s Republic of China
and regulations, Party A has the right to request Party B and Party C to
transfer part of or all the underlying equity interests to Party A or the third
party designated by Party A at the exercise price.

 
1.3
In the vesting period, Party A or the third party designated by Party A is
entitled to exercise its equity acquisition option under this Agreement in
fraction with unlimited fractions until all the underlying equity interest is
transferred to Party A or the third party designated by Party A.

 
1.4
Permitted by law, after Party A issues the exercise notice (see Article 4.1) ,
Party B and Party C shall unconditionally execute the above procedure and
transfer part of or all the underlying equity interests to Party A or the third
party designated by Party A, and execute the necessary approval, license,
registration, filing and other procedures with Party A.

 
1.5
In the vesting period, if Party B and / or Party C continuing to hold all or
part of the underlying equity interest is in violation of laws and
administrative regulations, Party B and / or Party C shall immediately give
written notice to Party A and explain the specific reason. In this case, Party A
will: (1) immediately exercise its rights in accordance with Article 4.1 of this
Agreement; or (2) specify the appropriate third party to purchase all or the
corresponding part of the underlying equity interests from Party B and / or
Party C at the exercise price.

 
2
Equity Acquisition Option Consideration
 
The consideration for the equity acquisition option is RMB 120,000,000 subject
to this Agreement.

 
3
Confirmation of Other Shareholders
 
When Party A exercises its option, Party B and/or Party C shall ensure that the
other shareholders (if any) will approve such equity transfer under this
Agreement and waive the right of preemption of the targeted equity.

 
4
Exercise

 
4.1
In the vesting period, and on the premise that the following activities are
permitted by applicable laws of the People’s Republic of China and regulations,
Party A may issue an exercise notice ("Exercise Notice") to Party B and / or
Party C, requiring to exercise the equity acquisition option under this
Agreement and purchase all or part of the underlying equity interests from Party
B and / or Party C or requiring to transfer the underlying equity interests to
the third party designated by Party A  .

 
4.2
Once Party B and / or Party C receive(s) the exercise notice issued in
accordance with Article 4.1 hereabove, Party B and / or Party C shall
immediately:

 
4.2.1
as required by the exercise notice and in accordance with the format listed in
annex I of this Agreement, sign an equity transfer agreement with Party A and /
or any third party;

 
4.2.2
as required by the Equity Transfer Agreement, modify the Articles of Association
of Jinzhong Longyue with Party A and / or the third party designated by Party A
and other Jinzhong Longyue shareholders at that time;

 
4.2.3
prompt shareholders’ meeting of Jinzhong Longyue to approve the equity transfer
under such exercise and the shareholders’ meeting resolution modifying the
Articles of Association of Jinzhong Longyue;

 
4.2.4
together with Party A and / or any third party designated by Party A and all the
other Jinzhong Longyue shareholders (if any), prompt Jinzhong Longyue to submit
the Equity Transfer Agreement and the modification of the Articles of
Association of Jinzhong Longyue to examining and approving authorities and / or
registration authorities, and assist in obtaining the necessary approval and /
or record; and

 
4.2.5
handle all other necessary matters for the completion of the equity transfer.

 
 
 
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5
Exercise Price
 
The Parties agree that the prices for Party A to purchase the targeted equity
from Party B and Party C are RMB 72,000,000 and RMB 48,000,000,respectively
(hereafter referred as to Exercise Price). In case that Party A only purchase
part of the targeted equity, the price shall be fixed according to the relevant
ratio of Exercise Price.

 
6
Jinzhong Longyue’s Termination
 
Party B and Party C further promise that they will not take any action that
might lead to Jinzhong Longyue's termination arising from bankruptcy, disband or
being ordered to terminate.

 
7
Representations and Warranties of Party B and Party C
 
Party B and Party C represent and warrant to Party A, as of the effective date
of this Agreement until all the underlying equity interest is transferred to
Party A:

 
7.1
they are Chinese citizens with the full capacity for civil conduct.

 
7.2
they have the power to sign this Agreement and to comply with the obligations
under the Agreement.

 
7.3
they have the valid authorization to sign this Agreement, to comply with the
obligations under the Agreement and to make them executable.

 
7.4
their obligations under this Agreement is valid, binding and enforceable in
accordance with the terms.

 
7.5
the signing of this agreement does not violate laws, decrees or administrative
regulations, or any obligation or commitment that restricts us or any assets of
us.

 
7.6
they have not performed activities that violate laws, decrees or administrative
regulations, official directives, contracts, commitments or obligations which
have or will have a substantial adverse impact on us or assets owned by us.

 
7.7
Party B and Party C legally hold the underlying equity interest.

 
7.8
Party B and Party C have strictly abided by the obligations set forth in the
Articles of Association of Jinzhong Longyue, shall not be subject to anything
that might affect the legal status of Party B and Party C as the Jinzhong
Longyue shareholders, nor is there anything that might affect the exercise of
equity acquisition option under this Agreement by Party A.

 
7.9
In addition to the equity pledge agreed by Party A, no security interest of any
form and no detainment is set on any underlying equity interest held by Party B
and Party C, nor is there any dispute, litigation, arbitration or any other form
of administrative, judicial compulsory measures against that equity interest,
and no one can make any claim to such equity interest.

 
7.10
Party B and Party C, have disclosed to Party A all the data or information that
might have a substantial adverse impact on the capacities of Party B and Party C
in fulfilling their obligations under this Agreement or have a substantial
adverse impact on the wish of Party A to enter into this Agreement.

 
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Party B and Party C’s further promise
 
Party B and Party C promise to Party A,

 
8.1
In the valid period of this Agreement, they must take all necessary measures to
ensure that Jinzhong Longyue can obtain all the business licenses and keep all
the business licenses sustained and effective at all times.

 
8.2
In the valid period of this Agreement, without Party A’s prior written consent,

 
8.2.1
Party B and Party C shall not transfer or by any other means dispose of any
underlying equity interest or set any security interest or other third party
rights on any underlying equity interest;

 
8.2.2
Party B and Party C shall not agree with the increase or decrease in registered
capital of Jinzhong Longyue, or increase or decrease of the existing
shareholders;

 
8.2.3
Party B and Party C shall not dispose of or cause the management of Jinzhong
Longyue to dispose of any Jinzhong Longyue assets (unless occurring in the
normal course of business);

 
 
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8.2.4
Party B and Party C shall not terminate or cause the management of Jinzhong
Longyue to terminate major agreements entered into by Jinzhong Longyue (such
major agreement shall be determined at the discretion of Party A), or enter into
any other agreement conflicting with the existing major agreement;

 
8.2.5
Party B and Party C shall not appoint or remove any executive director or board
member (if any), supervisor of Jinzhong Longyue, or other management officers
that shall be appointed and removed by the existing shareholders;

 
8.2.6
Except under the mandatory provisions of law, Party B and Party C shall not
allocate and actually issue any distributable profits, bonuses or dividends of
Jinzhong Longyue without prior consent of Party A;

 
8.2.7
Except under the mandatory provisions of law, Party B and Party C shall not
modify the Articles of Association of Jinzhong Longyue.

 
9
Confidentiality
 
Without the prior consent of the Parties, any party to this Agreement shall be
confidential and shall not disclose to any other person the contents of this
Agreement or give comment on any of the contents of this Agreement. Unless:

 
(1)
any disclosure is made as required by law or stock exchange provisions;

 
(2)
any disclosed information is already publicly available, and it is not caused
because the breach by the disclosing party;

 
(3)
any disclosure is made to his shareholders, accountants, financial advisors,
legal advisors or other professional advisers;

 
(4)
Any disclosure is made to his party or potential buyers of his equity / assets,
other investors, debt or equity providers, but the recipient shall make
appropriate promise on confidentiality(where the transferor is not Party
A,  Party A's consent must be obtained.)

 
10
Liability for Breach of Agreement

 
10.1
The following constitute Party B and / or Party C’s events of default:

 
10.1.1
Party B and / or Party C are of breach of any provision set forth in this
Agreement, or any representation and warranty of Party B and / or Party C made
in this Agreement has material misstatement or is false and incorrect;

 
10.1.2
Without Party A’s prior written consent, Party B and / or Party C shall not
transfer, otherwise assign or dispose of any rights under this Agreement.

 
10.2
In the event of events of default or other events in Party B and / or Party C,
except the breach relief measures required by law, Party A may also take the
following measures:

 
10.2.1
On the premise that the following activities are permitted by applicable laws of
the People’s Republic of China, Party B and / or Party C shall immediately
transfer all or any part of the underlying equity interest to Party A or any
third party designated by Party A at the exercise price;

 
10.2.2
Immediately collect the borrowing under the loan agreement signed with Party B
and / or Party CI;

 
10.2.3
Party B and / or Party C shall compensate for all direct and indirect losses,
including but not limited to: the fruits produced by underlying equity interest,
all attorney’s fees, travel expenses, investigation fees and so on paid for the
purpose of enforcement and getting relief for breach of the agreement.

 
11
Termination of Contract

 
11.1
At any time within the vesting period, Party A may at its own discretion issue a
written notice to Party B and / or Party C and unconditionally terminate this
Agreement without taking any responsibility.

 
 
 
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11.2
At any time within the vesting period, Party B and Party C have no right to
unilaterally terminate this Agreement.

 
12
Applicable Law and Settlement of Disputes

 
12.1
The conclusion, validity, interpretation, and performance of the contract of
this Agreement and settlement of disputes in connection therewith shall be
governed by the laws of the People’s Republic of China.

 
12.2
Any dispute in connection with this Agreement or arising from the performance of
this agreement by the Parties shall be settled first through friendly
consultation. Should the Parties fail to resolve any such dispute within sixty
(60) days after one Party givens a written notice of a dispute to the other,
either party may submit the dispute to China International Economic and Foreign
Trade Arbitration Commission for arbitration in accordance with then effective
arbitration rules in Beijing. The arbitration award shall be final and binding
on each party.

 
13
Other Matters

 
13.1
All the appendices to this Agreement shall be an integral part of this Agreement
and shall have the same legal force as this agreement.

 
13.2
Matters not covered in this Agreement shall be settled in the form of
supplementary agreements.  Any supplementary agreement reached by the parties in
writing is an integral part of this Agreement.

 
13.3
Any party to this Agreement shall not unilaterally alter this agreement. Any
changes to this Agreement shall be made by consultations between the Parties and
reach a written contract or agreement.

 
13.4
Party A’s failure to exercise or delay in exercising any rights or relief under
the Agreement shall be construed as a waiver of such rights or relief by Party
A, and will not affect Party A in exercising such rights or relief at any time
under this Agreement and / or laws and regulations.

 
13.5
Any invalid terms of this Agreement does not affect the validity of other terms
of this Agreement.

 
13.6
Party A reserves the right to be entitled to transfer all or part of the rights
under this Agreement to a third party without the consent of Party B and Party
C; but Party B and Party C shall not transfer any rights and obligations under
this Agreement without Party A's consent. After the rights under this Agreement
is transferred Party A and the transferee shall still comply with the relevant
obligations under this arrangement.

 
14
Text and Commencement

 
14.1
This Agreement will have six (6) copies. Each party has two (2) copies and both
shall have the same legal force.

 
14.2
This Agreement goes into effect after being signed by the Parties or their
authorized representatives and as of the date the parties otherwise agree.
Regardless of whether this Agreement has any contrary provisions, any party to
this Agreement shall not request to terminate this Agreement, declare this
agreement invalid or early termination of this Agreement on the ground that this
Agreement is grossly unconscionable, or violates the principle of fairness,
trade practices or market prices, or a similar reason.

 
(No Text)
 
 
 
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This Agreement is signed by the Parties or their duly authorized representatives
on the date first above written in Beijing.
 

 
Party A: Detian Yu Biotechnology (Beijing) Co. Limited (Seal)
 

Signature: /s/ Authorized Person           
Name:
Position:
 
 
Party B: Zhao Jing
 
/s/ Zhao Jing                                            

 
Party C: Zhao Peilin
 

/s/ Zhao Peilin                                         

 
 
 
 
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Annex I: Equity Transfer Agreement

 
This Equity Transfer Agreement is signed by the following Parties on
______(date) in [    ].
 
(1)     [ ]
(2)     [ ]
 
 
In view of:
 
1.
The transferor holds [   ]% of the equity interests of Jinzhong Longyue
Investment Consulting Co., Ltd. (hereinafter referred to as " Jinzhong Longyue
");

 
2.
The transferor is willing to transfer [   ]% of Jinzhong Longyue equity
interests held by it to the transferee, and the transferee agrees to accept the
above equity interests.

 
For this purpose, both sides reached the following agreement on the transfer of
the above equity interest through friendly consultation:
 
Article 1 Equity Transfer and Delivery
 
1.1
Both sides to this Agreement agreed that the transferor transfers [  ]% of the
Jinzhong Longyue equity interest held by it to the transferee in accordance with
the terms and conditions agreed in this Agreement. The transferee agrees to
accept the equity interest of the transferor.

 
1.2
The delivery date of the above equity interest is the date when Jinzhong Longyue
completes registering the modifications with the industry and commerce
administration authorities. As of the equity interest delivery date, the [  ]%
of the Jinzhong Longyue equity interest held by the transferor is held by the
transferee, the transferee is entitled to Jinzhong Longyue shareholder rights
and assume shareholder obligations based on the equity interest held by it.

 
Article 2  Transfer Price
 
2.1
The parties to this Agreement agree that the price of the equity transfer is RMB
￥[  ] , and will be paid within ___ days after the signing of this Agreement.

 
Article 3 Taxes and Fees
 
Both sides should pay any applicable tax and fee and expense of them incurred by
their consultations, preparation and conclusion of this Agreement and to obtain
the necessary approval of the Agreement, including reasonable costs and expenses
of their lawyers, accountants, and other experts.
 
Article 4 Settlement of Disputes
 
Any disputes between the transferor and the transferee in connection with this
Agreement shall first be settled through friendly consultation. If the dispute
cannot be resolved within thirty (30) days of the commencement of consultation,
either party may submit the dispute to China International Economic and Foreign
Trade Arbitration Commission for arbitration in accordance with the arbitration
rules in Beijing. The arbitration award shall be final and binding on the
parties to this Agreement.
 
Article 5 Others
 
This Agreement shall be signed in Chinese and in six (6) copies. Both the
transferor and the transferee hold two copies. One original copy is submitted to
the original and commerce registration authorities of Jinzhong Longyue for the
record, and the other is submitted to the public notary organization (if then
required). The copies have the same legal effect.
 
[  ]
[  ]
Authorized Representative (Signature):
 
Authorized Representative (Signature):
 
Name:
 
Name:
 

 
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