EXCLUSIVE OPTION AGREEMENT
 
This Exclusive Option Agreement (the “Agreement”) is entered into as of 25th
September, 2008 between the following parties in Xi’an, P.R.China.
 
Party A:
  
Xi’an Huifeng Bio-Technic Inc.
 
  
Registered Address: 16B/F, Ruixin Bldg, No.25 Gaoxin RD, Xi’an China
 
 
Party B:
  
Pu Jun, A citizen of P.R.C.,
 
  
Identity Card Number: 610113197307152133
   
Zhang Yong, A citizen of P.R.C.
   
Identity Card Number: 610404196907211075
Party C:
  
Xi’an Qinba Xintong Medical Ltd.,
 
  
Registered Address: 906F/A, Zhengxin Bldg, No.5 Gaoxin Road, Xi’an China.

 
WHEREAS:
 
1.
Party A is a wholly foreign-owned enterprise incorporated under the laws of the
People’s Republic of China (the “P.R.C.”), which was registered at
Administration of Industry and Commerce Bureau of Xi’an (City), in P.R.C., and
the registered number is 002469 Shaanxi. It legally exists to date.

 
2.
Party C is an enterprise which was registered at Administration of Industry and
Commerce Bureau of Xi’an (City), in P.R.C., and the registered number
is6101001401713. It legally exists to date.

 
3.
As of the date of this Agreement Party B is the only shareholder of Party C, and
Pu Jun legally holds the 50% equity interest of Party C, Zhang Yong legally
holds 50% equity interest of Party C..

 
NOW, THEREFORE, the Parties through mutual negotiations hereby enter into this
Agreement according to the following terms and conditions:

1.
THE GRANT AND EXERCISE OF PURCHASE OPTION

 

 
1.1
Grant: Party B and Party C hereby grants Party A an irrevocable exclusive
purchase option (the “Purchase Option”) to purchase all or part of the shares of
Party C currently owned by Party B (the “Object Shares”), or to purchase the
object assets which are currently owned by Party C (the “Object Assets”), or
increase the investment until Party A holds 49% of the issued and outstanding
shares (when laws, regulations or policies of P.R.C permitted, the investment
would be increased up to 100%) of Party C (the “Increasing Investment”). This
Purchase Option is irrevocable and shall be exercised only by Party A (or the
qualified persons appointed by Party A). The term “person” used herein shall
include any entity, corporation, partnership, joint venture and non-corporate
organizations.

 

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1.2
Exercise Procedures:

 
1.2.1
Party A shall notify Parties B and C in writing prior to exercising its Purchase
Option (the “Option Notice” hereinafter).

 
1.2.2
One day following the receipt of the Option Notice, Parties B and C together
with party A (or the qualified person appointed by Party A), shall promptly
compile all necessary documents (the “Transfer Documents”) to submit to the
government bodies for approving the object shares or object assets transfer or
increasing investment in connection with the Purchase Option exercise so that
the shares or assets transfer can be transferred or investment can be increased,
in whole or in part.

 
1.2.3
Upon the completion of the compilation of all the Transfer Documents and the
Transfer Documents being confirmed by Party A, Parties B and C shall promptly
and unconditionally obtain, together with Party A (or the qualified person
appointed by Party A), all approvals, permissions, registrations, documents and
other necessary approvals to effectuate the transfer of the object shares and
object assets or increasing investment in connection with the Purchase Option
exercise.

 
1.3
Exercise Condition: Party A could exercise the optional purchase right to
purchase object shares and object assets or increase investment, at any time
when Party A considers it is necessary and feasible.

2
Price of Option

Party A shall purchase the Object Shares and Object Assets or Increase
Investment at a price agreed by all parties. When laws, regulations or policies
of P.R.C require these assets to be appraised, the purchase or Increasing
Investment price shall be the appraisal price. Any consideration obtained by
Party B and Party C shall be: (1) returned to Party A for operation in
accordance with the Entrusted Agreement, or (2) paid back to Party A in any
other way permittable. Parties B and C shall execute any related agreements or
letters of undertaking that is necessary to pay back such consideration. Party A
has the discretion to decide the time and arrangement of the acquisition,
provided that the acquisition will not violate any P.R.C. laws or regulations
then in effect.
 
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3.
REPRESENTATIONS AND WARRANTIES

 
3.1
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 any significant contract or
agreement to which it is a party or by which it or its assets are bounded.

 
3.2
Party B hereto represent to Party A that: (1) she is the legally registered sole
shareholder of Party C with full ownership of all of the issued and outstanding
shares of Party C and has paid Party C the full amount of Party C's registered
capital required under the PRC laws; (2) Party B has not mortgaged or pledged
their shares of Party C, nor has granted any security interest or borrow against
their shares of Party C in any form except as set forth in the Shares Pledge
Agreement by and between Parties A and B dated 25th September, 2008; and (3)
Party B has not sold or will sell to any third party any of its equity interests
in Party C.

 
3.3
Party C hereto represents to Party A that: (1) it is a limited liability company
duly registered and validly existing under the P.R.C. law; and (2) its business
operations are in compliance with applicable laws of the P.R.C. in all material
respects.

4.
COVENANTS

The Parties further agree as follows:

 
4.1
Before Party A has acquired all the equity/assets of Party C or increased
investment by exercising the purchase option provided hereunder, Party C shall
not:

 
4.1.1
sell, assign, mortgage or otherwise dispose of, or create any encumbrance on,
any of its assets, operations or any legal or beneficiary interests with respect
to its revenues (unless such sale, assignment, mortgage, disposal or encumbrance
is relating to its daily operation or has been disclosed to and agreed upon by
Party A in writing);

 
4.1.2
enter into any transaction which may materially affect its assets, liability,
operation, shareholders’ equity or other legal rights (unless such transaction
is relating to its daily operation or has been disclosed to and agreed upon by
Party A in writing); and

 
4.1.3
Distribute any dividend to Party B in any manner.

 
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4.2
Before Party A has acquired all the equity/assets of Party C or increased
investment by exercising the purchase option provided hereunder, Party B shall
not individually or collectively:

 
4.2.1
supplement, alter or amend the articles of association of Party C in any manner
to the extent that such supplement, alteration or amendment may have a material
effect on Party C's assets, liability, operation, shareholders’ equity or other
legal rights;

 
4.2.2
cause Party C to enter into any transaction to the extent such transaction may
have a material effect on Party C's assets, liability, operation, shareholders’
equity or other legal rights (unless such transaction is relating to Party C's
daily operation or has been disclosed to and agreed upon by Party A in writing);
and
     
 
4.3
Party B shall entrust Party C to Party A for management in accordance with
Management Entrustment Agreement by and between the Parties herein dated 25th
September, 2008.

 5.
ASSIGNMENT OF AGREEMENT

 
 
5.1
Each of Party B and Party C shall not transfer their rights and obligations
under this Agreement to any third party without the prior written consent of the
Party A.

 
 
5.2
Each of Party B and Party C hereby agrees that Party A shall have the right to
transfer all of its rights and obligation under this Agreement to any third
party whenever it desires. Any such transfer shall only be subject to a written
notice sent to Party B and Party C by Party A, and no any further consent from
Party B and Party C will be required.

 
6.
CONFIDENTIALITY

 
The Parties acknowledge and confirm that any oral or written materials exchanged
by the Parties in connection with this Agreement are confidential. The Parties
shall maintain the secrecy and confidentiality of all such materials. 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:
 
 
a.
The materials are known by the public (except for any materials disclosed to the
public by the Party who receives such materials);

 
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b.
The materials are required to be disclosed under the applicable laws or the
rules or provisions of stock exchange; or

 
 
c.
The materials disclosed by each Party to its legal or financial consultant
relate to the transaction contemplated under this Agreement, and such legal or
financial consultant shall comply with the confidentiality set forth in this
Section. The disclosure of the confidential materials by an employee of any
Party shall be deemed disclosure of such materials by such Party, and such Party
shall be liable for breaching the contract. This Article 6 shall survive this
Agreement even if this Agreement is invalid, amended, revoked, terminated or
unenforceable by any reason.

7.
BREACH OF CONTRACT

 
 
Any violation of any provision hereof, any incomplete or mistaken performance of
any obligation provided hereunder, any misrepresentation made hereunder, any
material nondisclosure or omission of any material fact, or any failure to
perform any covenants provided hereunder by any Party shall constitute a breach
of this Agreement. The breaching Party shall be liable for any such breach
pursuant to the applicable laws.

8.
APPLICABLE LAW AND DISPUTE RESOLUTION

 
 
8.1
Applicable Law

 
The execution, validity, interpretation and performance of this Agreement and
the disputes resolution under this Agreement shall be governed by the laws of
PRC.
 
 
8.2
Dispute Resolution

 
The parties shall strive to settle any dispute arising from the interpretation
or performance of this Agreement through friendly consultation. In case no
settlement can be reached through consultation within thirty (30) days after
such dispute arises, each party can submit such matter to China International
Economic and Trade Arbitration Commission (the “CIETAC”) in accordance with its
rules. The arbitration shall take place in Beijing. The arbitration award shall
be final, conclusive and binding upon both parties.
 
9.
EFFECTIVENESS AND TERMINATION

 
 
9.1
This Agreement shall be effective upon the execution hereof by all Parties
hereto and shall remain effective thereafter.

 
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9.2
This Agreement may not be terminated without the unanimous consent of all the
Parties except that Party A may, by giving a thirty (30) days prior notice to
the other Parties hereto, terminate this Agreement.

 
10.
MISCELLANEOUS

 
 
10.1
Amendment, Modification and Supplement

 
Any amendment and supplement to this Agreement shall be made by the Parties in
writing. The amendment and supplement duly executed by each Party shall be
deemed an integral part of this Agreement and shall have the same legal effect
as this Agreement.
 
 
10.2
Entire Agreement

 
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 agreements and understandings in oral or
written form.
 
 
10.3
Severability

 
If any provision of this Agreement is adjudicated to be invalid or
non-enforceable according to relevant laws of the PRC, such a provision shall be
deemed invalid only to the extent the PRC laws are applicable in China, and the
validity, legality and enforceability of the other provisions hereof shall not
be affected or impaired in any way. The Parties shall, through consultation
based on the principal of fairness, replace such invalid, illegal or
non-enforceable provision with a valid provision so that any substituted
provision may bring the similar economic effects as those intended by the
invalid, illegal or non-enforceable provision.
 
 
10.4
Headings

 
The headings contained in this Agreement are for the convenience of reference
only and shall not in any way affect the interpretation, explanation or the
meaning of the provisions of this Agreement.
 
 
10.5
Language and Copies

 
This Agreement is executed in Chinese and English in Three copies; each of Party
A and Party B and Party C holds one copy of each language, and each original
copy has the same legal effect. In the event of any conflict between the two
versions, the Chinese version shall prevail.
 
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10.6
Successor

 
This Agreement shall bind and benefit the successor or the transferee of each
Party.
 
IN WITNESS THEREFORE, the parties hereof have caused this Agreement to be
executed by their duly authorized representatives as of the date first written
above.
 
PARTY A: Xi’an Huifeng Bio-Technic Inc.     (seal)
 
Legal Representative(Signature): /s/ Jing’an Wang

PARTY B:
/s/ Pu Jun
(Attached with ID copy)
       
/s/ Zhang Yong
(Attached with ID copy)

 
PARTY C: Xi’an Qinba Xintong Medical Ltd.,     (Seal)
 
/s/ Pu Jun

 
Legal Representative (Signature):
 
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