Exhibit 10.3
PUT AGREEMENT

This Put Agreement (the “Agreement”) is entered into as of March 22, 2006 by and
among China-Biotics, Inc., a Delaware corporation (“China-Biotics”), Sinosmart
Group Inc., a British Virgin Islands corporation (the “Company”), and the
persons and entities listed on the signature pages hereto (the “Shareholders”).
 
RECITALS
 
A. Pursuant to a Subscription Agreement dated as of the date hereof (the
“Subscription Agreement”) among the Company and the Shareholders, the
Shareholders have agreed to purchase, and the Company has agreed to issue to
each Shareholder, Ordinary Shares of the Company, $1.00 par value (the “Ordinary
Shares”), for aggregate consideration (the “Consideration”) of $5,067,700 (the
“Private Placement”).
 
B.  At the closing of the Private Placement, which is occurring on the same date
as the execution and delivery of this Agreement, the Company is directing that a
portion of the Consideration be deposited into an escrow account to be released
in accordance with the terms that certain Escrow Agreement dated as of the date
hereof (the “Escrow Agreement”) among the Company, Chinamerica Fund, L.P. and
Gateway National Bank, N.A., as escrow agent (the “Escrow Agent”).
 
C. Immediately after the consummation of the Private Placement, the Company and
the Shareholders are entering into, and consummating the transactions
contemplated by, a Securities Exchange Agreement dated as of the date hereof
with China-Biotics, Inc. (“China-Biotics”) and the other persons and entities
listed on the signature pages thereto, whereby all of the shareholders of the
Company are exchanging all of the Ordinary Shares for shares of common stock of
China-Biotics (the “Exchange”). In the Exchange, the Shareholders are receiving
an aggregate of 1,870,000 shares of common stock of China-Biotics (the “Exchange
Shares”).
 
D. China-Biotics is entering into a Registration Rights Agreement on the date
hereof with the Shareholders and certain other parties whereby it will be
obligated to file a registration statement (the “Registration Statement”) with
the U.S. Securities and Exchange Commission (the “SEC”) with respect to the
resale of the Exchange Shares and certain other shares owned by the Shareholders
and such other parties.
 
INTENDING TO BE LEGALLY BOUND, and in consideration of the premises and the
mutual representations, warranties, covenants, and agreements contained herein,
the parties hereto hereby agree as follows:
 
1. Put Right.

a. Exercise of Put Right. If China-Biotics does not file the Registration
Statement with the SEC on or before April 14, 2006, the Company shall become
obligated to purchase all of the Exchange Shares upon delivery of a written
notice (the “Purchase Notice”) from Chinamerica Fund, L.P. to the Escrow Agent
in the form of Exhibit C to the Escrow Agreement, with a copy to China-Biotics.
The purchase price (the “Purchase Price”) for the Exchange Shares purchased
pursuant to this Section 1 shall be $5,059,842.

--------------------------------------------------------------------------------

b. Payment of Purchase Price. Upon the valid delivery of a Purchase Notice
hereunder (i) all voting rights and other rights with respect the Exchange
Shares shall transfer to China-Biotics, (ii) Preston Gates & Ellis LLP will
automatically be irrevocably authorized to deliver any certificates representing
the Exchange Shares in its possession to China-Biotics and (iii) China-Biotics
shall deliver to the Company any other certificates representing the Exchange
Shares not in the possession of Preston Gates & Ellis LLP. As set forth in the
Escrow Agreement, upon delivery to the Escrow Agent of the Purchase Notice
signed by Chinamerica Fund, L.P., the Escrow Agent shall disburse cash to the
persons set forth in the Purchase Notice in an aggregate amount equal to the
Purchase Price (or such lesser amount as remains in the escrow account
established pursuant thereto).

2. Delivery of Purchase Notice. Each Shareholder agrees that Chinamerica Fund,
L.P. is hereby authorized to deliver a Purchase Notice on its behalf to the
Escrow Agent and China-Biotics exercising the put right evidenced herein with
respect to all of the Exchange Shares it owns if China-Biotics does not file the
Registration Statement with the SEC on or before April 14, 2006, and that
China-Biotics may rely on any Purchase Notice delivered by Chinamerica Fund,
L.P. as evidence of such Shareholder’s desire and intent to exercise such put
right with respect to such Exchange Shares.
 
3. Amendment and Modification. Subject to applicable law, this Agreement may be
amended, supplemented or modified only in a writing duly executed by all of the
parties hereto.
 
4. Waiver of Compliance; Consents. Any failure of a party to comply with any
obligation, covenant, agreement or condition herein may be expressly waived in
writing by the Company and China-Biotics, on the one hand, and the Shareholders,
on the other, but such waiver or failure to insist upon strict compliance with
such obligation, covenant, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure. No single or
partial exercise of a right or remedy shall preclude any other or further
exercise thereof or of any other right or remedy hereunder. Whenever this
Agreement requires or permits the consent by or on behalf of a party, such
consent shall be given in writing in the same manner as for waivers of
compliance.
 
5. No Third Party Beneficiaries. Nothing in this Agreement shall entitle any
person or entity (other than a party hereto and his, her or its respective
successors and assigns permitted hereby) to any claim, cause of action, remedy
or right of any kind.
 
6. Notices. All notices, requests, demands and other communications required or
permitted hereunder shall be made in writing pursuant to the notice provisions
set forth in Section 17 of the Subscription Agreement.
 
7. Assignment. This Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned (whether
voluntarily, involuntarily, by operation of law or otherwise) by any of the
parties hereto without the prior written consent of the other parties.
 
2

--------------------------------------------------------------------------------

8. Governing Law. This Agreement and the legal relations among the parties
hereto shall be governed by and construed in accordance with the internal
substantive laws of Delaware (without regard to the laws of conflict that might
otherwise apply) as to all matters, including matters of validity, construction,
effect, performance and remedies.
 
9. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
 
10 Headings. The table of contents and the headings of the sections and
subsections of this Agreement are inserted for convenience only and shall not
constitute a part hereof.
 
11 Entire Agreement. This Agreement, the Escrow Agreement and any other writings
referred to in this Agreement together they embody the entire agreement and
understanding of the parties hereto in respect of the transactions contemplated
by this Agreement. This Agreement supersedes all prior agreements and
understandings between the parties with respect to the transaction or
transactions contemplated by this Agreement.
 
12 Severability. The provisions of this Agreement will be deemed severable and
the invalidity or unenforceability of any provision will not affect the validity
or enforceability of the other provisions hereof; provided that if any provision
of this Agreement, as applied to any party hereto or to any circumstance, is
adjudged by an governmental authority, arbitrator, or mediator not to be
enforceable in accordance with its terms, the parties hereto agree that the
governmental authority, arbitrator, or mediator making such determination will
have the power to modify the provision in a manner consistent with its
objectives such that it is enforceable, and/or to delete specific words or
phrases, and in its reduced form, such provision will then be enforceable and
will be enforced.
 
(remainder of page left intentionally blank)
 
3

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
 

 SINOSMART GROUP INC.      CHINA-BIOTICS, INC.         /s/ Song Jinan    
/s/ Song Jinan

--------------------------------------------------------------------------------

SONG JINAN
   

--------------------------------------------------------------------------------

Song Jinan Title: Director     Chief Executive Officer and President

 

 Chinamerica Fund, L.P.      Chinamerica Sino-biotics Acquisition, LLC        
 
By: Chinamerica Partners, LP
Its General Partner
By: Chinamerica Holdings, LLC
Its General Partner
   
 
By: Chinamerica Holdings, LLC
Its Manager
        /s/ Beau Johnson     /s/ Beau Johnson

--------------------------------------------------------------------------------

Name:  Beau Johnson   
Title:  Manager
   

--------------------------------------------------------------------------------

Name:  Beau Johnson   
Title:  Manager

 Pope Investments LLC      Halter/Pope USX China Fund  Pope Asset Managment     
          /s/ William P. Wells     /s/ Stephen Parr

--------------------------------------------------------------------------------

Name:  William P. Wells 
Title:  Member
   

--------------------------------------------------------------------------------

Name:  Stephen Parr 
Title:  President 

 

 BFS US Special Opportunities Trust PLC      Renaissance US Growth Investment
Trust PLC
 
By: RENN Capital Group, Inc.
        Its Investment Advisor
 
     
By: RENN Capital Group, Inc.
        Its Investment Advisor
        /s/ Russell Cleveland     /s/ Russell Cleveland

--------------------------------------------------------------------------------

Name: Russell Cleveland     
Title: President
   

--------------------------------------------------------------------------------

Name: Russell Cleveland     
Title: President

 Matt Hayden               /s/ Matt Hayden    

--------------------------------------------------------------------------------

   

 
[Signature Page to Put Agreement]

--------------------------------------------------------------------------------