EXHIBIT 10.1


 


TERMINATION
AGREEMENT


 


 


This Agreement
is made as of this 29th day of October, 2012, by and between China YCT International Group, Inc. a Delaware corporation with its
principal place of business at Gucheng Road, Sishui County, Shandong Province, China 273200 (”CYIG”), LY Research Corp.,
a New Jersey corporation, with its registered office at 22 Sunrise Bay Boulevard, Tuckerton, New Jersey 08087 (“LY Research”),
LY. (HK) Biotech Limited, a Hong Kong corporation (“LYHK”) and LY Holding Limited, a New Jersey corporation (“Holding”,
LY Research, LYHK and Holding are collectively known as “LY”) and McLaughlin & Stern LLP, 260 Madison Avenue, New
York New York 10016 (“Escrow Agent”).


 


WHEREAS, the parties executed a
Purchase Agreement in February 2011, as amended as of August 15, 2011 and October 21, 2011 (the “Purchase Agreement”)
which provided, in part, for the transfer to CYIG of US patent No. 6,475,531 B1 (the “Patent””) in consideration
for the issuance of shares of common stock of CYIG


 


WHEREAS, LYHK assigned the Patent
to CYIG on January 25, 2011 (the “Assignment”), and CYIG issued 44,255,067 shares of Common Stock (the “Shares”)
to Holding in consideration for the Patent and agreed to issue additional shares of Common Stock to Holding upon the satisfaction
of certain conditions;


 


WHEREAS, the Purchase Agreement
provides that if certain conditions are not fulfilled on or before October 21, 2012, the Patent will be returned to LYHK and the
Shares will be returned to CYIG;


 


WHEREAS, such conditions have not
been fulfilled and the parties desire to return the Patent and the Shares and to terminate the Purchase Agreement.


 


NOW, THEREFORE, the parties agree
as follows:


 


1.       Delivery of Documents.


 


i.       LY shall deliver
the following documents to Escrow Agent:


a.       stock certificate 7077 of CYIG
for the Shares (“Stock Certificate”),


b.       stock power duly executed by
an officer of Holding, with a medallion guaranteed signature in the form attached as Exhibit A (“Stock Power”),


c.       assignment agreement between
CYIG and LY, substantially in the form attached as Exhibit B, duly executed by LY and providing for the assignment of the Patent
from CYIG to LYHK (the “Assignment Agreement”),


d.
      letter from Holdings addressed to the transfer agent of CYIG to cancel the shares in the
form attached as Exhibit C (“Holding Letter”), and


e.       certification
of resolutions of the Board of Directors of Holding authorizing Yaguang Liu to execute the stock power on behalf of Holdings
in the form of Exhibit D (“Certification”).


 


ii.       CYIG shall
deliver the following documents to Escrow Agent:


a.
      Assignment Agreement, duly executed by CYIG,


b.       Recording of
Assignment, duly executed by CYIG, in the form attached as Exhibit E (“Assignment Recording”), and


 






    	1



    	 



    
 


c.       Recording form
cover sheet, duly executed by CYIG, in the form attached as Exhibit F (“Cover Sheet”).


 


2.       Release of Documents.
      Upon receipt of the documents as provided in Section 1 (the “Documents’), the Escrow Agent is authorized to release
the Documents listed in Section 1(i) (the Stock Certificate, Stock Power, Holding Letter, Certification and Assignment Agreement
to CYIG) and the Documents listed in Section 1(ii) (the Assignment Agreement, Assignment Recording and the Cover Sheet) to LY.


 


3.       Escrow Agent. 


 


i.       The Escrow
Agent shall have no duties or obligations other than as stated in this agreement and shall be protected in acting upon any
affidavit, notice, document or other communication from the LY or the CYIG (or their respective counsel, employees or
agents), which the Escrow Agent, in good faith, believes to be valid or genuine and to have been signed and presented by the
LY or CYIG (or their respective counsel, employees or agents).


 


ii.       The Escrow
Agent shall have no liability whatsoever arising from any of its actions or omissions hereunder except for willful misconduct or
gross negligence. The CYIG and LY jointly and severally agree to indemnify the Escrow Agent against any and all costs, expenses,
fees (including attorneys' fees) and charges incurred in connection with this Agreement.


 


iii.       Should any
controversy arise among the parties hereto with respect to this Agreement, the Escrow Agent shall have the right to consult counsel
and/or to institute an appropriate interpleader action to determine the rights of the parties.


 


iv.       The Escrow Agent
may act in reliance upon any instrument or signature believed by it in good faith to be genuine and may assume that any person
purporting to give receipt or advice or make any statement or execute any document in connection with the provisions hereof has
been duly authorized to do so.


 


4.       Termination.
      Upon the release of the Documents from escrow and the recording of the assignment of the Patent with the United States Patent
and Trademark Office, the Purchase Agreement and any and all of the respective rights, benefits, and obligations of CYIG and LY
existing or arising under, pursuant to or in connection with the Purchase Agreement are hereby cancelled and rendered null and
void in their entirety subject to and upon the terms and conditions set forth herein.


 


5.       Release       Upon the release
of the Documents and by reason of the Termination Agreement, the parties expressly acknowledge, agree, and stipulate as follows:


 


i.       No party owes any
sums to any other party under, or pursuant to the Purchase Agreement or otherwise. No party has any claim or cause of action against
the other arising out of, pursuant to, or in connection with, the Purchase Agreement through and as of the date hereof;


 


ii.       The express purpose
of the Termination Agreement is to effect a complete, final, and unconditional settlement between the parties with respect to the
Purchase Agreement and any and all matters, transaction, or disputes between the parties thereunder or otherwise which may be outstanding
through and as of the date hereof; and


 






    	2



    	 



    
 


iii.       Upon the
cancellation and termination of the Purchase Agreement effected by the provisions hereof, no party shall have any remaining
duties or obligations whatsoever to the other with respect to any matter or transaction except that the parties agree to
execute any additional documents as may be reasonably required to effectuate the purposes of this Agreement.


 


6.       Representations.


 


i.       LY represents and warrants
to CYIG that LY is the sole beneficial owner of the Shares, and owns the Shares, free and clear of all mortgages, pledges, restrictions,
liens, charges, encumbrances, security interests, obligations or other claims.


 


ii.       CYIG represents and warrants to LY that
CYIG is the sole beneficial owner of the Patent, and owns the Patent, free and clear of all mortgages, pledges, restrictions, liens,
charges, encumbrances, security interests, obligations or other claims.


 


7.
      Entire Agreement.       This Termination Agreement constitutes the entire agreement of
the parties hereto with respect to the matters herein contained and may not be altered, modified, or amended except in
writing, executed, and delivered by or on behalf of the parties.


 


8.       Notice.
      All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have
been duly given (a) on the date of receipt if delivered personally or by overnight courier, (b) on the day of transmission if
sent by facsimile/email transmission and confirmation of receipt is obtained, or (c) on the fifth day after mailing,
registered or certified, postage prepaid return receipt requested, to the parties at the address first set forth above, with
the notices to LY to be sent to LY Research.


 


9.       Miscellaneous.
      This Agreement may not be changed, modified or amended except by writing signed by both parties hereto. This Agreement shall be
binding upon and inure to the benefit of the successors, affiliates and assigns of the parties. This Agreement shall be governed
by the laws of the State of New York without regard to conflicts of laws. In the event of conflict, the parties consent to the
jurisdiction and venue of the courts of the State of New York.


 






    	3



    	 



    
 


IN WITNESS WHEREOF,
the parties have hereunto set their hands as of the date first written above.


 


 


 


	 	L. Y. Research Corporation
	 	 	 
	 	By:	/s/ Yaguang Liu          
	 	   	Yaguang Liu
	 	Title: 	Chief Executive Officer
	 	 	 
	 	 	 
	 	 	 
	 	L.Y. (HK) Biotech Limited
	 	 	 
	 	By:	/s/ Yaguang Liu          
	 	   	Yaguang Liu
	 	Title:	Chief Executive Officer
	 	 	 
	 	 	 
	 	 	 
	 	L.Y. HOLDING LIMITED
	 	 	 
	 	By:	/s/ Yaguang Liu          
	 	 	Yaguang Liu
	 	Title: 	Chief Executive Officer
	 	 	 
	 	 	 
	 	 	 
	 	China YCT International Group, Inc.
	 	 	 
	 	By:	/s/ Tinghe Yan            
	 	 	Tinghe Yan
	 	Title: 	Chief Executive Officer




 






    	4