China Biologic Products, Inc.: Exhibit 10.1 - Prepared by TNT Filings
Inc.




  

   






Exhibit 10.1

  
                
              
            
          
        
      
    
  
  

  
    Thelen Translation (10-10-2008) 
  


Equity Transfer Agreement 

This Equity Transfer Agreement is entered into as of October 10, 2008
in Xi'an by and between the following parties: 

Transferor: Fan Qingchun (hereinafter the "Transferor") 

The Transferor is an individual residing in the People's
Republic of China with the ID card No. 412901196912053094 and his address is
Room 508, Building 2, Suojinsicun, Xuanwu District, Nanjing City. 

The Transferee: Shandong Taibang Biological Products Co., Ltd.
(hereinafter, the "Transferee") 

The Transferee has been established in the People's Republic
of China with the business license code Qi He Lu Tai Zong Zi No. 000689, and its
registered address is No. 14 Hushandong Road, Tai'an City, Shandong Province.





Whereas:


1. 



Xi'an Huitian Blood Products Co., Ltd.
(hereinafter, the "Xi'an
Huitian"), established by the Transferor and Shaanxi Power Construction
Corporation (hereinafter, the "Shaanxi Power Construction"), is a
limited liabilities company duly established and lawfully existing. Xi'an
Huitian was established on October 17, 1996. Its Business License Number is
610131100005945 and the domicile is at No. 9, Guangde Road, Xi'an Hi-Tech
Industries Development Zone. Its registered capital is RMB 51,000,000 and its
enterprise form is limited liabilities company. 

2. 



The Transferor is a lawful shareholder of
Xi'an Huitian and his capital contribution in the registered capital of Xi'an
Huitian is RMB17,850,000, holding 35% of the equity interest in Xi'an Huitian
(hereinafter, the "Subject
Equity Interests"). 

3. 

The Transferor proposes to
transfer such Subject Equity Interests to the Transferee so that
the Transferee would finally hold 35% of the total equity interest in Xi'an
Huitian, and the Transferee agrees to accept such transfer. 

 

1



4. 


The Transferor holds lawful titles to the Subject
Equity Interests, and the Transferor has not entered into any agreement for
sales of the Subject Equity Interests or any binding option agreement or right
of first refusal agreement with any third Person except the Transferee. There
does not exist any Security Interests or judicial garnishment or attachment upon
the Subject Equity Interests and affiliated interests therein. 


5. 



This equity transfer has been unanimously
approved by shareholders' meeting of Xi'an Huitian, and Shaanxi Power
Construction has
agreed on this equity transfer and has not waived its right of first refusal.


6.

 The Transferee proposes to
accept the Subject Equity Interests, and this equity transfer has been approved
by the Board of Directors of the Transferee. 

7. 


The Transferee has engaged Intermediary Agents to
investigate and audit the assets, financials, material contracts, internal
control and other information and data of Xi'an Huitian and has been aware of
the basic status of Xi'an Huitian. 


8. 


The Transferee has paid the Transferor RMB
10,000,000 into the bank account designated by the Transferor in this Agreement
as the Deposit Money to ensure mutual performance of this Agreement. The
Transferor has received such money through the bank account designated by the
Transferor in this Agreement and pledges that it will perform this Agreement in
earnest. 


9.


The blood
product industry is restricted for foreign investment, and this equity transfer
needs approval from Government
Authorities; this equity transfer has not been approved by Government
Authorities 


NOW THEREFORE, through friendly
consultation and for mutual benefits, the Parties have entered into this
agreement for security interests, escrow and transfer of equity interests in
accordance with the relevant laws and regulations of the PRC. 

 2



Article 1 Definitions 



  
     1-1
    

    
    Unless stipulated otherwise in this
    Agreement, the following items in this Agreement are defined as follows:
    

    
Person:
means any natural persons, companies, partnerships, joint ventures, firms,
associations, Government Authorities, or other civil subjects.



This Agreement: means this Equity Transfer Agreement and all its attachments
and appendices.  "This Agreement" or other similar items refer to the entirety
of this Agreement, not any specific articles thereof.  Any "this Agreement"
mentioned herein means this Agreement and its attachments and appendices as
supplemented and amended from time to time.



Security Interests: means any mortgage, pledge, lien, deposit money,
preemptive rights prescribed by law or other third-party priority right.



Affiliated Party: As to any Person, it means any Person controlling such
party, being controlled by such party or under common control with such party,
directly or indirectly.  If any Person directly or indirectly holds more than
50% of voting equity interests (shares) or economic interests of one party, or
has the power to appoint a majority of the Board of Directors of such party,
this Person is deemed to have control on such party.

Closing:
means that the Transferor registers all the Subject Equity Interests in the
name of the Transferee and go through the registration formalities for amending
Xi'an Huitian's Contract and Articles of Associations according to this
Agreement (completion of the formalities for alteration registration with AIC
for equity interests transfer will indicate consummation of Closing).

Date of
Closing: means the day on which all the Subject Equity Interests have been
registered in the name of the Transferee (i.e. the date on which the alteration
registration formalities with AIC are completed for the equity interests
transfer).


Transition of Equity Interest or Transition: means that the Transferee,
pursuant to the Shareholder Joint Venture and Cooperation Agreement entered into
with Shaanxi Power Construction or the entrustment agreement for the Subject
Equity Interest entered into with the Transferee, dispatches its staff to Xi'an
Huitian to take over all or part of the liabilities and obligations of the
Transferor in Xi'an Huitian and enjoy the rights derived from the 35% equity
interests in Xi'an Huitian.


Intellectual Property and Administrative Approval: means any patent, patent
application right, copyright, trademark, domain name, proprietary technology,
commercial secrets, trade name, mark, GMP certificate, production permit,
production approval, plasma collection permit and other intellectual products
and professional rights, and any rights relating to the application,
registration and grants thereof.

3

    

Material
Adverse Effect:


(1) Any event, circumstance or act, newly discovered by the Transferor or the
Transferee after the Date of Execution and not known in the past, which occurred
prior to the Date of Transition and will have material adverse effect on the
general business, financial conditions, properties, business or performance
results of Xi'an Huitian, provided however that no event, circumstance or act
should be deemed as Material Adverse Effect if its reasonably expected financial
impact is less than 10% of Xi'an Huitian's audited net asset amount for the year
2007 as audited under Independent Auditing Standards of the PRC; Material
Adverse Effect also excludes the following: (i) amendments to Independent
Auditing Standards and Enterprise Accounting Standards of the PRC; and (ii)
revision by the PRC Government Authorities to the laws and their interpretations
applicable to enterprises or others.


(2) Material Change: means any change that would or may result in Material
Adverse Effect on an independent or accumulative basis.

Effects that
materially impede the capabilities of the Transferor or the Transferee to
respectively perform their obligations under this Agreement, or effects that
materially threaten or impede the performance of the proposed transaction under
this Agreement.

Deposit
Money: means money paid by the Transferor to the Transferee for performance
security purpose to ensure mutual compliance with this Agreement.  If the
Transferor breaches this Agreement by transferring the Subject Equity Interests
to any third party without prior permission from Transferee and makes this
Agreement unenforceable, the Transferor should repay twice such deposit amount.
 If the Transferee does not pay the Transferor the second installment in
accordance with this Agreement and the Transferor decides to rescind this
Agreement with the Transferee, the Transferor will not return such security
money.


Subsidiary: As to any Person, if any company or other entity holds more than
50% equity interest of such Person or other interests on the basis of which it
could elect the majority of the Board of Directors of such Person, this Person
is the Subsidiary of such company or other entity.

Accrued
Interests: mean any benefits or rights that would or may accrue on the
Subject Equity Interests prior to the Date of Closing, including but not limited
to dividends, equity earnings, share dividend, share allotment, etc.


Attachments: All the information and data relating to this Agreement which
have been provided by one Party according to the notice methods hereunder and
confirmed by the other Party by the Date of Closing, and other agreements
entered into by the Parties relating to this Agreement, both of which constitute
attachments to this Agreement, including but not limited to the attachment
attached to this Agreement.

    

    
    4

    


    

Data: 
All written data provided by the Transferor or Xi'an Huitian in the process of
due diligence and received by the Transferee, its financial consultant, auditor
or attorney.

Plasma
Companies: mean plasma collection companies duly established and validly
existing in Shaanxi Province.  Xi'an Huitian now solely owns Baishui Huitian
Plasmaphoresis Station Co., Ltd. and Fuping Huitian Plasmaphoresis Station Co.,
Ltd.  Ankang Hanbin Huitian Yongdong Plasmaphoresis Station Co., Ltd. has
finished its restructuring and established one-on-one plasma supply relationship
with Xi'an Huitian, but it has not completed AIC registration formalities.


Contingent Liabilities: mean the liabilities that Xi'an Huitian shall pay
for as a result of external guarantee, debt, contract and litigation, and
undisclosed taxation that were concealed prior to the execution of this
Agreement.


Obligation to Assist: mean obligations the Transferor has promised to the
Transferee that the Transferor will perform in connection with the pledge,
entrustment, governmental approvals, AIC alteration registration of the Subject
Equity Interests involved in this Agreement that the Transferor could complete
independently without assistance or approvals from Governmental Authorities,
Xi'an Huitian or Shaanxi Power Construction.


Government Authorities: mean the central and local governments (including
the commerce authorities and their subordinates and constituent departments) and
entities have been empowered by law or delegated to exercise state
administrative power.

1-2


Unless provided otherwise, if expiration of a certain term as required by this
Agreement falls upon a date that is not a Business Day, such term will be
extended to the immediately following Business Day after such non-Business Day.

Article 2       Equity Transfer Price and Payment


2-1

  


Equity Transfer Price


2-1-1




The Parties agree that the Transfer Price for Subject Equity Interests and
Accrued Interests is RMB44,000,000 only (Forty-Four Million RMB).


2-1-2


The interests of Subject Equity Interests and Accrued Interests are subject to
the Shareholders Joint Venture and Cooperation Agreement between the Transferee
and Shaanxi Power Construction and the revised Article of Association.


2-1-3


The rights and liabilities between the Transferor, Shaanxi Power Construction
and its affiliates and Xi'an Huitian have been confirmed by Xi'an Huitian, the
Transferor and Shaanxi Power Construction.

5




2-2          
Payment Dates and Arrangements for Payments:


2-2-1


The Transferor shall, from the date of execution, assist the Transferee in
completing the approval formalities for such equity transfer from Government
Authorities and assist in AIC alteration registration of the Subject Equity
Interests and register the Subject Equity Interests in the name of the
Transferee or the Affiliated Party.  After the AIC alteration registration, the
Deposit Money of RMB 10,000,000 paid by the Transferee to the Transferor will
automatically become the initial installment of consideration.


2-2-2


Simultaneous to the execution of this Equity Transfer Agreement, the Transferor
and the Transferee will sign a pledge agreement and an entrustment agreement
regarding the Subject Equity Interests, under which the Transferor shall
immediately pledge the Subject Equity Interests to the Transferee or a financial
institution designated by the Transferee and the entrustment agreement shall be
immediately notarized,   which shall take effect after the second installment is
paid from the Transferee to the Transferor.  Within 5 days after completion of
the pledge and notarization formalities, the Transferee shall pay RMB 12,000,000
to the Transferor as the second installment.  With the assistance from the
Transferor, the Transferee shall complete the pledge and entrustment formalities
for the Subject Equity Interests within one month after the execution of this
Agreement.  If the pledge and entrustment formalities for the Subject Equity
Interests could not be completed within one month after the execution of this
Agreement for any reason other than absence of timely assistance from the
Transferor, the Transferee shall still pay the second installment to the
Transferor.  After the Transferor has received the second installment, the
entrustment agreement of the Subject Equity Interests shall immediately take
effect and the Transferor shall immediately formally entrust the Subject Equity
Interests to the Transferee.  The Transferor shall finish the transition matters
for Xi'an Huitian according to the requirements of the Transferee and shall
agree that the Transferee will exercise all the rights of 35% equity interests
in Xi'an Huitian and enjoy all the benefits therefrom.


2-2-3


There shall be interests accrued upon  the Transferee's unpaid transfer price,
calculated at annual rate of 8% from October 1, 2008.  The balance of the
transfer price shall be fully paid within 5 days following the 6 months
anniversary of October 1, 2008.  If the Transferor's failure to provide timely
assistance to the completion of pledge and entrustment of equity interests,
governmental approvals of the equity transfer and AIC alteration registration
leads to any delay in the completion of such formalities, then the Transferee
has the right to correspondingly postpone the payment of the transfer price
without interests accruing during the period of such postponement, unless the
Transferee has already been in breach of this Agreement.

 

6




2-2-4


If it is found that there are pre-existing Contingent Liabilities in Xi'an
Huitian before the date of execution, the Transferee will deduct 35% of such
Contingent Liabilities and then pay the post-deduction balance of the transfer
price according to Article 2-2-3.


2-2-5


If the Transferee fails to pay within 10 working days after each due date for
any installment, there will be  liquidated damages in the amount of 10% of such
unpaid due amount in addition to the accrued interests.  This liquidated damages
and the interests under Article 2-2-3 shall be calculated and paid at the
payment of the last installment.  If the Transferor fails to assist in
completion of the abovementioned formalities within 10 working days from the
receipt of a notice from the Transferee requesting such assistance, the
Transferor shall pay to the Transferee as liquidated damages an amount equal to
10% of the portion of the equity transfer price paid by the Transferee, unless
the Transferee has already been in breach of this Agreement.  Such liquidated
damages shall be applied when the Transferee pays the last installment.


2-2-6


The Transferee shall wire transfer the Transfer Payment to the following bank
account or other bank account designated by the Transferor:

Receiver:
Zhengzhou Antuo Investment Co., Ltd.

Bank: Bank
of China, Zhengzhou Hi-Tech Development Zone Branch

Bank
Account: 633941250888091001


Article 3      
Closing and Transition


3-1


On the date of execution of this Agreement, the Transferee has entered into a
Shareholders Joint Venture and Cooperation Agreement with Shaanxi Power
Construction and has finished the execution of relevant legal documents
including amendment to the Articles of Association of Xi'an Huitian.



3-2


The Transferor should, prior to the closing of the Subject Shares, perform the
Obligation to Assist Transferee so as to secure Governmental Authorities'
approvals and AIC alteration registration formalities as soon as possible for
this equity transfer. If Governmental Authorities and AIC object to anything in
this Agreement and requires its revision, the Parties shall negotiate to revise
this Agreement and submit the revised Agreement to Governmental Authorities and AIC for approval.  


 


 

 





 

 


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3-3


The Transferor agrees that the Transferee may hold the equity in entrustment
from the Transition till the Closing, exercise the full powers that Transferor
holds in Xi'an Huitian, and will be entitled to all the revenues from it.



3-4


 Both parties should make reasonable efforts to complete the Transition for the
Subject Equity within 30 days of the effectiveness of this Agreement.  The
Closing of this equity transfer should be consummated within 30 days of approval
by Government Authorities .  After the Closing, the Transferee should enjoy its
rights as a shareholder and fulfill its obligations as a shareholder according
to the law, regulations and the amended Articles of Association of Xi'an Huitian.



3-5


The Transferor is a natural person.  To assist the Transferee from time to time
in fulfilling its obligations relating to the Closing, the Transferor shall,
pursuant to the request of the Transferee, conduct notarization-related
engagement with natural persons designated by the Transferee in relation to the
registration procedures for this equity transfer. 



Article 4       
Representations and Warranties of the Transferor

The
Transferor  has, pursuant to requests by Transferee and its financial
consultant, auditors and attorneys, provided to   the Transferee and its
financial consultant, auditor and attorney accurate and true Data relating to
the transfer of equity interest in Xi'an Huitian, and has not concealed, or
misled the Transferee on, any information relating to Xi'an Huitian.  The
Transferor hereby represents and warranties on the Date of Execution as follows,
and if there may be or has been any circumstance beyond the provisions of this
Article 4 at any time between the Date of Execution and the Date of Transition,
the Transferor shall immediately inform the Transferee in writing, and negotiate
with the Transferee for mutual resolution so that the Transferee could seriously
consider if it would still accept the equity transfer.



4-1


Due Organization and Valid Existence


4-1-1


Xi'an Huitian is a limited liabilities company duly organized and lawfully and
validly existing according to PRC Law.  It has all the necessary capacity and
authority for ongoing operation of its current business.  The Transferor has
prepared and delivered to the Transferee the true and accurate copies of Blood
Product Enterprise Operation Permit, Enterprise Legal Person Business License
and Articles of Association (collectively hereinafter, the "Xi'an Huitian
Constitutional Documents").  Xi'an Huitian has valid constitutional
documents, and has been approved by Ministry of Health of the PRC to perform its
business in China as a blood product producing enterprise.


 


8




4-1-2


When the Transferor executes and delivers this Agreement or complies with
provisions under this Agreement, it will


(1)


not violate any provision of Xi'an Huitian Constitutional Documents; or, in case
of any violation, has obtained relevant exemption from liabilities;


(2)


To the extent of the Transferor's knowledge, not violate PRC Law.


In addition, any contract or agreement that has been entered into by the
Transferor will not effect the execution of this Agreement by the Transferor or
its performance of rights and obligations under this Agreement.


4-2


Equity Interest


4-2-1 The registered capital of Xi'an Huitian is RMB 51,000,000, and there does
not exist any third party priority, right of subscription, option or other
rights, or court decree, judgment or convertible bonds pursuant to which Xi'an
Huitian should increase or decrease its registered capital.


4-2-2 The Transferor holds lawful title to the Equity Interest to Be
Transferred.  The Transferor has not entered into any agreement with any third
Person other than the Transferee for sales of the shares of Xi'an Huitian or for
the issuance of new share, or any binding agreement regarding any option or
preemptive right.  The Equity Interest to Be Transferred is based on valid
capital contribution and has full power and right as listed in Xi'an Huitian
Constitutional Documents.  There exist on the Equity Interest to Be Transferred
and the affiliated interests no Security Interests or judicial garnishment or
attachment.  The Transferor warrants that the Transferee would not be subject to
any form of claim.


4-3


Subsidiary


Xi'an Huitian has exactly one following Subsidiary, and only has the following
equity interest in the following Subsidiary:


9




Xi'an Huitian now solely owns Baishui Huitian Plasmaphoresis Station Co., Ltd.
and Fuping Huitian Plasmaphoresis Station Co., Ltd.  Ankang Hanbin Huitian
Yongdong Plasmaphoresis Station Co., Ltd. has finished its restructuring and
established one-on-one plasma supply relationship with Xi'an Huitian, but the
investment fund has not been paid and it has not completed AIC registration
formalities.


Xi'an Huitian has no other Subsidiary except the above.  The Transferor has
provided to the Transferee information on equity ownership and business model of
the three plasmaphoresis stations.


4-4


Financial Information


4-4-1


The Transferor has delivered to the Transferee the duplicate of reports issued
by accounting firm for him as of August 31, 2008 (including balance

sheet, profit
statement, cash flow statement, reconciliation  statement, etc., collectively
the "Audited Financial Information").  The Transferor
warrants that Xi'an Huitian has no external guarantee, or hidden liabilities or
contracts as of September 12, 2008.


4-4-2


Real Estate, Titles to Production Equipment and Security Interests


Xi'an Huitian has good and disposable titles respectively to its owned or leased
assets (as to the owned real estate and production equipment) or valid and
binding lease interests (as to the leased assets), and there does not exist any
Security Interests, judicial garnishment or attachment or any claim by any third
party thereon, but not including:


(i)


Security Interests listed in the Audited Financial Information or Non-Audited
Financial Information;

(ii)

Security
Interests publicly registered in any real estate registration authority.





4-5


Contracts


Except those provided by the Transferor to the Transferee, on September 12, 2008
and the Transition, Xi'an Huitian is not a party to any of the following
contract or agreement, nor is it subject to any of the following contract or
agreement:


10




(1)


Joint venture agreement, partnership agreement, or cooperation agreement entered
into with any other Person involving sharing of profits, loss, cost or debt;


(2)


Any agreement entered into outside ordinary course of business after the Date of
Execution for the purchase or disposal of the business or assets of Xi'an
Huitian, the amount of which exceeds RMB500,000;


(3)


Agreement involving the offer to any Person of preemptive rights to purchase any
assets or real estate of Xi'an Huitian, excluding those preemptive rights that
are required by PRC Law to be provided to a third party; 


4-6


Tax


Except those as listed in the Audited Financial Information, (i) all the tax
returns regarding Xi'an Huitian required to be submitted prior to the Date of
Execution have been submitted within the time limit according to PRC Law, and
(ii) all the due taxes as listed in the relevant tax returns have been fully
paid or provided for.


4-7


Intellectual Property and Administrative Approvals


The Intellectual Property and Administrative Approvals held by Xi'an Huitian
regarding which the Transferor has provided information to the Transferee is
lawfully owned by Xi'an Huitian, and there is no dispute or encumbrances
thereon.


4-8


Labor Dispute and Labor Contract


Xi'an Huitian has not been involved in any material pending dispute or actions
with its employees or trade union.  Xi'an Huitian has provided appropriate labor
protection and social security and welfare according to PRC Law for a portion of
its employees.


Article 5      
Representations and Warranties of the Transferee

The
Transferee shall be deemed to have warranted as true, accurate, and not
misleading all the Data that have been provided by the Transferee to the
Transferor relating to transfer to it of equity interest in Xi'an Huitian.  The
Transferee hereby represents and warrants on the Date of Execution as follows:

11




5-1



Due Organization and Valid Existence

5-1-1 The
Transferee is a duly organized and lawfully and validly existing limited
liabilities company.  It has all the necessary capacity and authority to own its
assets and for ongoing operation of its most current business.  The Transferee
has true and accurate Enterprise Legal Person Business License and Articles of
Association (collectively hereinafter, the "Transferee Constitutional
Documents").

5-1-2 When
the Transferor executes and delivers this Agreement or complies with provisions
under this Agreement, it will


(a)
not violate any provision of Business License, Articles of Association or other
constitutional documents of the Transferee;


(b)
to the extent the Transferee knows, not violate any PRC Law.


(c)
any contract or agreement that has been entered into by the Transferee will not
impact the Transferee's execution of this Agreement or its performance of
obligations under this Agreement.


(d)
this Agreement is binding on the Transferee from its formation.


5-2
Financial Capability



The Transferee warrants that it has the capability to pay all the Transfer
Payment to the Transferor, and has reserved sufficient fund to pay the Transfer
Payment according the terms and conditions of this Agreement.




Article 6       Covenants of
Transferor




Except the liabilities otherwise specified herein, Transferor hereby further covenants as
follows:


6-1   
Unless Transferor acquires the prior written consent from Transferee,
Transferor, as the shareholder of Xi'an Huitian, shall perform the following
obligations from the Date of Execution to the Date of Transition:

6-1-1

To cause
Xi'an Huitian to do business in the normal situation as it used to;

12




6-1-2


To cause Xi'an Huitian to take all the reasonable measures to protect its
commercial reputation and maintain the relationship with its clients and
suppliers, and not to conduct any act which will damage its commercial
reputation;


6-1-3


To ensure that Xi'an Huitian will not conclude or make any contracts or
commitments beyond its general or normal business scope which may have material
effect on its assets, liabilities or current business;


6-1-4


To ensure that Xi'an Huitian will not declare any dividend or make any
distribution on its capital or profits;


6-1-5


To ensure that Xi'an Huitian will not withdraw or pay any amount of cash to
Transferor and its Affiliated Party in the form of management fee or in any form
beyond its normal business scope;


6-2   Before the Date of Transition, Transferor will assist Xi'an Huitian to
maintain or acquire any governmental approval, license, permit, consent or
registration which are necessary for Xi'an Huitian's operation.


6-3   Before the Date of Transition, Transferor will assist Xi'an Huitian to
maintain or apply for all the tax preferences or preferential treatment which
may be enjoyed or will be enjoyed by Xi'an Huitian under PRC Laws.

Article 7       Covenants of
Parties


7-1


Confidentiality.  Unless it is superseded by the similar agreements between
both parties, the existence of this Agreement and the terms and conditions of
this Agreement shall be kept secret and confidential, except information or
material which shall be submitted to Government Authorities or Approval
Authorities under the PRC laws or regulations and information which shall be
disclosed under PRC and US laws or regulations.  Disclosing party shall give two
(2) days' notice to the other party herein before the disclosure.

7-2


Notice.  During the period from the Date of Execution to the Date of
Closing, Transferor shall notify Transferee any matter or situation which, to
the extent of the Transferor's knowledge, will cause, or, under reasonable
situations, may cause inaccuracy in Transferor's representations and warranties
under Article 4 herein.  During the period from the Date of Execution to the
date that Transferee pays all the Transfer Price,  Transferee shall notify
Transferee any matter or situation which, to the extent of the Transferor's
knowledge, will cause, or, under reasonable situations, may cause inaccuracy in
Transferee's representations and warranties under Article 5 herein.

 

13



 




7-3


Management during Transition Period.  Entrusted management will be
implemented during the transition period from the Date of Execution to the Date
of Closing, that is, after Transferor receives from Transferee the second
installment of RMB 12,000,000, Transferor shall entrust all the Subject Equity
Interests to Transferee, and Transferee will dispatch management staff who will
replace the management staff appointed by Transferor subject to the powers set
forth in the constitutional documents of Xi'an Huitian.  Transferor agrees that
Transferee will exercise all the powers of Transferor in Xi'an Huitian.  Upon
Transferor's receiving the second installment paid by Transferee, this Agreement
will be regarded as an Entrustment Agreement and will be performed immediately;
it will be fully implemented within five (5) Business Days.  Transferee may
request a notary public office to make a notarization of the entrustment, and
Transferor will give its fullest cooperation.

7-4


Recourse.  Within two years after Transferee fully takes over the rights and
interests of Xi'an Huitian previously held by Transferor, if it finds any
Contingent Liabilities that arose before September 12, 2008 and was unknown to
Transferee before the Date of Transition, Transferee will have the right to
claim against Transferor after paying the Transfer Price.

Article 8       Expenses and
Tax



8-1


The transaction charges, including the registration fee for the equity transfer,
will be subject to the relevant national regulations and paid by both parties
respectively.


8-2 


The charges caused by equity transfer approval and the relevant public notice
will be paid by the parties that have incurred such charges.


8-3 


The service fees for intermediaries, including financial consultants, auditors
or attorneys, relating to this equity transfer, will be determined by
negotiation between both parties if they are hired by both parties, or paid by
each engaging party if they are engaged separately.

 

 

14




8-4 


The taxes related to this equity transfer will be reported and paid to the
relevant tax authority by each party.  Transferor, Transferee and Xi'an Huitian
will not be responsible for withholding taxes for any other party.  If failure
by any party to pay the taxes according to the PRC Laws causes negative impact
on any other party, the other parties so impacted will be entitled to damages
from the responsible party.

Article 9      
Non-assignment

Without the
prior written consent by both parties, neither Transferor nor Transferee shall
allocate or assign any rights and obligations under this Agreement.  However,
each party entitled to assign all or part of its rights and obligations to the
Affiliated Party it designates, if necessary, provided that both such parties
shall be jointly and severally liable for their obligations hereunder.

Article 10       Notice

10-1    

Any notice
issued according to this Agreement will be written in Chinese in advance and may
be delivered in person, by registered mail or facsimile to the other party.  


10-2


Unless a fifteen (15) days' advance notice in writing is given to the other
party, addresses of both parties are as follows:


Transferor

Fan Qingchun

Address: 

Jiaozuo Antuo Co. Ltd

New Businesses Park, Hi-Tech Development Zone

Jiaozuo City, Henan

Postcode:
454003

Telephone:
0391-3966136

Fax:
0391-3966136

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Transferee

Shandong
Taibang Biological Products Co., Ltd

Address: No.
14 Hushandong Road, Tai'an City, Shandong Province

Postcode:
271000

Telephone:
0538-6217079

Fax:
0538-6206636

Contact:
Zhao Chaoming

 


10-3


Both parties may notify other party and Xi'an Huitian in writing of change of
address .

Article 11       Liability
for Breach


11-1


Both parties hereby agree that if (i) one party breaches any representations and
warranties herein; or (ii) one party breaches any covenant or stipulation herein
(other than those breaches for which waiver has been given by the non-breaching
party), which directly or indirectly cause any damage, claim, loss, legal
action, lawsuit, penalty or other reasonable charges or expenses (including
reasonable attorney fees) (collectively "Relevant Losses"), the breaching party
shall indemnify and hold harmless the other party.


11-2  


Transferee will pay the entire Transfer Price to Transferor according to this
Agreement.  If Transferee fails to make the payment as scheduled, Transferee is
deemed to be in breach of this Agreement, and Transferee will pay to Transferor
 liquidated damages pursuant to this Agreement, except where Transferor has
already breached this Agreement.


11-3  


Transferor will perform all the obligations, representations and warranties
according to this Agreement.  Transferor will handle legal procedures and
entrustment procedures related to this equity transfer in accordance with the
schedule set forth in this Agreement.  If Transferor fails to complete the
procedures due to its own reason, Transferor is deemed to be in breach of this
Agreement, and Transferor  will pay to Transferee liquidated damages pursuant to
this Agreement, except where Transferee has already breached this Agreement .



Article 12       Settlement
of Disputes and Governing Law

Any dispute
arising out of or related to this Agreement shall be settled by friendly
negotiation by both parties hereby.  If no resolution is attained through
friendly negotiation, any party may bring a legal action at the competent court
for the location where this Agreement is executed.  The execution,
effectiveness, interpretation, performance, enforcement, amendment and
termination of this Agreement will be governed by the laws of the PRC.

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Article 13       Termination
and Rescind of Contract


13-1 


 This Agreement will be effective upon the execution.  No parties may terminate
this Agreement unilaterally.   

13-2  


This Agreement will be terminated under the following situations:

13-2-1
Transferor and Transferee reach a written agreement to terminate this Agreement;


13-2-2 any material breach by any Party makes it impossible for this Agreement
to be performed, and this Agreement is terminated after both Parties enter into
an agreement for termination


13-3 


If either Transferor or Transferee terminates this Agreement according to
Article 13-1 herein, this Agreement will cease to be effective upon the date of
its termination, and no party will be liable to the other party and its
Affiliated Party, directors, management officers or employees, except for the
obligations between both parties as set fort in the following provisions:
Confidentiality, Notice, Settlement of Disputes and Governing Law.  In addition,
this provision will not release any party from liabilities for breaches and due
obligations that arise prior to the termination of this Agreement.



Article 14       Counterparts
and Integration

This
Agreement will be made in eight counterparts; each party will hold two of them,
and certain copies will be submitted to the relevant authorities.  Each
counterpart has the same legal effect.


Article 15       Waiver


Unless
otherwise specified, no failure or delay by any party to exercise any right,
power or privilege under this Agreement will operate as a waiver of any such
right, power or remedy.  Any separate or partial exercise of any right, power or
privilege will not impede the exercise of any other right, power or privilege.




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――Signature
Page――


IN WITNESS
WHEREOF, both parties have executed this Agreement on October 10, 2008 in Xi'an.


 


Transferor:
Fan Qingchun

Authorized
Representative (signature):______________________________


 



Transferee: Shandong Taibang Biological Products Co., Ltd


Legal Representative or Authorized Representative
(signature):______________________________


 


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THELEN TRANSLATION (10-10-2008)


List of Exhibits to the Agreement



Exhibit 1       
Audit Reports and Appraisal Reports


1、Audit Report for 2005(Shan Hua Shen Zi[2006]NO.230)

2、Audit Report for 2006(Zhong Xing Hua Shen Zi[2007]No.005)

3、Audit Report for 2007(Zhong Xing Zheng Xin Shen[2008]NO.010189)

4、Audit Report for January to August 2008(Zhong Rui Yue Hua Shan Zhuan Shen
Zi[2008]No 003)

5.  Shan Hua Xi Ping Bao Zi (2007) No.14

6.  Shan Zhong Heng Xin Kuai Shi Ping Zi (2008) No. 004


Exhibit 2       
Real Estate, Titles to Production Equipment and Security Interests


1、Property Ownership Certificate (Xi'an City Property Ownership Certificate Gao
Xin Qu Zi No. 107510601-10-2)

2、Property Ownership Certificate (Xi'an City Property Ownership Certificate Gao
Xin Qu Zi No. 107510601-10-1)

3、Right of Land Use Certificate (Xi Gao Ke Ji Guo Yong (2000) No. 37702)


Exhibit 3       A List of Intellectual Properties and Administrative Approvals


1、GMP Certificate H3934(scope of certification: blood products)

2、Medicine Production License - Shaan S20060157(production scope: blood
products; Expiration Date: December 31, 2010)

3、Trademark Registration Certificate NO.1375266(HUITIAN Word-Trademark)

4.   
Trademark Registration Certificate NO.1375264("回天" Word-Trademark)   


5、Trademark Registration Certificate NO.1383464(Image mark)

6、Approvals for Production

(1)Human Serum Albumin (HSA) 20% 10g/bottle, Guo Yao Zhun Zi SF19990034

(2)Human Serum Albumin (HSA) 20% 2g/bottle, Guo Yao Zhun Zi SF19990036

(3)Human Serum Albumin (HSA) 20% 5g/bottle, Guo Yao Zhun Zi SF19990035

(4)Human Intravenous Immunoglobulin(pH4)1.0g/bottle, Guo Yao Zhun Zi SF20010059

(5)Human Intravenous Immunoglobulin(pH4)1.25g/bottle, Guo Yao Zhun Zi SF20010056

(6)Human Intravenous Immunoglobulin(pH4)10.0g/bottle, Guo Yao Zhun Zi SF20020055

(7)Human Intravenous Immunoglobulin(pH4)2.5g/bottle, Guo Yao Zhun Zi SF20010057

(8)Human Intravenous Immunoglobulin(pH4)5.0g/bottle, Guo Yao Zhun Zi SF20010058

(9)Human Normal Immunoglobulin 150mg/bottle, Guo Yao Zhun Zi SF20010054

(10)Human Normal Immunoglobulin 300mg/bottle, Guo Yao Zhun Zi SF20010053











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