Document:

EX-10.3 OPTION AGREEMENT

 

Exhibit 10.3

Option
Agreement with Beijing Holdings Limited to acquire the remaining 49%
interest of CNT dated September 13, 2005

Dated the 13th day of September  , 2005

BEIJING HOLDINGS LIMITED

and

TRAMFORD INTERNATIONAL LIMITED

 

OPTION AGREEMENT

Relating to the Option to purchase the 49% interest

in the share capital of

Future Solutions Development Inc.

 

 

 

THIS AGREEMENT is made on the 13th day of September  , 2005

BETWEEN

	(1)	 	BEIJING HOLDINGS LIMITED, a company incorporated in Hong Kong whose registered office and
principal place of business is at Room 4301, 43/F., Central Plaza, 18 Harbour Road, Wanchai,
Hong Kong (the “Grantor”); and

	(2)	 	TRAMFORD INTERNATIONAL LIMIED, a company incorporated in The British Virgin Islands and
having its principal executive offices at Room 2413-18, Shui On Centre, 8 Harbour Road,
Wanchai, Hong Kong (the “Grantee”)

WHEREAS:

(D) The Grantee is a company incorporated in the British Virgin Islands and is listed on the NASDAQ
Stock Exchange.

(E) The Grantor is the beneficial owner of Sale Shares as at the date hereof.

(F) A Sale and Purchase agreement was entered into between the Parties hereto whereas the Grantee
agreed to purchase from the Grantor and the Grantor agreed to sell to the Grantee 51% interest of
the entire issued share capital of FSD in consideration of the Grantee issuing 2,233,800 new
ordinary shares of Common Stock of US$0.01 each of the Grantee;

(G) The Grantor has agreed to grant a call option to the Grantee to purchase the remaining 49%
interest of the entire issued share capital of FSD on the terms and conditions set out in this
Agreement.

THE PARTIES AGREE THAT:

1. Definitions

1.1 The Schedules and Exhibits to this Agreement shall form part of this Agreement and shall have
the same force and effect as if expressly set out in the body of this Agreement and any reference
to this Agreement shall, unless the context otherwise requires, include such Schedules and
Exhibits.

1.2 In this Agreement the following expressions shall, unless the context otherwise requires, have
the following respective meanings:

	 	 	 
	“Agreement”

	 	means this option agreement as amended or varied from time to time by an
agreement in writing duly executed by the Parties;
	 
	 	 
	“Business Day”

	 	means any day (excluding a Saturday) on which banks generally are open
for business in Hong Kong;
	 
	 	 
	“Call Option”

	 	means the call option granted by the Grantor to the Grantee
whereas the Grantor shall sell the Option Shares to the Grantee in exchange for the
Consideration Shares from the Grantee;

 

 

	 	 	 
	“Consideration Shares”

	 	means the common stock of 2,146,200 newly issued ordinary shares
of US$0.01 each of the Grantee to be issued by the Purchaser as the consideration
in acquiring the 49% interest of FSD from the Vendor upon exercise of the Call
Option by the Grantee in accordance with Clause 2 hereof;
	 
	 	 
	“FSD”

	 	means Future Solutions Development Inc., a limited company
incorporated in the British Virgin Islands which owns 71.43% equity
interest in Zhejiang University (Hangzhou) Innoessen Bio-Technology
Limited, a company incorporated in the PRC and is engaged in the
research and development, production and sale of chemical extracts
from bamboo;
	 
	 	 
	“HK$”

	 	means Hong Kong dollars;
	 
	 	 
	“Hong Kong”

	 	means the Hong Kong Special Administrative Region of the
People’s Republic of China;
	 
	 	 
	“Parties”

	 	means the parties named to this Agreement and their respective successors and
permitted assigns;
	 
	 	 
	“Option Period”

	 	12 months from October 21, 2005 or from the date of passing the relevant
Special Resolution, whichever the later.
	 
	 	 
	“Option Completion”

	 	means completion of the Call Option in accordance with Clause 3
hereof;
	 
	 	 
	“Option Completion Date ”

	 	means the date on which the Option Completion shall take
place, being 3 business days following the exercise of the Call Option by the
Grantee pursuant to the terms and conditions herein (or such other date as may be
agreed in writing between the Parties);
	 
	 	 
	“Option Shares”

	 	means 79,186 shares of US$0.01 each in FSD being 49% of the entire
existing issued shares of FSD owned by the Grantor to be sold to the Grantee
(and/or such other persons as the Purchaser may direct) upon the exercise of the
Call Option by the Grantee in accordance with Clause 2 hereof.
	 
	 	 
	“PRC”

	 	means the People’s Republic of China excluding Taiwan, Hong Kong and
the Macao Special Administrative Region for the purpose of this Agreement;
	 
	 	 
	“Special Resolution”

	 	means the Special Resolution of Shareholders of the Grantee
approving the exercise by the Company to

 

 

	 	 	 
	 

	 	acquire the 49% equity interest in FSD;
	 
	 	 
	 “US”

	 	means the United States of America; and
	 
	 	 
	 “US$”

	 	means the US dollars.

	1.3	 	Construction and Certain References

	 	(i)	 	References in this Agreement to persons include references to bodies
corporate and references to the singular include references to the plural and vice
versa.
	 
	 	(ii)	 	References to Recitals and Clauses are to the recitals and clauses of
this Agreement, a reference to a sub-clause is to the relative numbered sub-clause
in the Clause in which the reference appears and a reference to a paragraph is to
the relative numbered paragraph of the sub-clause in which the reference appears.
	 
	 	(iii)	 	In this Agreement, (save as otherwise expressly stated herein)
references to any statute or statutory provision includes a reference to that
statute or statutory provision as from time to time amended, extended or
re-enacted.
	 
	 	(iv)	 	All references in this Agreement in relation to any time, date or
period shall mean Hong Kong time.
	 
	 	(v)	 	Unless the context otherwise requires, words importing the singular
shall include the plural and vice versa; words importing natural person shall
include corporations and unincorporated associations and words importing the
masculine gender only shall include the feminine gender and the neuter gender.

1.4 Headings in this Agreement are for convenience only and shall not affect the construction of
this Agreement.

1.5 Unless the context otherwise requires, words importing the singular shall include the plural
and vice versa; words importing natural person shall include corporations and unincorporated
associations and words importing the masculine gender only shall include the feminine gender and
the neuter gender.

	2.	 	Call Option

 

 

2.1 In consideration of HK$1.00 paid by the Grantee to the Grantor (receipt whereof is hereby
acknowledged), the Grantor hereby grants to the Grantee an option to require the Grantor to sell
(“the Call Option”) the Option Shares during the Option Period in consideration of the issue of the
Consideration Shares.

2.2 Subject to the relevant Special Resolution being passed at the 2005 Meeting of Shareholders of
the Grantee approving the exercise by the Company to acquire the 49% equity interest in FSD, the
Grantee may exercise the Call Option by written notice to Grantor given within a period of 3
Business Days prior to the expiry of the Option Period subject to and on the terms hereinafter
appearing.

3. Completion of Call Option

3.1 Upon exercise of the Call Option by the Grantee, the Grantor shall sell the Option Shares free
from all rights of pre-emption, options, liens, claims, equities, charges, mortgages, pledges and
encumbrances or third party rights of whatever nature whatsoever and with all rights attached,
accrued or accruing or becoming attached thereto on and after the date of exercise of the Call
Option by the Grantee.

3.2 The completion of the Call Option shall take place on the Option Completion Date before 5:00
p.m. or at such d time as the Parties may agree.

3.3 To the extent physical delivery or document exchange is required, Sale Completion under
sub-clause (A) above shall take place at the office of the Grantee at Room 2413, 24th Floor, Shui
On Centre, 8 Harbour Road, Central, Wancahi, Hong Kong or such other venue as the Parties may
agree.

	4.	 	Obligations of the Parties
	 
	4.1	 	Grantor’s Obligations

4.1.1 After the exercise by the Grantee of the Call Option and against compliance by the Grantee
with its obligations pursuant to Clause 4.2.1, on the Option Completion Date, the Grantor shall
deliver the relevant instrument of transfer duly executed by the authorized person of the grantor
or the nominee of the Option Shares, to the Grantee and procure the issuing of the new share
certificate in respect of the Option Shares to the Grantee or to the Grantee’s nominated receiving
agent, and the Grantee agrees that the delivery of the relevant instrument of transfer thereof
shall constitute a complete discharge of the Grantor’s payment obligations in respect of the
Consideration Shares; and

4.1.2 (if applicable) the Grantor shall as soon as reasonably practicable after the Option
Completion, arrange for payment of any stamp duty and prescribed fees for the transfer of the
Option Shares.

 

 

	4.2	 	Grantee’s Obligations

4.2.1 On Option Completion and subject to the performance of the delivery obligations of the
Grantor under Clause 3.2.1 above, in respect of the title to the Option Shares, the Grantee shall
settle the Consideration Shares within 10 business day after the Option Completion, the Grantee
shall deliver to, or procure the delivery to, the Grantor or as it may direct, the relevant share
certificates for the Consideration.

	5.	 	Further Undertakings

	5.1	 	Grantor’s Undertakings

5.1.1 The Grantor hereby undertakes to the Grantee to submit to the applicable regulatory
authorities as and when it is required to do so, such information which it may have regarding the
Grantor as the applicable regulatory authorities may require.

	5.2	 	Grantee’s Undertakings

5.2.1 In consideration of the Grantor entering into this Agreement and agreeing to perform its
obligations hereunder, the Grantee hereby undertakes to the Grantor to provide the Grantor, at its
request, with all such information known to it or which on reasonable enquiry ought to be known to
it and relating to the Grantee as may be reasonably required by the Grantor in connection with the
transactions contemplated or arising under this Agreement for the purposes of, without limitation,
complying with all requirements of applicable law (including any due diligence defences) or of the
rules and regulations of the NASDAQ stock exchange or any applicable regulatory bodies; and

	6.	 	Notice

6.1 Notices or other communications required or permitted to be given to any Party pursuant to this
Agreement shall be written in English and sent in letter form or by facsimile to the address of
such Party set out below or to such other address as may from time to time be designated by such
Party through notification to the other parties given in accordance with this Clause.

If to the Grantor, to:

Room 4301, Central Plaza

18 Harbour Road

Wanchai, Hong Kong

Facsimile: (852) 2858 1544

Attention: Mr. Changshan Zhao

 

 

If to the Purchaser, to:

Room 2413, Shui On Center

24/F., 8 Harbour Road

Wanchai, Hong Kong

Facsimile: (852) 3112 8461

Attention: Mr. Michael Siu

6.2 The dates on which notices shall be deemed to be effectively given shall be determined as
follows:-

	 	(a)	 	notices given by personal delivery shall be deemed effectively given on
the day of delivery;
	 
	 	(b)	 	notices sent by prepaid registered post shall be deemed effectively
given on the third business day after the day of posting; and
	 
	 	(c)	 	notices given by facsimile shall be deemed effectively given on the day
of transmission.

	7.	 	Successors and Assigns

7.1 This Agreement shall be binding upon each Party’s personal representatives, successors and
assigns.

	8.	 	Waivers and Amendments

8.1 This Agreement may be amended or supplemented, and any provision hereof may be waived, only by
an instrument in writing signed by all the parties or, in the case of a waiver, by the party
waiving compliance. No delay on the part of any Party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any Party of such
right, power or privilege, or any single or partial exercise thereof, preclude any further exercise
thereof or the exercise of such or of any other right, power or privilege. The rights and remedies
herein provided are cumulative and are not exclusive of any rights or remedies that any Party may
otherwise have.

	9.	 	Costs and Stamp Duty

9.1 Each Party shall bear his/its own costs and disbursements incurred in connection with the
negotiation, preparation, execution and Completion of this Agreement.

9.2 Any stamp duty or other government levy or duties payable in respect of the sale and purchase
of the Shares under Clause 2 shall be borne and paid by Grantor and Grantee in equal shares.

	10.	 	 Time

	10.1	 	Time is of the essence of this Agreement in every respect.
	 
	11.	 	 Entire Agreement

 

 

11.1 This Agreement (together with the documents referred to herein) constitutes the whole
agreement between the parties and supersedes all previous agreements and understandings between the
parties.

	12.	 	Governing law and jurisdiction

12.1 The formation, validity, interpretation, execution and settlement of disputes arising out of
this Agreement shall be construed in accordance with and governed by the laws of Hong Kong.

12.2 Each Party hereto irrevocably agrees that the courts of Hong Kong shall have jurisdiction to
hear and determine any suit, action or proceedings, and to settle any disputes which may arise out
of or in connection with this Agreement and for such purposes irrevocably submits to the
jurisdiction of such courts.

12.3 The submission to the jurisdiction of the courts of Hong Kong shall not (and shall not be
construed so as to) limit the right of any Party hereto to take proceedings against the other
parties to this Agreement in any other court of competent jurisdiction nor shall the taking of
proceedings in any one or more jurisdiction preclude the taking of proceedings in any other
jurisdiction, whether concurrently or not.

 

 

     IN WITNESS whereof the Parties hereto have executed this Agreement the day and year first
above written.

	 	 	 	 	 
	SIGNED by
	 	)	 	 
	ZHAO Chang Shan
	 	)	 	 
	for and on behalf of
	 	)
	 	/s/ Changshan Zhao
	Beijing Holdings Limited
	 	)	 	 
	in the presence of: Michael Siu
	 	)	 	 

	 	 	 	 	 
	SIGNED by
	 	)	 	 
	 
	 	)	 	 
	for and on behalf of
	 	)
	 	/s/ Xu Qian
	Tramford International Limited
	 	)	 	 
	in the presence of: William Kwok
	 	)EX-10.4 SUPPLY OF GOODS AGREEMENT

 

Exhibit 10.4

Supply
of Goods Agreement with the New Era Health Industry Group Limited
dated March 22, 2004

(Translated version)

Supply of Goods Agreement

	 	 	 
	Party A:

	 	Yan Tai New Era Natural Food Supplement Company Limited
	 
	 	 
	Party B:

	 	Zhejiang University (Hangzhou) Innoessen Bio-technology Inc.

     For economic purpose of both parties and after adequate negotiation, it is hereby agreed as
follows:

1. Name, Classification, Specification and Quality of products

	a.	 	Name, Classification and Specification of Products:
	 
	 	 	Bamboo Leaf Flavone fine powder (EOB-f04); Total flavone: 24 ~ 32%, ash £ 5%, lead (Pb) £
2mg/kg, Arsenic(As) £ 1mg/kg
	 
	 	 	Bamboo Leaf Flavone powder (EOB-f04): Total flavone 12 ~ 16%, ash £ 8%, lead (Pb) £ 1mg/kg,
Arsenic (As) £ 0.5mg/kg
	 
	b.	 	Standard of product technology (including quality requirement): According to corporation’s
standard

2. Quantity of products

     Quantity of orders for 2004 is approximately: EOB-f02  15  tons; EOB-f04  15
 tons. Party A must give 15 days’ prior written notification to Party B for each month’s
purchases and Party B shall confirm thereof in writing to party A. Party A must inform Party B in
writing (by FAX or emails) 20 days’ prior notification in respect of the quantity and delivery time
of each order.

3. Standard of packing and supply and return of packing materials of products

	a.	 	Packing of products: according to the agreed standard
	 
	b.	 	All packing expenses shall be borne by Party B

4. Delivery entity, delivery method, transportation mode, destination

	a.	 	Delivery entity: Zhejiang University (Hangzhou) Innoessen Bio-technology Inc.
	 
	b.	 	Delivery method: Party B is responsible to arrange for delivery
	 
	c.	 	Expenses: To be borne by Party B
	 
	d.	 	Transportation: Railway or truck transportation

 

 

	e.	 	Delivery destination and products receiving entity (or recipient): The address
location of
Party A. If Party A wishes to change the delivery destination or products recipient, it has to
give 10 days’ notice to Party B before the delivery date.

5. Deadline of delivery / withdrawal of products

	a.	 	The date of delivery is the date of the transportation company’s stamping to transport the
products as instructed by Party B.
	 
	b.	 	The date of withdrawal of products by Party A itself is the date which Party B notifies Party
A in accordance with the agreement. In the buyer’s notification of withdrawal of products, it
must give the seller necessary time for delivery. The actual delivery or withdrawal of goods
being earlier or later than as stipulated in the agreement will be considered as early or late
delivery or withdrawal of the products.
	 
	c.	 	The delivery of products by Party B is the actual date of delivery of the products.

6. Price of goods and payments

	 	 	 	 	 	 	 
	a.

	 	Price of goods:
	 	EOB-f02
	 	RMB700 / kg;
	 

	 	 	 	EOB-f04
	 	RMB300 / kg

	 	 	 	 	 
	b.

	 	Payment for purchases:
	 	Party B will deliver the products upon
receipt of payment from Party A
	 
	 	 	 	 
	c.

	 	Other agreed terms:
	 	A discount of 5% will be given upon the
purchase of the same product up to 5 tons
and a discount of 10% will be given upon
the purchase of the same product up to 10
tons

7. Inspection of products

	 	 	 	 	 
	a.

	 	Time of inspection:
	 	Within one week after products arrive at destination
	 
	 	 	 	 
	b.

	 	Method of inspection:
	 	As agreed by both parties
	 
	 	 	 	 
	c.

	 	Standard of inspection:
	 	According to Clause 1 of the agreement
	 
	 	 	 	 
	d.

	 	Mode of confirmation:
	 	By Fax or emails

8. About the time limit and method to notify discrepancy of products

	a.	 	In the process of inspection of the products, if Party A is aware of any discrepancy in terms
of classification, model, specification and quality, Party A shall store the products properly
and notify Party B of the discrepancy found within one week.
	 
	b.	 	If Party A does not notify Party B of the discrepancy found within the time limit, the
products shall be regarded as delivered as specified in the agreement.
	 
	c.	 	Party A shall not dispute if the products have been used, kept and maintained improperly by
Party A, resulting deterioration thereof.
	 
	d.	 	Upon receipt of Party A’s notification of discrepancy, Party B shall deal with it within a

 

 

	 	 	week’s time otherwise it shall be treated as that Party B has agreed to the discrepancy as
notified and the rectification as proposed by Party A.
	 
	e.	 	The purchaser shall specify in its notification of discrepancy the product name, model
number, specification, trademark, license number, approval number, certificate of compliance
or warranty certificate number, quantity, packing, method of inspection, condition of
inspection and certificate of inspection and proposal of rectification and those items which
must be specified as agreed.

9. Obligation on breach by Party B

	a.	 	Party B shall promptly notify the purchaser of non-delivery of the products and unless
otherwise with the consent of the purchaser, Party B shall pay a damage equivalent to 20% of
the purchase price of the products in respect of which Party B failed to deliver.
	 
	b.	 	Products delivered by Party B which classification, model number, specification and quality
are not as specified in the agreement, the price of the products shall be adjusted by
negotiation if the products are still usable. If the products are un-usable, Party B shall be
responsible to arrange for replacement thereof and bear the actual expenses for the
replacement. If Party B does not arrange for replacement of the un-usable products, the
products ordered shall be considered as not delivered.
	 
	c.	 	Party B shall pay a penalty to Party A in respect of late delivery of products, calculated in
accordance with the portion of the sale proceeds of the products of the late delivery and
shall be responsible to compensate Party A of all loss and damage which Party A may have
suffered as a result of the late delivery.
	 
	d.	 	For the sake of Party B, if the products are delivered to a wrong destination or recipient,
Party B, besides that it shall deliver the products to the right destination and recipient as
specified in the agreement, it also shall pay all actual expenses incurred and damage to Party
A in respect of the late delivery. Party B shall bear all additional expenses if it changes
the route and means of transportation by its own.
	 
	e.	 	If the products are delivered earlier than the date as agreed, Party A is only obliged to
settle the payment as specified in the agreement.

10. Responsibility on breach of Party A

	a.	 	In the case that Party A returns the products as delivered, it has to pay Party B an amount
equivalent to 20% of the sale price of the products as the penalty.
	 
	b.	 	If Party A does not withdraw the products on the date as specified in the agreement, it shall
pay to Party B a penalty for late withdrawal and in addition, it shall pay a fee for safe
keeping and maintenance of the products.
	 
	c.	 	Part A shall compensate Party B for late payment.
	 
	d.	 	If Party A does not accept delivery as specified in the agreement, it shall pay a penalty and
damage to Party B as a result of the non-acceptance of delivery.
	 
	e.	 	If Party A wrongly notifies Party B of the destination and recipient, it shall bear the

 

 

	 	 	responsibility to compensate Party B.

11. Force Majeure

     Any of the parties for superior force reasons cannot perform its obligations under the
agreement shall forthwith notify the other party of the reason and provide evidence of the
non-performance within 15 days that it cannot fully or partially perform its obligations under the
agreement and request for an extension of time to perform, partially perform or not to perform its
obligation in the agreement and, according to practical circumstances, request for an exemption of
part or all responsibility in respect of the non-performance.

12. Settlement on disputes

     If there are disputes in the course of performing the obligations of the agreement, the
disputes shall be resolved by friendly negotiation of both parties, failing which, the disputes
shall be resolved in the following manner:

	a.	 	to be decided by arbitration under the supervision of the local arbitration authority;

	 
	b.	 	to be litigated in the People’s law courts.

13. Others

     The penalty, compensation, maintenance fee and various economic damages shall be settled
within 10 days after the determination of the responsibility, otherwise, it shall be considered as
a late payment.

     This agreement shall be in force as from March 22, 2004. The agreement shall not be modified
nor determined by any of the parties hereof. Any part of this agreement being deficient shall be
supplemented after negotiation. Terms in the supplemental agreement shall have the same binding
effect as this agreement. This agreement shall be executed in duplicates and each party shall
retain one executed copy.

	 	 	 
	Party A:

	 	Yan Tai New Era Natural Food Supplement Company Limited (Company’s Chop)
	 
	 	 
	Legal representative:

	 	Yin Hesheng
	 
	 	 
	Authorized Person:

	 	Liu Zhihe (/s/ Liu Zihe, with company chop of Party A)
	 
	 	 
	Address:

	 	Block 4, No. 30 Zhu Jiang Lu, Yan Tai Development District, Yan Tai
	 
	 	 
	Bank:

	 	Industrial Bank, Yan Tai Development District
	 
	 	 
	Account No.:

	 	1606020809022180477
	 
	 	 
	Telephone:

	 	0535-6378544
	 
	 	 
	Postal Code:

	 	264006
	 
	 	 
	Party B:

	 	Zhejiang University (Hangzhou) Innoessen Bio-technology Inc. (Company’s Chop)
	 
	 	 
	Authorized Person:

	 	Zhang Ying (/s/ Zhang Ying, with company chop of Party B)
	 
	 	 
	Address:

	 	13th Floor, Qian Jiang Science Building, 388 Wen San Lu, Hangzhou, Zhejiang
	 
	 	 
	Bank:

	 	Shanghai Pudong Development Bank, Wenhui Branch, Hangzhou
	 
	 	 
	Account No.:

	 	95140155300000059
	 
	 	 
	Telephone:

	 	0571-88216326/88216324
	 
	 	 
	Postal Code:

	 	310012

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