EXHIBIT 2.1
SALE AND PURCHASE AGREEMENT IN RELATION TO THE ENTIRE ISSUED
SHARE CAPITAL OF SHEUNG TAI INVESTMENTS LIMITED DATED MAY 24, 2004
DATED MAY 24, 2004
(1) GOOD ACHIEVE INVESTMENTS LIMITED
(2) PROFIT SPRING INTERNATIONAL LIMITED
(3) ANMER CAPITAL LIMITED
(4) DUNKLEY INTERNATIONAL LIMITED
(5) NATION EXPRESS LIMITED
(6) HAN HONG LU
(7) MA LEUNG
(8) ALAN LI
(9) CHEN MING YOU
(10) GUO JIANJUN
AND
(11) CHINA PHARMACEUTICALS CORPORATION
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SALE AND PURCHASE AGREEMENT
IN RELATION TO THE ENTIRE ISSUED SHARE CAPITAL OF
SHEUNG TAI INVESTMENTS LIMITED
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STEPHENSON HARWOOD & LO
18TH FLOOR, EDINBURGH TOWER
THE LANDMARK
15 QUEEN'S ROAD CENTRAL
HONG KONG
TEL: (852) 2868 0789
FAX: (852) 2868 1504
REF: JKC/XXD/BA2092H/OO012G05.DOC
INDEX
1. INTERPRETATION........................................................... 2
2. SALE AND PURCHASE OF THE SALE SHARES......................................4
3. CONSIDERATION.............................................................5
4. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS OF THE
VENDORS AND THE WARRANTORS................................................5
5. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS OF THE
PURCHASER.................................................................7
6. COMPLETION................................................................9
7. POST COMPLETION EFFECT...................................................10
8. RESTRICTIVE COVENANTS....................................................10
9. FURTHER ASSURANCE AND ASSISTANCE.........................................12
10. DOCUMENTS CONSTITUTING AGREEMENT.........................................12
11. CONFIDENTIALITY..........................................................12
12. NOTICES AND OTHER COMMUNICATIONS ........................................12
13. COSTS AND EXPENSES ......................................................13
14. GOVERNING LAW AND JURISDICTION...........................................13
SCHEDULE 1 -
PART A - SUBSIDIARIES.........................................................14
PART B - PARTICULARS OF THE SUBSIDIARIES......................................15
SCHEDULE 2 -
PART A - PARTICULARS OF THE BVI COMPANY.......................................18
PART B - CERTIFICATE OF INCUMBENCY OF THE BVI COMPANY.........................19
SCHEDULE 3 - DEFINITION OF "TAXATION".........................................20
SCHEDULE 4 - THE WARRANTIES...................................................21
SCHEDULE 5 -
PART A - THE PURCHASER'S WARRANTIES...........................................27
PART B - THE PERCENTAGES OF SHAREHOLDING REFRESENTED BY THE
CONSIDERATION SHARES..........................................................28
SCHEDULE 6 - THE ACCOUNTS.....................................................29
SCHEDULE 7 - FORM OF BOARD RESOLUTIONS........................................30
SCHEDULE 8 - MEDICINES AND OTHER PRODUCTS FOR WHICH AN APPROVAL NUMBER
HAS BEEN OBTAINED.............................................................33
SCHEDULE 9 - PROJECTS WHICH ARE UNDER RESEARCH AND DEVELOPMENT................34
SCHEDULE 10 -
PART A - TRADEMARKS...........................................................35
PART B - PATENT APPLICATIONS..................................................35
SCHEDULE 11 - CORRESPONDENCE DETAILS..........................................36
THIS AGREEMENT IS MADE THIS 24TH DAY OF MAY, 2004
BETWEEN
(1) GOOD ACHIEVE INVESTMENTS LIMITED, a company incorporated in the British
Virgin Islands whose registered office is situate at the offices of
Offshore Incorporations Limited, P.O.Box 957, Offshore Incorporations
Centre, Road Town, Tortola, British Virgin Islands ("GOOD ACHIEVE");
(2) PROFIT SPRING INTERNATIONAL LIMITED, a company incorporated in the
British Virgin Islands whose registered office is situate at the
offices of Offshore Incorporations Limited, P.O.Box 957, Offshore
Incorporations Centre, Road Town, Tortola, British Virgin Islands
("PROFIT SPRING");
(3) ANMER CAPITAL LIMITED, a company incorporated in the British Virgin
Islands whose registered office is situate at the offices of Trident
Trust Company (B.V.I.) Limited, Trident Chambers, P.O.Box 146, Road
Town, Tortola, British Virgin Islands ("ANMER");
(4) DUNKLEY INTERNATIONAL LIMITED, a company incorporated in the British
Virgin Islands whose registered office is situate at the offices of
Trident Trust Company (B.V.I.) Limited, Trident Chambers, P.O.Box 146,
Road Town, Tortola, British Virgin Islands ("DUNKLEY");
(5) NATION EXPRESS LIMITED, a company incorporated in the British Virgin
Islands who registered office is situate at the offices of Trident
Trust Company (B.V.I.) Limited, Trident Chambers, P.O.Box 146, Road
Town, Tortola, British Virgin Islands ("NATION EXPRESS");
(Good Achieve, Profit Spring, Anmer, Dunkley and Nation Express
together known as the "VENDORS" or individually the "VENDOR")
(6) HAN HONG LU (PRC identity card number: 330104580914161) of 172 Kaixuan
Lu, Jianggan District, Hangzhou City, Zhejiang Province, the PRC ("MR.
HAN");
(7) MA LEUNG (Hong Kong identity card number: K968915(A)) of Room 4905,
Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong
("MR. MA");
(8) ALAN LI (Hong Kong identity card number: P544292(1)) of 6D Borita,
135-143 Third Street, Sai Ying Pun, Hong Kong ("MR. LI");
(9) CHEN MING YOU (PRC identity card number: 420106581220083) of Room 801,
Block 2, Defu Yuan (Zone A), Dexing Garden, Shenzhen, Guangdong
Province, the PRC ("MR. CHEN");
(10) GUO JIANJUN (Hong Kong identity card number: P918183(4)) of 5/F Yee Kan
Court, 12 Swatow Street, Wanchai, Hong Kong ("MR. Guo");
(Mr. Han, Mr. Ma, Mr. Li, Mr. Chen and Mr. Guo together known as the
"WARRANTORS" or individually the "WARRANTOR"); and
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(11) CHINA PHARMACEUTICALS CORPORATION, a company incorporated in Delaware
whose registered office is situate at 615, South Dupont Highway, City
of Dover, Zip Code 19901, County of Kent, Delaware, the United States
of America and which has a correspondence address in Hong Kong at Units
3207 - 08, 32/F, West Tower, Shun Tak Centre, 168-200 Connaught Road
Central, Hong Kong (the "PURCHASER").
PRELIMINARY
(A) Mr. Han is the registered and beneficial owner of the entire issued
share capital of Anmer. Mr. Ma is the registered and beneficial owner
of the entire issued share capital of Good Achieve. Mr. Li is the
registered and beneficial owner of the entire issued share capital of
Dunkley. Mr. Chen is the registered and beneficial owner of the entire
issued share capital of Profit Spring. Mr. Guo is the registered and
beneficial owner of the entire issued share capital of Nation Express.
The Vendors together are the registered and beneficial owners of the
entire issued share capital of the BVI Company.
(B) The Vendors and the Purchaser have agreed to a sale and purchase of the
Sale Shares on the following terms and conditions.
IT IS AGREED AS FOLLOWS :-
1. INTERPRETATION
1.1 In this Agreement, unless the context otherwise requires, the following
expressions shall have the respective meanings set opposite thereto:-
"ACCOUNTS" means the audited consolidated accounts of Zhejiang
University Pharmaceutical Company Limited and its subsidiary which
comprise consolidated balance sheets, statements of operations,
statements of stockholders' equity, statements of cashflows and all the
notes thereto for each of the two years ended 31st December, 2002 and
31st December, 2003, a copy of which is set out in Schedule 6;
"ASSOCIATES" in relation to each Warrantor, means his spouse and
children under 18 and any company in which he and/or his family
interests taken together are directly or indirectly interested so as to
exercise or control the exercise of 30 per cent. or more of the voting
power at general meetings or to control the composition of a majority
of the board of directors; and in relation to each Vendor, means any
company in which it is directly or indirectly interested so as to
exercise or control the exercise of 30 per cent. or more of the voting
power at general meetings or to control the composition of a majority
of the board of directors;
"BVI COMPANY" means Sheung Tai Investments Limited, brief particulars
of which are set out in Part A of Schedule 2;
"COMPLETION" means the completion of the sale and purchase of the Sale
Shares in accordance with the provisions of this Agreement;
"COMPLETION DATE" means the date on which Completion takes place;
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"CONSIDERATION SHARES" means a total of 13,848,220 shares of US$0.0001
each in the capital of the Purchaser or (where the context otherwise
indicates) any of such share;
"DOLLARS" or "HK$" means Hong Kong dollars;
"GROUP" means the BVI Company and the Subsidiaries and "GROUP COMPANY"
and "MEMBER OF THE GROUP" shall be construed accordingly;
"HONG KONG" means the Hong Kong Special Administrative Region of the
PRC;
"INTELLECTUAL PROPERTY" means patents, trade marks and service marks,
rights in designs, trade or business names and copyrights (whether or
not any of these is registered and including applications for
registration of any such thing) and rights under licences and consents
in relation to any such thing and all rights or forms of protection of
a similar nature or having equivalent or similar effect to any of these
which may subsist anywhere in the world;
"LAST ACCOUNTING DATE" means 31st December, 2003;
"LISTING RULES" means the OTC Bulletin Board Rules;
"PRC" means the People's Republic of China;
"RELEVANT CAPACITY" means for his own account or for that of any
person, firm or company other than the Purchaser or the Group and
whether through the medium of any company which is his Associate (for
which purpose there shall be aggregated with his shareholding or
ability to exercise control the shares held or controlled by any of his
Associates) or as principal, partner, director, employee, consultant or
agent;
"RESTRICTED PERIOD" means after Completion, the 12-month period
commencing on the date on which any Vendor ceases to be a shareholder
of the Purchaser;
"SALE SHARES" means 1,000 shares of US$1.00 in the capital of the BVI
Company representing the entire issued share capital of the BVI
Company, of which 477 shares are held by Anmer, 206 shares are held by
Good Achieve, 154 shares are held by Profit Spring, 100 shares are held
by Dunkley and 63 shares held by Nation Express;
"STOCK EXCHANGE" means the OTC Bulletin Board;
"SUBSIDIARIES" means the companies whose name and registered office
addresses are set out in Schedule 1;
"US$" means the United States dollars; and
"WARRANTIES" means the warranties representations and undertakings set
out in Schedule 4 and referred to in Clause 4.1.
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1.2 Any reference to a Clause, sub-clause or Schedule (other than to a
Schedule to a statutory provision) is a reference to a Clause or a
sub-clause or Schedule to this Agreement and the Schedules form part of
and are deemed to be incorporated into this Agreement.
1.3 Words denoting the singular number or the masculine shall include the
plural or the feminine or neuter and vice versa.
1.4 Any reference to "SUBSIDIARIES" has the meaning ascribed to it in the
Companies Ordinance (Cap 32) of the Laws of Hong Kong. Any reference to
an ordinance, statute, legislation or enactment shall be construed as a
reference to such ordinance, statute, legislation or enactment as may
be amended or re-enacted from time to time and for the time being in
force.
1.5 The headings to the Clauses of this Agreement are for ease of reference
only and shall be ignored in interpreting this Agreement.
2. SALE AND PURCHASE OF THE SALE SHARES
2.1 Good Achieve shall, as registered and beneficial owner sell to the
Purchaser and the Purchaser, relying on the representations,
warranties, undertakings and indemnities made or given by the Vendors
and the Warrantors and subject to the terms and conditions contained in
this Agreement, shall purchase from Good Achieve 206 Sale Shares free
from all claims, charges, liens, encumbrances, equities and third party
rights and together with all rights attached thereto and all dividends
and distributions declared, paid or made in respect thereof after the
Completion Date.
2.2 Profit Spring shall, as beneficial owner sell to the Purchaser and the
Purchaser, relying on the representations, warranties, undertakings and
indemnities made or given by the Vendors and the Warrantors and subject
to the terms and conditions contained in this Agreement, shall purchase
from Profit Spring 154 Sale Shares free from all claims, charges,
liens, encumbrances, equities and third party rights and together with
all rights attached thereto and all dividends and distributions
declared, paid or made in respect thereof after the Completion Date.
2.3 Anmer shall, as beneficial owner sell to the Purchaser and the
Purchaser, relying on the representations, warranties, undertakings and
indemnities made or given by the Vendors and the Warrantors and subject
to the terms and conditions contained in this Agreement, shall purchase
from Anmer 477 Sale Shares free from all claims, charges, liens,
encumbrances, equities and third party rights and together with all
rights attached thereto and all dividends and distributions declared,
paid or made in respect thereof after the Completion Date.
2.4 Dunkley shall, as beneficial owner sell to the Purchaser and the
Purchaser, relying on the representations, warranties, undertakings and
indemnities made or given by the Vendors and the Warrantors and subject
to the terms and conditions contained in this Agreement, shall purchase
from Dunkley 100 Sale Shares free from all claims, charges, liens,
encumbrances, equities and third party rights and together with all
rights attached thereto and all dividends and distributions declared,
paid or made in respect thereof after the Completion Date.
2.5 Nation Express shall, as beneficial owner sell to the Purchaser and the
Purchaser, relying on the representations, warranties, undertakings and
indemnities made or given by the Vendors and the Warrantors and subject
to the terms and conditions contained in this Agreement, shall purchase
from Nation Express 63 Sale Shares free from all claims, charges,
liens, encumbrances, equities
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and third party rights and together with all rights attached thereto
and all dividends and distributions declared, paid or made in respect
thereof after the Completion Date.
2.6 Each of the Vendors hereby unconditionally and irrevocably waive any
pre-emption rights which it may have in respect of the Sale Shares.
3. CONSIDERATION
3.1 The consideration for the sale by Good Achieve of the 206 Sale Shares
shall be the allotment and issue by the Purchaser on the terms of
Clause 3.6 to Good Achieve (or as Good Achieve may otherwise direct) of
3,005,064 Consideration Shares.
3.2 The consideration for the sale by Profit Spring of the 154 Sale Shares
shall be the allotment and issue by the Purchaser on the terms of
Clause 3.6 to Profit Spring (or as Profit Spring may otherwise direct)
of 2,248,028 Consideration Shares.
3.3 The consideration for the sale by Anmer of the 477 Sale Shares shall be
the allotment and issue by the Purchaser on the terms of Clause 3.6 to
Anmer (or as Anmer may otherwise direct) of 6,407,110 Consideration
Shares.
3.4 The consideration for the sale by Dunkley of the 100 Sale Shares shall
be the allotment and issue by the Purchaser on the terms of Clause 3.6
to Dunkley (or as Dunkley may otherwise direct) of 1,357,125
Consideration Shares.
3.5 The consideration for the sale by Nation Express of the 63 Sale Shares
shall be the allotment and issue by the Purchaser on the terms of
Clause 3.6 to Nation Express (or as Nation Express may otherwise
direct) of 830,893 Consideration Shares.
3.6 The Consideration Shares shall be allotted and issued as fully paid and
shall rank pari passu in all respects with the existing issued ordinary
shares in the capital of the Purchaser. Immediately after the allotment
and issuance of the Consideration Shares, the Purchaser will have in
total 46,160,733 shares of US$0.0001 in issue and the percentages of
shares in the Purchaser represented by the Consideration Shares are set
out in Part B of Schedule 5.
3.7 After this Agreement has been executed by the parties, the Vendors and
the Purchaser shall sign any documents (undated) or procure the
production of such documents as are required for Completion and deliver
the same to Stephenson Harwood & Lo to arrange for Completion.
4. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS OF THE VENDORS AND THE
WARRANTORS
4.1 Each of the Vendors and the Warrantors hereby represents, warrants and
undertakes to the Purchaser (for himself and as trustee for each Group
Company) in the terms of Schedule 4 (each of the Warranties being
hereinafter referred to as a "WARRANTY" and together as the
"WARRANTIES") and acknowledges that the Purchaser is entering into this
Agreement in reliance upon the Warranties and that the Purchaser shall
be entitled to treat the Warranties as conditions of this Agreement.
5
4.2 Each of the Warranties set out in each sub-paragraph of Schedule 4
hereto shall be separate and independent and save as expressly provided
shall not be limited by reference to any other sub-paragraph or
anything in this Agreement or the Schedules hereto.
4.3 The benefit of the Warranties may be assigned in whole or in part and
without restriction by the person for the time being entitled thereto.
4.4 The Vendors and the Warrantors shall not (save only as may be necessary
to give effect to this Agreement) do or allow and shall procure that no
act or omission shall occur before Completion which would constitute a
breach of any of the Warranties if they were given at the time of such
act or omission and/or at Completion or which would make any of the
Warranties inaccurate or misleading if they were so given and the
Vendors and the Warrantors jointly and severally undertake to disclose
to the Purchaser in writing any matter occurring prior to Completion
which constitutes a breach of or is inconsistent with any of the
Warranties forthwith upon becoming aware of the same.
4.5 In the event of it being found prior to Completion that any of the
Warranties is incorrect or misleading or has not been fully carried out
in any material respect, or in the event of any matter or thing arising
or becoming known or being notified to the Purchaser which is
inconsistent with any of the Warranties or any other provision of this
Agreement or in the event of any of the Vendors or any of the
Warrantors becoming unable or failing to do anything required to be
done by him at or before Completion the Purchaser shall not be bound to
complete this Agreement and the Purchaser may by notice rescind this
Agreement without liability on its part. The right conferred on the
Purchaser by this Clause is for the exclusive benefit of the Purchaser
and in addition to and without prejudice to any other rights or
remedies of the Purchaser (including any rights under the
Misrepresentation Ordinance or any rights to claim damages or
compensation from the Vendors and the Warrantors by reason of any such
breach or non-fulfilment) and failure to exercise it shall not
constitute a waiver of any such rights or remedies.
4.6 If in respect of or in connection with any breach of any of the
Warranties any sum payable to the Purchaser by the Vendors and/or the
Warrantors pursuant to this Agreement by way of compensation is subject
to Taxation (as defined in Schedule 3), then such further amount shall
be paid to the Purchaser by the Vendors so as to secure that the net
amount received by the Purchaser is equal to the amount of the
compensation due to it as aforesaid.
4.7 Each of the Vendors and the Warrantors undertake to compensate the
Purchaser against all costs (including reasonable legal costs),
expenses or other liabilities which the Purchaser may properly incur
either before or after the commencement of any action in connection
with:-
4.7.1 the settlement of any claim that any of the Warranties is
untrue or misleading or has been breached;
4.7.2 any legal proceedings in which the Purchaser claims that any
of the Warranties is untrue or misleading or has been breached
and in which judgment is given for the Purchaser; or
4.7.3 the enforcement of any such settlement or judgment.
6
4.8 If any of the Vendors and the Warrantors defaults in the payment when
due of any sum payable under this Agreement (whether determined by
agreement or pursuant to an order of a court or otherwise), the
liability of the Vendors and the Warrantors shall be increased to
include interest on such sum from the date when such payment is due
until the date of actual payment (as well after as before judgment) at
a rate per annum of 2 per cent. above the prime rate from time to time
of The Hongkong and Shanghai Banking Corporation Limited. Such interest
shall accrue from day to day and shall be compounded annually.
4.9 Each of the Vendors and the Warrantors represents and warrants to the
Purchaser that each of the Warranties is accurate in all respects and
not misleading at the date of this Agreement and that if for any reason
there is any interval of time between the time of this Agreement and
Completion, the Warranties will continue to be accurate in all respects
and not misleading at all times subsequent to the date of this
Agreement up to and including the Completion Date as if repeated on
each such day immediately before Completion.
4.10 Each of the Warranties shall, save where the context otherwise
requires, be given in respect of each of the member of the Group.
4.11 In the absence of fraud, dishonesty or wilful concealment on the part
of the Vendors and/or the Warrantors in respect of any potential
liabilities under this Clause 4, no claim shall be brought by the
Purchaser against the Vendors and/or the Warrantors unless notice of
any such claim (specifying in reasonable detail the nature of the
breach) has been given to the Vendors and the Warrantors on or prior to
the of the expiry of the first 18-month period commencing on the
Completion Date.
5. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS OF THE PURCHASER
5.1 The Purchaser hereby represents, warrants and undertakes to the Vendors
in the terms of Schedule 5 (each of the Warranties being hereinafter
referred to as a "PURCHASER'S WARRANTY" and together as the
"PURCHASER'S WARRANTIES") and acknowledges that each of the Vendors is
entering into this Agreement in reliance upon the Purchaser's
Warranties and that each of the Vendors shall be entitled to treat the
Purchaser's Warranties as conditions of this Agreement.
5.2 Each of the Purchaser's Warranties set out in each sub-paragraph of
Schedule 5 hereto shall be separate and independent and save as
expressly provided shall not be limited by reference to any other
sub-paragraph or anything in this Agreement or the Schedules hereto.
5.3 The benefit of the Purchaser's Warranties may be assigned in whole or
in part and without restriction by the person for the time being
entitled thereto.
5.4 The Purchaser shall not (save only as may be necessary to give effect
to this Agreement) do or allow and shall procure that no act or
omission shall occur before Completion which would constitute a breach
of any of the Purchaser's Warranties if they were given at the time of
such act or omission and/or at Completion or which would make any of
the Purchaser's Warranties inaccurate or misleading if they were so
given and the Purchaser undertakes to disclose to the Vendors in
writing any matter occurring prior to Completion which constitutes a
breach of or is inconsistent with any of the Purchaser's Warranties
forthwith upon becoming aware of the same.
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5.5 In the event of it being found prior to Completion that any of the
Purchaser's Warranties is incorrect or misleading or has not been fully
carried out in any material respect, or in the event of any matter or
thing arising or becoming known or being notified to the Vendors which
is inconsistent with any of the Purchaser's Warranties or any other
provision of this Agreement or in the event of Purchaser becoming
unable or failing to do anything required to be done by it at or before
Completion the Vendors shall not be bound to complete this Agreement
and the Vendors may by notice rescind this Agreement without liability
on their part. The right conferred on the Vendors by this Clause is for
the exclusive benefit of the Vendors and in addition to and without
prejudice to any other rights or remedies of the Vendos (including any
rights under the Misrepresentation Ordinance or any rights to claim
damages or compensation from the Purchaser by reason of any such breach
or non-fulfilment) and failure to exercise it shall not constitute a
waiver of any such rights or remedies.
5.6 If in respect of or in connection with any breach of any of the
Purchaser's Warranties any sum payable to the Vendors by the Purchaser
pursuant to this Agreement by way of compensation is subject to
Taxation (as defined in Schedule 3), then such further amount shall be
paid to the Vendors by the Purchaser so as to secure that the net
amount received by the Vendors is equal to the amount of the
compensation due to it as aforesaid.
5.7 The Purchaser undertakes to compensate the Vendors against all costs
(including reasonable legal costs), expenses or other liabilities which
the Vendors may properly incur either before or after the commencement
of any action in connection with:-
5.7.1 the settlement of any claim that any of the Purchaser's
Warranties is untrue or misleading or has been breached;
5.7.2 any legal proceedings in which any Vendor claims that any of
the Purchaser's Warranties is untrue or misleading or has been
breached and in which judgment is given for the Vendor; or
5.7.3 the enforcement of any such settlement or judgment.
5.8 If the Purchaser defaults in the payment when due of any sum payable
under this Agreement (whether determined by agreement or pursuant to an
order of a court or otherwise), the liability of the Purchaser shall be
increased to include interest on such sum from the date when such
payment is due until the date of actual payment (as well after as
before judgment) at a rate per annum of 2 per cent. above the prime
rate from time to time of The Hongkong and Shanghai Banking Corporation
Limited. Such interest shall accrue from day to day and shall be
compounded annually.
5.9 The Purchaser represents and warrants to the Vendors that each of the
Purchaser's Warranties is accurate in all respects and not misleading
at the date of this Agreement and that if for any reason there is any
interval of time between the time of this Agreement and Completion, the
Purchaser's Warranties will continue to be accurate in all respects and
not misleading at all times subsequent to the date of this Agreement up
to and including the Completion Date as if repeated on each such day
immediately before Completion.
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6. COMPLETION
6.1 Completion shall take place at the offices of Stephenson Harwood & Lo
at 18/F., Edinburgh Tower, The Landmark, 15 Queen's Road Central, Hong
Kong or such other place as the parties may agree forthwith upon the
execution of this Agreement, on the date on which the conditions
precedent are satisfied (or such later date as agreed by the parties
hereto), such conditions precedents being (1) the release of all
charges and encumbrances to which the Sale Shares are subject and (2)
all the following business being able to be simultaneously transacted
:-
6.1.1 each of the Vendors shall deliver to the Purchaser or as it
may direct the following:-
(a) instruments of transfer in favour of the Purchaser
and/or its nominee(s) in respect of the Sale Shares
duly executed by the registered holders thereof;
(b) original share certificates in respect of the Sale
Shares (if any);
(c) such other documents as may be required to give a
good and effective transfer of title of the Sale
Shares to the Purchaser and/or its nominee(s) and to
enable it/them to become the registered holders
thereof;
(d) signed resignation letters from Ma Leung, Yu Sin,
Chen Ming You, Liu Yan Xin, Han Hong Lu, Cheng Jia
An, and Alan Li as directors of the BVI Company;
6.1.2 each of the Vendors and the Warrantors shall cause a meeting
of the board of directors of the BVI Company to be held at
which resolutions shall be passed to approve the transfer of
the Sale Shares referred to above and the issue of new share
certificate for the Sale Shares in the name of the Purchaser
and/or its nominee(s), if so required, the acceptance of the
resignation of the directors as stated in Clause 6.1.1(d) and
the appointments of the persons stated in Clause 6.1.3(e) as
directors of the BVI Company; and
6.1.3 the Purchaser shall:-
(a) procure the passing of the board resolutions in
Schedule 7 and allot and issue the Consideration
Shares, credited as fully paid, to the Vendors (or as
the Vendors may otherwise direct) on the terms of
Clause 3.6;
(b) deliver to the Vendors (or his nominee(s)) share
certificates for the Consideration Shares or as the
Vendors may otherwise direct;
(c) produce for inspection by the Vendors the instruments
of transfer in respect of the Sale Shares duly
executed by the Purchaser and/or its nominee(s);
(d) arrange to present the instruments of transfer
together with the share certificates in respect of
the Sale Shares to the BVI Company for registration
of such transfer; and
(e) deliver to the Company the signed consent to act as
directors of the BVI Company from Aaron Zhu Xiaojun.
9
6.2 The transactions described in Clause 6.1 shall take place at the same
time, so that in default of the performance of any such transactions by
either party, the other party shall not be obliged to complete this
Agreement or perform any obligations hereunder (without prejudice to
any further legal remedies).
7. POST COMPLETION EFFECT
This Agreement shall remain in full force and effect after and
notwithstanding Completion in respect of all obligations, agreements,
covenants, undertakings, conditions, representations, warranties or
indemnities which have not been done, observed or performed at or prior
to Completion and that the parties may take action for any breach or
non-fulfilment of any of such obligations, agreement, covenants,
undertakings, conditions, representations, warranties or indemnities
either before or after Completion (whether or not such breach or
non-fulfilment may have been known to or discoverable by the Purchaser
prior to Completion) it being agreed that Completion shall not be
deemed to constitute a waiver of or operate as an estoppel against any
right to take any such action.
8. RESTRICTIVE COVENANTS
8.1 For the purpose of assuring to the Purchaser the full benefit of the
business and goodwill of the Group, each of the Vendors and the
Warrantors undertakes by way of further consideration for the
obligations of the Purchaser under this Agreement, as separate and
independent agreements that he will not and shall procure his
Associates will not:
8.1.1 at any time after Completion disclose to any person, or
himself use for any purpose, and shall use his best endeavours
to prevent the publication or disclosure of, any information
concerning the business, accounts or finances of any Group
Company, or any of its clients', suppliers' or customers'
transactions or affairs, which may, or may have, come to his
knowledge except with the consent of the Purchaser;
8.1.2 in any Relevant Capacity at any time during the Restricted
Period directly or indirectly solicit, interfere with, employ
or endeavour to entice away from any Group Company with a view
to competing with the Group any person who, to his knowledge,
has during the 12 months preceding the date of the
commencement of the Restricted Period been, a client,
customer, supplier or employee of, or has been in the habit of
dealing with, any Group Company; and/or
8.1.3 at any time after Completion use the name or trading style of
any Group Company, or any trade marks or logos or device
similar in appearance to any trade marks, in Hong Kong or any
other part of the world, or represent himself as carrying on
or continuing or being connected with any Group Company or its
business for any purposes whatsoever unless he is so
authorised by the Group Company.
8.2 Each of the Vendors and the Warrantors who individually will be holding
5% or more of the issued share capital of the Purchaser hereby:
8.2.1 undertakes with the Purchaser, to supply to it on Completion
with full and accurate details of any business or interest
which each of the Vendors and/or each of the Warrantors and/or
his or its Associates has or may have which competes or may
compete
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with the business from time to time carried on by the Group
and any other conflicts of interests which each of the Vendors
and/or each of the Warrantors has or may have with the Group
and whether each of the Vendors and/or each of the Warrantors
and/or his or its Associates intends or does not intend to
inject such business or interest into the Group;
8.2.2 undertakes with the Purchaser, at any time during which the
Purchaser is listed on the Stock Exchange and for so long as
each of the Vendors and/or each of the Warrantors his or its
Associates is individually interested in 5% or more of the
issued share capital of the Purchaser, notify the Purchaser
forthwith of any changes of the details and information
referred to in Sub-clause 8.2.1 above so as to enable the
Purchaser to disclose such information by way of a press
announcement and, if so required by the Stock Exchange,
include such information in all circulars, annual reports and
half-year reports required to be issued by the Purchaser
pursuant to the Listing Rules;
8.2.3 Undertakes with the Purchaser to procure any director of the
Purchaser from time to time nominated by the Vendors and/or
the Warrantors:
(i) to disclose to the Purchaser after Completion and at
any time during which the Purchaser is listed on the
Stock Exchange full and accurate details of any
business or interest which such Director and/or his
Associates has or may have which competes or may
compete with the business from time to time carried
on by the Group and any other conflicts of interest
which such Director has or may have with the Group;
(ii) to notify the Purchaser forthwith of any changes of
the details and information referred to in Sub-clause
8.2.3 above, including any such business or interest
acquired by such Director and/or his Associates after
the listing of the Purchaser so as to enable the
Purchaser to include such information in its annual
reports and, if so required by the Stock Exchange,
its quarter-year reports and circulars; and
8.2.4 acknowledges that and, if so required by the Purchaser,
procure such director referred to in Sub-clause 8.2.3 to
acknowledge that the information supplied to the Purchaser
pursuant to this Clause 8.2 will or may be disclosed by the
Purchaser in the prospectus, circulars, reports, announcements
and other statements to the Stock Exchange and/or any
regulatory authorities and their respective officers and
employees from time to time issued by the Purchaser and that
such disclosure is required by the Purchaser in order to
comply with the requirements of the Stock Exchange and/or
other regulatory bodies.
8.3 While the restrictions contained in this Clause 8 are considered by the
parties to be reasonable in all the circumstances, it is agreed that if
any one or more of such restrictions shall either taken by itself or
themselves together be adjudged to go beyond what is reasonable in all
the circumstances for the protection of the legitimate interests of the
Purchaser but would be adjudged reasonable if any particular
restriction or restrictions were deleted or if any part or parts of the
wording thereof were deleted, restricted or limited in a particular
manner or if the period thereof were reduced or if the range of
activities reduced in scope, then the remaining restrictions shall be
valid to the extent that they are not held to be invalid and the
affected restriction
11
contained in this Clause 8 shall apply with such deletion, restriction
or limitation, as the case may be.
9. FURTHER ASSURANCE AND ASSISTANCE
The Vendors shall, and the Warrantors shall procure that the Vendors
shall, do, execute and perform and shall procure to be done, executed
and performed all such further acts, deeds, documents and things as the
Purchaser may require from time to time effectively to vest the
beneficial ownership of the Sale Shares in the Purchaser or as it
directs free from all liens, charges, options, encumbrances or adverse
rights or interest of any kind and otherwise to give to the Purchaser
the full benefit of this Agreement.
10. DOCUMENTS CONSTITUTING AGREEMENT
This Agreement and all agreements entered or to be entered into
pursuant to the terms of this Agreement together constitute the entire
agreement and understanding between the parties in connection with the
subject-matter of this Agreement and supersedes all previous proposals,
representations, warranties, agreements or undertakings relating
thereto whether oral, written or otherwise and neither party has relied
on any such proposals, representations, warranties, agreements or
undertakings.
11. CONFIDENTIALITY
Other than such disclosure as may be required by the Stock Exchange,
none of the parties hereto shall make any announcement or release or
disclose any information concerning this Agreement or the transactions
herein referred to or disclose the identity of any of the other parties
(save disclosure to their respective professional advisers who are
under a duty of confidentiality) without the prior written consent of
the other parties.
12. NOTICES AND OTHER COMMUNICATIONS
Each of the Vendors and the Warrantors hereby appoint Mr. Ma at the
address stated in Schedule 11 as its agent to receive on its or his
behalf service of process any proceedings in Hong Kong. The Purchaser
hereby appoints Mr. Aaron Zhu Xiaojun at the address stated in Schedule
11 as its agent to receive on its behalf service of process any
proceedings in Hong Kong. Any notice or other communications to be
given under this Agreement shall be in writing and may be delivered by
hand or given by facsimile, telex, telegram or cable to the respective
addresses of the parties set out in Schedule 11. Any such notice or
communication shall be sent to the party to whom it is addressed and
must contain sufficient reference and/or particulars to render it
readily identifiable with the subject matter of this Agreement. If so
delivered by hand or given by facsimile, telex, telegram or cable such
notice or communication shall be deemed received on the date of
despatch and if so sent by post (or, if sent to an address outside of
Hong Kong, so sent by first class air-mail) shall be deemed received 2
business days after the date of despatch.
13. COSTS AND EXPENSES
The parties hereto bear their respective legal and professional fees,
costs and expenses incurred in the negotiation, preparation and
execution of this Agreement and all documents contemplated hereby.
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14. GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by and construed and take effect in
all respects in accordance with the laws of Hong Kong and the parties
hereto agree to submit to the non-exclusive jurisdiction of the courts
of Hong Kong.
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19
IN WITNESS whereof the parties hereto have executed this Agreement the
day and year first above written.
SIGNED by Ma Leung )
)
for and on behalf of GOOD ACHIEVE )
)
INVESTMENTS LIMITED )
)
in the presence of:- )
Josephine C. K. Chan
18th Floor Edinburgh Tower
The Landmark, Central
Hong Kong
Solicitor, HKSAR
SIGNED by )
)
MA LEUNG )
)
in the presence of:- )
Josephine C. K. Chan
18th Floor Edinburgh Tower
The Landmark, Central
Hong Kong
Solicitor, HKSAR
14
SIGNED by Chen Ming You )
)
for and on behalf of PROFIT SPRING )
)
INTERNATIONAL LIMITED )
)
in the presence of:- )
Josephine C. K. Chan
18th Floor Edinburgh Tower
The Landmark, Central
Hong Kong
Solicitor, HKSAR
SIGNED by )
)
CHEN MING YOU )
)
in the presence of:- )
Josephine C. K. Chan
18th Floor Edinburgh Tower
The Landmark, Central
Hong Kong
Solicitor, HKSAR
15
SIGNED by Han Hong Lu )
)
for and on behalf of )
)
ANMER CAPITAL LIMITED )
)
in the presence of:- )
SIGNED by )
)
HAN HONG LU )
)
in the presence of:- )
16
SIGNED by Alan Li )
)
for and on behalf of DUNKLEY )
)
INTERNATIONAL LIMITED )
)
in the presence of:- )
Josephine C. K. Chan
18th Floor Edinburgh Tower
The Landmark, Central
Hong Kong
Solicitor, HKSAR
SIGNED by )
)
ALAN LI )
)
in the presence of:- )
Josephine C. K. Chan
18th Floor Edinburgh Tower
The Landmark, Central
Hong Kong
Solicitor, HKSAR
17
SIGNED by Guo Jianjun )
)
for and on behalf of NATION )
)
EXPRESS LIMITED )
)
in the presence of:- )
Josephine C. K. Chan
18th Floor Edinburgh Tower
The Landmark, Central
Hong Kong
Solicitor, HKSAR
SIGNED by )
)
GUO JIANJUN )
)
in the presence of:- )
Josephine C. K. Chan
18th Floor Edinburgh Tower
The Landmark, Central
Hong Kong
Solicitor, HKSAR
18
SIGNED by Aaron Zhu Xiaojun )
)
for and on behalf of )
)
CHINA PHARMACEUTICALS )
)
CORPORATION )
)
in the presence of:- )
19