EXHIBIT 4.5
AGREEMENT DATED JANUARY 19, 2005
DATED THE 19TH DAY OF JANUARY, 2005.
GOOD ACHIEVE INVESTMENTS LIMITED
PROFIT SPRING INTERNATIONAL LIMITED
ANMER CAPITAL LIMITED
DUNKLEY INTERNATIONAL LIMITED
NATION EXPRESS LIMITED
(as Vendors)
HAN HONG LU
MA LEUNG
ALAN LI
CHEN MING YOU
GUO JIANJUN
(as Warrantors)
CHINA PHARMACEUTICALS
INTERNATIONAL CORPORATION
(as Purchaser)
and
DICHAIN HOLDINGS LIMITED
(as Guarantor)
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A G R E E M E N T
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JOHNNY K. K. LEUNG & CO.,
Solicitors & Notaries,
16/F., The Chinese Bank Building,
61 Des Voeux Road Central,
Hong Kong.
Ref.:- D-22896-04-JL
THIS AGREEMENT is made the 19th day of January, 2005
BETWEEN
1 GOOD ACHIEVE INVESTMENTS LIMITED, a company incorporated in the British
Virgin Islands whose registered office is situate at the offices of
Offshore Incorporation Limited, P. O. Box 957, Offshore Incorporation
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 Incorporation Limited, P. O. Box 957, Offshore
Incorporation 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 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 ("NATION EXPRESS");
(Good Achieve, Profit Spring, Anmer, Dunkley and Nation Express are
hereinafter collectively referred to as the "VENDORS" or individually
as the "VENDOR")
6 HAN HONG LU (holder of PRC Identity Card No.330104580914161) of 172
Kaixuan Lu, Jianggan District, Hangzhou City, Zhejiang Province, PRC
("MR. HAN");
7 MA LEUNG (holder of Hong Kong Identity Card No.K968915(A)) of Room
4905, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong
Kong ("MR. MA");
8 ALAN LI (holder of Hong Kong Identity Card No.P544292(1)) of 6D Borita,
134-143 Third Street, Sai Ying Pun, Hong Kong ("MR. LI");
9 CHEN MING YOU (holder of PRC Identity Card No.420106581220083) of Room
801, Block 2 Defu Yuan (Zone A), Dexing Garden, Shenzhen, Guangdong
Province, PRC ("MR. CHEN")
10 GUO JIANJUN (holder of Hong Kong Identity Card No.P918183(4)) of 5th
Floor,
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Yee Kan Court, 12 Swatow Street, Wanchai, Hong Kong ("MR. GUO")
(Mr. Han, Mr. Ma, Mr. Li, Mr. Chen and Mr. Guo are hereinafter
collectively referred to as the "WARRANTORS" or individually the
"WARRANTOR");
11 CHINA PHARMACEUTICALS INTERNATIONAL CORPORATION, a company incorporated
in the British Virgin Islands whose registered office is situate at
Palm Grove House, P.O. Box 438, Road Town, Tortola, British Virgin
Islands and which has a correspondence address in Hong Kong at Units
3207-08, 32nd Floor, West Tower, Shun Tak Centre, 168-200 Connaught
Road Central, Hong Kong (the "PURCHASER");
12 DICHAIN HOLDINGS LIMITED whose registered office is situate at Units
3207-8, 32/F, West Tower, Shun Tak Centre, 168-200 Connaught Road
Central, Hong Kong (the "GUARANTOR").
RECITALS :-
(A) This Agreement is entered into pursuant to a deed of settlement (the
"DEED OF SETTLEMENT") of even date among the parties hereto to
implement the terms of the settlement as referred to therein.
(B) Good Achieve is the registered and beneficial owner of the First Sale
Shares (as defined below).
(C) Profit Spring is the registered and beneficial owner of the Second Sale
Shares (as defined below).
(D) Anmer is the registered and beneficial owner of the Third Sale Shares
(as defined below).
(E) Dunkley is the registered and beneficial owner of the Fourth Sale
Shares (as defined below).
(F) Nation Express is the registered and beneficial owner of the Fifth Sale
Shares (as defined below).
(G) 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.
(H) China Pharmaceuticals Corporation ("CPC") was a company incorporated in
the State of Delaware, the United States. It was re-incorporated in the
British Virgin Islands by
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a merger with its subsidiary, namely, the Purchaser, in accordance
with the applicable laws of the State of Delaware and British Virgin
Islands (the "MERGER") as a result of which:
(1) the Purchaser became the surviving entity of the Merger and CPC
has ceased its corporate existence;
(2) by operation of law, all rights, interests and obligations were
transferred to and assumed by the Purchaser to the same extent
and effect as such were of CPC and the Purchaser before the
Merger;
(3) all shares of CPC were converted to shares of the Purchaser on
the effect date of the Merger, namely, 9 August 2004; and
(4) the shares of the Purchaser are traded on the Stock Exchange
(as defined below)
(I) The Vendors have agreed with the Purchaser for the sale and purchase of
the First Sale Shares, the Second Sale Shares, the Third Sale Shares,
Fourth Sale Shares and Fifth Sale Shares under the terms and conditions
hereinafter appearing.
(J) The Guarantor is the single largest ultimate shareholder of the
Purchaser. The Guarantor agrees to provide a guarantee in accordance
with Clause 6.2(j).
IT IS HEREBY AGREED as follows :-
1. PURPOSE AND DEFINITIONS
1.1 This Agreement sets out the terms and conditions under and subject to
which the Vendors shall sell and the Purchaser shall purchase the First Sale
Shares, the Second Sale Shares, the Third Sale Shares, the Fourth Sale Shares
and the Fifth Sale Shares.
1.2 The Schedules 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.
1.3 In this Agreement the following expressions shall, unless the context
otherwise requires, have the following respective meanings:
EXPRESSION MEANING
"COMPANY" Sheung Tai Investments Limited, a
company incorporated in the British
Virgin Islands, particulars of which
are set out in the First Schedule
hereto.
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"COMPLETION" Completion of the sale and purchase
of the First Sale Shares, the Second
Sale Shares, the Third Sale Shares,
the Fourth Sale Shares and the Fifth
Sale Shares pursuant to Clause 5.
"COMPLETION DATE" The date of Completion in accordance
with Clause 5.
"CONSIDERATION SHARES" 1,000 ordinary shares of US$1.00
each in the capital of the Company
or any of such shares.
"CPC" China Pharmaceuticals Corporation, a
company incorporated in Delaware,
United States of America, which has
ceased its corporate existence since
the effective date of the Merger.
"ENCUMBRANCES" Any mortgage, charge, pledge, lien,
hypothecation or other encumbrance,
priority or security interest,
option, claim, defect or equity of
any kind whatsoever, or any deferred
purchase, title retention, leasing,
sale and repurchase or sale and
lease back arrangement whatsoever,
or any agreement therefor, and
"encumber" shall be construed
accordingly.
"FIFTH SALE SHARES" All such shares of the Purchaser
held by Nation Express into which
830,893 ordinary shares of US$0.0001
each in the capital of CPC had been
converted pursuant to the Merger.
"FIRST SALE SHARES" All such shares of the Purchaser
held by Good Achieve into which
3,005,064 ordinary shares of
US$0.0001 each in the capital of CPC
had been converted pursuant to the
Merger.
"FOURTH SALE SHARES" All such shares of the Purchaser
held by Dunkley into which 1,357,125
ordinary shares of US$0.0001 each in
the capital of CPC had been
converted pursuant to the Merger.
"GOOD ACHIEVE'S SOLICITORS" Messrs. Fong & Ng, Solicitors, Suite
1101, 11th Floor, Nine Queen's Road
Central, Hong Kong.
"MERGER" The merger process undergone by CPC
and the Purchaser as a result of
which the Purchaser became the
surviving entity, as more
particularly described in Recital
(H).
"PURCHASER'S SOLICITORS" Messrs. Johnny K. K. Leung & Co.,
Solicitors &
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Notaries, 16th Floor, The Chinese
Bank Building, 61 Des Voeux Road
Central, Hong Kong.
"PRC" The People's Republic of China
"SALE SHARES" Any of the First Sale Shares, Second
Sale Shares, Third Sale Shares,
Fourth Sale Shares and Fifth Sale
Shares.
"SEC" The Securities and Exchange
Commission of the United States.
"SECOND SALE SHARES" All such shares of the
Purchaser held by Profit Spring into
which 2,248,028 ordinary shares of
US$0.0001 each in the capital of CPC
had been converted pursuant to the
Merger.
"STOCK EXCHANGE" The OTC Bulletin Board
"THIRD SALE SHARES" All such shares of the
Purchaser held by Anmer into which
6,407,110 ordinary shares of
US$0.0001 each in the capital of CPC
had been converted pursuant to the
Merger.
"TRANSFER" Sell, assign, exchange, convey,
transfer, donate, bequeath or
otherwise dispose of, beneficially
or of record, or contract to
transfer.
"US$" The United States of America Dollars.
1.4 References to statutory provisions shall where the context so admits or
requires be construed as references to those provisions as respectively amended,
consolidated, extended, or re-enacted from time to time, and shall, where the
context so admits or requires, be construed as including references to the
corresponding provisions of any earlier legislation whether repealed or not)
directly or indirectly amended, consolidated, extended, or replaced thereby or
re-enacted therein, which may be applicable to any relevant tax year or other
period, and shall include any orders, regulations, instruments or other
subordinate legislation made under the relevant statute.
1.5 Headings in this Agreement are for convenience only and shall not
affect the construction of this Agreement.
1.6 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. SALE AND PURCHASE
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2.1 Good Achieve shall, as registered and beneficial owner, sell and the
Purchaser shall purchase the First Sale Shares free from all claims and
encumbrances whatsoever but together with all rights attached, accrued or
accruing thereto on and after the date of this Agreement.
2.2 Profit Spring shall, as registered and beneficial owner, sell and the
Purchaser shall purchase the Second Sale Shares free from all claims and
encumbrances whatsoever but together with all rights attached, accrued or
accruing thereto on and after the date of this Agreement.
2.3 Anmer shall, as registered and beneficial owner, sell and the Purchaser
shall purchase the Third Sale Shares free from all claims and encumbrances
whatsoever but together with all rights attached, accrued or accruing thereto on
and after the date of this Agreement.
2.4 Dunkley shall, as registered and beneficial owner, sell and the
Purchaser shall purchase the Fourth Sale Shares free from all claims and
encumbrances whatsoever but together with all rights attached, accrued or
accruing thereto on and after the date of this Agreement.
2.5 Nation Express shall, as registered and beneficial owner, sell and the
Purchaser shall purchase the Fifth Sale Shares free from all claims and
encumbrances whatsoever but together with all rights attached, accrued or
accruing thereto on and after the date of this Agreement.
2.6 It is expressly agreed and declared that the sale and purchase of the
First Sale Shares, the Second Sale Shares, the Third Sale Shares, the Fourth
Sale Shares and the Fifth Sale Shares under sub-clauses 1, 2, 3, 4 and 5 of this
Clause shall be completed simultaneously so that if the sale and purchase of
either the First Sale Shares or the Second Sale Shares or the Third Sale Shares
or the Fourth Sale Shares or the Fifth Sale Shares shall not or cannot be
completed for any reason other than the default of the Purchaser, the Purchaser
shall not be obliged to complete the purchase of the First Sale Shares and/or
the Second Sale Shares and/or the Third Sale Shares and/or the Fourth Sale
Shares and/or the Fifth Sale Shares.
3. CONDITION PRECEDENTS
3.1 Completion of this Agreement is conditional upon the delivery to the
Vendors of:
(a) a certified true copy of all such resolutions of the board of
directors and shareholders of the Purchaser (including the
consents from eAngels EquiDebt Partners V) which were duly
passed in accordance with its articles of association and all
applicable laws which are required to approve and effect the
transactions contemplated by the Deed of Settlement and this
Agreement;
(b) a certified true copy of a legal opinion (which form and
substance is to the satisfaction of the Vendors) from
qualified United States of America lawyers on the following
issues:
(i) the Merger has been completed and all assets, rights,
interests and
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obligations of CPC were effectively transferred to
and assumed by Purchaser to the same extent and
effect as such were of CPC before the Merger; and
(ii) save for post-completion filing of Schedule 13G by
Mr. Ma and Mr. Han, there are no requirements under
the applicable laws of the United States of America
or applicable rules and regulations of the SEC or
filing requirements which will affect the validity or
enforceability of the Deed of Settlement, this
Agreement and the consummation of the transactions
contemplated thereby have been satisfied;
(c) a certified true copy of a legal opinion from qualified
British Virgin Islands lawyers on the following issues:
(i) good standing of the Purchaser;
(ii) the matters set out in the Fourth Schedule hereto
(except paragraph 1.1, 1.2 and solvency of the
Purchaser under paragraph 2.2 thereof); and
(iii) the certified copies of resolutions referred to in
(a) above having been validly passed in accordance
with the Articles of Association of the Purchaser and
the applicable laws of the British Virgin Islands;
(d) a certified true copy of the Certificate of Ownership and
Merger which was filed with the Secretary of State of the
State of Delaware;
(e) a certified true copy of the Articles of Merger which was
filed with the Registrar of Companies of the British Virgin
Islands;
(f) a statutory declaration of the current director(s) of the
Company attaching true copies of all resolutions of directors
or shareholders of the Company (if any) which were passed
since the Purchaser became a shareholder of the Company;
(g) a statutory declaration of the current directors of the
Purchaser stating that the Purchaser is solvent upon the
signing of this Agreement, immediately before Completion and
immediately after Completion; and
(h) within 7 days of Completion (or such later day as Good Achieve
may agree) a copy of the confirmation from the United States
lawyers in a form satisfactory to Good Achieve confirming that
written notice of the proposed consent to action by the
members and the proposed Share Swap Agreement has been given
to all the shareholders of the Purchaser in compliance with
section 80(d) of the International Business Companies Act of
the British Virgin Islands.
3.2 The Vendors shall be under no obligation to proceed to Completion
unless and until all of the conditions precedent in Clause 3.1 shall
have occurred (except as waived in writing by all of the Vendors).
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4. CONSIDERATION
4.1 The consideration for the sale by Good Achieve of the First Sale Shares
shall be the transfer by the Purchaser to Good Achieve of 206 Consideration
Shares free from all claims and encumbrances whatsoever but together with all
rights attached, accrued or accruing thereto on and after the date of this
Agreement.
4.2 The consideration for the sale by Profit Spring of the Second Sale
Shares shall be the transfer by the Purchaser to Profit Spring of 154
Consideration Shares free from all claims and encumbrances whatsoever but
together with all rights attached, accrued or accruing thereto on and after the
date of this Agreement. Profit Spring hereby directs the Purchaser to transfer
the 154 Consideration Shares in favour of Good Achieve.
4.3 The consideration for the sale by Anmer of the Third Sale Shares shall
be the transfer by the Purchaser to Anmer of 477 Consideration Shares free from
all claims and encumbrances whatsoever but together with all rights attached,
accrued or accruing thereto on and after the date of this Agreement.
4.4 The consideration for the sale by Dunkley of the Fourth Sale Shares
shall be the transfer by the Purchaser to Dunkley of 100 Consideration Shares
free from all claims and encumbrances whatsoever but together with all rights
attached, accrued or accruing thereto on and after the date of this Agreement.
4.5 The consideration for the sale by Nation Express of the Fifth Sale
Shares shall be the transfer by the Purchaser to Nation Express of 63
Consideration Shares free from all claims and encumbrances whatsoever but
together with all rights attached, accrued or accruing thereto on and after the
date of this Agreement. Nation Express hereby directs the Purchaser to transfer
the 63 Consideration Shares in favour of Dunkley.
5. COMPLETION
5.1 Completion shall take place on the day of satisfaction of (or waiver by
the Vendors of) the conditions precedent as stated in Clause 3.1 herein, but in
any event, no later than 31st January 2005 or such later date as the parties
hereto shall agree at the office of the Good Achieve's Solicitors or at such
other place as the parties may agree on Completion Date in accordance with the
Second Schedule hereto and each party hereto shall perform its obligations set
out herein at Completion.
5.2 The obligations of the Vendors as regards the Second Schedule shall be
several and shall relate only to the Sale Shares beneficially owned by the
particular Vendor.
6. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
6.1 (a) Each of the Warrantors and Vendors (jointly in the case of a
Vendor and the respective Warrantor who owns the shares in the
Vendor but otherwise severally) hereby represent, warrant and
undertake to the Purchaser in the
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terms set out in the Third Schedule hereto and in the other
provisions of this Agreement as regards such Vendor and the
Sale Shares held by such Vendor and that each of the
representations, warranties and undertakings (except otherwise
qualified therein) is now and will at Completion, and will at
all times between the date of this Agreement and the
Completion Date, be true, complete and accurate and on
Completion, the Vendors and the respective Warrantors shall be
deemed to have repeated the same on such basis and that the
same shall have effect as if given at Completion as well as at
the date of this Agreement (except otherwise qualified
therein), and each of the Warrantors and each of the Vendors
(jointly in the case of a Vendor and the respective Warrantor
who owns the shares in such Vendor jointly but otherwise
severally) agree and acknowledge that the Purchaser is
entering into this Agreement strictly in reliance on such
representations, warranties and undertakings notwithstanding
any investigation which may have been made by or on behalf of
the Purchaser up to the date hereof.
(b) All matters, documents or information disclosed by the Vendors
and the Warrantors as regards themselves and their respective
Sale Shares shall be deemed to be true, accurate and complete
unless such disclosure is specifically qualified in writing at
the time of disclosure.
(c) Up to the Completion Date the Vendors and the Warrantors shall
forthwith notify the Purchaser upon any of them becoming aware
of any event which may cause any of the representations,
warranties and undertakings and the matters disclosed to be
incorrect, misleading or breached.
(d) Each of the representations, warranties and undertakings
contained in this Agreement shall be construed as a separate
representation, warranty or undertaking and (save as expressly
provided to the contrary) shall not be limited or restricted
by reference to or inference from the terms of any other
representations, warranties and undertakings or any other
terms of this Agreement.
(e) Any provision of this Agreement which is capable of being
performed after but which has not been performed at or before
Completion and all representations, warranties, undertakings
and indemnities contained in or entered into pursuant to this
Agreement shall remain in full force and effect
notwithstanding Completion.
(f) All matters disclosed herein are disclosed for all purposes
relative to this Agreement and all other documents referred to
herein and to the transactions contemplated herein including,
but not limited to, the representations, warranties and
undertakings and indemnities contained in this Agreement.
Where any disclosure is made in relation to a particular
warranty or representation, it shall be deemed to be given in
relation to each and every warranty or representation as the
context may permit and shall not be regarded as being so
limited.
(g) Subject to Completion, each of the Vendors and the Warrantors
hereby
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severally warrants and undertakes to supply (to the extent as
such information is available and in the possession of the
Company and/or Zheda (as defined hereinafter)) the Purchaser
at the Purchaser's costs with all necessary financial
information and produce the originals (to the extent as such
originals are available and in the possession of the Company
and/or Zheda (as defined hereinafter)) for inspection and
allowing making of copies thereof of the documents set out in
the Fifth Schedule hereof pertaining to Zhejiang University
Pharmaceutical Co. Ltd. ( (R)y|?*j3/4CAAo ~|(3)--*1/2(Y)q )
("Zheda") relating to the period when Zheda was a subsidiary
of the Purchaser for the purpose of (and only to the extent as
required for such purpose) complying with the reporting
requirements under the rules and regulations of the SEC within
14 days upon written demand of the Purchaser.
(h) Mr. Han and Mr. Ma hereby severally warrant and undertake the
filing of Schedule 13G reports with the SEC to report the
disposal of the First Sale Shares and the Third Sale Shares.
(i) Each of the Warrantors and each of the Vendors (jointly in the
case of a Vendor together with its respective Warrantor which
owns the shares in the Vendor but otherwise severally) warrant
and undertake (as regards themselves or their respective Sale
Shares) to compensate the Purchaser against all claims,
demands, losses, damages, costs (including reasonable legal
costs), expenses or other liabilities which the Purchaser may
sustain or incur as a result of or in connection with the
breach of any of their respective representations, warranties
or undertakings herein.
(j) Each of the Warrantors and each of the Vendors (jointly in the
case of a Vendor together with its respective Warrantor which
owns the shares in the Vendor but otherwise severally) warrant
and undertake that Zheda will not be, directly or indirectly,
listed or injected into any publicly listed company(s) in the
United States of America ("US") in the US securities markets,
including but not limited to, New York Stock Exchange, NASDAQ,
American Stock Exchange, OTC Bulletin Board, Pink Sheet,
within two years from the Completion Date..
6.2 (a) The Purchaser represents, warrants and undertakes to the
Vendors in the terms set out in the Fourth Schedule hereto and
in the other provisions of this Agreement and that each of the
representations, warranties and undertakings (except otherwise
qualified therein) is now and will at Completion, and will at
all times between the date of this Agreement and the
Completion Date, be true, complete and accurate and on
Completion, that the Purchaser shall be deemed to have
repeated the same on such basis and the same shall have effect
as if given at Completion as well as at the date of this
Agreement (except otherwise qualified therein), and that the
Purchaser agrees and acknowledges that the Vendors are
entering into this Agreement strictly in reliance on such
representations, warranties and undertakings notwithstanding
any investigation which may have been made by or on behalf of
the Vendors up to the date hereof.
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(b) All matters, documents or information disclosed by the
Purchaser shall be deemed to be true, accurate and complete
unless such disclosure is specifically qualified in writing at
the time of disclosure.
(c) Up to the Completion Date the Purchaser shall forthwith notify
the Vendors upon it becoming aware of any event which may
cause any of the representations, warranties and undertakings
and the matters disclosed to be incorrect, misleading or
breached.
(d) Each of the representations, warranties and undertakings
contained in this Agreement shall be construed as a separate
representation, warranty or undertaking and (save as expressly
provided to the contrary) shall not be limited or restricted
by reference to or inference from the terms of any other
representations, warranties and undertakings or any other
terms of this Agreement.
(e) Any provision of this Agreement which is capable of being
performed after but which has not been performed at or before
Completion and all representations, warranties, undertakings
and indemnities contained in or entered into pursuant to this
Agreement shall remain in full force and effect
notwithstanding Completion.
(f) All matters disclosed herein are disclosed for all purposes
relative to this Agreement and all other documents referred to
herein and to the transactions contemplated herein including,
but not limited to, the representations, warranties and
undertakings and indemnities contained in this Agreement.
Where any disclosure is made in relation to a particular
warranty or representation, it shall be deemed to be given in
relation to each and every warranty or representation as the
context may permit and shall not be regarded as being so
limited.
(g) The Purchaser warrants and undertakes the filings by the
Purchaser of all and any necessary documents and reports with
the SEC as required by the applicable laws, rules and
regulations.
(h) The Purchaser warrants and undertakes to compensate each of
the Vendors against all claims, demands, losses, damages,
costs (including reasonable legal costs) or expenses which
each of the Vendors may sustain or incur as a result of or in
connection with default on the part of the Purchaser or the
breach of any obligations, representations, warranties or
undertakings herein.
(i) The Purchaser undertakes to compensate each of the Vendors
against all claims, demands, losses, damages, costs (including
reasonable legal costs), or expenses which each of the Vendors
may sustain or incur as a result of this Agreement and the
transactions contemplated hereunder having been declared or
treated as void or voidable except due to any claims brought
by any of the Vendors asserting their rights as minority
shareholders of the Purchaser.
(j) In consideration of the Vendors agreeing to enter into this
Agreement, the
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Guarantor hereby unconditionally and irrevocably guarantees to
each of the Vendors the due and punctual performance by the
Purchaser of its obligations under Clause 6.2(i) above of this
Agreement and undertakes to indemnify and keep indemnified
each of the Vendors in accordance with Clause 6.2(i) above as
if it is primarily liable to do so Provided that the Guarantor
shall only be liable under this Clause if this Agreement and
the transactions contemplated hereunder have been declared or
treated as void or voidable due to matters, events or causes
of actions occurring on or before the expiration of two (2)
years from the Completion Date. The Guarantor shall not be
discharged or released from its guarantee and undertaking
under this Clause by any arrangement made between the other
parties or by any alteration in the obligations on the part of
the Purchaser under this Agreement or by time or other
indulgence granted by any of the Vendors and this guarantee
and undertaking shall remain in force (regardless of any
change in shareholding or control of the Purchaser).
7. NOTICES AND OTHER COMMUNICATIONS
7.1 Each of the Vendors and the Warrantors hereby appoints Mr. Ma Leung of
Room 4905, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong as
its agent to receive on its behalf service of any notice or other communications
required or permitted to be given pursuant to this Agreement and process of any
proceedings in Hong Kong.
8. FURTHER ASSURANCE
8.1 Subject to Completion, each of the Warrantors and each of the Vendors
(jointly together with the respective Warrantor which owns the shares in the
Vendor but otherwise severally) agree with and undertake to the Purchaser that
at any time and from time to time upon the written request of the Purchaser,
each of the Vendors will at the costs of the Purchaser :-
(a) promptly and duly execute and deliver any and all such further
instruments and documents and do or procure to be done all and
any such acts or things as may be necessary in obtaining the
full benefit of this Agreement and of the rights and ownership
herein granted and in vesting in the Purchaser all rights,
interests and benefits in the First Sale Shares, the Second
Sale Shares, the Third Sale Shares, the Fourth Sale Shares and
the Fifth Sale Shares free from encumbrances; and
(b) do or procure to be done each and every act or thing which the
Purchaser may from time to time reasonably require to be done
for the purpose of enforcing the Purchaser's rights under this
Agreement.
8.2 Subject to Completion, the Purchaser hereby agrees with and undertakes
to the Vendors that at any time and from time to time upon the written request
of the Vendors, the Purchaser will at the costs of the Vendors:-
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(a) promptly and duly execute and deliver any and all such further
instruments and documents and do or procure to be done all and
any such acts or things as may be necessary in obtaining the
full benefit of this Agreement and of the rights and ownership
herein granted and in vesting in the respective Vendors all
rights, interests and benefits in the Consideration Shares
free from encumbrances; and
(b) do or procure to be done each and every act or thing which the
Vendors may from time to time reasonably require to be done
for the purpose of enforcing the Vendors' rights under this
Agreement.
8.3 The Purchaser undertakes to deliver to Good Achieve within 20 days of
Completion (or such later day as Good Achieve may agree) a copy of the
confirmation from the United States lawyers in a form satisfactory to Good
Achieve confirming that written notice of the consent to action by the members
approving the Share Swap Agreement has been given to all the shareholders of the
Purchaser who were not signing parties to the said consent in action, in
compliance with section 83(4) of the International Business Companies Act of the
British Virgin Islands.
9. SUCCESSORS AND ASSIGNS
9.1 This Agreement shall be binding upon each party's personal
representatives, successors and assigns.
9.2 Neither party shall be entitled to assign its rights, benefits and
claims under this Agreement (including the benefits of the representations,
warranties, undertakings and indemnities herein contained) without the prior
written consent of the other party.
10. WAIVERS AND AMENDMENTS; NONCONTRACTUAL REMEDIES
10.1 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.
11. SEVERABILITY
11.1 If any provision of this Agreement shall be held to be unenforceable
or invalid by any court of competent jurisdiction, such holding, if not
inconsistent with the parties' principal understanding, shall not affect the
enforceability or validity of the remainder of the provisions of this Agreement.
13
12. COSTS
12.1 Each party shall bear and pay its own solicitors costs and
disbursements incurred in connection with the negotiation, preparation,
execution and Completion of this Agreement.
12.2 Each party shall bear any stamp duty or other government levy or duties
payable in respect of the transfer of the relevant shares in its favour (if
any).
13. TIME
13.1 Time is of the essence of this Agreement in every respect.
14. ENTIRE AGREEMENT
14.1 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.
15. GOVERNING LAW AND JURISDICTION
15.1 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.
15.2 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.
15.3 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.
16. COUNTERPARTS
16.1 This Agreement may be executed in one or more counterparts, and by the
parties on separate counterparts, but shall not be effective until each party
has executed at least one counterpart and each such counterpart shall constitute
an original of this Agreement but all the counterparts shall together constitute
one and the same instrument.
14
THE FIRST SCHEDULE ABOVE REFERRED TO
PARTICULARS OF THE COMPANY
1. Name of the Company : SHEUNG TAI INVESTMENTS LIMITED
2. Registered Office : The offices of Offshore
Incorporations Limited, P. O.
Box 957, Offshore Incorporations
Centre, Road Town, Tortola,
British Virgin Islands
3. Date of Incorporation : 3rd February, 2003
Company No. : 532289
Place of Incorporation : British Virgin Islands
4. Directors : Zhou Li Yang
5. Authorised Share Capital : US$50,000.00 divided into 50,000
ordinary shares of US$1.00 each
Issued Share Capital : US$1,000.00 divided into 1,000
ordinary shares of US$1.00 each
7. Share held as follows :-
Registered and Whether
BENEFICIAL SHAREHOLDER NO. OF SHARES CLASS OF SHARES PAID UP
---------------------- ------------- --------------- -----------
The Purchaser 1,000 Ordinary Paid up
15
THE SECOND SCHEDULE ABOVE REFERRED TO
COMPLETION REQUIREMENTS
1. OBLIGATIONS OF THE GOOD ACHIEVE, PROFIT SPRING, ANMER, DUNKLEY AND
NATION EXPRESS
1.1 Good Achieve, Profit Spring, Anmer, Dunkley and Nation Express shall
deliver to the Purchaser :-
(a) Original share certificates of 3,005,064 ordinary shares of
US$0.0001 each in CPC.
(b) Instrument of transfer of the First Sale Shares duly executed
by Good Achieve in favour of the Purchaser or its nominee(s)
or as the Purchaser may direct.
(c) Original share certificates of 2,248,028 ordinary shares of
US$0.0001 each in CPC.
(d) Instrument of transfer of the Second Sale Shares duly executed
by Profit Spring in favour of the Purchaser or its nominee(s)
or as the Purchaser may direct.
(e) Original share certificates of 6,407,110 ordinary shares of
US$0.0001 each in CPC.
(f) Instrument of transfer of the Third Sale Shares duly executed
by Anmer in favour of the Purchaser or its nominee(s) or as
the Purchaser may direct.
(g) Original share certificates of 1,357,125 ordinary shares of
US$0.0001 each in CPC.
(h) Instrument of transfer of the Fourth Sale Shares duly executed
by Dunkley in favour of the Purchaser or its nominee(s) or as
the Purchaser may direct.
(h) Original share certificates of 830,893 ordinary shares of
US$0.0001 each in CPC.
(i) Instrument of transfer of the Fifth Sale Shares duly executed
by Nation Express in favour of the Purchaser or its nominee(s)
or as the Purchaser may direct.
1.2 Each of Good Achieve, Profit Spring, Anmer, Dunkley and Nation Express
shall upon Completion provide the Purchaser with Certificate of Incumbency
issued by their respective registered agent in British Virgin Islands.
16
2. OBLIGATIONS OF THE PURCHASER
2.1 The Purchaser shall deliver to the Vendors:-
(a) Original share certificates of 206 Consideration Shares.
(b) Instrument of transfer of the 206 Consideration Shares duly
executed by the Purchaser in favour of Good Achieve or its
nominee(s) or as Good Achieve may direct.
(c) Original share certificates of 154 Consideration Shares.
(d) Instrument of transfer of the 154 Consideration Shares duly
executed by the Purchaser in favour of Good Achieve as
directed by Profit Spring.
(e) Original share certificates of 477 Consideration Shares.
(f) Instrument of transfer of the 477 Consideration Shares duly
executed by the Purchaser in favour of Anmer or its nominee(s)
or as Anmer may direct.
(g) Original share certificates of 100 Consideration Shares.
(h) Instrument of transfer of the 100 Consideration Shares duly
executed by the Purchaser in favour of Dunkley or its
nominee(s) or as Dunkley may direct.
(i) Original share certificates of 63 Consideration Shares.
(j) Instrument of transfer of the 63 Consideration Shares duly
executed by the Purchaser in favour of Dunkley as directed by
Nation Express.
(k) Signed letters of resignation of Zhou Li Yang, the sole
director of the Company as director of the Company with effect
on the Completion Date, such resignations to contain a
confirmation that he has and will make no claim against the
Company in respect of disbursements, compensation for loss of
office, unpaid directors' fee or, without limitations,
otherwise howsoever.
2.2 The Purchaser shall at its own costs and expenses procure :-
(a) Zhou Li Yang, the sole director of the Company, immediately
prior to Completion to resign as director of the Company
without compensation or other payment for loss of office.
(b) Zhou Li Yang, the sole director of the Company immediately
prior to Completion to sign the necessary written resolution
of the Company to approve:
17
(i) the appointment of such persons to be nominated by
the Vendors to be director(s) in place of the
resigning director as aforesaid;
(ii) the registration of the Consideration Shares in the
respective names of the Vendors and/or their
respective nominee(s) or as the respective Vendors
shall direct;
(iii) the transfer of the Consideration Shares (subject to
due stamping of the instrument of transfer, if
required);
(iv) such other matters as shall be dealt with and
resolved upon as the Vendors shall reasonably require
for perfecting the transfer of the Consideration
Shares to the Vendors or their respective nominee(s)
or as the respective Vendors shall direct; and
(v) the resignation as director of Zhou Li Yang, the sole
director of the Company as mentioned in the last
preceding Sub-clause (a).
2.3 The Purchaser shall (if it has not done so) deliver to Good Achieve all
of the documents relating to the Company, its subsidiaries or their
respective businesses which are in the possession and custody of the
Purchaser or its ultimate controlling shareholder.
18
THE THIRD SCHEDULE ABOVE REFERRED TO
REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS OF THE VENDORS AND THE WARRANTORS
1. OWNERSHIP OF THE FIRST SALE SHARES, THE SECOND SALE SHARES, THE THIRD
SALE SHARES, THE FOURTH SALE SHARES AND THE FIFTH SALE SHARES
1.1 Good Achieve, Profit Spring, Anmer, Dunkley and Nation Express are
respectively the beneficial owners of the First Sale Shares, the Second Sale
Shares, the Third Sale Shares, the Fourth Sale Shares and the Fifth Sale Shares
and will have on Completion the right, power and authority to sell and transfer
its entire interests respectively in the First Sale Shares, the Second Sale
Shares, the Third Sale Shares, the Fourth Sale Shares and the Fifth Sale Shares
to the Purchaser free from encumbrances.
1.2 All existing mortgage, charge or encumbrances on the First Sale Shares,
the Second Sale Shares, the Third Sale Shares, the Fourth Sale Shares and the
Fifth Sale Shares (if any) will be discharged before Completion.
2. COMPLIANCE WITH LEGAL REQUIREMENT
2.1 Each of the Vendors has been duly incorporated and constituted, and is
legally subsisting under the law of its place of incorporation, and there has
been no resolution, petition or order for the winding-up of each of the Vendors
and no receiver has been appointed in respect thereof or any part of the assets
thereof, nor are any such resolutions, orders and appointments imminent or
likely.
2.2 Each of the Vendors is solvent, have full power and authority, and has
obtained all necessary consents and approvals, to enter into this Agreement and
to exercise their respective rights and perform their respective obligations
hereunder and all corporate and other actions required to authorize the
execution of this Agreement and their respective performance of their respective
obligations hereunder have been duly taken.
2.3 The execution delivery and performance by the respective Vendors of
this Agreement will not violate in any respect of any of:
(a) any law or regulation or any order or decree of any
governmental authority, agency or court of Hong Kong or the
British Virgin Islands;
(b) the laws and documents incorporating and constituting the
respective Vendors; or
(c) any agreement or other undertaking to which the respective
Vendors is/are party/parties or which is/are binding upon the
Vendors or any of their respective assets, and does not and
shall not result in the creation or imposition of any
encumbrance on any of their respective assets pursuant to the
provisions of any such agreement or other undertaking.
19
3. SEVERAL LIABILITIES
3.1 The representations, warranties and undertakings given by the Vendors
and the Warrantors in this Schedule and in this Agreement shall, as regards each
Vendor and its respective Warrantor, relate to the particular Vendor or
Warrantor and to the Sale Shares beneficially owned by them only.
20
THE FOURTH SCHEDULE ABOVE REFERRED TO
REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS BY THE PURCHASER
1. OWNERSHIP OF THE CONSIDERATION SHARES
1.1 The Purchaser is the beneficial owner of the Consideration Shares and
will have on Completion the right, power and authority to sell and transfer its
entire interests in the Consideration Shares to the Vendors free from
encumbrances.
1.2 The Purchaser warrants that all existing mortgages, charges or
encumbrances on the Consideration Shares (if any) will be discharged before
Completion.
1.3 The Merger has been completed in accordance with the applicable laws,
rules and regulations, a summary of which has been accurately stated in Recital
(H).
2. COMPLIANCE WITH LEGAL REQUIREMENTS
2.1 The Purchaser has been duly incorporated and constituted, and is
legally subsisting under the law of its place of incorporation, and there has
been no resolution, petition or order for the winding-up of the Purchaser and no
receiver has been appointed in respect thereof or any part of the assets
thereof, nor are any such resolutions, orders and appointments imminent or
likely.
2.2 The Purchaser is solvent upon signing of this Agreement and up to and
including the time of Completion, has full power and authority, and has obtained
all necessary consents and approvals, to enter into this Agreement and to
exercise its rights and perform its obligations hereunder and all corporate and
other actions required to authorize the execution of this Agreement and its
performance of its obligations hereunder have been duly taken.
2.3 The execution delivery and performance by the Purchaser of this
Agreement will not violate in any respect of any of :
(a) any law or regulation or any order or decree of any
governmental authority, agency or court of Hong Kong or the
United States of America or the British Virgin Islands;
(b) the laws and documents incorporating and constituting the
Purchaser; or
(c) any agreement or other undertaking to which the Purchaser is a
party or which is binding upon it or any of its assets, and
does not and shall not result in the creation or imposition of
any encumbrance on any of its assets pursuant to the
provisions of any such agreement or other undertaking.
2.4 All the resolutions of the board and shareholders of the Company (if
any) passed during the period while the Purchaser was a shareholder of the
Company have been produced to the Vendors before the signing of this Agreement.
21
THE FIFTH SCHEDULE ABOVE REFERRED TO
DOCUMENTS TO BE PRODUCED IN RELATION TO
ZHEJIANG UNIVERSITY PHARMACEUTICAL CO. LTD.
[Name in Chinese omitted]
1. Trial balance.
2. A list of related parties and related party transactions together with the
relevant documents during the period from the 24th day of May, 2004 to the
Completion Date ("CPIC Ownership Period").
3. A list of descriptions and evaluations for any and all litigation asserted
and unasserted claims and assessments, if applicable, together with the
relevant documents during the CPIC Ownership Period.
4. A list of all law firms with names and addresses retained during the CPIC
Ownership Period together with authorization to each of those law firms
release information to the Purchaser.
5. Invoices and Statements received from law firms during the CPIC Ownership
Period.
6. Minutes of all board meetings during the CPIC Ownership Period.
7. Bank statements of all bank accounts CPIC Ownership Period.
8. A letter signed by a director certifying compliance with all laws and
regulations.
9. All contracts and agreements including but not limited to lease
agreements, employment agreements, promissory notes, loan agreements
entered into during the CPIC Ownership Period.
10. Bank reconciliation statements of all bank accounts during the CPIC
Ownership Period.
11. Copies of Forms 1099, 1096, 941 and 940 for 2003, where applicable.
12. A list of "Accounts Payable" together with the relevant documents during
the CPIC Ownership Period.
13. A list showing details on any liens placed on any of the Company assets
together with the relevant documents during the CPIC Ownership Period.
14. A list showing of "Accounts Receivable" and subsequent settlement together
with the relevant documents during the CPIC Ownership Period.
15. Books of accounts and supporting vouchers covering the CPIC Ownership
Period.
22
16. Articles of Incorporation / bye-laws and Business Permit.
17. Expenditure ledger together with supporting vouchers and documents during
the CPIC Ownership Period.
18. Bank ledger or Cheque Register of all bank accounts during the CPIC
Ownership Period.
19. A completed and duly signed standard checklist of the auditor of the
Purchaser for internal control systems and processes over cash
disbursements, cash receipts and payrolls for the purpose of Section 404
of the Sarbanes-Oxley Act of 2002.
20. Audit work papers from the auditors of Zhejiang University Pharmaceutical
Co. Ltd. [Name in Chinese omitted], if required.
21. Any and all other standard audit information as requested by the auditor
of the Purchaser.
23
AS WITNESS the parties hereto have executed this Agreement the day and
year first above written.
GOOD ACHIEVE
SIGNED by )
Ma Leung )
for and on behalf of )
Good Achieve Investments Limited )
in the presence of :- )
MA LEUNG
SIGNED by Ma Leung )
In the presence of:- )
24
PROFIT SPRING
SIGNED by )
Chen Ming You )
for and on behalf of Profit Spring )
International Limited in the presence )
of :- )
CHEN MING YOU
SIGNED by Chen Ming You )
In the presence of:- )
25
ANMER
SIGNED by )
Han Hong Lu )
for and on behalf of Anmer Capital )
Limited in the presence of :- )
HAN HONG LU
SIGNED by Han Hong Lu )
In the presence of:- )
26
DUNKLEY
SIGNED by )
Alan Li )
for and on behalf of Dunkley )
International Limited in the presence )
of :- )
ALAN LI
SIGNED by Alan Li )
In the presence of:- )
27
NATION EXPRESS
SIGNED by )
Guo Jianjun )
for and on behalf of Nation Express )
Limited in the presence of :- )
GUO JIANJUN
SIGNED by Guo Jianjun )
In the presence of:- )
28
PURCHASER
SIGNED by )
)
for and on behalf of China )
Pharmaceuticals International )
Corporation in the presence of :- )
GUARANTOR
SEALED with the Common Seal )
of DiChain and SIGNED by )
)
a person authorized by its Board of Directors )
in the presence of:- )
29