Common use of Representation, Warranties and Undertakings Clause in Contracts

Representation, Warranties and Undertakings. 7.1. For the purpose of this Contract, Party A makes the following unconditional and irrevocable representations and warranties to Party B: (1) Party A is an enterprise established and existing pursuant to the laws of the PRC and is an independent corporate legal person; (2) Party A has the power and legal capacity to execute and perform this Contract and all other documents related to the Contract where Party A is a party; (3) Party A has taken all measures and obtained all authorizations to execute this Contract and all other related documents where Party A is a party; (4) Party A has obtained all approvals, consents, authorizations and permissions from relevant governmental authorities to execute this Contract, Articles of Association and Appendices; and (5) Party A is the lawful owner of and has full and valid title to the contribution made by Party A to the JVC, free and clear of any securities, mortgages, pledges, lien and/or other encumbrance/debt and/or third party rights or claims. 7.2. For the purpose of this Contract, Party B makes the following unconditional and irrevocable representations and warranties to Party A: (1) Party B is a limited liability company established and existing pursuant to the laws of its place of registration and is an independent corporate legal person; (2) Party B has the power and legal capacity to execute and perform this Contract and all other documents related to the Contract where Party B is a party; (3) Party B has taken all measures and obtained all authorizations to execute this Contract and all other related documents where Party B is a party; (4) Party B has obtained all approvals, consents, authorizations and permissions to execute this Contract, Articles of Association and Appendices; and (5) Party B is the lawful owner of and has full and valid title to the contribution made by Party B to the JVC, free and clear of any securities, mortgages, pledges, lien and/or other encumbrance/debt and/or third party rights or claims.. 7.3. Upon negotiations, Party A or Party B agrees to make the following unconditional and irrevocable representations, warranties and undertakings: (1) the assets and liabilities as of the date hereof which have been confirmed in writing by Party B will be transferred to the JVC by Party A. Any asset or liability that is not confirmed by Party B shall be owned or assumed by Party A, and Party A warrants it will be responsible for any issues arising therefrom, and guarantees the JVC will not be involved in any economic or legal disputes or suffer any losses arising therefrom; (2) the balance sheet confirmed by the Parties will be audited by a qualified accounting firm in China appointed by the Parties. The audited financial statements shall be used as the basis for the general ledger the JVC; (3) considering that a) Party A is in continual operation as a going concern; b) the balance sheet in Appendix A hereto solely reflects the transaction price of the Party A’s Assets as agreed by both Parties based on appraisal, and c) there have been changes in the balance sheet from the appraisal date to the Date of Establishment, the Parties agree to appoint a qualified accounting firm in China to audit the financial statements of Party A’s Assets for a period ended on the Date of Establishment (the “Audited Financial Statements”), and adjust the financial statements in Appendix A hereto on the basis of the Audited Financial Statements. The JVC will prepare its accounts on the basis of the Audited Financial Statements; (4) Party A represents and warrants that all information related to the assets and liabilities disclosed to Party B is complete, true and valid. Party A shall indemnify the JVC against any damages and losses incurred or suffered by the JVC arising from any untrue statements by Party A; (5) starting from the Date of Establishment, Party A shall assist the JVC in counting, stocktaking and confirming the assets, and deliver to the JVC all assets, documents and materials that the JVC shall be entitled to, and the JVC shall then confirm the receipts of the above in writing to Party A; (6) Party A represents and warrants that a) all land, power and environmental facilities as part of Party A’s contribution into the JVC are in compliance with regulatory requirements and in good working conditions; and b) Party A has not received any order or other instructions from any governmental authority, requiring Party A to change land use, or add, expand or remodel any facilities to fulfil regulatory requirements; (7) in connection with the account receivables confirmed by both Parties as listed in the balance sheet in Appendix A hereto, Party A shall execute contracts, agreements or confirmation letters with relevant enterprises or individual debtors (the “Debtors”), whereby the Debtors shall confirm the amount owed by them to the JVC and undertake to pay the confirmed amount to the JVC within three months from the Date of Establishment. Any amount that has not been confirmed or paid by Debtors shall be deducted from the balance sheet and Party B may reduce its capital contribution into the JVC by an amount equals to such unpaid or unconfirmed amount; (8) the liquid liabilities confirmed by both Parties as listed in balance sheet in Appendix A hereto are the maximum liabilities that the JVC agrees to assume. Party A shall handle or settle any additional or unrecorded liabilities and guarantee the JVC will not be held responsible for such liabilities or suffer any damages; (9) Party A shall obtain the approval of the transfer of the state-owned assets to the JVC from the competent State-owned Assets Administration Office; (10) Party A agrees to assist the JVC in obtaining loans from banks on terms and conditions no less favourable than those offered to Party A. JVC shall grant security interests over its assets as the banks may require. The Parties shall provide guarantee in favour of the banks in proportion to their ownership percentage in the JVC if additional guarantee is required. Before it obtains such loans from the banks, the JVC will confirm to Party A in writing that it would assume a loan of [**] listed on Party A’s balance sheet. This confirmation letter will become invalid on the date when the loans are deposited in JVC’s account; (11) Party A shall be responsible for dealing with the legal and economic relations and assume any liabilities in connection with its investment projects or tertiary industry projects that are not taken over by the JVC, and ensure, under no circumstance will the JVC be liable for any consequences in connection with the projects. (12) in connection with Party A’s in-kind contribution of inventory to the JVC, Party A warrants that a) the inventory (including raw materials, finished drug products and packaging materials) is relevant to the [**] product Varieties of the JVC; b) the raw materials and auxiliary ingredients comply with the quality standard and requirements; and c) and the semi-finished products and finished products of the traditional Chinese medicine have not expired. Party B may engage a pharmaceutical research institute to test the inventory as it deems necessary, and pharmaceutical research institute’s decision shall be final and binding. Any inventory which does not comply with the aforesaid requirements will not be accepted as part of the contribution to the JVC, and Party B may reduce its contribution to the JVC by an amount equals to the value of such unqualified inventory. (13) after the establishment of the JVC, Party A shall procure that the employees of the No.1 Chinese Traditional Medicine Factory who would be retained by the JVC enter into the employment contracts with the JVC. Party A shall be responsible for the employees who are not retained by the JVC (the “Redundant Employees”). Except for the redundancy payment provided by Party B and paid by the JVC as stipulated in Section 14.4 herein, the JVC shall not have any legal or economic responsibilities for the Redundant Employees. The Parties agree that upon the establishment of the JVC, the number of employees required shall be [**]; (14) Party A guarantees it shall be responsible for all taxes (sales tax, value-added tax and income tax, etc.) and employees’ taxes (including, without limitation, personal income tax), social welfare funds and other expenses incurred prior to Date of Establishment of the JVC, and ensures that the JVC has nothing to do with these taxes and expenses. Party A undertakes that from the Date of Establishment of the JVC, it shall assist the JVC in maintaining its normal operation and keeping all supply chains (including but not limited supply chains related to raw materials, auxiliary ingredients, packaging materials, semi-finished products) running smoothly; (15) Party A warrants that it is the lawful owner of the “Two Certificates”, “Product Certificate or Product Approval” and “Shanghai Pharma” trademark, and no third party has raised or will raise any claim or objection in respect of such ownership. Party A has full right to transfer the “Two Certificates”, “Product Certificate or Product Approval” and “Shanghai Pharma” trademark to the JVC. Party A undertakes that starting from the Date of Establishment of the JVC, it will stop production and cease all use of the “Two Certificates”, “Product Certificate or Product Approval” and “Shanghai Pharma” trademark, provided that Party A has a grace period of six months to use the “Shanghai Pharma” trademark so that it can continue to sell any inventory of packaging materials with Shanghai Pharma” trademark until such materials have been consumed. The grace period shall not exceed six months from the date hereof. The inventory of packaging materials are listed in Appendix J hereto and the grace period shall not apply to any product that is not included in the list. (16) the Parties undertake that they will assist the JVC in protecting the “Shanghai Pharma” trademark and preventing any infringement, counterfeiting or other diminution in value (the “Infringement”), and they will immediately notify the senior management of the JVC if they detect any Infringement, so the JVC can take necessary actions to stop such Infringement and seek remedies against infringers ; (17) Party A ensures that the JVC has autonomy to recruit any employee to fill a position at any time without any constraint, and Party A, its Associated Company or its Affiliate will not object or hinder the JVC from recruiting any employee who has worked for Shanghai Pharmaceuticals Holding Co., Ltd., its Affiliate or Associated Company; and (18) the Parties hereby agree that Party A shall be responsible for all debts and liabilities (except for the accounts payable listed in Appendix A hereto that will be assumed by the JVC as agreed by Party B) related to Party A’s Contracts (listed in Appendix B hereto) occurred prior to the date on which Party A’s Contracts (Appendix B hereto) are transferred to the JVC (the “Transfer Date”), and under no circumstance, will the JVC be responsible for such debts or liabilities. Party A shall indemnity, reimburse and hold the JVC harmless from any losses (including proceedings and legal fees) incurred by the JVC arising out of or resulting from any third party claim or demand brought after the Transfer Date against the JVC with respect to Party A’s above debts or liabilities. Party A shall be entitled to any benefits arising under Party A’s Contracts relating to claims or rights incurred or brought against any third party prior to the Transfer Date. The JVC agrees to assist Party A in exercising or realizing such right or claim as and when needed. If the JVC receives any proceeds relating to such claims or rights as a result of the assumption of Party A’s Contracts, it shall immediately pay such proceeds to Party A. JVC shall assume any right, obligation, risk and liability under Party A’s Contracts occurred after the Transfer Date pursuant to this Contract. Should Party A has received any advance payment or realized any rights ahead of time prior to the Transfer Date, Party A shall immediately pay the received amount to the JVC or transfer the realized rights to the JVC for free. Party A shall be responsible for all liabilities and obligations under the contracts that are not transferred to the JVC, and the JVC has nothing to do with such contracts.

Representation, Warranties and Undertakings. 7.1. For the purpose of this Contract, Party A makes the following unconditional and irrevocable representations and warranties to Party B: (1) Party A is an enterprise established and existing pursuant to the laws of the PRC and is an independent corporate legal person; (2) Party A has the power and legal capacity to execute and perform this Contract and all other documents related to the Contract where Party A is a party; (3) Party A has taken all measures and obtained all authorizations to execute this Contract and all other related documents where Party A is a party; (4) Party A has obtained all approvals, consents, authorizations and permissions from relevant governmental authorities to execute this Contract, Articles of Association and Appendices; and (5) Party A is the lawful owner of and has full and valid title to the contribution made by Party A to the JVC, free and clear of any securities, mortgages, pledges, lien and/or other encumbrance/debt and/or third party rights or claims. 7.2. For the purpose of this Contract, Party B makes the following unconditional and irrevocable representations and warranties to Party A: (1) Party B is a limited liability company established and existing pursuant to the laws of its place of registration and is an independent corporate legal person; (2) Party B has the power and legal capacity to execute and perform this Contract and all other documents related to the Contract where Party B is a party; (3) Party B has taken all measures and obtained all authorizations to execute this Contract and all other related documents where Party B is a party; (4) Party B has obtained all approvals, consents, authorizations and permissions to execute this Contract, Articles of Association and Appendices; andand [**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. (5) Party B is the lawful owner of and has full and valid title to the contribution made by Party B to the JVC, free and clear of any securities, mortgages, pledges, lien and/or other encumbrance/debt and/or third party rights or claims.. 7.3. Upon negotiations, Party A or Party B agrees to make the following unconditional and irrevocable representations, warranties and undertakings: (1) the assets and liabilities as of the date hereof which have been confirmed in writing by Party B will be transferred to the JVC by Party A. Any asset or liability that is not confirmed by Party B shall be owned or assumed by Party A, and Party A warrants it will be responsible for any issues arising therefrom, and guarantees the JVC will not be involved in any economic or legal disputes or suffer any losses arising therefrom; (2) the balance sheet confirmed by the Parties will be audited by a qualified accounting firm in China appointed by the Parties. The audited financial statements shall be used as the basis for the general ledger the JVC; (3) considering that a) Party A is in continual operation as a going concern; b) the balance sheet in Appendix A hereto solely reflects the transaction price of the Party A’s Assets as agreed by both Parties based on appraisal, and c) there have been changes in the balance sheet from the appraisal date to the Date of Establishment, the Parties agree to appoint a qualified accounting firm in China to audit the financial statements of Party A’s Assets for a period ended on the Date of Establishment (the “Audited Financial Statements”), and adjust the financial statements in Appendix A hereto on the basis of the Audited Financial Statements. The JVC will prepare its accounts on the basis of the Audited Financial Statements; (4) Party A represents and warrants that all information related to the assets and liabilities disclosed to Party B is complete, true and valid. Party A shall indemnify the JVC against any damages and losses incurred or suffered by the JVC arising from any untrue statements by Party A; (5) starting from the Date of Establishment, Party A shall assist the JVC in counting, stocktaking and confirming the assets, and deliver to the JVC all assets, documents and materials that the JVC shall be entitled to, and the JVC shall then confirm the receipts of the above in writing to Party A; (6) Party A represents and warrants that a) all land, power and environmental facilities as part of Party A’s contribution into the JVC are in compliance with regulatory requirements and in good working conditions; and b) Party A has not received any order or other instructions from any governmental authority, requiring Party A to change land use, or add, expand or remodel any facilities to fulfil regulatory requirements;; [**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. (7) in connection with the account receivables confirmed by both Parties as listed in the balance sheet in Appendix A hereto, Party A shall execute contracts, agreements or confirmation letters with relevant enterprises or individual debtors (the “Debtors”), whereby the Debtors shall confirm the amount owed by them to the JVC and undertake to pay the confirmed amount to the JVC within three months from the Date of Establishment. Any amount that has not been confirmed or paid by Debtors shall be deducted from the balance sheet and Party B may reduce its capital contribution into the JVC by an amount equals to such unpaid or unconfirmed amount; (8) the liquid liabilities confirmed by both Parties as listed in balance sheet in Appendix A hereto are the maximum liabilities that the JVC agrees to assume. Party A shall handle or settle any additional or unrecorded liabilities and guarantee the JVC will not be held responsible for such liabilities or suffer any damages; (9) Party A shall obtain the approval of the transfer of the state-owned assets to the JVC from the competent State-owned Assets Administration Office; (10) Party A agrees to assist the JVC in obtaining loans from banks on terms and conditions no less favourable than those offered to Party A. JVC shall grant security interests over its assets as the banks may require. The Parties shall provide guarantee in favour of the banks in proportion to their ownership percentage in the JVC if additional guarantee is required. Before it obtains such loans from the banks, the JVC will confirm to Party A in writing that it would assume a loan of [**] listed on Party A’s balance sheet. This confirmation letter will become invalid on the date when the loans are deposited in JVC’s account; (11) Party A shall be responsible for dealing with the legal and economic relations and assume any liabilities in connection with its investment projects or tertiary industry projects that are not taken over by the JVC, and ensure, under no circumstance will the JVC be liable for any consequences in connection with the projects. (12) in connection with Party A’s in-kind contribution of inventory to the JVC, Party A warrants that a) the inventory (including raw materials, finished drug products and packaging materials) is relevant to the [**] product Varieties of the JVC; b) the raw materials and auxiliary ingredients comply with the quality standard and requirements; and c) and the semi-finished products and finished products of the traditional Chinese medicine have not expired. Party B may engage a pharmaceutical research institute to test the inventory as it deems necessary, and pharmaceutical research institute’s decision shall be final and binding. Any inventory which does not comply with the aforesaid requirements will not be accepted as part of the contribution to the JVC, and Party B may reduce its contribution to the JVC by an amount equals to the value of such unqualified inventory. [**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. (13) after the establishment of the JVC, Party A shall procure that the employees of the No.1 Chinese Traditional Medicine Factory who would be retained by the JVC enter into the employment contracts with the JVC. Party A shall be responsible for the employees who are not retained by the JVC (the “Redundant Employees”). Except for the redundancy payment provided by Party B and paid by the JVC as stipulated in Section 14.4 herein, the JVC shall not have any legal or economic responsibilities for the Redundant Employees. The Parties agree that upon the establishment of the JVC, the number of employees required shall be [**]; (14) Party A guarantees it shall be responsible for all taxes (sales tax, value-added tax and income tax, etc.) and employees’ taxes (including, without limitation, personal income tax), social welfare funds and other expenses incurred prior to Date of Establishment of the JVC, and ensures that the JVC has nothing to do with these taxes and expenses. Party A undertakes that from the Date of Establishment of the JVC, it shall assist the JVC in maintaining its normal operation and keeping all supply chains (including but not limited supply chains related to raw materials, auxiliary ingredients, packaging materials, semi-finished products) running smoothly; (15) Party A warrants that it is the lawful owner of the “Two Certificates”, “Product Certificate or Product Approval” and “Shanghai Pharma” trademark, and no third party has raised or will raise any claim or objection in respect of such ownership. Party A has full right to transfer the “Two Certificates”, “Product Certificate or Product Approval” and “Shanghai Pharma” trademark to the JVC. Party A undertakes that starting from the Date of Establishment of the JVC, it will stop production and cease all use of the “Two Certificates”, “Product Certificate or Product Approval” and “Shanghai Pharma” trademark, provided that Party A has a grace period of six months to use the “Shanghai Pharma” trademark so that it can continue to sell any inventory of packaging materials with Shanghai Pharma” trademark until such materials have been consumed. The grace period shall not exceed six months from the date hereof. The inventory of packaging materials are listed in Appendix J hereto and the grace period shall not apply to any product that is not included in the list. (16) the Parties undertake that they will assist the JVC in protecting the “Shanghai Pharma” trademark and preventing any infringement, counterfeiting or other diminution in value (the “Infringement”), and they will immediately notify the senior management of the JVC if they detect any Infringement, so the JVC can take necessary actions to stop such Infringement and seek remedies against infringers ; (17) Party A ensures that the JVC has autonomy to recruit any employee to fill a position at any time without any constraint, and Party A, its Associated Company or its Affiliate will not object or hinder the JVC from recruiting [**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. any employee who has worked for Shanghai Pharmaceuticals Holding Co., Ltd., its Affiliate or Associated Company; and (18) the Parties hereby agree that Party A shall be responsible for all debts and liabilities (except for the accounts payable listed in Appendix A hereto that will be assumed by the JVC as agreed by Party B) related to Party A’s Contracts (listed in Appendix B hereto) occurred prior to the date on which Party A’s Contracts (Appendix B hereto) are transferred to the JVC (the “Transfer Date”), and under no circumstance, will the JVC be responsible for such debts or liabilities. Party A shall indemnity, reimburse and hold the JVC harmless from any losses (including proceedings and legal fees) incurred by the JVC arising out of or resulting from any third party claim or demand brought after the Transfer Date against the JVC with respect to Party A’s above debts or liabilities. Party A shall be entitled to any benefits arising under Party A’s Contracts relating to claims or rights incurred or brought against any third party prior to the Transfer Date. The JVC agrees to assist Party A in exercising or realizing such right or claim as and when needed. If the JVC receives any proceeds relating to such claims or rights as a result of the assumption of Party A’s Contracts, it shall immediately pay such proceeds to Party A. JVC shall assume any right, obligation, risk and liability under Party A’s Contracts occurred after the Transfer Date pursuant to this Contract. Should Party A has received any advance payment or realized any rights ahead of time prior to the Transfer Date, Party A shall immediately pay the received amount to the JVC or transfer the realized rights to the JVC for free. Party A shall be responsible for all liabilities and obligations under the contracts that are not transferred to the JVC, and the JVC has nothing to do with such contracts.