ACQUISITION AGREEMENT
THIS AGREEMENT executed as of October 6, 2000,
AMONG:
DRAGON PHARMACEUTICALS INC., a company organized and existing under the
Laws of the State of Florida, the United States of America, having a
principal place of business at 0000 - 000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx,
X.X., X0X 0X0
("Dragon")
AND:
ALPHATECH BIOENGINEERING LIMITED, a company organized and existing under
the Laws of Hong Kong having its registered office at 00 Xxx Xxxxx Xxxx
Xxxxxxx, 00xx Xxxxx, Xxxx Xxxx
("Alphatech")
AND:
LONGBIN LIU, of 0000 - 000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, X.X., X0X 0X0
AND:
XXXXXX XXXX, of 00 Xxx Xxxxx Xxxx Xxxxxxx, 00xx Xxxxx, Xxxx Xxxx
(together the "Shareholders")
WHEREAS:
(A) Dragon carries on the business of the development, production and marketing
of recombinant protein medicines;
(B) Alphatech owns certain assets and technology relating to the production of
vaccines;
(C) Shareholders are the sole shareholders of Alphatech; and
(D) Alphatech has agreed to sell certain of such assets and technology, as well
as certain rights related thereto, to Dragon on the terms and subject to
the conditions hereinafter contained;
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration for the sum of
$10.00 and the mutual covenants and agreements herein contained, and other good
and valuable consideration the sufficiency and receipt of which are hereby
acknowledged, the parties mutually agree as follows:
Part 1
INTERPRETATION
Definitions
1.1 In this Agreement, including the recitals, except as otherwise expressly
provided or unless the context otherwise requires,
Affiliate means a company that is related to another company by virtue of
the fact that the first company is, directly or indirectly, a subsidiary of
the second company or both companies are, directly or indirectly,
subsidiaries of the same company or each company is, directly or
indirectly, controlled by the same person or company;
Assets means all the assets ordinarily used, or in which Alphatech hold
rights, in connection with the Business, including
(a) the Books and Records,
(b) the Cells,
(c) the Material Contracts,
(d) the Rights, and
(e) the Technology,
and all other tangible and intangible property and assets used in
connection with the Business whether located on Alphatech's premises or
otherwise;
Assumed Liabilities means those Liabilities set out in Schedule D ;
Books and Records means all books, records, files, documents and other
written, electronically maintained or computer accessed information
relating solely to the Assets or the Business;
Business means the business of producing Hepatitis B vaccine through the
application of genetic techniques on hamster ovary cells including the
culturing of the Cells and the purification of the HBsAg from the culture
of the Cells;
Business Day means a day that is not a Saturday or a Sunday or a British
Columbia provincial, Canadian federal, Florida state, United States federal
holiday or Hong Kong holiday;
Cells means a cell-line of hamster ovary cells and in particular a HBsAgCHO
cell culture, which act as a host expression system for the production of
HBsAg;
Confidential Information means all information (including, without
limitation, trade secrets, know-how, specifications, analyses, formulae,
drawings, data, reports, patterns, devices, plans, processes, or
compilations) and any other documentation, whether written, graphic or
stored electronically or magnetically, belonging to either Party or any of
its Affiliates, including:
(a) all proprietary information licensed to or acquired, used or developed
by the party including information in respect of laboratory or
research procedures and techniques, research data, chemical
compositions and processes and other scientific strategies and
concepts; and
(b) all information relating to the party's business, structure,
personnel, operations, financial condition, marketing, advertising and
commercial strategies, customer and supplier lists, agreements and
contractual records and correspondence that may not be generally
known;
Closing means the completion of the sale and purchase of the Assets
hereunder by the transfer and conveyance thereof and the completion of any
other related or ancillary matters all as provided herein, and "Closing
Time" means the time that Closing occurs;
Closing Date means October 13, 2000, or such other date as is agreed upon
by the parties;
Encumbrance means any mortgage, charge, pledge, hypothecation, lien,
easement, right-of-way, encroachment, security interest, covenant,
condition, right of re-entry, right of possession, lease, license,
assignment, option, claim or other title defect, encumbrance or charge
whatsoever, whether or not registered or registrable and whether or not
consensual or arising by law, statutory or otherwise, that secures the
payment of any Liabilities or the performance of any obligation or creates
in favour of or grants to any Person a proprietary right;
Governmental Authority means, as applicable, the government of Canada, the
government of the United States of America, the government of a Canadian
province or territory, the government of a state in the United States of
America, the government of Hong Kong, and a ministry, department,
commission, board, bureau or other agency of, or municipality, regional
district or other local governing body established by, any such government,
or other political subdivision thereof and includes any Person exercising
executive, legislative, judicial, regulatory or administrative functions
of, or pertaining to, any such government;
Hazardous Substance includes any contaminants, pollutants, dangerous
substances, liquid wastes, industrial wastes, hauled liquid wastes, toxic
substances, hazardous wastes, hazardous materials, or hazardous substances
as defined in or pursuant to any law, judgment, decree, order, injunction,
rule, statute and regulation of any court, arbitrator or Governmental
Authority by which the Business, the Assets or Alphatech is bound or to
which Business, the Assets or Alphatech is subject;
HBsAg means Hepatitis B vaccine protein;
Liabilities in respect of a Person means collectively, all liabilities,
indebtedness, capitalized lease obligations, advances, debts, duties,
endorsements, guarantees, obligations, responsibilities and undertakings of
such Person assumed, created, incurred, or made, or to which such Person is
bound or subject, whether voluntary or involuntary, however arising,
whether due or not due, absolute, inchoate or contingent, liquidated or
unliquidated, determined or undetermined, direct or indirect, express or
implied, and whether in respect of which such Person is liable individually
or jointly with others;
Material Contracts means all contracts, engagements or commitments, whether
written or oral, to which Alphatech is entitled in connection with the
Business including the right, title and interest of Alphatech in the
material agreements and contracts described in Schedule C;
Permitted Encumbrances means the Encumbrances described in Schedule D;
Person means an individual, corporation, body corporate, firm, limited
liability company, partnership, syndicate, joint venture, society,
association, trust, unincorporated organization or Governmental Authority
or any trustee, executor, administrator or other legal representative;
Purchase Price has the meaning assigned to it in ss.3.1;
Rights means the right to commercialize, manufacture, have manufactured,
market and sublicense the Technology; and
Technology means all ideas, methods, inventions, know-how, trade secrets,
techniques and formulations developed or acquired or licensed by Alphatech
relating to the Cells and the commercial production of HBsAg and a
Hepatitis B vaccine, including methods for industrial scale-up,
purification and vaccine production.
Interpretation
1.2 In this Agreement, except as expressly provided or unless the context
otherwise requires,
(a) "this Agreement" means this Acquisition Agreement, including the
Schedules hereto, as from time to time supplemented or amended by one
or more agreements entered into pursuant to the applicable provisions
hereof,
(b) the headings in this Agreement are inserted for convenience only and
do not form a part of this Agreement and are not intended to
interpret, define or limit the scope, extent or intent of this
Agreement or any provision hereof,
(c) the word "including", when following any general statement or term, is
not to be construed as limiting the general statement or term to the
specific items or matters set forth or to similar items or matters,
but rather as permitting the general statement or term to refer to all
other items or matters that could reasonably fall within its broadest
possible scope,
(d) all accounting terms not otherwise defined herein have the meanings
assigned to them, and all calculations to be made hereunder are to be
made, in accordance with United States generally accepted accounting
principles applied on a consistent basis,
(e) all references to currency mean currency of the United States of
America,
(f) a reference to a statute includes all regulations made thereunder, all
amendments to the statute or regulations in force from time to time,
and any statute or regulation that supplements or supersedes such
statute or regulations,
(g) a reference to an entity includes any successor to that entity,
(h) words importing the masculine gender include the feminine or neuter,
words in the singular include the plural, words importing a corporate
entity include individuals, and vice versa,
(i) a reference to "approval", "authorization" or "consent" means written
approval, authorization or consent, and
(j) a reference to a Part is to a Part of this Agreement and the symbol
ss. followed by a number or some combination of numbers and letters
refers to the section, paragraph, subparagraph, clause or subclause of
this Agreement so designated.
1.3 The Schedules attached hereto are incorporated in this Agreement by
reference and deemed to form a part hereof.
Part 2
PURCHASE AND SALE
Assets
2.1 On the Closing Date, Dragon will purchase from Alphatech and Alphatech will
sell, assign and transfer to Dragon all of its right, title and interest in
the Assets, free and clear of all Encumbrances, except the Permitted
Encumbrances.
Excluded Assets and Liabilities
2.2 Dragon is only purchasing the Assets and in particular is not purchasing
any of the business of Alphatech, any other assets of Alphatech, its
corporate identity or facilities, nor is it hiring any of the employees of
Alphatech. Accordingly, Dragon will not assume any Liabilities of Alphatech
relating to any of its business or operations, other than as expressly set
out in Schedule D , and, without limiting the generality of the foregoing,
specifically will not assume
(a) any liabilities for taxes either accruing or relating to the periods
on or prior to the Closing Time, except as otherwise provided in this
Agreement;
(b) any claim, judgment, penalty, settlement agreement or other obligation
that is pending or threatened on or prior to the Closing Time;
(c) any claims, liabilities or other obligations that relate to injuries,
actions, omissions, conditions or events that occurred or existed on
or prior to the Closing Time, whether or not based on any act or
omission of Alphatech, in connection with the operation of the
Business;
(d) all claims and liabilities arising out of or relating to
(i) the treatment, storage or disposal on or prior to the Closing
Time of Hazardous Materials by Alphatech or any other person on
any property used in the operation of the Business,
(ii) releases, on or before the Closing Time, of Hazardous Materials
on, at or from any assets or properties,
(iii)generation or transportation of Hazardous Materials by Alphatech
in the operation of the Business, and
(iv) releases of Hazardous Materials by any person on or from property
used in the operation of the Business prior to Alphatech's
ownership or use thereof;
(e) all severance obligations and other costs of terminating employees of
Alphatech prior to the Closing Time from whatever source such
obligations and costs arise, including, without limitation,
contractual obligations, notices to employees, employment manuals,
course of dealings, past practices or otherwise; and
(f) all other liabilities accrued prior to the Closing Time, and
Alphatech agrees to pay or otherwise discharge the Liabilities of the Business
that are not assumed by Dragon, and any failure to do so will be subject to
indemnification under Part 14.
Part 3
PURCHASE PRICE
Purchase Price
3.1 In consideration for the transfer of the Assets, Dragon will, on the
Closing Date make a payment to Alphatech in the amount of US$4,000,000 (the
"Purchase Price")
Allocation of Purchase Price
3.2 The parties agree to utilize the fair market values of the Assets for the
purpose of allocating the purchase price paid the Assets for federal,
state, provincial, local and other tax. Each party agrees to report
federal, state, local and other tax consequences of the transactions
contemplated by this Agreement in a manner consistent with such allocation.
Part 4
REPRESENTATIONS AND WARRANTIES
Representations and Warranties of Alphatech
4.1 In order to induce Dragon to enter into and consummate the transactions
contemplated by this Agreement, Alphatech and the Shareholders represent
and warrant to Dragon the statements contained in Schedule A as
representations and warranties that are true, accurate and complete as at
the date of this Agreement and at the Closing Time as if such
representations and warranties were made at the Closing Time (except
insofar as such representations and warranties are stated to be given as of
a particular date or for a particular period and relate solely to such date
or period, in which case such representations and warranties are true,
accurate and complete in all material respects as at that date), subject to
the condition, however, that paragraph 14 of Schedule A will not be
applicable in the event Longbin Liu ceases to be with Dragon as an officer,
employee or consultant for any reason other than a purely voluntary
departure.
4.2 Notwithstanding the actual damaged suffered by Dragon, Alphatech's and the
Shareholders liability to indemnify or otherwise compensate Dragon for
breaches of any representation or warranty set out in paragraphs 12, 13 or
14 of Schedule A will be limited to the amount of the Purchase Price.
Representations and Warranties of Dragon
4.3 In order to induce Alphatech to enter into and consummate the transactions
contemplated by this Agreement, Dragon represents and warrants to Alphatech
the statements contained in Schedule B as representations and warranties
that are true, accurate and complete as at the date of this Agreement and
at the Closing Time as if such representations and warranties were made at
the Closing Time (except insofar as such representations and warranties are
stated to be given as of a particular date or for a particular period and
relate solely to such date or period, in which case such representations
and warranties are true, accurate and complete in all material respects as
at that date).
Survival of Representations and Warranties
4.4 The representations and warranties of each of Alphatech and Dragon
contained in this Agreement will not merge at Closing and will survive the
Closing and the payment of the Purchase Price and will continue in full
force and effect for the benefit of Dragon or Alphatech, as applicable, for
a period of three years after the Closing Date.
Breach by Alphatech
4.5 Notwithstanding the actual damage suffered by Dragon, and without limiting
the rights of Dragon to receive any other damage award, Dragon will have
the right to receive from Alphatech a full refund of the Purchase Price if
Alphatech breaches any of the representations and warranties set out in
paragraphs 12, 13 or 14 of Schedule A.
Part 5
COVENANTS
Covenants of Alphatech
5.1 Alphatech covenants and agrees with Dragon that from and after the date of
execution of this Agreement to the Closing Date:
(a) as soon as Alphatech has determined that a state of facts exist which
results in or will result in
(i) a representation or warranty contained in ss.4.1 being untrue or
incorrect in any material respect, or
(ii) the non-fulfilment of any of the conditions precedent set forth
in ss.6.1.
Alphatech will notify Dragon of such state of facts;
(b) Alphatech will obtain any release, waiver, consent, assignment or
approval that Dragon, acting reasonably, may advise is required in
order that the execution and delivery of this Agreement, the
completion of the transactions contemplated hereby and the observance
and performance of the obligations of Alphatech herein will not result
in a representation or warranty contained in ss.4.1 being untrue or
incorrect;
(c) Alphatech will maintain in force policies of insurance heretofore
maintained,
(d) Alphatech will take good care of, do and make all necessary repairs
and maintenance to, and take reasonable care to protect and safeguard,
the Assets;
(e) Alphatech will permit Dragon, its officers, directors, agents,
professional advisors or other authorized representatives at any time
and from time to time to inspect and review the Assets, the Business
and the Books and Records and for these purposes will permit such
persons at any time and from time to time upon reasonable notice and
during regular business hours to enter into or upon such premises
where the Assets or any such information may be;
(f) Alphatech will not sell, consume, or dispose of or transfer possession
of any of the Assets (except in the usual and ordinary course of the
operation of the Business);
(g) Alphatech will conduct the Business, only in the usual and ordinary
course of the operation of such business, endeavour to preserve the
organization of such business intact and preserve the goodwill of the
suppliers and customers and others having business relations with
Alphatech relating to such business;
(h) Alphatech will be liable for and pay all sales, use, transfer and
similar taxes, properly payable upon and in connection with the sale
and transfer of the Assets; and
(i) Alphatech will make all necessary tax, governmental and other filings
required of it in a timely fashion.
Covenants of Dragon
5.2 Dragon covenants and agrees with Alphatech that Dragon will:
(a) co-operate with Alphatech with respect to the covenants set forth in
ss.5.1 and the satisfaction of the conditions precedent set forth in
ss.6.1;
(b) at the request of Alphatech, execute and deliver such applications for
consent and such assumption agreements, and provide such information
as may reasonably be necessary to obtain the consents referred to in
ss.5.1(b) and will reasonably assist and cooperate with Alphatech in
obtaining the said consents; provided that nothing herein will
obligate Dragon to assume or become liable or responsible for any
liabilities or obligations of Alphatech other than as expressly set
forth in this Agreement; and
(c) on and after the Closing Time, assume, perform and discharge all
obligations arising under the Material Contracts and all other
contracts, commitments or engagements relating to the Business which
are entered into by Alphatech between the date of this Agreement and
the Closing Time in the usual and ordinary course of the operation of
the Business, and will indemnify and save Alphatech harmless of and
from all claims, demands, suits and actions in respect thereof.
Mutual Covenants
5.3 Each party intends to treat the transactions contemplated herein as fully
taxable transactions for applicable income tax purposes. Neither party
hereto will take any action inconsistent with this treatment.
Part 6
CONDITIONS PRECEDENT TO OBLIGATIONS OF DRAGON
Conditions Precedent of Dragon
6.1 Notwithstanding any other provision of this Agreement, the obligation of
Dragon to complete the purchase of the Assets is subject to the following
conditions being met:
(a) the representations and warranties of Alphatech contained in this
Agreement and in any agreement, certificate or document delivered
pursuant to the provisions hereof or in connection with the
transactions contemplated hereby, are true on and as of the Closing
Date with the same effect as though such representations and
warranties had been made on and as of the Closing Date except
(i) to the extent that any of such representations and warranties
have been waived by Dragon or affected by the transactions
between the parties contemplated hereby, or
(ii) insofar as such representations and warranties are given as of a
particular date or for a particular period and relate solely to
such date or period;
(b) all of the covenants, agreements and deliveries of Alphatech to be
performed or complied with by it on or before the Closing Date have
been duly performed or complied with, except to the extent that such
performance or compliance has been waived by Dragon or is prevented by
a default by Dragon in the performance of its obligations hereunder;
(c) all consents or approvals required to be obtained by Alphatech for the
purpose of selling, assigning or transferring the Assets have been
obtained;
(d) from the date hereof to the Closing Date, no event has occurred and no
action has been taken which materially and adversely affects the
Business, or any of the Assets, or the value thereof; and
(e) no injunction or restraining order of a court, administrative
tribunal, arbitrator or Governmental Authority of competent
jurisdiction being in effect which prohibits the transactions
contemplated hereunder and no action or proceeding having been
instituted and remaining pending before any such court, administrative
tribunal, arbitrator or Governmental Authority to restrain or prohibit
the transactions contemplated hereby.
Conditions for Benefit of Dragon
6.2 The foregoing conditions are for the exclusive benefit of Dragon and any
such condition may be waived in whole or in part by Dragon on or before the
Closing Date by delivery to Alphatech of a written waiver to that effect,
signed by Dragon.
Part 7
CONDITIONS PRECEDENT TO OBLIGATIONS OF ALPHATECH
Conditions Precedent of Alphatech
7.1 Notwithstanding any other provision of this Agreement, the obligation of
Alphatech to complete the transactions contemplated hereunder is subject to
the following conditions being met:
(a) the representations and warranties of Dragon contained in this
Agreement and in any agreement, certificate or document delivered
pursuant to the provisions hereof or in connection with the
transactions contemplated hereby, are true on and as of the Closing
Date with the same effect as though such representations and
warranties had been made on and as of the Closing Date except
(i) to the extent that any of such representations and warranties
have been waived by Alphatech or affected by the transactions
between the parties contemplated hereby, or
(ii) insofar as such representations and warranties are given as of a
particular date or for a particular period and relate solely to
such date or period;
(b) all of the covenants, agreements and deliveries of Dragon to be
performed or complied with by it on or before the Closing Date have
been duly performed or complied with, except to the extent that such
performance or compliance has been waived by Alphatech or is prevented
by a default by Alphatech in the performance of its obligations
hereunder;
(c) from the date hereof to the Closing Date, no event has occurred and no
action has been taken which materially and adversely affects the
business or assets of Dragon; and
(d) no injunction or restraining order of a court, administrative
tribunal, arbitrator or Governmental Authority of competent
jurisdiction being in effect which prohibits the transactions
contemplated hereunder and no action or proceeding having been
instituted and remaining pending before any such court, administrative
tribunal, arbitrator or Governmental Authority to restrain or prohibit
the transactions contemplated hereby.
Conditions for Benefit of Alphatech
7.2 The foregoing conditions are for the exclusive benefit of Alphatech and any
such condition may be waived in whole or in part by Alphatech on or before
Closing Date by delivery to Dragon of a written waiver to that effect,
signed by Alphatech.
Part 8
DELIVERIES AT CLOSING
Closing
8.1 Subject to the terms and conditions of this Agreement, the Closing will
take place at the offices of Dragon in Vancouver, British Columbia at 11:00
a.m. on the Closing Date, or at such other location or time as the parties
may agree. If the Closing has not occurred by December 31, 2000 either
party may terminate this Agreement, provided that no such termination will
relieve any party from any liability for any breach or default of the terms
of this Agreement.
Deliveries of Alphatech
8.2 At the Closing, Alphatech will deliver or cause to be delivered to Dragon:
(a) a certified copy of a resolution of the directors of Alphatech duly
passed, authorizing the execution, delivery and implementation of this
Agreement, and of all transactions contemplated hereby and of all
documents to be delivered by Alphatech pursuant hereto;
(b) where applicable, all deeds of conveyance, bills of sale, transfer and
assignments and assumption agreements, duly executed, in form and
content satisfactory to Dragon, appropriate to effectively vest good
and marketable title to the Assets in Dragon to the extent
contemplated by this Agreement, and immediately registrable in all
places where registration of such instruments is necessary or
desirable;
(c) all consents or approvals required to be obtained by Alphatech
hereunder;
(d) possession of the Assets including the Cells and Technology, and all
rights appurtenant thereto;
(e) a legal opinion, addressed to Dragon, dated the Closing Date,
substantially in the form set out in Schedule F , delivered by the
counsel for Alphatech;
(f) a certificate of a senior officer of Alphatech certifying as to the
accuracy of the representations and warranties of Alphatech herein as
at the Closing Date and the fulfilment by Alphatech of the covenants
and agreements required to be fulfilled by it at or before the
Closing, which will include a representation and warranty that all
third party consents have been obtained; and
(g) all such other documents and instruments as counsel for Dragon may
reasonably require.
Deliveries of Dragon
8.3 At the Closing, Dragon will deliver or cause to be delivered to Alphatech:
(a) a certified copy of resolutions of the directors of Dragon duly
passed, authorizing the execution, delivery and implementation of this
Agreement, and of all transactions contemplated hereby and of all
documents to be delivered by Dragon pursuant hereto;
(b) evidence of a deposit of US$4,000,000 representing payment for the
Purchase Price into the trust account of Alphatech's authorized agent,
Messrs. Yung, Xx, Xxxx & Company at the Wing Lung Bank Limited, Head
Office, 00 Xxx Xxxxx Xxxx Xxxxxxx, Xxxx Xxxx (the "Agent"), account
number 0000000;
(c) a legal opinion, addressed to Alphatech, dated the Closing Date,
substantially in the form set out in Schedule G , delivered by the
counsel for Dragon;
(d) a certificate of a senior officer of Dragon certifying as to the
accuracy of the representations and warranties of Dragon herein as at
the Closing Date and the fulfilment by Dragon of the covenants and
agreements required to be fulfilled by it at or before the Closing.
8.4 Immediately after the receipt by Dragon of all of Alphatech's Assets,
Dragon will authorize the Agent to pay out US$4,000,000 from the Agent's
trust account to Alphatech as full and final payment of the Purchase Price.
Part 9
LOSS OR DAMAGE BEFORE CLOSING
Loss or Damage Closing
9.1 If, before the Closing Date, there will have been any loss or damage to any
of the Assets, Alphatech will forthwith thereafter deliver to Dragon a
detailed list showing the insurance coverage with respect thereto,
particulars of any claims made by Alphatech under its insurance coverage,
and the standing of such claims and if, notwithstanding such loss or
damage, Dragon elects by notice in writing to Alphatech to complete the
transactions contemplated herein, the sale and purchase provided for herein
will be completed and Alphatech will, on Closing
(a) pay to Dragon all monies received by Alphatech before the Closing Date
as proceeds of insurance with respect thereto, and
(b) deliver to Dragon, a duly executed assignment in form and substance
satisfactory to Dragon of all of Alphatech' interest in and to any
proceeds of insurance with respect to any such items and Alphatech'
written undertaking to cooperate with Dragon in the satisfactory
settlement of all claims.
Part 10
ADJUSTMENTS
Effective Date of Transfer of Assets
10.1 Subject as otherwise specified in this Agreement, all transactions in the
Business conducted before the Closing Date will be for the account of
Alphatech and all transactions in the Business on or after that date will
be for the account of Dragon. From and after the Closing Date, all amounts
expended by Alphatech for the Business and the Assets in the ordinary
course, including insurance premiums, will be reimbursed by Dragon,
forthwith upon request.
Part 11
CONVEYANCE
Conveyance of Assets
11.1 On completion of the Closing, this Agreement will, without further act or
formality, operate as a transfer to Dragon of all Assets to be sold and
purchased hereunder as the same will be at the close of business on the
Closing Date.
Trust Regarding Assets Not Conveyed
11.2 If any of the Assets intended to be transferred hereunder are not
transferred to Dragon on the Closing Date, Alphatech will hold as bare
trustee in trust for, and at the sole cost of Dragon, all such Assets from
the Closing Time until such Assets are effectively transferred.
Part 12
NON-COMPETITION AND CONFIDENTIALITY
Non-Competition
12.1 For a period of three years from the Closing Date, Alphatech will not,
directly or indirectly, in sole proprietorship, in any partnership or joint
venture or as an owner of more than 10% of the shares in the capital of any
class of a corporation or in any other manner, compete with Dragon in the
manufacture, marketing and sale of a Hepatitis B vaccine.
Confidential Information
12.2 As a result of completing the transactions contemplated by this Agreement,
each party (the "Recipient") acknowledges that it may acquire or hold
Confidential Information (other than information that is an Asset)
belonging to (whether acquired by Discloser before the date of, or as a
result of the transactions contemplated by, this Agreement) the other party
(the "Discloser"). Alphatech also acknowledges that certain directors,
officers and employees of Alphatech, and its agents or third party agents
and contractors, may be aware of Confidential Information that forms part
of the Assets, which information is, for the purpose of this Part, deemed
to belong to Dragon as a Discloser. Discloser warrants that it has the
right to disclose the Confidential Information disclosed to Recipient under
this Agreement.
Property
12.3 Except as provided for in this Agreement, all Confidential Information
belonging to Discloser (whether acquired by Discloser before the date of,
or as a result of the transactions contemplated by, this Agreement) will
remain the exclusive property of the Discloser.
12.4 Except as expressly set out herein, nothing in this Agreement confers on
Recipient any interest, licence or other right in respect of Confidential
Information of the Discloser.
Fiduciary Relationship
12.5 Recipient acknowledges that certain of the Confidential Information
consists of information vital to the business and commercial prospects of
Discloser and that such information is of a special, valuable and unique
nature and would not normally be disclosed to Recipient and, accordingly,
Recipient will act as a fiduciary of Discloser in holding and using such
Confidential Information.
Obligation of Confidentiality
12.6 Except as provided for in this Agreement, all Confidential Information
belonging to Discloser and known to or held by Recipient will be held in
strict confidence and the Recipient:
(a) agrees to use such Confidential Information only for the purposes of
completing the transactions contemplated by this Agreement;
(b) will, and will ensure that each of its directors, officers, employees
and agents (collectively, the "Recipient's Agents") will, hold in
confidence and keep confidential the Confidential Information
disclosed to them by the Discloser;
(c) will not, and will ensure that none of the Recipient's Agents will,
directly or indirectly, use or disclose any such Confidential
Information except to the extent that it is strictly necessary to
enable the Recipient to exercise its rights and perform its
obligations under this Agreement;
(d) will not, and will ensure that none of the Recipient's Agents will,
except to the extent necessary to enable the Recipient to exercise its
rights or perform its obligations under this Agreement, make copies of
such Confidential Information;
(e) will, upon the request of the Discloser, return, and cause the
Recipient's Agents to return, all Confidential Information and copies
thereof to the Discloser; and
(f) will, and will ensure that each of the Recipient's Agents will,
maintain all such Confidential Information in a manner so as to
protect the same against wrongful disclosure, misuse, espionage and
theft.
Exceptions
12.7 Nothing in this Agreement will prevent the Recipient or the Recipient's
Agents from making use of or disclosing any Confidential Information:
(a) which has already become generally available to the public through no
breach of this Agreement or any other obligation of the Recipient or
the Recipient's Agents to the Disclosing Party;
(b) which the Recipient can show, through written evidence, has been
independently developed, without use of any Confidential Information
belonging to the Discloser, by employees of the Recipient who had no
access to such Confidential Information;
(c) which the Recipient can show, through written evidence, was received
by it on a non-confidential basis from a source other than the
Discloser and which source, to the knowledge of Recipient, lawfully
obtained such information and had the right to disclose such
information; or
(d) which is required to be disclosed pursuant to a final order or
judgment of a court of competent jurisdiction and in such case the
parties will cooperate with one another to seek to obtain an
appropriate protective order or other reliable assurance that
confidential treatment will be afforded to such Confidential
Information.
Recipient will immediately notify Discloser if Recipient becomes legally
compelled to disclose any Confidential Information sufficiently in advance of
the date of disclosure so as to provide Discloser with a reasonable opportunity
to seek an appropriate remedy to enjoin such disclosure from occurring.
Reasonable Restriction
12.8 Each party agrees that the restrictions contained in this Part are
reasonable in order to protect the respective legitimate business interests
of the parties and all defences to the strict enforcement of such
restrictions are hereby waived by the parties.
Injunctive Relief
12.9 Each party acknowledges that a breach by it of any covenants contained in
this Part could result in damages to the other party to this Agreement
which damages could not adequately be compensated for by monetary award.
Accordingly, each party agrees that in the event of any such breach by such
party, in addition to all other remedies available to any other party at
law or in equity, such other party will be entitled as a matter of right to
apply to a court of competent jurisdiction for such relief by way of
restraining order, injunction, decree or otherwise, as may be appropriate,
to ensure compliance with the provisions of this Agreement.
Survival of Covenants
12.10The covenants and agreements contained in this Part, except ss.12.1, will
survive the Closing for a period of three years after the Closing Time and
will be separate and distinct covenants and agreements enforceable after
the termination of the remainder of this Agreement in accordance with the
terms thereof, and any reference in this Agreement to termination will not
influence the termination of this Part unless specifically agreed to by the
parties.
Part 13
DISPUTE RESOLUTION
Disputes
13.1 If at any time there is a dispute among the parties with respect to any
matter relating to this Agreement, any party that wishes the issue to be
considered further will give notice to the other of that it requires the
dispute to be decided under the terms of this Agreement.
Referral to Senior Officers
13.2 If a notice is given under ss.13.1, each party will designate a senior
officer to undertake discussions for the purpose of settling the dispute. A
decision reached by these officers and communicated in writing to the
parties will be determinative of the dispute and will be binding on each
party.
Arbitration
13.3 If no decision is reached under ss.13.2 within 30 days of the dispute being
sent for consideration, either party may, by notice to the other party
given at any time before a decision is rendered under ss.13.2, submit the
dispute for determination by a single arbitrator acting under the Rules of
the British Columbia Commercial Arbitration Centre.
13.4 If the parties can not agree on a single arbitrator, the arbitrator will be
appointed by the British Columbia International Commercial Arbitration
Centre.
13.5 The arbitration will take place in Vancouver, British Columbia and will be
administered by the British Columbia International Arbitration Centre and
conducted in accordance with the procedures of the Centre.
Legal Proceedings
13.6 A legal proceeding commenced by a party to this Agreement in respect of an
issue or dispute that may be arbitrated under this Agreement will be stayed
until the time during which an arbitration may be initiated has expired or,
if an arbitration is initiated, a decision on the arbitration is delivered
or the arbitration process has otherwise ended.
Exclusions
13.7 This Part will not apply to any action pursuant to Part 12 or any actions
seeking any grant of provisional remedies, including injunctions,
restraining orders and specific performance, and each party reserves its
right to commence such action or seek such remedies from a court of
competent jurisdiction.
Part 14
INDEMNITIES
Indemnity
14.1 Subject to ss.14.2, without prejudice to any other remedy available to a
party (the "Indemnified Party") at law or in equity, the other party (the
"Indemnifying Party") hereby agrees, forthwith upon demand, to indemnify
and save harmless the Indemnified Party from and against any and all costs,
losses, damages, taxes or expenses suffered or incurred by the Indemnified
Party in any manner arising out of, in connection with, with respect to or
relating to any representation or warranty the Indemnifying Party set forth
in this Agreement, including any representation or warranty given at
Closing, being untrue or incorrect or the failure of the Indemnifying Party
to observe or perform any of its obligations pursuant hereto, and any and
all goods and services taxes, actions, suits, proceedings, demands,
assessments, judgments, reasonable costs and reasonable legal and other
expenses incidental thereto.
Claim Limits
14.2 Any claim(s) under ss.14.1
(a) must exceed $100,000 in the aggregate before any claim is made, in
which event all damages or deficiencies may be claimed and not just
the amount in excess of the aforementioned amount,
(b) must be claimed within a period of four years after the Closing Date,
and
(c) can not, if it relates to any breach of a representation or warranty
set out in paragraphs 12, 13 or 14 of Schedule A, in the aggregate
against Alphatech exceed the Purchase Price.
Notification Regarding Claim
14.3 Each party will promptly notify the other when it has determined that it
has actual (and not attributed or assumed) knowledge of a state of facts
which gives rise to a claim under this Part.
Litigation
14.4 Dragon will promptly notify Alphatech of any claim made by any Person
against Dragon in respect of which Dragon has the right to indemnity under
ss.14.1. If Alphatech acknowledges and accepts liability in respect of such
claim,
(a) Alphatech will be entitled (but not obligated) to assume the defence
of any such claim, in which case Alphatech will do so in a bona fide
and diligent fashion and will bear the costs and expenses associated
therewith,
(b) and if Alphatech has elected not to assume the defence of such claim,
(i) Dragon will be entitled (but not obligated) to do so, and will
bear the cost and expenses associated therewith provided that any
such costs and expenses will be recoverable from Alphatech under
ss.14.1,
(ii) Alphatech will have the right to join such proceeding as a party
defendant, each of Dragon and Alphatech hereby agreeing to the
entry of an order making Alphatech a party defendant in such
proceeding should Alphatech so wish,
(c) and if Alphatech has elected to assume the defence of such claim,
(i) Alphatech will select and employ legal counsel to appear and to
participate in any proceeding relating to such claim on behalf of
Dragon (subject to the approval of such legal counsel by Dragon)
unless both Alphatech and Dragon are defendants in any such
proceeding and, in the reasonable opinion of independent counsel
to Dragon, Dragon may have legal defences available to it which
are different from or in addition to those available to Alphatech
or representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests
between them, in which case Alphatech will be liable for the fees
and expenses of one such separate counsel, and
(ii) Dragon will, at the cost of Alphatech, cooperate with Alphatech
in contesting such claim, and
(iii)Alphatech will be the sole judge of the acceptability of any
compromise or settlement of such proceeding provided that such
compromise or settlement
(A) results in the complete release of Dragon from all claims
which are the subject of such proceeding in respect of which
Dragon has the right to make a claim under ss.14.1,
(B) requires no more than the payment of money (that is, Dragon
is not required to admit any wrong doing or to take or
refrain from taking any material action), and
(C) does not contain any admission of liability or fault on the
part of Dragon,
and Dragon is satisfied, acting reasonably, that the full amount of
money required to be paid by Dragon as a result of such settlement will
be paid by Alphatech. In all other cases such compromise or settlement
will require the prior written approval of Dragon.
Part 15
GENERAL PROVISIONS
Modifications, Approvals and Consents
15.1 No amendment, modification, supplement, termination or waiver of any
provision of this Agreement will be effective unless in writing signed by
the appropriate party and then only in the specific instance and for the
specific purpose given.
Survival of Covenants
15.2 The covenants and agreements contained in ss.3.2 and Part 14 will survive
the termination of the remainder of this Agreement and will be separate and
distinct covenants and agreements enforceable after the termination of the
remainder of this Agreement in accordance with the terms thereof, and any
reference in this Agreement to termination will not influence the
termination of such provisions unless specifically agreed to by the
parties.
Further Assurances
15.3 The parties will execute such further assurances and other documents and
instruments and do such further and other things as may be necessary to
implement and carry out the intent of this Agreement.
Entire Agreement
15.4 The provisions in this Agreement and the other agreements contemplated
herein constitute the entire agreement among the parties and supersede all
previous expectations, understandings, communications, representations and
agreements, whether verbal or written, among the parties, including,
without limitation, all previous confidentiality agreements between the
parties, and if there is any conflict between the terms of this Agreement
and the terms of any other agreements with respect to the subject matter
hereof, the provisions of this Agreement will prevail.
Notice
15.5 Every notice, request, demand, direction or other communication (each, for
the purposes of ss.15.5, 15.6 and 15.7, a "Notice") required or permitted
to be given pursuant to this Agreement will be deemed to be well and
sufficiently given if in writing and delivered by hand (including
recognized overnight courier service) or transmitted by facsimile, in each
case addressed as follows:
(a) if to Alphatech at:
00 Xxx Xxxxx Xxxx Xxxxxxx
00xx Xxxxx
Xxxx Xxxx
Attention: President
Fax: 000-0000-0000
if to the Shareholders at:
Longbin Liu
00xx Xxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
Fax: (000) 000-0000
Xxxxxx Xxxx
00 Xxx Xxxxx Xxxx Xxxxxxx
00xx Xxxxx
Xxxx Xxxx
Fax: 000-0000-0000
with a copy to:
Xxxxxxx Xxxxx
00xx Xxxxx
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
Attention: Xxxxxxx X. Xxxxxxxxx
Fax: (000) 000-0000
(b) if to Dragon at:
00xx Xxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
Attention: CEO and CFO
Fax: (000) 000-0000
with a copy to
Lang Xxxxxxxx Xxxxxxxx & Xxxx
1500 - 0000 Xxxx Xxxxxxx Xxxxxx
X.X. Xxx 00000
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attention: Xxx Xxxxxx
Fax: (000) 000-0000
or to such other address or transmission receiving station as is specified by
the particular party by Notice to the other.
Deemed Receipt
15.6 Any Notice delivered or sent as aforesaid will be deemed conclusively to
have been effectively given and received on the day Notice was delivered or
sent as aforesaid if it was delivered or sent on a day that was a Business
Day or on the next day that is a Business Day if it was delivered or sent
on a day that was not a Business Day.
Change of Address
15.7 A party may at any time, by Notice to the other, change its address to some
no less convenient address and will so change its address whenever its
address ceases to be suitable for delivery by hand.
Enurement
15.8 This Agreement will enure to the benefit of and be binding upon Alphatech
and Dragon and their respective permitted assigns.
Assignment
15.9 Alphatech may not assign its rights, title or interests, or any part
thereof, under this Agreement, other than to an Affiliate of Alphatech,
except with the prior written consent of Dragon, which consent may be
arbitrarily withheld. Dragon may not assign its rights, title or interests,
or any part thereof, under this Agreement to any person, other than to an
Affiliate of Dragon, except with the prior written consent of Alphatech,
which consent may be arbitrarily withheld.
Applicable Law
15.10This Agreement will be deemed to have been made in the Province of British
Columbia and the construction, validity and performance of this Agreement
will be governed in all respects by the laws prevailing in the Province of
British Columbia.
Attornment
15.11Each party irrevocably attorns to the non-exclusive jurisdiction of the
courts of British Columbia and all courts having appellate jurisdiction
thereover in respect of any proceeding arising out of or relating to this
Agreement.
Convenient Forum
15.12Notwithstanding ss.15.10 and ss.15.11, at its absolute discretion Dragon
may proceed against Alphatech in any court of any other jurisdiction in the
world and, if required by law, may elect for this Agreement to be governed
by the laws of the jurisdiction most applicable to Alphatech in respect of
the action undertaken.
Severability
15.13If any one or more of the provisions contained in this Agreement is
invalid, illegal or unenforceable in any respect in any jurisdiction, the
validity, legality and enforceability of such provision or provisions will
not in any way be affected or impaired thereby in any other jurisdiction
and the validity, legality and enforceability of the remaining provisions
contained herein will not in any way be affected or impaired thereby,
unless in either case as a result of such determination this Agreement
would fail in its essential purpose.
Counterparts
15.14This Agreement may be executed in any number of counterparts or by
facsimile, each of which will together, for all purposes, constitute one
and the same instrument, binding on the parties, and each of which will
together be deemed to be an original, notwithstanding that all of the
parties are not signatories to the same counterpart or facsimile.
IN WITNESS WHEREOF the above noted parties have executed this Agreement as and
of the date first above written.
The Common Seal of )
DRAGON PHARMACEUTICALS INC. )
was affixed in the presence of: )
)
) C/S
)
Authorized Signatory )
)
)
-------------------------------------------- )
Authorized Signatory )
)
The Common Seal of )
ALPHATECH BIOENGINEERING LIMITED )
was affixed in the presence of: )
)
) C/S
)
Authorized Signatory )
)
)
--------------------------------------------
Authorized Signatory )
Signed, Sealed and Delivered by LONGBIN LIU in )
the presence of: )
)
)
)
) LONGBIN LIU
Witness (Signature) )
)
)
)
)
-------------------------------------------- )
Name (please print) )
)
)
)
)
-------------------------------------------- )
Address )
City, Province
Signed, Sealed and Delivered by XXXXXX XXXX in )
the presence of: )
)
)
)
) XXXXXX XXXX
Witness (Signature) )
)
)
)
)
-------------------------------------------- )
Name (please print) )
)
)
)
)
-------------------------------------------- )
Address )
)
)
)
City, Province )
