EXHIBIT 10.1
------------
SHARE PURCAHSE AGREEMENT
------------------------
THIS SHARE PURCAHSE AGREEMENT is dated and made for reference
--------------------------------
effective as fully executed on this 26th day of January, 2004.
BETWEEN:
-------
SINOVAC BIOTECH LTD., a corporation organized under the laws
--------------------
of Country of Antigua and having an address for notice and
delivery located at Suite #10-Epicurean, Xxxxx Centre, P.O.
Box W-645, St. John's, Antigua, West Indies
(the "Purchaser");
OF THE FIRST PART
-----------------
AND:
---
TANGSHAN YIAN BIOLOGICAL ENGINEERING, CO., LTD., a
--------------------------------------------------------
corporation organized under the laws of the People's
Republic of China and having an address for notice and
delivery located at 120 Huoju Rd., High Tech. Developing
Zone Tangshan, Hbei Provence, 063000 P.R. China
(the "Company");
OF THE SECOND PART
------------------
AND:
---
THE UNDERSIGNED SHAREHOLDER OF TANGSHAN YIAN BIOLOGICAL
------------------------------------------------------------
ENGINEERING CO., LTD., having an address for notice and
-----------------------
delivery located at x/x 000 Xxxxx Xx., Xxxx Xxxx. Xxxxxxxxxx
Xxxx Xxxxxxxx, Xxxx Provence, 063000 P.R. China
(such shareholder being hereinafter referred to as the
"Vendor");
OF THE THIRD PART
-----------------
(the Vendor, the Company and the Purchaser being hereinafter
singularly also referred to as a "Party" and collectively
referred to as the "Parties" as the context so requires).
2
WHEREAS:
-------
A. The Company is a body corporate subsisting under and registered
pursuant to the laws of the People's Republic of China;
B. The Company is in the business of research and development
specializing in the development and manufacturing of various vaccines including
flu vaccines and vaccines for Hepatitis A (collectively, the "Company's
Business");
C. The Vendor is the legal and beneficial owner of all of the issued and
outstanding shares in the capital of the Company (each a "Purchased Share"); the
particulars of the registered and beneficial ownership of such Purchased Shares
being set forth in Schedule "A" which is attached hereto and which forms a
material part hereof; and
D. The Parties hereto have agreed to enter into this Share Purchase
Agreement (the "Agreement") which formalizes, amends and replaces, in its
entirety, the Letter of Intent, dated October 30, 2003 (the "Letter of Intent")
as contemplated and required by the terms of such Letter of Intent, and which
clarifies their respective duties and obligations in connection with the
purchase by the Purchaser from the Vendor of all of the Purchased Shares
together with the further development of the Company's Business as a consequence
thereof;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
----------------------------------------
mutual promises, covenants and agreements herein contained, THE PARTIES HERETO
------------------
COVENANT AND AGREE WITH EACH OTHER as follows:
----------------------------------
Article 1
---------
DEFINITIONS
-----------
1.1 Definitions. For the purposes of this Agreement, except as otherwise
-----------
expressly provided or unless the context otherwise requires, the following words
and phrases shall have the following meanings:
(a) "Agreement" means this "Share Purchase Agreement" as entered into
among the Vendor, the Company and the Purchaser herein, together with
any amendments thereto and any Schedules as attached thereto;
(b) "Board of Directors" means, as applicable, the respective Board of
Directors of each of the Parties hereto as duly constituted from time
to time;
3
(c) "business day" means any day during which Canadian Chartered Banks are
open for business in the City of Vancouver, Province of British
Columbia;
(d) "Business Documentation" means any and all records and other factual
data and information relating to the Company's Business interests and
assets and including, without limitation, all plans, agreements and
records which are in the possession or control of Vendor or the
Company in that respect;
(e) "Closing" has the meaning ascribed to it in Article "6.1" hereinbelow;
(f) "Closing Date" has the meaning ascribed to it in Article "6.1"
hereinbelow;
(g) "Commercial Arbitration Act" means the Arbitration Act of the Province
of British Columbia, R.S.B.C. 1996, as amended from time to time, as
set forth in Article "11" hereinbelow;
(h) "Commissions" means the United States Securities and Exchange
Commission;
(i) "Common Shares" means the 3,500,000 shares of common stock of the
Purchaser to be issued and delivered to the Vendor as part of the
Purchase Price of the Purchased Shares;
(j) "Company" means Tangshan Yian Biological Engineering Co., Ltd., a
corporation organized under the laws of the People's Republic of
China, or any successor company, however formed, whether as a result
of merger, amalgamation or other action;
(k) "Company's Assets" means all assets, contracts, equipment, goodwill,
inventory and Intellectual Property of the Company;
(l) "Company's Business" has the meaning ascribed to it in recital "B."
hereinabove;
(m) "Company's Financial Statements" has the meaning ascribed to it in
Article "3.3(s)" hereinbelow;
(n) "Defaulting Party" and "Non-Defaulting Party" have the meanings
ascribed to them in Article "12" hereinbelow;
(o) "Encumbrances" means mortgages, liens, charges, security interests,
encumbrances and third party claims of any nature;
(p) "Exchange" means the NASD Over-the-Counter Bulletin Board;
(q) "Execution Date" means the actual date of the complete execution of
this Agreement and any amendment thereto by all Parties hereto as set
forth on the front page hereof;
4
(r) "Indemnified Party" and "Indemnified Parties" have the meanings
ascribed to them in Article "7.1" hereinbelow;
(s) "Intellectual Property" means, with respect to the Company, all right
and interest to all patents, patents pending, inventions, know-how,
any operating or identifying name or registered or unregistered
trademarks and tradenames, all computer programs, licensed end-user
software, source codes, products and applications (and related
documentation and materials) and other works of authorship (including
notes, reports, other documents and materials, magnetic, electronic,
sound or video recordings and any other work in which copyright or
similar right may subsist) and all copyrights (registered or
unregistered) therein, industrial designs (registered or
unregistered), franchises, licenses, authorities, restrictive
covenants or other industrial or intellectual property used in or
pertaining to the Company;
(t) "Parties" or "Party" means, respectively, the Vendor, the Company
and/or the Purchaser hereto, as the case may be, together with their
respective successors and permitted assigns as the context so
requires;
(u) "person" or "persons" means an individual, corporation, partnership,
party, trust, fund, association and any other organized group of
persons and the personal or other legal representative of a person to
whom the context can apply according to law;
(v) "Purchased Shares" has the meaning ascribed to it in recital "C."
hereinabove; the particulars of the registered and beneficial
ownership of such Purchased Securities being set forth in Schedule "A"
which is attached hereto;
(w) "Purchase Price" has the meaning ascribed to it in Article "2.2"
hereinbelow;
(x) "Purchaser" means Sinovac Biotech Ltd., a corporation organized under
the laws of the Country of Antigua, or any successor company, however
formed, whether as a result of merger, amalgamation or other action;
(y) "Purchaser's Initial Due Diligence" has the meaning ascribed to it in
Article "5.1(b)" hereinbelow;
(z) "Purchaser's Ratification" has the meaning ascribed to it in Article
"5.1(a)" hereinbelow;
(aa) "Takeover" means that transaction or series of transactions pursuant
to which the Purchaser will acquire all of the Purchased Shares of the
Company from the Vendor in exchange for the issuance from treasury by
the Purchaser of the Common Shares and US$2,200,000 payable with 12
months of entering into this Share Purchase Agreement and all matters
necessarily ancillary thereto;
5
(ab) "Time of Closing" means 2:00 o'clock, p.m. (Vancouver Time) on the
Closing Date;
(ac) "Transfer Agent" means Pacific Stock Transfer Company; and
(ad) "Vendor" means the sole shareholder of the Company who has executed
this Agreement as a Party hereto.
1.2 Schedules. For the purposes of this Agreement, except as otherwise
---------
expressly provided or unless the context otherwise requires, the following shall
represent the Schedules which are attached to this Agreement and which form a
material part hereof:
Schedule Description
-------- -----------
Schedule "A": Purchased Shares and Vendor; and
Schedule "B" Promissory Note issued by the
Purchaser.
1.3 Interpretation. For the purposes of this Agreement, except as
--------------
otherwise expressly provided or unless the context otherwise requires,:
(a) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular Article, section or other subdivision of this Agreement;
(b) any reference to an entity shall include and shall be deemed to be a
reference to any entity that is a permitted successor to such entity;
and
(c) words in the singular include the plural and words in the masculine
gender include the feminine and neuter genders, and vice versa.
Article 2
---------
PURCHASE AND SALE OF THE ALL OF THE PURCHASED SHARES
----------------------------------------------------
2.1 Purchase and Sale. Subject to the terms and conditions hereof and
------------------
based upon the representations and warranties contained in Articles "3" and "4"
hereinbelow and prior satisfaction of the conditions precedent which are set
forth in Article "5" hereinbelow, the Vendor hereby agrees to assign, sell and
transfer at the Closing Date (as hereinafter determined) all of his respective
rights, entitlement and interest in and to the Purchased Shares to the Purchaser
and the Purchaser hereby agrees to purchase all of the Purchased Shares from the
Vendor on the terms and subject to the conditions contained in this Agreement.
6
2.2 Purchase Price. The total purchase price (the "Purchase Price") for
---------------
all of the Purchased Shares will be satisfied by way of the issuance and
delivery by the Purchaser to the Vendor, in accordance with section "2.3"
hereinbelow, of an aggregate of 3,500,000 common shares in the capital of the
Purchaser (each a "Common Share"), at a deemed issuance price of US$0.76 per
Common Share and a promissory note issued by the Purchaser to the Vendor in the
amount of US$2,200,000, which amount shall be due and payable within 12 months
of the effective date of this Agreement, and which is attached hereto as
Schedule "C".
2.3 Resale Restrictions. The Vendor hereby acknowledges and agrees that
--------------------
the Purchaser makes no representations as to any resale or other restriction
affecting the Common Shares and that it is presently contemplated that the
Common Shares will be issued by the Purchaser to the Vendor in reliance upon the
registration and prospectus exemptions contained in the United States Securities
Act of 1933, as amended (the "Securities Act") or "Regulation S" promulgated
under the Securities Act which will impose a trading restriction in the United
States on the Common Shares for a period of at least 12 months from the Closing
Date (as hereinafter determined). In addition, the obligation of the Purchaser
to issue the Common Shares pursuant to section "2.2" hereinabove will be subject
to the Purchaser being satisfied that an exemption from applicable registration
and prospectus requirements is available under the Securities Act and all
applicable securities laws, in respect of the Vendor and related Common Shares,
and the Purchaser shall be relieved of any obligation whatsoever to purchase any
Purchased Shares of the Vendor and to issue Common Shares in respect of the
Vendor where the Purchaser reasonably determines that a suitable exemption is
not available to it.
Article 3
---------
REPRESENTATIONS, WARRANTIES AND COVENANTS
-----------------------------------------
BY THE COMPANY AND THE VENDOR
-----------------------------
3.1 General Representations, Warranties and Covenants by the Company and
----------------------------------------------------------------------
Xxxxxxxx Xxxx. In order to induce the Purchaser to enter into and consummate
--------------
this Agreement, the Company and Xxxxxxxx Xxxx, jointly and severally, represents
to, warrants to and covenants with the Purchaser, with the intent that the
Purchaser will rely thereon in entering into this Agreement and in concluding
the transactions contemplated herein, that, to the best of the knowledge,
information and belief of each of Xxxxxxxx Xxxx and the Company, after having
made due inquiry:
(a) if a corporation, it is duly organized under the laws of its
respective jurisdiction of incorporation and is validly existing and
in good standing with respect to all statutory filings required by the
applicable corporate laws;
(b) it is qualified to do business in those jurisdictions where it is
necessary to fulfill its obligations under this Agreement and it has
the full power and authority to enter into this Agreement and any
agreement or instrument referred to or contemplated by this Agreement;
(c) it has the requisite power, authority and capacity to own and use all
of its respective business assets and to carry on its respective
7
business as presently conducted by it and to fulfill its respective
obligations under this Agreement;
(d) the execution and delivery of this Agreement and the agreements
contemplated hereby have been duly authorized by all necessary action,
corporate or otherwise, on its respective part;
(e) there are no other consents, approvals or conditions precedent to the
performance of this Agreement which have not been obtained;
(f) this Agreement constitutes a legal, valid and binding obligation of it
enforceable against it in accordance with its terms, except as
enforcement may be limited by laws of general application affecting
the rights of creditors;
(g) no proceedings are pending for, and it is unaware of, any basis for
the institution of any proceedings leading to its respective
dissolution or winding up, or the placing of it in bankruptcy or
subject to any other laws governing the affairs of insolvent companies
or persons;
(h) the making of this Agreement and the completion of the transactions
contemplated hereby and the performance of and compliance with the
terms hereof does not and will not:
(i) if a corporation, conflict with or result in a breach of or
violate any of the terms, conditions or provisions of its
respective constating documents;
(ii) conflict with or result in a breach of or violate any of the
terms, conditions or provisions of any law, judgment, order,
injunction, decree, regulation or ruling of any Court or
governmental authority, domestic or foreign, to which it is
subject, or constitute or result in a default under any
agreement, contract or commitment to which it is a party;
(iii) give to any party the right of termination, cancellation or
acceleration in or with respect to any agreement, contract
or commitment to which it is a party;
(iv) give to any government or governmental authority, or any
municipality or any subdivision thereof, including any
governmental department, commission, bureau, board or
administration agency, any right of termination,
cancellation or suspension of, or constitute a breach of or
result in a default under, any permit, license, control or
authority issued to it which is necessary or desirable in
connection with the conduct and operations of its respective
business and the ownership or leasing of its respective
business assets; or
(v) constitute a default by it, or any event which, with the
giving of notice or lapse of time or both, might constitute
8
an event of default, under any agreement, contract,
indenture or other instrument relating to any indebtedness
of it which would give any party to that agreement,
contract, indenture or other instrument the right to
accelerate the maturity for the payment of any amount
payable under that agreement, contract, indenture or other
instrument; and
(i) neither this Agreement nor any other document, certificate or
statement furnished to the Purchaser by or on behalf of any of the
Vendor or the Company in connection with the transactions contemplated
hereby knowingly or negligently contains any untrue or incomplete
statement of material fact or omits to state a material fact necessary
in order to make the statements therein not misleading which would
likely affect the decision of the Purchaser to enter into this
Agreement.
3.2 Representations, Warranties and Covenants by the Vendor respecting the
----------------------------------------------------------------------
Purchased Shares and the Common Shares. In order to induce the Purchaser to
----------------------------------------
enter into and consummate this Agreement, the Vendor hereby represents to,
warrants to and covenants with the Purchaser, with the intent that the Purchaser
will also rely thereon in entering into this Agreement and in concluding the
transactions contemplated herein, that, to the best of the knowledge,
information and belief of the Vendor, after having made due inquiry:
(a) save and except as set forth in Schedule "A" which is attached hereto,
the Vendor has good and marketable title to and is the legal and
beneficial owner of all of the Purchased Shares, and the Purchased
Shares are fully paid and non-assessable and are free and clear of
liens, charges, encumbrances, pledges, mortgages, hypothecations,
security interests and adverse claims of any and all nature whatsoever
and including, without limitation, options, pre-emptive rights and
other rights of acquisition in favour of any person, whether
conditional or absolute;
(b) the Vendor has the power and capacity to own and dispose of the
Purchased Shares, and the Purchased Shares are not subject to any
voting or similar arrangement;
(c) there are no actions, suits, proceedings or investigations (whether or
not purportedly against or on behalf of the Vendor or the Company),
pending or threatened, which may affect, without limitation, the
rights of the Vendor to transfer any of the Purchased Shares to the
Purchaser at law or in equity, or before or by any federal, state,
provincial, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, and,
without limiting the generality of the foregoing, there are no claims
or potential claims under any relevant family relations legislation or
other equivalent legislation affecting the Purchased Shares. In
addition, the Vendor is not now aware of any existing ground on which
any such action, suit or proceeding might be commenced with any
reasonable likelihood of success;
9
(d) no other person, firm or corporation has any agreement, option or
right capable of becoming an agreement for the purchase of any of the
Purchased Shares;
(e) the Vendor acknowledges that the Common Shares will be issued under
certain exemptions from the registration and prospectus filing
requirements otherwise applicable under the Securities Act, and that,
as a result, the Vendor may be restricted from using most of the
remedies that would otherwise be available to the Vendor, the Vendor
will not receive information that would otherwise be required to be
provided to the Vendor and the Purchaser is relieved from certain
obligations that would otherwise apply to the Purchaser, in either
case, under applicable securities legislation;
(f) the Vendor has not received, nor has the Vendor requested or does the
Vendor require to receive, any offering memorandum or a similar
document describing the business and affairs of the Purchaser in order
to assist the Vendor in entering into this Agreement and in
consummating the transactions contemplated herein;
(g) the Vendor acknowledges and agrees that the Common Shares have not
been and will not be qualified or registered under the securities laws
of the United States or any other jurisdiction and, as such, the
Vendor may be restricted from selling or transferring such Common
Shares under applicable law;
(h) the Vendor is resident in the jurisdiction as set forth under the
Vendor's address in Schedule "A" which is attached hereto, and that
all negotiations and other acts in furtherance of the execution and
delivery of this Agreement by the Vendor in connection with the
transactions contemplated herein have taken place and will take place
solely in such jurisdiction or in the "Country of Antigua; and
(i) the Purchased Shares have been issued in accordance with all
applicable securities and corporate legislation and policies.
3.3 Representations, Warranties and Covenants by the Company and the
----------------------------------------------------------------------
Vendor respecting the Company. In order to induce the Purchaser to enter into
-------------------------------
and consummate this Agreement, each of the Vendor and the Company hereby,
jointly and severally, also represents to, warrants to and covenants with the
Purchaser, with the intent that the Purchaser will also rely thereon in entering
into this Agreement and in concluding the transactions contemplated herein,
that, to the best of the knowledge, information and belief of each of the Vendor
and the Company, after having made due inquiry:
Corporate Status of the Company
-------------------------------
(a) the Company is a company with limited liability duly and properly
organized and validly subsisting under the laws of the People's
Republic of China being the only jurisdiction where it is required to
10
be registered for the purpose of enabling it to carry on its business
and own its property as presently carried on and owned;
(b) the Company has good and sufficient power, authority and right to own
or lease its property, to enter into this Agreement and to perform its
obligations hereunder;
Authorization
-------------
(c) this Agreement has been duly authorized, executed and delivered by the
Vendor and the Company and is a legal, valid and binding obligation of
the Vendor and the Company, enforceable against the Vendor and/or the
Company, as the case may be, by the Purchaser in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency
and other laws affecting the rights of creditors generally and except
that equitable remedies may be granted only in the discretion of a
court of competent jurisdiction;
No Other Agreements to Purchase
-------------------------------
(d) no person other than the Purchaser has any written or oral agreement
or option or any right or privilege (whether by law, pre-emptive or
contractual) capable of becoming an agreement, or option for the
purchase or acquisition from the Vendor of any of the Purchased
Shares;
Options
-------
(e) no person has any agreement or option or any right or privilege
(whether by law, pre-emptive or contractual) capable of becoming an
agreement, including convertible securities, warrants or convertible
obligations of any nature, for the purchase, subscription, allotment
or issuance of any unissued shares or other securities of the Company;
Title to Shares
---------------
(f) the Purchased Shares are beneficially owned by the Vendor with good
and marketable title thereto free of all Encumbrances and are
registered in the books of the Company in the name of the Vendor and,
without limitation thereto, none of the Purchased Shares are subject
to any voting trust, unanimous shareholders agreement, other
shareholders agreements, pooling agreements or voting agreements;
(g) upon completion of the transactions contemplated by this Agreement,
all of the Purchased Shares will be owned by the Purchaser as the
beneficial owner of record, with good and marketable title thereto
(except for such Encumbrances as may have been granted by the
Purchaser);
11
Title to Personal Property and Other Property
---------------------------------------------
(h) the property and assets of the Company are, and between the date
hereof and the Closing Date (as hereinafter determined), will be,
owned beneficially by the Company with a good and marketable title
thereto, free and clear of all Encumbrances save as previously
disclosed to the Purchaser;
Intellectual Property
---------------------
(i) the Company has provided the Purchaser with a complete and accurate
list of all trade marks, trade names, business names, patents,
inventions, know-how, copyrights, service marks, brand names,
industrial designs and all other industrial or intellectual property
owned or used by the Company in carrying on the Company's Business and
all applications therefor and all goodwill connected therewith,
including, without limitation, all licenses, registered user
agreements and all like rights used by or granted to the Company in
connection with the Company's Business and all right to register or
otherwise apply for the protection on any of the foregoing
(collectively, the "Intellectual Property");
(j) the Intellectual Property comprises all trade marks, trade names,
business names, patents, inventions, know-how, copyrights, service
marks, brand marks, industrial designs and all other industrial or
intellectual property necessary to conduct the Company's Business;
(k) the Company is the beneficial owner of the Intellectual Property, free
and clear of all Encumbrances, and is not a party to or bound by any
contract or other obligation whatsoever that limits or impairs its
ability to sell, transfer, assign or convey, or that otherwise
affects, the Intellectual Property;
(l) no person has been granted any interest in or right to use all or any
portion of the Intellectual Property;
(m) neither the Vendor nor the Company are aware of a claim of any
infringement or breach of any industrial or intellectual property
rights of any other person by the Company, nor have the Vendor or the
Company received any notice that the conduct of the Company's Business
infringes or breaches any industrial or intellectual property rights
of any other person, and neither the Vendor nor the Company, after due
inquiry, have any knowledge of any infringement or violation of any of
their rights or the rights of the Company in the Intellectual
Property;
(n) the conduct of the Company's Business does not infringe upon the
patents, trade marks, licenses, trade names, business names, copyright
or other industrial or intellectual property rights, domestic or
foreign, of any other person;
12
(o) neither the Vendor nor the Company are aware of any state of facts
that casts doubt on the validity or enforceability of any of the
Intellectual Property;
(p) the Company has provided to the Purchaser a true and complete copy of
all Contracts and amendments thereto that comprise or relate to the
Intellectual Property;
Financial Statements
--------------------
(q) the Company's Audited Financial Statements dated June 30, 2003, have
been prepared in accordance with generally accepted accounting
principles applied on a basis consistent with prior periods, are
correct and complete and present fairly the assets, liabilities
(whether accrued, absolute, contingent or otherwise) and financial
condition of the Company as at the respective dates of and for the
respective periods covered by the Company's Financial Statements;
(r) for any period up to the Time of Closing the Company will not have any
debts or liabilities whatsoever (whether accrued, absolute or
contingent or otherwise), including any liabilities for federal,
provincial, sales, excise, income, corporate or any other taxes of the
Company except for;
(i) the debts and liabilities disclosed on, provided for or
included in the balance sheet forming a part of the most
recent of the Company's Financial Statements;
(ii) debts or liabilities disclosed in this Agreement or any
Schedule hereto; and
(iii) liabilities incurred by the Company in the ordinary course
of the Company's Business subsequent to the date of the
balance sheet referred to in the Company's Financial
Statements;
Books and Records
-----------------
(s) the books and records of the Company fairly and correctly set out and
disclose, in all material respects, in accordance with generally
accepted accounting principles, consistently applied, the financial
condition of the Company as of the date of this Master Agreement and
all material financial transactions of the Company have been
accurately recorded in such books and records;
Corporate Records
-----------------
(t) the Corporate records and minute books of the Company contain complete
and accurate minutes, (duly signed by the chairman and/or secretary of
the appropriate meeting) of all meetings of the directors and
shareholders of the Company since its date of incorporation;
13
(u) the share certificate records, the securities register, the register
of disclosures , the register of directors and officers for the
Company are contained in the corporate minute book and are complete
and accurate in all respects;
Directors and Officers
----------------------
(v) the present directors and officers of the Company are as follows:
Name Position
---- --------
Xxxxxxxx Xxxx President and Director
Accuracy of Warranties
----------------------
(w) neither this Agreement nor any document, schedule, list, certificate,
declaration under oath or written statement now or hereafter furnished
by the Vendor or the Company to the Purchaser in connection with the
transactions contemplated by this Agreement contains or will contain
any untrue statement or representation of a material fact on the part
of the Vendor or the Company, or omits or will omit on behalf of the
Vendor or the Company to state a material fact necessary to make any
such statement or representation therein or herein contained not
misleading; and
Full Disclosure
---------------
(x) the Vendor has no information or knowledge of any fact not
communicated to the Purchaser and relating to the Company or to the
Company's Business or to the Purchased Shares which, if known to the
Purchaser, might reasonably be expected to deter the Purchaser from
entering into this Agreement or from completing the transactions
contemplated by this Agreement.
3.4 Survival of the Representations, Warranties and Covenants by each of
----------------------------------------------------------------------
the Vendor and the Company. To the extent they have not been fully performed at
--------------------------
or prior to the Time of Closing, each and every representation and warranty of
the Vendor or the Company contained in this Agreement and any agreement,
instrument, certificate or other document executed or delivered pursuant to this
Agreement shall:
(a) be true and correct on and as of the Closing Date with the same force
and effect as though made or given on the Closing Date;
(b) remain in full force and effect notwithstanding any investigations
conducted by or on behalf of the Purchaser; and
(c) survive the completion of the transactions contemplated by this
Agreement until the second anniversary of the Closing Date and shall
continue in full force and effect for the benefit of the Purchaser
during that period, except that:
14
(i) the representations and warranties set out in section 3.2(a)
to and including 3.2(i) above shall survive and continue in
full force and effect without limitation of time; and
(ii) a claim for any breach of any of the representations and
warranties contained in this Agreement or in any agreement,
instrument, certificate or other document executed or
delivered pursuant hereto involving fraud or fraudulent
misrepresentation may be made at any time following the
Closing Date, subject only to applicable limitation periods
imposed by law.
(d) to the extent they have not been fully performed at or prior to the
Time of Closing, each and every covenant of the Vendor contained in
this Agreement and any agreement, instrument, certificate or other
document executed or delivered pursuant to this Agreement shall
survive the completion of the transactions contemplated by this
Agreement and, notwithstanding such completion, shall continue in full
force and effect for the benefit of the Purchaser.
Article 4
---------
WARRANTIES, REPRESENTATIONS AND COVENANTS BY THE PURCHASER
----------------------------------------------------------
4.1 Warranties, Representations and Covenants by the Purchaser. In order
-----------------------------------------------------------
to induce the Vendor and the Company to enter into and consummate this
Agreement, the Purchaser hereby warrants to, represents to and covenants with
each of the Vendor and the Company, with the intent that each of the Vendor and
the Company will rely thereon in entering into this Agreement and in concluding
the transactions contemplated herein, that, to the best of the knowledge,
information and belief of the Purchaser, after having made due inquiry:
Corporate Status of the Purchaser
---------------------------------
(a) the Purchaser is a company with limited liability duly and properly
incorporated, organized and validly subsisting under the laws of the
Country of Antigua being the only jurisdiction where it is required to
be registered for the purpose of enabling it to carry on its business
and own its property as presently carried on and owned;
(b) the Purchaser has good and sufficient power, authority and right to
own or lease its property, to enter into this Agreement and to perform
its obligations hereunder;
Authorization
-------------
(c) this Agreement has been duly authorized, executed and delivered by the
Purchaser and is a legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser, as the case may be, by
the Vendor and/or the Company in accordance with its terms, except as
15
enforcement may be limited by bankruptcy, insolvency and other laws
affecting the rights of creditors generally and except that equitable
remedies may be granted only in the discretion of a court of competent
jurisdiction;
Share Capital
-------------
(d) the authorized capital of the Purchaser consists of 100,000,000 shares
of common stock of which 27,091,033 shares of common stock of the
Purchaser have been duly issued and are outstanding as fully paid and
non-assessable, and 50,000,000 shares of preferred stock of which no
shares of preferred stock are issued and outstanding;
(e) all of the issued and outstanding shares of the Purchaser are listed
and posted for trading on the Exchange;
(f) the Purchaser will allot and issue the Common Shares on the Closing
Date in accordance with sections "2.2" and "2.3" hereinabove as fully
paid and non-assessable in the capital of the Purchaser, free and
clear of all actual or threatened liens, charges, security interests,
options, encumbrances, voting agreements, voting trusts, demands,
limitations and restrictions of any nature whatsoever, other than hold
periods or other restrictions imposed under applicable securities
legislation or by securities regulatory authorities;
Options
-------
(g) no person has any agreement or option or any right or privilege
(whether by law, pre-emptive or contractual) capable of becoming an
agreement, including convertible securities, warrants or convertible
obligations of any nature, for the purchase, subscription, allotment
or issuance of any unissued shares or other securities of the
Purchaser except for 3,000,000 stock options exercisable at US$1.31
per share which have been granted to directors, officers, employees
and consultants of the Purchaser;
Directors and Officers
----------------------
(h) the present directors and officers of the Purchaser are as follows:
Name Position
---- --------
Xxx Xxxx Yin Director, President and CEO;
Xxxx Xxxx Director and CFO;
Xx Xxxx Wang Director
Xxx Xxxx Xxx Director
Full Disclosure
---------------
(i) the Purchaser has no information or knowledge of any fact not
communicated to the Vendor and the Company and relating to the
Purchaser or to the Purchaser's business or to its issued and
outstanding securities which, if known to the Vendor and/or the
16
Company, might reasonably be expected to deter the Vendor and/or the
Company from entering into this Agreement or from completing the
transactions contemplated by this Agreement.
4.2 Survival of the Representations, Warranties and Covenants by the
----------------------------------------------------------------------
Purchaser. To the extent they have not been fully performed at or prior to the
---------
Time of Closing, each representation and warranty of the Purchaser contained in
this Agreement or in any document, instrument, certificate or undertaking given
pursuant hereto shall:
(a) be true and correct on and as of the Closing Date with the same force
and effect as though made or given on the Closing Date;
(b) remain in full force an effect notwithstanding any investigations
conducted by or on behalf of the Purchaser, and
(c) survive the completion of the transactions contemplated by this
Agreement until the second anniversary of the Closing Date and shall
continue in full force and effect for the benefit of the Vendor and
the Company during that period, except that a claim for any breach of
any of the representations and warranties contained in this Agreement
or in any agreement, instrument, certificate or other document
executed or delivered pursuant hereto involving fraud or fraudulent
misrepresentation may be made at any time following the Closing Date,
subject only to applicable limitation periods imposed by law.
(d) To the extent they have not been fully performed at or prior to the
Time of Closing, each and every covenant of the Purchaser contained in
this Agreement and any agreement, instrument, certificate or other
document executed or delivered pursuant to this Agreement shall
survive the completion of the transactions contemplated by this
Agreement and, notwithstanding such completion, shall continue in full
force and effect for the benefit of the Vendor and the Company.
Article 5
---------
CONDITIONS PRECEDENT TO CLOSING
-------------------------------
5.1 Parties' Conditions Precedent prior to the Closing Date. All of the
----------------------------------------------------------
rights, duties and obligations of each of the Parties hereto under this
Agreement are subject to the following conditions precedent for the exclusive
benefit of each of the Parties to be fulfilled in all material aspects in the
reasonable opinion of each of the Parties or to be waived by each or any of the
Parties, as the case may be, as soon as possible after the Execution Date;
however, unless specifically indicated as otherwise, not later than the Time of
Closing:
(a) the specific ratification of the terms and conditions of this
Agreement by the Board of Directors of the Purchaser within five
business days of the due and complete execution of this Agreement by
each of the Parties hereto (the "Purchaser's Ratification");
17
(b) the completion by the Purchaser of an initial due diligence and
operations review of the Company's Business and operations within five
(5) calendar days of the prior satisfaction by the Purchaser of the
Purchaser's Ratification (the "Purchaser's Initial Due Diligence");
5.2 Parties' Waiver of Conditions Precedent. The conditions precedent set
---------------------------------------
forth in section "5.1" hereinabove are for the exclusive benefit of each of the
Parties hereto and may be waived by each of the Parties in writing and in whole
or in part at or prior to the Time of Closing.
5.3 The Vendor's and the Company's Conditions Precedent. The purchase and
---------------------------------------------------
sale of the Purchased Securities is subject to the following terms and
conditions for the exclusive benefit of the Vendor and the Company, to be
fulfilled or performed at or prior to the Time of Closing:
(a) the representations and warranties of the Purchaser contained in this
Agreement shall be true and correct in all material respects at the
Time of Closing, with the same force and effect as if such
representations and warranties were made at and as of such time;
(b) all of the terms, covenants and conditions of this Agreement to be
complied with or performed by the Purchaser at or before the Time of
Closing shall have been complied with or performed in all material
respects;
(c) there shall have been obtained, from all appropriate federal,
provincial, municipal or other governmental or administrative bodies,
such licenses, permits, consents, approvals, certificates,
registrations and authorizations as are required by law, if any, to be
obtained by the Purchaser to permit the change of ownership of the
Purchased Shares contemplated hereby, in each case in form and
substance satisfactory to the Vendor and the Company, acting
reasonably;
(d) no legal or regulatory action or proceeding shall be pending or
threatened by any person to enjoin, restrict or prohibit the purchase
and sale of the Purchased Shares contemplated hereby;
If any of the conditions contained in this section 5.3 shall not be
performed or fulfilled at or prior to the Time of Closing to the satisfaction of
the Vendor and the Company, acting reasonably, the Vendor and/or the Company
may, by notice to the Purchaser, terminate this Agreement and the obligations of
the Vendor, the Company and the Purchaser under this Agreement, other than the
obligations contained in Article 8 hereinbelow, shall be terminated, provided
that the Vendor and the Company may also bring an action pursuant to Article 7
against the Purchaser for damages suffered by the Vendor and/or the Company
where the non-performance or non-fulfillment of the relevant condition is as a
result of a breach of covenant, representation or warranty by the Purchaser. Any
such condition may be waived in whole or in part by the Vendor and the Company
in writing without prejudice to any claims it may have for breach of covenant,
representation or warranty.
18
5.4 Purchaser's Conditions Precedent prior to the Closing Date. The sale
------------------------------------------------------------
and purchase of the Purchased Shares is subject to the following terms and
conditions for the exclusive benefit of the Purchaser, to be fulfilled or
performed at or prior to the Time of Closing:
(a) the representations and warranties of the Vendor and the Company
contained in this Agreement shall be true and correct at the Time of
Closing, with the same force and effect as if such representations and
warranties were made at and as of such time;
(b) all of the terms, covenants and conditions of this Agreement to be
complied with or performed by the Vendor and the Company at or before
the Time of Closing shall have been complied with or performed;
(c) there shall have been obtained, from all appropriate federal,
provincial, municipal or other governmental or administrative bodies,
such licenses, permits, consents, approvals, certificates,
registrations and authorizations as are required to be obtained, if
any, by the Vendor and the Company to permit the change of ownership
of the Purchased Shares contemplated hereby;
(d) there shall have been no material adverse changes in the condition
(financial or otherwise), assets, liabilities, operations, earnings,
the Company's Business or prospects of the Company since the date of
the Company's Financial Statements;
(e) no legal or regulatory action or proceeding shall be pending or
threatened by any person to enjoin, restrict or prohibit the purchase
and sale of the Purchased Shares contemplated hereby;
(f) no material damage by fire or other hazard to the whole or any
material part of the property or assets of the Company shall have
occurred from the date hereof to the Time of Closing;
If any of the conditions contained in this section 5.4 shall not be
performed or fulfilled at or prior to the Time of Closing to the satisfaction of
the Purchaser, acting reasonably, the Purchaser may, by notice to the Vendor and
the Company, terminate this Agreement and the obligations of the Vendor, the
Company and the Purchaser under this Agreement, other than the obligations set
forth in Article 8, shall be terminated, provided that the Purchaser may also
bring an action pursuant to Article 7 against the Vendor and/or the Company for
damages suffered by the Purchaser where the non-performance or non-fulfillment
of the relevant condition is as a result of a breach of covenant, representation
or warranty by the Vendor or the Company. Any such condition may be waived in
whole or in part by the Purchaser without prejudice to any claims it may have
for breach of covenant, representation or warranty.
19
Article 6
---------
CLOSING AND EVENTS OF CLOSING
-----------------------------
6.1 Closing and Closing Date. The closing (the "Closing") of the within
-------------------------
purchase and delivery of the Purchased Shares, as contemplated in the manner as
set forth in Article "2" hereinabove, together with all of the transactions
contemplated by this Agreement shall occur on January 29, 2004 (the "Closing
Date"), or on such earlier or later Closing Date as may be agreed to in advance
and in writing by each of the Parties hereto, and will be closed at the offices
of solicitors for the Purchaser, Xxxxxx Xxxxxx, Barristers and Solicitors,
located at Xxxxx 0000 - 000 X. Xxxxxxxx Xx., Xxxxxxxxx, X.X., X0X 0X0, at 2:00
p.m. (Vancouver time) on the Closing Date.
6.2 Latest Closing Date. If the Closing Date has not occurred by January
---------------------
31, 2004, subject to an extension as may be mutually agreed to by the Parties
for a maximum of 14 days per extension, then the Purchaser and the Vendor shall
each have the option to terminate this Agreement by delivery of written notice
to the other Party. Upon delivery of such notice, this Agreement shall cease to
be of any force and effect except for Article "8" hereinbelow, which shall
remain in full force and effect notwithstanding the termination of this
Agreement.
6.3 Documents to be delivered by the Company and the Vendor prior to the
----------------------------------------------------------------------
Closing Date. Not later than five calendar days prior to the Closing Date, and
------------
in addition to the documentation which is required by the agreements and
conditions precedent which are set forth hereinabove, the Company and the Vendor
shall also execute and deliver or cause to be delivered to Purchaser's counsel
all such other documents, resolutions and instruments as may be necessary, in
the opinion of counsel for the Purchaser, acting reasonably, to complete all of
the transactions contemplated by this Agreement and including, without
limitation, the necessary transfer of all of the Purchased Shares to the
Purchaser free and clear of all liens, security interests, charges and
encumbrances, and in particular including, but not being limited to, the
following materials:
(a) all documentation as may be necessary and as may be required by the
solicitors for the Purchaser, acting reasonably, to ensure that all of
the Purchased Shares have been transferred, assigned and are
registerable in the name of and for the benefit of the Purchaser under
all applicable corporate and securities laws;
(b) certificates representing the Purchased Shares registered in the name
of the Vendor, duly endorsed for transfer to the Purchaser and/or
irrevocable stock powers transferring the Purchased Shares to the
Purchaser;
(c) certificates representing the Purchased Shares registered in the name
of the Purchaser;
(d) a certified copy of the resolutions of the directors (and of the
Vendor/shareholder, if necessary) of the Company authorizing the
transfer by the Vendor to the Purchaser of the Purchased Shares;
20
(e) a copy of all corporate records and books of account of the Company
and including, without limiting the generality of the foregoing, a
copy of all minute books, share register books, share certificate
books and annual reports of the Company;
(f) all remaining Business Documentation; and
(g) all such other documents and instruments as the Purchaser's solicitors
may reasonably require.
6.4 Documents to be delivered by the Purchaser prior to the Closing Date.
---------------------------------------------------------------------
Not later than the Closing Date, and in addition to the documentation which is
required by the agreements and conditions precedent which are set forth
hereinabove, the Purchaser shall also execute and deliver or cause to be
delivered to the Company's and the Vendor's counsel, all such other documents,
resolutions and instruments that may be necessary, in the opinion of counsel for
the Company and the Vendor, acting reasonably, to complete all of the
transactions contemplated by this Agreement and including, without limitation,
the necessary acceptance of the transfer of all of the Purchased Shares to the
Purchaser free and clear of all liens, charges and encumbrances, and in
particular including, but not being limited to, the following materials:
(a) a copy of the resolutions of the directors of the Purchaser providing
for the approval of all of the transactions contemplated hereby;
(b) an executed treasury order of the Purchaser providing for the due
issuance of all of the Purchase Price Common Shares to the order and
direction of the Vendor in accordance with section "2.2" and "2.3"
hereinabove; and
(c) all such other documents and instruments as the Company's and the
Vendors' respective solicitors may reasonably require.
Article 7
---------
INDEMNIFICATION AND LEGAL PROCEEDINGS
-------------------------------------
7.1 Indemnification. The Parties hereto agree to indemnify and save
---------------
harmless the other Parties hereto and including, where applicable, their
respective affiliates, directors, officers, employees and agents (each such
party being an "Indemnified Party") harmless from and against and agree to be
liable for any and all losses, claims, actions, suits, proceedings, damages,
liabilities or expenses of whatever nature or kind, including any investigation
expenses incurred by any Indemnified Party, to which an Indemnified Party may
become subject by reason of the terms and conditions of this Agreement.
7.2 No Indemnification. This indemnity will not apply in respect of an
-------------------
Indemnified Party in the event and to the extent that a court of competent
21
jurisdiction in a final judgment shall determine that the Indemnified Party was
grossly negligent or guilty of willful misconduct.
7.3 Claim of Indemnification. The Parties hereto agree to waive any right
------------------------
they might have of first requiring the Indemnified Party to proceed against or
enforce any other right, power, remedy, security or claim payment from any other
person before claiming this indemnity.
7.4 Notice of Claim. In case any action is brought against an Indemnified
---------------
Party in respect of which indemnity may be sought against any of the Parties
hereto, the Indemnified Party will give the relevant Party hereto prompt written
notice of any such action of which the Indemnified Party has knowledge and such
Party will undertake the investigation and defense thereof on behalf of the
Indemnified Party, including the prompt consulting of counsel acceptable to the
Indemnified Party affected and the payment of all expenses. Failure by the
Indemnified Party to so notify shall not relieve any Party hereto of such
Party's obligation of indemnification hereunder unless (and only to the extent
that) such failure results in a forfeiture by any Party hereto of substantive
rights or defenses.
7.5 Settlement. No admission of liability and no settlement of any action
----------
shall be made without the consent of each of the Parties hereto and the consent
of the Indemnified Party affected, such consent not to be unreasonably withheld.
7.6 Legal Proceedings. Notwithstanding that the relevant Party hereto will
-----------------
undertake the investigation and defense of any action, an Indemnified Party will
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel will be at the
expense of the Indemnified Party unless:
(a) such counsel has been authorized by the relevant Party hereto;
(b) the relevant Party hereto has not assumed the defense of the action
within a reasonable period of time after receiving notice of the
action;
(c) the named parties to any such action include that any Party hereto and
the Indemnified Party shall have been advised by counsel that there
may be a conflict of interest between any Party hereto and the
Indemnified Party; or
(d) there are one or more legal defenses available to the Indemnified
Party which are different from or in addition to those available to
any Party hereto.
7.7 Contribution. If for any reason other than the gross negligence or bad
------------
faith of the Indemnified Party being the primary cause of the loss claim,
damage, liability, cost or expense, the foregoing indemnification is unavailable
to the Indemnified Party or insufficient to hold them harmless, the relevant
22
Party hereto shall contribute to the amount paid or payable by the Indemnified
Party as a result of any and all such losses, claim, damages or liabilities in
such proportion as is appropriate to reflect not only the relative benefits
received by any Party hereto on the one hand and the Indemnified Party on the
other, but also the relative fault of the Parties and other equitable
considerations which may be relevant. Notwithstanding the foregoing, the
relevant Party hereto shall in any event contribute to the amount paid or
payable by the Indemnified Party, as a result of the loss, claim, damage,
liability, cost or expense (other than a loss, claim, damage, liability, cost or
expenses, the primary cause of which is the gross negligence or bad faith of the
Indemnified Party), any excess of such amount over the amount of the fees
actually received by the Indemnified Party hereunder.
Article 8
---------
NON-DISCLOSURE
--------------
8.1 Public Announcements and Disclosure to Regulatory Authorities. All
----------------------------------------------------------------
information relating to the Agreement and the transaction contemplated therein
shall be treated as confidential and no public disclosure shall be made by any
Party without the prior approval of the Company and the Purchaser.
Notwithstanding the provisions of this Article, the Parties hereto agree to make
such public announcements and disclosure to the Regulatory Authorities of this
Agreement promptly upon its execution all in accordance with the requirements of
applicable securities legislation and regulations.
Article 9
---------
ASSIGNMENT AND AMENDMENT
------------------------
9.1 Assignment. Save and except as provided herein, no Party hereto may
----------
sell, assign, pledge or mortgage or otherwise encumber all or any part of its
respective interest herein without the prior written consent of all of the other
Parties hereto.
9.2 Amendment. This Agreement and any provision thereof may only be
---------
amended in writing and only by duly authorized signatories of each of the
respective Parties hereto.
Article 10
----------
FORCE MAJEURE
-------------
10.1 Events. If any Party hereto is at any time prevented or delayed in
------
complying with any provisions of this Agreement by reason of strikes, walk-outs,
labour shortages, power shortages, fires, wars, acts of God, earthquakes,
storms, floods, explosions, accidents, protests or demonstrations by
environmental lobbyists or native rights groups, delays in transportation,
breakdown of machinery, inability to obtain necessary materials in the open
market, unavailability of equipment, governmental regulations restricting normal
operations, shipping delays or any other reason or reasons beyond the control of
that Party, then the time limited for the performance by that Party of its
23
respective obligations hereunder shall be extended by a period of time equal in
length to the period of each such prevention or delay.
10.2 Notice. A Party shall, within seven calendar days, give notice to the
------
other Parties of each event of force majeure under section "10.1" hereinabove,
and upon cessation of such event shall furnish the other Parties with notice of
that event together with particulars of the number of days by which the
obligations of that Party hereunder have been extended by virtue of such event
of force majeure and all preceding events of force majeure.
Article 11
----------
ARBITRATION
-----------
11.1 Matters for Arbitration. The Parties agree that all questions or
------------------------
matters in dispute with respect to this Agreement shall be submitted to
arbitration pursuant to the terms hereof.
11.2 Notice. It shall be a condition precedent to the right of any Party to
------
submit any matter to arbitration pursuant to the provisions hereof that any
Party intending to refer any matter to arbitration shall have given not less
than 10 calendar days' prior written notice of its intention to do so to the
other Party together with particulars of the matter in dispute. On the
expiration of such 10 calendar days the Party who gave such notice may proceed
to refer the dispute to arbitration as provided in section "11.3" hereinbelow.
11.3 Appointments. The Party desiring arbitration shall appoint one
------------
arbitrator, and shall notify the other Party of such appointment, and the other
Party shall, within two calendar days after receiving such notice, appoint an
arbitrator, and the two arbitrators so named, before proceeding to act, shall,
within 10 calendar days of the appointment of the last appointed arbitrator,
unanimously agree on the appointment of a third arbitrator, to act with them and
be chairman of the arbitration herein provided for. If the other Party shall
fail to appoint an arbitrator within 10 calendar days after receiving notice of
the appointment of the first arbitrator, and if the two arbitrators appointed by
the Parties shall be unable to agree on the appointment of the chairman, the
chairman shall be appointed under the provisions of the Commercial Arbitration
Act (British Columbia) (the "Arbitration Act"). Except as specifically otherwise
provided in this section, the arbitration herein provided for shall be conducted
in accordance with such Arbitration Act. The chairman, or in the case where only
one arbitrator is appointed, the single arbitrator, shall fix a time and place
in Vancouver, British Columbia, for the purpose of hearing the evidence and
representations of the Parties, and he shall preside over the arbitration and
determine all questions of procedure not provided for under such Arbitration Act
or this section. After hearing any evidence and representations that the Parties
may submit, the single arbitrator, or the arbitrators, as the case may be, shall
make an award and reduce the same to writing, and deliver one copy thereof to
each of the Parties. The expense of the arbitration shall be paid as specified
in the award.
24
11.4 Award. The Parties agree that the award of a majority of the
-----
arbitrators, or in the case of a single arbitrator, of such arbitrator, shall be
final and binding upon each of them.
Article 12
----------
DEFAULT AND TERMINATION
-----------------------
12.1 Default. The Parties hereto agree that if any Party hereto is in
-------
default with respect to any of the provisions of this Agreement (herein called
the "Defaulting Party"), the non-defaulting Party (herein called the
"Non-Defaulting Party") shall give notice to the Defaulting Party designating
such default, and within 10 calendar days after its receipt of such notice, the
Defaulting Party shall either:
(a) cure such default, or commence proceedings to cure such default and
prosecute the same to completion without undue delay; or
(b) give the Non-Defaulting Party notice that it denies that such default
has occurred and that it is submitting the question to arbitration as
herein provided.
12.2 Arbitration. If arbitration is sought, a Party shall not be deemed in
-----------
default until the matter shall have been determined finally by appropriate
arbitration under the provisions of Article "11" hereinabove.
12.3 Curing the Default. If:
------------------
(a) the default is not so cured or the Defaulting Party does not commence
or diligently proceed to cure the default; or
(b) arbitration is not so sought; or
(c) the Defaulting Party is found in arbitration proceedings to be in
default, and fails to cure it within five calendar days after the
rendering of the arbitration award,
the Non-Defaulting Party may, by written notice given to the Defaulting Party at
any time while the default continues, terminate the interest of the Defaulting
Party in and to this Agreement.
12.4 Termination. In addition to the foregoing it is hereby acknowledged
-----------
and agreed by the Parties hereto that this Agreement will be terminated in the
event that:
25
(a) the Purchaser's Ratification is not received within five business days
of the due and complete execution of this Agreement by each of the
Parties hereto;
(b) the Purchaser fails to complete a successful and Purchaser's Initial
Due Diligence review of the Company's business and operations within
five (5) calendar days of the prior satisfaction by the Purchaser of
the Purchaser's Ratification;
(c) the conditions specified in section "5.1" hereinabove have not been
satisfied at or prior to the Time of Closing;
(d) either of the Parties hereto has not either satisfied or waived each
of their respective conditions precedent at or prior to the Time of
Closing in accordance with the provisions of Article "5" hereinabove;
(e) either of the Parties hereto has failed to deliver or caused to be
delivered any of their respective documents required to be delivered
by Articles "5" and "6" hereinabove at or prior to the Time of Closing
in accordance with the provisions of Articles "5" and "6"; or
(f) by Closing has not occurred on or before January 31, 2004, or such
later date, all in accordance with section "6.2" hereinabove; or
(g) by agreement in writing by each of the Parties hereto;
and in such event this Agreement will be terminated and be of no further force
and effect other than the obligations under Article "8" hereinabove.
Article 13
----------
NOTICE
------
13.1 Notice. Each notice, demand or other communication required or
------
permitted to be given under this Agreement shall be in writing and shall be sent
by prepaid registered mail deposited in a post office addressed to the Party
entitled to receive the same, or delivered to such Party, at the address for
such Party specified above. The date of receipt of such notice, demand or other
communication shall be the date of delivery thereof if delivered, or, if given
by registered mail as aforesaid, shall be deemed conclusively to be the third
calendar day after the same shall have been so mailed, except in the case of
interruption of postal services for any reason whatsoever, in which case the
date of receipt shall be the date on which the notice, demand or other
communication is actually received by the addressee.
13.2 Change of Address. Either Party may at any time and from time to time
-----------------
notify the other Party in writing of a change of address and the new address to
which notice shall be given to it thereafter until further change.
26
Article 14
----------
GENERAL PROVISIONS
------------------
14.1 Entire Agreement. This Agreement constitutes the entire agreement to
----------------
date between the Parties hereto and supersedes every previous agreement,
communication, expectation, negotiation, representation or understanding,
whether oral or written, express or implied, statutory or otherwise, between the
Parties with respect to the subject matter of this Agreement and including,
without limitation, the agreement as between the Purchaser, the Vendor and the
Company.
14.2 Enurement. This Agreement will enure to the benefit of and will be
---------
binding upon the Parties hereto, their respective heirs, executors,
administrators and assigns.
14.3 Schedules. The Schedules to this Agreement are hereby incorporated by
---------
reference into this Agreement in its entirety.
14.4 Time of the Essence. Time will be of the essence of this Agreement.
-------------------
14.5 Representation and Costs. It is hereby acknowledged by each of the
-------------------------
Parties hereto that, as between the Parties hereto, Xxxxxx Xxxxxx, Barristers
and Solicitors, acts solely for the Purchaser, and that each of the Vendor and
the Company have been advised by Xxxxxx Xxxxxx to obtain independent legal
advice with respect to their respective reviews and execution of this Agreement.
In addition, it is hereby further acknowledged and agreed by the Parties hereto
that each Party to this Agreement will bear and pay its own costs, legal and
otherwise, in connection with its respective preparation, review and execution
of this Agreement, and, in particular, that the costs involved in the
preparation of this Agreement, and all documentation necessarily involved
thereto, by Xxxxxx Xxxxxx shall be at the cost of the Purchaser.
14.6 Applicable Law. The situs of this Agreement is Vancouver, British
---------------
Columbia and for all purposes this Agreement will be governed exclusively by and
construed and enforced in accordance with the laws and Courts prevailing in the
Province of British Columbia.
14.7 Further Assurances. The Parties hereto hereby, jointly and severally,
------------------
covenant and agree to forthwith, upon request, execute and deliver, or cause to
be executed and delivered, such further and other deeds, documents, assurances
and instructions as may be required by the Parties hereto or their respective
counsel in order to carry out the true nature and intent of this Agreement.
14.8 Severability and Construction. Each Article, section, paragraph, term
-----------------------------
and provision of this Agreement, and any portion thereof, shall be considered
27
severable, and if, for any reason, any portion of this Agreement is determined
to be invalid, contrary to or in conflict with any applicable present or future
law, rule or regulation in a final unappealable ruling issued by any court,
agency or tribunal with valid jurisdiction in a proceeding to any of the Parties
hereto is a party, that ruling shall not impair the operation of, or have any
other effect upon, such other portions of this Agreement as may remain otherwise
intelligible (all of which shall remain binding on the Parties and continue to
be given full force and agreement as of the date upon which the ruling becomes
final).
14.9 Captions. The captions, section numbers, Article numbers and Schedule
--------
numbers appearing in this Agreement are inserted for convenience of reference
only and shall in no way define, limit, construe or describe the scope or intent
of this Agreement nor in any way affect this Agreement.
14.10 Currency. Unless otherwise stipulated, all references to money amounts
--------
herein shall be in lawful money of the United States.
14.11 Counterparts. This Agreement may be signed by the Parties hereto in as
------------
many counterparts as may be necessary, and via facsimile if necessary, each of
which so signed being deemed to be an original and such counterparts together
constituting one and the same instrument and, notwithstanding the date of
execution, being deemed to bear the effective Execution Date as set forth on the
front page of this Agreement.
14.12 No Partnership or Agency. The Parties hereto have not created a
--------------------------
partnership and nothing contained in this Agreement shall in any manner
whatsoever constitute any Party the partner, agent or legal representative of
any other Party, nor create any fiduciary relationship between them for any
purpose whatsoever. No Party shall have any authority to act for, or to assume
any obligations or responsibility on behalf of, any other party except as may
be, from time to time, agreed upon in writing between the Parties or as
otherwise expressly provided.
14.13 Consents and Waivers. No consent or waiver expressed or implied by
----------------------
either Party hereto in respect of any breach or default by any other Party in
the performance by such other of its obligations hereunder shall:
(a) be valid unless it is in writing and stated to be a consent or waiver
pursuant to this section;
(b) be relied upon as a consent to or waiver of any other breach or
default of the same or any other obligation;
(c) constitute a general waiver under this Agreement; or
(d) eliminate or modify the need for a specific consent or waiver pursuant
to this section in any other or subsequent instance.
28
IN WITNESS WHEREOF each of the Parties hereto has hereunto executed
-------------------
this Agreement as of the Execution Date as set forth on the front page of this
Agreement.
SIGNED and DELIVERED by )
XX XXXX WANG, a Vendor )
------------ )
herein, in the presence of: )
)
)
Witness Signature ) /s/ Xx Xxxx Xxxx
) -------------------------------
) XX XXXX WANG
) ------------
Witness Address )
)
)
Witness Name and Occupation )
TANGSHAN YIAN BIOLOGICAL )
------------------------ )
ENGINEERING CO., LTD., the Company )
--------------------- )
herein, )
)
)
Per: /s/ Xxxxxxxx Xxxx )
------------------------------------)
Authorized Signatory )
SINOVAC BIOTECH LTD., the )
-------------------- )
Purchaser herein, )
)
)
Per: /s/ Xxx Xxxx Yin )
------------------------------------)
Authorized Signatory )
29
Schedule A
----------
This is Schedule "A" to that certain Share Purchase Agreement among
Sinovac Biotech Ltd., Tangshan Yian Biological Engineering Co., Ltd. and the
Vendor shareholder of Tangshan Yian Biological Engineering Co., Ltd.
Purchased Securities and Vendors
--------------------------------
Authorized Capital: unlimited common shares
------------------
Issued Capital: 9,335,435 common shares
--------------
Vendor:
------
Xx Xxxx Xxxx: 9,335,435 common shares.
------------
X/x 000 Xxxxx Xx.
Xxxx Xxxx. Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxxx Provence
063000 P.R. China
30
Schedule B
----------
This is Schedule "B" to that certain Share Purchase Agreement among
Sinovac Biotech Ltd., Tangshan Yian Biological Engineering Co., Ltd. and the
Vendor shareholder of Tangshan Yian Biological Engineering Co., Ltd.
Promissory Note Issued by Sinovac Biotech Ltd. to Tangshan Yian Biological
--------------------------------------------------------------------------
Engineering Co., Ltd.
---------------------
Refer to the materials attached hereto.
--------------------------------------
----------
31
PROMISSORY NOTE
---------------
Principal: US$2,200,000 Made and Dated at: Vancouver, B.C.
Interest: 0% per annum
Issuance Date: January 26, 2004 Maturity Date: January 26, 2005
Borrower: Sinovac Biotech Ltd.
Lender: Xx Xxxx Wang
FOR VALUABLE CONSIDERATION, receipt whereof is hereby acknowledged, the Borrower
--------------------------
hereby promises to pay to the Lender (also called the "holder"), or the
authorized and registered subsequent holder of this promissory note (the
"Note"), the principal sum of $2,200,000 in lawful money of the United States
(hereinafter referred to as the "Principal Amount"), with no interest.
The Principal Amount, as specified above, is due and payable by the
Borrower on the Maturity Date. The Borrower may prepay any amount of the
Principal Amount at any time prior to the Maturity Date without penalty and this
Note shall be discharged in respect to the amount paid.
If the Borrower fails to make payment of the Principal Amount on the
Maturity Date, the balance of the Principal Amount under this Promissory Note
will become immediately due and payable.
To secure payment of the Principal Amount hereunder, the Borrower
hereby irrevocably appoints and authorizes any representative of the holder to
appear before a court of competent jurisdiction and enter judgment, without
process, in favour of the holder for any unpaid Principal Amount, and the
Borrower waives and releases all errors which may intervene and consents to
immediate execution upon such judgment.
The Borrower hereby waives demand, presentment for payment, notice of
non-payment, and protest.
If any provision of this Note is held to be invalid, illegal, or
unenforceable, then such shall not affect or impair the validity, legality, or
enforceability of the remaining provisions.
WITNESS the hand and seal of the Borrower as of the 26th day of
January, 2004.
SINOVAC BIOTECH LTD.
--------------------
per: /s/ Xxx Xxxx Yin
------------------------------------
Authorized Signatory
