DATED July 2, 2005 AND AGREEMENT FOR THE SALE AND PURCHASE OF THE ENTIRE ISSUED CAPITAL OF SINO CONCEPT TECHNOLOGY LIMITED 中外科技有榰公司 Baker & 14th Floor Hutchison House Hong Kong Telephone: (852) 2846-1888 Fax: (852) 2845-0476
Exhibit
(10)-gg
Execution
Copy
DATED
July 2, 2005
(1)
SINO BIOPHARMACEUTICAL LIMITED
AND
(2)
BAUSCH & LOMB INCORPORATED
AGREEMENT
FOR THE
SALE
AND PURCHASE OF
THE
ENTIRE ISSUED CAPITAL OF
SINO
CONCEPT TECHNOLOGY LIMITED 中外科技有榰公司
Xxxxx
&
00xx
Xxxxx Xxxxxxxxx Xxxxx
Xxxx
Xxxx
Telephone:
(000) 0000-0000
Fax:
(000) 0000-0000
CONTENTS
|
Number
|
Clause
Headings
|
Page
|
||
|
1.
|
Definitions
and Interpretation
|
5
|
||
|
2.
|
Sale
of Sale Shares
|
17
|
||
|
3.
|
Consideration
|
17
|
||
|
4.
|
Conditions
|
17
|
||
|
5.
|
Completion
|
21
|
||
|
6.
|
Post-Completion
|
29
|
||
|
7.
|
Restriction
of Vendor and Undertaking of Purchaser
|
30
|
||
|
8.
|
Warranties
|
33
|
||
|
9.
|
Pre-Completion
|
34
|
||
|
10.
|
Confidentiality
and Restriction on Announcements
|
38
|
||
|
11.
|
Costs
|
39
|
||
|
12.
|
General
|
39
|
||
|
13.
|
Notices
|
41
|
||
|
14.
|
Governing
Law and Arbitration
|
42
|
||
|
15.
|
English
and Chinese Versions
|
42
|
||
|
SCHEDULE
1
|
Details
of the Company
|
44
|
||
|
SCHEDULE
2
|
Details
of the Subsidiaries
|
45
|
||
|
SCHEDULE
3
|
The
Properties
|
49
|
||
|
SCHEDULE
4
|
Deed
of Indemnity
|
50
|
||
|
SCHEDULE
5
|
Warranties
|
61
|
||
|
SCHEDULE
6
|
Intellectual
Property
|
98
|
||
|
SCHEDULE
7
|
Hong
Kong Legal Opinion
|
99
|
||
|
SCHEDULE
8
|
Patents
|
103
|
||
|
SCHEDULE
9
|
Patent
License Contract
|
106
|
||
|
SCHEDULE
10
|
Deed
of Undertaking
|
107
|
||
|
SCHEDULE
11
|
List
of Key Employees
|
111
|
||
|
SCHEDULE
12
|
Principal
Terms of Key Management Retention Agreement
|
112
|
||
|
SCHEDULE
13
|
Resignation
Letter
|
113
|
||
|
SCHEDULE
14
|
Irrevocable
Power of Attorney
|
114
|
||
|
SCHEDULE
15
|
Confirmation
and Declaration of Shandong Research Institute
|
117
|
||
|
Annex
I
|
Accounts
|
118
|
||
|
Annex
II
|
Management
Accounts
|
119
|
||
|
Annex
III
|
Subsidiary
Accounts
|
120
|
||
|
Annex
IV
|
Subsidiary
Management Accounts
|
121
|
||
|
Annex
V
|
Approved
Extraordinary Expenditures
|
122
|
||
|
Execution
|
122
|
|||
DATE:
July
2,
2005
PARTIES:
|
(1)
|
SINO
BIOPHARMACEUTICAL LIMITED,
a
company incorporated in the Cayman Islands, whose registered office
is at
Century Yard, Cricket Square, Xxxxxxxx Drive, P.O. Box 2681 GT, Xxxxxx
Town, Grand Cayman, British West Indies and whose principal place
of
business in Hong Kong is Xxxx 00, 00xx Xxxxx, Xxxxxx Xxxxx, Xxxxxxxxxx
Xxxxx, 0 Harbour Road, Wanchai, Hong Kong (the “Vendor”).
|
|
(2)
|
BAUSCH
& LOMB INCORPORATED,
a
company incorporated in the State of New York, United States of America,
whose principal place of business is at Xxx Xxxxxx & Xxxx Xxxxx,
Xxxxxxxxx, Xxx Xxxx 00000-0000, Xxxxxx Xxxxxx of America (the “Purchaser”).
|
RECITALS:
|
(A)
|
The
Company (as defined below) is a limited liability company incorporated
in
Hong Kong with registered number 300326 and as at the date of this
Agreement has an authorised share capital of HK$10,100 divided into
10,100
ordinary shares of HK$1.00 each, all of which have been issued and
are
fully paid up and are beneficially owned by the Vendor. Further
particulars of the Company are set out in Schedule
1.
|
|
(B)
|
The
Vendor wishes to sell and the Purchaser wishes to purchase the Sale
Shares
(as defined below) on the terms and conditions set out in this
Agreement.
|
TERMS
AGREED:
| 1. |
Definitions
and Interpretation
|
|
1.1
|
In
this Agreement where the context so admits the following words and
expressions shall have the following
meanings:
|
|
“Accounting
Date”
|
December
31, 2004;
|
|
“Accounts”
|
the
audited consolidated financial statements of the Company for the
accounting period which ended on the Accounting Date (each such financial
statement comprising the consolidated profit and loss account,
consolidated balance sheet, consolidated summary statement of changes
in
equity, consolidated cash flow statement, a balance sheet for the
Company,
directors’ and auditors’ reports, and notes to the financial statements as
at and for the period ended on the Accounting Date), copies of which
are
annexed hereto as Annex I and initialled for the purposes of
identification by the Parties;
|
|
“Approved
Extraordinary Expenditures”
|
the
expected extraordinary expenditures for the Subsidiaries for the
three (3)
months immediately after the date of this Agreement which have been
approved by the Purchaser, a list of which is annexed hereto as Annex
V
and initialled for the purposes of identification by the
Parties;
|
|
“Auditors”
|
Ernst
& Young;
|
|
“Board”
|
the
board of directors of the Company for the time being;
|
|
“Business
Day”
|
|
|
“Company”
|
Sino
Concept Technology Limited 中外科技有榰公司,
details of which are set out in Schedule 1;
|
|
“company”
|
any
company or body corporate wherever incorporated;
|
|
“Companies
Ordinance”
|
Companies
Ordinance (Chapter 32 of the Laws of Hong Kong);
|
|
“Completion”
|
completion
of the sale and purchase of the Sale Shares as specified in Clause
5;
|
|
“Completion
Date”
|
the
date of Completion, being the fifth Business Day after the fulfilment
or
waiver (as the case may be) of all of the Conditions specified in
Clause
4.1 (save for the Conditions set out in Clauses 4.1.2, 4.1.3, 4.1.4
and
4.1.7) (or such later date as the Parties may agree in
writing);
|
|
“Conditions”
|
the
conditions specified in Clause 4.1;
|
|
“Consideration”
|
the
amount of US$200,000,000 (United States Dollars Two Hundred
Million);
|
|
“Control”
|
a
person or persons (each a “controller”) shall be taken to have Control of
another person (“the controlled person”) if one or more of the
controllers, whether by law or in fact has, or is entitled to acquire,
the
right or the power to secure whether directly or indirectly, that
the
controlled person’s affairs are conducted in accordance with the wishes of
the controller and in particular, but without prejudice to the generality
of the foregoing, if one or more of the controllers holds:
(i) the
greater part of the share capital of the controlled person or of
the
voting rights attaching to the controlled person’s shares; or
(ii) the
power to control the composition of any board of directors or governing
body of the controlled person;
For
the purposes of the foregoing and without limitation there shall
be
attributed to any controller:
(i) any
rights or powers which another person possesses on his behalf or
is or may
be required to exercise on his direction or behalf; and
(ii) all
rights and powers of any body corporate of which any controller alone
or
together with another or other controllers has control or of any
two or
more such bodies corporate;
|
|
“CTF”
|
山东正大福瑞灂制粑有榰公司
(Shandong Chia Xxx Xxxxx Pharmaceutical Co. Ltd.), details of which
are
set out in Part A of Schedule 2;
|
|
“CTFP”
|
山东正大福瑞灂包眻新材料有榰公司
(Shandong Chia Xxx Xxxxx New Packaging Resources Co. Ltd.), details
of
which are set out in Part B of Schedule 2;
|
|
“Deed
of Indemnity”
|
the
deed of indemnity to be entered into between the Vendor, the Company
and
the Purchaser in the form set out in Schedule 4;
|
|
“Dermatitis
Products”
|
cremes,
emollients and other topical medicines sold and administered principally
for therapeutic purposes, and distinguished from products sold and
administered principally for cosmetic purposes, which are not the
subject
of a restrictive covenant;
|
|
“Directors”
|
the
persons listed as directors of the Company in Schedule
1;
|
|
“Disclosure
Letter”
|
the
letter of today’s date from the Vendor to the Purchaser in the approved
terms;
|
|
“Environment”
|
all
or any of the following media, namely, the air, water and land; and
the
medium of air includes the air within buildings and the air within
other
natural or man-made structures above or below ground;
|
|
“Environmental
Law”
|
all
and any laws, directives, regulations, notices, standards having
force of
law, codes of practice, guidance notes, by-laws, judgments, decrees
or
orders of and within the PRC, relating to pollution, contamination
or
protection of the Environment or to the storage, labelling, handling,
release, treatment, manufacture, processing, deposit, transportation
or
disposal of Hazardous Substances;
|
|
“Environmental
Licence”
|
any
permit, licence, authorisation, consent or other approval, that may
be
required by any Environmental Law;
|
|
“Equity
Interests”
|
the
55% equity interests held by the Company in each of CTF and
CTFP;
|
|
“Formulation
Information”
|
the
written statement of ingredients, concentrations and manufacturing
instructions, specifications and procedures for each of the following
products of the Subsidiaries:
(i) Moisten
Eye Drops,
(ii) Mioclear
Eye Drops,
(iii) Renown
Eye Drops,
(iv) Levsaxin
Eye Drops,
(v) Mioclear
Eye Cleaning Solution, and
(vi) Sodium
Hyaluronate Injection;
|
|
“Group”
|
the
group of companies comprising the Company and the Subsidiaries; the
expression “member
of the Group”
shall mean any or a specific one of them;
|
|
“HA”
|
hyaluronic
acid or hyaluronate, a polysaccharide made up of two repeating
monosaccharide units (N-acetylglucosamine and Naglucuronate) present
in
the intercellular matrix of nearly all connective
tissues;
|
|
“Hazardous
Substances”
|
all
substances of whatever description which may cause or have a harmful
effect on the Environment, including, without limitation, all poisonous,
toxic, noxious, dangerous and offensive substances;
|
|
“HK$”
|
|
|
“HKIAC”
|
has
the meaning ascribed to it in Clause 14.2;
|
|
the
Hong Kong Special Administrative Region of the People’s Republic of
China;
|
|
|
“Intellectual
Property”
|
includes
patents, knowhow, trade secrets and other confidential information,
registered designs, copyrights, Internet domain names of any level,
design
rights, rights in circuit layouts, moral rights, trade marks, service
marks, trade dress, business names, registrations of, applications
to
register and rights to apply for registration of any of the aforesaid
items, rights in the nature of any of the aforesaid items in any
country,
rights in the nature of unfair competition rights and rights to xxx
for
passing off;
|
|
“Key
Employees”
|
those
individuals whose names are set out in Schedule 11;
|
|
“Key
Management Retention Agreements”
|
the
services retention agreements to be entered into between the relevant
member of the Group and the Key Employees which will incorporate
the
principal terms set out in Schedule 12;
|
|
“Leases”
|
all
the leases, sub-leases, tenancy agreements, sub-tenancy agreements,
licences or other documents (including any options for extension
relating
thereto) granted or agreed to be granted to any member of the Group
or
pursuant to which any member of the Group holds or occupies any property,
details of which are set out in Schedule 3;
|
|
“Leased
Properties”
|
the
properties short particulars of which are set out in Part 2 of Schedule
3;
|
|
“Listing
Rules”
|
the
Rules Governing the Listing of Securities on The Stock Exchange of
Hong
Kong Limited;
|
|
“Management
Accounts”
|
the
unaudited consolidated balance sheet of the Company as at May 31,
2005 and
the unaudited consolidated profit and loss account of the Company
for the
period commencing from January 1, 2005 and ending on May 31, 2005,
copies
of which are annexed hereto as Annex II and initialled for the purpose
of
identification by the Parties;
|
|
“Material
Adverse Effect”
|
a
material adverse effect on the assets, business, liabilities, operations,
property or financial condition of the Group taken as a
whole;
|
|
“Owned
Properties”
|
the
properties, short particulars of which are set out in Part 1 of Schedule
3;
|
|
“Parties”
|
the
named parties to this Agreement and their respective successors and
assigns and “Party”
means each or any specific one of them;
|
|
“Patents”
|
the
patents and patent applications listed in Schedule 8 and such unpatented
products and technology (including unfiled, abandoned or not yet
filed
patents and patent applications on inventions) as are used by the
Subsidiaries in the production, use or sale of its products (including
pipeline products) at the date hereof and where applicable, patents
and
patent applications filed by the Subsidiaries even if they are not
used in
any of the products of the Subsidiaries;
|
|
“PRC”
|
the
People’s Republic of China and for the purposes of this Agreement, shall
exclude Hong Kong, the Macau Special Administrative Region and
Taiwan;
|
|
“Properties”
|
the
Owned Properties and the Leased Properties;
|
|
“Purchaser’s
Patent Review”
|
the
review to be conducted by the Purchaser’s Solicitors as described in
Clause 4.1.9;
|
|
“Purchaser’s
Solicitors”
|
Xxxxx
& XxXxxxxx of 00xx Xxxxx Xxxxxxxxx Xxxxx, 00 Xxxxxxxx Xxxx, Xxxxxxx,
Xxxx Xxxx;
|
|
“Relevant
Scheme”
|
has
the meaning ascribed to it in Clause 9.1.9;
|
|
“Restricted
Businesses”
|
the
manufacturing and sale of (i) ophthalmic chemical products regardless
of
whether they incorporate HA as the key compound or agent (the “Restricted
Ophthalmic Business”) and (ii) osteoarthritis products or Dermatitis
Products for external applications incorporating HA as the key compound
or
agent (the “Restricted Other Businesses”);
|
|
“RMB”
|
Renminbi,
the lawful currency of the PRC;
|
|
“Sale
Shares”
|
the
10,100 ordinary shares of HK$1.00 each in the share capital of the
Company, being the entire issued share capital of the
Company;
|
|
“Shandong
Research Institute”
|
Shandong
Biopharmaceutical Research Institute, a biopharmaceutical research
laboratory in Shandong Province, PRC;
|
|
“Subsidiaries”
|
CTF
and CTFP;
|
|
“Subsidiary
Accounts”
|
the
audited financial statements of each Subsidiary for the accounting
period
which ended on the Accounting Date (each such financial statement
comprising a balance sheet, profit and loss account, statement of
cash
flow, auditors’ report, and any notes, reports or statements included
therein or annexed thereto), copies of which are annexed hereto as
Annex
III and initialled for the purposes of identification by the
Parties;
|
|
“Subsidiary
Management Accounts”
|
the
unaudited balance sheet of each Subsidiary as at May 31, 2005, and
the
unaudited profit and loss account of each Subsidiary for the period
commencing from January 1, 2005 and ending on May 31, 2005, copies
of
which are annexed hereto as Annex IV and initialled for the purpose
of
identification by the Parties;
|
|
“Tax”
|
all
forms of taxation, estate duties, deductions, withholdings, duties,
imposts, levies, fees, charges, social security contributions and
rates
imposed, levied, collected, withheld or assessed by any local, municipal,
regional, urban, governmental, state, federal or other body in Hong
Kong,
the PRC, or elsewhere and any interest, additional taxation, penalty,
surcharge or fine in connection therewith;
|
|
“US$”
|
United
States dollars, the lawful currency of the United States of
America;
|
|
“Vendor’s
Solicitors”
|
Xxxxxxxx
& Xxxxxxxx of 21st Floor, Entertainment Building, 30 Queen’s Road
Central, Hong Kong; and
|
|
“Warranties”
|
the
representations, warranties and undertakings contained or referred
to in
Clause 8 and set out in Schedule 5; “Warranty”
means any or a specific one of
them.
|
|
1.2
|
Save
where the context otherwise requires words and phrases the definitions
of
which are contained or referred to in the Companies Ordinance shall
be
construed as having the meaning thereby attributed to
them.
|
|
1.3
|
Any
references, express or implied, to statutes or statutory provisions
shall
be construed as references to those statutes or provisions as respectively
amended or re-enacted or as their application is modified from time
to
time by other provisions (whether before or after the date hereof)
and
shall include any statutes or provisions of which they are re-enactments
(whether with or without modification) and any orders, regulations,
instruments or other subordinate legislation under the relevant statute
or
statutory provision. References to Sections of consolidating legislation
shall, wherever necessary or appropriate in the context, be construed
as
including references to the Sections of the previous legislation
from
which the consolidating legislation has been
prepared.
|
|
1.4
|
References
in this Agreement to Clauses and Schedules are to clauses in and
schedules
to this Agreement (unless the context otherwise requires). The Recitals
and Schedules to this Agreement shall be deemed to form part of this
Agreement.
|
|
1.5
|
Headings
are inserted for convenience only and shall not affect the construction
of
this Agreement.
|
|
1.6
|
The
expressions “the
Vendor”
and “the
Purchaser”
include their respective successors and
assigns.
|
|
1.7
|
References
to “persons”
shall include individuals, bodies corporate, unincorporated associations
and partnerships (whether or not having separate legal
personality).
|
|
1.8
|
References
to writing shall include any methods of producing or reproducing
words in
a legible and non-transitory form.
|
|
1.9
|
The
masculine gender shall include the feminine and neuter and the singular
number shall include the plural and vice
versa.
|
|
1.10
|
A
document expressed to be “in
the approved terms”
means a document the terms of which have been approved by or on behalf
of
the Parties in writing.
|
1.11 In
construing this Agreement:
|
1.11.1
|
the
rule known as the ejusdem generis rule shall not apply and, accordingly,
general words introduced by the word “other” shall not be given a
restrictive meaning by reason of the fact that they are preceded
by words
indicating a particular class of acts, matters or things;
and
|
|
1.11.2
|
general
words shall not be given a restrictive meaning by reason of the fact
that
they are followed by particular examples intended to be embraced
by the
general words.
|
| 2. |
Sale
of Sale Shares
|
|
2.1
|
Subject
to the terms of this Agreement, the Vendor shall sell as legal and
beneficial owner and the Purchaser shall purchase, the Sale Shares,
free
from all liens, charges and encumbrances and together with all rights
now
or hereafter attaching to them, including all rights to any dividend
or
other distribution declared, made or paid after the date of this
Agreement.
|
|
2.2
|
The
Vendor hereby waives and agrees to procure the waiver of any restrictions
on transfer (including pre-emption rights), if any, which may exist
in
relation to the Sale Shares, whether under the articles of association
of
the Company or otherwise.
|
| 3. |
Consideration
|
|
3.1
|
The
total consideration payable for the Sale Shares shall be the
Consideration.
|
|
3.2
|
The
Consideration shall be payable on Completion in accordance with Clause
5.2.1.
|
| 4. |
Conditions
|
4.1 The
sale
and purchase of the Sale Shares is conditional upon:
|
4.1.1
|
no
notice having been received from the PRC Ministry of Commerce
(“MOFCOM”)
and/or the PRC State Administration of Industry and Commerce (“SAIC”)
pursuant to the Provisional
Rules on Mergers with and Acquisitions of Domestic Enterprises by
Foreign
Investors,
promulgated by the Ministry of Foreign Trade and Economic Cooperation
(the
predecessor of MOFCOM), State Administration of Taxation, SAIC and
State
Administration of Foreign Exchange on 7 March 2003 and effective
as of 12
April 2003, ordering an anti-trust filing to be made in respect of
the
sale and purchase of the Sale Shares pursuant to this Agreement;
in the
event such order to file is received, this condition shall be satisfied
after the Vendor and the Purchaser have jointly made the necessary
anti-trust filing and MOFCOM and SAIC having consented to the sale
and
purchase of the Sale Shares pursuant to this
Agreement;
|
|
4.1.2
|
the
Warranties not being untrue or inaccurate or misleading at Completion
which results in a Material Adverse
Effect;
|
|
4.1.3
|
the
Vendor having complied fully with the obligations specified in Clause
9.1
and otherwise having performed all of the covenants and agreements
required to be performed by it under this
Agreement;
|
|
4.1.4
|
no
statute, regulation or decision which would prohibit, restrict or
materially delay the sale and purchase of the Sale Shares or the
operation
of any member of the Group after Completion having been proposed,
enacted
or taken by any governmental or official authority;
|
|
4.1.5
|
(i)
Xx. Xxxx Peixue having entered into a license contract with CTF,
acknowledged by the Shandong Research Institute, substantially in
the form
set out in Schedule 9 (the “Patent
License Contract”);
(ii) Xx. Xx Hongjie having executed a license contract with CTF,
acknowledged by Shandong Research Institute, substantially similar
in form
to the Technology License Contract; (iii) Xx. Xxxx, Xx. Xx and, if
necessary, the Shandong Research Institute having executed the relevant
governmental license recordal forms requested by Purchaser in respect
of
the Technology License Contracts referred to in sub-clauses (i) and
(ii)
above; and (iv) the Shandong Research Institute having executed a
Confirmation and Declaration substantially in the form set out in
Schedule
15;
|
|
4.1.6
|
the
approval of the shareholders of the Vendor (or, if required under
the
Listing Rules, the approval of the independent shareholders of the
Vendor), being obtained in respect of the sale and purchase of the
Sale
Shares pursuant to this Agreement;
|
|
4.1.7
|
there
being no change in the business or operations of the Group which
has a
Material Adverse Effect any time between the date of this Agreement
and
Completion;
|
|
4.1.8
|
each
of the Key Employees having entered into a Key Management Retention
Agreement;
|
|
4.1.9
|
the
Purchaser’s Solicitors (through Chiang Ling Li) shall have been provided
with the Formulation Information and shall not have within a period
of
fifteen (15) Business Days (counted, for the sake of clarity, beginning
with the first Business Day after
Formulation Information is actually delivered) determined based on
a
review of the Formulation Information so provided, that one or more
claim
of a published patent in the PRC or patent application in the PRC
is
infringed by one or more of the products which are the subject of
the
Formulation Information. The foregoing condition shall be deemed
satisfied
unless the Purchaser’s Solicitors’ conclusion that there is such
infringement, with detailed findings, is provided to the Vendor’s
Solicitors in writing on or before the end of such fifteen (15) Business
Day period. For purposes of the foregoing, the Vendor shall not be
required to provide the Formulation Information to the Purchaser’s
Solicitors as stated above unless and until the Conditions set out
in
Clauses 4.1.5 and 4.1.8 shall have been fulfilled or waived in
writing.(pursuant to Clause 4.2);
and
|
|
4.1.10
|
a
contract to terminate the existing license granted by Xx. Xxxx Peixue
and
any other licensor(s) thereto (if any) to Shandong Xxxxx Biotechnology
Engineering Co. Ltd. in respect of eye wash solutions containing
hyaluronic acid and salts and their preparation methods and technology
which are the subject of patent application number 200410035712.3
at an
aggregate termination costs not exceeding RMB150,000 and and such
termination contract must contain a provision obliging and requiring
Shandong Xxxxx Biotechnology Engineering Co. Ltd. to cease production,
use
and sale of all products containing the foregoing Intellectual Property
by
December 31, 2005.
|
|
4.2
|
Save
for the Conditions set out in Clauses 4.1.1, 4.1.4 and 4.1.6, the
Purchaser may waive in whole or in part all or any of the Conditions
at
any time by notice in writing to the
Vendor.
|
|
4.3
|
The
Vendor shall in good faith use his best efforts and proceed diligently
to
procure the fulfilment of the Conditions set out in Clauses 4.1.3,
4.1.5,
4.1.6, 4.1.7, 4.1.8 and 4.1.10 on or before the date specified in
Clause
4.5 below, provided that best efforts shall not require the payment
of
amounts which are not ordinarily required to be paid to ensure the
performance by a third party of actions necessary to ensure the fulfilment
of the relevant Condition.
|
|
4.4
|
The
Vendor shall give the Purchaser notice in writing and provide relevant
evidence reasonably satisfactory to the Purchaser of the satisfaction
of
each relevant Condition (save for the Conditions set out in Clauses
4.1.1,
4.1.2, 4.1.3, 4.1.4 and 4.1.7) within three (3) Business Days of
becoming
aware of the same.
|
|
4.5
|
In
the event that any of the Conditions (other than the Conditions set
out in
Clause 4.1.2) shall not have been fulfilled (or waived pursuant to
Clause
4.2) by September 30, 2005 (the “Drop Dead Date”), then neither the
Purchaser nor the Vendor shall be bound to proceed with the sale
and
purchase of the Sale Shares and this Agreement shall cease to be
of any
effect except Clauses 1, 10, 11, 12, 13, 14 and 15 which shall remain
in
force and save in respect of claims arising out of any antecedent
breach
of this Agreement, provided
that (i) if the Condition(s) which has (have) not been fulfilled
by the
Drop Dead Date is (are) any of the Conditions set out in any of Clauses
4.1.3, 4.1.5, 4.1.6, 4.1.7, 4.1.8 or 4.1.10 and such non-fulfilment
is the
result of the Vendor’s breach of its obligations under Clause 4.3 in
relation to such Condition(s), then the Purchaser shall have the
right
upon notice in writing to the Vendor, to extend the last date for
the
fulfilment of the said Condition(s) past the Drop Dead Date and this
Agreement
shall remain in full force and effect in all respects; and (ii) if
the
fifteen (15) Business Day period referred to in Clause 4.1.9 is not
completed prior to the Drop Dead Date, then the Drop Dead Date shall
be
automatically extended to allow for the end of such fifteen (15)
Business
Day period and all references in this Agreement to the Drop Dead
Date
shall be construed accordingly.
|
|
4.6
|
In
the event that the Purchaser shall waive any of the Conditions (save
for
the Conditions set out in Clauses 4.1.1, 4.1.4 and 4.1.6), such waiver
shall not, except to the limited extent set forth below, imply that
the
Purchaser is not relying on the Warranties but rather only that it
is
prepared, in reliance upon the Warranties and such comfort, if any,
as it
has taken from its investigations, to proceed with the transaction.
Without limiting the requirement of Clause 5.3.1.7, each Party agrees
to
promptly notify the other Party in writing upon becoming aware of
any
breach of any of the Warranties by the Vendor after the date of this
Agreement and before Completion. In the event the Purchaser elects
to
proceed to Completion after being notified by the Vendor in writing
that
the Vendor is aware of a breach of a Warranty which cannot be cured,
notwithstanding the best efforts of the Vendor, the Purchaser will,
in
such case, no longer be entitled to make a claim in respect of such
breach
of Warranty after the Completion
Date.
|
| 5. |
Completion
|
|
5.1
|
Subject
to the provisions of Clause 4, Completion shall take place on the
Completion Date at the offices of the Purchaser’s Solicitors (or such
other place as the Parties may agree in writing) when all of the
events
described in this Clause 5 shall
occur.
|
5.2
At
Completion, the Purchaser shall:
|
5.2.1
|
pay
an amount equal to the Consideration to the Vendor by telegraphic
bank
transfer to the following bank account (and/or such other account(s)
as
may be designated in writing by the Vendor at least five (5) Business
Days
prior to the Completion Date);
|
Name
of
Bank: Citic
Ka
Wah Bank Limited
Address
of Bank: 000
Xxxxxxxx Xxxx, Xxx Xxxx, Xxxx Xxxx
Name
of
Account Holder: Sino
Biopharmaceutical Ltd.
Account
Number: 725103608801
|
5.2.2
|
deliver
to the Vendor an original counterpart of the Deed of Indemnity duly
executed by the Purchaser; and
|
|
5.2.3
|
deliver
to the Vendor a certified copy of the minutes of a duly held meeting
of
the board of directors of the Purchaser approving and authorising
the
execution of this Agreement, the performance of this Agreement and
all
transactions contemplated herein.
|
5.3 At
Completion, the Vendor shall:
5.3.1 deliver
to the Purchaser:
|
5.3.1.1
|
duly
executed transfers and sold notes in respect of all of the Sale Shares
in
favour of the Purchaser or its nominee together with the relative
share
certificates;
|
|
5.3.1.2
|
a
cheque for an amount equal to 0.1% of the HK$ equivalent of the
Consideration as at the Completion Date in respect of the Vendor’s share
of stamp duty drawn in favour of the Government of the Hong Kong
Special
Administrative Region;
|
|
5.3.1.3
|
an
original counterpart of the Deed of Indemnity duly executed by the
Vendor
and the Company;
|
|
5.3.1.4
|
duly
executed letter of resignation of the Auditors, resigning as the
auditors
of the Company, such letter to comply with the requirements of Section
140A of the Companies Ordinance, and duly executed letter from Shandong
Sincere Certified Public Accountants Co., Ltd. confirming that it
has no
claim against the Subsidiaries, whether for any outstanding fees
or
otherwise;
|
|
5.3.1.5
|
(if
any) the title deeds, Leases and all other relevant deeds, documents
and
correspondence relating to the Properties, the land use rights
certificates and building ownership certificates relating to the
Owned
Properties, and leases in respect of the Leased Properties of the
Subsidiaries, which are in the possession or under the control of
the
Vendor or the Company;
|
|
5.3.1.6
|
all
the statutory and other books and records (including financial records)
duly written up to date of the Company and the certificate of
incorporation, current business registration certificate, common
seal and
chop of the Company and any other papers and documents of the Company
in
its possession or under its control; and (if any) the Certificates
of
Approval, business licences, chops, capital contribution reports,
tax
registration certificates, and foreign exchange registration certificates
for each of the Subsidiaries, all the statutory and other books and
records (including financial records) duly written up to date of
the
Subsidiaries and any other papers and documents of the Subsidiaries
which
are in the possession or under the control of the Vendor or the
Company;
|
|
5.3.1.7
|
a
completion certificate duly executed by the Vendor pursuant to which
it
confirms that (1) the Warranties remain true and accurate and not
misleading as given as of the Completion Date, save for any breach
of the
Warranties which the Vendor has notified the Purchaser in writing
at least
five (5) Business Days prior to the Completion Date and matters fairly
and
specifically disclosed in the Disclosure Letter; and (2) the Vendor
has
complied fully with its obligations, covenants, undertakings and
agreements under this Agreement on or prior to the Completion Date;
|
|
5.3.1.8
|
unconditional
letters of release from the bankers to each member of the Group (if
any)
evidencing the release and discharge of all guarantees, debentures
and
charges (if any) granted by any member of the Group in favour of
the
Vendor and/or any subsidiaries of the Vendor, or in favour of third
parties in respect of the performance of the obligations of the Vendor
and/or any subsidiaries of the Vendor or any other person not being
a
member of the Group;
|
|
5.3.1.9
|
a
certified copy of the minutes of a duly held meeting of the board
of
directors of the Vendor approving and authorising the execution of
this
Agreement and the performance of this Agreement and all transactions
contemplated herein;
|
|
5.3.1.10
|
duly
executed letters of resignation dated as of the Completion Date in
the
form set out in Schedule 13 (or the Chinese equivalent) from the
Directors
and the secretary of the Company and the directors of each of the
Subsidiaries who are nominated or appointed by the Vendor (and in
case of
the Subsidiaries, through the
Company);
|
|
5.3.1.11
|
a
duly executed confirmation or release from the Vendor (for itself
and on
behalf of its subsidiaries) and from Xx. Xxx Ping (for himself and
on
behalf of entities Controlled by him) (as applicable) under seal,
in the
approved terms, releasing the Company and the Subsidiaries from any
liability whatsoever (whether actual or contingent) (other than trade
debts) which may be owing to the Vendor or any of its subsidiaries
or to
Xx. Xxx Ping or to any persons Controlled by any of them, by the
Company
or any of the Subsidiaries at
Completion;
|
|
5.3.1.12
|
irrevocable
powers of attorney (in the form set out in Schedule 14) executed
under
seal by each of the holders of the Sale Shares in favour of the Purchaser
or such person(s) as may be nominated by the
Purchaser;
|
|
5.3.1.13
|
a
legal opinion issued by the Vendor’s Solicitors, in the form set out in
Schedule 7;
|
|
5.3.1.14
|
a
legal opinion issued by a firm of lawyers qualified to advise on
PRC law
and is satisfactory to the Purchaser, in the form and substance
satisfactory to the Purchaser, to state that each Subsidiary has
been duly
established and registered as a PRC legal person with limited liability,
and is validly existing under PRC law, and 55% of the equity interests
of
each of the Subsidiaries is legally owned by the Company;
|
|
5.3.1.15
|
all
documents evidencing registration or filing (as applicable) of all
registrable Intellectual Property owned by the Group, including,
without
limitation, registration certificates and applications, in the possession
or under the control of the Vendor or the Company (if
any);
|
|
5.3.1.16
|
a
deed of undertaking by Xx. Xxx Ping in favour of the Purchaser in
the form
set out in Schedule 10 duly executed by Xx. Xxx Ping;
|
|
5.3.1.17
|
true
and correct copies of the Key Management Retention Agreements entered
into
between the Key Employees and the relevant members of the
Group;
|
|
5.3.1.18
|
a
true and correct copy of a new HA Compound supply agreement duly
executed
by CTF and the existing supplier of HA compound to CTF;
|
|
5.3.1.19
|
true
and correct copies of the approval of the shareholders of the Vendor
(or,
if required under the Listing Rules, the approval of the independent
shareholders of the Vendor), in respect of the sale and purchase
of the
Sale Shares pursuant to this
Agreement;
|
|
5.3.1.20
|
a
true and correct copy of the Patent Licence Contract duly executed
by
Shandong Research Institute and Xx. Xxxx Peixue;
and
|
|
5.3.1.21
|
a
true and correct copy of the Property Title Certificate in respect
of
CTF’s ownership of the property located at Guanhai Building, northwest
corner, Xxxxxx Xxxx, Xxx Xxxxxxx Xxxxx Xx, Xxxxxxx Xxxxxxxx,
Xxxxxxx;
|
|
5.3.2
|
make
available to the Purchaser in the PRC for inspection
purposes:
|
|
5.3.2.1
|
the
title deeds, Leases and all other relevant deeds, documents and
correspondences relating to the Properties, the land use rights
certificates and building ownership certificates relating to the
Owned
Properties, and leases in respect of the Leased Properties of the
Subsidiaries;
|
|
5.3.2.2
|
the
Certificates of Approval, business licences, chops, capital contribution
reports, tax registration certificates, and foreign exchange registration
certificates for each of the Subsidiaries, all the Statutory and
other
books and records (including financial records) duly written up to
date of
the Subsidiaries and all other papers and documents of the Subsidiaries;
and
|
|
5.3.2.3
|
all
documents evidencing registration or filing (as applicable) of all
registrable Intellectual Property owned by the Group, including,
without
limitation, registration certificates and
applications;
|
|
5.3.3
|
cause
the Directors to hold a meeting of the Board at which the Directors
shall
pass resolutions to:
|
|
5.3.3.1
|
approve
the transfer of the Sale Shares pursuant to this Agreement and the
registration of the Purchaser or its nominees as members of the Company
subject only to the production of duly stamped and completed transfers
in
respect of the Sale Shares;
|
|
5.3.3.2
|
approve
and authorise the execution by the Company of the Deed of
Indemnity;
|
|
5.3.3.3
|
accept
the resignation of the Auditors, Directors and secretary of the Company
referred to in Clauses 5.3.1.4 and
5.3.1.10;
|
|
5.3.3.4
|
appoint
the directors and secretary of the Company nominated by the Purchaser;
and
|
|
5.3.3.5
|
(if
any bank account of the Company remains on the Completion Date) revoke
all
of the authorities to the bankers of the Company relating to bank
accounts
and authorise such persons as the Purchaser may nominate to operate
the
same;
|
|
5.3.4
|
cause
such persons as the Purchaser may nominate (at least three (3) Business
Days prior to the Completion Date) to be validly appointed as directors
and secretary of the Company and upon such appointment forthwith
cause the
Directors and the secretary of the Company to resign from their respective
offices and as employees, each delivering to the Purchaser a resignation
letter under seal in the form set out in Schedule
13;
|
|
5.3.5
|
cause
the Legal Representative of each of the Subsidiaries to arrange for
the
filing with the relevant authorities in the PRC in relation to the
new
directors of the Subsidiaries nominated or appointed by the Purchaser
through the Company, subject to the new directors having signed the
appointment forms;
|
|
5.3.6
|
cause
such persons as the Purchaser may nominate (at least three (3) Business
Days prior to the Completion Date) to be validly appointed as directors
of
each of the Subsidiaries nominated or appointed by the Vendor through
the
Company in accordance with the Joint Venture Contract and Articles
of
Association of the relevant Subsidiary and upon such appointment
forthwith
cause the directors of each of the Subsidiaries nominated or appointed
by
the Vendor through the Company to resign from their respective offices
and
as employees, each delivering to the Purchaser a letter acknowledging
that
the person so retiring has no claim outstanding for compensation
or
otherwise; and
|
|
5.3.7
|
(i)
procure revocation of all authorities to the bankers of the Company
relating to bank accounts and use best efforts to procure the giving
of
authority to such persons as the Purchaser may nominate to operate
the
same, or if no bank account of the Company remains on the Completion
Date,
deliver a bank cashier order made payable to the Company for all
credit
balances therein prior to their closure in excess of HK$10,000; and
(ii)
procure the delivery to a representative of the Purchaser of the
chops
held by the Chief Financial Officer of the Subsidiaries which are
required
in order to operate the bank accounts of the Subsidiaries in the
PRC.
|
|
5.4
|
Without
prejudice to any other remedies available to the relevant Party,
if in any
respect the provisions of Clause 5 (other than Clause 5.3.1.21) are
not
complied with by the relevant Party on the Completion Date, the Party
not
in default may:
|
|
5.4.1
|
defer
Completion to a date not more than 28 days after the Completion Date
(and
so that the provisions of this Clause 5.4 shall apply to Completion
as so
deferred);
|
|
5.4.2
|
proceed
to Completion so far as practicable (without prejudice to its rights
under
this Agreement); or
|
|
5.4.3
|
terminate
this Agreement.
|
| 6. |
Post-Completion
|
|
6.1
|
The
Vendor shall use all reasonable endeavours to procure Xx. Xxxx Yanping
will, during the period from the Completion Date to the date falling
six
(6) months thereafter, provide services to any member of the Group
for the
purpose of and as is reasonably necessary for post-Completion
transition.
|
|
6.2
|
The
Vendor shall fully indemnify and hold harmless the Purchaser and
the
members of the Group and their directors, officers and employees
for a
period of ten years after the date hereof against any and all liability,
loss, damage, claim or expense, including attorney’s fees and costs
arising out of failure to obtain state asset valuation with respect
to the
Patents which were alleged to have been developed by the Shandong
Research
Institute.
|
|
6.3
|
In
the event the Vendor does not deliver to the Purchaser the Property
Title
Certificate on the Completion Date pursuant to Clause 5.3.1.21, the
Vendor
shall fully indemnify and hold harmless the Purchaser against any
and all
liability, loss, damage, claim or expense, including attorney’s fees and
costs incurred by the Purchaser and 55% of any and all liability,
loss,
damage, claim or expense, including attorney’s fees and costs incurred by
CTF arising out of the failure of CTF to obtain the necessary Property
Title Certificate in respect of CTF’s ownership of the property located at
Guanhai Building, northwest corner, Xxxxxx Xxxx, Bei Sanhuan Xxxxx
Xx,
Haidian District, Beijing.
|
| 7. |
Restriction
of Vendor and Undertaking of
Purchaser
|
|
7.1
|
Subject
to Completion, the Vendor undertakes with the Purchaser (for itself
and as
trustee for the Company and each of the Subsidiaries) that, except
with
the consent in writing of the Purchaser and subject to the provisions
of
Clause 7.3:
|
|
7.1.1
|
for
the period of five years after the Completion Date in respect of
the
Restricted Ophthalmic Business and a period of three years in respect
of
the Restricted Other Businesses, it will not within any country or
place
in which any member of the Group has carried on business during the
year
preceding the Completion Date, either on its own account or in conjunction
with or on behalf of any person, firm or company carry on or be engaged,
concerned or interested, directly or indirectly, whether as shareholder,
director, employee, partner, agent or otherwise in carrying on the
relevant Restricted Businesses (other than as a holder of not more
than 5
per cent of the issued shares or debentures of any company listed
on a
recognised stock exchange);
|
|
7.1.2
|
for
the period of five years after the Completion Date, it will not either
on
its own account or in conjunction with or on behalf of any other
person,
firm or company solicit or entice away or attempt to solicit or entice
away from any member of the Group the custom of any person, firm,
company
or organisation who shall at any time within the year preceding the
date
hereof have been a customer or identified prospective customer of
any
member of the Group in respect of any Restricted
Businesses;
|
|
7.1.3
|
for
the period of three years after the Completion Date, it will not
either on
its own account or in conjunction with or on behalf of any other
person,
firm or company solicit, entice away or attempt to solicit or entice
away
from any member of the Group (which for the avoidance of doubt, shall
exclude any advertisement or solicitation targeted at or made available
to
the general public) any person who at the time of such solicitation,
enticement or attempt is an officer, manager, consultant or employee
of
any member of the Group whether or not such person would commit a
breach
of contract by reason of leaving such
employment;
|
|
7.1.4
|
it
will not at any time hereafter make use of or disclose or divulge
to any
person (other than to officers or employees of the Vendor, the Company
or
any of the Subsidiaries whose province it is to know the same) any
information (other than any information properly available to the
public
or disclosed or divulged pursuant to an order of a court of competent
jurisdiction or the requirements of The Stock Exchange of Hong Kong
Limited or of the Securities and Futures Commission in Hong Kong,
or
disclosed or divulged to the auditors of the Vendor solely for the
purpose
of performing an audit in respect of the Vendor (provided always
that the
Vendor shall procure its auditors will observe the provisions of
this
Clause 7.1.4), or disclosed or divulged to professional advisers
or
designated employees of the Vendor strictly on a need-to-know basis
(provided always that the Vendor shall procure such professional
advisers
and employees will observe the provisions of this Clause 7.1.4))
relating
to any member of the Group, the identity of its customers and suppliers,
its products, finance, contractual arrangements, business or methods
of
business;
|
|
7.1.5
|
if,
in connection with the business or affairs of any member of the Group,
it
shall have obtained trade secrets or other confidential information
belonging to any third party under an agreement purporting to bind
any
member of the Group which contained restrictions on disclosure it
will not
without the previous written consent of the Purchaser at any time
infringe
or take any action which would or might result in an infringement
of such
restrictions;
|
|
7.1.6
|
it
will not at any time hereafter in relation to any trade, business
or
company use or register a name, trade xxxx, service xxxx, trade dress
or
business name including the words or symbol “Chia Xxx Xxxxx”, “CT Xxxxx”,
“XX Xxxxx”, “CTF Xxxxx”, “CPF Xxxxx” and/or “Xxxxx”, or their Chinese
equivalents or any word or symbol confusingly similar thereto in
such a
way as to be capable of or likely to be confused with the name, any
trade
xxxx, service xxxx, trade dress or business name of any member of
the
Group and shall use his best endeavours to procure that no such name,
trade xxxx, service xxxx, trade dress or business name shall be used
by
any person, firm or company with which is under its Control, and
it will
not take any action contrary to the Intellectual Property of any
member of
the Group, including, without limitation, challenging the ownership
of
such right, title or interest or contesting any registration or
application for any Intellectual Property of any member of the Group.
For
the avoidance of doubt, the foregoing restriction does not apply
to the
words “Xxxx Xxx”, “CTF”, “CPF”, “CT” or “CP” individually or their Chinese
equivalents.
|
|
7.2
|
The
Vendor shall procure that all entities Controlled by the Vendor will
observe the restrictions contained in the foregoing provisions of
this
Clause 7 and shall use all reasonable endeavours to procure that
the
respective employees of itself, its subsidiaries and its Controlled
entities will observe the confidentiality restrictions contained
in Clause
7.1.4.
|
|
7.3
|
While
the restrictions contained in this Clause 7 are considered by the
Parties
to be reasonable in all the circumstances, it is recognised that
restrictions of the nature in question may fail for technical reasons
and
accordingly it is hereby agreed and declared that if any of such
restrictions shall be adjudged to be void as going beyond what is
reasonable in all the circumstances for the protection of the interests
of
the Purchaser but would be valid if part of the wording thereof were
deleted or the periods thereof reduced or the range of activities
or area
dealt with thereby reduced in scope the said restriction shall apply
with
such modifications as may be necessary to make it valid and
effective.
|
7.4 Subject
to Completion, the Purchaser undertakes to the Vendor that:-
|
7.4.1
|
it
shall not, and shall procure that its Controlled entities (including
without limitation the Group) shall not, in relation to any new product
of
the Group with effect from the Completion Date use the words “正大”
or “Xxxx Xxx” or “CP” (save as part of “Chia Xxx Xxxxx”, “XX Xxxxx” or
their Chinese equivalent), as part of its name, trade xxxx, service
xxxx,
trade dress or business name, or any word or symbol confusingly similar
thereto in such a way as to be capable of or likely to be confused
with
such word or symbol;
|
|
7.4.2
|
it
shall not, and shall procure that its Controlled entities in the
PRC
(including without limitation the Group) shall not, directly or
indirectly, with effect from the date falling five (5) years from
the
Completion Date, in relation to any product, trade, business or company
use or register a name, trade xxxx, service xxxx, trade dress or
business
name including the words or symbol “正大”
or “Xxxx Xxx” or “CP” or “CT” (including as part of “Chia Xxx Xxxxx”, “XX
Xxxxx”, “CT Xxxxx”, “CTF”, “CPF” or their Chinese equivalents), or any
word or symbol confusingly similar thereto in such a way as to be
capable
of or likely to be confused with such word or
symbol;
|
Provided
that for the avoidance of doubt, the Purchaser shall not be restricted from
the
use of “Xxxxx” or its Chinese equivalent, either alone or in connection with any
other term or word except as stated above.
| 8. |
Warranties
|
|
8.1
|
The
Vendor represents, warrants and undertakes to and with the Purchaser
that
each of the statements set out in Schedule 5 is now and will at Completion
(with all references in any such statement to “the date of this
Agreement”, or “the date hereof”, or any other comparable references being
changed to “the Completion Date”) be true and
accurate.
|
|
8.2
|
The
Warranties (other than Warranties in respect of title and ownership
of the
Sale Shares, the equity interests of the Subsidiaries held by the
Company,
and approvals and authorizations of the Vendor necessary for the
Vendor to
enter into this Agreement and perform its obligations under this
Agreement
(the “Fundamental
Warranties”),
in respect of which no qualification is accepted) are given subject
to
matters fairly and specifically disclosed in the Disclosure Letter
but no
other information relating to the Company or the Subsidiaries of
which the
Purchaser has knowledge (actual or constructive) and no investigation
by
or on behalf of the Purchaser shall prejudice any claim made by the
Purchaser under the Warranties or operate to reduce any amount
recoverable, and liability in respect thereof shall not be confined
to
breaches discovered before Completion. No letter, document or other
communication shall be deemed to constitute a disclosure for the
purposes
of this Agreement unless the same is expressly referred to in the
Disclosure Letter.
|
|
8.3
|
The
Vendor acknowledges that the Purchaser has entered into this Agreement
in
reliance upon the Warranties.
|
|
8.4
|
Subject
to Completion, in the event that any of the Warranties is breached
or (as
the case may be) proves to be untrue or misleading and without prejudice
to any other equitable relief a court of competent jurisdiction may
see
fit to award, the Vendor shall, on demand, pay to the
Purchaser:
|
|
8.4.1
|
the
amount necessary to put the Purchaser and the Company, and 55% of
the
amount necessary to put the relevant Subsidiary (or Subsidiaries),
into
the position which would have existed if the Warranties had not been
breached or (as the case may be) had been true and not misleading;
and
|
|
8.4.2
|
all
costs and expenses incurred by the Purchaser and the Company, and
55% of
all costs and expenses incurred by the relevant Subsidiary (or
Subsidiaries), in connection with or as a result of such breach and
any
costs (including legal costs on a solicitor and own client basis),
expenses or other liabilities which the Purchaser and the Company,
and 55%
of any such costs, expenses or other liabilities which any of the
Subsidiaries may incur either before or after the commencement of
any
action in connection with (i) any legal proceedings in which the
Purchaser
claims that any of the Warranties has been breached or is untrue
or
misleading and in which judgement or an arbitral award is given for
the
Purchaser or (ii) the enforcement of any settlement of, or judgement
or an
arbitral award in respect of, such
claim.
|
|
8.5
|
Each
of the Warranties shall be separate and independent and, save as
expressly
provided to the contrary, shall not be limited by inference from
or
non-specific reference to any other Warranty or any other term of
this
Agreement, nor by anything in the Disclosure Letter which is not
expressly
referenced to the Warranty concerned, notwithstanding any contrary
or
conflicting provision in the Disclosure
Letter.
|
|
8.6
|
The
Vendor hereby agrees with the Purchaser (for itself and as trustee
for the
Company and each of the Subsidiaries) to waive any rights which it
may
have in respect of any misrepresentation or inaccuracy in, or omission
from, any information or advice supplied or given by the Company
or its
Subsidiaries or their officers, employees or advisers in connection
with
the giving of the Warranties and the preparation of the Disclosure
Letter.
|
|
8.7
|
The
Vendor shall procure that (save only as may be necessary to give
effect to
this Agreement) neither it nor any member of the Group shall do,
allow or
procure any act or omission before Completion which would constitute
a
breach of any of the Warranties if they were given at Completion
or which
would make any of the Warranties inaccurate or misleading if they
were so
given.
|
|
8.8
|
The
Vendor hereby agrees to disclose promptly to the Purchaser in writing
immediately upon becoming aware of the same, any matter, event or
circumstance (including any omission to act) which may arise or become
known to it after the date of this Agreement and before Completion
which
constitutes a breach of or is inconsistent with any of the
Warranties.
|
|
8.9
|
The
benefit of the Warranties may be assigned to other members of the
Bausch
& Lomb group in whole or in part and without restriction by the person
for the time being entitled
thereto.
|
|
8.10
|
If
any sum payable by the Vendor under this Clause 8 shall be subject
to Tax
(whether by way of deduction or withholding or direct assessment
of the
person entitled thereto) such payment shall be increased by such
an amount
as shall ensure that after deduction, withholding or payment of such
Tax
the recipient shall have received a net amount equal to the payment
otherwise required hereby to be made. If the Vendor pays any sum
to the
Purchaser under this Clause 8, the Consideration shall be deemed
to be
reduced by the amount of such
payment.
|
|
8.11
|
Where
any statement in the Warranties is qualified by the expression “to the
best of the Vendor’s knowledge and belief” or any similar expression, that
statement shall be deemed to include an additional statement that
it has
been made after reasonable and careful enquiry and shall be deemed
to
include the knowledge of the senior management of the Vendor (including,
without limitation, Xx. Xxx Ping, Xx. Xxxx Xxxxxxx, the directors,
officers and senior managers of the Vendor, and the officers and
senior
managers and factory managers of the
Subsidiaries).
|
|
8.12
|
The
liabilities of the Vendor under the
Warranties:
|
|
8.12.1
|
together
with the liabilities of the Vendor under the Deed of Indemnity, shall,
except for the Fundamental Warranties, be limited to a maximum aggregate
amount equal to 50% of the
Consideration;
|
|
8.12.2
|
shall
in relation to those Warranties in respect of Tax (“Tax
Warranties”)
cease seven years after the Completion Date, except in respect of
matters
which have been the subject of a written claim made before such date
by
the Purchaser to the Vendor;
|
|
8.12.3
|
shall,
except for the Fundamental Warranties, cease two years after the
Completion Date, except in respect of matters which have been the
subject
of a written claim made before such date by the Purchaser to the
Vendor;
|
|
8.12.4
|
shall
be exempted in respect of any breach of Warranties which arises as
a
result of any PRC
tax laws, including an increase in the rate of Tax, not in force
as at the
date
of this Agreement and which is retrospective in effect;
and
|
|
8.12.5
|
shall
be exempted in respect of a claim for breach of Warranty to the extent
that provision or reserve in respect of the matter or thing giving
rise to
such claim has been specifically provided for in the Accounts or
the
Management Accounts, or has been specifically disclosed in this Agreement
or the Disclosure Letter;
|
unless
the relevant claim or claims has arisen by reason of fraud, wilful concealment,
dishonesty on the part of the Vendor, in which event there shall be no limit
under this Agreement on the amount recoverable by the Purchaser from the Vendor
in respect of such claim or claims or the time period within which such claims
may be brought.
|
8.13
|
The
Vendor shall not be liable for a claim under the Warranties if a
claim in
respect of the same event or circumstance has already been made under
the
Deed of Indemnity.
|
|
8.14
|
The
Parties agree that no liability shall attach to the Vendor in relation
to
any Warranty claim to the extent that such claim would not have arisen
but
for an omission or a voluntary act (other than an omission or act
carried
out pursuant to a legally binding obligation created on or before
Completion) of the Purchaser or any member of the Group occurring
after
Completion which constitutes fraud or wilful
misconduct.
|
|
8.15
|
The
Parties agree that no liability shall attach to the Vendor in relation
to
any Warranty claim until the aggregate amount of all claims, each
of which
(including on an aggregated basis where the individual claim is associated
with or forms part of a series of related claims arising from or
with
respect to the same facts or circumstances) is of an amount (for
the sake
of clarify, prior to reduction in respect of the Subsidiaries as
may be
required by Clause 8.4) of US$30,000 or higher, exceeds US$4,500,000
and
in such event, the Vendor shall be liable only for the excess of
the
aggregate amount of all claims over the said US$4,500,000, subject,
as the
case may be, to limitation in respect of the Subsidiaries as may
be
required by Clause 8.4. For the sake of clarity, the limitations
under
this Clause 8.15 shall not apply to the obligations under the Deed
of
Indemnity or under Clause 6.2
hereof.
|
|
8.16
|
If
the Purchaser shall become aware of any material breach of Warranty
in
respect of which a claim could be made under this Agreement, it shall
give
reasonable written notice thereof to the Vendor and provide the Vendor
with the opportunity to cure such breach (only if such breach is
curable)
within ten Business Days of its receipt of such notice from the Purchaser.
In addition, the Purchaser shall (provided that the Vendor shall
indemnify
and hold harmless the Purchaser and the Company and the Subsidiaries,
as
applicable, to the Purchaser’s reasonable satisfaction, against any and
all liabilities, costs, damages and/or expenses which may be incurred
thereby) take such action and procure that the Company take such
action as
may reasonably be necessary to mitigate the loss or damage incurred
relating to the Warranty claim; provided that neither the Company
nor the
relevant Subsidiary nor the Purchaser shall in any event be required
to
take any steps which would require any admission of guilt or liability
relating to matters connected with the claim in question or which
would
affect the conduct of the business of the Purchaser or the Company
or any
of the Subsidiaries. For the avoidance of doubt, under no circumstances
shall the failure by the Purchaser to provide prior reasonable written
notice to the Vendor or the opportunity of the Vendor to cure such
breach
reduce or limit the liability of the Vendor in respect of such breach,
unless and to the extent the Vendor is actually and materially prejudiced
by such failure by the Purchaser.
|
| 9. |
Pre-Completion
|
|
9.1
|
The
Vendor shall procure that, during the period from the date of this
Agreement to the Completion Date or the termination of this Agreement
pursuant to the terms hereof, each member of the Group shall carry
on
business in the same manner as it was operated prior hereto and in
the
normal and usual course and in furtherance of the foregoing, no member
of
the Group shall undertake any of the matters listed below without
the
prior written consent of the Purchaser:
|
|
9.1.1
|
enter
into any contract, make any material change to the terms of the existing
contracts or assume any liability which will result in any long term,
unusual or onerous liability or commitment of any member of the
Group;
|
|
9.1.2
|
save
for the Approved Extraordinary Expenditures, enter into any capital
commitment with an individual contract value of more than HK$500,000
(whether by way of purchase, lease, hire purchase or
otherwise);
|
|
9.1.3
|
make
any change in the nature, scope or organisation of its business or
dispose
of the whole of its undertaking or property or a substantial part
thereof;
|
|
9.1.4
|
acquire
or form any subsidiary or acquire any shares in any company or acquire
the
whole or any substantial part of the undertaking, assets or business
of
any other company or any firm or person or enter into any joint venture
or
partnership with any other person;
|
|
9.1.5
|
make
any loans or grant any credit (other than credit given in the normal
course of trading and advances made to employees against expenses
incurred
by them on its behalf);
|
|
9.1.6
|
borrow
any money or make any payments out of or drawings on its bank accounts
(except routine payments in the ordinary course of business);
|
|
9.1.7
|
enter
into any guarantee, indemnity or
surety;
|
|
9.1.8
|
save
as required by any applicable laws or regulations and as contemplated
under Condition 4.1.8, make any changes to the terms of employment
or of
any profit sharing, share option, profit related, bonus or incentive
scheme of any of its employees or in any arrangements with its
consultants, or make any special or extraordinary payments to any
of its
employees or consultants;
|
|
9.1.9
|
save
as required by any applicable laws or regulations, change (or announce
to
employees any proposal to change) the terms of any retirement scheme
or
pension plan in which that member of the Group participates (“Relevant
Scheme”),
or exercise any discretionary power under the Relevant Scheme, or
cause
the Relevant Scheme to be terminated or wound up (or otherwise fail
to
maintain the Relevant Scheme in full force and effect) or fail to
make any
required contribution (or other payment) to the Relevant Scheme,
or fail
to meet any obligation of any kind whatsoever to the Relevant
Scheme;
|
|
9.1.10
|
acquire
or dispose of or grant any option or right of pre-emption in respect
of
any material asset (including, without limitation, any of its Intellectual
Property) or any interest nor give nor receive any service otherwise
than
at market value;
|
|
9.1.11
|
acquire
or dispose of any freehold or leasehold property or grant any lease
or
third party right in respect of any of the
Properties;
|
|
9.1.12
|
enter
into any leasing, hire purchase agreement or any agreement or arrangements
for payment on deferred terms;
|
|
9.1.13
|
grant
or enter into any assignment, licence, franchise or other agreement
or
arrangement concerning any part of its name, trading names, know-how,
patents, trademarks, service marks, trade dress, copyright, inventions
or
any other of its Intellectual
Property;
|
|
9.1.14
|
declare,
authorize, make or pay any dividend or other distribution (whether
in cash
or in specie) or reduce its paid-up
capital;
|
|
9.1.15
|
incur
or pay any management charges;
|
|
9.1.16
|
permit
any of its insurances to lapse or do anything which would make any
policy
of insurance void or voidable;
|
|
9.1.17
|
make
any payments to either the Vendor or any of its subsidiaries or to
Xx. Xxx
Ping or to any persons (other than members of the Group) affiliated
with
any of the foregoing (for the purpose of this Clause, a person shall
be
considered to be “affiliated” with another person if that person either
Controls, is Controlled by or under the common Control with such
person);
|
|
9.1.18
|
other
than in the ordinary course of business, apply for, surrender or
agree any
variations to any Environmental
Licences;
|
|
9.1.19
|
agree,
conditionally or otherwise, to do any of the
foregoing;
|
|
9.1.20
|
commence
the prosecution or defence of, or settle, any legal or arbitration
proceedings (other than in connection with the collection of ordinary
trade debts);
|
|
9.1.21
|
make
any changes in the pricing of any products of any member of the Group,
other than in the ordinary course of business or as required by applicable
laws or regulations;
|
|
9.1.22
|
make
any changes to any of its constitutional
documents;
|
|
9.1.23
|
amend
the accounting policies or practices or reporting practices existing
as of
the date of this Agreement;
|
|
9.1.24
|
terminate,
enter into or amend any supply or distribution agreement or arrangement;
or
|
|
9.1.25
|
create,
allot or issue or agree to create, allot or issue any share or loan
capital or other security, or equity interests, or grant any option
over
or other right to subscribe for any share or loan capital or other
security, or equity interests.
|
|
9.2
|
The
Vendor undertakes and covenants with the Purchaser that during the
period
from the date hereof until the Completion Date or the termination
of this
Agreement pursuant to the terms hereof, it will
not:
|
|
9.2.1
|
sell,
mortgage, grant an option over or otherwise dispose of or encumber
to any
person the whole or any part of the shares or equity interests of
any
member of the Group owned by the Vendor or the Company or the business
or
assets of any member of the Group, or indicate a willingness to consider
any offer to do any of the
foregoing;
|
|
9.2.2
|
engage
in discussions or negotiations with any person in relation to the
sale,
mortgage or other disposition of, or grant of an option or other
encumbrance in respect of, the whole or any part of the shares or
equity
interests of any member of the Group owned by the Vendor or the Company
or
the business or assets of any member of the Group;
or
|
|
9.2.3
|
provide
to any prospective purchaser of the whole or any part of the business,
assets or shares or equity interests of any member of the Group any
non-public information concerning any member of the
Group;
|
provided
that the foregoing shall not prevent the sale or other disposal or any
discussions or negotiations in respect of any such sale or other disposal by
any
member of the Group of any of its assets in the usual and ordinary course of
business.
|
9.3
|
The
Vendor undertakes that it will after the signing of this Agreement
and
before Completion make available to the Purchaser upon its request
personnel with knowledge of the history and development of the Group’s
products for the purpose of providing information thereon to the
Purchaser.
|
| 10. |
Confidentiality
and Restriction on
Announcements
|
|
10.1
|
Subject
to Clause 10.2, each Party shall treat as confidential all information
received or obtained by it or its directors, employees, agents or
advisers
as a result of entering into or performing this Agreement including
(i)
information relating to the provisions of this Agreement; (ii) the
negotiations leading up to this Agreement;(iii) the subject matter
of this
Agreement; or (iv) the business or affairs of the other Party, and
shall
not at any time make use of, disclose or divulge to any person any
such
information or make any announcement on any such information without
the
prior written consent of the other
Party.
|
|
10.2
|
The
restrictions contained in Clause 10.1 shall not apply so as to prevent
a
Party from disclosing or making any announcement of any information
which
would otherwise be confidential if and to the extent: (i) required
by law
of any relevant jurisdiction; (ii) required by any securities exchange,
supervisory, regulatory or governmental body to which such Party
is
subject (including but not limited to The Stock Exchange of Hong
Kong
limited and the Securities and Futures Commission in Hong Kong) whether
or
not the requirement for information has the force of law; (iii) disclosed
to any professional advisers of such Party (provided always that
such
Party shall procure such professional advisers will observe the provision
of this Clause 10); (iv) disclosed in a press announcement in a form
agreed by both Parties or consistent with a mutually agreed set of
questions and answers; or (v) any information which comes into the
public
domain through no fault of such Party.
|
| 11. |
Costs
|
|
11.1
|
Each
Party shall pay its own costs of and incidental to this Agreement
and the
sale and purchase hereby agreed to be
made.
|
|
11.2
|
The
Vendor and the Purchaser shall each equally bear any stamp duty payable
as
a result of the sale and purchase of the Sale Shares pursuant to
this
Agreement.
|
|
11.3
|
The
Vendor confirms that no costs or expenses of whatever nature relating
to
the sale of the Sale Shares has been or is to be borne by any member
of
the Group and if any such costs or expenses have been or are to be
borne
by any member of the Group, the Vendor shall forthwith reimburse
any and
all such costs and expenses to the relevant member of the
Group.
|
| 12. |
General
|
|
12.1
|
This
Agreement shall be binding upon and enure for the benefit of the
estates,
personal representatives or successors of the Parties. Save for an
assignment of this Agreement by the Purchaser to a subsidiary of
the
Purchaser, no Party may assign or transfer its rights or obligations
under
this Agreement without the prior written consent of the other
Party.
|
|
12.2
|
This
Agreement (together with any documents referred to herein or executed
contemporaneously by the Parties in connection herewith) constitutes
the
whole agreement between the Parties and supersedes any previous agreements
or arrangements between them relating to the subject matter hereof;
it is
expressly declared that no variations hereof shall be effective unless
made in writing signed by duly authorised representatives of the
Parties.
Notwithstanding the foregoing, the Confidentiality Agreement entered
into
between the Vendor and the Purchaser dated November 21, 2004, as
amended
on July 2, 2005, survives the signing of the Agreement, but shall
terminate upon Completion.
|
|
12.3
|
All
of the provisions of this Agreement shall remain in full force and
effect
notwithstanding Completion (except insofar as they set out obligations
which have been fully performed at
Completion).
|
|
12.4
|
If
any provision or part of a provision of this Agreement shall be,
or be
found by any authority or court of competent jurisdiction to be,
invalid
or unenforceable, such invalidity or unenforceability shall not affect
the
other provisions or parts of such provisions of this Agreement, all
of
which shall remain in full force and
effect.
|
|
12.5
|
Any
right of rescission conferred upon any Party hereby shall be in addition
to and without prejudice to all other rights and remedies available
to it
(and, without prejudice to the generality of the foregoing, shall
not
extinguish any right to damages to which that Party may be entitled
in
respect of the breach of this Agreement) and no exercise or failure
to
exercise such a right of rescission shall constitute a waiver by
that
Party of any such other right or
remedy.
|
|
12.6
|
No
failure of any Party to exercise, and no delay or forbearance in
exercising, any right or remedy in respect of any provision of this
Agreement shall operate as a waiver of such right or
remedy.
|
|
12.7
|
Upon
and after Completion the Vendor shall do and execute or procure to
be done
and executed all such further acts, deeds, documents and things as
may be
reasonably necessary to give effect to the terms of this Agreement
and to
place control of the Company and the Subsidiaries in the hands of
the
Purchaser and to deliver and make available to the Purchaser all
documents
and records (if any) of the Company and the Subsidiaries, and all
documents (if any) evidencing registration or filing (as applicable)
of
all registrable Intellectual Property owned by the Group, which are
in the
possession or under the control of the Vendor, and pending the doing
of
such acts, deeds, documents and things, the Vendor shall as from
Completion hold the legal estate in the Sale Shares in trust for
the
Purchaser.
|
|
12.8
|
This
Agreement may be executed in one or more counterparts (including
by
facsimile signature), but shall not be effective until each Party
has
executed at least one counterpart and each such counterpart shall
constitute an original of this Agreement but all the counterparts
shall
together constitute one and the same
instrument.
|
| 13. |
Notices
|
Each
notice, demand or other communication given or made under this Agreement shall
be in writing and delivered or sent to the relevant Party at its address or
fax
number set out below (or such other address or fax number as the addressee
has
by five (5) Business Days’ prior written notice specified to the other
Party):
To
the
Vendor:
Sino
Biopharmaceutical Limited
Xxxx
00,
00xx Xxxxx
Xxxxxx
Xxxxx
Xxxxxxxxxx
Xxxxx
0
Xxxxxxx
Xxxx
Xxxxxxx
Xxxx
Xxxx
Attention: Xx.
Xxx
Ping
Fax
Number: (000)
0000 0000
To
the
Purchaser:
Bausch
& Lomb Incorporated
Xxx
Xxxxxx & Xxxx Xxxxx
Xxxxxxxxx,
Xxx Xxxx 00000-0000
Xxxxxx
Xxxxxx of America
Attention: Vice
President - Business Development
Fax
Number: (0-000)
000-0000
With
a
copy
to:
Bausch
& Lomb Incorporated
Xxx
Xxxxxx & Xxxx Xxxxx
Xxxxxxxxx,
Xxx Xxxx 00000-0000
Xxxxxx
Xxxxxx of America
Attention: Senior
Vice President and
General
Counsel
Fax
Number: (0-000)
000-0000
Any
notice, demand or other communication so addressed to the relevant Party shall
be deemed to have been delivered (a) if given or made by letter, when actually
delivered to the relevant address and (b) if given or made by fax, when
despatched.
| 14. |
Governing
Law and Arbitration
|
|
14.1
|
This
Agreement shall be governed by and construed in accordance with the
laws
of Hong Kong.
|
|
14.2
|
Any
dispute, controversy or claim arising out or relating to this Agreement,
or the breach, termination or invalidity thereof, shall be settled
by
final and binding arbitration in accordance with the UNCITRAL Arbitration
Rules as at present in force and as may be amended by the rest of
this
Clause. The appointing body shall be the Hong Kong International
Arbitration Centre (“HKIAC”).
The place of arbitration shall be in Hong Kong at HKIAC. The tribunal
for
any arbitration shall consist of three (3) arbitrators with each
of the
Purchaser and the Vendor having the right to appoint one arbitrator
and
the third arbitrator shall be appointed by the Secretary General
of HKIAC.
The language to be used in the arbitral proceedings shall be
English.
|
| 15. |
English
and Chinese Versions
|
The
Parties hereby acknowledge and agree that even though they will each execute
both an English and a Chinese version of this Agreement, if and to the extent
that there is any conflict or inconsistencies between the English and Chinese
versions of this Agreement, the English version of this Agreement shall prevail
at all times and no Party shall take any steps which may be inconsistent with
the foregoing.
IN
WITNESS WHEREOF
the
Parties have executed this document on the date appearing at the head
hereof.
SIGNED
by
)
Xxx
Xxxx
)
for
and
on behalf of )
/s/ Xxx
Xxxx
SINO
BIOPHARMACEUTICAL LIMITED )
in
the
presence
of:
)
/s/
Oh
Xxxx Xxx
SIGNED
by )
Xxxx
X.
Xxxxxxxx
)
for
and
on behalf of )
/s/
Xxxx X. Xxxxxxxx
XXXXXX
& LOMB INCORPORATED )
in
the
presence
of:
)
/s/
Xxxxxxx Xxxx
