SALE AND PURCHASE AGREEMENT
Exhibit
10.16
This
SALE
AND PURCHASE AGREEMENT (this "Agreement") made as of December 20, 2007 by and
among Tianshi International Investment Group Co., Ltd., a company formed under
the laws of The British Virgin Islands ("Seller"), Tianshi International
Holdings Group Limited, a company formed under the laws of The British Virgin
Islands (“Buyer”), Tianjin Tianshi Biological Development Co., Ltd., a
Sino-Foreign joint venture formed under the laws of the People’s Republic of
China., (“Biological”) and Tianjin Tianshi Biological Engineering Co., Ltd., a
Chinese-funded enterprise formed under the laws of the People’s Republic of
China (“Engineering”).
(b)
At
the Closing, and subject to the terms and conditions of this Agreement, the
Buyer shall pay the Purchase Price as follows:
(i) |
Renminbi
Two Hundred Eleven Million Two Hundred Fifty Thousand Four Hundred
Eleven
(RMB 211,250,411) by cancellation of the
Loan,
|
1
(ii) |
Renminbi
One Hundred Twenty Two Million Three Hundred Thirty Four Thousand
Fifty
Four (RMB 122,334,054) by cancellation of “other receivables” in the same
amount owed to Biological by Engineering,
and
|
(iii) |
Renminbi
One Hundred Forty Million Eighty Nine Thousand Nine Hundred Fifty
(RMB
141,089,950) by wire transfer in immediately available funds to an
account
to be designated by Seller.
|
Confirmation
of the cancellation of the liabilities in (i) and (ii) above shall be given
in
writing at the Closing by Biological.
The
Seller represents and warrants to the Buyer as follows:
(b)
The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the People’s Republic of China and has all requisite
corporate power and authority to own, lease and operate its properties and
assets and to conduct its business as it is now being conducted.
(c)
The
Company does not presently own or control, directly or indirectly, any interest
in any other corporation, association, or other business entity. The Company
is
not a participant in any joint venture, partnership, or similar
arrangement.
2.3
Absence of Violations or Required Consents. Except as set forth in Section
2.3
of the Disclosure Schedule and, in the case of clauses (b), (c) and (d), except
for such violations, breaches, defaults, consents, approvals, authorizations,
orders, actions, registrations, filings, declarations, notifications and
Encumbrances that would not reasonably be expected to have a Material Adverse
Effect or materially impair or delay the consummation of the transactions
contemplated hereby, the execution, delivery and performance by the Seller
of
this Agreement do not and will not (a) violate or result in the breach or
default of any provision of the Seller’s or Company’s articles of association,
(b) violate any Law or Governmental Order applicable to either Seller or the
Company or any of their respective properties or assets, (c) except for the
Required Consents, require any consent, approval, authorization or other order
of, action by, registration or filing with or declaration or notification to
any
Governmental Authority or any other Person or (d) result in any violation or
breach of, constitute a default (or event which with the giving of notice,
or
lapse of time or both, would become a default) under, require any consent under,
or give to others any rights of termination, amendment, acceleration,
suspension, revocation or cancellation of, or result in the creation of any
Encumbrance on the Seller' or the Company’s respective assets, or result in the
imposition or acceleration of any payment, time of payment, vesting or increase
in the amount of compensation or benefit payable, pursuant to, any note, bond,
mortgage or indenture, contract, agreement, lease, sublease, license or permit,
or franchise to which either Seller or the Company is a party or by which their
respective assets are bound.
2
(b)
Other
than this Agreement, there are no outstanding options, warrants or other rights
of any kind relating to the sale, issuance or voting of any shares of capital
stock or other ownership interests in any of the Company.
(c)
Upon
the consummation of the Sale at the Closing as contemplated by this Agreement,
the Seller will deliver to the Buyer good title to the Shares free and clear
of
any security interests, pledges, liens, charges, encumbrances, adverse claims,
restrictions or defects in title.
2.5
Financial Information. The Seller has furnished to the Buyer the unaudited
balance sheet of the Company (the "Balance Sheet") as of October 31, 2007.
The
Balance Sheet has been prepared in accordance with Chinese Generally Accepted
Accounting Principles and
fairly
presents the financial condition of the Company as of such date. Since its
formation, the Company has had no operations other than engaging in certain
activities relating to its organization, and the acquisition of rights to,
and
construction of buildings on, the Real Property.
2.8
Absence of Certain Changes, Events and Conditions. Since October 31, 2007,
except as otherwise provided in or contemplated by this Agreement or as
disclosed in Section 2.8 of the Disclosure Schedule except for such matters
that, individually or in the aggregate, would not reasonably be expected to
have
a Material Adverse Effect:
3
(a)
other
than in the ordinary course of business consistent with past practice, neither
Seller nor the Company has sold, transferred, leased, subleased, licensed,
encumbered or otherwise disposed of any assets of the Company, other than
transfers of cash;
(b)
neither Seller nor the Company has suffered any casualty loss or damage with
respect to any assets of the Company;
(c)
there
has not been any Material Adverse Effect;
(d)
neither Seller nor the Company has entered into any agreement, contract,
commitment or arrangement to do any of the foregoing.
2.15
Affiliates. Other than Seller, the Company is not controlled by any Person
and
the Company is not in control of any other Person. Schedule 2.18 lists each
contract, arrangement, or understanding to which the Company and Seller or
any
Affiliate of Seller is a party.
4
Engineering
represents and warrants to the Buyer as follows:
3.3
Absence of Violations or Required Consents. Except for such violations,
breaches, defaults, consents, approvals, authorizations, orders, actions,
registrations, filings, declarations, notifications and Encumbrances that would
not reasonably be expected to materially impair or delay its obligations hereby,
the execution, delivery and performance by Engineering of this Agreement do
not
and will not (a) violate or result in the breach or default of any provision
of
Engineering’s articles of association, (b) violate any Law or Governmental Order
applicable to Engineering or any of its properties or assets, or (c) require
any
consent, approval, authorization or other order of, action by, registration
or
filing with or declaration or notification to any Governmental Authority or
any
other Person.
The
Buyer
represents and warrants to the Seller as follows:
5
5.1
Conduct of the Business Prior to Closing; Access. The Seller covenants as
follows:
(a)
Between the date hereof and the Closing Date, except as contemplated by this
Agreement, except as described in either Section 2 or Section 5.1 of the
Disclosure Schedule, the Seller will cause the Company to be operated in the
ordinary course of business consistent with past practice and will not
permit:
(i)
any
of the assets of the Company to be subjected to any Encumbrance, other than
Permitted Exceptions, that will not be released at or prior to the Closing
Date;
(ii)
other than, in each case, in the ordinary course of business consistent with
past practice, any assets of the Company to be sold, transferred, leased,
subleased, licensed, encumbered or otherwise disposed of (including, without
limitation, sales, transfers, leases, subleases, licenses or dispositions of
material assets to Seller or any of its subsidiaries other than the Company),
other than the sale of obsolete Equipment and transfers of cash;
(iii)
any
material Action, Indebtedness or any other claims or rights related to the
Company to be compromised, settled or otherwise adjusted, or any waiver or
release relating thereto to be granted other than in the ordinary course of
business;
(iv)
any
new agreement, contract, commitment or arrangement, or any amendments or
modifications to any existing such agreement, contract, commitment or
arrangement, to be entered into with the Company that is material to the Company
or that will continue in effect after the Closing Date and not be terminable
by
the Company on not more than 60 days' written notice without payment of premium
or penalty;
(v)
any
Indebtedness to be created, incurred, assumed or guaranteed by any Company
that
cannot be prepaid or terminated without payment of premium or penalty, except
for borrowings under existing credit agreements (or replacements therefor on
substantially the same terms) or the creation of trade payables;
(b)
Pending the Closing Date, the Seller shall:
(1)
Ensure that the Buyer and its representatives are given reasonable access during
normal business hours to all of the properties, books and records of the Company
and that the Buyer and its representatives are furnished with such information
concerning the Company as the Buyer may reasonably require, including such
access and cooperation as may be necessary to allow the Buyer and its
representatives to:
(A)
identify those contracts and Permits that require third party consent to the
transactions contemplated hereby, those that expire prior to or soon after
the
Closing and those that may require special documentation at the
Closing;
(B)
make
appropriate arrangements for the continuation of ongoing maintenance,
construction and plant upgrade activities of the Company after the
Closing;
(2)
Make
available for the Buyer all other routine management and statistical reports
of
the Company;
(3)
From
time to time, furnish to the Buyer such additional information (financial or
otherwise) concerning the Company as the Buyer may reasonably
request;
(4)
Except for disputes in good faith, honor and comply in all material respects
with the terms and conditions contained in all contracts to which the Company
is
a party or by which it is bound.
(5)
Use
reasonable efforts to obtain all consents or other actions legally required
in
connection with the execution, delivery and performance by Seller or Engineering
of this Agreement and the instruments of transfer contemplated hereby and the
consummation by Seller and Engineering of the transactions contemplated
hereby.
6
The
obligations of the Buyer to consummate the transactions contemplated by this
Agreement are, at its option, subject to satisfaction of each of the following
conditions:
7
(d)
Notwithstanding anything to the contrary in this Agreement, the indemnifications
in Sections 8.1 and 8.2 hereof will be the sole and exclusive remedies available
to the Buyer or the Seller, or any of their respective Affiliates, officers,
directors, employees, agents or representatives, after the Closing for breaches
of any representations or warranties in this Agreement, or any certificate
delivered pursuant to this Agreement, or any covenants or agreements contained
in this Agreement or otherwise in connection with this Agreement. Any claim
for
indemnification must be made as provided in Sections 8.5 hereof.
8
Unless
otherwise stated in this Agreement, the following capitalized terms have the
following meanings:
Action
means any action, suit, claim, arbitration, or proceeding or investigation
(of
which the Seller or the Buyer, as the case may be, have knowledge) commenced
by
or pending before any Governmental Authority.
Agreement
or this Agreement means this Purchase Agreement dated as of the date first
above
written (including the Annexes and Exhibits hereto and the Disclosure Schedule)
and all amendments hereto made in accordance with the provisions of Section
10.4
hereof.
Buyer
has
the meaning specified in the introductory paragraph to this
Agreement.
Claims
and Damages means, except as otherwise expressly provided in this Agreement,
any
and all losses, claims, demands, liabilities, obligations, actions, suits,
orders, statutory or regulatory compliance requirements, or proceedings asserted
by any Person (including, without limitation, Governmental Authorities), and
all
damages, costs, expenses, assessments, judgments, recoveries and deficiencies,
including, to the extent required pursuant to Article 8, reasonable attorneys'
fees and costs, incurred by or awarded against a party to the extent indemnified
in accordance with Article 8 hereof, but shall not include any consequential
special, multiple, punitive or exemplary damages, except to the extent such
damages have been recovered by a third party and are the subject of a third
party claim for which indemnification is available under the express terms
of
Article 8 hereof.
Closing
has the meaning set forth in Section 1.4 hereof.
Closing
Date has the meaning set forth in Section 1.4 hereof.
Disclosure
Schedule means the Disclosure Schedule, dated as of the date hereof, delivered
to the Buyer by the Seller in connection with this Agreement.
Encumbrance
means any security interest, pledge, mortgage, lien (including, without
limitation, tax liens), charge, encumbrance, easement, adverse claim,
preferential arrangement, restriction or defect in title that adversely affects
the use of the property in the manner it is being used prior to the Closing
Date
or the value of the property as measured in the context of the current uses
thereof.
Environmental
Laws has the meaning set forth in Section 2.16 hereof.
9
Equipment
means all of the tangible personal property, machinery, equipment, vehicles,
rolling stock, furniture, and fixtures of the Company in which the Company
has
an interest, by ownership or lease, together with any replacements thereof,
or
additions thereto made in the ordinary course of business between the date
hereof and the Closing Date.
Governmental
Authority means any People’s Republic of China government authority or local
government or any foreign government, any governmental, regulator legislative,
executive or administrative authority, agency or commission or any court,
tribunal, or judicial body.
Indebtedness
means obligations with regard to borrowed money and leases classified or
accounted for as capital or financing leases on financial statements, but shall
expressly not include either accounts payable or accrued liabilities that are
incurred in the ordinary course of business or obligations under operating
leases classified or accounted for as such on financial statements.
Indemnified
Party has the meaning set forth in Section 8.5 hereof.
Indemnifying
Party has the meaning set forth in Section 8.5 hereof.
Law
means
any federal, state, local or foreign statute, law, ordinance, regulation, rule,
code, order or other requirement or rule of law.
Liability
Claim has the meaning set forth in Section 8.3 hereof.
Loan
means the Loan between Biological and Engineering, dated September 27, 2007
in
the principal amount of Renminbi Two Hundred Million (RMB
200,000,000).
Material
Adverse Effect means any circumstance, change in, or effect on the Company
that
has a material adverse effect on the business, results of operations or
financial condition of the Company taken as a whole; provided, however, that
Material Adverse Effect shall not include adverse effects relating to or
resulting from (or, in the case of effects that have not yet occurred,
reasonably likely to result from) (i) the execution of this Agreement or the
announcement of agreement among the parties with respect to the transactions
contemplated by this Agreement, (ii) general economic or industry conditions
that have a similar effect on other participants in the industry or (ii)
regional economic or industry conditions that have a similar effect on other
participants in the industry in such region.
Material
Contracts means the written agreements, contracts, policies, plans, mortgages,
understandings, arrangements or commitments primarily relating to the Company
to
which the Company is a party or by which any of the assets of the Company are
bound as described below:
(i)
any
agreement or contract providing for payments by the Company to any Person in
excess of $1,000,000 per year commencing on the date hereof;
(ii)
any
employment agreement or consulting agreement or similar contract providing
for
payments to any Person in excess of $50,000 per year commencing on the date
hereof;
(iii)
any
retention or severance agreement or contract with respect to any officer of
the
Company who is to be employed by the Company following the Closing
Date;
(iv)
any
lease of Equipment or Real Property or license with respect to Intellectual
Property (other than licenses granted in connection with the purchase of
equipment or other assets) by the Company from another Person providing for
payments to another Person in excess of $1,000,000 per year;
(v)
any
lease of Equipment or Real Property or license with respect to Intellectual
Property (other than licenses granted in connection with the purchase of
equipment or other assets) by the Company
to another Person providing for payments to the Seller or the Company in excess
of $1,000,000 per year commencing on the date hereof;
(vi)
any
joint venture, partnership or similar agreement or contract of the
Company;
10
(vii)
any
agreement or contract under which any Company, or Seller in connection with
the
Company’s business, has borrowed or loaned any money in excess of $1,000,000 or
issued or received any note, bond, indenture or other evidence of indebtedness
in excess of $1,000,000 or directly or indirectly guaranteed indebtedness,
liabilities or obligations of others in an amount in excess of
$1,000,000;
Permits
has the meaning set forth in Section 2.10 hereof.
Permitted
Exceptions means each of the following:
(a)
mortgages, security interests or other Encumbrances described in Section 2.6
of
the Disclosure Schedule;
(b)
liens
for taxes, assessments and governmental charges or levies not yet due and
payable or the validity of which is being contested in good faith by appropriate
proceedings;
(c)
Encumbrances imposed by law, such as materialmen's, mechanics', carriers',
workmen's and repairmen's liens and other similar liens, arising in the ordinary
course of business;
(d)
survey exceptions, rights of way, easements, reciprocal easement agreements
and
other Encumbrances on title to real property that do not, individually or in
the
aggregate, materially adversely affect the use of such property in the conduct
of the Company’s business as it is being conducted prior to the Closing
Date;
(f)
zoning laws and other land use restrictions that do not materially detract
from
the value or impair the use of the property subject thereto;
(g)
security interests in favor of suppliers of goods for which payment has not
been
made in the ordinary course of business consistent with past
practice;
Public
Company has the meaning set forth in Section 5.2 hereof.
Purchase
Price has the meaning set forth in Section 1.3 hereof.
Real
Property has the meaning set forth in Section 2.7 hereof.
Required
Consents means any consents, approvals, orders, authorizations, registrations,
declarations and filings required under or in relation to laws, rules,
regulations, practices and orders of any state or local or foreign regulatory
bodies.
Sale
has
the meaning set forth in the recitals hereto.
Seller
has the meaning set forth in the introductory paragraph to this
Agreement.
Shares
has the meaning set forth in Section 1.1 hereof.
Tax
or
Taxes means any and all taxes, fees, withholdings, levies, duties, tariffs,
imposts, and other charges of any kind (together with any and all interest,
penalties, additions to tax and additional amount d imposed with respect
thereto) imposed by any government or taxing authority, including, without
limitation, taxes or other charges on or with respect to income, franchises,
windfall or other profits, gross receipts property, sales, use, capital stock,
payroll, employment, social security, workers' compensation, unemployment
compensation, or net worth, taxes or other charges in the nature of excise,
withholding, ad valorem, stamp, transfer, value added or gains taxes, license,
registration and documentation fees, and customs duties, tariffs and similar
charges.
11
(a)
Seller and Buyer by mutual consent;
(b)
Seller if the Closing shall not have been consummated on or before the date
which is the earlier of (i) five days after the satisfaction of the condition
in
Section 6 (or the following business day if such date is not a business day),
or
(ii) sixty (60) days after the date hereof (the “Cut-off Date”), unless the
failure of the Closing to occur by such date shall be due to the failure of
Seller to perform or observe its covenants and agreements set forth
herein;
(c)
Buyer
if the Closing shall not have been consummated on or before the date which
is
the earlier of (i) five days after the satisfaction of the condition in Section
7 (or the following business day if such date is not a business day), or (ii)
the Cut-off Date, unless the failure of the Closing to occur by such date shall
be due to the failure of Buyer to perform or observe its covenants and
agreements set forth herein;
Seller:
|
Tianshi
International Investment Group Co., Ltd.
|
|
Room
2402-03, 24/F.,
New York Life Tower, Windsor House
|
||
000
Xxxxxxxxxx Xxxx,
Xxxxxxxx Xxx, Xxxx Xxxx
|
||
Attention:
Xxxxxxx
Xx
|
||
Buyer:
|
Tianshi
International Holdings Group Limited
|
|
00xx
Xxxxx Xx. 000 Xxxxxx Xxxx Xxxx Xxxx
|
||
Attention:
Xxxxxxx
Xx
|
||
Biological:
|
Tianjin
Tianshi Biological Development Co., Ltd., a Sino-Foreign joint
venture
|
|
Xx.
0 Xxxxxxxx Xxxx, Xxxxxx Xxxxxxxxxx Xxxx Xxxxxxx, XXX
000000
|
||
Attention:
Xxxxx
Xx
|
||
Engineering:
|
Tianjin
Tianshi Biological Engineering Co., Ltd.
|
|
Xx.
0 Xxxxxxxx Xxxx, Xxxxxx Xxxxxxxxxx Xxxx Xxxxxxx. XXX
000000
|
||
Attention:
Xxxxx
Xx
|
Any
such
notice shall be deemed to have been received on the date of personal delivery,
the date set forth on the Postal Service return receipt, or the date of delivery
shown on the records of the overnight courier, as applicable.
12
10.6
Dispute Resolution. This Agreement shall be governed by, and construed in
accordance with, Hong Kong law. Any dispute, controversy or claim arising out
of
or relating to this Agreement shall be settled by arbitration in accordance
with
the UNCITRAL Arbitration Rules as at present in force and as may be amended.
The
arbitration body shall be Hong Kong International Arbitration Centre ("HKIAC").
The place of arbitration shall be in Hong Kong at HKIAC. There shall be a panel
of three arbitrators. The language to be used in the arbitral proceedings shall
be English.
TIANSHI INTERNATIONAL INVESTMENT GROUP CO., LTD | ||
|
|
[COMPANY
SEAL AFFIXED]
|
By: | /s/ Xxxxxxx Xx | |
Name: Xxxxxxx Xx |
||
Title: President |
TIANSHI INTERNATIONAL HOLDINGS GROUP LIMITED. | ||
|
|
[COMPANY
SEAL AFFIXED]
|
By: | /s/ Xxxxxxx Xx | |
Name: Xxxxxxx Xx |
||
Title: President |
TIANJIN TIANSHI BIOLOGICAL DEVELOPMENT CO., LTD. | ||
|
|
[COMPANY
SEAL AFFIXED]
|
By: | /s/ Xxxxx Xx | |
Name: Xxxxx Xx |
||
Title: Legal Representative |
TIANJIN TIANSHI BIOLOGICAL ENGINEERING CO., LTD | ||
|
|
[COMPANY
SEAL AFFIXED]
|
By: | /s/ Xxxxx Xx | |
Name: Xxxxx Xx |
||
Title: Legal Representative |
13