154
EXHIBIT 10.11
-------------
This is an Exhibit to the Form 20-F of Sinovac Biotech Ltd.
-----------------------------------------------------------
Attached find the following materials:
Corporate Services Agreement entered into between the Company and
-----------------------------------------------------------------
Segue Ventures LLC, dated for reference effective May 1, 2005
-------------------------------------------------------------
155
CORPORATE SERVICES
------------------
AGREEMENT
---------
THIS CORPORATE SERVICES AGREEMENT is made and dated for reference
------------------------------------
effective (the "Effective Date") as of the 1st day of May, 2005.
BETWEEN:
-------
SEGUE VENTURES LLC. having its address for delivery and service
---------------------
located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(the "Consultant");
OF THE FIRST PART
-----------------
AND:
---
SINOVAC BIOTECH LTD. a company duly incorporated under the laws of
--------------------
Antigua and having an address for delivery and service located at
▇▇. ▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, P.R.C 100085
(the "Company");
OF THE SECOND PART
------------------
(the Consultant and the Company being hereinafter singularly also
referred to as a "Party" and collectively referred to as the
"Parties" as the context so requires)
WHEREAS:
-------
A. The Company is in the medical business (the "Business") of developing and
marketing vaccines in China and is listed on the AMEX;
B. The Company retains the Consultant under this agreement (the "Agreement")
to act as the Company's Investment Relations Manager. Its purpose is to
establish and execute an effective, combined IR - PR strategy that powerfully
communicates Sinovac's qualities and potential to the investment community. The
Consultant's goal is to help achieve and maintain favorable market valuations,
stable stock price and relations with the investment and media communities.
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT THE PARTIES HERETO AGREE AS
-------------------------------------------------------------------------
FOLLOWS:
-------
156
Article I
---------
SERVICES AND RESPONSIBILITIES OF THE CONSULTANT
-----------------------------------------------
1.1 Consultant Services. The Consultant will provide to the Company, as an
--------------------
independent consultant, on a non-exclusive basis, the services ("Services") set
forth below together with such reasonable additions and modifications thereto as
the Company may request from time-to-time:
A. Investor Relations - Conduct day-to-day investor relations ("IR")
operations for the Company including:
a. Manage a toll free investor relations information line and
provide response services in a professional manner
compliant with SEC and stock exchange regulations that
Sinovac is a member of;
b. Draft Company press releases for approval by Company
management;
c. Assist in the preparation and distribution of Company
information brochures and other media material;
d. Prepare for Company approval strategic IR plans for cost
effective and market effective news dissemination and
public awareness programs and programs to enhance Company
stockholder base and distribution;
e. Coordinate conference calls & web-casts for North America;
f. Prepare for Company approval, an investment awareness plan
that identifies contacts at investment institutions likely
to find Sinovac interesting and develop media material that
introduces potential investment and financial institutions
to Sinovac. ;
g. Provide shareholders with latest news and Company
information releases;
h. Provide strategic counsel on investor relations' issues to
senior management including feed-back on investor Company
knowledge;
i. Track market and Sinovac shareholder activity and prepare
analysis concerning trends and significance to the Company;
and
j. Assist in preparing statements and commentary for SEC forms
and reports.
B. Website Management - Assist Sinovac with its website as follows:
a. Prepare basic website content, monitor website for content
currency and update as necessary;
b. Prepare for website - annual reports, news releases,
Frequently Asked Questions (FAQs) section, links section
and other published content;
C. Strategic Media Relations
a. Establish and maintain contacts with suitable reporters,
editors, key journalists and other media;
b. Provide analysis of media coverage, journalist profiling;
c. Provide strategy-driven corporate media communications
programs; and
d. Cultivate investor relations networks.
D. Cultivate Capital Markets and Shareholder Relations
157
a. Produce targeted programs to identify and connect with
qualified institutional investors. Be prepared to provide
personal and telephone briefings to the institutional
investment community in order to present the Company's
benefits to investors and to establish positive productive
business relationships;
b. Assist the Company with preparation of information
presentations and documents appropriate for the
institutional investment community and financial
institutions to become knowledgeable about the Company;
c. Establish and enhance channels of communication between the
Company and institutional investors, market makers,
registered representatives, buy-and sell-side financial
analysts, and portfolio managers; but
d. Consultant's responsibilities do not include the
solicitation or sales of securities.
E. Road Show Public Relations / Promotion
a. Prepare and present multimedia briefing strategies and
assist in planning speaking agendas and venues; and
b. Provide coaching and assistance to Sinovac officers for
public speaking.
F. Opinion Research - conduct polls and targeted interviews with
investors and the investment community to determine Company's
message penetration and effectiveness.
G. Support Business Plan Development and Execution
a. Marketing and business plans - assist in providing
information, validating and improving ideas, trouble shoot
logic flaws and provide research support;
b. Corporate Governance - facilitate informing the public of
the Company's corporate governance programs and events and
develop and execute an information disclosure program;
c. Message Development - develop a systematic message process
to help the Company focus its strategic communications
objectives and frame effective messages to achieve them;
and
d. Executive Coaching:
i. Media Coaching to improve individual skills in
dealing with the news media and for general public
communication; and
ii. Presentation Skills to help develop skills in speech
delivery and conducting meetings.
(such above-referenced services being, collectively, also called the "Consulting
Services").
1.2 Reporting By Consultant. The Consultant will report to the Company on a
-----------------------
timely basis as to its activities and performance in its conduct of the Services
and any issues which arise. The Consultant shall report as soon as reasonably
possible in respect to material matters and shall render summary reports not
less than monthly.
158
Article II
----------
INFORMATION TO BE PROVIDED BY THE COMPANY
-----------------------------------------
2.1 Information to be made available. The Company agrees to make available
--------------------------------
to the Consultant all corporate, financial and operating information which is
reasonably necessary and sufficient to allow the Consultant to perform the
Consulting Services. The Company agrees to make all such information available
to the Consultant and hereby authorizes the Consultant to provide such
information to investors, potential investors, registered representatives, legal
and accounting advisers, and other persons, subject to such reasonable
conditions and restrictions as the Company deems necessary or appropriate and
subject to insider information rules and restrictions. The Consultant will use
such information only for the purposes set out herein and for no competitive or
other purpose whatsoever.
2.2 Accuracy of the information. The Company agrees that it will bear sole
---------------------------
responsibility for the accuracy and completeness of the information provided to
the Consultant, information created by the Consultant and approved by the
Company, but not for information created and released by the Consultant without
the approval of the Company.
2.3 Material change in information. The Company agrees to advise the
---------------------------------
Consultant promptly of any material change in the affairs of the Company or in
any information provided to the Consultant from the date at which such
information is given.
Article III
-----------
COMPLIANCE WITH LAWS
--------------------
3.1 Consultant Compliance Issues and Insurance. The Consultant shall comply
------------------------------------------
with all laws, whether federal or state, applicable to the Consulting Services
and, when requested by the Company, will advise the Company of any particular
compliance issues affecting any Consulting Services or transactions for which
the Consultant's services have been engaged. The Consultant will engage in its
own name liability insurance coverage for its activities which will be charged
as an expense to the Company, subject to Company approval which shall not be
unreasonably with held. It is presently contemplated that the Consultant will be
able to acquire insurance of $1,000,000, with a $10,000 deductible, for an
estimated annual premium of approximately $9500, which is acceptable to the
Company.
3.2 Professionals. The fees and disbursements of counsel and accountants in
-------------
regard to the Consulting Services will be paid for by the Company subject to
prior approval by the Company.
3.3 Company Information Security. The Consultant shall effect and comply
----------------------------
with all reasonable endeavors to ensure that it affords security to information
of the Company and that the Consultant, or any persons with whom the Consultant
works or with whom the Consultant deals, do not employ information of the
Company in any manner contrary to law or fiduciary obligations.
3.4 Company Compliance Issues. The Company shall comply with all laws,
--------------------------
whether federal or state, applicable to the Consulting Services and the Company.
159
The Company shall effect commercially reasonable best efforts to continue as a
reporting issuer in good standing in the US on the AMEX or another public
exchange.
3.5 Trading. In the event that the Consultant, or any person with whom the
-------
Consultant works or with whom the Consultant deals, trades in the Company's
market then the Consultant shall employ reasonable prudence as to such trading
and shall effect such in compliance with law. Any trading shall be effected in a
manner which does not damage market stability and orderliness and is in
compliance with insider knowledge laws.
Article IV
----------
TERM
----
4.1 Term. The initial term of this Agreement is from the Effective Date to
----
July 30, 2005 (the "Initial Term"). After the Initial Term, and provided that
neither Party gives notice of termination by July 30, 2005 this Agreement will
renew for a one year period ending July 30, 2006 unless terminated by either
Party, without any requirement for the giving of any cause for such termination,
upon 60 days' prior written notice (the entire period of this Agreement to
termination being the "Term").
Article V
---------
COMPENSATION OF THE CONSULTANT
------------------------------
5.1 Compensation to the Consultant. The Consultant shall be compensated for
------------------------------
the Consulting Services and its costs as follows:
(a) $10,000.00 per month, payable on the 1st day of the month, in
advance; and
(b) subject to the Term continuing (effective July 30th, 2005) 15,000
restricted shares awarded on August 1st, 2005 and options for
28,000 shares of stock with an exercise price of $2.40 per share,
vesting on August 1st, 2005 and expiring July 31st, 2010.
5.2 Reimbursement of Expenses. During the Term the Company shall reimburse
--------------------------
the Consultant for all invoiced and substantiated expenses properly incurred for
the Consulting Services within 15 days of invoice. The Company shall not be
responsible for expenses unless it has given approval as follows:
(i) Any single expense in excess of $500; and
(ii) Any month in which it is anticipated that aggregate expenses will
exceed $2000.
5.3 Ownership of Clientele. The Consultant agrees that all work product,
-----------------------
market data, investor leads and identities, institutional data and all other
information generated by the Consultant for the purposes of the Consulting
Services and all data acquired from the Company (collectively the "Confidential
Information") are the property of the Company and shall be kept confidential
except as permitted or required by this Agreement or as otherwise permitted in
writing. Such Confidential Information shall remain confidential and not used by
the Consultant until the same has become public as to Company data and for a
160
period of one (1) year as to investor or institutional data following
termination of this Agreement, subject to any extension of a continuing
transaction right in regard to incomplete transactions completing after
termination of this Agreement, as elsewhere herein provided. This within
provision is a perpetuating guarantee, for the period stated, and applies to any
and all transactions entertained by the Parties, including subsequent follow-up,
repeat transactions, extended or renegotiated transactions, as well as to the
initial transaction, regardless of the success of the project. This provision
does not prejudice the Consultant or the Company from continuing relations or
business with parties to whom they have been introduced during the Term and
conducting business with such parties for their own account but the Consultant
shall not make the Company's Confidential Information available to third parties
or distract the investors in a manner which may compete with or damage the value
of the Company's Confidential Information or its finance or market
possibilities.
Article VI
----------
INFORMATION AND ADVICE CONFIDENTIAL
-----------------------------------
6.1 Confidential Information. No information furnished hereunder in
--------------------------
connection with any transaction or the Consulting Services shall be published by
any Party without the prior written consent of the other Party, but such consent
in respect of the reporting of factual data shall not be unreasonably withheld,
and shall not be withheld in respect of information required to be publicly
disclosed pursuant to applicable securities or other applicable laws.
Article VII
-----------
INDEMNIFICATION AND LEGAL PROCEEDINGS
-------------------------------------
7.1 Indemnification. Subject to section 7.2 below, each Party agrees to
---------------
indemnify and save the other, its affiliates and their respective directors,
officers, employees and agents (each an "Indemnified Party") harmless from and
against any and all losses, claims, actions, suits, proceedings, damages,
liabilities or expenses of whatsoever nature or kind, including any
investigation expenses incurred by any Indemnified Party, to which an
Indemnified Party may become subject by reason of breach of this Agreement or of
law by the defaulting Party.
7.2 Consultant Liability. The Consultant shall not be liable in respect of
---------------------
any act or omission committed by it, and the Company or its personnel shall have
no claim against the Consultant, of any nature whatsoever whether in contract,
tort or otherwise in respect of any act or omission arising out of or in
connection with the provision of the Services except where such arises as a
consequence of willful wrongs or gross negligence. Except for willful wrongs or
gross negligence, the Consultant shall not be liable to the Company or its
personnel for:
(a) Any loss or damage (except death or personal injury arising from
the negligence of the Consultant) arising from any inaccuracies,
omissions, data loss, faults or delays arising out of the
Consultant Services, no matter how such faults, delays,
inaccuracies, omissions or losses may arise or
161
(b) Any loss or failure to perform any obligation under this agreement
due to causes beyond its reasonable control including, industrial
disputes, supplier failure, fire, power or telecommunications
failure.
In no circumstance, subject to section 7.2 above, shall the Consultant be liable
for any direct or indirect financial loss, or consequential loss or damage with
respect to the Consultant Services.
Article VIII
------------
FORCE MAJEURE
-------------
8.1 Events. If either Party hereto is at any time during this Agreement
------
prevented or delayed in complying with any provisions of this Agreement by
reason of strikes, walk-outs, labour shortages, power shortages, fires, wars,
acts of God, earthquakes, storms, floods, explosions, accidents, protests or
demonstrations by environmental lobbyists or native rights groups, delays in
transportation, breakdown of machinery, inability to obtain necessary materials
in the open market, unavailability of equipment, governmental regulations
restricting normal operations, shipping delays or any other reason or reasons
beyond the control of that Party, then the time limited for the performance by
that Party of its obligations hereunder shall be extended by a period of time
equal in length to the period of each prevention or delay.
8.2 Notice. A Party shall within seven calendar days give written notice to
------
the other Party of each event of force majeure under section 8.1 hereinabove,
and upon cessation of such event shall furnish the other Party with notice of
that event together with particulars of the number of days by which the
obligations of that Party hereunder have been extended by virtue of such event
of force majeure and all preceding events of force majeure.
Article IX
----------
DEFAULT AND TERMINATION
-----------------------
9.1 Default. If either of the Parties is in default with respect to any of
-------
the provisions of this Agreement (hereinafter referred to as the "Defaulting
Party"), the non-defaulting Party (hereinafter referred to as the
"Non-Defaulting Party") shall give notice to the Defaulting Party designating
such default, and within fifteen (15) business days after its receipt of such
notice, the Defaulting Party shall either:
(a) cure such default, or diligently commence proceedings to cure such
default and prosecute the same to completion without undue delay,
with notice to the Non-Defaulting Party of the procedures it has
instigated to cure; or
(b) give the Non-Defaulting Party notice that it denies that such
default has occurred and that it is submitting the question to
arbitration in accordance with the arbitration rules of the
American Arbitration Association. Arbitration shall be conducted
by a single arbitrator selected mutually by the Parties (failing
which they shall each select one and decide which acts by a flip
of a coin), the arbitrator shall determine rules of conduct and
all decisions of the arbitrator shall be final, binding,
unappealable and may be entered by the winning Party in court as a
162
judgement, and each Party shall bear their own legal costs and pay
50% of the arbitration costs.
9.2 Termination. If default is not addressed appropriately in the form
-----------
required by 9.1(a) above, or cured within 15 days of an arbitrator's finding of
default of 9.1(b), then the Non-Defaulting Party may terminate this Agreement at
any time, without prejudice to any claims it may have for an accounting or
damages.
Article X
---------
NOTICE
------
10.1 Notice. Each notice, demand or other communication required or permitted
------
to be given under this Agreement shall be in writing and shall be delivered to
the other Party, at the address for such Party specified above. The date of
receipt of such written notice, demand or other communication shall be the date
of delivery thereof. Notice shall be sent via major international overnight
carrier service (eg. FedEx, UPS, DHL) to the following addresses:
SEGUE VENTURES, LLC
C/O ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
COURTESY COPY TO LEGAL COUNSEL OF ▇▇. ▇▇▇▇:
ATTN: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ESQ.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SINOVAC BIOTECH LTD.
C/O ▇▇. ▇▇▇ ▇▇▇▇ ▇▇▇
▇▇. ▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, P.R.C 100085
163
COURTESY COPY TO LEGAL COUNSEL OF SINOVAC BIOTECH LTD:
ATTN: ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, LAWYERS
▇▇▇▇-▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
10.2 Change of Address. Either Party may at any time and from time to time
-------------------
notify the other Party in writing of a change of address and the new address to
which notice shall be given to it thereafter until further change.
Article XI
----------
GENERAL PROVISIONS
------------------
11.1 Entire Agreement. This Agreement constitutes the entire agreement
----------------
between the Parties hereto in respect to this subject matter and supersedes
every previous agreement, expectation, negotiation, representation or
understanding, whether oral or written, express or implied, statutory or
otherwise, between the Parties with respect to the subject matter of this
Agreement.
11.2 Enurement and Assignment. This Agreement will enure to the benefit of
------------------------
and will be binding upon the Parties, their respective heirs, executors,
administrators and permitted assigns. This Agreement may not be assigned as to
any part by any Party without the permission in writing of the other Party, such
permission not to be unreasonably withheld.
11.3 Time of the Essence. Time will be of the essence of this Agreement.
-------------------
11.4 Applicable Law. The situs of this Agreement is Vancouver, British
---------------
Columbia, and for all purposes this Agreement will be governed exclusively by
and construed and enforced in accordance with the laws of such Province, except
that the Pennsylvania Limited Liability Company Law shall apply.
11.5 Currency. Unless otherwise stated, all references in this Agreement to
--------
currency shall be United States currency.
11.6 Severability and Construction. Each Article, section, paragraph, term
-----------------------------
and provision of this Agreement, and any portion thereof, shall be considered
severable, and if, for any reason, any portion of this Agreement is determined
to be invalid, contrary to or in conflict with any applicable present or future
law, rule or regulation in a final unappealable ruling issued by any Court,
agency or tribunal with valid jurisdiction in a proceeding to which any Party
hereto is a party, that ruling shall not impair the operation of, or have any
other effect upon, such other portions of this Agreement as may remain otherwise
intelligible (all of which shall remain binding on the Parties and continue to
be given full force and effect as of the date upon which the ruling becomes
final).
11.7 Counterparts. This Agreement may be signed by the Parties hereto in as
------------
many counterparts as may be necessary, each of which so signed shall be deemed
164
to be an original, and such counterparts together shall constitute one and the
same instrument and notwithstanding the date of execution will be deemed to bear
the execution date as set forth on the front page of this Agreement.
11.08 No Partnership or Agency. The Parties have not created a partnership and
------------------------
nothing contained in this Agreement shall in any manner whatsoever constitute
any Party the partner, agent or legal representative of the other Party, nor
create any fiduciary relationship between them for any purpose whatsoever. No
Party shall have any authority to act for, or to assume any obligations or
responsibility on behalf of, the other Party except as may be, from time to
time, agreed upon in writing between the Parties or as otherwise expressly
provided.
11.09 Consents and Waivers. No consent or waiver expressed or implied by either
--------------------
Party in respect of any breach or default by the other in the performance by
such other of its obligations hereunder shall:
(a) be valid unless it is in writing and stated to be a consent or
waiver pursuant to this section;
(b) be relied upon as a consent to or waiver of any other breach or
default of the same or any other obligation;
(c) constitute a general waiver under this Agreement; or
(d) eliminate or modify the need for a specific consent or waiver
pursuant to this section in any other or subsequent instance.
IN WITNESS WHEREOF the Parties hereto have hereunto set their hands and
-------------------
seals in the presence of their duly authorized signatories effective as at the
date first above written.
SINOVAC BIOTECH LTD )
-------------------- )
by its authorized signatory )
)
)
/s/ ▇▇▇▇▇▇▇ ▇▇▇ )
--------------------------------------------)
Authorized Signatory )
SEGUE VENTURES LLC. )
------------------- )
by its authorized signatory: )
)
)
/s/ ▇▇▇▇▇ ▇▇▇▇ )
--------------------------------------------)
Authorized Signatory )
End of Exhibit 10.11
----------