79
EXHIBIT 10.2
------------
This is an Exhibit to the Form 20-F of Sinovac Biotech Ltd.
-----------------------------------------------------------
Attached find the following materials:
Share Purchase Agreement entered into between Net Force Systems Inc. and
------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇, dated September 24, 2003
-----------------------------------
End of Exhibit 10.2
---------
80
SHARE PURCHASE AGREEMENT
------------------------
THIS SHARE PURCHASE AGREEMENT (together with all schedules, exhibits and
------------------------------
all ancillary agreements contemplated herein are hereinafter referred to as this
"Agreement"), is entered into as of the 24th day of September, 2003, by and
between Net Force Systems Inc., a corporation organized under the laws of the
Country of Antigua (the "Net Force") and ▇▇▇▇ ▇▇▇▇ ("Wang"), a natural person.
Net Force and the Wang are referred to collectively as the "Parties".
WHEREAS, Wang owns not less than 51% ownership interest in Sinovac Biotech
-------
Co, Ltd ("Sinovac"), a company organized under the laws of the People's Republic
of China ("PRC");
WHEREAS, Wang desires to sell and Net Force desires to acquire the Wang
-------
Shares equalling 68,136,000 shares representing not less than 51% ownership
interest in Sinovac in consideration for 10,000,000 newly-issued shares of
common stock of Net Force, at a stated value of $0.60 per share, constituting
approximately 37% of Net Force's outstanding capital stock after such issuance
on a fully-diluted basis, on the terms and conditions hereinafter provided;
NOW THEREFORE, on the stated premises and for and in consideration of the
-------------
mutual covenants and agreements hereinafter set forth and the mutual benefits to
the Parties to be derived herefrom, it is hereby agreed as follows:
ARTICLE I
---------
REPRESENTATIONS AND WARRANTIES
------------------------------
OF THE SINOVAC SHAREHOLDER
--------------------------
The Sinovac Shareholder represents and warrants as follows:
Section 1.01 - Organization of Sinovac. Sinovac is a company duly organized
-----------------------
and validly existing under the laws of PRC and has the corporate power and is
duly authorized, qualified, and licensed under all applicable laws, regulations,
ordinances, and orders of public authorities to undertake the transactions
contemplated by this Agreement, to own all of its properties and assets to carry
on its business. The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will not, violate any
provision of Sinovac's articles of incorporation or bylaws (or the foreign
equivalent thereof). Sinovac has taken, or will have taken prior to Closing (as
described in Article III herein), all actions required by law, its articles of
incorporation, or otherwise, to authorize the execution and delivery of this
Agreement. Sinovac has, or will have prior to Closing (as described in Article
III herein), full power, authority, and legal right and has, or will have prior
to Closing (as described in Article III herein), taken all action required by
law, its bylaws, articles of incorporation (or the foreign equivalent thereof)
and otherwise to consummate the transactions herein contemplated.
Section 1.02 - Capitalization and Outstanding Shares. The authorized
----------------------------------------
capitalization of Sinovac consists of 250,000,000 authorized common shares,
$0.001 par value per share, of which 133,600,000 are issued and outstanding as
of August 31, 2003. All outstanding share of Sinovac are validly issued, fully
paid, and non-assessable and not issued in violation of the preemptive or other
rights of any person.
Section 1.03 - Options or Warrants or Subscriptions. There are no existing
------------------------------------
options, warrants, calls, subscriptions or commitments of any character relating
to any authorized and unissued stock of any class of Sinovac.
Section 1.04 - Ownership of Sinovac Shares. With respect to herself, the
----------------------------
Sinovac Shareholder is the legal and beneficial owner of that number of Sinovac
shares set forth opposite her name in the attached Schedule A (which together
81
constitute 51% of all of Sinovac's outstanding shares), free and clear of any
claims, charges, equities, liens, security interests, and encumbrances
whatsoever.
Section 1.05 - Shares Validly Issued. With respect to the Sinovac Shares
-----------------------
issued to her the Sinovac Shares have been validly issued to the Shareholder and
are fully paid, fully vested, non-assessable and not issued in violation of the
pre-emptive or other rights of any person.
Section 1.06 - Valid Transfer of Fully Vested Shares. With respect to
----------------------------------------
herself, the Sinovac Shareholder has full right, power, and authority to
transfer, assign, convey, and deliver its Sinovac Shares. With respect to
herself, delivery by the Sinovac Shareholder of such shares at the Closing (as
described in Article III herein) will convey to Net Force good and marketable
title to such Sinovac Shares, free and clear of any claims, charges, equities,
liens, security interests, and encumbrances whatsoever.
Section 1.07 - Underlying Transaction Lawful. All transactions contemplated
-----------------------------
by this Agreement are lawful under the laws of Antigua and are enforceable in
the courts of Antigua. This Agreement and each of its terms are lawful under the
laws of Antigua and are enforceable in Antigua courts.
Section 1.08 - Enforceable Obligation. The transactions contemplated by
-----------------------
this Agreement are the valid and binding obligations of the Shareholder,
enforceable against the respective Shareholder, by Net Force in accordance with
the terms of this Agreement.
Section 1.9 - No Conflicts. The execution and delivery by each Sinovac
-------------
Shareholder of this Agreement, the performance by each Sinovac Shareholder of
his, her or its obligations under this Agreement and the consummation of the
transactions contemplated hereby do not and will not: (i) conflict with or
result in a violation or breach of, (ii) constitute (with or without notice or
lapse of time or both) a default under, (iii) require any Sinovac Shareholder to
obtain any consent, approval or action of, make any filing with or give any
notice to any person as a result or under the terms of, (iv) result in or give
to any person any right of termination, cancellation, acceleration or
modification in or with respect to, (v) result in or give to any person any
additional rights or entitlement to increased, additional, accelerated or
guaranteed payments under, or (vi) result in the creation or imposition of any
lien upon any Sinovac Shareholder or any of their respective assets and
properties under any contract to which any Sinovac Shareholders is bound.
Section 1.10 - Voting Trusts. The Sinovac Shares are not subject to any
--------------
voting trust agreement or other contract restricting or otherwise relating to
the voting or disposition of the Sinovac Shares.
Section 1.11 - Governmental Authorizations and Licenses. The Sinovac
-------------------------------------------
Shareholder has, or will have upon Closing (as described in Article III herein),
all licenses, franchises, permits, and other governmental authorizations that
are legally required to enable it to conduct its business in all material
respects as conducted. No authorization, approval, consent, or order of, or
registration, declaration, or filing with, any court or other governmental body
is required in connection with the execution and delivery by the Sinovac
Shareholders of this Agreement and consummation by the Sinovac Shareholders of
the transaction contemplated hereby.
Section 1.12 - Compliance with Laws and Regulations. The Sinovac
-----------------------------------------
Shareholder has complied with all applicable statutes and regulations of any
applicable laws except to the extent that noncompliance would not result in the
occurrence of any material liability for any Sinovac Shareholder.
Section 1.13 - Power of Stock Transfer. The Sinovac Shareholder has duly
------------------------
executed a stock transfer power in the substantial form as set forth in Schedule
B.
82
ARTICLE II
----------
REPRESENTATIONS, COVENANTS AND
------------------------------
WARRANTIES OF NET FORCE
-----------------------
Net Force represents and warrants as follows:
Section 2.01 - Organization and Due Authorization. Net Force is a
-------------------------------------
corporation duly organized, validly existing, and in good standing under the
laws of the Country of Antigua and has the corporate power and is duly
authorized, qualified, and licensed under all applicable laws, regulations,
ordinances, and orders of public authorities to own all of its properties and
assets. The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will not violate any
provision of Net Force's articles of incorporation or bylaws. Net Force has
taken all action required by law and under its articles of incorporation, its
bylaws, or otherwise to authorize the execution and delivery of this Agreement,
and Net Force has full power, authority, and legal right and has taken all
action required by law, its articles of incorporation, bylaws, or otherwise to
consummate the transactions herein contemplated.
Section 2.02 - Capitalization and Outstanding Shares. Net Force's
------------------------------------------
authorized capitalization currently consists of 100,000,000 shares of common
stock, par value $.001, of which 17,066,033 shares of common stock are issued
and outstanding as of the date hereof and 50,000,000 shares of preferred stock
of which no shares are outstanding as of the date hereof. All issued and
outstanding shares are legally issued, fully paid, non-assessable and not issued
in violation of the pre-emptive or other rights of any person.
Section 2.03 - Options or Warrants or Subscriptions. There are no existing
------------------------------------
options, warrants, calls, subscriptions or commitments of any character relating
to the authorized and unissued stock of Net Force.
Section 2.04 - Approval of Agreement. The board of directors of Net Force
----------------------
has approved this Agreement and the transactions contemplated hereby.
Section 2.05 - Underlying Transaction Lawful. All transactions contemplated
-----------------------------
by this Agreement are lawful under the laws of the Country of Antigua and are
enforceable in the courts of Antigua. This Agreement and each of its terms are
lawful under the laws of the Country of Antigua and are enforceable in Antigua
courts.
Section 2.06 - Enforceable Obligation. The transaction contemplated by this
----------------------
Agreement is a valid and binding obligation of Net Force, enforceable against
it, by the other Parties in accordance with the terms of this Agreement.
Section 2.07 - Compliance with Laws and Regulations. Net Force has complied
------------------------------------
with all applicable statutes and regulations of any applicable laws except to
the extent that noncompliance would not result in the occurrence of any material
liability for Net Force.
Section 2.08 - No Information Statement on 14C Required. Net Force
---------------------------------------------
represents and warrants to the Sinovac Shareholders that under to the laws of
the Country of Antigua, Net Force is not legally required to file an information
statement on Schedule 14C promulgated under the Exchange Act of 1934, as
amended.
ARTICLE III
-----------
PLAN OF PURCHASE AND SALE OF THE SINOVAC SHARES
-----------------------------------------------
Section 3.01 - The Purchase and Sale of the Sinovac Shares.
-------------------------------------------
(a) Wang agrees to assign, transfer, and deliver to Net Force, free and
clear of all liens, pledges, encumbrances, charges, restrictions or known claims
83
of any kind, nature, or description, 68,136,000 shares of the capital stock of
Sinovac, constituting 51% of the issued and outstanding capital stock of Sinovac
as of September 24, 2003.
(b) Net Force agrees to issue and deliver to the Wang 10,000,000
newly-issued shares of Net Force's common stock, par value $.001 and stated
value of $0.60 per share, to Wang. The shares issued by Net Force under this
Section 3.01(b) shall be issued with the rights of registration contained in
that certain registration rights agreement between the Wang and Net Force
attached hereto as Schedule D.
Section 3.02 - Closing. The closing ("Closing") of the transactions
-------
contemplated by this Agreement shall occur after the signing of this Agreement,
after the fulfillment of all conditions precedent set forth in Article III
hereof and at such time and place as the parties may mutually agree ("Closing
Date").
Section 3.03 - Closing Events. At the Closing, each of the respective
---------------
Parties hereto shall execute, acknowledge, and deliver (or shall ensure to be
executed, acknowledged, and delivered), as applicable, the following:
(a) In the case of the Wang: (i) a completed Schedule A containing a list
indicating the number of shares owned by her, and the number of shares to be
transferred by her under this Agreement; (ii) a stock transfer power and
authorization of designee executed by Wang listed on Schedule B in the
substantial form set forth in Schedule A; and (iii) a certificate of
registration issued by the office of registration of the PRC evidencing the
approximate 51% ownership interest of Sinovac by Wang;
(b) In the case of Net Force; (i) an opinion of counsel as required by
Section 2.07 of this Agreement; and (ii) to Wang set forth on Schedule E that
number of newly issued Net Force Shares set forth beside Wang's name on Schedule
E.
ARTICLE IV
----------
SPECIAL REPRESENTATIONS AND COVENANTS WITH RESPECT TO COMMON SHARES
-------------------------------------------------------------------
ISSUED BY THE COMPANY TO THE SHAREHOLDERS
-----------------------------------------
Section 4.01 - Shares Issued by Net Force to Wang Not Registered. The
-----------------------------------------------------
consummation of this Agreement and the transactions herein contemplated,
including the issuance of common shares by Net Force to Wang as set forth in
Article III, constitute the offer and sale of securities under the Securities
Act of 1933, as amended (the "Securities Act") and applicable state statutes.
Wang acknowledge that the shares of Net Force to be delivered to Wang pursuant
to this Agreement have not been registered under the Securities Act or the laws
of any other jurisdiction, and that therefore the stock is not fully
transferable except as permitted under various exemptions, if any, contained in
the Securities Act and the rules of the Securities and Exchange Commission
interpreting the Securities Act. Under US law, Net Force's common stock cannot
be sold or transferred by Wang unless they are subsequently registered under
applicable law or an exemption from registration is available. The provisions
contained in this paragraph are intended to ensure compliance with the
Securities Act.
Section 4.02 - Regulation S Representations. For purposes of this Section
-----------------------------
4.02, "United States" includes the United States, its territories and
possessions, any state, and the District of Columbia. Each Shareholder is not a
"U.S. Person", defined in Rule 902(k) of the Securities Act as any one of the
following: (i) any natural person resident in the United States; (ii) any
partnership or corporation organized under the laws of the United States; (iii)
any estate of which any executor or administrator is a U.S. person; (iv) any
trust of which any trustee is a U.S. person; (v) any agency or branch of a
foreign entity located in the United States; (vi) any non-discretionary account
or similar account (other than an estate or trust) held by a dealer or other
fiduciary for the benefit or the account of a U.S. person; (vii) any
discretionary account or similar account (other than an estate or trust) held by
a dealer or other fiduciary organized, incorporated or (if an individual)
resident in the United States; (viii) any partnership or corporation, if such
84
entity was formed under the laws of a foreign jurisdiction by a U.S. person
principally for the purpose of investing in securities not registered under the
Securities Act, unless it is organized or incorporated, and owned, by accredited
investors. Each Shareholder did not receive offering materials with respect to
the transactions contemplated by the Agreement. At the time of this Agreement,
each Shareholder is outside of the United States. Therefore Wang agrees not to
sell or otherwise dispose of any of the common shares of Net Force received
pursuant to this agreement unless such Shareholder:
(a) has delivered to Net Force a written legal opinion in form and
substance satisfactory to counsel for Net Force to the effect that the
disposition is permissible under the terms of the Securities Act and
the rules and regulations promulgated thereunder;
(b) has complied with the registration and prospectus requirements of the
Securities Act relating to such disposition; or
(c) has presented Net Force satisfactory evidence that such a disposition
is exempt from registration under the Securities Act. The Net Force
shall place a stop transfer order against transfers of shares until
one of the conditions set forth in this paragraph have been met.
Furthermore, Wang agrees that the certificates evidencing the common
shares that each will receive under this Agreement will contain the
following legend or one substantially similar:
(begin boldface)
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE FEDERAL
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER
THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED,
PLEDGED OR HYPOTHECATED (1) ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER THE
ACT; OR (2) ABSENT AN OPINION OF COUNSEL, WHICH OPINION IS REASONABLY
SATISFACTORY IN FORM AND SUBSTANCE TO THE COMPANY AND ITS COUNSEL, TO THE EFFECT
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR SUCH STATES OR THAT
SUCH TRANSACTION COMPLIES WITH THE RULES PROMULGATED BY THE SECURITIES AND
EXCHANGE COMMISSION UNDER SAID ACT OR SUCH STATES.
(end boldface)
Section 4.03 - Third Party Consents and Certificates. The Parties agree to
-------------------------------------
cooperate with each other in order to obtain any required third party consents
to this Agreement and the transactions herein and therein contemplated.
Section 4.04 - Indemnification.
---------------
(a) Wang hereby agrees to indemnify Net Force, its respective officers,
agents and directors as of the date of execution of this Agreement against any
loss, liability, claim, damage or expense (including, but not limited to, any
and all expenses whatsoever reasonably incurred in investigating, preparing, or
defending against any litigation, commenced or threatened, or any claim
whatsoever), to which it or they may become subject arising out of or based on
any inaccuracy appearing in or misrepresentations made under Article I of this
Agreement. The indemnification provided for in this paragraph shall survive the
Closing and consummation of the transactions contemplated hereby and termination
of this Agreement.
(b) Net Force hereby agrees to indemnify Wang as of the date of execution
of this Agreement against any loss, liability, claim, damage or expense
(including, but not limited to, any and all expenses whatsoever reasonably
incurred in investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever), to which they may become
subject arising out of or based on any inaccuracy appearing in or
misrepresentations made under Article II of this Agreement. The indemnification
provided for in this paragraph shall survive the Closing and consummation of the
transactions contemplated hereby and termination of this Agreement.
85
ARTICLE V
---------
CONDITIONS PRECEDENT TO OBLIGATIONS OF NET FORCE
------------------------------------------------
The obligations of Net Force under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 5.01 - Accuracy of Representations. The representations and
-----------------------------
warranties made by Wang in this Agreement were true when made and shall be true
at the Closing Date with the same force and effect as if such representations
and warranties were made at and as of the Closing Date (except for changes
therein permitted by this Agreement), and Wang shall have performed or complied
with all pre-closing covenants and conditions required by this Agreement to be
performed or complied with by them prior to or at the Closing.
Section 5.02 - No Material Adverse Change. Prior to the Closing Date, there
--------------------------
shall not have occurred any material adverse change in the financial condition,
business, or operations of Sinovac nor shall any event have occurred which, with
the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business or operations of Sinovac.
Section 5.03 - Deliverables. Each deliverable required to be delivered by
------------
Wang under Article I and/or Section 3.01 of this Agreement has been delivered.
ARTICLE VI
----------
MISCELLANEOUS
-------------
Section 6.01 - Governing Law. This Agreement shall be governed by,
--------------
enforced, and construed under and in accordance with the laws of the County of
Antigua.
Section 6.02 - Resolution of Disputes.
----------------------
(a) Any dispute, controversy or claim arising out of or relating to
this Agreement, or the interpretation, breach, termination or
validity hereof, shall first be resolved through friendly
consultation, if possible. Such consultation shall begin
immediately after one party has delivered to the other party a
written request for such consultation (the "Consultation Date").
If the dispute cannot be resolved within 30 days following the
Consultation Date, the dispute shall be submitted to arbitration
upon the request of either party, with written notice to the
other party.
(b) Arbitration. The arbitration shall be conducted in New York, New
-----------
York under the auspices of the American Arbitration Association
("AAA") in accordance with the commercial arbitration rules and
supplementary procedures for international commercial arbitration
of the AAA. There shall be three arbitrators--one arbitrator
shall be chosen by each party to the dispute and those two
arbitrators shall choose the third arbitrator. All arbitration
proceedings shall be conducted in English. Each party shall
cooperate with the other in making full disclosure of and
providing complete access to all information and documents
requested by the other party in connection with the arbitration
proceedings. Arbitration shall be the sole, binding, exclusive
and final remedy for resolving any dispute between the parties;
86
either party may apply to any court of competent jurisdiction in
the State of New York for enforcement of any award granted by the
arbitrators.
(c) During the period when a dispute is being resolved, except for
the matter being disputed, the parties shall in all other
respects continue to abide by the terms of this Agreement.
Section 6.03 - Notices. Any notice or other communications required or
-------
permitted hereunder shall be sufficiently given if personally delivered to it or
sent by registered mail or certified mail, postage prepaid, or by prepaid
telegram addressed as follows:
(a) If to Net Force, address as follows:
Net Force Systems Inc.
C/O Stepp Law Group
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
(b) If to Wang, address as follows:
▇▇▇▇ ▇▇▇▇
Suite 202 - ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax:
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given as of the date so delivered, mailed or telegraphed.
Section 6.04 - Attorney's Fees. In the event that any party institutes any
----------------
action or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the breaching party or parties shall reimburse the
non-breaching party or parties for all costs, including reasonable attorney's
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
Section 6.05 - Schedules Knowledge. Each party is presumed to have full
--------------------
knowledge of all information set forth in the other party's schedules delivered
pursuant to this Agreement.
Section 6.06 - Entire Agreement. This Agreement represents the entire
-----------------
agreement between the parties relating to the subject matter thereof.
Section 6.07 - Survival Termination. The representations, warranties, and
--------------------
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for a period of three
months. All rights and obligations under this entire Agreement shall be binding
upon and inure to the benefit of the heirs, executors, administrators and
assigns of the parties.
87
Section 6.08 - Counterparts. This Agreement may be executed in multiple
------------
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument. For purposes of this Agreement,
facsimile signatures may be deemed originals.
Section 6.09 - Amendment or Waiver. Every right and remedy provided herein
-------------------
shall be cumulative with every other right and remedy, whether conferred herein,
at law, or in equity, and may be enforced concurrently herewith, and no waiver
by any party of the performance of any obligation by the other shall be
construed as a waiver of the same of any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may be amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance may be extended by a writing
signed by the party or parties for whose benefit the provision is intended.
[The remainder of this page intentionally left blank]
-----------------------------------------------------
88
SIGNATURES
----------
IN WITNESS WHEREOF the parties hereto have duly executed this Agreement.
------------------------------------------------------------------------
NET FORCE SYSTEMS INC.
----------------------
Per: /s/ ▇▇ ▇▇▇▇ ▇▇▇▇
---------------------------- ---------------------
(Witness/Seal) ▇▇ ▇▇▇▇ Wang
Director
Per: /s/ ▇▇▇▇ ▇▇▇▇
---------------------------- ---------------------
(Witness/Seal) ▇▇▇▇ ▇▇▇▇
Director
Per: /s/ ▇▇▇ ▇▇▇▇ Yin
---------------------------- ---------------------
(Witness/Seal) ▇▇▇ ▇▇▇▇ Yin
Director
▇▇▇▇ ▇▇▇▇
---------
/s/ ▇▇▇▇ ▇▇▇▇
---------------------------- ---------------------------
(Witness/Seal) ▇▇▇▇ ▇▇▇▇
89
SCHEDULE A
----------
SINOVAC SHAREHOLDER
-------------------
Name and Address Number of Shares Owned Number of Shares to Be Transferred
---------------- ---------------------- ----------------------------------
▇▇▇▇ ▇▇▇▇ 68,136,000 68,136,000
Suite ▇▇▇ - ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇
90
SCHEDULE B
----------
SHAREHOLDERS' STOCK TRANSFER POWER AND
--------------------------------------
AUTHORIZATION OF DESIGNEE
-------------------------
FOR VALUE RECEIVED, the undersigned ("Assignor") hereby sells, transfers
and assigns unto Net Force Systems Inc. ("Assignee"), a corporation organized
under the laws of the Country of Antigua, 68,136,000 shares of the common stock
representing not less than 51% of Sinovac, a corporation organized under the
laws of the PRC and does hereby irrevocably constitute and appoint each of Net
Force's officers and directors as its attorney-in-fact to transfer the said
shares on the books and records of Net Force, with full power of substitution in
the premises. This Stock Transfer Power shall be subject to the terms and
conditions of that certain Share Purchase Agreement by and between, inter alia,
Assignor and Assignee dated as of September 24, 2003.
Dated: September 24, 2003
By: /s/ ▇▇▇▇ ▇▇▇▇
----------------------
Name: ▇▇▇▇ ▇▇▇▇
91
SCHEDULE C
----------
Stock Ownership Transfer Agreement
----------------------------------
Assignor: Sino Pharma Co., Ltd. (hereinafter referred to as "Party A")
Address: ▇▇▇▇ ▇▇▇-▇, ▇▇▇▇▇▇▇▇ Mansion, #130-136. Middle Gannuo Road, Hongkong
Name of the legal representative: Li Keying Position: Chairman of the Board
Nationality: Singapore
Assignor: Tangshan Yian Biological Engineering Co., Ltd. (hereinafter referred
to as ..Party B").
Address: the High and New Technology Development Zone in Tangshan City
Name of the legal representative: Li Keying Position: Chairman of the Board
Nationality: Singapore
Assignor: Beijing ▇▇▇▇▇▇ Investment Co., Ltd. (hereinafter referred to as "Party
C") Address: Beijing University
▇▇▇▇▇▇▇ ▇▇▇▇▇, #▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. Haidian
District, Beijing
Name of the legal representative: ▇▇▇ ▇▇▇▇▇▇▇ Position: Chairman of the Board
Nationality: China
Assignee: ▇▇▇▇ ▇▇▇▇ (hereinafter referred to as "Party D")
Nationality: America
This agreement is signed by Parry A and Party B on September, 2003 in Beijing.
Party A legally owns 20.95% of the stock ownership of Sinovac Biotech Co., Ltd.
(hereinafter referred to as "Sinovac"). Party B legally owns 15.72% of the stock
ownership of Sinovac. Party C legally owns 6.08% of the stock ownership of
Sinovac. Sinovac is founded on April 28, 2001 with the approval of the
Industrial and Commercial Administration of Beijing Municipality. Party A now
intends to transfer all of its stock ownership of Sinovac, namely 28 million
shares; Party B now intends to transfer all of its stock ownership of Sinovac,
namely 21 million shares; and Party C now intends to transfer part of its stock
ownership of Sinovac, namely 8.12 million shares. The transfer of the stock
ownership by Party A, Party B and Party C has been agreed by other share holders
of Sinovac and been approved by the board of Sinovac according to its meeting
resolution.
Party D herein agree to accept the 57.12 million shares (42.75%) of the stock of
Sinovac transferred by Party A. Party B, and Party C. The board of Sinovac also
agree to Party D's acceptance of the 57.12 million shares (42.75%) of the stock
of Sinovac owned by Party A, Party B, and Party C. Based on the principle of
equality and mutual benefits, Party A. Party B, Party C and Party D reached
following agreements on the transfer of the 42.75% stock ownership. namely 57.12
million shares of the stock of Sinovac owned by ▇▇▇▇▇ A, Party B, and Party C
after friendly consultation:
92
I. Stock Ownership Transfer Price
Party A, Party B, and Party C jointly agree to transfer their 57.12 million
shares of the stock of Sinovac to Party D with the price of $5.0294 million USD
pursuant to the terms and conditions of this agreement. Party D agree to accept
the 57.12 million shares (42.75%) of the stock of Sinovac owned by Party A,
Party B, and Party C with the price of $5.0294 million USD.
II. Agreement Violation Liability
1. If any Party of this agreement failed to fulfill its obligations
reasonably and completely pursuant to the regulations of this
Agreement, the violating Party shall bear relative liabilities for the
violation of the Agreement. Any obligations and damages thus brought
upon the non-violation Part shall be remedied by the Party violating
this Agreement.
III. Modification and Termination of This Agreement
If any one of the following circumstances aroused, this Agreement can be
modified or terminated, however, the modification or termination shall become
valid only after the signing of the modification or termination agreement by
Party A, Party B, Party C and Party D.
1. It is impossible to carry out the terms and conditions of this
Agreement due to force majeure, or external causes the Party cannot
prevent and not resulted from the Party's negligence.
2. Party A, Party B, Party C and Party D all agree to modify or terminate
this Agreement after consultation due to the change of conditions.
IV. Others
This Agreement is in six originals. One for Party A, Party B, Party C, Party D
and Sinovac, and the rest being kept by relative government department.
93
Assignor (Party A) (Seal) [SINO PHARMA COMPANY LIMITED STAMP]
Legal Representative or Authorized Trustor (singature):
Date: September 17, 2003
/s/ Keying Li
------------------------------
Keying Li
Assignor (Party B) (Seal) [STAMP]
Legal Representative or Authorized Trustor (singature):
Date: September 17, 2003
/s/ Keying Li
------------------------------
Keying Li
Assignor (Party C) (Seal) [STAMP]
Legal Representative or Authorized Trustor (singature):
Date: September 17, 2003
/s/ ▇▇▇ ▇▇▇▇ Yin
------------------------------
▇▇▇ ▇▇▇▇ Yin
Assignor (Party D) (Seal)
Legal Representative or Authorized Trustor (singature):
Date: September 17, 2003
/s/ ▇▇▇▇ ▇▇▇▇
------------------------------
▇▇▇▇ ▇▇▇▇
94
SCHEDULE D
----------
Stock Ownership Transfer Agreement
----------------------------------
Assignor: Shenzhen Bio-port Co., Ltd. (hereinafter referred to as "Party A")
Name of the legal representative: ▇▇▇▇▇▇▇▇ ▇▇▇▇ Position: Chairman of the Board
Nationality: China
Assignee: ▇▇▇▇ ▇▇▇▇ (hereinafter referred to as "Party B")
Nationality: America
This agreement is signed by Party A and Party B on September 17, 2003 in
Beijing.
Party A legally owns 12.43% of the stock ownership of Sinovac Biotech Co., Ltd.
(hereinafter referred to as "Sinovac"). Sinovac is founded on April 28, 2001
with the approval of the Industrial and Commercial Administration of Beijing
Municipality. Party A now intends to transfer its stock ownership of Sinovac,
namely 11.016 million shares (8.25%). The transfer of the stock ownership by
Party A has been agreed by other shareholders of Sinovac and has been approved
by the board of Sinovac according to its meeting resolution.
Party B herein agrees to accept the 11.016 million shares (8.25%) of the stock
of Sinovac transferred by Party A. The board of Sinovac also agrees to Party B's
acceptance of the 11.016 million shares (8.25%) of the stock of Sinovac owned by
Party A. Based on the principle of equality and mutual benefits, Party A and
Party B, reached the following agreements on the transfer of the 8.25% stock
ownership, namely 11.016 million shares of the stock of Sinovac owned by Party A
after friendly consultation.
I. Stock Ownership Transfer Price
Party A agrees to transfer its 11.016 million shares of the stock of Sinovac to
Party B for the price of $0.9706 million USD pursuant to the terms and
conditions of this agreement. Party B agrees to accept the 11.016 million shares
(8.25 %) of the stock of Sinovac owned by Party A for the price of $0.9706
million USD.
II. Agreement Violation Liability
1. If any Party of this agreement failed to fulfill its obligations reasonably
and completely pursuant to the regulations of this Agreement, the violating
Party shall bear relative liabilities for the violation of the Agreement.
Any obligations and damages thus brought upon the non-violation Party shall
be remedied by the Party violating this Agreement.
III. Modification and Termination of This Agreement
If any one of the following circumstances aroused, this Agreement can be
modified or terminated, however, the modification or termination shall become
valid only after the signing of the modification or termination agreement by
Party A and Party B.
▇.▇▇ is impossible to carry out the terms and conditions of this Agreement due
to force majeure, or external causes the Party cannot prevent and not resulted
from the Party's negligence.
▇.▇▇▇▇▇ A and Party B all agree to modify or terminate this Agreement after
consultation due to the change of conditions.
95
IV. Others
This Agreement is in four originals, one for Party A, Party B, and Sinovac, and
the rest being kept by the relative government department.
Assignor (Party A) (Seal): [stamp]
Legal Representative or Authorized Trustor (signature):
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇
Assignee (Party B) (Seal):
Legal Representative or Authorized Trustor (signature):
/s/ ▇▇▇▇ ▇▇▇▇
------------------------------
▇▇▇▇ ▇▇▇▇
96
SCHEDULE E
----------
DESIGNEES OF THE NEWLY-ISSUED CAPITAL STOCK OF NET FORCE
--------------------------------------------------------
Number of Shares to be
Name Address Issued by Net Force
---- ------- ----------------------
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ - ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇. 10,000,000
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇