EXHIBIT 10.1
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SHARE PURCHASE AGREEMENT
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Between:
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SINOVAC BIOTECH LTD.
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And Each of:
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CHINA BIOWAY BIOTECH GROUP CO., LTD.
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And:
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BEIJING ▇▇▇▇▇▇ CO., LTD.
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And:
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SHENZHEN BIO-PORT CO., LTD.
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SHARE PURCHASE AGREEMENT
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THIS SHARE PURCHASE AGREEMENT is dated and made for reference effective as
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fully executed on this 30th day of November, 2004.
BETWEEN:
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SINOVAC BIOTECH LTD., a corporation organized
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under the laws of the Country of Antigua and
having an address for notice and delivery
located at ▇▇. ▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇., ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ 100085
(hereinafter referred to as the "Purchaser");
OF THE FIRST PART
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AND:
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CHINA BIOWAY BIOTECH GROUP CO., LTD., a
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corporation organized under the laws of the
People's Republic of China and having an
address for notice and delivery located at
PKU Bio-city, Shangdi Xilu ▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
(hereinafter referred to as "Bioway");
OF THE SECOND PART
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AND:
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BEIJING ▇▇▇▇▇▇ CO., LTD., a corporation
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organized under the laws of the People's
Republic of China and having an address for
notice and delivery located at PKU Bio-city,
Shangdi Xilu ▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇
(hereinafter referred to as "▇▇▇▇▇▇");
OF THE THIRD PART
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AND:
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SHENZHEN BIO-PORT CO., LTD., a corporation
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organized under the laws of the People's
Republic of China and having an address for
notice and delivery located at ▇▇▇, ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Street ▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
(hereinafter referred to as "Shenzhen")
OF THE FOURTH PART
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(Bioway, ▇▇▇▇▇▇ and Shenzhen are also
hereinafter referred to as a "Vendor" and
collectively referred to as the "Vendors" as
the contest so requires);
(the Purchaser, Bioway, ▇▇▇▇▇▇ and Shenzhen
being hereinafter singularly also referred to
as a "Party" and collectively referred to as
the "Parties" as the context so requires).
WHEREAS:
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A. Sinovac Biotech Co., Ltd. (hereinafter referred to as the "Company") is a
body corporate subsisting under and registered pursuant to the laws of the
People's Republic of China and is also majority owned (51%) by the Purchaser;
B. The Purchaser is in the business of research and development specializing
in the development and manufacturing of various vaccines including flu vaccines
and vaccines for hepatitis A, hepatitis B and hepatitis A&B (collectively, the
"Purchaser's Business")
C. Bioway is the legal and beneficial owner of 13,000,000 shares of the
Company, representing 9.73% of the issued and outstanding shares (each a
"Purchased Share") in the capital of the Company as set forth in Schedule "A"
which is attached hereto and which forms a material part hereof;
▇. ▇▇▇▇▇▇ is the legal and beneficial owner of 3,890,000 shares of the
Company, representing 2.91% of the issued and outstanding shares (each a
"Purchased Share") in the capital of the Company as set forth in Schedule "A"
which is attached hereto and which forms a material part hereof;
E. Shenzhen is the legal and beneficial owner of 10,580,000 shares of the
Company, representing 7.92% of the issued and outstanding shares (each a
"Purchased Share") in the capital of the Company as set forth in Schedule "A"
which is attached hereto and which forms a material part hereof;
F. The Parties hereto have agreed to enter into this Share Purchase Agreement
(the "Agreement") which formalizes and clarifies the Parties' respective duties
and obligations in connection with the purchase by the Purchaser, from the
Vendors, of the Purchased Shares together with the further development of the
Company's Business as a consequence thereof;
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NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the mutual
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promises, covenants and agreements herein contained, THE PARTIES HERETO COVENANT
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AND AGREE WITH EACH OTHER as follows:
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Article 1
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DEFINITIONS
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1.1 Definitions. For the purposes of this Agreement, except as otherwise
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expressly provided or unless the context otherwise requires, the following words
and phrases shall have the following meanings:
(a) "Agreement" means this "Share Purchase Agreement" as entered into
between the Purchaser and the Vendors, together with any amendments
thereto and any Schedules as attached thereto;
(b) "Board of Directors" means, as applicable, the respective Board of
Directors of each of the Parties hereto as duly constituted from time
to time;
(c) "business day" means any day during which Canadian Chartered Banks are
open for business in the City of Vancouver, Province of British
Columbia;
(d) "Closing" has the meaning ascribed to it in Article "6.1" hereinbelow;
(e) "Closing Date" has the meaning ascribed to it in Article "6.1"
hereinbelow;
(f) "Commercial Arbitration Act" means the Arbitration Act of the Province
of British Columbia, R.S.B.C. 1996, as amended from time to time, as
set forth in Article "11" hereinbelow;
(g) "Commissions" means the United States Securities and Exchange
Commission;
(h) "Company" means Sinovac Biotech Co. Ltd., a corporation organized
under the laws of the People's Republic of China and majority owned by
the Purchaser, or any successor company, however formed, whether as a
result of merger, amalgamation or other action;
(i) "Defaulting Party" and "Non-Defaulting Party" have the meanings
ascribed to them in Article "12" hereinbelow;
(j) "Encumbrances" means mortgages, liens, charges, security interests,
encumbrances and third party claims of any nature;
(k) "Execution Date" means the actual date of the complete execution of
this Agreement and any amendment thereto by all Parties hereto as set
forth on the front page hereof;
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(l) "Indemnified Party" and "Indemnified Parties" have the meanings
ascribed to them in Article "7.1" hereinbelow;
(m) "Parties" or "Party" means, respectively, the Purchaser, Bioway,
▇▇▇▇▇▇ and/or Shenzhen hereto, as the case may be, together with their
respective successors and permitted assigns as the context so
requires;
(n) "person" or "persons" means an individual, corporation, partnership,
party, trust, fund, association and any other organized group of
persons and the personal or other legal representative of a person to
whom the context can apply according to law;
(o) "Purchased Shares" has the meaning ascribed to it in recital "C", "D"
and "E" hereinabove; the particulars of the registered and beneficial
ownership of such Purchased Securities being set forth in Schedule "A"
which is attached hereto;
(p) "Purchase Price" has the meaning ascribed to it in Article "2.2"
hereinbelow;
(q) "Purchaser" means Sinovac Biotech Ltd., a corporation organized under
the laws of the Country of Antigua, or any successor company, however
formed, whether as a result of merger, amalgamation or other action;
(r) "Purchaser's Initial Due Diligence" has the meaning ascribed to it in
Article "5.1(b)" hereinbelow;
(s) "Purchaser's Ratification" has the meaning ascribed to it in Article
"5.1(a)" hereinbelow;
(t) "Time of Closing" means 2:00 o'clock, p.m. (Vancouver Time) on the
Closing Date; and
(u) "Vendors" means Bioway, ▇▇▇▇▇▇ and Shenzhen hereto, as the case may
be, together with their respective successors and permitted assigns as
the context so requires.
1.2 Schedules. For the purposes of this Agreement, except as otherwise
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expressly provided or unless the context otherwise requires, the following shall
represent the Schedules which are attached to this Agreement and which form a
material part hereof:
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Schedule Description
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Schedule "A": Description of Purchased Shares
1.3 Interpretation. Forthe purposes of this Agreement, except as otherwise
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expressly provided or unless the context otherwise requires,:
(a) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular Article, section or other subdivision of this Agreement;
(b) any reference to an entity shall include and shall be deemed to be a
reference to any entity that is a permitted successor to such entity;
and
(c) words in the singular include the plural and words in the masculine
gender include the feminine and neutral genders, and vice versa.
Article 2
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PURCHASE AND SALE OF THE ALL OF THE PURCHASED SHARES
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2.1 Purchase and Sale. Subject to the terms and conditions hereof and based
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upon the representations and warranties contained in Articles "3" and "4"
hereinbelow and prior satisfaction of the conditions precedent which are set
forth in Article "5" hereinbelow, the Vendors hereby agree to assign, sell and
transfer at the Closing Date (as hereinafter determined) all of their respective
rights, entitlement and interest in and to the Purchased Shares in the Company
to the Purchaser and the Purchaser hereby agrees to purchase all of the
Purchased Shares from the Vendors on the terms and subject to the conditions
contained in this Agreement.
2.2 Purchase Price. The total purchase price (the "Purchase Price") for
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all of the Purchased Shares will be satisfied by way of payment in cash in the
amounts of US$1,570,000 to Bioway, US$470,000 to ▇▇▇▇▇▇ and US$1,270,000 to
Shenzhen at closing.
Article 3
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REPRESENTATIONS, WARRANTIES AND COVENANTS
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BY THE VENDORS
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3.1 General Representations, Warranties and Covenants by the Vendors. In
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order to induce the Purchaser to enter into and consummate this Agreement, the
Vendors, represent to, warrant to and covenant with the Purchaser, with the
intent that the Purchaser will rely thereon in entering into this Agreement and
in concluding the transactions contemplated herein, that, to the best of the
knowledge, information and belief of each of the Vendors, after having made due
inquiry:
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(a) if a corporation, it is duly organized under the laws of its
respective jurisdiction of incorporation and is validly existing and
in good standing with respect to all statutory filings required by the
applicable corporate laws;
(b) it is qualified to do business in those jurisdictions where it is
necessary to fulfill its obligations under this Agreement and it has
the full power and authority to enter into this Agreement and any
agreement or instrument referred to or contemplated by this Agreement;
(c) it has the requisite power, authority and capacity to own and use all
of its respective business assets and to carry on its respective
business as presently conducted by it and to fulfill its respective
obligations under this Agreement;
(d) the execution and delivery of this Agreement and the agreements
contemplated hereby have been duly authorized by all necessary action,
corporate or otherwise, on its respective part;
(e) there are no other consents, approvals or conditions precedent to the
performance of this Agreement which have not been obtained;
(f) this Agreement constitutes a legal, valid and binding obligation of it
enforceable against it in accordance with its terms, except as
enforcement may be limited by laws of general application affecting
the rights of creditors;
(g) no proceedings are pending for, and it is unaware of, any basis for
the institution of any proceedings leading to its respective
dissolution or winding up, or the placing of it in bankruptcy or
subject to any other laws governing the affairs of insolvent companies
or persons;
(h) the making of this Agreement and the completion of the transactions
contemplated hereby and the performance of and compliance with the
terms hereof does not and will not:
(i) if a corporation, conflict with or result in a breach of or
violate any of the terms, conditions or provisions of its
respective constating documents;
(ii) conflict with or result in a breach of or violate any of the
terms, conditions or provisions of any law, judgment, order,
injunction, decree, regulation or ruling of any Court or
governmental authority, domestic or foreign, to which it is
subject, or constitute or result in a default under any
agreement, contract or commitment to which it is a party;
(iii) give to any party the right of termination, cancellation or
acceleration in or with respect to any agreement, contract
or commitment to which it is a party;
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(iv) give to any government or governmental authority, or any
municipality or any subdivision thereof, including any
governmental department, commission, bureau, board or
administration agency, any right of termination,
cancellation or suspension of, or constitute a breach of or
result in a default under, any permit, license, control or
authority issued to it which is necessary or desirable in
connection with the conduct and operations of its respective
business and the ownership or leasing of its respective
business assets; or
(v) constitute a default by it, or any event which, with the
giving of notice or lapse of time or both, might constitute
an event of default, under any agreement, contract,
indenture or other instrument relating to any indebtedness
of it which would give any party to that agreement,
contract, indenture or other instrument the right to
accelerate the maturity for the payment of any amount
payable under that agreement, contract, indenture or other
instrument; and
(i) neither this Agreement nor any other document, certificate or
statement furnished to the Purchaser by or on behalf of any of the
Vendors in connection with the transactions contemplated hereby
knowingly or negligently contains any untrue or incomplete statement
of material fact or omits to state a material fact necessary in order
to make the statements therein not misleading which would likely
affect the decision of the Purchaser to enter into this Agreement.
3.2 Representations, Warranties and Covenants by the Vendors respecting the
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Purchased Shares. In order to induce the Purchaser to enter into and consummate
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this Agreement, the Vendors hereby represent to, warrant to and covenant with
the Purchaser, with the intent that the Purchaser will also rely thereon in
entering into this Agreement and in concluding the transactions contemplated
herein, that, to the best of the knowledge, information and belief of the
Vendors, after having made due inquiry:
(a) the Vendors have good and marketable title to and are the legal and
beneficial owners of the Purchased Shares of the Company in such
amounts as are set out in this Agreement, and the Purchased Shares are
fully paid and non-assessable and are free and clear of liens,
charges, encumbrances, pledges, mortgages, hypothecations, security
interests and adverse claims of any and all nature whatsoever and
including, without limitation, options, pre-emptive rights and other
rights of acquisition in favour of any person, whether conditional or
absolute;
(b) the Vendors have the power and capacity to own and dispose of the
Purchased Shares, and the Purchased Shares are not subject to any
voting or similar arrangement;
(c) there are no actions, suits, proceedings or investigations (whether or
not purportedly against or on behalf of the Vendors individually or
collectively), pending or threatened, which may affect, without
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limitation, the rights of the Vendors to transfer any of the Purchased
Shares to the Purchaser at law or in equity, or before or by any
federal, state, provincial, municipal or other governmental
department, commission, board, bureau, agency or instrumentality,
domestic or foreign, and, without limiting the generality of the
foregoing, there are no claims or potential claims under any relevant
family relations legislation or other equivalent legislation affecting
the Purchased Shares. In addition, the Vendors are not now aware of
any existing ground on which any such action, suit or proceeding might
be commenced with any reasonable likelihood of success;
(d) no other person, firm or corporation has any agreement, option or
right capable of becoming an agreement for the purchase of any of the
Purchased Shares; and
(e) the Purchased Shares have been issued in accordance with all
applicable securities and corporate legislation and policies.
3.3 Survival of the Representations, Warranties and Covenants by each of the
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Vendors. To the extent they have not been fully performed at or prior to the
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Time of Closing, each and every representation and warranty of the Vendors
contained in this Agreement and any agreement, instrument, certificate or other
document executed or delivered pursuant to this Agreement shall:
(a) be true and correct on and as of the Closing Date with the same force
and effect as though made or given on the Closing Date;
(b) remain in full force and effect notwithstanding any investigations
conducted by or on behalf of the Purchaser;
(c) survive the completion of the transactions contemplated by this
Agreement until the second anniversary of the Closing Date and shall
continue in full force and effect for the benefit of the Purchaser
during that period, except that:
(i) the representations and warranties set out in section 3.2(a)
to and including 3.2(e) above shall survive and continue in
full force and effect without limitation of time; and
(ii) a claim for any breach of any of the representations and
warranties contained in this Agreement or in any agreement,
instrument, certificate or other document executed or
delivered pursuant hereto involving fraud or fraudulent
misrepresentation may be made at any time following the
Closing Date, subject only to applicable limitation periods
imposed by law; and
(d) to the extent they have not been fully performed at or prior to the
Time of Closing, each and every covenant of the Vendors contained in
this Agreement and any agreement, instrument, certificate or other
document executed or delivered pursuant to this Agreement shall
survive the completion of the transactions contemplated by this
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Agreement and, notwithstanding such completion, shall continue in full
force and effect for the benefit of the Purchaser.
Article 4
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WARRANTIES, REPRESENTATIONS AND COVENANTS BY THE PURCHASER
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4.1 Warranties, Representations and Covenants by the Purchaser. In order to
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induce the Vendors to enter into and consummate this Agreement, the Purchaser
hereby warrants to, represents to and covenants with the Vendors, with the
intent that the Vendors will rely thereon in entering into this Agreement and in
concluding the transactions contemplated herein, that, to the best of the
knowledge, information and belief of the Purchaser, after having made due
inquiry:
Corporate Status of the Purchaser
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(a) the Purchaser is a company with limited liability duly and properly
incorporated, organized and validly subsisting under the laws of the
Country of Antigua being the only jurisdiction where it is required to
be registered for the purpose of enabling it to carry on its business
and own its property as presently carried on and owned;
(b) the Purchaser has good and sufficient power, authority and right to
own or lease its property, to enter into this Agreement and to perform
its obligations hereunder;
Authorization
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(c) this Agreement has been duly authorized, executed and delivered by the
Purchaser and is a legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser, as the case may be, by
the Vendors in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency and other laws affecting the rights
of creditors generally and except that equitable remedies may be
granted only in the discretion of a court of competent jurisdiction;
and
Full Disclosure
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(d) the Purchaser has no information or knowledge of any fact not
communicated to the Vendors and relating to the Purchaser or to the
Purchaser's business or to its ability to make payments which, if
known to the Vendors, might reasonably be expected to deter the
Vendors from entering into this Agreement or from completing the
transactions contemplated by this Agreement.
4.2 Survival of the Representations, Warranties and Covenants by the
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Purchaser. To the extent they have not been fully performed at or prior to the
Time of Closing, each representation and warranty of the Purchaser contained in
this Agreement or in any document, instrument, certificate or undertaking given
pursuant hereto shall:
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(a) be true and correct on and as of the Closing Date with the same force
and effect as though made or given on the Closing Date;
(b) remain in full force an effect notwithstanding any investigations
conducted by or on behalf of the Purchaser;
(c) survive the completion of the transactions contemplated by this
Agreement until the second anniversary of the Closing Date and shall
continue in full force and effect for the benefit of the Vendors
during that period, except that a claim for any breach of any of the
representations and warranties contained in this Agreement or in any
agreement, instrument, certificate or other document executed or
delivered pursuant hereto involving fraud or fraudulent
misrepresentation may be made at any time following the Closing Date,
subject only to applicable limitation periods imposed by law; and
(d) To the extent they have not been fully performed at or prior to the
Time of Closing, each and every covenant of the Purchaser contained in
this Agreement and any agreement, instrument, certificate or other
document executed or delivered pursuant to this Agreement shall
survive the completion of the transactions contemplated by this
Agreement and, notwithstanding such completion, shall continue in full
force and effect for the benefit of the Vendors.
Article 5
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CONDITIONS PRECEDENT TO CLOSING
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5.1 Parties' Conditions Precedent prior to the Closing Date. All of the
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rights, duties and obligations of each of the Parties hereto under this
Agreement are subject to the condition precedent for the exclusive benefit of
each of the Parties to be fulfilled in all material aspects in the reasonable
opinion of each of the Parties or to be waived by each or any of the Parties, as
the case may be, as soon as possible after the Execution Date; however, unless
specifically indicated as otherwise, not later than the Time of Closing:
(a) the specific ratification of the terms and conditions of this
Agreement by the Board of Directors of the Purchaser within five
business days of the due and complete execution of this Agreement by
each of the Parties hereto (the "Purchaser's Ratification").
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5.2 Parties' Waiver of Conditions Precedent. The conditions precedent set
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forth in section "5.1" hereinabove are for the exclusive benefit of each of the
Parties hereto and may be waived by each of the Parties in writing and in whole
or in part at or prior to the Time of Closing.
5.3 The Vendors' Conditions Precedent. The purchase and sale of the
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Purchased Securities is subject to the following terms and conditions for the
exclusive benefit of the Vendors and the Purchaser, to be fulfilled or performed
at or prior to the Time of Closing:
(a) the representations and warranties of the Purchaser contained in this
Agreement shall be true and correct in all material respects at the
Time of Closing, with the same force and effect as if such
representations and warranties were made at and as of such time; and
(b) all of the terms, covenants and conditions of this Agreement to be
complied with or performed by the Purchaser at or before the Time of
Closing shall have been complied with or performed in all material
respects.
(c) no legal or regulatory action or proceeding shall be pending or
threatened by any person to enjoin, restrict or prohibit the purchase
and sale of the Purchased Shares contemplated hereby.
If any of the conditions contained in this section 5.3 shall not be
performed or fulfilled at or prior to the Time of Closing to the satisfaction of
the Vendors, acting reasonably, the Vendors may, by notice to the Purchaser,
terminate this Agreement and the obligations of the Vendors and the Purchaser
under this Agreement, other than the obligations contained in Article 8
hereinbelow, shall be terminated, provided that the Vendors may also bring an
action pursuant to Article 7 against the Purchaser for damages suffered by the
Vendors where the non-performance or non-fulfillment of the relevant condition
is as a result of a breach of covenant, representation or warranty by the
Purchaser. Any such condition may be waived in whole or in part by the Vendors
in writing without prejudice to any claims it may have for breach of covenant,
representation or warranty.
5.4 Purchaser's Conditions Precedent prior to the Closing Date. The sale and
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purchase of the Purchased Shares is subject to the following terms and
conditions for the exclusive benefit of the Purchaser, to be fulfilled or
performed at or prior to the Time of Closing:
(a) the representations and warranties of the Vendors contained in this
Agreement shall be true and correct at the Time of Closing, with the
same force and effect as if such representations and warranties were
made at and as of such time;
(b) all of the terms, covenants and conditions of this Agreement to be
complied with or performed by the Vendors at or before the Time of
Closing shall have been complied with or performed;
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(c) there shall have been obtained, from all appropriate federal,
provincial, municipal or other governmental or administrative bodies,
such licenses, permits, consents, approvals, certificates,
registrations and authorizations as are required to be obtained, if
any, by the Vendors to permit the change of ownership of the Purchased
Shares contemplated hereby;
(d) no legal or regulatory action or proceeding shall be pending or
threatened by any person to enjoin, restrict or prohibit the purchase
and sale of the Purchased Shares contemplated hereby;
If any of the conditions contained in this section 5.4 shall not be
performed or fulfilled at or prior to the Time of Closing to the satisfaction of
the Purchaser, acting reasonably, the Purchaser may, by notice to the Vendors,
terminate this Agreement and the obligations of the Vendors and the Purchaser
under this Agreement, other than the obligations set forth in Article 8, shall
be terminated, provided that the Purchaser may also bring an action pursuant to
Article 7 against the Vendors for damages suffered by the Purchaser where the
non-performance or non-fulfillment of the relevant condition is as a result of a
breach of covenant, representation or warranty by the Vendors. Any such
condition may be waived in whole or in part by the Purchaser without prejudice
to any claims it may have for breach of covenant, representation or warranty.
Article 6
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CLOSING AND EVENTS OF CLOSING
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6.1 Closing and Closing Date. The closing (the "Closing") of the within
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purchase and delivery of the Purchased Shares, as contemplated in the manner as
set forth in Article "2" hereinabove, together with all of the transactions
contemplated by this Agreement shall occur on December 30, 2004 (the "Closing
Date"), or on such earlier or later Closing Date as may be agreed to in advance
and in writing by each of the Parties hereto, and will be closed at the offices
of solicitors for the Purchaser, ▇▇▇▇▇▇ ▇▇▇▇▇▇, Barristers and Solicitors,
located at ▇▇▇▇▇ ▇▇▇▇ - ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇▇, ▇.▇., ▇▇▇ ▇▇▇, at 2:00
p.m. (Vancouver time) on the Closing Date.
6.2 Latest Closing Date. If the Closing Date has not occurred by January 30,
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2005, subject to an extension as may be mutually agreed to by the Parties for a
maximum of 14 days per extension, then the Purchaser and the Vendors shall each
have the option to terminate this Agreement by delivery of written notice to the
other Party. Upon delivery of such notice, this Agreement shall cease to be of
any force and effect except for Article "8" hereinbelow, which shall remain in
full force and effect notwithstanding the termination of this Agreement.
6.3 Documents to be delivered by the Vendors prior to the Closing Date. Not
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later than five calendar days prior to the Closing Date, and in addition to the
documentation which is required by the agreements and conditions precedent which
are set forth hereinabove, the Vendors shall also execute and deliver or cause
to be delivered to Purchaser's counsel all such other documents, resolutions and
instruments as may be necessary, in the opinion of counsel for the Purchaser,
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acting reasonably, to complete all of the transactions contemplated by this
Agreement and including, without limitation, the necessary transfers of all of
the Purchased Shares to the Purchaser free and clear of all liens, security
interests, charges and encumbrances, and in particular including, but not being
limited to, the following materials:
(a) all documentation as may be necessary and as may be required by the
solicitors for the Purchaser, acting reasonably, to ensure that all of
the Purchased Shares have been transferred, assigned and are
registerable in the name of and for the benefit of the Purchaser under
all applicable corporate and securities laws;
(b) certificates representing the Purchased Shares registered in the names
of the Vendors, duly endorsed for transfer to the Purchaser and/or
irrevocable stock powers transferring the Purchased Shares to the
Purchaser;
(c) certificates representing the Purchased Shares registered in the name
of the Purchaser;
(d) a certified copy of the resolutions of the directors of the Vendors
authorizing the transfer by the Vendors to the Purchaser of the
Purchased Shares; and
(e) all such other documents and instruments as the Purchaser's solicitors
may reasonably require.
6.4 Documents to be delivered by the Purchaser prior to the Closing Date.
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Not later than the Closing Date, and in addition to the documentation which is
required by the agreements and conditions precedent which are set forth
hereinabove, the Purchaser shall also execute and deliver or cause to be
delivered to the Vendors' counsel, all such other documents, resolutions and
instruments that may be necessary, in the opinion of the Vendors' respective
solicitors, acting reasonably, to complete all of the transactions contemplated
by this Agreement and including, without limitation, the necessary acceptance of
the transfer of all of the Purchased Shares to the Purchaser free and clear of
all liens, charges and encumbrances, and in particular including, but not being
limited to, the following materials:
(a) a copy of the resolutions of the directors of the Purchaser providing
for the approval of all of the transactions contemplated hereby; and
(b) all such other documents and instruments as the Vendors' respective
solicitors may reasonably require.
Article 7
---------
INDEMNIFICATION AND LEGAL PROCEEDINGS
-------------------------------------
7.1 Indemnification. The Parties hereto agree to indemnify and save
----------------
harmless the other Parties hereto and including, where applicable, their
respective affiliates, directors, officers, employees and agents (each such
15
party being an "Indemnified Party") harmless from and against and agree to be
liable for any and all losses, claims, actions, suits, proceedings, damages,
liabilities or expenses of whatever nature or kind, including any investigation
expenses incurred by any Indemnified Party, to which an Indemnified Party may
become subject by reason of the terms and conditions of this Agreement.
7.2 No Indemnification. This indemnity will not apply in respect of an
-------------------
Indemnified Party in the event and to the extent that a court of competent
jurisdiction in a final judgment shall determine that the Indemnified Party was
grossly negligent or guilty of willful misconduct.
7.3 Claim of Indemnification. The Parties hereto agree to waive any right
---------------------------
they might have of first requiring the Indemnified Party to proceed against or
enforce any other right, power, remedy, security or claim payment from any other
person before claiming this indemnity.
7.4 Notice of Claim. In case any action is brought against an Indemnified
------------------
Party in respect of which indemnity may be sought against any of the Parties
hereto, the Indemnified Party will give the relevant Party hereto prompt written
notice of any such action of which the Indemnified Party has knowledge and such
Party will undertake the investigation and defense thereof on behalf of the
Indemnified Party, including the prompt consulting of counsel acceptable to the
Indemnified Party affected and the payment of all expenses. Failure by the
Indemnified Party to so notify shall not relieve any Party hereto of such
Party's obligation of indemnification hereunder unless (and only to the extent
that) such failure results in a forfeiture by any Party hereto of substantive
rights or defenses.
7.5 Settlement. No admission of liability and no settlement of any action
-----------
shall be made without the consent of each of the Parties hereto and the consent
of the Indemnified Party affected, such consent not to be unreasonably withheld.
7.6 Legal Proceedings. Notwithstanding that the relevant Party hereto will
------------------
undertake the investigation and defense of any action, an Indemnified Party will
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel will be at the
expense of the Indemnified Party unless:
(a) such counsel has been authorized by the relevant Party hereto;
(b) the relevant Party hereto has not assumed the defense of the action
within a reasonable period of time after receiving notice of the
action;
(c) the named parties to any such action include that any Party hereto and
the Indemnified Party shall have been advised by counsel that there
may be a conflict of interest between any Party hereto and the
Indemnified Party; or
16
(d) there are one or more legal defenses available to the Indemnified
Party which are different from or in addition to those available to
any Party hereto.
7.7 Contribution. If for any reason other than the gross negligence or bad
-------------
faith of the Indemnified Party being the primary cause of the loss claim,
damage, liability, cost or expense, the foregoing indemnification is unavailable
to the Indemnified Party or insufficient to hold them harmless, the relevant
Party hereto shall contribute to the amount paid or payable by the Indemnified
Party as a result of any and all such losses, claim, damages or liabilities in
such proportion as is appropriate to reflect not only the relative benefits
received by any Party hereto on the one hand and the Indemnified Party on the
other, but also the relative fault of the Parties and other equitable
considerations which may be relevant. Notwithstanding the foregoing, the
relevant Party hereto shall in any event contribute to the amount paid or
payable by the Indemnified Party, as a result of the loss, claim, damage,
liability, cost or expense (other than a loss, claim, damage, liability, cost or
expenses, the primary cause of which is the gross negligence or bad faith of the
Indemnified Party), any excess of such amount over the amount of the fees
actually received by the Indemnified Party hereunder.
Article 8
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NON-DISCLOSURE
--------------
8.1 Public Announcements and Disclosure to Regulatory Authorities. All
-------------------------------------------------------------------
information relating to the Agreement and the transaction contemplated therein
shall be treated as confidential and no public disclosure shall be made by any
Party without the prior approval of the Company and the Purchaser.
Notwithstanding the provisions of this Article, the Parties hereto agree to make
such public announcements and disclosure to the Regulatory Authorities of this
Agreement promptly upon its execution all in accordance with the requirements of
applicable securities legislation and regulations.
Article 9
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ASSIGNMENT AND AMENDMENT
------------------------
9.1 Assignment. Save and except as provided herein, no Party hereto may
-----------
sell, assign, pledge or mortgage or otherwise encumber all or any part of its
respective interest herein without the prior written consent of all of the other
Parties hereto.
9.2 Amendment. This Agreement and any provision thereof may only be amended
----------
in writing and only by duly authorized signatories of each of the respective
Parties hereto.
17
Article 10
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FORCE MAJEURE
-------------
10.1 Events. If any Party hereto is at any time prevented or delayed in
-------
complying with any provisions of this Agreement by reason of strikes, walk-outs,
labour shortages, power shortages, fires, wars, acts of God, earthquakes,
storms, floods, explosions, accidents, protests or demonstrations by
environmental lobbyists or native rights groups, delays in transportation,
breakdown of machinery, inability to obtain necessary materials in the open
market, unavailability of equipment, governmental regulations restricting normal
operations, shipping delays or any other reason or reasons beyond the control of
that Party, then the time limited for the performance by that Party of its
respective obligations hereunder shall, by agreement of the affected Parties, be
extended by a period of time equal in length to the period of each such
prevention or delay. However, any modification or termination of the Agreement
shall be valid only upon the signing of a modification or termination agreement
by the affected Parties.
10.2 Notice. A Party shall, within seven calendar days, give notice to the
-------
affected Party of each event of force majeure under section "10.1" hereinabove
and upon cessation of such event shall furnish the affected 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 11
----------
ARBITRATION
-----------
11.1 Matters for Arbitration. The Parties agree that all questions or matters
------------------------
in dispute with respect to this Agreement shall be submitted to arbitration
pursuant to the terms hereof.
11.2 Notice. It shall be a condition precedent to the right of any Party to
-------
submit any matter to arbitration pursuant to the provisions hereof that any
Party intending to refer any matter to arbitration shall have given not less
than 10 calendar days' prior written notice of its intention to do so to the
other Party together with particulars of the matter in dispute. On the
expiration of such 10 calendar days the Party who gave such notice may proceed
to refer the dispute to arbitration as provided in section "11.3" hereinbelow.
11.3 Appointments. The Party desiring arbitration shall appoint one
-------------
arbitrator, and shall notify the other Party of such appointment, and the other
Party shall, within two calendar days after receiving such notice, appoint an
arbitrator, and the two arbitrators so named, before proceeding to act, shall,
within 10 calendar days of the appointment of the last appointed arbitrator,
unanimously agree on the appointment of a third arbitrator, to act with them and
be chairman of the arbitration herein provided for. If the other Party shall
fail to appoint an arbitrator within 10 calendar days after receiving notice of
18
the appointment of the first arbitrator, and if the two arbitrators appointed by
the Parties shall be unable to agree on the appointment of the chairman, the
chairman shall be appointed under the provisions of the Commercial Arbitration
Act (British Columbia) (the "Arbitration Act"). Except as specifically otherwise
provided in this section, the arbitration herein provided for shall be conducted
in accordance with such Arbitration Act. The chairman, or in the case where only
one arbitrator is appointed, the single arbitrator, shall fix a time and place
in Vancouver, British Columbia, for the purpose of hearing the evidence and
representations of the Parties, and he shall preside over the arbitration and
determine all questions of procedure not provided for under such Arbitration Act
or this section. After hearing any evidence and representations that the Parties
may submit, the single arbitrator, or the arbitrators, as the case may be, shall
make an award and reduce the same to writing, and deliver one copy thereof to
each of the Parties. The expense of the arbitration shall be paid as specified
in the award.
11.4 Award. The Parties agree that the award of a majority of the
------
arbitrators, or in the case of a single arbitrator, of such arbitrator, shall be
final and binding upon each of them.
Article 12
----------
DEFAULT AND TERMINATION
-----------------------
12.1 Default. The Parties hereto agree that if any Party hereto is in
--------
default with respect to any of the provisions of this Agreement (herein called
the "Defaulting Party"), the non-defaulting Party (herein called the
"Non-Defaulting Party") shall give notice to the Defaulting Party designating
such default, and within 10 calendar days after its receipt of such notice, the
Defaulting Party shall either:
(a) cure such default, or commence proceedings to cure such default and
prosecute the same to completion without undue delay; or
(b) give the Non-Defaulting Party notice that it denies that such default
has occurred and that it is submitting the question to arbitration as
herein provided.
12.2 Arbitration. If arbitration is sought, a Party shall not be deemed in
------------
default until the matter shall have been determined finally by appropriate
arbitration under the provisions of Article "11" hereinabove.
12.3 Curing the Default. If:
-------------------
(a) the default is not so cured or the Defaulting Party does not commence
or diligently proceed to cure the default; or
(b) arbitration is not so sought; or
19
(c) the Defaulting Party is found in arbitration proceedings to be in
default, and fails to cure it within five calendar days after the
rendering of the arbitration award,
the Non-Defaulting Party may, by written notice given to the Defaulting Party at
any time while the default continues, terminate the interest of the Defaulting
Party in and to this Agreement.
12.4 Termination. In addition to the foregoing it is hereby acknowledged and
------------
agreed by the Parties hereto that this Agreement will be terminated in the event
that:
(a) the Purchaser's Ratification is not received within five business days
of the due and complete execution of this Agreement by each of the
Parties hereto;
(b) the Purchaser fails to complete a successful and Purchaser's Initial
Due Diligence review of the Company's business and operations within
five (5) calendar days of the prior satisfaction by the Purchaser of
the Purchaser's Ratification;
(c) the conditions specified in section "5.1" hereinabove have not been
satisfied at or prior to the Time of Closing;
(d) either of the Parties hereto has not either satisfied or waived each
of their respective conditions precedent at or prior to the Time of
Closing in accordance with the provisions of Article "5" hereinabove;
(e) either of the Parties hereto has failed to deliver or caused to be
delivered any of their respective documents required to be delivered
by Articles "5" and "6" hereinabove at or prior to the Time of Closing
in accordance with the provisions of Articles "5" and "6"; or
(f) by Closing has not occurred on or before January 30, 2005, or such
later date, all in accordance with section "6.2" hereinabove; or
(g) by agreement in writing by each of the Parties hereto;
and in such event this Agreement will be terminated and be of no further force
and effect other than the obligations under Article "8" hereinabove.
Article 13
----------
NOTICE
------
13.1 Notice. Each notice, demand or other communication required or
-------
permitted to be given under this Agreement shall be in writing and shall be sent
by prepaid registered mail deposited in a post office addressed to the Party
entitled to receive the same, or delivered to such Party, at the address for
such Party specified above. The date of receipt of such notice, demand or other
20
communication shall be the date of delivery thereof if delivered, or, if given
by registered mail as aforesaid, shall be deemed conclusively to be the third
calendar day after the same shall have been so mailed, except in the case of
interruption of postal services for any reason whatsoever, in which case the
date of receipt shall be the date on which the notice, demand or other
communication is actually received by the addressee.
13.2 Change of Address. Either Party may at any time and from time to time
------------------
notify the other Party in writing of a change of address and the new address to
which notice shall be given to it thereafter until further change.
Article 14
----------
GENERAL PROVISIONS
------------------
14.1 Entire Agreement. This Agreement constitutes the entire agreement to
------------------
date between the Parties hereto and supersedes every previous agreement,
communication, expectation, negotiation, representation or understanding,
whether oral or written, express or implied, statutory or otherwise, between the
Parties with respect to the subject matter of this Agreement and including,
without limitation, the agreement as between the Purchaser and each of the
Vendors.
14.2 Enurement. This Agreement will enure to the benefit of and will be
----------
binding upon the Parties hereto, their respective heirs, executors,
administrators and assigns.
14.3 Schedules. The Schedules to this Agreement are hereby incorporated by
----------
reference into this Agreement in its entirety.
14.4 Time of the Essence. Time will be of the essence of this Agreement.
--------------------
14.5 Representation and Costs. It is hereby acknowledged by each of the
---------------------------
Parties hereto that, as between the Parties hereto, ▇▇▇▇▇▇ ▇▇▇▇▇▇, Barristers
and Solicitors, acts solely for the Purchaser, and that the Vendors have been
advised by the Purchaser to obtain independent legal advice with respect to
their respective reviews and execution of this Agreement. In addition, it is
hereby further acknowledged and agreed by the Parties hereto that each Party to
this Agreement will bear and pay its own costs, legal and otherwise, in
connection with its respective preparation, review and execution of this
Agreement, and, in particular, that the costs involved in the preparation of
this Agreement, and all documentation necessarily involved thereto, by ▇▇▇▇▇▇
▇▇▇▇▇▇ shall be at the cost of the Purchaser.
14.6 Applicable Law. The situs of this Agreement is Vancouver, British
----------------
Columbia and for all purposes this Agreement will be governed exclusively by and
21
construed and enforced in accordance with the laws and Courts prevailing in the
Province of British Columbia.
14.7 Further Assurances. The Parties hereto hereby, jointly and severally,
-------------------
covenant and agree to forthwith, upon request, execute and deliver, or cause to
be executed and delivered, such further and other deeds, documents, assurances
and instructions as may be required by the Parties hereto or their respective
counsel in order to carry out the true nature and intent of this Agreement.
14.8 Severability and Construction. Each Article, section, paragraph, term
------------------------------
and provision of this Agreement, and any portion thereof, shall be considered
severable, and if, for any reason, any portion of this Agreement is determined
to be invalid, contrary to or in conflict with any applicable present or future
law, rule or regulation in a final unappealable ruling issued by any court,
agency or tribunal with valid jurisdiction in a proceeding to any of the Parties
hereto is a party, that ruling shall not impair the operation of, or have any
other effect upon, such other portions of this Agreement as may remain otherwise
intelligible (all of which shall remain binding on the Parties and continue to
be given full force and agreement as of the date upon which the ruling becomes
final).
14.9 Captions. The captions, section numbers, Article numbers and Schedule
---------
numbers appearing in this Agreement are inserted for convenience of reference
only and shall in no way define, limit, construe or describe the scope or intent
of this Agreement nor in any way affect this Agreement.
14.10 Currency. Unless otherwise stipulated, all references to money amounts
---------
herein shall be in lawful money of the United States.
14.11 Counterparts. This Agreement may be signed by the Parties hereto in as
-------------
many counterparts as may be necessary, and via facsimile if necessary, each of
which so signed being deemed to be an original and such counterparts together
constituting one and the same instrument and, notwithstanding the date of
execution, being deemed to bear the effective Execution Date as set forth on the
front page of this Agreement.
14.12 No Partnership or Agency. The Parties hereto have not created a
---------------------------
partnership and nothing contained in this Agreement shall in any manner
whatsoever constitute any Party the partner, agent or legal representative of
any other Party, nor create any fiduciary relationship between them for any
purpose whatsoever. No Party shall have any authority to act for, or to assume
any obligations or responsibility on behalf of, any other party except as may
be, from time to time, agreed upon in writing between the Parties or as
otherwise expressly provided.
14.13 Consents and Waivers. No consent or waiver expressed or implied by
-----------------------
either Party hereto in respect of any breach or default by any other Party in
the performance by such other of its obligations hereunder shall:
22
(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 each of the Parties hereto has hereunto executed this
-------------------
Agreement as of the Execution Date as set forth on the front page of this
Agreement.
SINOVAC BIOTECH LTD., the Purchaser
--------------------
herein,
Per:
-------------------------------
Authorized Signatory
CHINA BIOWAY BIOTECH GROUP CO., LTD.
------------------------------------
a Vendor herein,
Per:
-------------------------------
Authorized Signatory
BEIJING ▇▇▇▇▇▇ CO., LTD.,
------------------------
a Vendor herein,
Per:
-------------------------------
Authorized Signatory
SHENZHEN BIO-PORT CO., LTD.,
---------------------------
a Vendor herein,
Per:
-------------------------------
Authorized Signatory
23
Schedule A
----------
This is Schedule "A" to that certain Share Purchase Agreement between
Sinovac Biotech Ltd. and each of China Bioway Group Co., Ltd., Beijing ▇▇▇▇▇▇
Co., Ltd. and Shenzhen Bio-port Co., Ltd.
Purchased Securities
--------------------
Authorized Capital 250,000,000 common shares
------------------
of Sinovac Biotech Co., Ltd:
Issued Capital
--------------
of Sinovac Biotech Co., Ltd.: 133,600,000 common shares
----------------------------
Vendor:
------
China Bioway Biotech Group Co., Ltd.: 13,000,000 common shares.
PKU Bio-city, Shangdi Xilu ▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
Beijing ▇▇▇▇▇▇ Co., Ltd. 3,890,000 common shares
PKU Bio-city, Shangdi Xilu ▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
Shenzhen Bio-port Co., Ltd. 10,580,000 common shares
16F Times Stock Center,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇