Translation) SALES AND PURCHASE OF TECHNOLOGY MASTER LICENSE AGREEMENT (Reference#121108ShanDZ/SIAF)
(Translation)
SALES
AND PURCHASE OF TECHNOLOGY MASTER LICENSE AGREEMENT
(Reference#121108ShanDZ/SIAF)
AN AGREEMENT made
this 12th day
of November, 2008
BETWEEN
▇▇. ▇▇▇▇ ▇▇ ▇▇▇▇▇ (Chinese
Identification Card No. ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇) of ▇▇▇▇ ▇▇ ▇▇▇ He Animal Health
Products Co. Ltd. and of address at ▇▇. ▇▇, ▇▇▇ ▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Jining City, Shandong Province, P. R. China. (hereinafter
called "the Vendor") of the one part.
AND
Tri-Way
Industries Limited (Company No. 1004146) a company incorporated in Hong Kong
SAR, People’s Republic of China with limited liability and having its principal
place of business at Rm 1613, 16/F, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇. (hereinafter called "the Purchaser") of the other part.
WHEREAS:-
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1.
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The
Vendor is the inventor, and the legal patent holder of an Intellectual
Property for the manufacturing of livestock feed applicable to the
consumption of cattle and cows, namely “▇▇▇ ▇▇ ▇▇▇ ▇▇▇ Si ▇▇▇▇ ▇▇▇▇ Ye ▇▇▇
▇▇▇▇ Pin ▇▇ ▇▇ Zhi Bei Fang Fa” registered under Patent Number “ZL2005
10063039.9 and Certificate # 329722” of People’s Republic of China
(hereinafter refer to as “SFM
Technology”).
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2.
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The
Purchaser is a company incorporated in Hong Kong Special Administrative
Region, People’s Republic of China with limited liability and having its
principal place of business at Rm 1613, 16/F, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇. It is a fully owned subsidiary of Sino
Agro Food, Inc. (“SIAF”) which is a Nevada Incorporation quoted on OTCB
under Pinksheet companies with a representative office at Rm3711, China
Shine Plaza, ▇▇.▇ ▇▇▇ ▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, People’s
Republic of China.
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3.
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The
Present market value of the SFM Technology including its related brand and
label is collectively valued at RMB68,000,000.00 (equivalent to
US$10,000,000.00 based on exchange rate of US$1=RMB6.80) as indicated in a
Valuation Report as prepared by a firm of professional valuers registered
in People’s Republic of China. Copies of the Valuation Report
dated 30th
September 2008 is annexed hereto and marked as Appendix (V
1).
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4.
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The
Vendor has agreed to sell and the Purchaser has agreed to purchase an
exclusive master license to use and to license other users to
use the secrets, copyrights, processes and other Intellectual Property
associated with the SFM Technology (hereinafter referred to as “the
Exclusive Master License”) in any territory of the People’s Republic of
China free from all encumbrances with all rights to the patented
Intellectual Property including related brand and label as governed by the
laws of People’s Republic of China after the date of this Agreement upon
the terms and conditions hereinafter
appearing.
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NOW
IT IS HEREBY AGREED as follows:-
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1.
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Definitions
and Interpretations
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In this
Agreement, unless the context otherwise requires, the following words or
expression shall have the following meaning:-
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(a)
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“Purchaser” includes
its respective nominees and successors in title
;
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1
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(b)
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“Vendor” include
his heir personal representative and successors in title
;
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(c)
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“The
Completion Date” shall refer to the date of full payment of all monies and
shares payable by the Purchaser herein provided
;
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(d)
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“US$”
means United States Dollars, the currency of the United States of America
;
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(e)
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All
undertakings, agreements, terms, warranties and representations expressed
to be made by two or more parties hereto shall be deemed to be made by
them and be binding on them jointly and severally
;
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(f)
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Reference
to natural persons shall be deemed to include body corporate and the
plural number shall include the singular number and vice versa
;
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(g)
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Words
importing the masculine gender shall be deemed to include the feminine and
neuter gender ;
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(h)
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The
headings are inserted for convenience of reference only and shall not
affect the interpretation of this Agreement hereof
;
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(i)
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Where
an act required to be done within a specified number of days after or from
a specified date, the period is inclusive of and begins to run from the
date so specified ;
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(j)
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A
period of a month from the happening of an event or the doing of an act or
thing shall be deemed to be inclusive of the day on which the event
happens or the act or thing is or was required to be done
;
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(k)
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The
Appendices hereto shall be taken, read and construed as an essential part
of this Agreement ;
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2.
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Agreement for the Sale
and Purchase
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2.1
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Purchase Consideration
and Part Payment
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In
consideration of the sum of RMB
Five Hundred Thousand (RMB500,000.00, equivalent to US$73,500.00) only (hereinafter
call “the Part Payment") now paid by the Purchaser to the Vendor by way of
deposit and part payment towards the purchase price of the Master License (the
receipt of which the Vendor hereby duly acknowledges, and the corresponding paid
order, signed receipt and corresponding banking record of the said payment are
annexed hereto marked Appendix A), (hereinafter referred to as “Part Payment”),
the Vendor hereby agrees to sell and the Purchaser hereby agrees to purchase the
Exclusive World Master License to use and to license other users to use the
secrets, copyrights, processes and other Intellectual Property associated with
the SFM Technology in any territory in the world free from all encumbrances with
all rights to the Patented Intellectual Property and related brand and label as
governed by the law of People’s Republic of China after the date of this
Agreement at the total purchase price of United States Dollars Eight Million
(US$8,000,000.00) only (hereinafter called
"the Purchase Price") and subject to further terms and conditions
hereinafter contained.
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2.2
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Payment of Balance
Purchase Price
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The
balance of the Purchase Price amounting to United States Dollars
Seven Million Nine Hundred and Twenty Six Thousand and Five
Hundred (US$7,926,500.00) only (hereinafter called "the Balance
Purchase Price”) shall be paid and settled within a period of three years
from the date hereof and in manner herein set
forth:
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2
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Tranche
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Date of settlements
on or before
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Partial payment amount
in US$
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Related terms and conditions
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1
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31st
December 2008
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4,426.00
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Payable
in cash and / or in other forms of assets acceptable to the
Vendor.
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2
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31st
December 2009
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1,000,000.00
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Payable
in cash and / or in SIAF shares calculated at 85% of its three months’
average of its market prices from the date leading up to the date of
settlement.
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3
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31st
December 2010
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1,000,000.00
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Payable
in cash and / or in SIAF shares calculated at 85% of its three months’
average of its market prices from the date leading up to the date of
settlement.
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4
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11th
November 2011
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1,500,000.00
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Payable
in cash and / or in SIAF shares calculated at 85% of its three months’
average of its market prices from the date leading up to the date of
settlement.
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2.3
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Purchaser’s Right
after payment of the Part
Payment
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Upon
payment by the Purchaser of the second payment of US$4,426,500.00 under Tranche
1 referred to in Clause 2.2 hereof, the Purchaser shall have the irrevocable and
non reversionary Exclusive Master License to use and to license other users to
use the secrets, copyrights, processes and other Intellectual Property
associated with the SFM Technology and related brand and label thereof in the
People’s Republic of China and the Vendor shall have no claim to the rights to
us or license to use Intellectual Property associated with the SFM Technology
and related brand and label thereof, but shall retain the right to claim against
the Purchaser for the Balance Purchase Price of US$3,500,000.00 remaining unpaid
by the Purchaser pursuant to the terms and conditions set forth in Clause 2.2
hereof.
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3.
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Due
Diligence
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3.1
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Purchaser's Rights to
Due Diligence
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Notwithstanding
the fact that the Purchaser has done its Due Diligence in respect of the said
patented SFM Technology and related business affairs satisfactorily during the
period prior to the execution of this Agreement, the Vendor hereby agrees that
during the period commencing from the date of this Agreement and ending on the
Completion Date (as defined below), the Purchaser shall be entitled
to:
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(i)
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make
such reasonable enquiries with relevant Authorities and clients of the
Vendor in the matters relating to the SFM Technology and related brand and
label.
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(ii)
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make
due diligence investigation of the track records of the SFM
Technology.
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(iii)
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make
due diligence investigation of the economic and financial forecast and
projection of the application of the SFM Technology by the Purchaser and
its auditors .
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3.2
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Vendor's
Obligations
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The
Vendor shall take all steps and do all things necessary to enable the Purchaser
and/or its representatives to carry out the enquiries and the due diligence
investigation as provided in Clause 3.1 and to notify and make known to the
relevant authorities and parties of the sale of the Exclusive Master License
within a reasonable time.
3
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3.3
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Purchaser's
Entitlement to claim
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In the
event that :
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(i)
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the
Purchaser is unable to make reasonable enquiries or to carry out due
diligence investigations set forth in Clause 3.1 hereof due to no fault of
the Purchaser; or
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(i)
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it
is found, as a result of the due diligence investigations or otherwise,
that any of the Representations and Warranties contained in Clause 9 are
untrue, misleading or incorrect or have not been fully carried out in any
material respect, or
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(iii)
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in
any event of any matter or thing arising or becoming known or being
notified to the Purchaser which is materially inconsistent with any of the
Representations and Warranties contained in Clause 9 hereof
;
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then the
Purchaser may by notice in writing to the Vendor to be given not later than the
Completion Date, specify and verify the amount of claims, (hereinafter referred
to as the Claims) and in which event (without prejudice to any claim in
damages), the Vendor shall refund forthwith to the Purchaser the claims together
with interest accruing thereon (if any).
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4.
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Delivery of
Documents
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Simultaneously
with the execution of this Agreement, the Vendor shall deliver or cause to be
delivered to the Purchaser all relevant documents concerning the SFM Technology
and related brand and label, including but not limited to the processes,
know-how, designs, operations manuals, specifications of equipment and
descriptions of operating principles and technology (hereinafter called “the
Patent Documents”).
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5.
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Completion
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The
Completion of this Agreement shall take place upon payment by the Purchaser of
the sum of US$4,426,500.00 under the Tranche 1 pursuant to Clause 2.2 hereof on
or before 31st
December 2008 (hereinafter referred to as “the Completion Date”).
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5A
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Subsequent
Settlement
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Each date
of the settlements referred to in Clause 2.2 is called the “Subsequent
Settlement Date”. On or before each Settlement Date and as a
commercial arrangement between the Parties hereto, the Purchaser shall settle
the respective tranche of the unpaid Balance Purchase Price either by cash
payment or by the combination of cash payment and SIAF shares or by SIAF shares
alone. In this respect of payment by SIAF shares, the Purchaser shall
transfer or cause to be transferred SIAF’s shares to the Vendor and/or his
nominee(s) as the Vendor shall direct and shall deliver the corresponding share
certificates to the Vendor.
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6.
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Outgoings
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The
Vendor hereby agrees to pay all annual patent fee, charges, levies, taxes
and other payments if any payable by Vendor in relation to the Patent of
the SFM Technology and its related brand and label on or before the
Completion Date, and as such the Vendor shall indemnify the Purchaser or
its assigns in respect of any penalties and damages which may be arise as
a result of any late payments or default in payment in respect of such
payments.
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8.
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Vendor’s
Indemnity
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If
there shall be any breach by the Vendor of any warranty, guarantee,
undertaking and agreement herein contained, then the Purchaser shall be
entitled to be indemnified by the Vendor in respect of any loss resulting
from such breach.
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4
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9.
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Representations
and Warranties
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9.1
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The
Vendor hereby represents, warrants and undertakes to and with the
Purchaser as follows :-
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(a)
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None
of the patented SFM Technology and its related brand and label that are
registered in the name of the Vendor are subject to any option, charge,
lien or encumbrances and the Vendor is the beneficial owner thereof
;
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(b)
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The
Valuation Report presented to the Purchaser dated 30th September 2008 gave
a true and fair view of the market value of the SFM Technology and its
related brand and label calculated up to the Completion
Date.
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(c)
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The
Vendor is not involved in any dispute with any revenue authorities
concerning any matter likely to affect in any way the ownership and
application of the SFM Technology and its related brand and
label.
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(d)
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The
Vendor has not prior to the date hereof agreed to sell or given or agreed
to license the Patent SFM Technology and its related brand and label to
any other party apart from the
Purchaser.
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(e)
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The
Vendor is not engaged in any litigation or arbitration proceedings and no
such proceedings and no prosecution are pending or threatened against the
Vendor in selling of the license of the SFM Technology and its related
brand and label, and the Vendor knows of no facts or matters likely to
give rise thereto.
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(f)
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The
Vendor has no mortgages liens other encumbrances secured over the SFM
Technology and its related brand and
label.
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10.
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Default by
Purchaser
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In the
event that the Purchaser shall fail to complete the sale and purchase herein by
failing to pay the Tranche 1 payment of US$4,426,470.00 in accordance with
Clause 2.2 hereof, the Vendor shall be entitled to claim liquidated damages
amounting up to the Balance Purchase Price of United State Dollars Seven Million
Nine Hundred Twenty Six Thousand and Four Hundred and Seventy
(US$7,926,470.00).
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11.
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Force
Majeure
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Notwithstanding
any provision herein to the contrary, no party hereto shall be liable to any
other party hereto for loss, injury, delay or damages suffered or incurred by
any such other party due to a substantial effect, acts of God, government
actions or any other cause which is beyond the reasonable control of the party
the performance of whose obligations hereunder are affected by such
cause.
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12.
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Time of
Essence
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Time
wherever mentioned shall be deemed to be of the essence of this
Agreement.
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13.
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Notice
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Every
notice, request, consent, demand or other communication under this
Agreement shall be given or made in writing shall be sufficiently served
on the party to whom it is addressed if it is left at or sent by
registered post or telegram to the address given above or to the place of
business for the time or to such address as one party hereto may from time
to time notify in writing to the other party hereto. A notice sent by
registered post or facsimile shall be deemed to have served at the time
when it ought in due course of post or transmission to have been
received.
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5
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14.
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Governing
Law
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This
Agreement shall be governed by and construed in accordance with the Laws
of Republic of People of China.
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15.
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Modifications
|
All
parties hereto agree that the provisions herein contained may if mutually agreed
upon be varied, amended, modified or substituted and any such variations,
amendment, modification or substitution thereof shall be in writing and signed
by all parties hereto. In the event of any inconsistency as to any of
the provisions thereof, the one subsequent in time shall prevail.
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16.
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Severability
|
If any of
the provisions of this Agreement becomes invalid, illegal or unenforceable in
any respect under any law, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired.
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17.
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This Agreement the
Sole Agreement
|
This
Agreement constitutes the sole and only agreement between the Vendor and the
Purchaser respecting the Exclusive Master License and correctly sets forth the
agreement reached between them in respect of the subject matter of this
Agreement and supersedes and cancels all previous and other agreements,
negotiations, representations, undertakings or undertakings whatsoever whether
written or oral in respect thereof.
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18.
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Costs
|
The
Parties hereto shall bear and pay their respective Solicitors’ fees and
costs.
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19.
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Successors
Bound
|
This
Agreement shall be binding on the respective successors-in-title, heirs
and permitted assigns of the parties hereto.
IN WITNESS WHEREOF the parties
hereto have hereunto set their hands and seal the day and year first above
written.
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Signed
by
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)
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THE
PURCHASER
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)
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(Rubber
stamp of
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)
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Tri-Way
Industries Limited affixed)
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)
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)
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(signed)
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Signed
by THE VENDOR
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)
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)
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)
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(signed)
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)
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▇▇▇▇
▇▇ ▇▇▇▇▇
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6
APENDIX
(V1)
VALAUTION
REPORT
APPENDIX
(V2)
COPY OF
THE PATENT # ZL2005 10063039.9
APPENDIX
(V3)
REGISTRATION
CERTIFICATE # 1785267 OF THE BRANDS AND LABELS
APPENDIX
(V4)
HIGH
TECHNOLOGY CERTIFICATE # 0453
APPENDIX(V5)
PROFESSIONAL
VERIFICATION CERTIFICATE
APPENDIX
(A)
CORRESPONDING
PAID ORDER, SIGNED RECEIPT AND CORRESPONDING BANKING RECORD OF “ THE PART
PAYMENT
7