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EXHIBIT 10.5
EXECUTION VERSION
SHARE TRANSFER AGREEMENT
This SHARE TRANSFER AGREEMENT (this "AGREEMENT") is made on
December 15, 2004 by
and between:
(1) WEN XIN (the "TRANSFEROR"), whose ID number is
110105580421183;
nationality is Chinese;
(2) BEIJING MED-PHARM COPORATION ("BMP" or the "TRANSFEREE"), a
corporation
organized under the State of Delaware, the United States, with
its
domicile at 1180 Main Street, Coventry, CT 06238, whose
legal
representative being Xiaoying Gao (Title: Chief Executive
Officer and
President; Nationality: USA).
The Transferor and the Transferee hereinafter individually
referred to as a
"PARTY" and collectively referred to as the "PARTIES".
RECITALS
(1) WHEREAS, Beijing Wanwei Pharmaceutical Co., Ltd. (the
"COMPANY") is a
limited liability company established under the laws of the
People's
Republic of China (the "PRC"), with its registered capital being
RMB
5,880,000. Beijing Wanhui Pharmaceutical Group ("WANHUI GROUP")
holds 80%
of its equity interests, and the Transferor holds the remaining
20%;
(2) WHEREAS, the Transferor agrees to transfer its equity
interests in the
Company to the Transferee and the Transferee agrees to acquire
such equity
interests as per the terms and conditions of this Agreement;
(3) WHEREAS, BMP has entered into a Share Transfer and Debt
Restructuring
Agreement with Wanhui Group on the date hereof to acquire Wanhui
Group's
equity interests in the Company;
(4) WHEREAS, The Transferor and Wanhui Group agree to increase
the registered
capital of the Company from the current RMB5,880,000.00 yuan to
US$
1,750,000, and the amount of increased capital US$1,039,000
shall be fully
subscribed by BMP; and
(5) WHEREAS, both Parties acknowledge that the contemplated
share transfer and
capital increase shall be completed in compliance with the
requirements of
the relevant laws and regulations of the PRC and the provisions
of the
Articles of Association of the Company.
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NOW, THEREFORE Both Parties hereby agree as follows:
ARTICLE 1. SHARE TRANSFER
1.1 The Transferor agrees to transfer to BMP and BMP agrees to
acquire from
the Transferor the 20% equity interest (the "TRANSFERRED
SHARES") held by
The Transferor in the Company on the terms and conditions of
this
Agreement.
The Transferor agrees that BMP shall fully subscribe the amount
of the
increased capital of the Company (the "AMOUNT OF INCREASED
CAPITAL"),
i.e.US$1,039,000. BMP shall contribute such Amount of Increased
Capital to
the Company in accordance with the revised Articles of
Association of the
Company.
1.2 Both Parties agree that from the date when all of the
following conditions
precedent have been satisfied (the "DATE OF TRANSFER"), BMP
shall be the
owner of the Transferred Shares and become the shareholder of
the Company:
(a) Beijing Drug Administration Bureau has renewed the
Pharmaceutical
Distribution License of the Company for an additional five years
and
has approved the change of legal representative and other issues
(if
any) thereon;
(b) The share transfer contemplated under this Agreement, the
share
transfer contemplated under the Share Transfer and Debt
Restructuring Agreement and the revised Articles of Association
of
the Company have been approved by the Ministry of Commerce or
its
authorized authority (the "EXAMINATION AND APPROVAL AUTHORITY")
and
the Company has been issued with an Approval Certificate of
Foreign
Investment Enterprise;
(c) The amendment registration in respect of the share
transfer
contemplated hereunder, the share transfer contemplated under
the
Share Transfer and Debt Restructuring Agreement between BMP
and
Beijing Wanhui Pharmaceutical Group, and the revised Articles
of
Association of the Company has been effected with Beijing
Administration for Industry and Commerce ("REGISTRATION
AUTHORITY");
and
(d) There shall have been no material adverse change in the
financial
condition, operations or business prospects of the Company
during
the Transition Period, as such terms are defined in Article
3.1,
with the exception of any such material adverse change
resulting
from an action or inaction taken by the Company with the
approval of
the Supervision Committee as such terms are defined in Article
3.1.
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Upon the completion of the share transfer hereunder and the
share transfer
as contemplated under the share transfer agreement between BMP
and Wanhui
Group, BMP shall become the sole shareholder of the Company, and
the
Company shall be converted into a wholly foreign owned
enterprise pursuant
to PRC law.
1.3 The Transferor confirms that, prior to the execution of this
Agreement,
the shareholders' meeting of the Company has adopted a valid
resolution
approving the transfer of the Transferred Shares to BMP from
the
Transferor, the subscription by BMP of the Amount of Increased
Capital and
the corresponding amendments to the Articles of Association of
the
Company.
1.4 The Transferor confirms that Wanhui Group has waived its
first right of
refusal with respect to the Transferred Shares prior to the
execution of
this Agreement. Its consent letter is attached herein as
Schedule 1.
1.5 No later than three (3) months after the date hereof, both
parties shall
cause the Company to submit this Agreement, the revised Articles
of
Association of the Company and an original copy of the duly
signed
resolution referred to in Article 1.3 above together with other
necessary
application documents to the Examination and Approval
Authority.
1.6 Both Parties shall take their best endeavour to obtain the
approval from
the Examination and Approval Authority, to assist the Company in
going
through the amendment registration formalities with the
Registration
Authority.
ARTICLE 2. CONSIDERATRION FOR THE SHARE TRANSFER
2.1 As consideration for transferring the Transferred Shares by
the Transferor
to BMP, BMP agrees to pay the Transferor US$ 1.00 ("TRANSFER
VALUE").
2.2 Both Parties agree that the Transfer Value shall be paid in
cash in US
dollar within 10 working days after the Date of Transfer. The
Transferor
shall issue written receipt after receiving the Transfer
Value.
ARTICLE 3. ARRANGEMENTS DURING TRANSITION PERIOD
3.1 Both Parties shall take all necessary measures to ensure the
proper
operation and smooth transmission of the Company between the
date hereof
and the Date of Transfer ("TRANSITION PERIOD"). Both parties
agree that
BMP, Wanhui Group and the Transferor shall appoint respective
delegates to
establish a supervision committee. Such committee shall be
composed of
seven members, with BMP appointing three, Wanhui Group
appointing three,
the Transferor appointing one. The Transferor hereby authorizes
BMP to
nominate such member for and on behalf of itself. The chairman
of the
supervision committee shall be
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from the delegates appointed by BMP. Any major decisions shall
not be
concluded unless approved by half (inclusive) of all the members
of the
supervision committee. No major business decision of the
Company
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