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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
