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Exhibit (10)-gg
Execution Copy

DATED July 2, 2005

(1) SINO BIOPHARMACEUTICAL LIMITED

AND

(2) BAUSCH & LOMB INCORPORATED

 

AGREEMENT FOR THE
SALE AND PURCHASE OF
THE ENTIRE ISSUED CAPITAL OF
SINO CONCEPT TECHNOLOGY LIMITED 中外科技有榰公司
 

Baker &
14th Floor Hutchison House
Hong Kong

Telephone: (852) 2846-1888
Fax: (852) 2845-0476

 
 

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CONTENTS

Number
Clause Headings
Page
1.
Definitions and Interpretation
5
2.
Sale of Sale Shares
17
3.
Consideration
17
4.
Conditions
17
5.
Completion
21
6.
Post-Completion
29
7.
Restriction of Vendor and Undertaking of Purchaser
30
8.
Warranties
33
9.
Pre-Completion
34
10.
Confidentiality and Restriction on Announcements
38
11.
Costs
39
12.
General
39
13.
Notices
41
14.
Governing Law and Arbitration
42
15.
English and Chinese Versions
42
     
SCHEDULE 1
Details of the Company
44
SCHEDULE 2
Details of the Subsidiaries
45
SCHEDULE 3
The Properties
49
SCHEDULE 4
Deed of Indemnity
50
SCHEDULE 5
Warranties
61
SCHEDULE 6
Intellectual Property
98
SCHEDULE 7
Hong Kong Legal Opinion
99
SCHEDULE 8
Patents
103
SCHEDULE 9
Patent License Contract
106
SCHEDULE 10
Deed of Undertaking
107
SCHEDULE 11
List of Key Employees
111
SCHEDULE 12
Principal Terms of Key Management Retention Agreement
112
SCHEDULE 13
Resignation Letter
113
SCHEDULE 14
Irrevocable Power of Attorney
114
SCHEDULE 15
Confirmation and Declaration of Shandong Research Institute
117
     
Annex I
Accounts
118
Annex II
Management Accounts
119
Annex III
Subsidiary Accounts
120
Annex IV
Subsidiary Management Accounts
121
Annex V
Approved Extraordinary Expenditures
122
     
Execution
 
122

 
 

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DATE: July 2, 2005

PARTIES:

(1)
SINO BIOPHARMACEUTICAL LIMITED, a company incorporated in the Cayman Islands,
whose registered office is at Century Yard, Cricket Square, Hutchins Drive, P.O.
Box 2681 GT, George Town, Grand Cayman, British West Indies and whose principal
place of business in Hong Kong is Unit 09, 41st Floor, Office Tower, Convention
Plaza, 1 Harbour Road, Wanchai, Hong Kong (the “Vendor”).

(2)
BAUSCH & LOMB INCORPORATED, a company incorporated in the State of New York,
United States of America, whose principal place of business is at One Bausch &
Lomb Place, Rochester, New York 14604-2701, United States of America (the
“Purchaser”).

RECITALS:

(A)
The Company (as defined below) is a limited liability company incorporated in
Hong Kong with registered number 300326 and as at the date of this Agreement has
an authorised share capital of HK$10,100 divided into 10,100 ordinary shares of
HK$1.00 each, all of which have been issued and are fully paid up and are
beneficially owned by the Vendor. Further particulars of the Company are set out
in Schedule 1.

(B)
The Vendor wishes to sell and the Purchaser wishes to purchase the Sale Shares
(as defined below) on the terms and conditions set out in this Agreement.

TERMS AGREED:

1.  
Definitions and Interpretation

1.1
In this Agreement where the context so admits the following words and
expressions shall have the following meanings:

“Accounting Date”
December 31, 2004;
“Accounts”
the audited consolidated financial statements of the Company for the accounting
period which ended on the Accounting Date (each such financial statement
comprising the consolidated profit and loss account, consolidated balance sheet,
consolidated summary statement of changes in equity, consolidated cash flow
statement, a balance sheet for the Company, directors’ and auditors’ reports,
and notes to the financial statements as at and for the period ended on the
Accounting Date), copies of which are annexed hereto as Annex I and initialled
for the purposes of identification by the Parties;
“Approved Extraordinary Expenditures”
the expected extraordinary expenditures for the Subsidiaries for the three (3)
months immediately after the date of this Agreement which have been approved by
the Purchaser, a list of which is annexed hereto as Annex V and initialled for
the purposes of identification by the Parties;
“Auditors”
Ernst & Young;
“Board”
the board of directors of the Company for the time being;
“Business Day”
a day on which banks are generally open for business in Hong Kong and which is
not a Saturday, a Sunday, a public holiday or a day on which typhoon signal no.
8 or a “black” rainstorm warning is hoisted in Hong Kong;
“Company”
Sino Concept Technology Limited 中外科技有榰公司, details of which are set out in
Schedule 1;
“company”
any company or body corporate wherever incorporated;
“Companies Ordinance”
Companies Ordinance (Chapter 32 of the Laws of Hong Kong);
“Completion”
completion of the sale and purchase of the Sale Shares as specified in Clause 5;
“Completion Date”
the date of Completion, being the fifth Business Day after the fulfilment or
waiver (as the case may be) of all of the Conditions specified in Clause 4.1
(save for the Conditions set out in Clauses 4.1.2, 4.1.3, 4.1.4 and 4.1.7) (or
such later date as the Parties may agree in writing);
“Conditions”
the conditions specified in Clause 4.1;
“Consideration”
the amount of US$200,000,000 (United States Dollars Two Hundred Million);
“Control”
a person or persons (each a “controller”) shall be taken to have Control of
another person (“the controlled person”) if one or more of the controllers,
whether by law or in fact has, or is entitled to acquire, the right or the power
to secure whether directly or indirectly, that the controlled person’s affairs
are conducted in accordance with the wishes of the controller and in particular,
but without prejudice to the generality of the foregoing, if one or more of the
controllers holds:
 
(i)    the greater part of the share capital of the controlled person or of the
voting rights attaching to the controlled person’s shares; or
 
(ii)    the power to control the composition of any board of directors or
governing body of the controlled person;
 
For the purposes of the foregoing and without limitation there shall be
attributed to any controller:
 
(i)     any rights or powers which another person possesses on his behalf or is
or may be required to exercise on his direction or behalf; and
 
(ii)     all rights and powers of any body corporate of which any controller
alone or together with another or other controllers has control or of any two or
more such bodies corporate;
“CTF”
山东正大福瑞灂制粑有榰公司 (Shandong Chia Tai Freda Pharmaceutical Co. Ltd.), details of
which are set out in Part A of Schedule 2;
“CTFP”
山东正大福瑞灂包眻新材料有榰公司 (Shandong Chia Tai Freda New Packaging Resources Co. Ltd.),
details of which are set out in Part B of Schedule 2;
“Deed of Indemnity”
the deed of indemnity to be entered into between the Vendor, the Company and the
Purchaser in the form set out in Schedule 4;
“Dermatitis Products”
cremes, emollients and other topical medicines sold and administered principally
for therapeutic purposes, and distinguished from products sold and administered
principally for cosmetic purposes, which are not the subject of a restrictive
covenant;
“Directors”
the persons listed as directors of the Company in Schedule 1;
“Disclosure Letter”
the letter of today’s date from the Vendor to the Purchaser in the approved
terms;
“Environment”
all or any of the following media, namely, the air, water and land; and the
medium of air includes the air within buildings and the air within other natural
or man-made structures above or below ground;
“Environmental Law”
all and any laws, directives, regulations, notices, standards having force of
law, codes of practice, guidance notes, by-laws, judgments, decrees or orders of
and within the PRC, relating to pollution, contamination or protection of the
Environment or to the storage, labelling, handling, release, treatment,
manufacture, processing, deposit, transportation or disposal of Hazardous
Substances;
“Environmental Licence”
any permit, licence, authorisation, consent or other approval, that may be
required by any Environmental Law;
“Equity Interests”
the 55% equity interests held by the Company in each of CTF and CTFP;
“Formulation Information”
the written statement of ingredients, concentrations and manufacturing
instructions, specifications and procedures for each of the following products
of the Subsidiaries:
 
(i) Moisten Eye Drops,
(ii) Mioclear Eye Drops,
(iii) Renown Eye Drops,
(iv) Levsaxin Eye Drops,
(v) Mioclear Eye Cleaning Solution, and
(vi) Sodium Hyaluronate Injection;
“Group”
the group of companies comprising the Company and the Subsidiaries; the
expression “member of the Group” shall mean any or a specific one of them;
“HA”
hyaluronic acid or hyaluronate, a polysaccharide made up of two repeating
monosaccharide units (N-acetylglucosamine and Naglucuronate) present in the
intercellular matrix of nearly all connective tissues;
“Hazardous Substances”
all substances of whatever description which may cause or have a harmful effect
on the Environment, including, without limitation, all poisonous, toxic,
noxious, dangerous and offensive substances;
“HK$”
Hong Kong dollars, the lawful currency of Hong Kong;
“HKIAC”
has the meaning ascribed to it in Clause 14.2;
“Hong Kong”
the Hong Kong Special Administrative Region of the People’s Republic of China;
“Intellectual Property”
includes patents, knowhow, trade secrets and other confidential information,
registered designs, copyrights, Internet domain names of any level, design
rights, rights in circuit layouts, moral rights, trade marks, service marks,
trade dress, business names, registrations of, applications to register and
rights to apply for registration of any of the aforesaid items, rights in the
nature of any of the aforesaid items in any country, rights in the nature of
unfair competition rights and rights to sue for passing off;
“Key Employees”
those individuals whose names are set out in Schedule 11;
“Key Management Retention Agreements”
the services retention agreements to be entered into between the relevant member
of the Group and the Key Employees which will incorporate the principal terms
set out in Schedule 12;
“Leases”
all the leases, sub-leases, tenancy agreements, sub-tenancy agreements, licences
or other documents (including any options for extension relating thereto)
granted or agreed to be granted to any member of the Group or pursuant to which
any member of the Group holds or occupies any property, details of which are set
out in Schedule 3;
“Leased Properties”
the properties short particulars of which are set out in Part 2 of Schedule 3;
“Listing Rules”
the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong
Limited;
“Management Accounts”
the unaudited consolidated balance sheet of the Company as at May 31, 2005 and
the unaudited consolidated profit and loss account of the Company for the period
commencing from January 1, 2005 and ending on May 31, 2005, copies of which are
annexed hereto as Annex II and initialled for the purpose of identification by
the Parties;
“Material Adverse Effect”
a material adverse effect on the assets, business, liabilities, operations,
property or financial condition of the Group taken as a whole;
“Owned Properties”
the properties, short particulars of which are set out in Part 1 of Schedule 3;
“Parties”
the named parties to this Agreement and their respective successors and assigns
and “Party” means each or any specific one of them;
“Patents”
the patents and patent applications listed in Schedule 8 and such unpatented
products and technology (including unfiled, abandoned or not yet filed patents
and patent applications on inventions) as are used by the Subsidiaries in the
production, use or sale of its products (including pipeline products) at the
date hereof and where applicable, patents and patent applications filed by the
Subsidiaries even if they are not used in any of the products of the
Subsidiaries;
“PRC”
the People’s Republic of China and for the purposes of this Agreement, shall
exclude Hong Kong, the Macau Special Administrative Region and Taiwan;
“Properties”
the Owned Properties and the Leased Properties;
“Purchaser’s Patent Review”
the review to be conducted by the Purchaser’s Solicitors as described in Clause
4.1.9;
“Purchaser’s Solicitors”
Baker & McKenzie of 14th Floor Hutchison House, 10 Harcourt Road, Central, Hong
Kong;
“Relevant Scheme”
has the meaning ascribed to it in Clause 9.1.9;
“Restricted Businesses”
the manufacturing and sale of (i) ophthalmic chemical products regardless of
whether they incorporate HA as the key compound or agent (the “Restricted
Ophthalmic Business”) and (ii) osteoarthritis products or Dermatitis Products
for external applications incorporating HA as the key compound or agent (the
“Restricted Other Businesses”);
“RMB”
Renminbi, the lawful currency of the PRC;
“Sale Shares”
the 10,100 ordinary shares of HK$1.00 each in the share capital of the Company,
being the entire issued share capital of the Company;
“Shandong Research Institute”
Shandong Biopharmaceutical Research Institute, a biopharmaceutical research
laboratory in Shandong Province, PRC;
“Subsidiaries”
CTF and CTFP;
“Subsidiary Accounts”
the audited financial statements of each Subsidiary for the accounting period
which ended on the Accounting Date (each such financial statement comprising a
balance sheet, profit and loss account, statement of cash flow, auditors’
report, and any notes, reports or statements included therein or annexed
thereto), copies of which are annexed hereto as Annex III and initialled for the
purposes of identification by the Parties;
“Subsidiary Management Accounts”
the unaudited balance sheet of each Subsidiary as at May 31, 2005, and the
unaudited profit and loss account of each Subsidiary for the period commencing
from January 1, 2005 and ending on May 31, 2005, copies of which are annexed
hereto as Annex IV and initialled for the purpose of identification by the
Parties;
“Tax”
all forms of taxation, estate duties, deductions, withholdings, duties, imposts,
levies, fees, charges, social security contributions and rates imposed, levied,
collected, withheld or assessed by any local, municipal, regional, urban,
governmental, state, federal or other body in Hong Kong, the PRC, or elsewhere
and any interest, additional taxation, penalty, surcharge or fine in connection
therewith;
“US$”
United States dollars, the lawful currency of the United States of America;
“Vendor’s Solicitors”
Morrison & Foerster of 21st Floor, Entertainment Building, 30 Queen’s Road
Central, Hong Kong; and
“Warranties”
the representations, warranties and undertakings contained or referred to in
Clause 8 and set out in Schedule 5; “Warranty” means any or a specific one of
them.

1.2
Save where the context otherwise requires words and phrases the definitions of
which are contained or referred to in the Companies Ordinance shall be construed
as having the meaning thereby attributed to them.

1.3
Any references, express or implied, to statutes or statutory provisions shall be
construed as references to those statutes or provisions as respectively amended
or re-enacted or as their application is modified from time to time by other
provisions (whether before or after the date hereof) and shall include any
statutes or provisions of which they are re-enactments (whether with or without
modification) and any orders, regulations, instruments or other subordinate
legislation under the relevant statute or statutory provision. References to
Sections of consolidating legislation shall, wherever necessary or appropriate
in the context, be construed as including references to the Sections of the
previous legislation from which the consolidating legislation has been prepared.

1.4
References in this Agreement to Clauses and Schedules are to clauses in and
schedules to this Agreement (unless the context otherwise requires). The
Recitals and Schedules to this Agreement shall be deemed to form part of this
Agreement.

1.5
Headings are inserted for convenience only and shall not affect the construction
of this Agreement.

1.6
The expressions “the Vendor” and “the Purchaser” include their respective
successors and assigns.

1.7
References to “persons” shall include individuals, bodies corporate,
unincorporated associations and partnerships (whether or not having separate
legal personality).

1.8
References to writing shall include any methods of producing or reproducing
words in a legible and non-transitory form.

1.9
The masculine gender shall include the feminine and neuter and the singular
number shall include the plural and vice versa.

1.10
A document expressed to be “in the approved terms” means a document the terms of
which have been approved by or on behalf of the Parties in writing.

1.11   In construing this Agreement:

 
1.11.1
the rule known as the ejusdem generis rule shall not apply and, accordingly,
general words introduced by the word “other” shall not be given a restrictive
meaning by reason of the fact that they are preceded by words indicating a
particular class of acts, matters or things; and

 
1.11.2
general words shall not be given a restrictive meaning by reason of the fact
that they are followed by particular examples intended to be embraced by the
general words.

2.            
Sale of Sale Shares

2.1
Subject to the terms of this Agreement, the Vendor shall sell as legal and
beneficial owner and the Purchaser shall purchase, the Sale Shares, free from
all liens, charges and encumbrances and together with all rights now or
hereafter attaching to them, including all rights to any dividend or other
distribution declared, made or paid after the date of this Agreement.

2.2
The Vendor hereby waives and agrees to procure the waiver of any restrictions on
transfer (including pre-emption rights), if any, which may exist in relation to
the Sale Shares, whether under the articles of association of the Company or
otherwise.

3.            
Consideration

3.1
The total consideration payable for the Sale Shares shall be the Consideration.

3.2
The Consideration shall be payable on Completion in accordance with Clause
5.2.1.

4.            
Conditions

4.1  The sale and purchase of the Sale Shares is conditional upon:

 
4.1.1
no notice having been received from the PRC Ministry of Commerce (“MOFCOM”)
and/or the PRC State Administration of Industry and Commerce (“SAIC”) pursuant
to the Provisional Rules on Mergers with and Acquisitions of Domestic
Enterprises by Foreign Investors, promulgated by the Ministry of Foreign Trade
and Economic Cooperation (the predecessor of MOFCOM), State Administration of
Taxation, SAIC and State Administration of Foreign Exchange on 7 March 2003 and
effective as of 12 April 2003, ordering an anti-trust filing to be made in
respect of the sale and purchase of the Sale Shares pursuant to this Agreement;
in the event such order to file is received, this condition shall be satisfied
after the Vendor and the Purchaser have jointly made the necessary anti-trust
filing and MOFCOM and SAIC having consented to the sale and purchase of the Sale
Shares pursuant to this Agreement;

 
4.1.2
the Warranties not being untrue or inaccurate or misleading at Completion which
results in a Material Adverse Effect;

 
4.1.3
the Vendor having complied fully with the obligations specified in Clause 9.1
and otherwise having performed all of the covenants and agreements required to
be performed by it under this Agreement;

 
4.1.4
no statute, regulation or decision which would prohibit, restrict or materially
delay the sale and purchase of the Sale Shares or the operation of any member of
the Group after Completion having been proposed, enacted or taken by any
governmental or official authority;

 
4.1.5
(i) Mr. Ling Peixue having entered into a license contract with CTF,
acknowledged by the Shandong Research Institute, substantially in the form set
out in Schedule 9 (the “Patent License Contract”); (ii) Mr. Hu Hongjie having
executed a license contract with CTF, acknowledged by Shandong Research
Institute, substantially similar in form to the Technology License Contract;
(iii) Mr. Ling, Mr. Hu and, if necessary, the Shandong Research Institute having
executed the relevant governmental license recordal forms requested by Purchaser
in respect of the Technology License Contracts referred to in sub-clauses (i)
and (ii) above; and (iv) the Shandong Research Institute having executed a
Confirmation and Declaration substantially in the form set out in Schedule 15;

 
4.1.6
the approval of the shareholders of the Vendor (or, if required under the
Listing Rules, the approval of the independent shareholders of the Vendor),
being obtained in respect of the sale and purchase of the Sale Shares pursuant
to this Agreement;

 
4.1.7
there being no change in the business or operations of the Group which has a
Material Adverse Effect any time between the date of this Agreement and
Completion;

 
4.1.8
each of the Key Employees having entered into a Key Management Retention
Agreement;

 
4.1.9
the Purchaser’s Solicitors (through Chiang Ling Li) shall have been provided
with the Formulation Information and shall not have within a period of fifteen
(15) Business Days (counted, for the sake of clarity, beginning with the first
Business Day after Formulation Information is actually delivered) determined
based on a review of the Formulation Information so provided, that one or more
claim of a published patent in the PRC or patent application in the PRC is
infringed by one or more of the products which are the subject of the
Formulation Information. The foregoing condition shall be deemed satisfied
unless the Purchaser’s Solicitors’ conclusion that there is such infringement,
with detailed findings, is provided to the Vendor’s Solicitors in writing on or
before the end of such fifteen (15) Business Day period. For purposes of the
foregoing, the Vendor shall not be required to provide the Formulation
Information to the Purchaser’s Solicitors as stated above unless and until the
Conditions set out in Clauses 4.1.5 and 4.1.8 shall have been fulfilled or
waived in writing.(pursuant to Clause 4.2); and

 
4.1.10
a contract to terminate the existing license granted by Mr. Ling Peixue and any
other licensor(s) thereto (if any) to Shandong Freda Biotechnology Engineering
Co. Ltd. in respect of eye wash solutions containing hyaluronic acid and salts
and their preparation methods and technology which are the subject of patent
application number 200410035712.3 at an aggregate termination costs not
exceeding RMB150,000 and and such termination contract must contain a provision
obliging and requiring Shandong Freda Biotechnology Engineering Co. Ltd. to
cease production, use and sale of all products containing the foregoing
Intellectual Property by December 31, 2005.

4.2
Save for the Conditions set out in Clauses 4.1.1, 4.1.4 and 4.1.6, the Purchaser
may waive in whole or in part all or any of the Conditions at any time by notice
in writing to the Vendor.

4.3
The Vendor shall in good faith use his best efforts and proceed diligently to
procure the fulfilment of the Conditions set out in Clauses 4.1.3, 4.1.5, 4.1.6,
4.1.7, 4.1.8 and 4.1.10 on or before the date specified in Clause 4.5 below,
provided that best efforts shall not require the payment of amounts which are
not ordinarily required to be paid to ensure the performance by a third party of
actions necessary to ensure the fulfilment of the relevant Condition.

4.4
The Vendor shall give the Purchaser notice in writing and provide relevant
evidence reasonably satisfactory to the Purchaser of the satisfaction of each
relevant Condition (save for the Conditions set out in Clauses 4.1.1, 4.1.2,
4.1.3, 4.1.4 and 4.1.7) within three (3) Business Days of becoming aware of the
same.

4.5
In the event that any of the Conditions (other than the Conditions set out in
Clause 4.1.2) shall not have been fulfilled (or waived pursuant to Clause 4.2)
by September 30, 2005 (the “Drop Dead Date”), then neither the Purchaser nor the
Vendor shall be bound to proceed with the sale and purchase of the Sale Shares
and this Agreement shall cease to be of any effect except Clauses 1, 10, 11, 12,
13, 14 and 15 which shall remain in force and save in respect of claims arising
out of any antecedent breach of this Agreement, provided that (i) if the
Condition(s) which has (have) not been fulfilled by the Drop Dead Date is (are)
any of the Conditions set out in any of Clauses 4.1.3, 4.1.5, 4.1.6, 4.1.7,
4.1.8 or 4.1.10 and such non-fulfilment is the result of the Vendor’s breach of
its obligations under Clause 4.3 in relation to such Condition(s), then the
Purchaser shall have the right upon notice in writing to the Vendor, to extend
the last date for the fulfilment of the said Condition(s) past the Drop Dead
Date and this Agreement shall remain in full force and effect in all respects;
and (ii) if the fifteen (15) Business Day period referred to in Clause 4.1.9 is
not completed prior to the Drop Dead Date, then the Drop Dead Date shall be
automatically extended to allow for the end of such fifteen (15) Business Day
period and all references in this Agreement to the Drop Dead Date shall be
construed accordingly.

4.6
In the event that the Purchaser shall waive any of the Conditions (save for the
Conditions set out in Clauses 4.1.1, 4.1.4 and 4.1.6), such waiver shall not,
except to the limited extent set forth below, imply that the Purchaser is not
relying on the Warranties but rather only that it is prepared, in reliance upon
the Warranties and such comfort, if any, as it has taken from its
investigations, to proceed with the transaction. Without limiting the
requirement of Clause 5.3.1.7, each Party agrees to promptly notify the other
Party in writing upon becoming aware of any breach of any of the Warranties by
the Vendor after the date of this Agreement and before Completion. In the event
the Purchaser elects to proceed to Completion after being notified by the Vendor
in writing that the Vendor is aware of a breach of a Warranty which cannot be
cured, notwithstanding the best efforts of the Vendor, the Purchaser will, in
such case, no longer be entitled to make a claim in respect of such breach of
Warranty after the Completion Date.

5.            
Completion

5.1
Subject to the provisions of Clause 4, Completion shall take place on the
Completion Date at the offices of the Purchaser’s Solicitors (or such other
place as the Parties may agree in writing) when all of the events described in
this Clause 5 shall occur.

5.2    At Completion, the Purchaser shall:

 
5.2.1
pay an amount equal to the Consideration to the Vendor by telegraphic bank
transfer to the following bank account (and/or such other account(s) as may be
designated in writing by the Vendor at least five (5) Business Days prior to the
Completion Date);

Name of Bank: Citic Ka Wah Bank Limited
Address of Bank: 116 Hennessy Road, Wan Chai, Hong Kong
Name of Account Holder: Sino Biopharmaceutical Ltd.
Account Number: 725103608801

 
5.2.2
deliver to the Vendor an original counterpart of the Deed of Indemnity duly
executed by the Purchaser; and

 
5.2.3
deliver to the Vendor a certified copy of the minutes of a duly held meeting of
the board of directors of the Purchaser approving and authorising the execution
of this Agreement, the performance of this Agreement and all transactions
contemplated herein.

5.3    At Completion, the Vendor shall:

5.3.1     deliver to the Purchaser:

 
5.3.1.1
duly executed transfers and sold notes in respect of all of the Sale Shares in
favour of the Purchaser or its nominee together with the relative share
certificates;

 
5.3.1.2
a cheque for an amount equal to 0.1% of the HK$ equivalent of the Consideration
as at the Completion Date in respect of the Vendor’s share of stamp duty drawn
in favour of the Government of the Hong Kong Special Administrative Region;

 
5.3.1.3
an original counterpart of the Deed of Indemnity duly executed by the Vendor and
the Company;

 
5.3.1.4
duly executed letter of resignation of the Auditors, resigning as the auditors
of the Company, such letter to comply with the requirements of Section 140A of
the Companies Ordinance, and duly executed letter from Shandong Sincere
Certified Public Accountants Co., Ltd. confirming that it has no claim against
the Subsidiaries, whether for any outstanding fees or otherwise;

 
5.3.1.5
(if any) the title deeds, Leases and all other relevant deeds, documents and
correspondence relating to the Properties, the land use rights certificates and
building ownership certificates relating to the Owned Properties, and leases in
respect of the Leased Properties of the Subsidiaries, which are in the
possession or under the control of the Vendor or the Company;

 
5.3.1.6
all the statutory and other books and records (including financial records) duly
written up to date of the Company and the certificate of incorporation, current
business registration certificate, common seal and chop of the Company and any
other papers and documents of the Company in its possession or under its
control; and (if any) the Certificates of Approval, business licences, chops,
capital contribution reports, tax registration certificates, and foreign
exchange registration certificates for each of the Subsidiaries, all the
statutory and other books and records (including financial records) duly written
up to date of the Subsidiaries and any other papers and documents of the
Subsidiaries which are in the possession or under the control of the Vendor or
the Company;

 
5.3.1.7
a completion certificate duly executed by the Vendor pursuant to which it
confirms that (1) the Warranties remain true and accurate and not misleading as
given as of the Completion Date, save for any breach of the Warranties which the
Vendor has notified the Purchaser in writing at least five (5) Business Days
prior to the Completion Date and matters fairly and specifically disclosed in
the Disclosure Letter; and (2) the Vendor has complied fully with its
obligations, covenants, undertakings and agreements under this Agreement on or
prior to the Completion Date;

 
5.3.1.8
unconditional letters of release from the bankers to each member of the Group
(if any) evidencing the release and discharge of all guarantees, debentures and
charges (if any) granted by any member of the Group in favour of the Vendor
and/or any subsidiaries of the Vendor, or in favour of third parties in respect
of the performance of the obligations of the Vendor and/or any subsidiaries of
the Vendor or any other person not being a member of the Group;

 
5.3.1.9
a certified copy of the minutes of a duly held meeting of the board of directors
of the Vendor approving and authorising the execution of this Agreement and the
performance of this Agreement and all transactions contemplated herein;

 
5.3.1.10
duly executed letters of resignation dated as of the Completion Date in the form
set out in Schedule 13 (or the Chinese equivalent) from the Directors and the
secretary of the Company and the directors of each of the Subsidiaries who are
nominated or appointed by the Vendor (and in case of the Subsidiaries, through
the Company);

 
5.3.1.11
a duly executed confirmation or release from the Vendor (for itself and on
behalf of its subsidiaries) and from Mr. Tse Ping (for himself and on behalf of
entities Controlled by him) (as applicable) under seal, in the approved terms,
releasing the Company and the Subsidiaries from any liability whatsoever
(whether actual or contingent) (other than trade debts) which may be owing to
the Vendor or any of its subsidiaries or to Mr. Tse Ping or to any persons
Controlled by any of them, by the Company or any of the Subsidiaries at
Completion;

 
5.3.1.12
irrevocable powers of attorney (in the form set out in Schedule 14) executed
under seal by each of the holders of the Sale Shares in favour of the Purchaser
or such person(s) as may be nominated by the Purchaser;

 
5.3.1.13
a legal opinion issued by the Vendor’s Solicitors, in the form set out in
Schedule 7;

 
5.3.1.14
a legal opinion issued by a firm of lawyers qualified to advise on PRC law and
is satisfactory to the Purchaser, in the form and substance satisfactory to the
Purchaser, to state that each Subsidiary has been duly established and
registered as a PRC legal person with limited liability, and is validly existing
under PRC law, and 55% of the equity interests of each of the Subsidiaries is
legally owned by the Company;

 
5.3.1.15
all documents evidencing registration or filing (as applicable) of all
registrable Intellectual Property owned by the Group, including, without
limitation, registration certificates and applications, in the possession or
under the control of the Vendor or the Company (if any);

 
5.3.1.16
a deed of undertaking by Mr. Tse Ping in favour of the Purchaser in the form set
out in Schedule 10 duly executed by Mr. Tse Ping;

 
5.3.1.17
true and correct copies of the Key Management Retention Agreements entered into
between the Key Employees and the relevant members of the Group;

 
5.3.1.18
a true and correct copy of a new HA Compound supply agreement duly executed by
CTF and the existing supplier of HA compound to CTF;

 
5.3.1.19
true and correct copies of the approval of the shareholders of the Vendor (or,
if required under the Listing Rules, the approval of the independent
shareholders of the Vendor), in respect of the sale and purchase of the Sale
Shares pursuant to this Agreement;

 
5.3.1.20
a true and correct copy of the Patent Licence Contract duly executed by Shandong
Research Institute and Mr. Ling Peixue; and

 
5.3.1.21
a true and correct copy of the Property Title Certificate in respect of CTF’s
ownership of the property located at Guanhai Building, northwest corner, Madian
Qiao, Bei Sanhuan Zhong Lu, Haidian District, Beijing;

 
5.3.2
make available to the Purchaser in the PRC for inspection purposes:

 
5.3.2.1
the title deeds, Leases and all other relevant deeds, documents and
correspondences relating to the Properties, the land use rights certificates and
building ownership certificates relating to the Owned Properties, and leases in
respect of the Leased Properties of the Subsidiaries;

 
5.3.2.2
the Certificates of Approval, business licences, chops, capital contribution
reports, tax registration certificates, and foreign exchange registration
certificates for each of the Subsidiaries, all the Statutory and other books and
records (including financial records) duly written up to date of the
Subsidiaries and all other papers and documents of the Subsidiaries; and

 
5.3.2.3
all documents evidencing registration or filing (as applicable) of all
registrable Intellectual Property owned by the Group, including, without
limitation, registration certificates and applications;

 
5.3.3
cause the Directors to hold a meeting of the Board at which the Directors shall
pass resolutions to:

 
5.3.3.1
approve the transfer of the Sale Shares pursuant to this Agreement and the
registration of the Purchaser or its nominees as members of the Company subject
only to the production of duly stamped and completed transfers in respect of the
Sale Shares;

 
5.3.3.2
approve and authorise the execution by the Company of the Deed of Indemnity;

 
5.3.3.3
accept the resignation of the Auditors, Directors and secretary of the Company
referred to in Clauses 5.3.1.4 and 5.3.1.10;

 
5.3.3.4
appoint the directors and secretary of the Company nominated by the Purchaser;
and

 
5.3.3.5
(if any bank account of the Company remains on the Completion Date) revoke all
of the authorities to the bankers of the Company relating to bank accounts and
authorise such persons as the Purchaser may nominate to operate the same;

 
5.3.4
cause such persons as the Purchaser may nominate (at least three (3) Business
Days prior to the Completion Date) to be validly appointed as directors and
secretary of the Company and upon such appointment forthwith cause the Directors
and the secretary of the Company to resign from their respective offices and as
employees, each delivering to the Purchaser a resignation letter under seal in
the form set out in Schedule 13;

 
5.3.5
cause the Legal Representative of each of the Subsidiaries to arrange for the
filing with the relevant authorities in the PRC in relation to the new directors
of the Subsidiaries nominated or appointed by the Purchaser through the Company,
subject to the new directors having signed the appointment forms;

 
5.3.6
cause such persons as the Purchaser may nominate (at least three (3) Business
Days prior to the Completion Date) to be validly appointed as directors of each
of the Subsidiaries nominated or appointed by the Vendor through the Company in
accordance with the Joint Venture Contract and Articles of Association of the
relevant Subsidiary and upon such appointment forthwith cause the directors of
each of the Subsidiaries nominated or appointed by the Vendor through the
Company to resign from their respective offices and as employees, each
delivering to the Purchaser a letter acknowledging that the person so retiring
has no claim outstanding for compensation or otherwise; and

 
5.3.7
(i) procure revocation of all authorities to the bankers of the Company relating
to bank accounts and use best efforts to procure the giving of authority to such
persons as the Purchaser may nominate to operate the same, or if no bank account
of the Company remains on the Completion Date, deliver a bank cashier order made
payable to the Company for all credit balances therein prior to their closure in
excess of HK$10,000; and (ii) procure the delivery to a representative of the
Purchaser of the chops held by the Chief Financial Officer of the Subsidiaries
which are required in order to operate the bank accounts of the Subsidiaries in
the PRC.

5.4
Without prejudice to any other remedies available to the relevant Party, if in
any respect the provisions of Clause 5 (other than Clause 5.3.1.21) are not
complied with by the relevant Party on the Completion Date, the Party not in
default may:

 
5.4.1
defer Completion to a date not more than 28 days after the Completion Date (and
so that the provisions of this Clause 5.4 shall apply to Completion as so
deferred);

 
5.4.2
proceed to Completion so far as practicable (without prejudice to its rights
under this Agreement); or

 
5.4.3
terminate this Agreement.

6.            
Post-Completion

6.1
The Vendor shall use all reasonable endeavours to procure Ms. Zhao Yanping will,
during the period from the Completion Date to the date falling six (6) months
thereafter, provide services to any member of the Group for the purpose of and
as is reasonably necessary for post-Completion transition.

6.2
The Vendor shall fully indemnify and hold harmless the Purchaser and the members
of the Group and their directors, officers and employees for a period of ten
years after the date hereof against any and all liability, loss, damage, claim
or expense, including attorney’s fees and costs arising out of failure to obtain
state asset valuation with respect to the Patents which were alleged to have
been developed by the Shandong Research Institute.

6.3
In the event the Vendor does not deliver to the Purchaser the Property Title
Certificate on the Completion Date pursuant to Clause 5.3.1.21, the Vendor shall
fully indemnify and hold harmless the Purchaser against any and all liability,
loss, damage, claim or expense, including attorney’s fees and costs incurred by
the Purchaser and 55% of any and all liability, loss, damage, claim or expense,
including attorney’s fees and costs incurred by CTF arising out of the failure
of CTF to obtain the necessary Property Title Certificate in respect of CTF’s
ownership of the property located at Guanhai Building, northwest corner, Madian
Qiao, Bei Sanhuan Zhong Lu, Haidian District, Beijing.

7.            
Restriction of Vendor and Undertaking of Purchaser

7.1
Subject to Completion, the Vendor undertakes with the Purchaser (for itself and
as trustee for the Company and each of the Subsidiaries) that, except with the
consent in writing of the Purchaser and subject to the provisions of Clause 7.3:

 
7.1.1
for the period of five years after the Completion Date in respect of the
Restricted Ophthalmic Business and a period of three years in respect of the
Restricted Other Businesses, it will not within any country or place in which
any member of the Group has carried on business during the year preceding the
Completion Date, either on its own account or in conjunction with or on behalf
of any person, firm or company carry on or be engaged, concerned or interested,
directly or indirectly, whether as shareholder, director, employee, partner,
agent or otherwise in carrying on the relevant Restricted Businesses (other than
as a holder of not more than 5 per cent of the issued shares or debentures of
any company listed on a recognised stock exchange);

 
7.1.2
for the period of five years after the Completion Date, it will not either on
its own account or in conjunction with or on behalf of any other person, firm or
company solicit or entice away or attempt to solicit or entice away from any
member of the Group the custom of any person, firm, company or organisation who
shall at any time within the year preceding the date hereof have been a customer
or identified prospective customer of any member of the Group in respect of any
Restricted Businesses;

 
7.1.3
for the period of three years after the Completion Date, it will not either on
its own account or in conjunction with or on behalf of any other person, firm or
company solicit, entice away or attempt to solicit or entice away from any
member of the Group (which for the avoidance of doubt, shall exclude any
advertisement or solicitation targeted at or made available to the general
public) any person who at the time of such solicitation, enticement or attempt
is an officer, manager, consultant or employee of any member of the Group
whether or not such person would commit a breach of contract by reason of
leaving such employment;

 
7.1.4
it will not at any time hereafter make use of or disclose or divulge to any
person (other than to officers or employees of the Vendor, the Company or any of
the Subsidiaries whose province it is to know the same) any information (other
than any information properly available to the public or disclosed or divulged
pursuant to an order of a court of competent jurisdiction or the requirements of
The Stock Exchange of Hong Kong Limited or of the Securities and Futures
Commission in Hong Kong, or disclosed or divulged to the auditors of the Vendor
solely for the purpose of performing an audit in respect of the Vendor (provided
always that the Vendor shall procure its auditors will observe the provisions of
this Clause 7.1.4), or disclosed or divulged to professional advisers or
designated employees of the Vendor strictly on a need-to-know basis (provided
always that the Vendor shall procure such professional advisers and employees
will observe the provisions of this Clause 7.1.4)) relating to any member of the
Group, the identity of its customers and suppliers, its products, finance,
contractual arrangements, business or methods of business;

 
7.1.5
if, in connection with the business or affairs of any member of the Group, it
shall have obtained trade secrets or other confidential information belonging to
any third party under an agreement purporting to bind any member of the Group
which contained restrictions on disclosure it will not without the previous
written consent of the Purchaser at any time infringe or take any action which
would or might result in an infringement of such restrictions;

 
7.1.6
it will not at any time hereafter in relation to any trade, business or company
use or register a name, trade mark, service mark, trade dress or business name
including the words or symbol “Chia Tai Freda”, “CT Freda”, “CP Freda”, “CTF
Freda”, “CPF Freda” and/or “Freda”, or their Chinese equivalents or any word or
symbol confusingly similar thereto in such a way as to be capable of or likely
to be confused with the name, any trade mark, service mark, trade dress or
business name of any member of the Group and shall use his best endeavours to
procure that no such name, trade mark, service mark, trade dress or business
name shall be used by any person, firm or company with which is under its
Control, and it will not take any action contrary to the Intellectual Property
of any member of the Group, including, without limitation, challenging the
ownership of such right, title or interest or contesting any registration or
application for any Intellectual Property of any member of the Group. For the
avoidance of doubt, the foregoing restriction does not apply to the words “Chia
Tai”, “CTF”, “CPF”, “CT” or “CP” individually or their Chinese equivalents.

7.2
The Vendor shall procure that all entities Controlled by the Vendor will observe
the restrictions contained in the foregoing provisions of this Clause 7 and
shall use all reasonable endeavours to procure that the respective employees of
itself, its subsidiaries and its Controlled entities will observe the
confidentiality restrictions contained in Clause 7.1.4.

7.3
While the restrictions contained in this Clause 7 are considered by the Parties
to be reasonable in all the circumstances, it is recognised that restrictions of
the nature in question may fail for technical reasons and accordingly it is
hereby agreed and declared that if any of such restrictions shall be adjudged to
be void as going beyond what is reasonable in all the circumstances for the
protection of the interests of the Purchaser but would be valid if part of the
wording thereof were deleted or the periods thereof reduced or the range of
activities or area dealt with thereby reduced in scope the said restriction
shall apply with such modifications as may be necessary to make it valid and
effective.

7.4    Subject to Completion, the Purchaser undertakes to the Vendor that:-

 
7.4.1
it shall not, and shall procure that its Controlled entities (including without
limitation the Group) shall not, in relation to any new product of the Group
with effect from the Completion Date use the words “正大” or “Chia Tai” or “CP”
(save as part of “Chia Tai Freda”, “CP Freda” or their Chinese equivalent), as
part of its name, trade mark, service mark, trade dress or business name, or any
word or symbol confusingly similar thereto in such a way as to be capable of or
likely to be confused with such word or symbol;

 
7.4.2
it shall not, and shall procure that its Controlled entities in the PRC
(including without limitation the Group) shall not, directly or indirectly, with
effect from the date falling five (5) years from the Completion Date, in
relation to any product, trade, business or company use or register a name,
trade mark, service mark, trade dress or business name including the words or
symbol “正大” or “Chia Tai” or “CP” or “CT” (including as part of “Chia Tai
Freda”, “CP Freda”, “CT Freda”, “CTF”, “CPF” or their Chinese equivalents), or
any word or symbol confusingly similar thereto in such a way as to be capable of
or likely to be confused with such word or symbol;

Provided that for the avoidance of doubt, the Purchaser shall not be restricted
from the use of “Freda” or its Chinese equivalent, either alone or in connection
with any other term or word except as stated above.

8.            
Warranties

8.1
The Vendor represents, warrants and undertakes to and with the Purchaser that
each of the statements set out in Schedule 5 is now and will at Completion (with
all references in any such statement to “the date of this Agreement”, or “the
date hereof”, or any other comparable references being changed to “the
Completion Date”) be true and accurate.

8.2
The Warranties (other than Warranties in respect of title and ownership of the
Sale Shares, the equity interests of the Subsidiaries held by the Company, and
approvals and authorizations of the Vendor necessary for the Vendor to enter
into this Agreement and perform its obligations under this Agreement (the
“Fundamental Warranties”), in respect of which no qualification is accepted) are
given subject to matters fairly and specifically disclosed in the Disclosure
Letter but no other information relating to the Company or the Subsidiaries of
which the Purchaser has knowledge (actual or constructive) and no investigation
by or on behalf of the Purchaser shall prejudice any claim made by the Purchaser
under the Warranties or operate to reduce any amount recoverable, and liability
in respect thereof shall not be confined to breaches discovered before
Completion. No letter, document or other communication shall be deemed to
constitute a disclosure for the purposes of this Agreement unless the same is
expressly referred to in the Disclosure Letter.

8.3
The Vendor acknowledges that the Purchaser has entered into this Agreement in
reliance upon the Warranties.

8.4
Subject to Completion, in the event that any of the Warranties is breached or
(as the case may be) proves to be untrue or misleading and without prejudice to
any other equitable relief a court of competent jurisdiction may see fit to
award, the Vendor shall, on demand, pay to the Purchaser:

 
8.4.1
the amount necessary to put the Purchaser and the Company, and 55% of the amount
necessary to put the relevant Subsidiary (or Subsidiaries), into the position
which would have existed if the Warranties had not been breached or (as the case
may be) had been true and not misleading; and

 
8.4.2
all costs and expenses incurred by the Purchaser and the Company, and 55% of all
costs and expenses incurred by the relevant Subsidiary (or Subsidiaries), in
connection with or as a result of such breach and any costs (including legal
costs on a solicitor and own client basis), expenses or other liabilities which
the Purchaser and the Company, and 55% of any such costs, expenses or other
liabilities which any of the Subsidiaries may incur either before or after the
commencement of any action in connection with (i) any legal proceedings in which
the Purchaser claims that any of the Warranties has been breached or is untrue
or misleading and in which judgement or an arbitral award is given for the
Purchaser or (ii) the enforcement of any settlement of, or judgement or an
arbitral award in respect of, such claim.

8.5
Each of the Warranties shall be separate and independent and, save as expressly
provided to the contrary, shall not be limited by inference from or non-specific
reference to any other Warranty or any other term of this Agreement, nor by
anything in the Disclosure Letter which is not expressly referenced to the
Warranty concerned, notwithstanding any contrary or conflicting provision in the
Disclosure Letter.

8.6
The Vendor hereby agrees with the Purchaser (for itself and as trustee for the
Company and each of the Subsidiaries) to waive any rights which it may have in
respect of any misrepresentation or inaccuracy in, or omission from, any
information or advice supplied or given by the Company or its Subsidiaries or
their officers, employees or advisers in connection with the giving of the
Warranties and the preparation of the Disclosure Letter.

8.7
The Vendor shall procure that (save only as may be necessary to give effect to
this Agreement) neither it nor any member of the Group shall do, allow or
procure any act or omission before Completion which would constitute a breach of
any of the Warranties if they were given at Completion or which would make any
of the Warranties inaccurate or misleading if they were so given.

8.8
The Vendor hereby agrees to disclose promptly to the Purchaser in writing
immediately upon becoming aware of the same, any matter, event or circumstance
(including any omission to act) which may arise or become known to it after the
date of this Agreement and before Completion which constitutes a breach of or is
inconsistent with any of the Warranties.

8.9
The benefit of the Warranties may be assigned to other members of the Bausch &
Lomb group in whole or in part and without restriction by the person for the
time being entitled thereto.

8.10
If any sum payable by the Vendor under this Clause 8 shall be subject to Tax
(whether by way of deduction or withholding or direct assessment of the person
entitled thereto) such payment shall be increased by such an amount as shall
ensure that after deduction, withholding or payment of such Tax the recipient
shall have received a net amount equal to the payment otherwise required hereby
to be made. If the Vendor pays any sum to the Purchaser under this Clause 8, the
Consideration shall be deemed to be reduced by the amount of such payment.

8.11
Where any statement in the Warranties is qualified by the expression “to the
best of the Vendor’s knowledge and belief” or any similar expression, that
statement shall be deemed to include an additional statement that it has been
made after reasonable and careful enquiry and shall be deemed to include the
knowledge of the senior management of the Vendor (including, without limitation,
Mr. Tse Ping, Ms. Zhao Yanping, the directors, officers and senior managers of
the Vendor, and the officers and senior managers and factory managers of the
Subsidiaries).

8.12
The liabilities of the Vendor under the Warranties:

 
8.12.1
together with the liabilities of the Vendor under the Deed of Indemnity, shall,
except for the Fundamental Warranties, be limited to a maximum aggregate amount
equal to 50% of the Consideration;

 
8.12.2
shall in relation to those Warranties in respect of Tax (“Tax Warranties”) cease
seven years after the Completion Date, except in respect of matters which have
been the subject of a written claim made before such date by the Purchaser to
the Vendor;

 
8.12.3
shall, except for the Fundamental Warranties, cease two years after the
Completion Date, except in respect of matters which have been the subject of a
written claim made before such date by the Purchaser to the Vendor;

 
8.12.4
shall be exempted in respect of any breach of Warranties which arises as a
result of any PRC tax laws, including an increase in the rate of Tax, not in
force as at the date of this Agreement and which is retrospective in effect; and

 
8.12.5
shall be exempted in respect of a claim for breach of Warranty to the extent
that provision or reserve in respect of the matter or thing giving rise to such
claim has been specifically provided for in the Accounts or the Management
Accounts, or has been specifically disclosed in this Agreement or the Disclosure
Letter;

unless the relevant claim or claims has arisen by reason of fraud, wilful
concealment, dishonesty on the part of the Vendor, in which event there shall be
no limit under this Agreement on the amount recoverable by the Purchaser from
the Vendor in respect of such claim or claims or the time period within which
such claims may be brought.

8.13
The Vendor shall not be liable for a claim under the Warranties if a claim in
respect of the same event or circumstance has already been made under the Deed
of Indemnity.

8.14
The Parties agree that no liability shall attach to the Vendor in relation to
any Warranty claim to the extent that such claim would not have arisen but for
an omission or a voluntary act (other than an omission or act carried out
pursuant to a legally binding obligation created on or before Completion) of the
Purchaser or any member of the Group occurring after Completion which
constitutes fraud or wilful misconduct.

8.15
The Parties agree that no liability shall attach to the Vendor in relation to
any Warranty claim until the aggregate amount of all claims, each of which
(including on an aggregated basis where the individual claim is associated with
or forms part of a series of related claims arising from or with respect to the
same facts or circumstances) is of an amount (for the sake of clarify, prior to
reduction in respect of the Subsidiaries as may be required by Clause 8.4) of
US$30,000 or higher, exceeds US$4,500,000 and in such event, the Vendor shall be
liable only for the excess of the aggregate amount of all claims over the said
US$4,500,000, subject, as the case may be, to limitation in respect of the
Subsidiaries as may be required by Clause 8.4. For the sake of clarity, the
limitations under this Clause 8.15 shall not apply to the obligations under the
Deed of Indemnity or under Clause 6.2 hereof.

8.16
If the Purchaser shall become aware of any material breach of Warranty in
respect of which a claim could be made under this Agreement, it shall give
reasonable written notice thereof to the Vendor and provide the Vendor with the
opportunity to cure such breach (only if such breach is curable) within ten
Business Days of its receipt of such notice from the Purchaser. In addition, the
Purchaser shall (provided that the Vendor shall indemnify and hold harmless the
Purchaser and the Company and the Subsidiaries, as applicable, to the
Purchaser’s reasonable satisfaction, against any and all liabilities, costs,
damages and/or expenses which may be incurred thereby) take such action and
procure that the Company take such action as may reasonably be necessary to
mitigate the loss or damage incurred relating to the Warranty claim; provided
that neither the Company nor the relevant Subsidiary nor the Purchaser shall in
any event be required to take any steps which would require any admission of
guilt or liability relating to matters connected with the claim in question or
which would affect the conduct of the business of the Purchaser or the Company
or any of the Subsidiaries. For the avoidance of doubt, under no circumstances
shall the failure by the Purchaser to provide prior reasonable written notice to
the Vendor or the opportunity of the Vendor to cure such breach reduce or limit
the liability of the Vendor in respect of such breach, unless and to the extent
the Vendor is actually and materially prejudiced by such failure by the
Purchaser.

9.            
Pre-Completion

9.1
The Vendor shall procure that, during the period from the date of this Agreement
to the Completion Date or the termination of this Agreement pursuant to the
terms hereof, each member of the Group shall carry on business in the same
manner as it was operated prior hereto and in the normal and usual course and in
furtherance of the foregoing, no member of the Group shall undertake any of the
matters listed below without the prior written consent of the Purchaser:

 
9.1.1
enter into any contract, make any material change to the terms of the existing
contracts or assume any liability which will result in any long term, unusual or
onerous liability or commitment of any member of the Group;

 
9.1.2
save for the Approved Extraordinary Expenditures, enter into any capital
commitment with an individual contract value of more than HK$500,000 (whether by
way of purchase, lease, hire purchase or otherwise);

 
9.1.3
make any change in the nature, scope or organisation of its business or dispose
of the whole of its undertaking or property or a substantial part thereof;

 
9.1.4
acquire or form any subsidiary or acquire any shares in any company or acquire
the whole or any substantial part of the undertaking, assets or business of any
other company or any firm or person or enter into any joint venture or
partnership with any other person;

 
9.1.5
make any loans or grant any credit (other than credit given in the normal course
of trading and advances made to employees against expenses incurred by them on
its behalf);

 
9.1.6
borrow any money or make any payments out of or drawings on its bank accounts
(except routine payments in the ordinary course of business);

 
9.1.7
enter into any guarantee, indemnity or surety;

 
9.1.8
save as required by any applicable laws or regulations and as contemplated under
Condition 4.1.8, make any changes to the terms of employment or of any profit
sharing, share option, profit related, bonus or incentive scheme of any of its
employees or in any arrangements with its consultants, or make any special or
extraordinary payments to any of its employees or consultants;

 
9.1.9
save as required by any applicable laws or regulations, change (or announce to
employees any proposal to change) the terms of any retirement scheme or pension
plan in which that member of the Group participates (“Relevant Scheme”), or
exercise any discretionary power under the Relevant Scheme, or cause the
Relevant Scheme to be terminated or wound up (or otherwise fail to maintain the
Relevant Scheme in full force and effect) or fail to make any required
contribution (or other payment) to the Relevant Scheme, or fail to meet any
obligation of any kind whatsoever to the Relevant Scheme;

 
9.1.10
acquire or dispose of or grant any option or right of pre-emption in respect of
any material asset (including, without limitation, any of its Intellectual
Property) or any interest nor give nor receive any service otherwise than at
market value;

 
9.1.11
acquire or dispose of any freehold or leasehold property or grant any lease or
third party right in respect of any of the Properties;

 
9.1.12
enter into any leasing, hire purchase agreement or any agreement or arrangements
for payment on deferred terms;

 
9.1.13
grant or enter into any assignment, licence, franchise or other agreement or
arrangement concerning any part of its name, trading names, know-how, patents,
trademarks, service marks, trade dress, copyright, inventions or any other of
its Intellectual Property;

 
9.1.14
declare, authorize, make or pay any dividend or other distribution (whether in
cash or in specie) or reduce its paid-up capital;

 
9.1.15
incur or pay any management charges;

 
9.1.16
permit any of its insurances to lapse or do anything which would make any policy
of insurance void or voidable;

 
9.1.17
make any payments to either the Vendor or any of its subsidiaries or to Mr. Tse
Ping or to any persons (other than members of the Group) affiliated with any of
the foregoing (for the purpose of this Clause, a person shall be considered to
be “affiliated” with another person if that person either Controls, is
Controlled by or under the common Control with such person);

 
9.1.18
other than in the ordinary course of business, apply for, surrender or agree any
variations to any Environmental Licences;

 
9.1.19
agree, conditionally or otherwise, to do any of the foregoing;

 
9.1.20
commence the prosecution or defence of, or settle, any legal or arbitration
proceedings (other than in connection with the collection of ordinary trade
debts);

 
9.1.21
make any changes in the pricing of any products of any member of the Group,
other than in the ordinary course of business or as required by applicable laws
or regulations;

 
9.1.22
make any changes to any of its constitutional documents;

 
9.1.23
amend the accounting policies or practices or reporting practices existing as of
the date of this Agreement;

 
9.1.24
terminate, enter into or amend any supply or distribution agreement or
arrangement; or

 
9.1.25
create, allot or issue or agree to create, allot or issue any share or loan
capital or other security, or equity interests, or grant any option over or
other right to subscribe for any share or loan capital or other security, or
equity interests.

9.2
The Vendor undertakes and covenants with the Purchaser that during the period
from the date hereof until the Completion Date or the termination of this
Agreement pursuant to the terms hereof, it will not:

 
9.2.1
sell, mortgage, grant an option over or otherwise dispose of or encumber to any
person the whole or any part of the shares or equity interests of any member of
the Group owned by the Vendor or the Company or the business or assets of any
member of the Group, or indicate a willingness to consider any offer to do any
of the foregoing;

 
9.2.2
engage in discussions or negotiations with any person in relation to the sale,
mortgage or other disposition of, or grant of an option or other encumbrance in
respect of, the whole or any part of the shares or equity interests of any
member of the Group owned by the Vendor or the Company or the business or assets
of any member of the Group; or

 
9.2.3
provide to any prospective purchaser of the whole or any part of the business,
assets or shares or equity interests of any member of the Group any non-public
information concerning any member of the Group;

provided that the foregoing shall not prevent the sale or other disposal or any
discussions or negotiations in respect of any such sale or other disposal by any
member of the Group of any of its assets in the usual and ordinary course of
business.

9.3
The Vendor undertakes that it will after the signing of this Agreement and
before Completion make available to the Purchaser upon its request personnel
with knowledge of the history and development of the Group’s products for the
purpose of providing information thereon to the Purchaser.

10.          
Confidentiality and Restriction on Announcements

10.1
Subject to Clause 10.2, each Party shall treat as confidential all information
received or obtained by it or its directors, employees, agents or advisers as a
result of entering into or performing this Agreement including (i) information
relating to the provisions of this Agreement; (ii) the negotiations leading up
to this Agreement;(iii) the subject matter of this Agreement; or (iv) the
business or affairs of the other Party, and shall not at any time make use of,
disclose or divulge to any person any such information or make any announcement
on any such information without the prior written consent of the other Party.

10.2
The restrictions contained in Clause 10.1 shall not apply so as to prevent a
Party from disclosing or making any announcement of any information which would
otherwise be confidential if and to the extent: (i) required by law of any
relevant jurisdiction; (ii) required by any securities exchange, supervisory,
regulatory or governmental body to which such Party is subject (including but
not limited to The Stock Exchange of Hong Kong limited and the Securities and
Futures Commission in Hong Kong) whether or not the requirement for information
has the force of law; (iii) disclosed to any professional advisers of such Party
(provided always that such Party shall procure such professional advisers will
observe the provision of this Clause 10); (iv) disclosed in a press announcement
in a form agreed by both Parties or consistent with a mutually agreed set of
questions and answers; or (v) any information which comes into the public domain
through no fault of such Party.

11.          
Costs

11.1
Each Party shall pay its own costs of and incidental to this Agreement and the
sale and purchase hereby agreed to be made.

11.2
The Vendor and the Purchaser shall each equally bear any stamp duty payable as a
result of the sale and purchase of the Sale Shares pursuant to this Agreement.

11.3
The Vendor confirms that no costs or expenses of whatever nature relating to the
sale of the Sale Shares has been or is to be borne by any member of the Group
and if any such costs or expenses have been or are to be borne by any member of
the Group, the Vendor shall forthwith reimburse any and all such costs and
expenses to the relevant member of the Group.

12.          
General

12.1
This Agreement shall be binding upon and enure for the benefit of the estates,
personal representatives or successors of the Parties. Save for an assignment of
this Agreement by the Purchaser to a subsidiary of the Purchaser, no Party may
assign or transfer its rights or obligations under this Agreement without the
prior written consent of the other Party.

12.2
This Agreement (together with any documents referred to herein or executed
contemporaneously by the Parties in connection herewith) constitutes the whole
agreement between the Parties and supersedes any previous agreements or
arrangements between them relating to the subject matter hereof; it is expressly
declared that no variations hereof shall be effective unless made in writing
signed by duly authorised representatives of the Parties. Notwithstanding the
foregoing, the Confidentiality Agreement entered into between the Vendor and the
Purchaser dated November 21, 2004, as amended on July 2, 2005, survives the
signing of the Agreement, but shall terminate upon Completion.

12.3
All of the provisions of this Agreement shall remain in full force and effect
notwithstanding Completion (except insofar as they set out obligations which
have been fully performed at Completion).

12.4
If any provision or part of a provision of this Agreement shall be, or be found
by any authority or court of competent jurisdiction to be, invalid or
unenforceable, such invalidity or unenforceability shall not affect the other
provisions or parts of such provisions of this Agreement, all of which shall
remain in full force and effect.

12.5
Any right of rescission conferred upon any Party hereby shall be in addition to
and without prejudice to all other rights and remedies available to it (and,
without prejudice to the generality of the foregoing, shall not extinguish any
right to damages to which that Party may be entitled in respect of the breach of
this Agreement) and no exercise or failure to exercise such a right of
rescission shall constitute a waiver by that Party of any such other right or
remedy.

12.6
No failure of any Party to exercise, and no delay or forbearance in exercising,
any right or remedy in respect of any provision of this Agreement shall operate
as a waiver of such right or remedy.

12.7
Upon and after Completion the Vendor shall do and execute or procure to be done
and executed all such further acts, deeds, documents and things as may be
reasonably necessary to give effect to the terms of this Agreement and to place
control of the Company and the Subsidiaries in the hands of the Purchaser and to
deliver and make available to the Purchaser all documents and records (if any)
of the Company and the Subsidiaries, and all documents (if any) evidencing
registration or filing (as applicable) of all registrable Intellectual Property
owned by the Group, which are in the possession or under the control of the
Vendor, and pending the doing of such acts, deeds, documents and things, the
Vendor shall as from Completion hold the legal estate in the Sale Shares in
trust for the Purchaser.

12.8
This Agreement may be executed in one or more counterparts (including by
facsimile signature), but shall not be effective until each Party has executed
at least one counterpart and each such counterpart shall constitute an original
of this Agreement but all the counterparts shall together constitute one and the
same instrument.

13.          
Notices

Each notice, demand or other communication given or made under this Agreement
shall be in writing and delivered or sent to the relevant Party at its address
or fax number set out below (or such other address or fax number as the
addressee has by five (5) Business Days’ prior written notice specified to the
other Party):

To the Vendor:                     Sino Biopharmaceutical Limited
Unit 09, 41st Floor
Office Tower
Convention Plaza
1 Harbour Road
Wanchai
Hong Kong
Attention: Mr. Tse Ping
Fax Number: (852) 2880 0847

To the Purchaser:                 Bausch & Lomb Incorporated
One Bausch & Lomb Place
Rochester, New York 14604-2701
United States of America
Attention: Vice President - Business Development
Fax Number: (1-585) 338-5043

With a copy to:                    Bausch & Lomb Incorporated
One Bausch & Lomb Place
Rochester, New York 14604-2701
United States of America
Attention: Senior Vice President and
General Counsel
Fax Number: (1-585) 338-8706

Any notice, demand or other communication so addressed to the relevant Party
shall be deemed to have been delivered (a) if given or made by letter, when
actually delivered to the relevant address and (b) if given or made by fax, when
despatched.

14.          
Governing Law and Arbitration

14.1
This Agreement shall be governed by and construed in accordance with the laws of
Hong Kong.

14.2
Any dispute, controversy or claim arising out or relating to this Agreement, or
the breach, termination or invalidity thereof, shall be settled by final and
binding arbitration in accordance with the UNCITRAL Arbitration Rules as at
present in force and as may be amended by the rest of this Clause. The
appointing body shall be the Hong Kong International Arbitration Centre
(“HKIAC”). The place of arbitration shall be in Hong Kong at HKIAC. The tribunal
for any arbitration shall consist of three (3) arbitrators with each of the
Purchaser and the Vendor having the right to appoint one arbitrator and the
third arbitrator shall be appointed by the Secretary General of HKIAC. The
language to be used in the arbitral proceedings shall be English.

15.          
English and Chinese Versions

The Parties hereby acknowledge and agree that even though they will each execute
both an English and a Chinese version of this Agreement, if and to the extent
that there is any conflict or inconsistencies between the English and Chinese
versions of this Agreement, the English version of this Agreement shall prevail
at all times and no Party shall take any steps which may be inconsistent with
the foregoing.

IN WITNESS WHEREOF the Parties have executed this document on the date appearing
at the head hereof.

SIGNED
by                                                                                
 )
Tse
Hsin                                                                                    
 )
for and on behalf of      ) /s/ Tse Hsin
SINO BIOPHARMACEUTICAL LIMITED      )
in the presence
of:                                                                      )

/s/ Oh Chee Hwa

SIGNED by       )
John M.
Loughlin                                                                      )
for and on behalf of      ) /s/ John M. Loughlin
BAUSCH & LOMB INCORPORATED       )
in the presence of:                    )

/s/ Stephen Chan