Document:

EX-10.1

 Exhibit 10.1 
 SAGENT PHARMACEUTICALS, INC. 
 AND 

CHENGDU KANGHONG PHARMACEUTICALS (GROUP) CO. LTD 

 
  

SHARE PURCHASE AGREEMENT 
  

 
 DATED APRIL
30, 2013 

			
	 SPA
	 	KSCP

  

 Contents 

 

					
	 Article 1 Definitions
	  	 	2	  
	 Article 2 Sale and Purchase of the Shares
	  	 	5	  
	 Article 3 Purchase Price and Payments
	  	 	6	  
	 Article 4 Conditions Precedent
	  	 	7	  
	 Article 5 Undertakings
	  	 	8	  
	 Article 6 Representations and Warranties
	  	 	11	  
	 Article 7 Breach of Agreement
	  	 	13	  
	 Article 8 Confidentiality
	  	 	13	  
	 Article 9 No Assignment
	  	 	14	  
	 Article 10 Notice
	  	 	14	  
	 Article 11 Governing Law and Dispute Resolution
	  	 	15	  
	 Article 12 Miscellaneous
	  	 	16	  

  
 1 

			
	 SPA
	 	KSCP

  

 THIS SHARE PURCHASE AGREEMENT (the “Agreement”) is entered into on April 30, 2013
between: 
 CHENGDU KANGHONG PHARMACEUTICALS (GROUP) CO. LTD (the “Selling Shareholder”), a company duly incorporated and existing
under the laws of People’s Republic of China, having its business address at No. 36 Shuxi Road, Jinniu District, Chengdu City, Sichuan Province, China, 
 and 
 SAGENT PHARMACEUTICALS, INC. (the “Buyer”), a company duly incorporated and
existing under the laws of Delaware, having its business address at 1901 North Roselle Road, Suite 700, Schaumburg, IL60195. 
 Whereas:

  

	A.	In December 2006, the Selling Shareholder and the Buyer jointly established KANGHONG SAGENT (CHENGDU) PHARMACEUTICAL CORPORATION LIMITED (“KSCP”), a
Sino-foreign joint venture company under the laws of the PRC, with its registered address at Suite 302, Building 2, 8 Kexin Road, West Zone, Chengdu High Technology Industrial Development Zone, Sichuan, China. KSCP has total registered capital of
FIFTY MILLION US DOLLARS (US$50,000,000). The Selling Shareholder and the Buyer each holds 50% shareholding in KSCP representing TWENTY-FIVE MILLION US DOLLARS (US$25,000,000) registered capital of KSCP. 

 

	B.	Both parties have negotiated and agreed to the sale of the 50% shareholding in KSCP held by the Selling Shareholder to the Buyer subject to the terms and conditions set
forth in this Agreement. After the sale, the Selling Shareholder will no longer hold any equity or other interest in KSCP. now it is hereby agreed as follows: 

 Article 1 Definitions 
  

	1.1	In this Agreement the following terms have the meanings given to them in this Clause 1.1, except where the context requires otherwise: 

  
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	 SPA
	 	KSCP

  

			
	Affiliated Party	  	means an enterprise or an entity that directly or indirectly controls a Party or is directly or indirectly controlled by a Party, or is under direct or indirect common control with
such Party. “Control” shall mean the ownership of more than fifty percent (50%) of the registered capital of an enterprise or an entity;
		
	Agreement	  	means the full text herein, all the exhibits and all other documents which the Parties agree to be exhibited herewith;
		
	AIC	  	means Chengdu Hi-Tech Zone Administration for Industry and Commerce, the governing registration authority of KSCP;
		
	Approving
 Authority
	  	means The Chengdu Hi-Tech Industrial Development Zone Bureau of Investment Services;
		
	Approval	  	Means the approval granted by the Approving Authority in respect of this Agreement and the Transaction;
		
	Completion of
 Transaction
	  	means the actual occurrence of the registration with the AIC in respect of the Transaction. The date when the registration at the AIC is completed, the Transaction shall be deemed
completed (the “Completion Date of Transaction”);
		
	Day	  	means calendar day;
		
	Disputes	  	means any disputes arising between the Parties in connection with this Agreement, including but not limited to the existence, construction, interpretation, validity, or performance
of this Agreement;
		
	Encumbrances	  	means any mortgage, charge, pledge, lien, option, restriction, right of first refusal, right of pre-emption, claim, right, interest or preference granted to any third party, or any
other encumbrance or security interest of any kind (or an agreement or commitment to create any of the same), however the options to purchase the Incentive Shares granted according to KSCP 2007 Employee Stock Option Plan shall be
excluded;

  
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	 SPA
	 	KSCP

  

			
	Escrow Account	  	 means the escrow account opened by the Buyer at HSBC Bank (China) Company Limited Chengdu Branch

 
 Account name: [SAGENT PHARMACEUTICALS, INC.]

 
 Account number: [TO BE PROVIDED BY HSBC]

 
 Account opening bank: HSBC Bank (China) Company Limited Chengdu
Branch;

		
	Escrow Agent	  	means HSBC Bank (China) Company Limited;
		
	Escrow
Agreement	  	means that certain Escrow Agreement, dated April 25, 2013, by and between the Parties and the Escrow Agent;
		
	Option to
 Purchase the

Incentive Shares
	  	According to KSCP 2007 Employee Stock Option Plan, shareholders of KSCP (the Parties) agreed to set aside 5% of the equity interests in KSCP as the Incentive Shares (the
Selling Shareholder 2.5% and the Buyer 2.5%). In 2007, KSCP’s registered capital was TWENTY-EIGHT MILLION US DOLLARS (US$28,000,000), in total there are 1,400,000 Incentive Shares with each share representing US$1.00 in the registered capital
of KSCP (the Buyer holds 700,000 Incentive Shares and the Selling Shareholder holds 700,000 Incentive Shares as “nominee shareholders”). The option holders cannot become the registered shareholder of KSCP upon option exercise i.e. the
purchase of the vested Incentive Shares. The relevant Incentive Shares will be held under the current shareholders’ names as nominee shareholders and the relevant option holders who purchase the Incentive Shares vested, shall be the beneficiary
owner indirectly holding KSCP’s equity interests. The relevant details have been set forth in the Option Allocation List which is attached to this Agreement as Exhibit 1;
		
	Party	  	means the Selling Shareholder or the Buyer;
		
	Parties	  	means collectively the Selling Shareholder and the Buyer;
		
	PRC	  	means the People’s Republic of China, excluding Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan;

  
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	 SPA
	 	KSCP

  

			
		
	Purchase Price	  	means the purchase price for the Shares as provided in Article 3.1 of this Agreement;
		
	Shares	  	means the entire 50% shareholding in KSCP, representing fully paid registered capital of TWENTY-FIVE MILLION US DOLLARS (US$25,000,000), together with all rights and interests
associated therewith lawfully held by the Selling Shareholder;
		
	Share Pledge
 Agreement
	  	means that certain Share Pledge Agreement, dated as of the same date hereof, by and between the Parties;
		
	Signing Date	  	Means April 30, 2013;
		
	Transaction	  	means the share transfer contemplated by this Agreement;
		
	USD or US$	  	means the US currency;
		
	Working Day	  	means normal business day of the week excluding weekend and any public holiday in China or the US.

  

	1.2	In this Agreement, unless the context requires otherwise, words importing the singular include the plural and vice versa and words importing a gender include every
gender. Headings are inserted for reference only and shall be ignored in construing this Agreement. In this Agreement, unless otherwise provided or the context requires otherwise, references to the contract, the agreement or the document shall mean
the contract, the agreement or the document as modified, supplemented or superseded from time to time; and references to articles, clauses and exhibits shall refer to the articles and clauses in or exhibits to this Agreement.

 Article 2 Sale and Purchase of the Shares 

 

	2.1	Subject to the terms and conditions hereof, the Selling Shareholder hereby agrees to sell and deliver the Shares, free and clear of any Encumbrances, to the Buyer.

  

	2.2	The Buyer hereby agrees to buy the Shares from the Selling Shareholder as further set out below at the Purchase Price and subject to the terms and conditions hereof.

  

	2.3	Upon the Completion of Transaction, KSCP shall be converted from a Sino-foreign joint venture company (“JV”) to a wholly foreign-owned enterprise
(“WFOE”), 100% owned by the Buyer. 

  
 5 

			
	 SPA
	 	KSCP

  

 The shareholding ratio in KSCP, as of the date hereof and immediately after the
Completion of Transaction, has been set forth in below table: 
  

									
	 	  	Current	 	 	Post-Transaction	 
	 The Buyer
	  	 	50	% 	 	 	100	% 
	 The Selling Shareholder
	  	 	50	% 	 	 	0	% 

 Article 3 Purchase Price and Payments 

 

	3.1	The purchase price for the Shares is Twenty Five Million US Dollars (US$ 25,000,000.00) (the “Purchase Price”) payable on the terms set forth in
Section 3.3 of this Agreement. The Parties agree that the Purchase Price shall be in US dollars. Both Parties acknowledge and agree that the Purchase Price is the sole and fixed amount to be paid by the Buyer to the Selling Shareholder, and
neither the Buyer nor any of its affiliates (including KSCP) shall be responsible for any future or additional payment to the Selling Shareholder with respect to the Transaction under this Agreement. 

 

	3.2	Each Party shall be responsible for payment of any taxes or other governmental charges or levies, imposed on such Party in accordance with the applicable laws in
connection with the Transaction. 

 Each Party and KSCP shall be responsible for payment of all relevant expenses
and fees (including but not limited to the financial costs, bank charges, travel expenses and professional fees, etc) incurred by such Party or KSCP, as applicable, in connection with the Transaction, unless otherwise agreed by the Parties in the
Escrow Agreement. 
  

	3.3	The Buyer shall direct the payments of the Purchase Price as follows: 

  

	 	3.3.1	 First Payment: US$ 10,000,000 shall be wired out by the Buyer to the Escrow Account on the Signing Date; On the conditions that (1) the
Transaction has been approved by the Approving Authority (2) the whole set of documents required for the relevant AIC registration (the list of such documents has been attached to this Agreement as Exhibit 2) have been duly prepared and
executed by 

  
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	 SPA
	 	KSCP

  

	 	
the relevant Parties (3) all the chops, books and records of KSCP (the list of such documents and items has been attached to this Agreement as Exhibit 3) have been fully delivered to an
employee of KSCP designated by the Buyer (4) the Special FCY Account of Domestic Assets Realization has been duly established by the Selling Shareholder, in accordance with the Escrow Agreement, both Parties shall execute the Release Notice (as
such term defined in the Escrow Agreement) to the Escrow Agent dictating the release of the First Payment from the Escrow Account to the Special FCY Account of Domestic Assets Realization duly opened by Kanghong. 

 

	 	3.3.2	Second Payment: US$ 2,500,000 on or prior to December 31, 2013; Third Payment: US$ 3,500,000 on or prior to September 30, 2014; and Fourth Payment: US$
9,000,000 on or prior to September 1, 2015. 

 Once the Approval is granted and the First Payment is released
from the Escrow Account to the Special FCY Account of Domestic Assets Realization duly opened by the Selling Shareholder as provided in section 3.3.1, the Buyer shall strictly and unconditionally comply with the Second, Third and Fourth Payments as
set forth in this section 3.3.2 which shall not be subject to any other approval from the Approving Authority. 
 Article 4 Conditions
Precedent 
 The Completion of Transaction contemplated by this Agreement shall be subject to the following conditions precedent:

  

	4.1	All necessary or required consents and approvals from relevant corporate bodies of the Selling Shareholder authorizing the Completion of Transaction contemplated by
this Agreement have been obtained by the Selling Shareholder; 

  

	4.2	All necessary or required consents and approvals from relevant corporate bodies of the Buyer authorizing the Completion of Transaction contemplated by this Agreement
have been obtained by the Buyer; 

  

	4.3	The Parties’ respective representatives and warranties in Article 6 shall be true and correct as of the Completion Date of Transaction as if given on such date
immediately prior to the Completion of Transaction; 

  
 7 

			
	 SPA
	 	KSCP

  

	4.4	If there are any required third-party consents to be obtained by the Selling Shareholder in connection with the Transaction, such consents have been obtained and are
valid and effective and in a form reasonably acceptable to the Buyer; 

  

	4.5	The Board of Directors of KSCP has passed resolutions approving the Transaction in accordance with the terms and conditions of this Agreement and related matters;

  

	4.6	The Approving Authority has approved the Transaction; and 

  

	4.7	The Buyer has fully and timely paid the First Payment according to section 3.3.1 of this Agreement, and the Share Pledge Agreement has been duly signed by the Parties
and approved by the Approving Authority. 

 When the above conditions precedent are satisfied and the changes related to the
Transaction are registered at the AIC, the Transaction shall be deemed consummated and completed. 
 Article 5 Undertakings

  

	5.1	The Selling Shareholder hereby undertakes: 

  

	 	5.1.1	To endeavor to assist KSCP to apply for the necessary approvals in the PRC required for the Transaction; 

 

	 	5.1.2	To endeavor to assist KSCP to register the changed shareholding and other changes related to the Transaction with the AIC; 

 

	 	5.1.3	To instruct its appointed directors to vote for the Transaction at the board meeting of KSCP; 

 

	 	5.1.4	To withdraw its appointed directors from KSCP’s Board of Directors which shall be effective immediately upon Completion of Transaction; during the period from the
date the Transaction has been approved by the Approving Authority to the Completion Date of Transaction, to arrange a proxy authorizing the Buyer’s designee directors to exercise all the powers of the designee directors of the Selling
Shareholder. 

  
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	 SPA
	 	KSCP

  

	 	5.1.5	According to section 3.3.1 of this Agreement and the relevant provisions of the Escrow Agreement, to return all the chops, stamps, licenses, approval documents,
certificates, permits, contracts, agreements and other documents which are the property of KSCP but are currently under the custody of the staff designated by the Selling Shareholder to the management staff of KSCP designated by the Buyer, and no
photocopies or soft copies thereof shall be retained by the Selling Shareholder, except (1) the materials clearly listed in the Exhibit 4 attached to this Agreement, and (2) the relevant contracts, articles of association, agreements,
approval documents, certificates and permits in respect of KSCP, originals or photocopies if the originals shall be delivered to the staff of KSCP designated by the Buyer, where the Selling Shareholder has been a contracting party up to the
Completion Date of Transaction; 

  

	 	5.1.6	The Selling Shareholder and its Affiliated Parties shall not (either alone or jointly with another, either directly or indirectly) continue or be engaged in or invest
in any Competing Business during a period of two (2) years commencing immediately after the Completion of Transaction. Competing Business means a business which involves any business the same as or substantially similar to those which have been
carried out by KSCP as of the Completion Date of Transaction (in particular small molecule generic pharmaceuticals to be developed, manufactured, marketed, sold or being developed, manufactured, marketed, sold, in relation to or for the US market),
except the aforesaid type of products that have been developed, manufactured, marketed or sold by the Selling Shareholder as of the date hereof which have been expressly listed in the Exhibit 5 attached to this Agreement. 

 

	 	5.1.7	The Selling Shareholder, and its Affiliated Parties, shall not within a period of two (2) years commencing immediately after the Completion of Transaction,
directly or indirectly, solicit or endeavor to entice away from KSCP, offer employment to or employ, or offer or conclude any contract for services with, any person who was employed by KSCP at any time during the six (6) months immediately
prior to the Completion Date of Transaction. The aforesaid non-solicitation restriction shall not apply to those persons assigned by the Selling Shareholder to KSCP during the establishment of KSCP and who continue to be employed by KSCP as of the
date hereof, as listed on Exhibit 6 to this Agreement, the relevant employment contracts shall be duly terminated with KSCP and re-entered with the Selling Shareholder according to the applicable laws and regulations. 

  
 9 

			
	 SPA
	 	KSCP

  

	5.2	The Buyer hereby undertakes: 

  

	 	5.2.1	To endeavor to assist KSCP to apply for the necessary approvals in the PRC required for the Transaction; 

 

	 	5.2.2	To endeavor to assist KSCP to register the changed shareholding and other changes related to the Transaction with the AIC; 

 

	 	5.2.3	To instruct its appointed directors to vote for the Transaction at the board meeting of KSCP; 

 

	 	5.2.4	To require KSCP to immediately apply to change its name, apply to change or cancel its registered trademark after the Completion of Transaction and following the change
of name, KSCP’s name, trademark or any advertising shall no longer include or use

 “KangHong” or “KH”. The Buyer shall make all reasonable efforts to assist KSCP to complete the name change and trademark change within six (6) months after the Completion of Transaction;

  

	 	5.2.5	To require KSCP to return the assets of the Selling Shareholder which are currently occupied or used by KSCP (the list of such assets is attached to this Agreement as
Exhibit 7) immediately following the Completion of Transaction; and to make all reasonable efforts to ensure KSCP no longer occupies or uses any assets of the Selling Shareholder after the Completion of Transaction except as agreed by the Parties
otherwise; 

  

	 	5.2.6	After the Completion of Transaction, the Selling Shareholder is entitled to keep and use the technical data, information and materials which have been developed or used
by KSCP in its R&D, manufacturing or operationto the extent specifically identified on Exhibit 4 attached to this Agreement. The Selling Shareholder may independently develop new technologies based on such data, information and materials in the
future, in such case, the Selling Shareholder shall have the relevant intellectual property rights of the newly developed technologies. 

  
 10 

			
	 SPA
	 	KSCP

  

	5.3	Both Parties agree and undertake to make all efforts to effectuate the registrations of the changes related to the Transaction with the AIC as promptly as practicable
(but in no event later than [60] days) after the Signing Date. 

 Article 6 Representations and Warranties

  

	6.1	Selling Shareholder’s Representations and Warranties to the Buyer: 

  

	 	6.1.1	The Selling Shareholder is the only legal and beneficial owner of the Shares and the Shares constitute 50% of the issued and registered share capital of KSCP. All
Shares are fully paid up. 

  

	 	6.1.2	The Selling Shareholder has good and valid title to the Shares, free and clear of any and all Encumbrances. The Selling Shareholder is not a party to any option,
warrant, purchase or offer or refusal right, contract, arrangement or understanding (other than this Agreement) that could require the Selling Shareholder to sell, transfer or otherwise dispose of the Shares (the options to purchase the Incentive
Shares granted according to KSCP 2007 Employee Stock Option Plan shall be excluded). 

  

	 	6.1.3	Subject to the approval from relevant corporate bodies, the Selling Shareholder has the requisite power and authority to enter into and perform its obligations under
this Agreement. 

  

	 	6.1.4	This Agreement and any other documents executed by the Selling Shareholder in connection with the Transaction, when entered into and delivered, shall constitute binding
obligations of the Selling Shareholder and shall be enforceable against the Selling Shareholder in accordance with their respective terms. 

  

	 	6.1.5	The execution of and entering into, and the performance of, and compliance with, this Agreement and the Completion of Transaction contemplated hereby, will not violate
any provision of the articles of association or other corporate governance documents of the Selling Shareholder, or conflict with, or result in a breach of, or constitute a default under any agreement between any third party, on the one hand, and
the Selling Shareholder or KSCP, on the other hand, or result in the imposition of any Encumbrances on the Shares or any material assets of KSCP, and the Selling Shareholder is not required to obtain any third party’s prior consent in
connection therewith (and if any such consent is necessary, the Selling Shareholder shall have obtained the same). 

  
 11 

			
	 SPA
	 	KSCP

  

	 	6.1.6	To the best of its knowledge, KSCP is duly incorporated, organized and validly existing in accordance with the PRC law. 

 

	 	6.1.7	There are no claims, actions, suits, litigations or other proceedings pending or, to the knowledge of the Selling Shareholder, threatened, which, if adversely
determined, would reasonably be expected to prevent, materially impair or delay the Transaction or the performance of the Selling Shareholder’s obligations under this Agreement. 

 

	 	6.1.8	The Selling Shareholder does not own any assets that are used by KSCP and is not a party to any contracts, indebtedness or any other commercial arrangements with KSCP
that will continue following the Transaction. 

  

	6.2	Buyer’s Representations and Warranties to the Selling Shareholder: 

  

	 	6.2.1	Subject to the approval from relevant corporate bodies, the Buyer has the requisite power and authority to enter into and perform its obligations under this Agreement.

  

	 	6.2.2	This Agreement and any other documents executed by the Buyer, when entered into and delivered, will constitute binding obligations of the Buyer and will be enforceable
against the Buyer in accordance with their respective terms. 

  

	 	6.2.3	There are no claims, actions, suits, litigations or other proceedings pending or, to the knowledge of the Buyer, threatened, which, if adversely determined, would
reasonably be expected to prevent, materially impair or delay the Transaction or the performance of the Buyer’s obligations under this Agreement. 

  

	 	6.2.4	To the best of its knowledge, KSCP is duly incorporated, organized and validly existing in accordance with the PRC law. 

 

	6.3	Both Parties give the above representations and warranties to each other as at Signing Date and at Completion Date of Transaction (as of immediately prior to the
Completion of Transaction). 

  
 12 

			
	 SPA
	 	KSCP

  

 Article 7 Breach of Agreement 

 

	7.1	If any Party is in breach of any provision of this Agreement, including the representations, warranties or undertakings hereunder, the breaching Party shall indemnify
the other Party for the losses suffered by the other Party as a result of such breach, and/or act timely to rectify such breach. 

  

	7.2	Any payments owing from the Selling Shareholder to the Buyer due to a breach of Selling Shareholder but not yet paid shall be applied as an offset to, and reduce the
amount of, the next outstanding payment(s) of the Purchase Price, unless the Selling Shareholder has made the payment of the damages before the next payment due date of the Purchase Price. 

 

	7.3	Where the Buyer does not make the relevant due payment in a timely manner according to Article 3.3 of this Agreement, the Buyer shall be charged penalty interest for
the delayed payment of 0.03% each day of the overdue payables until payment is made. Where the payment is overdue for more than thirty (30) days, the Selling Shareholder shall be entitled to excise its rights pursuant to and in accordance with
the Share Pledge Agreement. 

  

	7.4	Except in the event of fraud or willful misconduct, the remedies provided in this Article are the exclusive remedies available to the Parties with respect to any breach
of this Agreement by either of the Parties. In particular the Parties shall not be entitled to rescind the Agreement. 

Article 8 Confidentiality 
 The
terms of this Agreement and all the undisclosed information of KSCP are confidential and all disclosures made by the Parties must be regarded as confidential. Confidential information received by either Party, including all information related to
KSCP except for any information that has been previously disclosed, must be kept strictly confidential to a standard not less than that which the receiving Party applies to its own confidential information and no less than reasonably expected. No
announcement or other disclosure may be made concerning the contents of this Agreement or any ancillary matter except: 
  

	a)	as required by law or any regulatory authority; or 

  

	b)	with the prior written approval of other Party; or 

  

	c)	to a Party’s professional advisors. 

  
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	 SPA
	 	KSCP

  

 Article 9 No Assignment 
 Neither the Agreement nor any rights and/or interests according to this Agreement are assignable by either of the Parties without the prior consent of the non-assigning Party. 

Article 10 Notice 
  

	10.1  	Any notice or other correspondence under this Agreement between the Selling Shareholder and the Buyer (“Notice”) shall be made in writing (delivered
personally, by post, fax or e-mail) and delivered to the notified party in accordance with the following address or number and shall constitute a valid notice only if the name of the contact person is specified: 

the Selling Shareholder: CHENGDU KANGHONG PHARMACEUTICALS (GROUP) CO., LTD 

Contact person: Yingmei He

 
 Address: No.36 Shuxi Road, Jinniu District, Chengdu City, Sichuan Province 

Postal code: 610036 
 Tel: +86 28 8751 7984 
 Fax: +86 28 8751 3956 

Email: hym@cnkh.com 
 the Buyer: SAGENT PHARMACEUTICALS, INC. 
 Contact person: Michael Logerfo, EVP and
Chief Legal Officer 
 Address: 1901 North Roselle Road, Suite 700, Schaumburg, IL 60195 

Postal code: IL 60195 
 Tel: +1-847-908-1608 
 Fax: +1-847-908-1808 

Email: mlogerfo@sagentpharma.com 
 If any of the above details are changed, the Party shall notify the other Party of the change in writing within seven (7) days in accordance with the foregoing notice requirements, otherwise, the
notice sent to its original address or numbers shall be deemed as valid. 

  
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	 SPA
	 	KSCP

  

	10.2	  The date and time of service of notices delivered as above shall be determined as follows: 

 

	 	a)	Any notice delivered personally shall be deemed as served when being signed by the recipient and not served without signature of the recipient;

  

	 	b)	Any posted or couriered notice shall be delivered by way of registered mail, express mail or courier, and shall be deemed as served 48 hours after the receipt signature
obtained from the recipient or the representative of the recipient (postponed accordingly in case of any public holidays); 

  

	 	c)	Any notice sent by fax or e-mail shall be deemed as served upon a delivery confirmation obtained. When the notice is sent on a public holiday, it shall be deemed as
served on the first following Working Day. 

 Article 11 Governing Law and Dispute Resolution 

 

	11.1  	This Agreement shall be governed by, interpreted under and construed in all respects in accordance with the PRC laws. If any part of this Agreement is held to be
invalid or unenforceable, the unenforceable or invalid part shall be construed in accordance with applicable law to the greatest extent possible to reflect the original intent of the Parties, and the remainder of the provisions of this Agreement
shall remain in full force and effect. 

  

	11.2  	In the event that the Dispute cannot be resolved amicably, any Party may submit such Dispute to arbitration in Singapore by the International Chamber of Commerce (the
“ICC”) in accordance with the rules of the ICC. The arbitral tribunal shall be composed of three (3) arbitrators. In accordance with ICC rules and procedures, the Selling Shareholder and the Buyer shall each be entitled to appoint one
(1) arbitrator and the ICC shall appoint the third arbitrator as chairman who shall not be a national of the country of incorporation of either of the Selling Shareholder or the Buyer. All arbitral proceedings shall be conducted in both Chinese
and English. Any award made by the arbitral tribunal shall be final and binding on the Parties who hereby exclude any right of appeal to any court which might otherwise have jurisdiction in respect of the matter. The Parties shall cause KSCP to
comply with the arbitral award in case the enforcement of such arbitral award requires actions from KSCP. 

  
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	 SPA
	 	KSCP

  

 The costs of arbitration, including fees for legal counsel, shall be borne by the losing
Party, unless otherwise determined by the arbitral award. 
 Article 12 Miscellaneous 

 

	12.1  	Amendment. Except as otherwise provided herein, this Agreement shall not be amended, modified, cancelled or terminated except by a written instrument duly executed by
each of the Parties. 

  

	12.2  	Entireness. This Agreement constitutes the entire and definitive agreement between the Parties relating to the Transaction and supersedes all previous agreements,
intent, negotiations and discussions between the Parties relating to the subject matter hereof. 

  

	12.3  	The failure to exercise or delay in exercising a right or remedy under this Agreement shall not constitute a waiver of the right or remedy or a waiver of any other
rights or remedies and no single or partial exercise of any right or remedy under this Agreement shall prevent any further exercise of the right or remedy or the exercise of any other rights or remedies. 

 

	12.4  	Language. Both Mandarin Chinese and English versions of this Agreement shall be executed with each version having the same legal effect. Both Parties shall not claim
rights against another or make interpretations in favor of itself based on the difference between the Chinese and English versions. This Agreement is made in [16] originals, [8] in Chinese and [8] in English. 

 

	12.5  	Effectiveness. This Agreement and its Exhibits shall be effective upon the Approval granted by the Approving Authority. Both Parties agree that the Approval from the
Approving Authority shall be obtained within one (1) month after the Signing Date. If the Approval cannot be obtained during such time period, unless otherwise agreed in written by both Parties to extend such time limit, the Transaction shall
be rescinded and there is no breach by any Party. 

  
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	 SPA
	 	KSCP

  

 SIGNATURE PAGE 
 IN WITNESS WHEREOF each of the Parties hereto has caused this Agreement to be executed by its duly authorized representative on the date first set forth above. 

 

			
	/s/ Zunhong Ke	 	/s/ James Hussey
	 Name: Zunhong Ke
 For and on
behalf of
	 	 Name: James Hussey
 For and
on behalf of

	  
 CHENGDU KANGHONG

PHARMACEUTICALS (GROUP) CO. LTD
	 	SAGENT PHARMACEUTICALS, INC.

  
 17EX-10.2

 Exhibit 10.2 

 

			
	Share Pledge Agreement	  	KSCP

  

 

 SHARE PLEDGE AGREEMENT 

This Share Pledge Agreement (hereinafter this “Agreement”) is dated April 30, 2013, and is entered into by and between CHENGDU KANGHONG
PHARMACEUTICALS (GROUP) CO. LTD (the “Pledgee”), and SAGENT PHARMACEUTICALS, INC. (the “Pledgor”), a shareholder of KANGHONG SAGENT (CHENGDU) PHARMACEUTICAL CORPORATION LIMITED (“KSCP”). 

WHEREAS: 
  

	1.	Pledgee is a company duly incorporated and existing under the laws of PRC, having its business address at No. 36 Shuxi Road, Jinniu District, Chengdu City, Sichuan
Province, China. 

  

	2.	Pledgor is a company duly incorporated and existing under the laws of Delaware, having its business address at 1901 North Roselle Road, Suite 700, Schaumburg, IL60195.

  

	3.	KSCP is a Sino-foreign joint venture company under the laws of the PRC, with its registered address at Suite 302, Building 2, 8 Kexin Road, West Zone, Chengdu High
Technology Industrial Development Zone, Sichuan, China. Pledgor is legally holding 50% shareholding in KSCP. 

  

	4.	Pledgee and Pledgor (the “Buyer” for the purpose of the Share Purchase Agreement) have executed a Share Purchase Agreement dated April 30, 2013 (the
“SPA”), pursuant to which Pledgor/Buyer shall pay a purchase price in total of Twenty Five Million US Dollars (US$ 25,000,000.00) (the “Purchase Price”) to Pledgee/Selling Shareholder for sale of Shares (as defined in the SPA) in
KSCP. 

  

	5.	In order to ensure that Buyer will perform its payment obligations under section 3.3.2 of the SPA, i.e. the Second, Third and Fourth Payments, in total of Fifteen
Million US Dollars (US$ 15,000,000.00) (the “Remaining Amount of the Purchase Price”), Pledgor agrees to pledge 70% of the Shares (50% shares of KSCP) purchased by the Pledgor pursuant to the SPA (i.e. 50% x 70% = 35% shares of KSCP) to
Pledgee as security for its performance of the obligations of the payments of the Remaining Amount of the Purchase Price under the SPA. 

 NOW THEREFORE, in consideration of the mutual covenants and agreements, Pledgee and Pledgor covenant and agree as follows: 
  

	1.	Definitions and Interpretations 

The terms cited but not specifically defined in this Agreement shall have the same definitions contained in the SPA. Additionally, unless otherwise
provided in this Agreement, the following terms shall have the following meanings: 
  

	1.1	“Pledge” refers to the full content of Section 2 hereinafter. 

  
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	1.2	“Pledged Shares” refers to 70% of the Shares (50% shares of KSCP) purchased by the Pledgor from the Pledgee pursuant to the SPA (i.e. 50% x 70% = 35% shares
of KSCP). 

  

	1.3	“Term” refers to the period provided on Article 3 hereinafter. 

  

	1.4	“Event of Default” refers to any event in accordance with Section7.1 hereinafter. 

 

	1.5	“Notice of Default” refers to the notice of default issued by Pledgee in accordance with this Agreement. 

 

	1.6	“PRC Laws” refers to the laws, regulations, rules, guidelines, decrees or directives of the PRC (for the purpose of this Agreement, excluding Hong Kong
Special Administrative Region, Macao Special Administrative Region and Taiwan) or issued by any local government, court, or other government agencies in the PRC. 

 

	2.	The Pledge 

 Pledgor hereby pledges
the Pledged Shares to Pledgee as a security for the obligations of the Buyer to pay the Remaining Amount of the Purchase Price under the SPA(the “Pledge”). Pursuant to this Agreement and the relevant PRC Laws, Pledgee shall
have priority in receiving payments from the proceeds from the auction or sale of the Pledged Shares. The Pledged Shares can hereinafter be referred to as the “Pledged Collateral”. 

 

	3.	Term 

  

	3.1	This Agreement shall become effective as of the date when the Pledge is approved by The Chengdu Hi-Tech Industrial Development Zone Bureau of Investment Services (the
“Approving Authority”); and the Pledge shall become effective as of the date when the Pledge is registered with Chengdu Hi-Tech Zone Administration for Industry and Commerce (the “AIC”). The Pledge shall be released pursuant to
Article 3.4 herein. 

  

	3.2	Pledgee shall be entitled to dispose of the Pledged Collateral in accordance with this Agreement and the relevant PRC Laws, solely in the event that Pledgor/Buyer fails
to pay the Remaining Amount of the Purchase Price on time and in full under the section 3.3.2 of the SPA and such failure to pay continues for more than thirty (30) days. 

 

	3.3	During the Term, Pledgee shall be entitled to collect any and all dividends declared or paid in connection with the Pledged Collateral. Dividends declared and paid in
connection with the Pledged Collateral shall be used to set off against the remaining due amount of the Purchase Price, with the maximum amount not exceeding the sum of the remaining due amount of the Purchase Price and the relevant penalty interest
(if any) thereof. 

  

	3.4	 Pledgee agrees that the Pledge shall be unconditionally released step by step,

  
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subject to the payments of the Remaining Amount of the Purchase Price as follows: 

  

	3.4.1	5.83% shares of the Pledge hereunder shall be discharged immediately after the Pledgor makes the Second Payment of the Purchase Price (US$ 2,500,000.00) and the
relevant penalty interest (if any) thereof; 

  

	3.4.2	8.17% shares of the Pledge hereunder shall be discharged immediately after the Pledgor makes the Third Payment of the Purchase Price (US$ 3,500,000.00) and the relevant
penalty interest (if any) thereof; 

  

	3.4.3	21% shares of the Pledge hereunder shall be discharged immediately after the Pledgor makes the Fourth Payment of the Purchase Price (US$ 9,000,000.00) and the relevant
penalty interest (if any) thereof. 

  

	3.4.4	The Pledgee shall take all necessary actions and execute all necessary documents to endeavor to assist the Pledgor and KSCP to complete the registration to cancel the
Pledge within three (3) working days after any portion of the Pledge is discharged in accordance with this Section 3.4. 

  

	4.	Pledge Procedure and Registration 

This Agreement shall not be effective unless and until approved by the Approving Authority. Pledgor, Pledgee and KSCP shall submit the Pledge to the
Approving Authority to apply for the approval at the same time of share transfer application in respect of the Transaction (as such term is defined under the SPA). The Pledge registration application shall be submitted to the AIC at the same time
of, or at the latest within ten (10) days after, the AIC registration application in respect of the Transaction. 
  

	5.	Representations and Warranties of the Pledgor 

 On account of the Pledgee’s representations and warranties as the Selling Shareholder to the Buyer for the Shares in the SPA, Pledgor has full legal title to the Pledged Collateral and the Pledged
Collateral are free from all liens, pledges, charges, rights of pre-emption, limitations on rights and third party rights which may result in Pledgor’s inability to Pledge all of the Pledged Collateral to Pledgee after the completion of the
registration at the AIC in respect of the Transaction (as such term is defined under the SPA), however, the options to purchase the Incentive Shares granted according to KSCP 2007 Employee Stock Option Plan shall be excluded. 

 

	6.	Covenants of Pledgor 

  

	6.1	During the Term, Pledgor agrees that, for Pledgee’s benefit, Pledgor shall 

 

	6.1.1	not transfer or assign the Pledged Collateral, nor create or permit to create any pledge or encumbrance to the Pledged Collateral which may adversely affect the rights
and/or benefits of Pledgee under this Agreement, without Pledgee’s prior written consent. 

  
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	6.1.2	Comply with the relevant applicable laws and regulations with respect to the Pledge; notify Pledgee of any notice, order or announcement with respect to the Pledge that
has been issued or made by a competent PRC authority within five (5) days upon receiving such notice, order or announcement; comply with such notice, order or announcement; or object to the foregoing matters upon the reasonable request from
Pledgee or with consent from Pledgee. 

  

	6.1.3	Timely notify Pledgee of any events which may affect the Pledged Collateral or Pledgor’s rights thereto, or which may change any of Pledgor’s warranties or
affect Pledgor’s performance of its obligations under this Agreement, in each case, in a material and adverse manner. 

  

	6.2	Pledgor agrees that in order to protect and perfect the security for the payment of the Remaining Amount of the Purchase Price, Pledgor shall execute in good faith and
cause other parties who have interests in the Pledged Collateral to execute all the title certificates, contracts, and perform actions and cause other parties (if any) who have interests to take action, as reasonably required by Pledgee.

  

	6.3	Pledgor agrees to execute all applicable and required amendments in connection with the approval and/or registration of the Pledge, and within a reasonable amount of
time upon request, provide the relevant notice, order or decision regarding such registration to Pledgee. 

  

	6.4	Pledgor agrees to abide by and perform all relevant guarantees, covenants, warranties, and conditions required to be abided or performed by it under this Agreement.
Pledgor shall compensate all direct losses suffered by Pledgee as a result of Pledgor’s failure to perform any such guarantees, covenants, warranties, or conditions. 

 

	7.	Events of Default 

  

	7.1	The occurrence of any one of the following events shall be regarded as an “Event of Default ”: 

 

	7.1.1	Pledgor is incapable of continuing to perform the obligations herein due to any reason except force majeure or the reason(s) attributable to the Pledgee;

  

	7.1.2	Pledgor/Buyer fails to timely pay the Remaining Amount of the Purchase Price in full as required under section 3.3.2 of the SPA and such failure has not been rectified
within the Grace Period (as defined in below section 7.3); 

  

	7.1.3	Pledgor makes any materially false or misleading representations or warranties under Section 5 herein, or breaches any warranties under Section 5 herein;

  

	7.1.4	Pledgor breaches any of the covenants under Section 6 herein in any material respect; 

 

	7.1.5	Pledgor breaches any terms and conditions of this Agreement in any material respect; 

  
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	7.1.6	Pledgor transfers or assigns, causes to be transferred or assigned, or abandons the Pledged Collateral without the prior written consent of Pledgee;

  

	7.1.7	The successors or agents of Buyer refuse, or are only partly able, to perform the payment obligations of the Remaining Amount of the Purchase Price under the SPA.

  

	7.2	Pledgor shall immediately give a written notice to the Pledgee if Pledgor is aware of or discovers that any event under Section 7.1 herein has occurred or is
reasonably likely to occur. 

  

	7.3	Unless an Event of Default has been resolved within thirty (30) days of the date on which Pledgor first becomes aware of or discovers the Event of Default (the
“Grace Period”), Pledgee may, at any time thereafter, give a written default notice (the “Default Notice”) to Pledgor and require Pledgor to make full payment of the then outstanding Purchase Price in accordance with the
provisions in the SPA within (30) days of the date when such Default Notice takes effect, such Default Notice shall not be effective until it is duly delivered to the Pledgor according to Article 14 of this Agreement and the default remains
uncured upon the receipt of such Notice. 

  

	8.	Exercise of Remedies 

  

	8.1	Where the Pledgor fails to rectify the Event of Default within the Grace Period and fails to make the Payment of the due amount as required in the Default Notice within
(30) days of the date when such Default Notice takes effect, the Pledgee may dispose of the Pledged Collateral by giving an express written notice to the Pledgor and KSCP. In such case, the Pledgor and KSCP shall cooperate with the Pledgee and
shall execute all necessary documents and take necessary actions according to the applicable laws and regulations to facilitate the Pledgee to exercise its rights on the Pledged Collateral. In any case, the payments to be received by the Pledgee in
relation to the disposal of the Pledged Collateral shall not exceed the outstanding due amount of the remaining Purchase Price pursuant to the SPA. 

  

	8.2	Pledgor shall not prohibit Pledgee from exercising its rights in accordance with this Agreement and shall give reasonable assistance requested by Pledgee in order to
facilitate Pledgee’s exercise of its rights under this Agreement. 

  

	9.	Assignment 

  

	9.1	Neither Party shall assign or otherwise transfer the rights and obligations herein without the other Party’s prior written consent. 

 

	9.2	This Agreement shall be binding upon Pledgor and its respective successors and permitted assignees, and shall be binding on Pledgee and each of its successors and
permitted assignees. 

  
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	9.3	Upon the transfer or assignment by Pledgee of any or all of its rights and obligations in accordance with the SPA, Pledgee’s transferee or assignee shall enjoy and
undertake the same rights and obligations as Pledgee under this Agreement. Pledgor shall be notified of any such transfer or assignment by written notice and at the request of Pledgee, Pledgor shall execute such relevant agreements and/or documents
with respect to such transfer and/or assignment. 

  

	10.	Formalities, Fees and Other Charges 

Each Party shall be responsible for payment of any taxes or other governmental charges and levies, imposed on such Party in accordance with the applicable
laws and regulations in connection with the Agreement. 
  

	11.	Force Majeure 

  

	11.1	“ Force Majeure ” shall include, but not be limited, to acts of governments, acts of nature, fire, explosion, typhoon, flood, earthquake, tide, lightning,
war, and any unforeseen events beyond a Party’s reasonable control or which cannot be prevented with reasonable care. However, any shortage of credit, capital or finance shall not be regarded as an event beyond a Party’s reasonable
control. A Party affected by Force Majeure shall promptly notify the other Party of such event in order to be exempted from such Party’s obligations under this Agreement. 

 

	11.2	In the event that the affected Party is delayed or prevented from performing its obligations under this Agreement due to Force Majeure, the affected Party shall not be
responsible for any damage caused by the delay or prevention of such performance, as long as such damage is within the scope of such delay or prevention. The affected Party shall take appropriate means to minimize or remove the effects of Force
Majeure and attempt to resume performance of the obligations delayed or prevented by Force Majeure. When such Force Majeure ceases to exist, both Parties covenant and agree to resume the performance of this Agreement with their reasonable best
efforts. 

  

	12.	Confidentiality 

 The Parties
hereby acknowledge and agree to ensure the confidentiality of all oral and written materials exchanged relating to this Agreement. No Party shall disclose any confidential information to any other third party without the other Parties’ prior
written approval, unless : (a) such information was in the public domain at the time it was communicated (unless it entered the public domain without the authorization of the disclosing Party); (b) the disclosure was in response to the
relevant laws, regulations, or stock exchange rules; or (c) the disclosure was required by any of the Party’s legal counsel or financial consultant for the purpose of the transaction underlying this

  
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Agreement. However, such legal counsel and/or financial consultant shall also comply with the confidentiality as stated hereof. The disclosure of confidential information by employees or agents
of the disclosing Party is deemed to be an act of the disclosing Party, and such disclosing Party shall bear all liabilities for any breach of confidentiality. 
  

	13.	Dispute Resolution 

  

	13.1	This Agreement shall be governed by and construed in accordance with the PRC Laws. 

 

	13.2	In the event that the Dispute cannot be resolved amicably, any Party may submit such Dispute to arbitration in Singapore by the International Chamber of Commerce (the
“ICC”) in accordance with the rules of the ICC. 

  

	13.3	The arbitral tribunal shall be composed of three (3) arbitrators. In accordance with ICC rules and procedures, the Pledgee and the Pledgor shall each be entitled
to appoint one (1) arbitrator and the ICC shall appoint the third arbitrator as chairman who shall not be a national of the country of incorporation of either of the Pledgee or the Pledgor. All arbitral proceedings shall be conducted in both
Chinese and English. 

  

	13.4	Any award made by the arbitral tribunal shall be final and binding on the Parties who hereby exclude any right of appeal to any court which might otherwise have
jurisdiction in respect of the matter. The Parties shall cause KSCP to comply with the arbitral award in case the enforcement of such arbitral award requires actions from KSCP. 

 

	13.5	The costs of arbitration, including fees for legal counsel, shall be borne by the losing Party, unless otherwise determined by the arbitral award.

  

	14.	Notices 

  

	14.1	Any notice or other correspondence under this Agreement between the Pledgee and the Pledgor (“Notice”) shall be made in writing (delivered personally, by
post, fax or e-mail) and delivered to the notified party in accordance with the following address or number and shall constitute a valid notice only if the name of the contact person is specified: 

the Pledgee: CHENGDU KANGHONG PHARMACEUTICALS (GROUP) CO., LTD 
 Contact person: Yingmei He (何映梅) 
 Address: No.36 Shuxi Road,
Jinniu District, Chengdu City, Sichuan Province 
 Postal code:610036 

Tel:+86 28 8751 7984 
 Fax:+86 28 8751 3956 

  
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 Email: hym@cnkh.com 

the Pledgor: SAGENT PHARMACEUTICALS, INC. 
 Contact person: Michael Logerfo, EVP and Chief Legal Officer 
 Address: 1901 North
Roselle Road, Suite 700, Schaumburg, IL 60195 
 Postal code:IL 60195 

Tel:+1-847-908-1608 
 Fax:+1-847-908-1808 
 Email: mlogerfo@sagentpharma.com 

If any of the above details are changed, the Party shall notify the other Party of the change in writing within seven (7) days in
accordance with the foregoing notice requirements, otherwise, the notice sent to its original address or numbers shall be deemed as valid. 
  

	14.2	The date and time of service of notices delivered as above shall be determined as follows: 

Any posted or couriered notice shall be delivered by way of registered mail, express mail or courier, and shall be deemed as served 48
hours after the receipt signature obtained from the recipient or the representative of the recipient (postponed accordingly in case of any public holidays); 
 Any notice sent by fax or e-mail shall be deemed as served upon a delivery confirmation obtained. When the notice is sent on a public holiday, it shall be deemed as served on the first following working
day. 
  

	15.	Entire Agreement 

 The Parties
agree that this Agreement constitutes the entire agreement of the Parties upon its effectiveness and supersedes all prior oral and/or written agreements and understandings relating to the subject matter hereof. 

 

	16.	Severability 

 If any provision or
provisions of this Agreement shall be held by a proper authority to be invalid, illegal, unenforceable or in conflict with the laws and regulations of the PRC, the validity, legality and enforceability of the remaining provisions shall not in any
way be affected or impaired thereby. 
  

	17.	Amendment or Supplement 

  

	17.1	The Parties may amend this Agreement in writing, provided that such amendment shall be duly executed and signed by Pledgee, and Pledgor, and such amendment shall
thereupon become a part of this Agreement and shall have the same legal effect as this Agreement. 

  
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	17.2	This Agreement shall come into effect on the date when it is approved by the Approving Authority. The Pledge created by this Agreement shall come into effect on the
date when the Pledge hereunder is registered at the AIC. 

  

	18.	Language and Copies of the Agreement 

 This Agreement shall be executed in Chinese and English with both languages equally binding. This Agreement is made in [16] originals, [8] in Chinese and [8] in English. 

[SIGNATURE PAGE FOLLOWS] 

  
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 SIGNATURE PAGE 
 IN WITNESS WHEREOF each of the Parties hereto has caused this Agreement to be executed by its duly authorized representative on the date first set forth above. 

 

			
	 Pledgee
  

/s/ Zunhong Ke
  
	  	 Pledgor
  

/s/ James Hussey
  

	 Name: Zunhong Ke
  

For and on behalf of
  
	  	 Name: James Hussey
  

For and on behalf of
  

	 CHENGDU KANGHONG

PHARMACEUTICALS (GROUP) CO. LTD
	  	SAGENT Pharmaceuticals, Inc.

  
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