Exhibit 10.1
SHARE PURCHASE
AGREEMENT
This SHARE PURCHASE AGREEMENT
(the “Agreement”) is made as of June 11, 2024 by and among China Jo-Jo Drugstores, Inc., a Cayman Islands exempted
company (the “Company”), the purchasers listed on Schedule A hereto (the “Schedule of Purchasers”),
each of which is herein referred to as a “Purchaser” and collectively, the “Purchasers” and, solely
for the limited and express purpose of Section 2(b), Lei Liu (“Liu”).
WHEREAS, subject to the terms
and conditions set forth in this Agreement and pursuant to an effective registration statement under the Securities Act of 1933, as amended
(the “Securities Act”), the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and
not jointly, desires to purchase from the Company, securities of the Company as more fully described in this Agreement.
NOW THEREFORE, in consideration
of the mutual agreements, representations, warranties and covenants herein contained, as well as other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged and accepted, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Definitions
(a) As
used in this Agreement, the following terms shall have the following respective meanings:
(i) “Adverse
Person” shall mean such Persons that is either (1) a Person listed (during any of the three completed calendar years
prior to the date hereof) in China Medicine Retail Company Top 100 published by the Ministry of Commerce of the PRC, or (2) a Person
listed (during any of the three completed calendar years prior to the date hereof) in China Medicine Store Chains Comprehensive Capabilities
Top 100 published by the 21st Century Medicine Store, as well as any Associate or Subsidiary of such Persons in clauses (1) or (2).
(ii) “Affiliate”
shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with
such Person. For purposes of this definition, “control” when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise,
and the terms “controlling” and “controlled” have correlative meanings.
(iii) “Associate”
shall mean, with respect to any Person, any other Person (together with any individual, firm, corporation, partnership, trust and incorporated
or unincorporated association controlling it, controlled by it or under the same control with it) which, directly or indirectly, through
voting securities or contractual arrangements or otherwise, (i) holds or has the right to acquire 25% or more of the capital stock,
either in terms of economic interests or voting power, of the Person specified; (ii) is the single largest shareholder of the Person
specified, or (iii) has the power to appoint or nominate or designate at least one-third of the members of the board of directors
(or other equivalent authority, as applicable) or one-third or more of the senior executive officers of the Person specified.
(iv) “Company
Intellectual Property” shall mean all of the Intellectual Property owned by the Company or any of its Subsidiaries.
(v) “Company
Intellectual Property Agreements” shall mean the contracts in effect as of the date of this Agreement: (i) under which
the Company or any of its Subsidiaries is granted a right to any third party’s Intellectual Property that is material to the operation
of the Company’s business as a whole, other than licenses and related services agreements for commercially available technology
or Intellectual Property, or (ii) under which the Company or any of its Subsidiaries has licensed to third parties rights under any
material Company Intellectual Property, other than customer, developer and reseller licenses and other agreements entered into in the
ordinary course of business or in connection with the sale or licensing of Company products or services.
(vi) “Company
Options” shall mean options to purchase Ordinary Share under any of the Company Stock Option Plans.
(vii) “Company
Stock Option Plan” shall mean each share option plan, share award plan, share appreciation right plan, phantom share plan, share
option, other equity or equity-based compensation plan, equity or other equity based award to any employee, whether payable in cash, shares
or otherwise (to the extent not issued pursuant to any of the foregoing plans), or other plan or contract of any nature with any employee
pursuant to which any share, option, warrant or other right to purchase or acquire shares of the Company or right to payment based on
the value of Company shares has been granted or otherwise issued.
(viii) “Exchange
Act” shall mean the U.S. Securities Exchange Act of 1934, as amended.
(ix) “FCPA”
shall mean the Foreign Corrupt Practices Act of 1977, as amended.
(x) “GAAP”
shall mean United States generally accepted accounting principles.
(xi) “Governmental
Entity” shall mean any national, provincial, state, municipal, local government, any instrumentality, subdivision, court, administrative
agency or commission or other governmental authority or instrumentality, or any quasi-governmental or private body exercising any regulatory,
taxing, importing or other governmental or quasi-governmental authority.
(xii) “Intellectual
Property” shall mean the rights associated with or arising under any of the following anywhere in the world: (i) patents
and applications therefor; (ii) copyrights, copyright registrations and applications therefor, and all other corresponding rights
in works of authorship, however denominated; (iii) rights in industrial designs and any registrations and applications therefor;
(iv) trademark rights and corresponding rights in trade names, logos and service marks, trademarks or service marks, and registrations
and applications therefor; (v) trade secrets rights and corresponding rights in confidential business and technical information and
know-how (“Trade Secrets”); and (vi) any similar or equivalent rights to any of the foregoing anywhere in the
world (as applicable).
(xiii) “Knowledge”
or any other similar knowledge qualification shall mean, the actual or constructive knowledge of such Person after due inquiry, and with
respect to any Person that is not a natural person, the actual or constructive knowledge of such Person’s directors and officers,
after due inquiry.
(xiv) “Legal
Requirements” shall mean any national, provincial, state, municipal, local or other law, statute, constitution, principle of
common law, resolution, ordinance, code, order, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated,
implemented or otherwise put into effect by or under the authority of any Governmental Entity.
(xv) “Lien”
shall mean any pledge, claim, lien, charge, encumbrance, option and security interest of any kind or nature whatsoever.
(xvi) “Material
Adverse Effect” shall mean, when used in connection with an entity, any change, event, violation, inaccuracy, circumstance or
effect that could have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability
of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition
(financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s
ability to perform in any material respect on a timely basis its obligations under any Transaction Document.
(xvii) “Nasdaq”
shall mean the Nasdaq Capital Market.
(xviii) “Ordinary
Share” shall mean an Ordinary Share of the Company, par value US$0.24 per share.
(xix) “Permits”
shall mean all permits, licenses, variances, exemptions, orders and approvals from Governmental Entities.
(xx) “Permitted
Liens” shall mean (i) statutory liens for taxes that are not yet due and payable, (ii) statutory liens to secure obligations
to landlords, lessors or renters under leases or rental agreements, (iii) deposits or pledges made in connection with, or to secure
payment of, workers’ compensation, unemployment insurance or similar programs mandated by applicable law, (iv) statutory liens
in favor of carriers, warehousemen, mechanics and materialmen, to secure claims for labor, materials or supplies and other like liens,
(v) liens in the ordinary course of business, and (vi) liens in favor of customs and revenue authorities arising as a matter
of an applicable Legal Requirement to secure payments of customs duties in connection with the importation of goods.
(xxi) “Person”
shall mean any individual, corporation (including any non-profit corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any limited liability company or joint stock company), firm or other enterprise,
association, organization, entity or Governmental Entity.
(xxii) “PRC”
shall mean the People’s Republic of China and solely for the purposes of this Agreement, exclude Hong Kong SAR, Macao SAR and Taiwan.
(xxiii) “Predecessor”
means China Jo-Jo Drugstores, Inc., a Nevada corporation and a predecessor to the Company.
(xxiv) “Preferred
Shares” means the preferred shares of the Company, par value US$0.001 per share.
(xxv) “Prospectus”
means the final prospectus filed for the Registration Statement.
(xxvi) “Prospectus
Supplement” means the supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is filed with the SEC
and delivered by the Company to each Purchaser at the Closing.
(xxvii) “Registration
Statement” means the effective registration statement with SEC (file No. 333-259692), which registers the sale of the Securities
to the Purchasers.
(xxviii) “Rule
424” means Rule 424 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended or interpreted from time
to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such Rule.
(xxix) “SEC”
shall mean the U.S. Securities and Exchange Commission.
(xxx) “Securities”
means the Ordinary Shares.
(xxxi) “Securities
Act” shall mean the Securities Act of 1933, as amended.
(xxxii) “Subsidiaries”
shall mean, when used with respect to any party, any corporation or other organization, whether incorporated or unincorporated, at least
a majority of the securities or other interests of which having by their terms ordinary voting power to elect a majority of the board
of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned
or controlled by such party or by any one or more of its Subsidiaries, or by such party and one or more of its Subsidiaries. For the avoidance
of doubt, the Subsidiaries of the Company shall include any variable interest entity over which the Company or any of its Subsidiaries
effects control pursuant to contractual arrangements and which is consolidated with the Company in accordance with generally accepted
accounting principles applicable to the Company.
(xxxiii) “Transaction
Documents” means this Agreement and all exhibits and schedules hereto and thereto.
(b) The
following capitalized terms shall have the respective meanings ascribed thereto in the respective sections of this Agreement set forth
opposite each of the capitalized terms below:
|
Term |
|
Section where Defined |
| Agreement |
|
Preamble |
| Board |
|
3(d)(iii) |
| Closing |
|
2(c) |
| Company |
|
Preamble |
| Company Balance Sheet |
|
3(d)(ii) |
| Company Financials |
|
3(d)(ii) |
| Company Permits |
|
3(l)(ii) |
| Company SEC Reports |
|
3(d)(i) |
| Correspondence |
|
6(b)(i) |
| Irreparable Breach |
|
6(e)(iii) |
| Purchase Shares |
|
2(a) |
| Purchaser |
|
Preamble |
| Purchasers |
|
Preamble |
| Schedule of Purchasers |
|
Preamble |
| Trade Secrets |
|
1(a)(xii) |
2. Purchase
and Sale
(a) Purchase
and Sale of the Purchase Shares. At the Closing, the Company hereby agrees to sell to the Purchasers, and the Purchasers hereby agree,
severally but not jointly, to purchase, for a purchase price of US$1.70 per share (the “Purchase Price”), Ordinary
Shares in the amounts listed on the Schedule of Purchasers (the “Purchase Shares”).
(b) Guaranteed
Minimum Repurchase Price. To incentivize each of the Purchasers into entering this Agreement, Liu, Chief Executive Officer and Chairman
of the Board of Directors of the Company, has voluntarily agreed to repurchase, in his individual capacity as a majority shareholder of
the Company, all or part of the Ordinary Shares purchased by a Purchaser to this Agreement, within six month of the date of this Agreement,
at a price of US$1.87 per share. Any Purchaser interested in the transaction contemplated in this Section 2(b) shall give written
notice to Liu, within the time limit provided herein, in accordance with the notices provision set forth in Section 6(b)(iv). For
the avoidance of doubt, the transaction contemplated in this Section 2(b) shall only apply to the Purchasers listed on Schedule
A to this Agreement and shall not be transferrable or assignable to any Person not a party to this Agreement.
(c) Closing.
At the closing (the “Closing”), the Company shall issue and sell the Purchase Shares to the Purchasers as indicated
on the Schedule of Purchasers. The Closing shall take place remotely through the exchange of signature pages and documents electronically
or by facsimile. The Closing shall take place on the first business day following the date of this Agreement or a later date as mutually
agreed upon by all parties.
(d) Company
Deliveries. At the Closing, the Company shall deliver to each Purchaser the following:
(i) this
Agreement duly executed by the Company;
(ii) a
book-entry account statement representing the Purchase Shares being purchased by such Purchaser at the Closing, as set forth opposite
such Purchaser’s name in the Schedule of Purchasers;
(iii) the
Prospectus and Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities Act).
(e) Purchaser
Deliveries. At the Closing, each Purchaser deliver to the Company the following:
(i) this
Agreement duly executed by such Purchaser;
(ii) the
Purchase Price for the Purchase Shares the Purchaser is purchasing as indicated in the Schedule of Purchasers, made by wire transfer of
funds to a bank account of the Company in accordance with the Company’s wire instructions.
3. Representations
and Warranties of the Company. Except as set forth in the Company SEC Reports, the Company hereby represents and warrants to the Purchasers
as follows:
(a) Organization;
Good Standing; Qualification; Subsidiaries. The Company and each of its Subsidiaries is a corporation or other organization duly organized
or incorporated (as applicable), validly existing and in good standing (when such concept is applicable) under the laws of the jurisdiction
of its incorporation or organization, has the requisite power and authority to own, lease and operate its properties and to carry on its
business as now being conducted as described in the Company SEC Reports. The Company is duly qualified and in good standing to do business
in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification necessary,
other than in such jurisdictions where the failure to be so qualified and in good standing, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on the Company. The Company owns, directly or indirectly, all of the capital
stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital
stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe
for or purchase securities.
(b) Capitalization,
Authorized Share Capital. The authorized share capital of the Company is US$36,010,000 divided into (i) 150,000,000 Ordinary Shares
of a par value of US$0.24 each, and (ii) 10,000,000 Preferred Shares of a par value of US$0.001 each. As of the date hereof, 4,674,077
Ordinary Shares were issued and outstanding and none of the Preferred Shares were issued and outstanding. All of the outstanding shares
of the Company are duly authorized and validly issued, fully paid and nonassessable and not subject to any preemptive rights.
(ii) Equity
Incentive Plan. As of the date hereof: 0 Ordinary Shares are reserved for future issuance under the Company Stock Option Plan. All
Ordinary Shares subject to issuance under the Company Stock Option Plans, upon issuance on the terms and conditions specified in the instruments
pursuant to which they are issuable (including payment of the exercise price therefor), would be duly authorized and validly issued, fully
paid and nonassessable. Except for outstanding Company Options, there are no outstanding or authorized restricted share units, share appreciations,
phantom shares, profit participation or other forms of share-based awards with respect to the Company.
(iii) Other
Securities. Other than 16,875 authorized but unissued shares that are being held in reserve by the Company for its future issuance
of shares underlying the warrants and/or options that were outstanding prior to the date hereof, there are no other securities, options,
warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which the Company or any of its Subsidiaries
is a party or by which any of them is bound obligating the Company or any of its Subsidiaries to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or other voting securities of the Company or any of its Subsidiaries, or
obligating the Company or any of its Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. All outstanding Ordinary Shares, all outstanding Company Options, and all outstanding
shares of capital stock of each Subsidiary of the Company have been issued and granted in compliance in all material respects with all
applicable securities laws and other material Legal Requirements.
(c) Authorization;
Non-Contravention.
(i) Authorization.
All corporate action on the part of the Company necessary for the authorization, execution and delivery of this Agreement and the other
Transaction Documents to which it is a party, the performance of all obligations of the Company hereunder and thereunder, and the authorization,
issuance, sale and delivery of the Purchase Shares has been taken prior to the date hereof, and each of this Agreement and the other Transaction
Documents to which the Company is a party, when validly executed by each of the Purchasers, constitutes a valid and legally binding obligation
of the Company, enforceable in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting the enforcement of creditors’ rights generally, (ii) as limited
by laws relating to the availability of specific performance, injunctive relief or other equitable remedies, and (iii) to the extent
the indemnification provisions contained therein may be limited by applicable federal or state securities laws.
(ii) Non-Contravention.
The execution, delivery and performance by the Company of this Agreement and of the other Transaction Documents to which it is a party
and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of
the Purchase Shares) will not (i) result in a violation of the Company’s charter documents (each as amended to date), (ii) conflict
with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or
any Subsidiary is a party, or (iii) subject to the consents set forth in Section 3(e), result in a violation of any Legal Requirement
applicable to the Company or by which any property or asset of the Company or any Subsidiary is bound or affected.
(d) SEC
Filings; Financial Statements; Internal Controls.
(i) SEC
Filings. As of the date hereof, the Company or the Predecessor, as applicable, has filed all required registration statements, prospectuses,
reports, schedules, forms, statements and other documents (including exhibits and all other information incorporated by reference) required
to be filed by it with the SEC. All such registration statements, prospectuses, reports, schedules, forms, statements and other documents
in the form filed with the SEC have been made available to the Purchasers or are publicly available in the Interactive Data Electronic
Applications database of the SEC. All such required registration statements, prospectuses, reports, schedules, forms, statements and other
documents, as amended, are referred to herein as the “Company SEC Reports.” As of their respective dates (or if subsequently
amended or supplemented, on the date of such amendment or supplement), the Company SEC Reports (i) were prepared in accordance and
complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such Company SEC Reports, and (ii) did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading. None of the Company’s Subsidiaries is required to file any forms,
reports or other documents with the SEC. No executive officer of the Company has failed to make the certifications required of him or
her under Section 302 or 906 of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated thereunder,
with respect to any Company SEC Report. Neither the Company nor any of its executive officers has received notice from any Governmental
Entity challenging or questioning the accuracy, completeness, form or manner of filing of such certifications.
(ii) Financial
Statements. Each of the consolidated financial statements (including, in each case, any related notes thereto) contained in the Company
SEC Reports (the “Company Financials”): (i) complied in all material respects with the published rules and regulations
of the SEC with respect thereto; (ii) was prepared in accordance with GAAP applied on a consistent basis throughout the periods involved
(except as may be indicated in the notes thereto or, in the case of unaudited interim financial statements, for normal and recurring year-end
adjustments and as may be permitted by the SEC on Form 10-K, 20-F, 10 Q, 8 K, 6-K or any successor or like form under the Exchange Act);
and (iii) fairly presented in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries
as at the respective dates thereof and the consolidated results of the Company’s operations and cash flows for the periods indicated.
The balance sheet of the Company as of September 30, 2023 contained in the Company SEC Reports is hereinafter referred to as
the “Company Balance Sheet.” Except as disclosed in the Company Financials, since the date of the Company Balance Sheet
and through the date hereof, neither the Company nor any of its Subsidiaries has any liabilities required under GAAP to be set forth on
a consolidated balance sheet which, individually or in the aggregate, would have a Material Adverse Effect on the Company.
(iii) Sarbanes-Oxley
and Internal Controls. To the Knowledge of the Company, the Company and the Subsidiaries are in compliance with any and all applicable
requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations
promulgated by the SEC thereunder that are effective as of the date hereof and as of the Closing. The Company has established and maintains,
adheres to and enforces a system of internal accounting controls which are effective in providing reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements in accordance with GAAP, including policies and procedures that (i) require
the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of
the Company and its Subsidiaries, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with GAAP, and that receipts and expenditures of the Company and its Subsidiaries are being made
only in accordance with appropriate authorizations of management and the board of directors of the Company (the “Board”),
and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of
the assets of the Company and its Subsidiaries. Neither the Company nor, to the Knowledge of the Company, the Company’s independent
auditors, has identified or been made aware of (A) any significant deficiency or material weakness, in each case which has not been
subsequently remediated, in the system of internal accounting controls utilized by the Company and its Subsidiaries, taken as a whole,
or (B) any fraud that involves the Company’s management or other employees who have a role in the preparation of financial
statements or the internal accounting controls utilized by the Company.
(e) Governmental
Consents. No consent, approval, order or authorization of, or registration, declaration or filing with any Governmental Entity is
required to be obtained or made by the Company in connection with the execution and delivery of this Agreement and the transactions contemplated
hereby, except for those that have been obtained on or prior to the date hereof.
(f) Brokers
or Finders. The Company has not incurred, and shall not incur, directly or indirectly, any liability for any brokerage or finders’
fees or agents commissions or any similar charges in connection with this Agreement or any transaction contemplated hereby.
(g) Nasdaq.
The Ordinary Shares are listed on Nasdaq. There are no proceedings to revoke or suspend such listing and the Company has not received
any notice from Nasdaq, nor does the Company have Knowledge of any reason that the Company does not or will not meet the listing or maintenance
requirements for continuing listing on Nasdaq.
(h) Valid
Issuance of Securities. The Purchase Shares have been duly authorized, and the Purchase Shares, when issued, sold and delivered in
accordance with the terms of this Agreement and upon payment of the Purchase Price therefor, will be validly issued, fully paid and nonassessable,
and free and clear of all Liens (other than restrictions on transfer imposed by U.S. law (both state and federal) or other applicable
securities laws and as set forth in the Transaction Documents).
(i) Offering.
The Company has prepared and filed the Registration Statement in conformity with the requirements of the Securities Act, which became
effective on December 19, 2022, including the Prospectus, and such amendments and supplements thereto as may have been required
to the date of this Agreement. The Registration Statement is effective under the Securities Act and no stop order preventing or suspending
the effectiveness of the Registration Statement or suspending or preventing the use of the Prospectus has been issued by the SEC and no
proceedings for that purpose have been instituted or, to the Knowledge of the Company, are threatened by the SEC. The Company, if required
by the rules and regulations of the SEC, shall file the Prospectus Supplement with the SEC pursuant to Rule 424(b). The Company was at
the time of the filing of the Registration Statement eligible to use Form F-3. The Company is eligible to use Form F-3 under the Securities
Act and it meets the transaction requirements with respect to the aggregate market value of securities being sold pursuant to this offering.
(j) No
Material Adverse Effect. Since September 30, 2023, no event or circumstance has occurred that, individually or in the aggregate, has
had or could reasonably be expected to have a Material Adverse Effect on the Company.
(k) Intellectual
Property. (i) The Company Intellectual Property is owned by the Company or its Subsidiaries free and clear of Liens, other than
(i) Permitted Liens, (ii) encumbrances, restrictions or other obligations arising under any of the Company Intellectual Property
Agreements, or (iii) Liens that could not be reasonably expected to have a Material Adverse Effect on the Company.
(i) The
Company and each of its Subsidiaries has taken reasonable steps consistent with applicable industry practice to protect and preserve the
confidentiality of material confidential information that they wish to, or are obligated by third parties to, protect as Trade Secrets,
and, to the Knowledge of the Company, there is no misappropriation from the Company of such Trade Secrets by any Person, except where
such misappropriation could not reasonably be expected to have a Material Adverse Effect on the Company.
(ii) To
the Knowledge of the Company, none of the Company or any of its Subsidiaries or any of its or their current products or services is infringing
upon or otherwise violating the Intellectual Property of any third party, except where such infringement could not reasonably be expected
to have a Material Adverse Effect on the Company.
(iii) As
of the date of this Agreement, the Company has not received written notice of any suit, claim, action, investigation or proceeding made,
conducted or brought by a third party that has been served upon or, to the Knowledge of the Company, filed or threatened in writing with
respect to any alleged infringement or other violation in any material respect by the Company or any of its Subsidiaries or any of its
or their current products or services or other operation of the Company’s or its Subsidiaries’ business of the Intellectual
Property of such third party. As of the date of this Agreement, to the Knowledge of the Company, there is no pending or threatened claim
challenging the validity or enforceability of, or contesting the Company’s or any of its Subsidiaries’ rights with respect
to, any of the material Company Intellectual Property.
(iv) The
execution and delivery of this Agreement by the Company, and the consummation of the transactions contemplated hereby, will not result
in (i) the Company or its Subsidiaries granting to any third party any rights or licenses to any Company Intellectual Property, (ii) any
right of termination or cancellation under any Company Intellectual Property Agreement, or (iii) the imposition of any Lien on any
Company Intellectual Property, except where any of the foregoing (in clauses (i) through (iii)) would not have a Company
Material Adverse Effect.
(l) Compliance;
Permits.
(i) Compliance.
Neither the Company nor any of its Subsidiaries is in conflict with, or in default or in violation of any Legal Requirement applicable
to the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries or any of their respective businesses or
properties is bound or affected, except for conflicts, violations and defaults that would not have a Material Adverse Effect on the Company.
As of the date hereof, no material investigation or review by any Governmental Entity is pending or, to the Knowledge of the Company,
has been threatened in a writing delivered to the Company or any of its Subsidiaries, against the Company or any of its Subsidiaries.
There is no judgment, injunction, order or decree binding upon the Company or any of its Subsidiaries which has or would reasonably be
expected to have a Material Adverse Effect on the Company.
(ii) Permits.
The Company and its Subsidiaries hold, to the extent legally required, all Permits that are required for the operation of the business
of the Company, as currently conducted, the failure to hold which would reasonably be expected to have a Material Adverse Effect on the
Company (collectively, “Company Permits”). As of the date hereof, no suspension or cancellation of any of the Company Permits
is pending or, to the Knowledge of Company, threatened. The Company and its Subsidiaries comply in all material respects with the terms
of the Company Permits.
(m) Litigation.
As of the date hereof, there are no claims, suits, actions or proceedings or, to the Knowledge of the Company, pending or threatened in
writing against the Company or any of its Subsidiaries, before any court, governmental department, commission, agency, instrumentality
or authority, or any arbitrator that seeks to restrain or enjoin the consummation of the transactions contemplated hereby or which would
reasonably be expected, either singularly or in the aggregate with all such claims, actions or proceedings, to have a Material Adverse
Effect on the Company.
(n) Ownership
of Assets. Other than Permitted Liens, to the Knowledge of the Company, there are no Liens over or affecting the whole or any part
of the material assets of the Company.
(o) Foreign
Corrupt Practices. Neither the Company nor any Subsidiary, nor to the Knowledge of the Company or any Subsidiary, any agent or other
Person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment
to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds,
(iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any Person acting on its behalf
of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of FCPA.
(p) Foreign
Private Issuer. The Company is a “foreign private issuer” within the meaning of Rule 405 under the Securities Act.
4. Representations,
Warranties and Covenants of the Purchasers. Each of the Purchasers, severally and not jointly, represents and warrants to the Company
as follows:
(a) Authorization.
All corporate action on the part of the Purchaser necessary for the authorization, execution and delivery of this Agreement, and the performance
of all obligations of the Purchaser hereunder and thereunder, has been taken prior to the date hereof, and each of this Agreement, when
validly executed by the Company, constitutes a valid and legally binding obligation of the Purchaser, enforceable in accordance with its
terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application
affecting the enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.
(b) Purchase
Entirely for Own Account. The Purchase Shares to be purchased by the Purchaser will be acquired for investment for the Purchaser’s
own account, and not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and the Purchaser has
no present intention of selling, granting any participation in, or otherwise distributing the same. The Purchaser is not a party to any
contract, understanding, agreement or arrangement with any person to sell, transfer or otherwise dispose of any of the Purchase Shares
purchased by it.
(c) Receipt
of Information. The Purchaser has had an opportunity to ask questions of, and receive answers from, the Company regarding the terms
and conditions of the issuance and sale of the Purchase Shares, and the business, properties, prospects and financial condition of the
Company, and to obtain additional information (to the extent the Company possessed such information or could acquire such information
without unreasonable effort or expense) necessary to verify the accuracy of any information furnished to it or to which it had access.
In particular, the Purchaser acknowledges the receipt of the Company’s semi-annual report for the six months ended September 30, 2023.
The foregoing, however, does not limit or modify the representations and warranties of the Company in Section 2(d) of this Agreement
or the right of the Purchaser to rely thereon. The Purchaser acknowledges and understands that no Person other than the Company has been
authorized to give any representations not contained in this Agreement in connection with the issuance and sale of the Purchase Shares
and, if given or made, such information or representation must not be relied upon as having been authorized by the Company.
(d) Governmental
Consents. No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity is
required to be obtained or made by the Purchaser in connection with the execution and delivery of this Agreement and the transactions
contemplated hereby.
(e) Adverse
Person. The Purchaser is not an Adverse Person.
5. Conditions
Precedent to Closing.
(a) Conditions
to the Obligation of the Purchasers to Consummate the Closing. The obligation of each of the Purchasers to consummate the Closing
and to purchase and pay for the Purchase Shares being purchased by it pursuant to this Agreement and the Prospectus and the Prospectus
Supplement is subject to the satisfaction of the following conditions precedent:
(i) Representations
and Warranties; Covenants.
(1) Each
of the representations and warranties of the Company in Section 3 shall be true and correct in all respects as of the date of this
Agreement and as of the date of the Closing as though made at that time.
(2) The
Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by
this Agreement prior to the date of Closing.
(3) The
Company shall have prepared the form ready to be submitted to the Chinese Securities Regulatory Commission within three business
days from the Closing of the transaction contemplated under this Agreement regarding this offering under its Trial Administrative Measures
of Overseas Securities Offering and Listing by Domestic Companies, which became effective on March 31, 2023.
(ii) Qualifications.
All authorizations, approvals or Permits, if any, of any Governmental Entity that are required in connection with the lawful issuance,
sale and purchase of the Purchase Shares, and the purchase and the procurement of foreign exchange for payment of the Purchase Price,
pursuant to this Agreement shall have been duly obtained and effective as of the Closing.
(b) Conditions
to the Obligation of the Company to Consummate the Closing. The obligation of the Company to consummate the Closing and to issue and
sell the Purchase Shares to the Purchasers at the Closing is subject to the satisfaction of the following conditions precedent:
(i) Representations
and Warranties; Covenants.
(1) Each
of the representations and warranties of each Purchaser in Section 4 shall be true and correct in all respects as of the date of
this Agreement and as of the date of the Closing as though made at that time.
(2) Each
of the Purchasers shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions
required by this Agreement prior to the date of Closing.
(ii) Qualifications.
All authorizations, approvals or Permits, if any, of any Governmental Entity that are required in connection with the lawful issuance
and sale of the Purchase Shares pursuant to this Agreement shall be duly obtained and effective as of the Closing.
6. Miscellaneous
Provisions.
(a) Public
Statements or Releases. None of the parties to this Agreement shall make, issue, or release any announcement, whether to the public
generally, or to any of its suppliers or customers, with respect to this Agreement or the transactions provided for herein, or make any
statement or acknowledgment of the existence of, or reveal the status of, this Agreement or the transactions provided for herein, without
the prior consent of the other parties, which shall not be unreasonably withheld or delayed, provided, that nothing in this Section 6(a)
shall prevent any of the parties hereto from making such public announcements as it may consider necessary in order to satisfy any Legal
Requirements applicable to it, but to the extent not inconsistent with such Legal Requirements, it shall provide the other parties with
an opportunity to review and comment on any proposed public announcement before it is made.
(b) Notices.
(i) Any
notices, reports or other correspondence (hereinafter collectively referred to as “Correspondence”) required or permitted
to be given hereunder shall be sent by international courier, facsimile, electronic mail or delivered by hand to the party to whom such
Correspondence is required or permitted to be given hereunder. Where a notice is sent by overnight courier, service of the notice shall
be deemed to be effected by properly addressing, and sending such notice through an internationally recognized express courier service,
delivery fees pre paid, and to have been effected three (3) business days following the day the same is sent as aforesaid. Where
a notice is delivered by facsimile, electronic mail, by hand or by messenger, service of the notice shall be deemed to be effected upon
delivery; provided that facsimile or electronic mail alone does not constitute an effective notice.
(ii) All
Correspondence to the Company shall be addressed as follows:
China Jo-Jo Drugstores, Inc.
4th Floor, Building 5, Renxin Yaju,
Gong Shu District, Hangzhou City,
Zhejiang Province, China, 310014
Attn: Chief Financial Officer
frank.zhao@jojodrugstores.com
(iii) All
Correspondence to any Purchaser shall be sent to such Purchaser at the address set forth under such Purchaser’s name on the Schedule
of Purchasers.
(iv) Solely
for the limited and express purpose of Section 2(b), all Correspondence to Liu shall be addressed as follows:
China Jo-Jo Drugstores,
Inc.
4th Floor, Building 5, Renxin Yaju,
Gong Shu District, Hangzhou City
Zhejiang Province, China,
310014
Attn: Mr. Lei Liu, Chief Executive Officer and Director
(v) Any
entity may change the address to which Correspondence to it is to be addressed by notification as provided for herein.
(c) Captions.
The captions and paragraph headings of this Agreement are solely for the convenience of reference and shall not affect its interpretation.
(d) Severability.
Should any part or provision of this Agreement be held unenforceable or in conflict with the applicable laws or regulations of any jurisdiction,
the invalid or unenforceable part or provisions shall be replaced with a provision which accomplishes, to the extent possible, the original
business purpose of such part or provision in a valid and enforceable manner, and the remainder of this Agreement shall remain binding
upon the parties hereto.
(e) Governing
Law; Arbitration; Injunctive Relief.
(i) This
Agreement shall be governed by and construed in accordance with the internal and substantive laws of the State of New York.
(ii) Other
than as set forth in Section 6(e)(iii), each of the parties hereto irrevocably (i) agrees that any dispute or controversy arising
out of, relating to, or concerning any interpretation, construction, performance or breach of this Agreement, may be settled by arbitration
to be held in the Borough of Manhattan in The City of New York in accordance with the rules then in effect of the American Arbitration
Association, (ii) waives, to the fullest extent it may effectively do so, any objection which it may now or hereafter have to the
laying of venue of any such arbitration, and (iii) submits to the non-exclusive jurisdiction of the State of New York in any such
arbitration or to the jurisdiction of state of federal courts in the state of New York in any of the legal actions or claims. If submitted
to arbitration in any jurisdiction, the decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration.
Judgment may be entered on the arbitrator’s decision in any court having jurisdiction. The parties to the arbitration shall each
pay an equal share of the costs and expenses of such arbitration, and each party shall separately pay for its respective counsel fees
and expenses; provided, however, that the prevailing party in any such arbitration shall be entitled to recover from the non-prevailing
party its reasonable costs and attorney fees.
(iii) Each
of the parties hereto acknowledges and agrees that damages will not be an adequate remedy for any material breach or violation of this
Agreement if such material breach or violation would cause immediate and irreparable harm (an “Irreparable Breach”).
Accordingly, in the event of a threatened or ongoing Irreparable Breach, each party hereto shall be entitled to seek, in any court of
law of competent jurisdiction, equitable relief of a kind appropriate in light of the nature of the ongoing or threatened Irreparable
Breach, which relief may include, without limitation, specific performance or injunctive relief; provided, however, that if the party
bringing such action is unsuccessful in obtaining the relief sought, the moving party shall pay the non-moving party’s reasonable
costs, including attorney’s fees, incurred in connection with defending such action. Such remedies shall not be the parties’
exclusive remedies but shall be in addition to all other remedies provided in this Agreement.
(f) Amendment.
This Agreement may not be amended, modified or terminated, and no rights or provisions may be waived, except with the written consent
of the Company and Purchasers.
(g) Expenses.
Each party will bear its own costs and expenses in connection with the drafting and negotiation of this Agreement and the other Transaction
Documents.
(h) Assignment.
This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may
not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser (except by merger,
share sale, consolidation, reorganization or similar transaction) and no Purchaser may assign any or all of its rights under this Agreement
to an Adverse Person or without the prior written consents of the Company. Any purported assignment in violation of this Section shall
be void.
(i) Survival.
The respective representations and warranties given by the parties hereto shall terminate upon the earlier of (i) the first anniversary
of the Closing, and (ii) the date on which this Agreement is terminated in accordance with Section 6(m) of this Agreement. Notwithstanding
any applicable statute of limitations, any claim with respect to the failure of a representation or warranty to be true and correct (other
than as a result of fraud or willful misconduct) that is not asserted within such timeframes may not be pursued and is hereby irrevocably
waived after such time.
(j) Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several and
not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance
of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction Document,
and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association,
a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Purchaser shall be entitled to independently
protect and enforce its rights including, without limitation, the rights arising out of this Agreement or out of the other Transaction
Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose.
Each Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents. It is
expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the
Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers.
(k) Entire
Agreement. This Agreement constitutes the entire agreement between the parties hereto respecting the subject matter hereof and supersedes
all prior agreements, negotiations, understandings, representations and statements respecting the subject matter hereof, whether written
or oral. No modification, alteration, waiver or change in any of the terms of this Agreement shall be valid or binding upon the parties
hereto unless made in writing and in accordance with the provisions of Section 6(f) hereof.
(l) Counterparts;
Reproductions. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument. A facsimile, portable document file (PDF) or other reproduction of this Agreement may be executed
by one or more parties and delivered by such party by facsimile, electronic mail or any similar electronic transmission pursuant to which
the signature of or on behalf of such party can be seen. Such execution and delivery shall be considered valid, binding and effective
for all purposes.
(m) Termination.
(i) This
Agreement may be terminated, and the transactions contemplated hereby abandoned at any time, by mutual consent of the Company and Purchasers.
This Agreement may also be terminated (x) by any Purchaser, as to such Purchaser’s obligations hereunder only and without any
effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the Company, or (y) by the
Company, by written notice to the Purchasers, in each case if the Closing has not been consummated on or before the tenth (10th) day
following the date hereof; provided, however, that no such termination will affect the right of any party to sue for any breach by any
other party (or parties), and provided, further, that the right of any party to terminate this Agreement shall not be available to any
party who’s action or failure to act has been a principal cause of or resulted in the failure of the Closing to occur on or before
such date and such action or failure to act constitutes a material breach of this Agreement.
(ii) If
terminated, this Agreement shall become void and there shall be no liability or obligation on the part of any party hereto or their respective
officers, directors or Affiliates; provided, however, that (1) each party shall remain liable for any breach of this Agreement prior
to its termination, and (2) the provisions of this Section 6 shall remain in full force and effect and survive any termination.
(n) WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY
WAIVES FOREVER TRIAL BY JURY.
(Remainder of Page Intentionally Left Blank)
IN WITNESS WHEREOF, the parties
hereto have executed this Agreement as of the date first written above.
| |
CHINA JO-JO DRUGSTORES, INC.: |
| |
|
| |
By: |
|
| |
Name: |
|
| |
Title: |
|
[Signature Page to Share Purchase Agreement]
IN WITNESS WHEREOF, the parties
hereto have executed this Agreement as of the date first written above.
| |
PURCHASER: |
| |
|
| |
By: |
|
| |
Name: |
|
| |
Title: |
|
[Signature Page to Share Purchase Agreement]
IN WITNESS WHEREOF, the parties
hereto have executed this Agreement as of the date first written above.
| |
PURCHASER: |
| |
|
| |
By: |
|
| |
Name: |
|
| |
Title: |
|
[Signature Page to Share Purchase Agreement]
IN WITNESS WHEREOF, the parties
hereto have executed this Agreement as of the date first written above.
| |
LIU, solely for the limited and express purpose of Section 2(b): |
| |
|
| |
|
| |
Lei Liu |
[Signature Page to Share Purchase Agreement]
Schedule A
SCHEDULE OF PURCHASERS
