SUBSCRIPTION AGREEMENT
among
J.R. HI-TECH INVESTMENT CORPORATION,
XX. XXXXXX XXXX,
MR. XXXX XXXXX
and
INTERMOST CORPORATION
________________________________
Dated as of October 24, 2000
________________________________
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
Solicitors and International Lawyers
12th Floor, Hong Kong Club Xxxxxxxx
0X Xxxxxx Xxxx
Xxxxxxx
Xxxx Xxxx
THIS SUBSCRIPTION AGREEMENT is made on the 1st day of September, 2000
AMONG:
(1) J.R. HI-TECH INVESTMENT CORPORATION, a company organized and
established in the British Virgin Islands ("BVI") and having its correspondence
address at 23rd Floor, Kinwick Center, 00 Xxxxxxxxx Xxxx, Xxxxxxx, xxx Xxxx Xxxx
Special Administrative Region of the People's Republic of China ("PRC") ("Hong
Kong") (the "Company");
(2) XX. XXXXXX XXXX, a citizen of Canada ("Canada") with his domicile at 0
Xxxxxxxx Xxxxxxxx, Xxxxxxx, Xxxxxx, holder of Canadian passport number XX000000
("Xx. Xxxx");
(3) MR. XXXX XXXXX, a citizen of Canada with his domicile at Apartment 4B,
Haikong Building, Seaview Garden, Shenzhen, the PRC, holder of Canadian passport
number XX000000 ("Xx. Xxxxx" together with Xx. Xxxx, the "Founders"); and
(4) INTERMOST CORPORATION, a company organized and established in the State
of Utah, the United States of America ("USA") and having its correspondence
address at 43rd Floor, Shenfang Plaza, 3005 Renmin Road South, Shenzhen, the PRC
(the "Investor" or "Intermost").
WHEREAS:
(A) The Company directly owns ninety-nine percent (99%) of Hong Kong
(China) Huifeng Group Limited ("HK Huifeng"), a limited liability company
organized and established in Hong Kong, and beneficially owns the remaining one
percent (1%) of HK Huifeng, which is held in trust by Xx. Xxxxx.
(B) The Company indirectly through HK Huifeng beneficially owns ninety
percent (90%) of Shenzhen China Xxxxxxxxxxx.xxx ("Shenzhen Huifeng"), a
Chinese-foreign equity joint venture established in the PRC which engages in the
provision of Internet security services, systems integration and software
development services.
(C) The Company and the Founders desire to allot and issue to the Investor,
and the Investor desires to subscribe for and purchase, shares of the Company
upon the terms and subject to the conditions set forth herein.
NOW IT IS HEREBY AGREED as follows:
1. Interpretation.
1.1 In this Subscription Agreement, unless the context requires
otherwise:
"Affiliate" of a Person (the "Subject Person") means (i) in the case
of a Subject Person other than a natural Person, any other Person that,
either directly or indirectly through one or more intermediate Persons,
controls, is controlled by or is under common control with the Subject
Person, and (ii) in the case of a Subject Person that is a natural Person,
any other Person that, either directly or indirectly through one or more
intermediate Persons, is controlled by the Subject Person or that is a
relative of the Subject Person. For purposes of this definition, "control"
means the power to direct the management or policies of a Person, whether
through the ownership of voting securities of such Person, through
contractual arrangements or otherwise.
"Basic Documents" means this Subscription Agreement, the Shareholders'
Agreement and the Restated Articles.
"Board" means the board of directors of the Company.
"Charter Documents" means, collectively, the Memorandum of Association
and Bye-Laws of the Company.
"Collective Warranties" means the representations and undertakings of
the Company and the Founders set forth in Schedule 2.
"Completion" means the completion of the subscription for and issuance
of the Subscribed Shares.
"Completion Date" means the date and time at which Completion takes
place.
"Consideration" means the consideration for the issuance of the
Subscribed Shares, being the amount set forth in Section 2.2.
"Governmental Authority" means any government or political subdivision
thereof; any department, agency or instrumentality of any government or
political subdivision thereof; any court or arbitral tribunal; and the
governing body of any securities exchange.
"Investor Warranties" means the representations, warranties and
undertakings of the Investor set forth in Schedule 3.
"OTCBB" means the OTC Bulletin Board of NASDAQ in the USA.
"Ownership" at any time means ownership of the ordinary shares on a
fully diluted basis, assuming the exercise, conversion or exchange of all
options, warrants and other securities exercisable for or convertible or
exchangeable into ordinary shares (including without limitation the
exercise of all outstanding options any stock option plan), regardless of
whether such options, warrants or other securities are currently
exercisable, convertible or exchangeable at such time.
"Parties" means the Company, the Investor and the Founders, and
"Party" means any of them.
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"Person" means any individual, firm, company, Governmental Authority,
joint venture, association, partnership or other entity (whether or not
having separate legal personality).
"Related Party" means (i) any shareholder of the Company, (ii) any
director of the Company, (iii) any officer of the Company, (iv) any
relative of a shareholder, director or officer of the Company, (v) any
Person in which any shareholder, director or officer of the Company has any
interest, other than a passive shareholding of less than 5% in a publicly
listed company, and (vi) any other Affiliate of the Company or of a
shareholder or director of the Company.
"Restated Articles " means the amended and restated Articles of
Association of the Company, in the form of Exhibit B, to be adopted by the
Company prior to Completion.
"RMB" means Renminbi, the lawful currency for the time being of the
PRC.
"Shareholders" means the Founders.
"Shareholders' Agreement" means the Shareholders' Agreement, in the
form of Exhibit A, to be entered into by the Company, the Investor and the
Shareholders.
"Shares" means the ordinary shares, par value US$1.00 per share, in
the capital of the Company.
"Subscribed Shares" means the ordinary shares to be subscribed by the
Investor pursuant to Section 2.
"US$" means United States Dollars, the lawful currency for the time
being of the United States of America.
"Warranties" means the Collective Warranties and the Investor
Warranties.
1.2 The following terms are defined in the indicated Section or
Schedule:
"Company" Preamble
"Founders" Preamble
"Investor" Preamble
"Losses" Section 10.1
1.3 References herein to any Section, Schedule or Exhibit is to such
Section of or Schedule or Exhibit to this Subscription Agreement unless the
context otherwise requires. The Schedules and Exhibits to this Subscription
Agreement shall be deemed to form part of this Subscription Agreement.
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1.4 References to a Party shall, where the context permits, include
such Party's respective successors, legal representatives and permitted
assigns.
1.5 The headings are inserted for convenience only and shall not
affect the construction of this Subscription Agreement.
1.6 Unless the context requires otherwise, words importing the
singular include the plural and vice versa, and pronouns importing a gender
include each of the masculine, feminine and neuter genders.
1.7 A document expressed to be "in the approved terms" means a
document the terms of which have been approved by or on behalf of the
parties hereto and a copy of which has been initialed for the purposes of
identification by or on behalf of the Parties.
1.8 References to the knowledge, information, belief or awareness of
any Person shall be deemed to include the knowledge, information, belief or
awareness such Person would have if such Person had made reasonable
inquiries.
2. Subscription for Shares.
2.1 Based on the terms and subject to the conditions of this
Subscription Agreement, the Company shall allot and issue to the Investor,
and the Investor shall subscribe for 70,000 Shares, representing 58.3%
Ownership immediately following Completion.
2.2 The Consideration payable by the Investor for the Subscribed
Shares shall be US$469,892 (approximately equivalent to RMB 3,994,086),
payable in the (i) cash payment of US$176,470 (approximately equivalent to
RMB 1,500,000) at Completion, and (ii) shares of Intermost Common Stock
with value of US$293,422 (approximately equivalent to RMB 2,494,087). The
exact number of shares of Intermost Common Stock is equivalent to
US$293,422 divided by the average closing price of Intermost stock as
quoted on the OTCBB for the 5 trading days immediately preceding this
Subscription Agreement. To avoid doubtness, this number is calculated to be
510,300 shares, and the 5-trading-day average price is US$0.575 based on
the information from xxxxxxxxxxxx.xxx and other web sites.
2.3 At Completion, the Investor shall pay the Consideration to the
Company by wire transfer to a bank account notified by the Company to the
Investor not less than two business days before Completion.
3. Conditions Precedent to Completion.
3.1 The obligation of the Investor to complete the subscription for
the Subscribed Shares is subject to the fulfillment, prior to or
simultaneously at Completion (or at the time specified below), of the
following conditions, any one or more of which may be waived by the
Investor:
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(a) the Collective Warranties remaining true and correct on the
Completion Date as provided in Section 6.4;
(b) the Company and the Founders having performed and complied
with all agreements, obligations and conditions contained in this
Subscription Agreement that are required to be performed or complied
with by it on or before Completion;
(c) the Company and the Founders having duly attended to and
carried out all corporate procedures that are required under BVI laws
in connection with the Basic Documents and the transactions
contemplated thereby, including without limitation:
(i) approval by the Board of the execution, delivery and
performance by the Company of the Basic Documents, the allotment
and issuance of the Subscribed Shares and the other transactions
contemplated by the Basic Documents to which the Company is a
party or which require approval by the Board; and
(ii) adoption of the Restated Articles by all necessary
action of the Board and the Shareholders and due filing of the
Restated Articles with the Registrar of Companies of the BVI;
(e) one nominee of the Investor having been duly elected to the
Board, effective upon Completion;
(f) all consents and approvals of, notices to and filings or
registrations with any Governmental Authority or any other Person
required pursuant to any applicable law or regulation of any
Governmental Authority, or pursuant to any contract binding on the
Company or the Founders or to which the Company or the Founders or its
respective assets are subject or bound, in connection with the
execution, delivery or performance by the Company and the Founders of
the Basic Documents or the consummation of the transactions
contemplated thereby, including without limitation the consents,
approvals and filings under PRC law in connection with (i) the
acquisition of 10% of Shenzhen Huifeng's increased registered capital
by Shenzhen Venture Capital Co., a PRC limited liability company; and
(ii) the transfer of 9% of Shenzhen Huifeng's increased registered
capital by Shenzhen Wojing Industrial Co., Ltd., a PRC limited
liability company, to HK Huifeng;
(g) there having been (i) no material adverse change in the
business, operations, properties, financial position (including
without limitation any material increase in provisions), prospects or
condition of the Company, HK Huifeng and Shenzhen Huifeng, and (ii) no
material change in any relevant laws, regulations or policies in any
of the jurisdictions in which the Company, HK Huifeng and Shenzhen
Huifeng do business (whether coming into effect prior to, on or after
the Completion Date) that, in the reasonable opinion of the Investor,
materially and adversely affects or may materially and adversely
affect the Company;
(h) there being no Governmental Authority or other Person that
has:
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(i) requested any information in connection with or
instituted or threatened any action or investigation to restrain,
prohibit or otherwise challenge the subscription of the
Subscribed Shares by the Investor;
(ii) threatened to take any action as a result of or in
anticipation of the implementation of such subscription; or
(iii) proposed or enacted any statute or regulation which
would prohibit, materially restrict or materially delay
implementation of the subscription or the operation of the
Company after Completion;
(i) the Company having delivered to the Investor a certificate,
dated the Completion Date and signed by the Founders in their capacity
as officers of the Company, certifying that the conditions set forth
in paragraphs (a) through (i) of this Section 3.1 have been satisfied;
(j) all corporate and other proceedings in connection with the
transactions contemplated at or prior to Completion pursuant to the
Basic Documents and all documents incident thereto being reasonably
satisfactory in form and substance to of the Investor, and the
Investor having received all such counterpart originals and certified
or other copies of such documents as it may reasonably request,
including without limitation the following:
(i) a copy of the Charter Documents (as amended through the
Completion Date), certified to be true, complete and correct
copies thereof as of the Completion Date;
(ii) a copy of the resolutions of the Board and the
Shareholders, evidencing the adoption of the Restated Articles,
the approval of the Basic Documents to which the Company is a
party or which require approval of the Shareholders, the
allotment and issuance of the Subscribed Shares and the other
matters contemplated hereby, certified to be true, complete and
correct; and
(iii) a copy of the register of members of the Company as at
the Completion Date, certified to be true, complete and correct;
and
(k) the Investor being satisfied with the results of its limited
due diligence investigation of the assets, liabilities, business,
financial and legal matters, references and background checks, if any,
relating to the Company and its Affiliates.
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4. Completion and Post-Completion Actions.
4.1 Completion shall take place within 5 business days after the
Investor has completed its due diligence work or at such time and place as
the Parties may agree.
4.2 At Completion,
(a) the Company shall:
(i) allot and issue the Subscribed Shares;
(ii) duly register the Subscribed Shares, in the name of the
Investor, in the Company's register of members;
(iii) deliver to the Investor, a share certificate, duly
completed in the name of the Investor; and
(iv) deliver to the Investor a receipt for the
Consideration;
(b) the Investor shall pay the cash portion of the Consideration
as provided in Section 2.2; and
(c) the Company and the Investor shall execute and deliver the
Shareholders' Agreement.
4.3 The Parties shall use all reasonable endeavours to ensure that the
conditions set forth in Section 3.l shall be fulfilled by the Target
Completion Date.
4.4 If any condition set forth in Section 3.l shall not have been
fulfilled or waived by the Target Completion Date, the Investor may, at its
option, without prejudice to its rights hereunder and under applicable law:
(a) defer Completion to a later date;
(b) proceed to Completion so far as practicable; or
(c) terminate this Subscription Agreement in accordance with
Section 11.
In the case of termination, no Party shall have any rights or
claims against the other, save for those that expressly survive
termination of this Subscription Agreement in accordance with the
provisions of Section 11.2.
5. Obligations of the Company between Execution and Completion.
5.1 From the date hereof through to the Completion Date, the Company
shall conduct its business and the businesses of HK Huifeng and Shenzhen
Huifeng in a manner, and shall otherwise use all reasonable efforts, so as
to ensure that the Collective Warranties shall continue to be true and
correct on and as of the Completion Date as if made on and as of the
Completion Date. The Company shall give the Investor prompt notice of any
event, condition or circumstance occurring from the date hereof until the
Completion Date that would constitute a violation or breach of any
Collective Warranty if such Collective Warranty were made as of any date
from the date hereof until the Completion Date, or that would constitute a
violation or breach of any terms and conditions contained in this
Subscription Agreement.
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5.2 From the date hereof through the Completion Date, the Company
shall not, and shall cause HK Huifeng and Shenzhen Huifeng not to, without
the prior written consent of the Investor:
(a) sell or otherwise dispose of any material part of its/their
assets (or any interest therein) or contract to do so;
(b) unless permitted under the terms of this Subscription
Agreement, appoint any additional directors or otherwise change
its/their key management or personnel;
(c) change its/their auditors;
(d) amend its/their Charter Documents, except by the adoption of
the Restated Articles;
(e) change its/their financial year end;
(f) acquire assets (or any interest therein) or contract to do
so, otherwise than in the ordinary course of its/their business;
(g) enter into any arrangement, contract or agreement with any
Related Party except on an arm's length basis and in the ordinary
course of business;
(h) borrow any money from any Related Party except where such
loan is unsecured and interest free or such loan subsists at the date
of this Subscription Agreement;
(i) lend any money or give any guarantee or indemnity in favor of
any party in respect of the performance or obligations of any Related
Party or give any financial assistance in any way to any Related
Party;
(j) declare, pay or make any dividend or distribution; or
(k) issue any securities of any kind other than as permitted
pursuant to this Subscription Agreement.
6. Representations, Warranties and Undertakings.
6.1 The Company and the Founders, jointly and severally, hereby
represent, warrant and undertake to the Investor in the terms set forth in
Schedule 2 and acknowledge that the Investor in entering into this
Subscription Agreement is relying on such representations, warranties and
undertakings.
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6.2 The Investor hereby represents, warrants and undertakes to the
Company in the terms set forth in Schedule 3 and acknowledges that the
Company in entering into this Subscription Agreement is relying on such
representations, warranties and undertakings.
6.3 No investigation by or on behalf of the Investor shall prejudice
any claim made by the Investor, under the indemnity contained in Section 10
or operate to reduce any amount recoverable thereunder. It shall not be a
defense to any claim against the Company or the Founders that the Investor
knew or ought to have known or had constructive knowledge of any
information relating to the circumstances giving rise to such claim.
6.4 The Collective Warranties and the Investor Warranties set forth in
each paragraph of Schedule 2 and Schedule 3, respectively, shall be
separate and independent and save as expressly provided shall not be
limited by reference to any other paragraph or anything in this
Subscription Agreement or the Schedules.
6.5 The Warranties shall be deemed to be repeated as at Completion as
if they were made on and as of the Completion Date and all references
therein to the date of this Subscription Agreement were references to the
Completion Date.
7. Restriction on Announcements.
Each Party undertakes that prior to Completion and thereafter it will not
make any announcement in connection with this Subscription Agreement unless the
other Parties shall have given its consent to such announcement, including both
as to timing and substance.
8. Access and Further Assurances.
8.1 As from the date of this Subscription Agreement, the Company shall
give to the Investor and its accountants, counsel and agents full access,
upon reasonable prior notice and during normal business hours, to the
premises and all the books and records of the Company and shall instruct
the officers and employees of the Company to give promptly all information
and explanations to the Investor or any such persons as the Investor may
reasonably request.
8.2 Each Party shall, at any time and from time to time upon the
written request of any other Party:
(a) promptly and duly execute and deliver all such further
instruments and documents, and do or procure to be done all such acts
or things, as such other Party may reasonably deem necessary or
desirable in obtaining the full benefits of this Subscription
Agreement and of the rights and ownership herein granted; and
(b) do or procure to be done each and every act or thing which
such other Party may from time to time reasonably require to be done
for the purpose of enforcing such other Party's rights under this
Subscription Agreement.
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9. Costs and Expenses.
Except as otherwise provided in any other provision of any Basic Document,
each Party shall pay its own costs and expenses (including the fees and costs of
any financial or technical advisors, lawyers or accountants engaged by it) in
relation to the negotiations leading up to the transactions contemplated
hereunder and to the preparation, execution and carrying into effect of the
Basic Documents and all other documents referred to in them which relate to the
transactions contemplated under them.
10. Indemnification.
10.1 The Company and the Founders shall, jointly and severally,
indemnify the Investor and hold the Investor harmless from and against any
losses (including without limitation any diminution in the value of the
Subscribed Shares), costs (including without limitation the fees,
disbursements and other charges of counsel), expenses, claims, damages and
liabilities (collectively, "Losses") that the Investor may incur or suffer
as a result of, arising out of or in connection with any breach of any
Collective Warranty or any other breach of any covenant or agreement of the
Company set forth herein.
10.2 Any indemnity as referred to in Clause 10.1 above shall be such
as to place the Investor in the same position as it would have been in had
there not been any breach of the Collective Warranty under which the
Investor is to be indemnified.
11. Termination.
11.1 This Subscription Agreement may be terminated prior to Completion
as follows:
(a) at the election of the Investor, if any one or more of the
conditions to the obligation of the Investor set forth in Section 3.1
to complete has not been fulfilled on or prior to the Target
Completion Date;
(b) at the election of the Investor, if the Company has breached
any Collective Warranty, or any other material covenant or agreement
of the Company contained in this Subscription Agreement, which breach
cannot be or is not cured within 30 days after being notified in
writing of the same;
(c) at the election of the Company, if the Investor has breached
any Investor Warranty, or any other material covenant or agreement of
the Investor contained in this Subscription Agreement, which breach
cannot be or is not cured within 30 days after being notified in
writing of the same; or
(d) at any time on or prior to the Completion Date, by mutual
written consent of the Company and the Investor.
11.2 If this Subscription Agreement is terminated in accordance with
Section 11.1, it shall become void and of no further force and effect,
except for the provisions of Sections 7, 11.2 and 14; provided, however,
that such termination shall, unless otherwise agreed by the Parties, be
without prejudice to the rights of any Party in respect of a breach of this
Subscription Agreement prior to such termination.
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12. Notices.
12.1 Each notice, demand or other communication given or made under
this Subscription Agreement shall be in writing and delivered or sent to
the relevant Party at its address or fax number set out below (or such
other address or fax number as the addressee has by five days' prior
written notice specified to the relevant Party):
To the Company: 00xx Xxxxx Xxxxxxx Xxxxxx
00 Xxxxxxxxx Xxxx
Xxxxxxx
Xxxx Xxxx
Attention: Xx. Xxxxxx Xxxx, Principal
To Xx. Xxxx:
Mob: 0000 000 0000
Email: xxxxxx_xxxx@xxxxxxxxx.xxx
To Xx. Xxxxx:
Mob: 0000 000 0000
Email: xxxxxx_xxxxx@xxxxxxxxx.xxx
To the Investor: 43rd Floor, Shenfang Plaza
3005 Renmin Road South
Shenzhen 518005
PRC
Attention: Mr. Xxx Xxxxx, President
Tel: (0000) 000 0000
Fax: (0000) 000 0000
Mob: 0000 000 0000
Email: xxxxxxxx@xxxxxxxxx.xxx
Any notice, demand or other communication so addressed to the relevant
party shall be deemed to have been delivered (a) if given or made by letter,
when actually delivered to the relevant address; and (b) if given or made by
fax, upon dispatch and the receipt of a transmission report confirming dispatch.
13. MISCELLANEOUS
13.1 This Subscription Agreement may not be amended, modified or
supplemented except by a written instrument executed by each Party.
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13.2 No waiver of any provision of this Subscription Agreement shall
be effective unless set forth in a written instrument signed by the Party
waiving such provision. No failure or delay by a Party in exercising any
right, power or remedy under this Subscription Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of the same
preclude any further exercise thereof or the exercise of any other right,
power or remedy. Without limiting the foregoing, no waiver by a Party of
any breach by another Party of any provision hereof shall be deemed to be a
waiver of any subsequent breach of that or any other provision hereof.
13.3 This Subscription Agreement shall not be assignable, except that
the Investor may assign its rights and obligations hereunder to any
Affiliate of the Investor.
13.4 This Subscription Agreement (together with the other Basic
Documents and any other documents referred to herein or therein)
constitutes the whole agreement between the Parties relating to the subject
matter hereof and supercedes any prior agreements or understandings
relating to such subject matter.
13.5 The provisions of this Subscription Agreement, insofar as the
same shall not have been fully performed at Completion, shall remain in
full force and effect notwithstanding Completion.
13.6 Each and every obligation under this Subscription Agreement shall
be treated as a separate obligation and shall be severally enforceable as
such and in the event of any obligation or obligations being or becoming
unenforceable in whole or in part. To the extent that any provision or
provisions of this Subscription Agreement are unenforceable they shall be
deemed to be deleted from this Subscription Agreement, and any such
deletion shall not affect the enforceability of this Subscription Agreement
as remain not so deleted.
13.7 This Subscription Agreement may be executed in one or more
counterparts which, signed and taken together, shall constitute one
document.
14. GOVERNING LAW AND JURISDICTION
14.1 This Subscription Agreement shall be governed by and construed in
accordance with the laws of Hong Kong.
14.2 Each Party irrevocably agrees that the courts of Hong Kong shall
have jurisdiction to hear and determine any suit, action or proceeding, and
to settle any disputes which may arise out of or in connection with this
Subscription Agreement and for such purposes irrevocably submits to the
non-exclusive jurisdiction of such courts.
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IN WITNESS WHEREOF this Subscription Agreement has been executed on the day
and year first above written.
J.R. HI-TECH INVESTMENT CORPORATION
By: _____________________________
Name:
Title:
INTERMOST CORPORATION
By:_____________________________
Name:
Title:
XXXXXX XXXX
_________________________________
XXXX XXXXX
_________________________________
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SCHEDULE 1
A. Particulars of the Company.
1. Registered Address : Commonwealth Trust Limited
Darke Xxxxxxxx
Tortola, British Virgin Islands
2. Date of Incorporation : October 25, 1997
Incorporation Number : 349271
Place of Incorporation : the British Virgin Islands
3. Directors : [ ]
4. Registered Agent : Commonwealth Trust Limited
X.X. Xxx 0000
Xxxx Xxxx
Xxxxxxx, Xxxxxxx Xxxxxx Xxxxxxx
0. Share Capital: Authorized : US$50,000, divided into 50,000 ordinary
shares of US$1 each
6. Issued and Paid Up : US$50,000, divided into 50,000
ordinary shares of US$1 each
7. Shareholders as of the Date Hereof:
Registered Shareholder Beneficial No. of Shares Type of Shares
Shareholder
Xxxxxx Xxxx Xxxxxx Xxxx 20,000 ordinary
Xxxx Xxxxx Xxxx Xxxxx 30,000 ordinary
8. Auditors : [ ]
9. Financial Year End : [ ]
B. Particulars of HK Huifeng.
1. Registered Office : 00xx Xxxxx, Xxxxxxx Xxxxxx, 00
Xxxxxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx
2. Date of Incorporation : March 30, 1998
Incorporation Number : 640598
Place of Incorporation : Hong Kong
3. Directors : Xxxxx Xxxx
Xx Xxxxxx
4. Secretary : LFDI Secretaries Limited
5. Share Capital: Authorized : HK$10,000, divided into 10 ordinary
shares of HK$1 each
Issued and Paid Up : HK$100 divided into 10 ordinary shares
of HK$1 each
6. Shareholders as of the Date Hereof :
Registered Shareholder Beneficial Shareholder No. of Shares Type of Shares
JR Hi-Tech Investment JR Hi-Tech Investment 99 ordinary
Corporation Corporation
Xxxx Xxxxx Xxxx Xxxxx 1 ordinary
7. Auditors : [ ]
8. Financial Year End : [March 31]
C. PARTICULARS OF SHENZHEN HUIFENG
1. Registered Address : [ ]
2. Date of Establishment : [ ]
Nature of Establishment : Equity Joint Venture
Company Number : [ ]
Place of Establishment : Shenzhen, the PRC
3. Legal Representative : [ ]
4. Total Investment : [ ]
Registered Capital : [ ]
5. Directors : Jiang Xxxx
Xxxx Xinlei
[ ]
6. Executive Officers : [ ]
7. Registered Parties as of the Date Hereof:
Registered Joint Venture Party Beneficial Owner Registered Capital Interest
Shenzhen Venture Capital Co. Shenzhen Venture 10%
Capital Co.
HK Huifeng HK Huifeng 90%
8. Auditors : [ ]
9. Financial Year End : [December 31]
SCHEDULE 2
COLLECTIVE WARRANTIES
I. DEFINITIONS
In this Schedule, capitalized terms not otherwise defined have the meanings
set forth in this Subscription Agreement, and the following terms have the
meanings specified:
"Accounts" means the audited consolidated balance sheets of the Company and
its Affiliates as at June 30, 2000] and the audited consolidated statements of
income and cash flows of the Company and its Affiliates for financial years of
the Company ended June 30, 2000 on such dates, copies of which are annexed
hereto and initialed by the Parties for purposes of identification.
"Accounts Date" means December 31.
"Assets" means all assets, rights and privileges of any nature and all
goodwill associated therewith, including without limitation all rights in
respect of Contracts, all Intellectual Property, Equipment and Software of the
Company, HK Huifeng and Shenzhen Huifeng.
"Contracts" means all contracts, agreements, licenses, engagements, leases,
financial instruments, purchase orders, commitments and other contractual
arrangements.
"Encumbrance" means (i) any mortgage, charge (whether fixed or floating),
pledge, lien, hypothecation, assignment, deed of trust, title retention,
security interest or other encumbrance of any kind securing, or conferring any
priority of payment in respect of, any obligation of any Person, including
without limitation any right granted by a transaction which, in legal terms, is
not the granting of security but which has an economic or financial effect
similar to the granting of security under applicable law, (ii) any lease,
sub-lease, occupancy agreement, easement or covenant granting a right of use or
occupancy to any Person, (iii) any proxy, power of attorney, voting trust
agreement, interest, option, right of first offer, negotiation or refusal or
transfer restriction in favor of any Person and (iv) any adverse claim as to
title, possession or use.
"Equipment" means all the plant and machinery, tools and equipment,
vehicles and office furniture, computer equipment (including without limitation
servers, personal computers, mainframes, modems, screens, terminals, keyboards,
disks, printers, cabling and associated and peripheral electronic equipment) and
other tangible assets, but excluding Software.
"Intellectual Property" means all letters patent, trademarks, service
marks, registered designs, domain names and utility models, copyrights,
inventions, confidential information, brand names, database rights, know-how and
business names and any similar rights situate in any country and the benefit
(subject to the burden) of any of the foregoing (in each case whether registered
or unregistered and including applications for the grant of any of the foregoing
and the right to apply for any of the foregoing in any part of the world).
"Liabilities" means all indebtedness and other liabilities of any nature
whatsoever, actual or contingent, and whether or not of a nature required to be
disclosed in the accounts of the Company.
"Management Accounts" means the unaudited consolidated balance sheet of the
Company and its Affiliates as at the Management Accounts Date, and the unaudited
statements of income and cash flows for the [one-month] period ending on such
date, copies of which are annexed hereto and initialed by the Parties for
purposes of identification.
"Management Accounts Date" means [June 30, 2000].
"Software" means any set of instructions for execution by microprocessor,
irrespective of application, language or medium.
II. THE WARRANTIES
The Company and each Founder hereby jointly and severally represent and
warrant to the Investor that, except as otherwise disclosed:
1. Corporate Matters.
(a) Organization, Good Standing and Qualification. Each of the Company, HK
Huifeng and Shenzhen Huifeng has been duly incorporated, organized and
established, and is validly existing in good standing, under the respective laws
of BVI, Hong Kong and the PRC. Each of the Company, HK Huifeng and Shenzhen
Huifeng has the corporate power and authority to own and operate its Assets and
properties and to carry on its business as currently conducted and proposed to
be conducted.
(b) Company Holding Structure Change. The Company will hold the equity of
Shenzhen Huifeng directly instead of holding through HK Huifeng. The Founders
undertake to make the structure changes as soon as legally permitted, this
includes, but not limited to, government registrations in Hong Kong and PRC.
(c) Charter Documents. The copies of the Charter Documents (having attached
thereto copies of all such resolutions as are by law required to be attached
thereto and all amendments made to date) that have been delivered to the
Investor are true and complete. All legal and procedural requirements and other
formalities concerning such Charter Documents have been duly and properly
complied with in all material respects.
(d) Capitalization and Other Particulars of the Company. The particulars of
each of the Company, HK Huifeng and Shenzhen Huifeng set forth in Parts A, B and
C of Schedule 1 are true, complete and correct as of the date hereof and will be
true, complete and correct as of the Completion Date except for the Company's
authorization and issuance of the Subscribed Shares.
(e) Options, Warrants and Reserved Shares. There are no outstanding
options, warrants, rights (including conversion or preemption rights) or
agreements for the subscription or purchase from the Company of any shares in
the capital stock of the Company or any securities convertible into or
ultimately exchangeable or exercisable for any shares of capital stock of the
Company, and no shares in the capital stock of the Company, or share issuable
upon exercise of any outstanding options, warrants or rights, or other shares
issuable by the Company, are subject to any preemptive rights, rights of first
refusal or other rights to subscribe or purchase such shares (whether in favor
of the Company or any other person), pursuant to any agreement or commitment of
the Company.
(f) Other Rights with respect to Shares. To the best knowledge of the
Company and the Founders, except as contemplated in this Subscription Agreement
or the Shareholders' Agreement, no voting or similar agreements exist related to
the Company's securities which are presently outstanding or that may hereafter
be issued. No Person has any right to cause any securities of the Company to be
registered under the Securities Act of 1933 of the United States of America.
(g) Subsidiaries. Except with HK Huifeng and Shenzhen Huifeng, the Company
does not own any direct or indirect interest in any other Person.
(h) Corporate Records. The statutory books, minute books and register of
members of the Company and HK Huifeng have been properly and accurately
maintained in all material respects and contain full and accurate records of all
resolutions passed by the respective directors and shareholders of the Company
and HK Huifeng and all issuances and transfers of shares or other securities of
the Company.
(i) PRC Joint Venture|.
(i) The activities of Shenzhen Huifeng have been conducted within the
scope permitted by PRC laws and regulations and, where a specific license
is required for any of its activities, such license have been procured and
successfully obtained.
(ii) Each joint venture party of Shenzhen Huifeng has made its
required registered capital contribution to the joint venture, and on the
basis of verification reports made by an accounting firm registered in the
PRC, each joint venture party has an investment certificate evidencing
payment of the total amount of its contributions as at the date of the
latest contribution.
(j) Founders' Competitive Activities. Neither Founder hold any equity
interests in any entity that carries on any business that competes with the
business of the Company, HK Huifeng or Shenzhen Huifeng as presently conducted
or as contemplated to be conducted.
2. Authorization and Validity of Transactions.
(a) Authorization. Each Founder has the legal right, power and authority,
and the Company has the corporate power and authority to, as the case may be,
execute, deliver and perform the Basic Documents to which it is a party. All
action on the part of each Founder and all corporate action on the part of the
Board and the Shareholders, as the case may be, necessary for the authorization,
execution, delivery of and the performance of all obligations of the Founders
and the Company respectively under the Basic Documents, the authorization,
issuance and delivery of the Subscribed Shares and the filing of the Restated
Articles has been taken or will be taken prior to Completion.
(b) Valid Issuance of Stock. The Subscribed Shares, when issued and paid
for as provided in this Subscription Agreement, will be duly authorized and
validly issued, fully paid and non-assessable. The Subscribed Shares are and
will be free of restrictions on transfer other than restrictions on transfer
under the Shareholders' Agreement, the Restated Articles and any applicable
securities laws.
(c) Enforceability. This Subscription Agreement is, and each other Basic
Document to which the Company is a party will when executed be, the valid and
binding obligation of the Company, enforceable against the Company in accordance
with their respective terms. This Subscription Agreement is, and each other
Basic Document to which each Founder is a party will when executed be, the valid
and binding obligation of each Founder, enforceable against each Founder in
accordance with its terms.
(d) Consents and Approvals. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any
Governmental Authority or any other Person is required in connection with the
execution, delivery and performance by the Company of this Subscription
Agreement and the Shareholders' Agreement or the consummation of the
transactions contemplated by the Basic Documents.
(e) No Breach. The execution and delivery by the Company and the Founders
of this Subscription Agreement and each other Basic Document to which it is a
party and the performance by the Company and the Founders of their respective
obligations under the Basic Documents do not and will not:
(i) breach or constitute a default under any Charter Document of the
Company;
(ii) result in a breach of, or constitute a default under, any
Contract to which the Company or either Founder is a party or by which it
is bound; or
(iii) result in a violation or breach of or default under any
applicable law or regulation or of any order, judgment or decree of any
Governmental Authority to which the Company or either Founder is a party or
by which the Company or either Founder is bound.
3. Legal Compliance.
(a) No Violation of Law. Neither the Company nor the Founders is/are
or has/have at any time been in violation of any applicable law or
regulation which may result in any liability or criminal or administrative
sanction to the Company or otherwise have a material adverse effect on the
ability of the Company, HK Huifeng or Shenzhen Huifeng to conduct its
businesses as currently conducted or as contemplated to be conducted.
(b) Permits. The Company, HK Huifeng and Shenzhen Huifeng have all
permits, approvals, authorizations and licenses necessary for the conduct
of its business as currently conducted and as contemplated to be conducted.
The Company, HK Huifeng and Shenzhen Huifeng are not in breach of or
default under any such permit, approval, authorization, franchise or
license.
4. Assets.
(a) Status of Assets. The Company and its Affiliates own or have the
right to use all Assets required for the conduct of their businesses as
currently conducted and contemplated to be conducted. The Assets owned by
the Company and its Affiliates are free and clear of all Encumbrances. The
Company has made available to the Investor true and complete copies of the
leases relating to all Assets leased by the Company and its Affiliates. The
Company and its Affiliates are in compliance with all such leases. The
Assets have been properly maintained and are in good working condition.
(b) Intellectual Property Rights.
(i) Without limiting the generality of paragraph 4(a) of this
Schedule 2, the Company, HK Huifeng and Shenzhen Huifeng have all
rights in Intellectual Property required for the businesses of the
Company, HK Huifeng and Shenzhen Huifeng as currently conducted and as
contemplated to be conducted.
(ii) Details of all Intellectual Property owned by the Company,
HK Huifeng and Shenzhen Huifeng are set out in Exhibit [ ],
distinguishing among rights that have been registered, rights in
respect of which applications to register have been made and rights in
respect of which no such registration or application has been made.
(iii) Details of all licenses granted to or by the Company, HK
Huifeng or Shenzhen Huifeng in respect of any Intellectual Property
(the "IP Licenses") are set out in Exhibits. True and complete copies
of all IP Licenses have been made available to the Investor. Except as
provided in the IP Licenses, the Company, HK Huifeng and Shenzhen
Huifeng are not obligated to pay any royalties or other payments to
any Person in respect of Intellectual Property used by the Company, HK
Huifeng and/or Shenzhen Huifeng. None of the Company, HK Huifeng or
Shenzhen Huifeng is in breach of any IP License or of any agreement
under which any confidential business information was or is to be made
available to it.
(iv) All rights in all Intellectual Property and confidential
business information owned or otherwise required for the businesses of
the Company, HK Huifeng and Shenzhen Huifeng as currently conducted or
contemplated to be conducted are vested in or validly granted to the
Company, HK Huifeng and Shenzhen Huifeng, and except as disclosed in
relation to paragraph (iii) above are not subject to any limit as to
time or any other limitation, right of termination (including on any
change in the underlying ownership or control of the Company, HK
Huifeng or Shenzhen Huifeng) or restriction and all renewal fees and
steps required for their maintenance or protection have been paid and
taken.
(v) None of the Company, HK Huifeng or Shenzhen Huifeng is a
party to any confidentiality or other agreement or subject to any duty
which restricts the free use or disclosure, or requires disclosure, of
business information owned by or required for the businesses of the
Company, HK Huifeng or Shenzhen Huifeng.
(vi) None of the Company, HK Huifeng or Shenzhen Huifeng has
granted, or is obliged to grant, any license, sub-license or
assignment in respect of any Intellectual Property owned or otherwise
required for the businesses of the Company, HK Huifeng and/or Shenzhen
Huifeng, and has not disclosed nor is obliged to disclose any
confidential business information required for the businesses of the
Company, HK Huifeng or Shenzhen Huifeng to any Person, other than its
employees for the purpose of carrying on its business. There are no
restrictions on the right of the Company, HK Huifeng or Shenzhen
Huifeng to license or sub-license any Intellectual Property owned by
it.
(vii) The processes and methods employed, the services provided,
the businesses conducted and the products manufactured, used or dealt
in by the Company, HK Huifeng and Shenzhen Huifeng do not, or at the
time of being employed, provided, conducted, manufactured, used or
dealt in did not, infringe the rights of any other Person in any
Intellectual Property or business information.
(viii) To the best knowledge of the Company and the Founders,
there is not, nor has there been at any time, any unauthorized use or
infringement by any Person of any of the Intellectual Property or
confidential business information owned or otherwise required for the
businesses of the Company, HK Huifeng or Shenzhen Huifeng.
(ix) None of the Company, HK Huifeng or Shenzhen Huifeng has
applications to register any Intellectual Property which are not being
pursued with all reasonable due diligence and speed.
(x) All employees of the Company, HK Huifeng and Shenzhen Huifeng
have entered into confidentiality and non-competition agreements with
their respective employers. To the best knowledge of the Company and
the Founders, none of these employees are in breach of such
agreements. To the best knowledge of the Company and the Founders,
none of the employees of the Company, HK Huifeng and Shenzhen Huifeng
is obligated under any Contract, or subject to any judgment, decree or
order of any Governmental Authority, that would (aa) interfere with
the use of his or her best efforts to promote the businesses and
interests of the Company, HK Huifeng and Shenzhen Huifeng; or (bb)
conflict with the businesses of the Company, HK Huifeng or Shenzhen
Huifeng as proposed to be conducted. Neither the execution or delivery
of this Subscription Agreement or the Shareholders' Agreement, nor the
carrying on of the businesses of the Company, HK Huifeng and Shenzhen
Huifeng by their employees, will, to the best knowledge of the Company
and each Founder, conflict with or result in a breach of the terms,
conditions or provisions of, or constitute a default under, any
contract, covenant or instrument under which any of such employees is
now obligated.
(c) Real Property. None of the Company, HK Huifeng or Shenzhen Huifeng
own any land, buildings or other real property. The Company has provided to
the Investor a true and complete list of all real property leases in
respect of real property used by the Company, HK Huifeng and Shenzhen
Huifeng as set out in Exhibits. The Company, HK Huifeng and Shenzhen
Huifeng is in compliance in all material respects with all such leases.
5. Contracts and Transactions.
(a) Contracts. Except as Disclosed, none of the Company, HK Huifeng or
Shenzhen Huifeng is a party to or bound by any Contract that (i) was
entered into outside of the ordinary course of business of the Company, HK
Huifeng or Shenzhen Huifeng, (ii) has a term (including extensions at the
option of any other party thereto) in excess of [one]1 year, (iii) involves
payments in excess of US$100,000 or (iv) is otherwise material to the
business or financial condition of the Company, HK Huifeng or Shenzhen
Huifeng (collectively, "Material Contracts"). A list of all Material
Contracts is disclosed in Exhibits. None of the Company, HK Huifeng or
Shenzhen Huifeng is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in
any Contract to which it is a party. Each such Contract has been duly
authorized, executed and delivered by the Company, HK Huifeng and Shenzhen
Huifeng, and to the best knowledge of the Company HK Huifeng and Shenzhen
Huifeng, constitutes the valid and binding obligation of each party
thereto, enforceable against each party thereto in accordance with its
terms. No party is in breach of any such Contract or has indicated any
intention to terminate any such Contract prior to the expiration of its
term.
(b) Related Party Transactions. Except as Disclosed, there are no
Contracts, understandings, transactions or proposed transactions between
the Company on the one hand and any Related Party on the other hand. No
Related Party or employee of the Company or any member of his or her
immediate family is indebted to the Company, nor is the Company indebted
(or committed to make loans or extend or guarantee credit) to any of them.
To the best knowledge of the Company and the Founders, none of such Persons
has any direct or indirect ownership in any business entity with which the
Company is affiliated or with which the Company has a business
relationship, or any business entity that competes with the Company. To the
best knowledge of the Company and the Founders, no such Person is, directly
or indirectly, interested in any Contract with the Company.
6. Financial Matters.
(a) Accounts. The Accounts and the Management Accounts of the Company
have been prepared in accordance with generally accepted international
accounting principles applied on a consistent basis and show a true and
fair view of the state of affairs, assets and liabilities, financial
position and profit or loss of the Company as at the respective dates
thereof and for the periods covered thereby and are not affected by any
unusual or non-recurring items not covered therein.
(b) Liabilities. The Company does not have any Liabilities other than
Liabilities reflected in the Management Accounts and Liabilities incurred
in the ordinary course of business since the Management Accounts Date. The
Company has not guaranteed any indebtedness of any other Person.
(c) Taxes. The Company, HK Huifeng and Shenzhen Huifeng have filed all
tax returns and reports as required by law. These returns and reports are
true and correct in all material respects. The Company, HK Huifeng and
Shenzhen Huifeng have paid all taxes and other assessments due.
(d) Projections. In connection with the transactions contemplated by
this Subscription Agreement, the Company has furnished to the Investor
certain projected budgets, financial statements and forecasts of the
Company, HK Huifeng and Shenzhen Huifeng. Such projected budgets, financial
statements and forecasts were prepared by the Company, HK Huifeng and
Shenzhen Huifeng in good faith based on its best knowledge, information and
belief.
7. Operations.
(a) Activities Since Accounts Date. Since the Accounts Date, there has
not been:
(i) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the Assets used by the
Company, HK Huifeng or Shenzhen Huifeng, or the operating results,
prospects or business of the Company, HK Huifeng or Shenzhen Huifeng
as currently conducted and proposed to be conducted;
(ii) any waiver by the Company, HK Huifeng or Shenzhen Huifeng of
a valuable right or of a material debt owed to it;
(iii) any material change or amendment to a material Contract by
which the Company, HK Huifeng or Shenzhen Huifeng is bound, except for
changes or amendments which are expressly provided for or disclosed in
this Subscription Agreement;
(iv) any resignation, threatened resignation or termination of
any key officers of the Company, HK Huifeng or Shenzhen Huifeng;
(v) any declaration or payment of any dividend or other
distribution by the Company, HK Huifeng or Shenzhen Huifeng;
(vi) any debt, obligation or liability incurred, assumed or
guaranteed by the Company, HK Huifeng or Shenzhen Huifeng, except
those for immaterial amounts and for current liabilities incurred in
the ordinary course of business; or
(vii) any agreement or commitment by the Company, HK Huifeng or
Shenzhen Huifeng to do any of the things described in this clause
7(a).
(b) Current Operations. To the Company's best knowledge, there is no
existing fact or circumstance that may have a material adverse effect on
the ability of the Company, HK Huifeng or Shenzhen Huifeng to conduct its
businesses as currently conducted and contemplated to be conducted.
8. EMPLOYEES.
(a) Labor Agreements and Actions. Neither the Company nor the Founders
are bound by or subject to any contract, commitment or arrangement with any
labor union of the Company, HK Huifeng or Shenzhen Huifeng, and, to the
best knowledge of the Company and each Founder, no labor union of the
Company, HK Huifeng or Shenzhen Huifeng has requested, sought or attempted
to represent any employees, representatives or agents of the Company, HK
Huifeng or Shenzhen Huifeng. There is no strike or other labor dispute
involving the Company, HK Huifeng or Shenzhen Huifeng pending nor, to the
best knowledge of the Company and the Founders, threatened. To the best
knowledge of the Company and the Founders, no employee of the Company, HK
Huifeng or Shenzhen Huifeng is or will be in violation of any judgment,
decree or order, or any term of any employment contract, patent disclosure
agreement, or other contract or agreement relating to the relationship of
any such employee with the Company, HK Huifeng or Shenzhen Huifeng, or any
other party because of the nature of the businesses conducted or to be
conducted by the Company, HK Huifeng or Shenzhen Huifeng, or to the use by
the employee of his best efforts with respect to such businesses.
(b) Employment; Compensation Arrangements. None of the Company, HK
Huifeng or Shenzhen Huifeng is a party to or bound by any currently
effective employment contract (other than contracts that can be terminated
on an at-will basis), deferred compensation agreement, bonus plan,
incentive plan, profit sharing plan, retirement agreement or other employee
compensation agreement.
(c) Status of Employees. To the best knowledge of the Company and the
Founders, no officer or key employee, or any group of key employees,
intends to terminate their employment with the Company, HK Huifeng or
Shenzhen Huifeng, and the Company, HK Huifeng and Shenzhen Huifeng do not
have a present intention to terminate the employment of any of the
foregoing. Subject to general principles related to wrongful termination of
employees, the employment of each officer and employee of the Company, HK
Huifeng and Shenzhen Huifeng is terminable at will by the Company, HK
Huifeng and Shenzhen Huifeng.
9. Claims and Proceedings.
(a) Litigation. None of the Company, HK Huifeng or Shenzhen Huifeng is
engaged in or the subject of any litigation, arbitration or administrative
or criminal proceedings (collectively, "Litigation'), whether as plaintiff,
defendant or otherwise. Neither any Shareholder nor any joint venture
party, director, officer or agent of the Company, HK Huifeng or Shenzhen
Huifeng is engaged in or are the subject of any Litigation, whether as
plaintiff, defendant or otherwise, which has had or may have an adverse
effect on the Company, HK Huifeng or Shenzhen Huifeng. No Litigation is
pending, threatened or expected by or against the Company, HK Huifeng or
Shenzhen Huifeng, and, to the best knowledge of the Company and the
Founders, no Litigation that may have an adverse effect on the Company, HK
Huifeng or Shenzhen Huifeng is pending, threatened or expected by or
against any Shareholder or any joint venture party, director, officer or
agent of the Company, HK Huifeng or Shenzhen Huifeng. There are no facts or
circumstances likely to give rise to any Litigation against the Company, HK
Huifeng or Shenzhen Huifeng or, to the best knowledge of the Company and
the Founders, any such Litigation against any Shareholder or any joint
venture party, director, officer or agent of the Company, HK Huifeng or
Shenzhen Huifeng.
(b) None of the Company, HK Huifeng or Shenzhen Huifeng, any
Shareholder or any joint venture party, director, officer or agent of the
Company, HK Huifeng or Shenzhen Huifeng is party to any undertaking or
assurance given to any Governmental Authority or the subject of any
injunction relating to the businesses of the Company, HK Huifeng or
Shenzhen Huifeng which is still in force.
(c) No Insolvency. No order has been made and no resolution has been
passed for the winding up of the Company, HK Huifeng or Shenzhen Huifeng or
for a provisional liquidator to be appointed in respect of the Company, HK
Huifeng or Shenzhen Huifeng and no petition has been presented and no
meeting has been convened for the purpose of winding up the Company, HK
Huifeng or Shenzhen Huifeng. No receiver has been appointed in respect of
the Company, HK Huifeng or Shenzhen Huifeng or all or any of its assets.
The Company, HK Huifeng and Shenzhen Huifeng are not insolvent or unable to
pay any of their debts as they fall due.
10. Disclosure.
(a) No Misrepresentation. No representation, warranty or statement by
the Company and the Founders in this Subscription Agreement, or in any
Exhibit, Schedule, statement or certificate furnished to the Investor or
relating to the Company, HK Huifeng and Shenzhen Huifeng pursuant to this
Subscription Agreement, contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements made
herein, in light of the circumstances under which they were made, not
misleading.
(b) Full Disclosure. To the best knowledge of the Company and the
Founders, there is no fact or circumstance relating to the affairs of the
Company, HK Huifeng or Shenzhen Huifeng which has not been disclosed to the
Investor and which if disclosed might reasonably have been expected to
influence the decision of the Investor to enter into this Subscription
Agreement.
(c) Best Knowledge. Without limiting the generality of Section 1.8,
the phrase "best knowledge of the Company and the Founders" means the best
knowledge of the Company, Xx. Xxxx and Xx. Xxxxx.
SCHEDULE 3
INVESTOR WARRANTIES
1. The Investor is a company duly organized and existing under the laws of
the State of Utah, the USA.
2. The Investor has the full power, authority and legal right to own assets
and carry on its business.
3. The execution, delivery and performance of this Subscription Agreement
by the Investor will not:
(a) violate any provision of the organizational documents of the
Investor;
(b) conflict with or result in any material breach or violation of any
of the terms and conditions of, or constitute (or with notice or lapse of
time or both constitute) a default under, any agreement to which the
Investor is a party or by which the Investor is bound;
(c) violate any court order, judgment, injunction, award, decree or
writ against, or binding upon, the Investor or upon its securities,
properties or business; or
(d) violate any law or regulation of the country where the Investor is
incorporated.
2. The Investor has the full power and authority to enter into, execute and
deliver this Subscription Agreement and to perform the transactions contemplated
hereby. The execution and delivery by the Investor of this Subscription
Agreement and the performance by the Investor of the transactions contemplated
hereby have been duly authorized by all necessary corporate or other action of
the Investor. Assuming the due authorization, execution and delivery hereof by
the other parties hereto, this Subscription Agreement constitutes the legal,
valid and binding obligation of the Investor.
EXHIBIT A
FORM OF SHAREHOLDERS' AGREEMENT
EXHIBIT B
FORM OF RESTATED COMPANY ARTICLES
