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Exhibit 2.08
(Execution Copy)
DATE 2003
(1) Hopeful Internet Technologies Limited
(as Vendor)
AND
(2) GENIUS TECHNOLOGY INTERNATIONAL LIMITED
(as Purchaser)
--------------------------------------------------
A G R E E M E N T
FOR SALE AND PURCHASE OF EQUITY CAPITAL IN
SHANGHAI SINOBULL INFORMATION CORPORATION LIMITED
--------------------------------------------------
Xxxxxx Xxx & Co.
19th Floor, Tower II,
The Gateway, 00 Xxxxxx Xxxx,
Xxxxxxx, Xxxx Xxxx
Telephone: (000) 0000 0000
Facsimile: (000) 0000 0000
Reference: P9/C48/C03916
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This AGREEMENT is entered into on 2003
BETWEEN:
(l) Hopeful Internet Technologies Limited, a company incorporated in the
British Virgin Islands and whose registered address is [ ]
and business address is Xxxxx X, 00/X., Xxxx Xxxxx, 000 Xxxxxx Xxxx,
Xxxxxxxxxxx, Xxxx Xxxx (the "Vendor"); and
(2) Genius Technology International Limited, a company incorporated under
the laws of Hong Kong whose registered office is situate at 19th Floor,
Wing On House, Xx. 00 Xxx Xxxxx Xxxx Xxxxxxx, Xxxx Xxxx (the
"Purchaser").
RECITALS:
A. The Company is a wholly foreign owned company established in Shanghai
under the laws of the PRC whose particulars are set out in Schedule 1.
B. The Vendor is the sole legal and beneficial owner of the Company.
C. The Vendor is desirous to sell and the Purchaser is desirous to
purchase the entire equity capital of the Company on the terms and
conditions set out in this Agreement.
NOW IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Agreement, unless the context otherwise requires, the following
words and expressions shall have the following meanings:
"Accounting Date" means 31st December, 2002;
"Accounts" means the audited consolidated accounts of the
Company comprising the balance sheet of the
Company and the consolidated balance sheet of the
Company as at the Accounting Date, the profit and
loss account of the Company and the consolidated
profit and loss account of the Company for the
financial year ended on the Accounting Date, the
notes thereto and the directors' and auditors'
reports thereon;
"Amended and Restated
Articles" means the amended and restated memorandum and
articles of association of the Company in the
agreed form to be registered by the Vendor with
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the applicable PRC authorities and as required in
order to effect the transfer of the Sale Shares
pursuant to the terms of this Agreement and
satisfy the conditions under Clause 4.1 (c);
"Business Day" means a day on which banks in Hong Kong are open
for business (except Saturdays, Sundays, public
holidays in Hong Kong and a day when the typhoon
signal number 8 is raised or black rain storm
warning is issued and is not lowered before 2
p.m. of such alert);
"BVI" means the British Virgin Islands;
"Chinese Sale and
Purchase Agreement" means the sale and purchase agreement written in
the Chinese language in the agreed form and
setting out the terms and conditions contemplated
under this Agreement to be registered by the
Vendor with the applicable PRC authorities and as
required in order to effect the transfer of the
Sale Shares pursuant to the terms of this
Agreement and satisfy the conditions under
Clauses 4.1 (c) and (d);
"Company" means Shanghai Sinobull Information Corporation
Limited , a wholly foreign owned company
established in Shanghai under the laws of the
PRC;
"Companies Ordinance" means the Companies Ordinance (Cap. 32 of the
Laws of Hong Kong);
"Completion" means the completion of the sale and purchase of
the Sale Shares pursuant to Clause 6;
"Completion Date" means the seventh (7th) Business Day after the
conditions set out in Clause 4.1 are fulfilled
(or such other date as the Vendor and the
Purchaser may agree in writing prior to
Completion);;
"Consideration" means HK$3,199,275, the consideration for the
Sale Shares which is to be settled in the manner
set out in Clause 5;
"Consideration Shares" means 57,826,793 ordinary shares of
HK$0.01 each in the share capital of the
Purchaser to be issued to the Vendor on
Completion, pursuant to Clause 5;
"Director" means a director from time to time appointed by
the Company;
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"Disclosure Letter" means the letter of even date issued by the
Vendor to the Purchaser in the agreed form;
"Encumbrances" means and includes any option, right to acquire,
right of pre-emption, mortgage, charge, pledge,
lien, hypothecation, title retention, right of
set off, counterclaim, trust arrangement or other
security or any equity or restriction;
"HK$" means Hong Kong dollars, the lawful currency of
Hong Kong;
"Hong Kong" means the Hong Kong Special Administrative Region
of the PRC;
"Intellectual
Property Rights" means the rights in respect of any patents, trade
marks, service marks, applications for any of the
foregoing, copyright, design rights, know-how,
confidential information, trade secrets, trade
and business names and any other similar
protected rights owned by or belonging to the
Company from time to time in any country;
"Listing Rules" means the Rules Governing the Listing of
Securities on the Stock Exchange;
"Metastock Project" means the adaptation and design from its original
design in the English language to the Chinese
language and to be marketed to and suite the
Chinese users in the PRC of the software known as
"Metastock", a Reuters project, and the
distribution right of the product in Greater
China;
"PRC" or "China" means the People's Republic of China, for the
purpose of this Agreement, excluding Hong Kong,
Macau and Taiwan;
"Sale Shares" means all the equity capital of the Company;
"Stock Exchange" means The Stock Exchange of Hong Kong Limited;
"Taxation" means and includes all forms of tax, rate, levy,
duty, charge, impost, fee, deduction or
withholding of any nature now or hereafter
imposed, levied, collected, withheld or assessed
by any taxing or other authority in the PRC and
includes any interest, additional tax, penalty or
other charge payable or claimed in respect
thereof;
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"Warranties" means the warranties, representations and
undertakings given by the Vendor pursuant to
Clause 7 and set out in Schedule 2 and any other
representations, warranties and indemnities made
by or on behalf of the Vendor in this Agreement.
1.2 Interpretation
In this Agreement unless the context otherwise requires:
(a) reference to any statute or statutory provision includes a
reference to that statute or statutory provision as from time to
time amended, extended or re-enacted;
(b) words and phrases the definitions of which are contained or
referred to in the Companies Ordinance shall be construed as
having the meaning thereby attributed to them but excluding any
statutory modification thereof not in force on the date of this
Agreement;
(c) words importing the singular include the plural, words importing
any gender include every gender, and words importing persons
include bodies corporate and unincorporated; and (in each case)
vice versa;
(d) all warranties, representations, indemnities, covenants,
agreements and undertakings given or entered into by more than one
person are given or entered into jointly and severally, unless
otherwise specified;
(e) where any Warranty is qualified by being given or made to the best
of the knowledge, information or belief of any person giving or
making the same or so far as that person is aware or is qualified
in any similar way such qualification shall be deemed to be
followed by the words "having made due and careful enquiry";
(f) references to the Parties, Recitals, Clauses and Schedules refer
to the parties, the recitals, clauses of and schedules to this
Agreement;
(g) references to a document being in the "agreed form" or "agreed
terms", means a document the terms of which have been approved by
or on behalf of the Vendor and the Purchaser and a copy of which
has been signed for the purpose of identification by or on behalf
of the Vendor and the Purchaser;
(h) headings used in this Agreement are for convenience only and shall
not affect its interpretation.
1.3 This Agreement include the Recitals, all Clauses and Schedules as may
be amended, varied or revised from time to time.
1.4 Time shall be of the essence in this Agreement.
2. SALE AND PURCHASE OF SALE SHARES
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2.1 Subject to the terms of this Agreement, the Vendor as legal and
beneficial owner shall sell and transfer or procure the transfer of the
Sale Shares free from Encumbrances and the Purchaser shall purchase the
Sale Shares upon Completion.
2.2 The Sale Shares are sold together with all rights attached or accruing
thereto and together with all dividends declared and paid in respect of
periods commencing on or after the Completion Date.
2.3 The Purchaser shall not be obliged to purchase any of the Sale Shares
unless the sale of all the Sale Shares is completed simultaneously.
2.4 Subject to the terms of this Agreement, the Vendor covenants to do and
execute all such acts and things as may be reasonably necessary to vest
the Sale Shares in the Purchaser and to place the Purchaser in full
control of the Sale Shares and hence the Company as from the Completion
Date.
3. TRANSFER OF METASTOCK
3.1 Subject to the terms of this Agreement, upon Completion (or as soon as
reasonably practicable thereafter), the Vendor shall make effective
transfer to the Purchaser all its Intellectual Property Rights of the
Chinese translation of the software "Metastock" and its distribution
right in the PRC . Consideration for the Metastock Project has been
included in the total number of Consideration Shares to be issued by
the Purchaser to the Vendor on Completion.
4. Conditions Precedent
4.1 Completion is conditional upon:
(a) the passing of a resolution by the board of directors of the
Vendor approving the sale of the Sale Shares to the Purchaser and
all terms in this Agreement and the implementation thereof;
(b) the passing of resolutions by the shareholders of the Purchaser
approving the purchase of the Sale Shares, the issue and allotment
of the Consideration Shares and all terms in this Agreement and
the implementation thereof;
(c) all necessary authorizations, orders, grants, consents,
permissions and approvals for all transactions contemplated by
this Agreement (including transfer of the Sale Shares to the
Purchaser, approval of the Chinese Sale and Purchase Agreement and
Amended and Restated Articles of the Company) having been obtained
from, and all filings and registrations having been performed
with, all applicable authorities, departments and bodies in the
PRC, including without the limitation to the government approval,
consent and permissions required in the PRC in respect of the
Company, from appropriate governments, governmental, supranational
or trade agencies and regulatory bodies and all such
authorizations, and such authorizations, orders, grants, consents,
permissions and approvals remaining in full force and effect; and
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(d) the entering into by the Vendor and the Purchaser of the Chinese
Sale and Purchase Agreement in the agreed form in order to
register and effect the transfer of the Sale Shares pursuant to
the terms of this Agreement and in accordance with the applicable
laws of the PRC governing the sale and purchase of the equity
capital of a wholly foreign owned enterprise in the PRC. In the
event of a conflict between the terms of the Chinese Sale and
Purchase Agreement and this Agreement, the terms of this Agreement
shall prevail.
4.2 The parties shall use their respective best endeavours to ensure that
the conditions set out in Clause 4.1 are fulfilled by 5:00 p.m. (Hong
Kong time) on the date referred to in Clause 4.3.
4.3 If the conditions set out in Clause 4.1 have not been fulfilled by 5:00
p.m. (Hong Kong time) on 31st July 2003 or such later date as the
parties may agree in writing, this Agreement and everything herein
contained shall, subject to the liability of any party to the other in
respect of any antecedent breaches of the terms hereof, be null and
void and of no effect.
5. CONSIDERATION
5.l The Consideration shall be settled by the Purchaser by the issue of the
Consideration Shares to the Vendor. The Consideration Shares shall be
issued and allotted, credited as fully paid and free from Encumbrances
to the Vendor. Upon Completion, the Consideration Shares issued to the
Vendor shall constitute approximately 17.1173% of the entire issued
share capital of the Purchaser as enlarged by the issue of the
Consideration Shares.
5.2 The Consideration Shares issued to the Vendor shall rank pari passu in
all respects with the all other existing issued and allotted shares of
the Purchaser and the Vendor shall be entitled to all rights attached
or accruing thereto including all dividends declared and paid on or
after Completion.
6. COMPLETION
6.1 Completion of the sale and purchase of the Sale Shares shall take place
on the Completion Date at the office of the Purchaser in accordance
with Schedule 3.
6.2 No party shall be obliged to complete the sale and purchase of the Sale
Shares unless the other party complies fully with the requirements set
out in Schedule 3 applicable to them respectively.
6.3 Without prejudice to any other remedies available to any party, if in
respect of the provisions of this Agreement and in particular Schedule
3 are not complied with by either the Vendor on the one part or by the
Purchaser on the other part on or before the Completion Date, the party
not in default may:
(a) defer Completion to a date not more than 28 days following the
Completion Date (and so that the provisions of this Clause 6.3 (a)
shall apply to Completion as so deferred);
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(b) proceed to Completion so far as practicable (but without prejudice
to its rights hereunder); or
(c) rescind this Agreement without prejudice to any of its other
rights in respect of such default.
7. WARRANTIES, REPRESENTATIONS, AND UNDERTAKINGS
7.1 Save as disclosed in the Disclosure Letter, the Vendor hereby warrants,
represents and undertakes to the Purchaser the Warranties and
acknowledges that the Purchaser is entering into this Agreement in
reliance on the Warranties and that the Purchaser may treat them as
conditions of this Agreement.
7.3 Save as except in this Agreement, the Vendor agrees to indemnify and
keep indemnified the Purchaser (for itself and as trustee for the
Company) against all losses, damages, costs, actions, proceedings,
claims, demands and expenses suffered by the Purchaser or the Company
as a result of or in connection with any breach of any of the
Warranties.
7.4 Each of the Warranties is without prejudice to each and every other
Warranty.
7.5 The Vendor undertakes to the Purchaser that it will forthwith notify
the Purchaser in writing of any matter or thing which may arise or
become known to them after the date of this Agreement and prior to
Completion which is a breach of or inconsistent with any of the
Warranties or other provisions contained in this Agreement.
7.6 In the event of the aforesaid notice is given to the Purchaser or the
Purchaser otherwise becoming aware of or it becoming apparent on or
before Completion that any of the Warranties or any other term of this
Agreement is incorrect or breached in any material respect, the
Purchaser may rescind this Agreement by notice in writing to the Vendor
without prejudice to any rights it may have in respect of the alleged
breach or rescission hereof. Failure by the Purchaser to exercise this
right of rescission shall not constitute a waiver of any of the rights
or remedies of the Purchaser arising by reason of any such breach.
7.7 The Warranties shall remain in full force and effect after and
notwithstanding Completion.
7.8 The Warranties are given subject to the matters disclosed in the
Disclosure Letter, no other information relating to the Company which
the Purchaser has knowledge whether actual or constructive shall
prejudice any claim made by the Purchaser under the Warranties or
operate to reduce any amount recoverable.
7.9 The Purchaser may take action for any breach or non-fulfillment of any
of the same before or after Completion and in the event of action taken
after Completion, Completion shall not in any way constitute a waiver
of the Purchaser's rights notwithstanding that such rights may have
been arisen or known to the Purchaser before Completion.
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7.10 The rights conferred upon the Purchaser by this Clause 7 are in
addition to and without prejudice to any other rights of the Purchaser
and failure to exercise it shall not constitute a waiver of any such
rights notwithstanding that such breach or non-fulfillment may have
been known to or discoverable by the Purchaser before Completion.
7.11 The Vendor hereby waives any and all claims against the Company and all
its subsidiaries and their respective officers, employees, servants,
agents and representatives in respect of any information supplied by
any of them to the Vendor on or before the date hereof in connection
with any of the Warranties or any matters which have been disclosed to
the Purchaser or otherwise howsoever in relation to the business or
affairs of the Company or any of its subsidiaries.
8. CONFIDENTIALITY
8.1 The Vendor undertakes at all reasonable times, notwithstanding
Completion, it will at the request of the Purchaser promptly give to
the Purchaser the Information (defined in Clause 8.3).
8.2 The Vendor further undertakes to the Purchaser that it will not and
will procure all its respective officers, employees, servants, agents
and representatives will not at any time before and after Completion
for their own benefit or on behalf of any other person take away, make
use of or disclose to any person (except as may be necessary to comply
with any statutory obligation or order of any court or statutory
tribunal of competent jurisdiction) any Information in any way relating
to the business or affairs of the Company or to any customer, client,
agent, supplier or any other person who has or has had any dealings
with the Company.
8.3 In this Clause 8, "Information" refers to all information in the
possession of or within the control of the Vendor or their respect
shareholders, officers, employees, servants, agents and representatives
concerning the business, dealings, transactions or affairs of the
Company and all claims made or threatened against the Company.
8.4 The Purchaser hereby undertakes with the Vendor that it will not, prior
to Completion and save as required by law, make use of or disclose or
divulge any confidential information relating to the Company obtained
by it or its representatives pursuant to this Agreement and the
transactions contemplated thereby to any person other than its own
officers, employees or professional advisors.
9. NON-COMPETITION AND NON-SOLICITATION
9.1 Subject to the fulfilment of Clause 4.1, the Vendor and its
shareholders undertake from the Completion Date to the expiry of 2
years after the Completion Date, they will not and will procure all
their respective officers, employees, servants, agents, associates and
representatives will not for their own benefit or on behalf of any
other person without the prior written consent of the Purchaser:
(a) carry on (whether alone or in partnership or joint venture with
anyone else) or be concerned with or interested any business
carried by the Company in the PRC at any time within 12 months
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prior to the Completion Date or directly or indirectly competitive
with such business of the Company in the PRC save and except as a
shareholder (for investment purposes only) holding not more than
5% directly or indirectly of the securities of a company listed on
a recognized stock exchange;
(b) whether as principal, agent or servant canvass or solicit business
from any person who was a customer, client, agent or supplier of
the Company in the PRC during the period of 12 months immediately
prior to Completion;
(iii)offer employment to any person who at the date of this Agreement
or within 12 months prior to the Completion Date, is or had been
an employee of the Company in the PRC and for so long thereafter
as such employee shall remain in the employment of the Company in
the PRC or any other subsidiary of the Purchaser or for a period
of 6 months after leaving such employment; or
(iv) offer any inducement or encouragement to any such employee to
cease to be so employed or to seek employment with any other
employer or to become self-employed or to go into any partnership
or business on his own account in the PRC.
9.2 Each of the restrictions contained in Clause 9.l is separate and
distinct and is to be construed separately from the other restrictions.
The Vendor hereby acknowledges that he/it considers such restrictions
to be reasonable both individually and in aggregate and that the
duration, extent and application of each of such restrictions are no
greater than is necessary for the protection of the legitimate
interests of the Purchaser and that the consideration paid by the
Purchaser under the terms of this Agreement takes into account and
adequately compensates them for any restriction or restraint imposed
hereby. However, in the event that any such restriction shall be found
to be void or unenforceable but would be valid or enforceable if some
part or parts thereof were deleted or the period or area of application
reduced, the Vendor hereby agrees that such restriction shall apply
with such modification as may be necessary to make it valid.
10. CONDUCT OF THE COMPANY UP TO COMPLETION
10.1 Pending Completion, the Vendor undertakes with the Purchaser to procure
that the Company will NOT:
(a) enter into any commitment, contract or arrangement other than in
the ordinary and proper course of its business;
(b) dispose of or create or permit any Encumbrances over any of its
assets or agree so to do, other than a disposal of its stock in
trade in the ordinary and proper course of its business;
(c) incur any material liabilities other than in the ordinary and
proper course of its business;
(d) hire any new employee other than those general staff, alter the
remuneration or conditions of employment or superannuation of any
employee (except under the requirements of any award, industrial
10
agreement, service contract or law) or terminate the employment of
any employee (except for fraud or misconduct);
(e) allot or issue or agree to allot or issue any shares or any loan
capital or any security convertible into share capital;
(f) declare or pay any dividend or make any other distribution of its
profits;
(g) alter its memorandum or articles of association other than for the
purpose of transferring the Sale Shares to the Purchaser and in
the agreed terms; or
(h) change its name.
10.2 Up to Completion the Vendor shall cause the Company, at all reasonable
times, to make all premises, plant, stock, Accounts and records
available for the Purchaser's inspection for the purposes of this
Agreement and allow copies of such records to be taken.
11. INDEMNITY
11.1 The Vendor and its shareholders shall indemnify and hold harmless the
Purchaser against each proceeding, judgment, loss, damage, cost,
expense or liability suffered, incurred by or brought or made or
recorded against the Purchaser, as a direct or indirect consequence of:
(a) any breach by the Vendor or any other person of any of the
Warranties;
(b) any Warranty not being true and correct or being misleading as at
the Completion Date; or
(c) any failure by the Vendor to duly perform any of the obligations
imposed upon it by this Agreement.
11.2 The Vendor further acknowledges that the aforesaid indemnity:
(a) extends to all costs, expenses and other amounts incurred or paid
by the Purchaser in the enforcement or purported or attempted
enforcement of such indemnity or for the preservation of or in any
manner in reference to the rights conferred upon the Purchaser by
this Agreement, including legal costs as between solicitor and
client;
(b) will not be abrogated, modified, prejudiced, affected or
considered as wholly or partially discharged by any one or more
of:
(i) any time, credit, indulgence or concession extended by the
Purchaser or the Company to the Vendor or any other
person;
(ii) any compounding, compromise, release, abandonment, waiver,
variation, relinquishment or renewal of any rights of the
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Purchaser or the Company against the Vendor or any other
person;
(iii) the neglect or omission of the Purchaser or the Company to
enforce any of those rights or any delay in the
enforcement of any of those rights; and
(iv) the winding up, bankruptcy or death of the Vendor.
(c) is continuing and irrevocable and the obligations of the Vendor
will be absolute and unconditional in all circumstances; and
(d) will be in addition to and not in substitution for any other
indemnity provided under this Agreement or any other rights which
the Purchaser or the Company may have against the Vendor from time
to time and will not merge on Completion.
11.3 The Purchaser shall indemnify and hold harmless at all times the Vendor
against each proceeding, judgment, loss, damage, cost, expense or
liability suffered, incurred by or brought or made or recorded against
the Vendor, whether before or after Completion or in respect of any
period before or after Completion, as a direct or indirect consequence
of:
(a) any breach by the Purchaser or any other person of any of the
Warranties;
(b) any Warranty not being true and correct or being misleading as at
the Completion Date; or
(c) any failure by the Purchaser to duly perform any of the
obligations imposed upon them by this Agreement.
11.4 The Purchaser further acknowledges that the aforesaid indemnity:
(a) extends to all costs, expenses and other amounts incurred or paid
by the Vendor in the enforcement or purported or attempted
enforcement of such indemnity or for the preservation of or in any
manner in reference to the rights conferred upon the Vendor by
this Agreement, including legal costs as between solicitor and
client;
(b) will not be abrogated, modified, prejudiced, affected or
considered as wholly or partially discharged by any one or more
of:
(i) any time, credit, indulgence or concession extended by the
Vendor or the Company to the Purchaser or any other
person;
(ii) any compounding, compromise, release, abandonment, waiver,
variation, relinquishment or renewal of any rights of the
Vendor or the Company against the Purchaser or any other
person;
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(iii) the neglect or omission of the Vendor or the Company to
enforce any of those rights or any delay in the
enforcement of any of those rights; and
(iv) the winding up, bankruptcy or death of the Purchaser.
(c) is continuing and irrevocable and the obligations of the Purchaser
will be absolute and unconditional in all circumstances; and
(d) will be in addition to and not in substitution for any other
indemnity provided under this Agreement or any other rights which
the Vendor or the Company may have against the Purchaser from time
to time and will not merge on Completion.
12. CONTINUING OBLIGATIONS
12.1 The Vendor must do nothing to discourage the Company's current clients
and new clients to utilize the goods and service of the Company's
business.
12.2 The Vendor must provide all reasonable assistance including access to
any documents in their possession or under their power or control in
relation to any dispute between the Company and any person.
12.3 Each obligation and warranty of a party to this Agreement (except an
obligation fully performed at Completion) continues in force despite
Completion.
12.4 Default
(a) No party to this Agreement shall be entitled to enforce any rights
or remedies under this Agreement or at common law arising out of
the default of any other party in performing or observing any of
the terms and conditions of this Agreement (other than the right
of any party to sue for any moneys already due) UNLESS the non
defaulting party has given to the party in default ("Defaulting
Party") a written notice specifying the default and stating his
intention to enforce his rights and remedies unless the default is
made good within 14 days and the Defaulting Party fails within
that period to remedy the default. If the default is not so
rectified then the non-defaulting party may :
(i) demand immediate payment to it of all moneys to be paid to
it by the defaulting Party pursuant to this Agreement;
(ii) suspend compliance with its obligations under this
Agreement until the default is so rectified; and
(iii) sue for damages or seek specific performance of this
Agreement or any other remedy to which it might be
entitled.
13. COSTS
13.1 Each party shall bear its own legal and other costs and expenses
arising directly or indirectly with respect to the preparation,
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execution, completion and performance of this Agreement or any other
related documentation.
13.2 Notwithstanding the foregoing, the Vendor and the Purchaser shall bear
any stamp duty payable in respect of the transfer of the Sale Shares in
equal shares.
14. NOTICE
14.1 Delivery
All notices, demands or other communications which are required to be
given under this Agreement shall be in writing in English and sent to:
(a) in the case of the Vendor:
Vendor
Address:
Xxxxx X, 00/X,
Xxxx Xxxxx,
000 Xxxxxx Xxxx,
Xxxxxxxxxxx, Xxxx Xxxx
Facsimile number : in PRC :- 86 21 5213 0664
Attention : Mr Xxxxx Xxxx
(b) in the case of the Purchaser:
Address:
19/F, Wing On House,
00 Xxx Xxxxx Xxxx Xxxxxxx,
Xxxx Xxxx
Facsimile number : 852-28106070
Attention : Xx Xxxxxxx Xxxxx
or to such other address or facsimile number or marked for the
attention of such other person as the recipient may designate by notice
given in accordance with the provisions of this Clause 15.
14.2 Receipt
Any such notice may be delivered personally or by prepaid post or sent
by facsimile transmission and shall be deemed to have been effectively
served:
(a) on the day of receipt, where any personally delivered letter or
facsimile message is received on any Business Day before or during
normal working hours;
(b) on the following Business Day, where any personally delivered
letter or facsimile message is received either on any Business Day
after normal working hours or on any day which is not a Business
Day;
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(c) on the third Business Day following the day of posting, upon
despatch from within Hong Kong of any posted letter to the address
of a recipient in Hong Kong, unless actually received sooner; or
(d) on the seventh Business Day following the day of posting, upon
despatch from within Hong Kong of any posted letter to the address
of an overseas recipient (and vice-versa), unless actually
received sooner.
15. GENERAL
15.1. Assignment
The Parties shall not be permitted to assign or transfer or purport to
assign or transfer any of their rights or obligations under this
Agreement without the prior written consent of the other party.
15.2. Waiver
(a) A failure or delay in exercising or the partial exercise of any
provision of, or right, election or discretion under, this
Agreement is not a waiver of that provision, right, election or
discretion.
(b) A waiver of any such provision, right, election or discretion or
of any breach or default under this Agreement must be in writing
and signed by the party granting the waiver.
15.3 Variation
A variation of any term of this Agreement must be in writing and signed
by all Parties.
15.4 Cumulative rights
The rights or remedies conferred on any party by this Agreement are in
addition to all rights and remedies of that party at law or in equity.
15.5 Further assurance
Each party will sign execute and complete all further documents
necessary to effect, perfect or complete the provisions of and the
transactions contemplated by this Agreement.
15.6 Severability
If any part of this Agreement is or becomes illegal, invalid or
unenforceable in a jurisdiction, the legality, validity or
enforceability of the remainder of this Agreement will not be affected
and this Agreement will be read as if that part had been deleted.
15.7 Entire understanding
This Agreement contains the entire understanding and agreement between
the Parties as to the subject matter of this Agreement.
15
15.8 Survival
All agreements, obligations covenants and representations contained in
this Agreement which have not been fulfilled shall unless otherwise
expressly stated survive the execution and consummation of this
Agreement and the transactions in relation thereto.
16. GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by and construed in accordance with
the laws of Hong Kong and each party shall submit to the non-exclusive
jurisdiction of the courts of Hong Kong.
IN WITNESS whereof this Agreement has been duly executed the day and year first
before written.
The Vendor
SIGNED by )
for and on behalf of Hopeful Internet )
Technologies Limited )
in the presence of : )
The Purchaser
SIGNED by )
for and on behalf of )
Genius Technology International Limited )
in the presence of: )
16
SCHEDULE 1
Particulars of the Company
A. The Company
1. Name : Shanghai Sinobull Information Corporation
Limited
2. Registered Office : Xx. 000, Xxx Xxxx Xxxx, Xxxx Xx Xxxxxxxx,
Xxxxxxxx
3. Date of Incorporation : 5 July, 2000
4. Place of Incorporation : Shanghai, PRC
5. Directors : Xxxxx Xxx, Xxxx Xxxx Xx, and Xxxx Xxxxxx
6. Registered Capital : US$1,110,000
7. Investor : Hopeful Internet Technologies Limited
17
SCHEDULE 2
Warranties, Representations and Undertakings
The Vendor hereby represents, warrants and undertakes to and with the Purchaser
and its successors in title in the following terms:-
l. CAPACITY
--------
1.1 The Vendor has full power and capacity to enter into and perform this
Agreement and this Agreement will, when executed, constitute binding
obligations on the Vendor in accordance with their terms.
1.2 All necessary authorization for the Vendor to enter into this Agreement
has been duly obtained.
2. ACCOUNTS AND RECORDS
--------------------
2.l Books and Records
-----------------
2.l.l The Company has at all times fully, properly and accurately maintained
all books, accounts and records required by law to be maintained all of
which books, accounts and records are in its possession.
2.l.2 The books, accounts and records of the Company duly and accurately
record all matters required by law to be entered therein and accurately
present and reflect in accordance with generally accepted accounting
principles and standards the assets and liabilities (actual and
contingent) of the Company and all transactions to which it is or has
been a party.
2.2 Accounting Matters
------------------
2.2.l The Accounts were prepared in accordance with the historical cost
convention and the bases and policies of accounting adopted for the
purpose of preparing the Accounts are the same as those adopted in
preparing the audited accounts of the Company in respect of the last
three preceding accounting periods of the Company.
2.2.2 The Accounts:-
2.2.2.l give a true and fair view of the assets and liabilities of
the Company at the Accounting Date and its profits for the
twelve months period ended on that date;
2.2.2.2 comply with the requirements of the relevant regulations and
legislation;
2.2.2.3 have been prepared in accordance with good accounting
practice in the PRC and comply with all current standard
accounting practices applicable to a PRC company;
2.2.2.4 are not affected by any extraordinary, exceptional or
non-recurring item;
18
2.2.2.5 properly reflect the financial position of the Company as at
their date;
2.2.2.6 fully disclose all the assets and liabilities of the Company
as at their date;
2.2.2.7 make full provision or reserve in accordance with good
accounting practice in PRC for all liabilities and capital
commitments of the Company outstanding at the Accounting Date
including contingent, unquantified or disputed liabilities;
2.2.2.8 make full and proper provision or reserve in accordance with
the principles set out in the notes included in the Accounts
for all Taxation liability to be assessed on the Company or
for which it may be accountable in respect of the twelve
months period ended on the Accounting Date and such provision
shall be sufficient to cover all Taxation assessed or liable
to be assessed on the Company or for which the Company is or
may become accountable in respect of profits, income,
earnings, receipts, transfers, events and transactions up to
and including the Accounting Date.
2.2.3 No amount included in the Accounts in respect of any fixed or current
asset exceeds its purchase price or production cost at the Accounting
Date.
2.2.4 No amount included in the Accounts in respect of any current assets
exceeds its net realisable value at the Accounting Date.
2.3 Stock-in-trade and work in progress
-----------------------------------
2.3.l In the Accounts the stock-in-trade and work in progress of the Company
have been treated strictly in accordance with standard accounting
practices applicable to a PRC company.
2.3.2 In the Accounts all redundant, obsolete and slow moving stock-in-trade
has been written off or written down as appropriate.
2.4 Depreciation
------------
In the Accounts the fixed assets of the Company have been depreciated
in accordance with standard accounting practices applicable to a PRC
company.
2.5 Deferred taxation
-----------------
Where provision for deferred Taxation is not made in the Accounts full
details of the amounts of such deferred Taxation must be disclosed in
the Disclosure Letter.
2.6 Book debts
----------
2.6.l No part of the amounts included in the Accounts or subsequently
recorded in the books of the Company as owing by any debtor is or shall
at the Completion Date be overdue by more than 12 weeks or has been
19
released on terms that any debtor pays less than the full book value of
his debt or has been written off or has proved to any extent to be
irrecoverable or is now regarded by the Company as irrecoverable in
whole or in part.
2.6.2 All amounts due to the Company from debtors as at the Completion Date
(less the amount of any provision or reserve determined on the same
basis as that applied in the Accounts and disclosed in writing to the
Purchasers) shall be recoverable in full in the ordinary course of
business (and in any event not later than 12 weeks after the Completion
Date) and none of such debts is or shall at the Completion Date be
subject to any counter-claim or set off except to the extent of any
such provision or reserve.
2.7 Treatment in the Accounts
-------------------------
There are no material differences between the accounting and taxation
treatment of any item in the Accounts.
2.8 Memorandum and articles of association and statutory books
----------------------------------------------------------
2.8.1 The copy of the memorandum and articles of association of the Company
provided by the Vendor to the Purchaser is accurate and complete in all
respects.
2.9 Documents filed
---------------
2.9.l All returns, particulars, resolutions and documents required by the
relevant legislation to be filed with the relevant government authority
in respect of the Company have been duly filed and were correct and due
compliance has been made with all the provisions of the relevant
regulations and legislation and other legal requirements in connection
with the formation of the Company.
2.9.2 All charges created by the Company have (if appropriate) been
registered in accordance with the provisions of the relevant
legislation.
3. MATTERS SINCE THE ACCOUNTING DATE
---------------------------------
3.l Since the Accounting Date:-
3.l.l no distribution of capital or income has been declared, made
or paid or agreed or resolved to be declared, made or paid;
3.l.2 no loans have been made by the Company and no loan capital or
loan has been or become liable to be repaid by the Company in
whole or in part;
3.l.3 the Company has not borrowed, raised or taken any money or
any financial facility;
3.l.4 the business of the Company has been carried on in the
ordinary and usual course both as regards the nature, scope
20
and manner of conducting the same and so as to maintain the
same as a going concern;
3.l.5 the Company has not entered into any capital commitments or
any transaction or agreement for the disposal of any asset
(including all forms of intellectual and industrial property
rights) or under which it has incurred or shall incur
(otherwise than in the ordinary and usual course of carrying
on its business) any liabilities (including contingent
liabilities) nor has it disposed of or realised any material
assets or any interest therein;
3.l.6 no resolutions have been (whether in general meeting or
otherwise) passed by the Company or any class of their
respective members;
3.l.7 nothing has been done in the conduct or management of the
affairs of the Company which would be likely to prejudice the
interests of the Purchaser as a prospective purchaser of the
Shares; and
3.l.8 no sum has been paid or voted to any director or employee (or
ex-director or ex-employee) of the Company by way of
remuneration or otherwise in excess of the rates paid to him
by the Company at the Accounting Date and no new services
agreements have been made by the Company.
3.2 Since the Accounting Date the business of the Company has not been
adversely affected by the loss of or material reduction in orders from
any important customer or the loss of or material reduction in any
source of supply or by any abnormal factor affecting similar businesses
to a like extent and after making due and careful enquiries none of the
Vendors is aware of any facts which are likely to give rise to any such
adverse effect.
3.3 Since the Accounting Date there has been no material adverse change in
the financial position or trading prospects of the Company nor is any
such material change expected.
4. FINANCE
-------
4.l Bank and other borrowings
-------------------------
4.l.l Full details of all limits on the Company's bank overdraft facilities
have been accurately disclosed in the Disclosure Letter to the
Purchaser.
4.l.2 The total amount borrowed by the Company from its bankers does not
exceed its overdraft facilities.
4.l.3 The total amount borrowed by the Company (as determined in accordance
with the provisions of the relevant instrument) does not exceed any
limitation on its borrowing power contained in its articles of
association or in any debenture or other deed or document binding upon
it.
21
4.l.4 The Company has no outstanding loan capital, nor has it agreed to
create or issue any, or factored any of its debts nor borrowed any
money which it has not repaid save for borrowings not exceeding the
amounts shown in the Accounts.
4.l.5 The Company has not since the Accounting Date repaid or become liable
to repay any loan or indebtedness in advance of its stated maturity.
4.2 Loans by and debts due to the Company
-------------------------------------
The Company has not lent any money (including shareholders' loan) which
has not been repaid to it, nor owns the benefit of any debt (whether or
not due for payment) other than debts owing to it in the ordinary
course of its business, and the Company has not made any loan or
quasi-loan contrary to the relevant legislation.
4.3 Liabilities
-----------
There are no liabilities (including contingent liabilities) which are
outstanding on the part of the Company other than those liabilities
disclosed in the Accounts or incurred in the ordinary and proper course
of business since the Accounting Date.
4.4 Bank accounts
-------------
4.4.l A statement of the bank accounts of the Company and of the credit or
debit balances thereon as at a date not more than seven days before the
date of Completion has been supplied to the Purchaser.
4.4.2 Since such statement there have been no payments out of any such
accounts except of payments in the ordinary course of business and the
balance on current accounts at the Completion Date shall not be
substantially different from the balances shown on such statement.
4.5 Working capital
---------------
Having regard to existing bank and other facilities the Company has
sufficient working capital for the purposes of continuing to carry on
its business in its present form and at the increased levels of
turnover contemplated herein following the Completion Date and for the
purposes of executing, carrying out and fulfilling in accordance with
their terms all orders, projects and contractual obligations which are
binding upon the Company and remain outstanding.
4.6 Continuance of facilities
-------------------------
4.6.l In relation to debentures, acceptances, credits, overdrafts, loans or
other financial facilities outstanding or available to the Company:-
4.6.l.l full details thereof and true and accurate copies of all
documents relating to such facilities have been disclosed in
the Disclosure Letter and the enclosures thereof; and
4.6.l.2 there has been no contravention of or non-compliance with any
provision of any such document.
22
4.7 Grants
------
4.7.l Full particulars have been disclosed of all grants, allowances, loans
or financial aids of any kind applied for or received or receivable by
the Company from any governmental department, board, body or agency or
any other supranational or national or local authority body or agency.
4.7.2 No act or transaction has been effected or omitted in consequence of
which:-
4.7.2.l the Company is or may become liable to refund wholly or
partly any of the grants, allowances, loans or aids referred
to in clause 4.7.l; or
4.7.2.2 any application made by the Company for the aforesaid grants,
allowance, loans or aids shall be rejected, deferred or not
accepted in full.
5. TAXATION
--------
5.l Provision for Taxation
----------------------
The provision for Taxation in the Accounts shall be sufficient (on the
basis of the law as presently existing) to cover all Taxation assessed
or liable to be assessed on the Company or for which the Company is,
may be or may become accountable in respect of profits, income,
earnings, receipts, transfers, events and transactions up to the
Accounting Date.
5.2 Obligation to account
---------------------
The Company has duly complied with its obligations to account to the
Commissioner of Inland Revenue and all other authorities for all
amounts for which it is or may become accountable in respect of
Taxation.
5.3 Returns and clearances
----------------------
All returns in connection with Taxation that should have been made by
the Company have been made and have been made correctly and on a proper
basis making full disclosure of all matters relevant to the assessment
of the Company's liability to Taxation. No such return is likely to be
disputed and there are no facts known or which would on reasonable
enquiry be known to the Company, its Directors or the Vendors which may
give rise to any dispute or to any claim for any Taxation or the
deprivation of any relief or advantage that might have been available
to the Company under any relevant legislation.
5.4 Disclosure
----------
There are no assessments or charges to Taxation against the Company
which are the subject of any present dispute with the relevant
government tax authority or any relevant statutory authority whether
such amounts of Taxation have been paid or not and regardless of which
form such dispute is being or is to be heard.
23
6. ASSETS
------
6.l Ownership of Assets
-------------------
6.l.l The Company was at the Accounting Date the owner with good and
marketable title of all the assets included in the Accounts and now so
owns and has in its possession and under its control all such assets
(save for current assets subsequently disposed of in the ordinary
course of its business). Save as disclosed in the Disclosure Letter,
all the existing assets and assets acquired by the Company after the
Accounting Date are free from any charge, lien, encumbrance or equity
and no other person has or claims any rights in relation to any of such
assets.
6.l.2 The fixed and loose plant, machinery, furniture, fixtures, fittings and
equipment, vehicles and other movable assets used in connection with
the business of the Company are in the possession and control and are
the sole and absolute property of the Company free from any charge,
lien, encumbrance, hire purchase, leasing or rental agreement or
agreement for payment on deferred terms or bill of sale and are in good
repair and condition and satisfactory working order and comprise all
assets necessary for the continuation of the business of the Company as
carried on at the Completion Date.
6.2 Stocks
------
6.2.l The stocks of raw materials, packaging materials and finished goods now
held are not excessive and are adequate in relation to the current
business requirements of the business of the Company and none of such
stock is obsolete, unusable, unmarketable or inappropriate or of
limited value in relation to the current business of the Company and no
contracts are outstanding which are likely to result in the foregoing
not being true.
6.2.2 The stock-in-trade of the Company is in good condition and is capable
of being sold by the Company in the ordinary course of its business in
accordance with the current price list without rebate or allowance to a
purchaser.
6.3 Retention of title
------------------
The Company has not purchased or agreed to purchase any stock, goods,
materials or assets on terms that property therein does not pass until
full payment is made or all indebtedness discharged.
6.5 Insurance
---------
6.5.1 The Company is fully covered by valid insurances against all risks
normally insured against by persons carrying on the same business as
that carried on by the Company and in particular all assets are and
have at all material times been insured to the full replacement or
reinstatement value thereof against fire and such other risks as
aforesaid and the Company is and has at all material times been
adequately covered against accident, damage, injury, third party loss
(including product liability), loss of profits and other risks normally
insured against by persons carrying on the same business as that
carried on by the Company.
24
6.5.2 Full particulars have been disclosed of all such insurances and there
are no outstanding claims or circumstances likely to give rise to a
claim thereunder and nothing has been done or omitted to be done which
has made or could make any policy of insurance void or voidable or
whereby the premium is likely to be increased.
6.5.3 None of the policies are subject to any special or unusual terms or
restrictions or to the payment of any premium in excess of the normal
rate.
7. INTELLECTUAL PROPERTY
---------------------
7.1 The Company is entitled to carry on its present business in the manner
in which it is presently carried on and such business does not and is
not likely to infringe or conflict with any right (and in particular
any industrial or intellectual property right) of any other person.
7.2 All trademarks, patents, designs, business names, trade names,
copyright, know-how and other similar industrial, commercial or
intellectual rights used by the Company in connection with its business
have been disclosed in the Disclosure Letter and are in the sole
beneficial ownership of the Company and to the extent to which the same
are capable of registration are registered in the name of the Company
as sole proprietor and are valid and enforceable and none of them is
being used, claimed, opposed or attacked by any other person nor has
anything been done or omitted whereby they or any of them might cease
to be valid and enforceable or used, claimed, opposed or attacked as
aforesaid.
7.3 No licence or other authority has been granted or agreed to be granted
by the Company to any person to use in any manner or to do anything
which would or might otherwise infringe any of the rights referred to
(specifically or in general terms) in clause 7.2 and the Company has
not permitted to be disclosed or agreed to disclose to any person other
the Purchaser any of its know-how, trade secrets, confidential
information, technical processes or lists of customers or suppliers.
7.4 All licences and authorities from any other person under which any of
the rights referred to (specifically or in general terms) in clause 7.2
are used by the Company and are in full force and effect and the
Vendors are not aware of any breach by the Company of the terms and
conditions of any such licence or authority or of any circumstances
whereby the same may be prematurely terminated or rescinded.
7.5 There is no infringement of any Intellectual Property Rights in the
operation of any business of the Company and all products and
properties of the Company are not subject to any third party's
Intellectual Properties Rights.
8. COMMITMENTS AND CONTRACTS
-------------------------
8.1 The Company is not a party to or subject to any liability (existing or
contingent) under any contract or arrangement not entered into in the
ordinary and usual course of business or any contract or arrangement of
an unusual, onerous or long term nature or which is not of an arms'
length nature.
25
8.2 All contracts for the purchase by the Company of raw materials, goods
or services or for the supply of goods or services by the Company are
on a formal arms' length basis.
8.3 All obligations of the Company to buy foreign exchange are against
known commitments to pay for stock to be imported and paid for in
foreign currency and any forward sales of foreign currency by the
Company are against known receipts of the currency to be sold and the
Company has no commitments in foreign exchange which are not covered by
a forward purchase or sale as appropriate of the relevant currency.
8.4 The Company is not and has not agreed to become bound by any debenture,
guarantee or contract of indemnity or suretyship and there is not now
outstanding any guarantee or contract for indemnity or suretyship given
for the accommodation of or in respect of any obligation on the part of
the Company.
8.5 The Company has not given any power of attorney which remains in force.
8.6 The Company has not entered into or agreed to enter not any selling,
purchasing, manufacturing or licensing agreement or arrangement or any
agreement or arrangement which in any way restricts the freedom of the
Company to carry on its business or any part thereof in any part of the
world in such manner as it thinks fit.
8.7 The Company does not owe any debts or other monies to the Vendor or any
of the Directors or any person connected with the Vendor or the
Directors or any of them respectively.
9. EMPLOYMENT
----------
9.1 Employment and terms of employment
----------------------------------
9.1.1 Full particulars of the identities, dates of commencement of employment
or appointments to office and terms and conditions of employment of all
the employees and officers of the Company including without limitation
profit sharing schemes or commission or discretionary bonus
arrangements have been fully and accurately disclosed in the Disclosure
Letter to the Purchaser.
9.1.2 There are no agreements or other arrangements whether or not legally
binding between the Company and any trade union or other body
representing its employees.
9.2 Bonus schemes
-------------
Save as disclose in the Disclosure Letter, there are no schemes in
operation by or in relation to the Company whereunder any employee of
the Company is entitled to a commission or remuneration of any sort
calculated by reference to the whole or part of the turnover profits or
sales of the Company.
9.3 Changes in remuneration
-----------------------
9.3.1 Since the date of the Disclosure Letter:-
26
9.3.1.1 no change has been made in the rate of remuneration or the
emoluments or pension benefits of any officer, ex-officer or
senior executive of the Company (a senior executive being a
person in receipt of remuneration in excess of HK$5,000.00
per annum);
9.3.1.2 no change has been made in the terms of employment of any
such officer or senior executive; and
9.3.1.3 no additional officers or senior executives have been
appointed.
9.3.2 The Company is not bound or accustomed to pay any monies other than in
respect of remuneration or emoluments of employment or pension benefits
to or for the benefit of any officer or employee of the Company.
9.4 Termination of contracts of employment
--------------------------------------
9.4.1 All subsisting contracts of service to which the Company is a party are
determinable on 12 months' notice or less without compensation.
9.4.2 No senior executive of the Company and no officer of the Company has
given or received notice terminating his employment except as expressly
contemplated in this Agreement and no such executive or officer will be
entitled to give such notice as a result of the provisions of this
Agreement.
9.5 Industrial disputes and employee claims
---------------------------------------
9.5.1 Neither the Company nor its employees are involved in any industrial
dispute and there are no facts known or which should on reasonable
enquiry be known to the Company, its Directors or the Vendor which
might suggest that there may be any such industrial dispute or that any
of the provisions of this Agreement may lead to any such industrial
dispute.
9.5.2 There is no outstanding claim against the Company by any person who is
now or has been an officer or employee of the Company or any dispute
between the Company and a material number or class of its employees.
9.6 Redundancies
------------
No employee of the Company shall become redundant and be entitled to a
redundancy payment as a result of any provision of this Agreement.
9.7 Pensions
--------
9.7.1 Other than required by the relevant legislations the Company is not
under any legal or moral liability or obligation or a party to any
ex-gratia arrangement or promise to pay pensions, gratuities,
superannuation allowances or the like to any of its past or present
officers or employees or their dependents.
9.7.2 Full particulars of the Company's retirement benefits scheme ("Scheme")
have been disclosed in the Disclosure Letter including without
27
limitation true copies of the trust deeds and the latest actuarial
report and full and accurate particulars of the assets funding
arrangements, rules and current membership.
9.7.3 The assets, investments or policies held by the trustees of the Scheme
are sufficient to satisfy the liabilities and obligations (both current
and contingent) which the Scheme owes to its members at the date
hereof.
10. LITIGATION, DISPUTES AND WINDING-UP
-----------------------------------
10.1 Claims
------
There are no outstanding claims against the Company in respect of
defects in quality or delays in delivery or completion of contracts or
deficiencies design or performance of equipment or otherwise relating
to liability for goods or services supplied or to be supplied by the
Company and no such claims are threatened or anticipated and the
Company has not given otherwise than in the ordinary course of business
any guarantee or warranty in relation to any goods or services supplied
or to be supplied by the Company.
10.2 Litigation
----------
10.2.1 The Company is not engaged in any litigation or arbitration proceedings
as plaintiff or defendant; there are no proceedings pending or
threatened either by or against the Company and there are no
circumstances which are or may be likely to give rise to any litigation
or arbitration.
10.2.2 There is no dispute with any revenue or other official department in
Shanghai or elsewhere in relation to the affairs of the Company and
there are no facts which may give rise to any dispute.
10.2.3 No order has been made or petition presented or resolution passed for
the winding up of the Company nor has any distress, execution or other
process been levied in respect of the Company which remains
undischarged nor is there any unfulfilled or unsatisfied judgement or
court order outstanding against the Company.
10.3 Compliance with legislation
---------------------------
10.3.1 Neither the Company nor its officers, agents or employees (during the
course of their duties to the Company) has committed or omitted to do
any act or thing the commission or omission of which is or could be in
contravention of any applicable laws and regulations (whether of
Shanghai or elsewhere) giving rise to any fine, penalty, default
proceedings or other liability on its part.
10.3.2 The Company has conducted and is conducting its business in all
respects in accordance with all applicable laws and regulations whether
of Shanghai or elsewhere.
10.4 Documents stamped
-----------------
28
All documents which in any way affect the right, title or interest of
the Company in or to any of its property, undertaking or assets or to
which the Company is a party and which attract stamp duty have been
duly stamped within the requisite period for stamping.
10.5 Business names
--------------
The Company does not use a name for any purpose other than its full
corporate name.]
10.8 Powers of attorney and authorities
----------------------------------
10.8.1 There are not in force any powers of attorney given by the Company.
10.8.2 There are not outstanding any authorities whether express or implied by
which any person may enter into any contract (other than the Agreement)
or commitment to do anything on behalf of the Company.
10.9 Licences and consents
---------------------
10.9.1 The Company has obtained all necessary licences and consents from any
person, authority or body for the proper operation of its business.
10.9.2 The Company is not in breach of any of the terms or conditions of any
such licences or consents which are all valid and subsisting and there
are no factors that might in any way prejudice the continuation or
renewal of any of them.
11. CAPITAL OF THE COMPANY
----------------------
11.1 The registered capital of the Company is as set out in Schedule 1.
11.2 The registered capital has been fully paid and the capital examination
procedures have been completed.
11.3 There is not now any loan capital of the Company nor any agreement,
arrangement or option under which any person may now or at any time
hereafter call for the creation, allotment, issue, sale or transfer of
any loan or share capital of the Company or require to be put under
option any loan or share capital of the Company.
11.4 The Company:-
11.4.1 is not the holder or beneficial owner of and has not agreed
to acquire any share or loan capital of any other company or
corporation (whether incorporated in Shanghai or elsewhere);
and
11.4.2 has neither a branch outside Shanghai nor any permanent
establishment outside Shanghai.
12. OTHER OPERATIONS
----------------
12.1 The Company does not have and has never had any interest in or agreed
to enter into any partnership, consortium, joint venture or similar
arrangement with any other entity save as disclosed in this Agreement.
29
13. RECITALS, SCHEDULES AND DISCLOSURES
-----------------------------------
The information and circumstances relating to the Company which are
known or ought on reasonable enquiry to be known to the Vendor and
which are material to be known by the Purchaser have been accurately
and completely disclosed in [the Disclosure Letter and] the recitals to
the Agreement the contents of all the schedules and all matters
disclosed in the Disclosure Letter and other information relating to
the Company given by the Vendor or their accountants to the Purchaser
are accurate and complete in every respect and there is no fact or
matter undisclosed which renders any such matters or information
untrue, incomplete or misleading.
14. EFFECT OF AGREEMENT
-------------------
14.1 No person is entitled to receive from the Company any finder's fee,
brokerage or commission in connection with the sale of the Shares to
the Purchaser.
14.2 There are no contracts or arrangements (whether written or oral) to
which the Company is a party which shall by their terms be determinable
as a result of the provisions of this Agreement or which shall or may
be determined by performance or Completion of this Agreement.
14.3 The execution and delivery of this Agreement and the fulfilment and
performance of the compliance with the terms thereof by the Vendor do
not and shall not:-
14.3.1 conflict with, violate or result in a breach by the Company
or the Vendor of the terms, provisions or conditions of:-
14.3.1.1 any agreement,
14.3.1.2 any law, undertaking to or judgement order,
injunction or decree of any court, or
14.3.1.3 the memorandum and articles of association of the
Company;
14.3.2 relieve any person of any contractual or other obligation to
the Company or entitle any person to terminate any such
obligation;
14.3.3 terminate or make subject to termination or adversely affect
from the Company's point of view the enjoyment of any present
or future benefit or privilege;
14.3.4 result in any customer or supplier of the Company ceasing to
deal or substantially reducing the level of his dealings with
the Company;
14.3.5 result in any indebtedness present or future of the Company
becoming due or capable of being declared due and payable
prior to the stated maturity date; or
30
14.3.6 give rise to any contractual or other obligation of the
Company to any person or entitle any person to require the
performance of or compliance with any existing contractual or
other obligation of the Company.
31
SCHEDULE 3
Completion Requirements
On the Completion Date, the Vendor and the Purchaser shall have the following
obligations:
1. Tax Deed of Indemnity
---------------------
Each party to this Agreement shall cause to be executed the Tax
Indemnity Deed in substantially the form specified in Schedule 4.
2. Obligations of the Vendor
-------------------------
2.1 The Vendor shall hand to or to the order of the Purchaser the
following:
(a) the statutory books and record duly made up to the Completion Date
and common seal(s) and chops of the Company and all its
subsidiaries;
(b) the written resignations of all the directors of the Company in
which the relevant director shall acknowledge that he/she has no
claim or right of action against the Company or any of it
subsidiaries for compensation for loss of office, termination of
employment or otherwise;
(c) documents to the reasonable satisfaction of the Purchaser
evidencing that the Company has been duly established under the
PRC law and is wholly owned by the Company;
(d) an assignment or other document in the agreed form duly signed by
the Vendor transferring the Intellectual Property Rights of the
Metastock Project to the Purchaser;
2.2 The Vendor shall procure that a board meeting of the Company be held at
which:
(a) it shall be resolved that the transfer of Sale Shares and the
adoption of the Amended and Revised Articles be approved as the
Purchaser may direct;
(b) nominees of the Purchaser be appointed as directors of the
Company.
3. Obligations of the Purchaser
----------------------------
3.1 The Purchaser shall procure that a board meeting of the Purchaser be
held at which a resolution approving the allotment of the Consideration
Shares to the Vendor pursuant to the terms of this Agreement be passed.
3.2 The Purchaser shall deliver or cause to be delivered to the Vendor:
(a) the share certificates in respect of the Consideration Shares,
issued in the name of the Vendor or as it may direct in writing
32
prior to Completion and a certified true copy of the register of
members of the Purchaser showing the Vendor's ownership of the
Consideration Shares; and
(b) certified true copy of the written resolutions of the board of
directors or shareholders of the Purchaser (i) approving the
purchase of the Sale Shares, (ii) the issue and allotment of the
Consideration Shares and all terms in this Agreement and the
implementation thereof; and (iii) the appointment of one director
nominated by the Vendor to the board of directors of the
Purchaser.
33
SCHEDULE 4
Tax Indemnity Deed
THIS DEED is made the day of 2003.
BETWEEN
(l) Hopeful Internet Technologies Limited, a company incorporated in the
British Virgin Islands whose registered address is [ ]
business address is Xxxxx X, 00/X., Xxxx Xxxxx, 000 Xxxxxx Xxxx,
Xxxxxxxxxxx, Xxxx Xxxx (the "Vendor"); and
(2) Genius Technology International Limited, a company incorporated under
the laws of Hong Kong whose registered office is situate at 19th Floor,
Wing On House, Xx. 00 Xxx Xxxxx Xxxx Xxxxxxx, Xxxx Xxxx (the
"Purchaser"); and
(3) Shanghai Sinobull Information Corporation Limited, a company
incorporated in Shanghai whose registered office is situate at 0000,
000 Xxxxxxx Xxxx Xxxx, Xxxxxxxx, XXX (the "Company").
WHEREAS pursuant to an agreement for the sale and purchase of equity capital in
the Company dated [o], the Vendor and the Purchaser have today
completed the sale and purchase of all the registered capital of the
Company in reliance (inter alia) upon the undertaking of the Vendor to
enter into this deed and upon the indemnities by the Vendor hereinafter
contained.
NOW THIS DEED made in pursuance of the aforesaid undertaking and in
consideration of the aforesaid purchase of shares WITNESSETH as
follows:-
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
"Accounts" means the audited management accounts of the
Company comprising the balance sheet as at the
Management Accounting Date, the profit and loss
account for the twelve-month period ended on the
Management Accounting Date and the notes thereto;
"Agreement" means the agreement for the sale and purchase of
the Sale Shares dated [o] under which the Vendors
agreed to sell and the Purchaser agreed to
purchase the entire equity capital of the Company;
"Claim for Taxation" includes:-
(1) any notice, demand, assessment letter or other
document issued or action taken by or on
behalf of the relevant tax authorities in the
PRC or any other statutory or governmental
34
authority or body whatsoever in any part of
the world whereby it appears that the Company
is or may be liable to make any payment of any
Taxation whether or not the same is primarily
payable by the Company and whether or not the
Company has or may have any right of
reimbursement;
(2) the loss or counteracting or clawing back of
any Relief which would otherwise have been
available to the Company; and
(3) the nullifying or cancellation or set-off of a
right to repayment of Taxation which would
have been available to the Company;
"Completion" means the completion of the sale and purchase of
the Sale Shares pursuant to the Agreement;
"Final Determination"in relation to a Claim for Taxation where there is
an appeal against that assessment, means:-
(1) an agreement under section 64(3) of the Inland
Revenue Ordinance (Cap. 112 of the Laws of
Hong Kong) or any legislative provision
corresponding to that section; or
(2) a decision of a court or tribunal from which
either no appeal lies or in respect of which
no appeal is made within the prescribed time
limit;
"Indemnified Person" means the Purchaser and the Company, and their
respective successors and assigns;
"Liability to
Taxation" means any liability to make a payment in respect
of Taxation;
"Management
Accounting Date" Means [31 December 2002];
"Relief" includes any relief, allowance, exemption, set-off
or deduction in computing or against profits,
income or gains of any description or from any
source or credit against Taxation;
"Sale Shares" means all the equity capital of the Company
registered in the name of and legal and
beneficially owned by the Vendor which have been
or are to be sold to the Purchaser pursuant to the
Agreement; and
"Taxation" means and includes all forms of tax, rate, levy,
duty, charge, impost, fee, deduction or
35
withholding of any nature now or hereafter
imposed, levied, collected, withheld or assessed
by any taxing or other authority in any part of
the world / the PRC and includes any interest,
additional tax, penalty or other charge payable or
claimed in respect thereof.
1.2 Interpretation
In this Deed unless the context otherwise requires all expressions used
in the Agreement shall have the same meanings in this Deed and the
definitions and interpretation contained in the Agreement shall be
deemed to be incorporated herein.
1.3 Headings
The headings contained in this Deed are for convenience only and shall
have no legal effect nor shall they affect the construction and
interpretation of this Deed.
2. INDEMNITY
2.1 Subject as hereinafter provided the Vendor hereby covenant with the
Purchaser (for itself and for its successors and assigns) and the
Company (for itself and for its successors and assignors) and as a
separate covenant with the each of them that the Vendor and its
respective representatives will indemnify the Purchaser and the Company
and keep the Purchaser and the Company indemnified against any loss
arising from time to time from a Claim for Taxation which imposes or
seeks to impose on the Company and/or the Purchaser a Liability to
Taxation as a consequence of any one or more events occurring on or
before Completion and (without prejudice to the generality of the
foregoing) against:-
(a) the amount of any settlement of a Claim for Taxation;
(b) any depletion of or diminution in the net tangible assets or any
increase in the amount of the net liabilities of the Company or
any loss by the Company of any benefit or advantage subsisting or
which might reasonably have been supposed to subsist at Completion
and arising by reason of or in consequence of or in connection
with any Liability to Taxation;
(c) the costs and expenses from time to time reasonably and properly
incurred by the Company in relation to any demands, actions,
proceedings and claims in respect of Liability to Taxation or
Claim for Taxation; and
(d) estate duty in respect of the death (whether before or after) of
any person whereby a liability in respect of estate duty may fall
on the Company by reason of any transfer of property or other
circumstances occurring prior to or at Completion.
2.2 No delay or omission on the part of an Indemnified Person in the
exercise of any right, power or privilege hereunder shall impair such
36
right, power or privilege or be construed as a waiver thereof and any
single or partial exercise of any such right, power or privilege shall
not preclude the further exercise of that or any other right, power or
privilege.
2.3 All sums payable by the Vendor to the Purchaser and/or the Company
and/or any of their respective successors or assigns hereunder shall be
paid insofar as is lawful free and clear of all deductions and
withholdings whatsoever and in the event that a deduction or
withholding is lawfully made the Vendor shall pay such greater sum
which after any lawful deduction or withholding therefrom results in a
net payment equal to the amount due under the indemnity provided for in
Clause 2.1.
2.4 If a sum payable by the Vendor hereunder attracts a Liability to
Taxation (or would have done so but for the availability of some
Relief) then the Vendor shall pay such further amount so that the net
receipts of the Company after Taxation in respect of the payment shall
be as if the payment were not subject to Taxation in the hands of the
Company.
2.5 The Vendor shall be liable under the indemnity in Clause 2.1
notwithstanding any Reliefs, rights or repayment or other rights or
claims of a similar nature which may be available to any person
entitled to the benefit of such indemnity to set against or otherwise
mitigate any liability arising from any Claim for Taxation so that the
indemnity in Clause 2.1 shall take effect as though no such Reliefs,
rights or repayment or other rights or claims were available.
3. LIMITATION OF LIABILITY
3.1 The Vendor shall not incur liability under the indemnities hereinbefore
contained by reason of a Liability to Taxation or Claim for Taxation
imposed on the Company and/or the Purchaser:-
(a) to the extent that full provision or reserve in respect thereof
was specifically made in the Accounts;
(b) to the extent that the Liability to Taxation or Claim for Taxation
arises or is increased as a result only of any increase in rates
of Taxation made after Completion with retrospective effect;
(c) to the extent that the liability to make such payment would not
have arisen but for a voluntary act, transaction or omission
carried out (other than pursuant to a legally binding commitment
created on or before Completion) by the Company after Completion
and otherwise than in the ordinary course of business; and
(d) to the extent that the liability to make such payment is in
respect of Taxation for which the Company is primarily liable
arising as a result of transactions carried out by them in the
ordinary course of business after Completion.
4. NOTICE OF CLAIMS
If the Purchaser and/or the Company shall become aware of any Claim for
37
Taxation relevant for the purposes of this Deed it shall as soon as
reasonable and practicable give written notice thereof to the Vendor
and shall (if the Vendor shall indemnify and secure the Purchaser
and/or the Company as the case may be to their reasonable satisfaction
against all losses, costs, damages, charges and expenses including
interest, fines, penalties and interest on overdue tax which may be
incurred hereby) take such action and give such information and
assistance in connection with the affairs of the Company as the Vendor
may reasonably and promptly by written notice request to avoid, resist,
appeal or compromise such Claim for Taxation PROVIDED THAT the
Purchaser and the Company shall not be obliged to appeal against any
Claim for Taxation made on them if after the Vendors have been given
written notice of such claim pursuant hereto they have not within 15
days thereafter received from the Vendor instructions in writing to do
so and PROVIDED FURTHER THAT in the final event any action taken shall
be at the discretion of the Purchaser or the Company (as the case may
be) and shall not interfere with the ordinary course of their
businesses and/or which in their opinions is likely to prejudice their
businesses and/or their relationships with the relevant taxing, fiscal
or other appropriate authority.
5. ASSIGNMENT
The whole of or any part of the benefit of this Deed may be assigned by
the Purchaser or the Company to the extent that the indemnities given
by this Deed shall enure to the benefit of such party's successors and
assigns.
6. NOTICES
6.1 Delivery
All notices, demands or other communications which are required to be
given under this Deed shall be in writing in English and sent to:
(a) in the case of the Vendor:
Address : Xxxxx X, 00/X, Xxxx Xxxxx, 000 Xxxxxx Xxxx,
Xxxxxxxxxxx, Xxxx Xxxx
Facsimile number : [ ]
Attention : Mr Xxxxx Xxxx
(b) in the case of the Purchaser:
Genius Technology International Limited
Address : 19/F, Wing On House,
00 Xxx Xxxxx Xxxx Xxxxxxx, Xxxx Xxxx
Facsimile number : (000) 00000000
Attention : Xx Xxxxxxx Xxxxx
(c) in the case of the Company:
Address : [ ]
Facsimile number : [ ]
Attention : [ ]
38
or to such other address or facsimile number or marked for the
attention of such other person as the recipient may designate by notice
given in accordance with the provisions of this Clause 6.
6.2 Receipt
Any such notice may be delivered personally or by prepaid post or sent
by facsimile transmission and shall be deemed to have been effectively
served:
(a) on the day of receipt, where any personally delivered letter or
facsimile message is received on any Business Day before or during
normal working hours;
(b) on the following Business Day, where any personally delivered
letter or facsimile message is received either on any Business Day
after normal working hours or on any day which is not a Business
Day;
(c) on the third Business Day following the day of posting, upon
despatch from within Hong Kong of any posted letter to the address
of a recipient in Hong Kong, unless actually received sooner; or
(d) on the seventh Business Day following the day of posting, upon
despatch from within Hong Kong of any posted letter to the address
of an overseas recipient (and vice-versa), unless actually
received sooner.
6.4 Nothing in this Clause 6 shall preclude the service of communication or
the proof of such service by any other mode permitted by law.
7. GOVERNING LAW
7.1 This Deed shall be governed by and construed in accordance with the
laws of Hong Kong.
7.2 Each party irrevocably and unconditionally submits to the non-exclusive
jurisdiction of the courts of Hong Kong and courts of appeal from them.
Each party waives any right it has to object to an action being brought
in those courts, to claim that the action has been brought in an
inconvenient forum, or to claim that those courts do not have
jurisdiction.
8. PROCESS AGENT
8.1 The Vendor hereby irrevocably appoints [o] of [address] as its/his
process agent to receive on its/his behalf service of process in any
proceedings in Hong Kong with respect to this Agreement. Service shall
be deemed completed on delivery to such process agent for Vendor
(whether or not such service is forwarded to or received by the
Vendors).
8.2 The Company hereby irrevocably appoints [o] of [address] in Hong Kong
as its process agent to receive on its behalf service of process in any
proceedings in Hong Kong with respect to this Agreement. Service shall
39
be deemed completed on delivery to such process agent for the Company
(whether or not such service is forwarded to or received by the
Company).
8.3 If for any reason the process agent for Vendor or the process agent for
the Company ceases or fails to act as process agent, the Vendors or the
Company (as the case may be) agree to appoint their respective
substitute process agent acceptable to other parties and to deliver to
other parties proof of the newly appointed process agent's acceptance
of such appointment within 7 calendar days.
IN WITNESS whereof this Xxxx has been duly executed the day and year first
before written.
The Vendor
SEALED with THE SEAL of )
Hopeful Internet Technologies Limited )
and SIGNED by )
)
in the presence of : )
The Purchaser
SIGNED by )
for and on behalf of )
Genius Technology International Limited )
in the presence of: )
The Company
SIGNED by )
for and on behalf of )
Shanghai Sinobull Information )
Corporation Limited )
in the presence of: )
40
SCHEDULE 5
----------
(Particulars of the Purchaser)
------------------------------
1. Name : Genius Technology International Limited
2. Place of Incorporation : Hong Kong
3. Company No : 678874
4. Date of Incorporation : 14 June 1999
5. Share Capital : HK$6,000,000 divided into 600,000,000 ordinary
shares of HK$0.01 each
6. Number of Issued Shares : 279,999,999 ordinary shares of HK$0.01 each
7. Shareholders and number of Shares held :
(a) Illumination International Limited holds 167,199,999 ordinary
shares of HK$0.01 each;
(b) Twin Tiger Limited holds 52,800,000 ordinary shares of HK$0.01
each;
(c) Kingsway Electronic Services Limited holds 15,000,000 ordinary
shares of HK$0.01 each;
(d) Xx Xxxx Xxxx holds 9,000,000 ordinary shares of HK$0.01 each;
(e) Xxxx Xxx holds 12,150,000 ordinary shares of HK$0.01 each
(f) Xxxx Xxxx Xxxx holds 11,250,000 ordinary shares of HK$0.01 each;
and
(g) Xx Xxxx holds 12,600,000 ordinary shares of HK$0.01 each
41