Exhibit 10.8
Dated Seventh day of September 2007
CV DISTRIBUTION SERVICES LTD.
and
SWINGSIDE LIMITED
and
SEAVI ADVENT CHL INVESTMENTS LTD.
and
FORTIS PRIVATE EQUITY ASIA FUND N.V.
and
PROSPER FIELD HOLDINGS LIMITED
(as Sellers)
XX. XXXXXXX XXXX XXXXX
and
XX. XXXXX XXXX JIMIN
(as Warrantors)
and
MENLO WORLDWIDE, LLC
(as Buyer)
-----------------------------------
AGREEMENT
FOR
THE SALE AND PURCHASE OF
THE ENTIRE ISSUED AND OUTSTANDING
SHARE CAPITAL OF
CHIC HOLDINGS LIMITED
-----------------------------------
CONTENTS
Clause Page
1. Interpretation........................................................... 4
2. Sale And Purchase........................................................12
3. Conditions...............................................................13
4. Completion...............................................................19
5. Warranties And Pre-Completion Conduct....................................20
6. The Buyer's Remedies And The Seller'S Remedies...........................21
7. Further Undertakings By The Sellers......................................25
8. Undertakings By The Buyer................................................27
9. Joint Transitional Management Committee..................................28
10. Confidential Information.................................................30
11. Announcements............................................................31
12. Costs....................................................................31
13. Escrow Account...........................................................32
14. General..................................................................34
15. Entire Agreement.........................................................35
16. Assignment...............................................................35
17. Notices..................................................................35
18. Force Majeure............................................................37
19. Governing Law And Jurisdiction...........................................37
20. Governing Language.......................................................38
21. Further Assurances.......................................................38
22. Counterparts.............................................................39
Schedule 1 Information About The Sellers, Company And The Subsidiaries..40
Schedule 2 Completion Requirements......................................44
Schedule 3 Accounting Principles........................................48
Schedule 4 Warranties...................................................49
Schedule 5 Action Pending Completion....................................63
Schedule 6 Real Property................................................67
Schedule 7 Intellectual Property Rights.................................76
Schedule 8 Tax Deed.....................................................77
Schedule 9 Key Personnel................................................78
Schedule 10 Form Employment, Confidentiality And Non-Compete Agreement...79
Schedule 11 Non-Disclosure And Non-Compete Agreement.....................80
Schedule 12 Disclosure Letter............................................81
THIS AGREEMENT is made on 7th day of September 2007 in Hong Kong
BY AND BETWEEN:
(1) Prosper Field Holdings Limited, a company incorporated in the
British Virgin Islands, whose registered office is at Kingston
Xxxxxxxx, P. X. Xxx 000, Xxxx Xxxx, Xxxxxxx, Xxxxxxx Xxxxxx
Xxxxxxx ("Prosper Field");
(2) Swingside Limited, a company incorporated in Hong Kong, whose
registered office is at 5705 57th Floor, Xxx Xxxxxx, 00
Xxxxx'x Xxxx Xxxxxxx, Xxxx Xxxx ("Swingside");
each party set out in paragraphs (1) to (2) is referred
to as an "Ordinary Share Seller" and together, the "Ordinary
Share Sellers";
(3) CV Distribution Services Ltd., a company incorporated in the
Cayman Islands, whose registered office is at Xxxxxx House,
South Church Street, Xxxxxx Town, Grand Cayman, Cayman Islands
("CVDS");
(4) SEAVI Advent CHL Investments Ltd., a company incorporated
British Virgin Islands, whose registered office is at P.O. Box
957, Offshore Incorporations Centre, Road Town, Tortola,
British Virgin Islands ("SEAVI");
(5) Fortis Private Equity Asia Fund N.V., a company incorporated
in Belgium, whose registered office is at Xxxxxxxxxxx 0, 0000,
Xxxxxxxx, Xxxxxxx ("Fortis");
each party set out in paragraphs (3) to (5) is referred
to as a "Preferred Share Seller" and together, the "Preferred
Share Sellers"; each Ordinary Share Seller or Preferred Share
Seller is referred to as a "Seller" and together, the "Sellers";
(6) Xx. Xxxxxxx Xxxx Xxxxx, a PRC citizen (holder of PRC ID
Number: 310104196411064078), whose address is at Xx.000, Xxxx
0000 Xxxxx Xxxx, Xxxxxxxx District, Shanghai PRC, 201108
("Xxxxxxx");
(7) Xx. Xxxxx Xxxx Jimin, a PRC citizen (holder of PRC ID
Number: 310107671123281), whose address is at Xxxx000, 000
Xxxxxxx Xxxxxxxx, 000 Xxxxxxx Xxxx, Xxxxx Xxxxxxxx, Xxxxxxxx
XXX, 000000 ("Xxxxx"); and
each party set out in paragraphs (6) to (7) is referred
to as a "Warrantor" and together, the "Warrantors";
(8) Menlo Worldwide, LLC, a company incorporated in the state of
Delaware of the United States of America and having its
primary business office at 0000 Xxxxxx Xxxxx, Xxxxx 000 Xxx
Xxxxx, XX 00000-0000, Xxxxxx Xxxxxx of America (the "Buyer").
WHEREAS:-
(A) (1) Chic Holdings Limited (the "Company") is a company incorporated
under the laws of the Cayman Islands whose registered office is
situated at c/x Xxxxxx & Calder, Xxxxxx House, P.O. Box 309, Xxxxxx
Town, Grand Cayman, Cayman Islands and is validly existing and in
good standing. The amount and particulars of the issued share
capital and certain other particulars of the Company are as set out
in Part B of Schedule 1.
(2) The Company is the registered holder and beneficial owner of 100%
ownership interest in Shanghai Chic Logistics Co.,
Ltd., a wholly foreign owned enterprise organized and
existing under the laws of the PRC ("Chic Logistics"). Chic
Logistics is the registered holder and beneficial owner of 100%
equity interest in each of Shanghai Chic Supply Chain Management
Co., Ltd., a company organized and existing under the laws of the
PRC ( "Chic SCM") and Shanghai Chic Storage and Transportation
Co., Ltd.( "Chic S&T") and will become the registered holder and
beneficial owner of 100% equity interest in Shanghai New Chic
Logistics Co., Ltd. a company organized and existing under the
laws of the PRC ( "New Chic")before the Completion. The amount
and particulars of the share capital and certain other particulars
of Chic Logistics, Chic SCM, Chic S&T and New Chic are as set out
in Part C of Schedule 1.
(B) Each of the Sellers is the legal and record owner of the relevant Sale
Shares (as hereinafter defined) as set out against its name in column (2),
Part A of Schedule 1.
(C) Each Warrantor was a founder of the Company. Xxxxxxx and Xxxxx
respectively own 90% and 10% of the issued and outstanding shares in the
share capital of Swingside. Each Warrantor agrees to provide certain
warranties under this Agreement.
(D) On the terms and subject to the conditions hereinafter set forth, the
Sellers have agreed to sell and the Buyer has agreed to purchase the Sale
Shares.
THE PARTIES AGREE as follows:
1. INTERPRETATION
1.1 In this Agreement:
"Accounts" means the individual audited accounts of each Group Company and
the Group's consolidated audited accounts, the auditors' reports on those
accounts, the relevant directors' reports for that year on those accounts
and the notes to those accounts (if and as applicable and available).
"Actual EBITDA Valuation" means the product of (i) FY2007 Actual EBITDA,
and (ii) 10.5.
"Affiliate" means a person that directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common control
with, a specified person, where "control" means the power and ability to
direct the management and policies of the controlled person through
ownership of voting shares of the controlled person or by contract or
otherwise.
"AIC" means the State Administration for Industry and Commerce of the PRC
and its local branches.
"Ancillary Documentation" means any and all agreements and documents
contemplated under this Agreement to be executed on or before Completion.
"Business Day" means a day (other than a Saturday or Sunday or public
holiday) on which banks are open for business in Hong Kong and the PRC.
"Buyer's Accountant" means KPMG.
"Buyer's Legal Counsel" means Xxx Xx Law Offices at 32nd Floor, Shanghai
Xxxxx Centre, 0000 Xxxx Xxxxxxx Xxxx, Xxxxxxxx, 000000, XXX.
"Buyer's Warranty" means a statement contained in Part C of Schedule 4 and
"Buyer's Warranties" means all of those statements.
"Companies Ordinance" means Companies Ordinance (Chapter 32 of the Laws of
Hong Kong) as amended from time to time.
"Company" means Chic Holdings Limited.
"Company's Accountant" means Deloitte Touche Tohmatsu Huayong Public
Accountants Co., Ltd.
"Completion" means completion of the sale and purchase of the Sale Shares
in accordance with this Agreement.
"Completion Date" means the third (3rd) Business Day after the date (not
being later than 17 October 2007) on which the last of the Conditions to be
satisfied or waived is satisfied or waived or such other date as the Buyer
and the Sellers may agree in writing.
"Completion Payment" has the meaning given to it in Clause 2.4.2.
"Condition" means a condition set out in Clause and Clause 3.2 and
"Conditions" means all those conditions.
"Confidential Information" means all information which is used in or
otherwise relates to any Group Company's business, customers or financial
or other affairs including, without limitation, information relating to:
(1) the marketing of services including, without limitation, customer names
and lists and other details of customers, sales targets, sales statistics,
market share statistics, prices, market research reports and surveys, and
advertising or other promotional materials; or
(2) pending projects, business development or planning, commercial
relationships and negotiations,
but does not include information which is in or comes into the public
domain otherwise than by disclosure in breach of this Agreement.
"Disclosure Letter" means (i) the letter set forth in Schedule 12 of this
Agreement which is given by the Sellers to the Buyer, dated the date of
this Agreement and set forth exceptions to the Warranties as of the date of
this Agreement and (ii) (if the Sellers deem necessary) an amendment or
supplement to the letter referenced to in subparagraph (i) above which is
given by the Sellers to the Buyer, dated the Completion Date and set forth
amended exceptions (occurring during the period from the date of this
Agreement to Completion) to the Warranties as of the Completion Date.
"Earn-out Payment" has the meaning given to it in Clause 2.3.2.
"EBITDA" means earnings before interest, taxes, depreciation and
amortization as defined by the International Accounting Standard Board.
"Employee Benefit Plan" means any bonus, incentive or deferred
compensation, employee loans, pension, profit sharing, severance,
retention, change of control, stock option, employee, stock purchase,
various statutory social welfare funds and housing funds, other equity-
based performance or other employee or retiree benefit or compensation
plan, scheme, agreement or arrangement that provides benefits or
compensation in respect of any Employee which is or has been maintained by
any Group Company, Ordinary Share Seller or Warrantor or to which any Group
Company, Ordinary Share Seller or Warrantor contributes or is or has been
obligated or required to contribute or is legally bound under applicable
laws or regulations.
"Employee" means a current employee of the Group and "Employees" means all
current employees of the Group.
"Encumbrance" means a mortgage, charge, pledge, lien, option, restriction,
right of first refusal, right of pre-emption, third-party right or
interest, other encumbrance or security interest of any kind, or another
type of preferential arrangement (including, without limitation, a title
transfer or retention arrangement) having similar effect.
"Environmental Laws" means any laws and regulations of the People's
Republic of China that relate to or otherwise impose liability or standards
of conduct concerning industrial hygiene, occupational and other safety
conditions, health conditions and environmental conditions on any Group
Company, including, without limitation, laws and regulations relating to
discharges, emission, release or threatened release of any noise, odors,
pollutants, contaminants or Hazardous Substance into the ambient air, water
or land or otherwise relating to manufacture, processing, generation,
distribution, use, treatment, storage, disposal, cleanup, transport,
handling of pollutants, contaminants or Hazardous Substance or otherwise
relating to registration or approval of the services provided by the Group.
"Escrow Account" means a separately designated interest-bearing account set
up by the parties and managed by the Escrow Agent according to Clause 13
and the Escrow Agreement.
"Escrow Agent" means the escrow agent appointed under the Escrow Agreement.
"Escrow Agreement" means the escrow agreement among the Sellers, the Buyer
and the Escrow Agent.
"Financial Projections" means the financial projections of the Group
Companies and their associated documents prepared by the Company, reviewed
by the Sellers and Warrantors and presented by the Company to the Buyer in
November 2006 and March 2007 with respect to the time periods projected
therein.
"FY2007 Actual EBITDA" means the unqualified, audited and consolidated
EBITDA of the Group for the fiscal year ending 31 December 2007 prepared by
the Company's Accountant, reviewed by Buyer's Accountant according to the
principles set forth in Schedule 3 of this Agreement and confirmed jointly
by the Buyer and Sellers in writing.
"Group Company" means the Company or a Subsidiary.
"Group" means the Company and each Subsidiary.
"Hazardous Substance" means any material, substance or waste that poses or
causes, or is alleged to pose or cause, any damage to property or personal
injury, including death, or threat to the environment, including without
limitation, those substances defined, listed, designated or classified as
hazardous, toxic, radioactive, or dangerous or otherwise regulated or
governed under any applicable environmental requirements of the People's
Republic of China, including without limitation, any petroleum product or
by-product, crude oil or any fraction thereof, natural gas, natural gas
liquids, liquefied natural gas, synthetic gas usable as fuel,
polychlorinated biphenyls, caustic, chlorine or chlorine-based compounds.
"Hong Kong" means the Hong Kong Special Administrative Region of the PRC.
"IFRS" means the International Financial Reporting Standards issued from
time to time by the International Accounting Standards Board.
"Indebtedness" of a person means (i) any and all financial liabilities and
obligations of such person (whether interest accruing or not) and (ii) any
and all costs to be incurred in connection with early repayment of any such
indebtedness, including without limitation, any costs to be incurred for
break funding and swap unwinding.
"Intellectual Property Rights" means any of the following rights owned,
used or required to be used by any Group Company:
(a) patents, trade marks, service marks, registered designs, applications
and rights to apply for any of those rights, trade, business and
company names, internet domain names and e-mail addresses,
unregistered trade marks and service marks, copyrights, database
rights, rights in software, know-how, rights in designs and
inventions;
(b) rights under licences, consents, orders, statutes or otherwise in
relation to a right in paragraph ;
(c) rights of the same or similar effect or nature as or to those in
paragraphs and which now or in the future may subsist; and
(d) the right to xxx for past infringements of any of the foregoing
rights.
"Joint Management Committee" has the meaning given to it in Clause 9.1.
"Key Personnel" means each person as set forth in Schedule 9 of this
Agreement;
"Last Accounting Date" means 30 June 2007.
"Material Adverse Change" means (i) any change in, or effect on any Group
Company or its businesses which is, or which could reasonably be expected
to be, materially adverse to the business, operations, assets, liabilities,
financial condition, or results of operation of any Group Company, or (ii)
any change, event, condition or development which will, or which could
reasonably be expected to, prevent or materially hinder or delay the
transaction contemplated by this Agreement, including without limitation
any change in relevant laws or regulations.
"Ordinary Sale Shares" means 594,221 Ordinary Shares of US$0.0001 per share
in the share capital of the Company, representing all the issued and
outstanding Ordinary Shares of the Company.
"Permit" means:
(a) a permit, licence, consent, approval, certificate, qualification,
order, clearance, governmental franchise, concession, specification,
registration or other authorisation; or
(b) a filing of a notification, report or assessment,
in each case from or with a Chinese or Cayman government agency and
necessary for the effective operation of any Group Company's business, its
ownership, possession, occupation or use of an asset as it currently
engages in or owns, possesses, occupies or uses, or the execution or
performance of this Agreement.
"PRC" means the People's Republic of China which for the sole purpose of
this Agreement shall exclude Hong Kong, Macau Special Administrative Region
and Taiwan.
"Preferred Sale Shares" means 446,119 Series A Preference Shares of
US$0.0001 per share and 387,438 Series B Preference Shares of US$0.0001 per
share in the issued share capital of the Company, representing all the
issued preference shares of the Company.
"Property" means the property or properties details of which are set out in
Schedule 6.
"Purchase Price" has the meaning given to it in Clause 2.2.
"Relevant Claim" means a Warranty Claim, a claim for breach of any
covenants and/or other provisions or for indemnifications by the Sellers or
Warrantors under this Agreement or any Ancillary Documentation, a claim for
any contingent or hidden liability, or a claim under the Tax Deed.
"Retained Payment" has the meaning given to it in Clause 2.4.1.
"SAFE" means the State Administration of Foreign Exchange of the PRC or its
local branches.
"Sale Shares" means each and all Ordinary Sale Shares and Preferred Sale
Shares.
"Sellers' Representative" means each of Xxxxx Xx and Xxxxx Xxx.
"Subsidiaries" means each of the companies set out in Part C of Schedule 1.
"Tax Authority" means any national, local, municipal, or other fiscal,
revenue, customs or excise authority, body or official.
"Tax Deed" means the tax deed in the form as set forth in Schedule 8 of
this Agreement.
"Taxes" mean (a) all taxes and social charges of that nature whether of
Cayman Islands, Hong Kong or the PRC, however denominated, including any
interest, penalties or other additions that may become payable in respect
thereof, which will include, without limiting the generality of the
foregoing, all customs duties, corporate and individual income taxes,
employee withholding taxes, withholding tax on other service providers,
withholding tax on capital gains, unemployment insurance, social security
taxes, national pension, national health insurance, statutory housing
funds, sales and use taxes, value added taxes, real and personal property
taxes, stamp taxes, transfer taxes, workers' compensation, other
governmental charges, and other obligations of the same or of a similar
nature to any of the foregoing, which are required to be paid, withheld or
collected, or (b) any liability for amounts referred to in (a) as a result
of any obligations to indemnify another person.
"Upfront Payment" has the meaning given to it in Clause 2.3.1.
"Warranty Claim" means a claim for breach of any Warranty.
"Warranty" means a statement contained in Parts A and B of Schedule 4 and
any other representations and warranties given by the Seller(s) or
Warrantor(s) under this Agreement and "Warranties" means all those
statements. For purposes of clarification, Warranties as defined here do
not include "Buyer's Warranties".
1.2 In this Agreement, a reference to:
1.2.1 a "subsidiary" is to be construed in accordance with section 2 of
the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) as
amended from time to time;
1.2.2 liability under, pursuant to or arising out of (or any analogous
expression) any agreement, contract, deed or other instrument
includes a reference to contingent liability under, pursuant to
or arising out of (or any analogous expression) that agreement,
contract, deed or other instrument;
1.2.3 liability includes, but is not limited to, any liability in
equity, contract or tort (including negligence);
1.2.4 a document in the "agreed form" is a reference to a document in a
form and substance approved by or on behalf of each party;
1.2.5 a statutory provision includes a reference to the statutory
provision as modified or re-enacted or both from time to time
before the date of this Agreement and any subordinate legislation
made under the statutory provision (as so modified or re-enacted)
before the date of this Agreement;
1.2.6 a "person" includes a reference to any individual, firm, company,
corporation or other body corporate, government, state or agency
of a state or any joint venture, association or partnership,
works council or employee representative body (whether or not
having separate legal personality);
1.2.7 a person includes a reference to that person's legal personal
representatives, successors and permitted assigns;
1.2.8 a "party" includes a reference to that party's successors and
permitted assigns;
1.2.9 a clause, paragraph or schedule, unless the context otherwise
requires, is a reference to a clause or paragraph of, or schedule
to, this Agreement and constitutes an integral part of this
Agreement;
1.2.10 any Hong Kong legal term for any action, remedy, method of
judicial proceeding, legal document, legal status, court,
official or any legal concept or thing shall in respect of any
jurisdiction other than Hong Kong be deemed to include what most
nearly approximates in that jurisdiction to the Hong Kong legal
term and to any Hong Kong ordinance shall be construed so as to
include equivalent or analogous laws of any other jurisdiction;
1.2.11 times of the day is to Hong Kong time;
1.2.12 "US$" or "United States dollars" shall mean the lawful currency
of the United States of America; and
1.2.13 "RMB" or "Renminbi" shall mean the lawful currency of the PRC.
1.3 The headings in this Agreement do not affect its interpretation.
1.4 Any monetary sum to be taken into account for the purposes of
calculating the Earn-out Payment where that sum is expressed in RMB
shall be translated into US$ at the closing mid-point dollar spot rate
applicable to the balance of all such amounts as are expressed in RMB at
close of business in PRC on December 31, 2007 published by the PRC
Foreign Exchange Center under the authorization of the People's Bank of
China.
1.5 Any monetary sum to be taken into account for the purposes of any
Relevant Claim where that sum is expressed in a currency other than US$
shall be translated into US$ at the closing mid-point dollar spot rate
applicable to the balance of all such amounts as are expressed in that
non-US$ currency at close of business in PRC on the Business Day
preceding the date of the written notification of the Relevant Claim
(or, if such day is not a Business Day, on the Business Day immediately
preceding such day) published by the PRC Foreign Exchange Center under
the authorization of the People's Bank of China.
1.6 All payments to be made pursuant to this Agreement shall be made in
immediately available funds by transfer of funds for the same day value
to such accounts as shall be notified by the Sellers in writing to the
Buyer at least three Business Days before the date on which the payment
is due or, as the case may be, by the Buyer in writing to the Sellers at
least three Business Days before the date on which the payment is due.
1.7 A reference to a party's knowledge, information or belief is deemed to
include knowledge, information and belief which such party would have if
it had made all due, diligent, careful and good faith queries and
investigations and, without limitation, includes the knowledge,
information and belief of its officers and affiliates, provided however
that a reference to the Preferred Share Sellers' knowledge shall mean
their actual knowledge and awareness and the knowledge and awareness
such Preferred Share Sellers have obtained with respect to matters noted
in the minutes of the meetings of, or otherwise presented in any form
to, the directors and shareholders of the Company.
1.8 Each representation, warranty, covenant, and/or liability of the Sellers
under this Agreement is warranted by the Warrantors regardless if the
Warrantors are specifically identified in any particular clauses.
1.9 Subject to other terms and conditions of this Agreement, the obligations
and liabilities of each of the Sellers and the Warrantors contained in
this Agreement shall be joint and several.
2. SALE AND PURCHASE
2.1 On the terms and subject to the conditions set forth herein, each Seller
agrees to sell to the Buyer, and the Buyer agrees to buy from such
Seller, the Sale Shares legally and owned of record by such Seller and
each right attaching to the Sale Shares at or after Completion, free of
any Encumbrance.
2.2 The Purchase Price of the Sale Shares shall be calculated as follows:
"Purchase Price" is equivalent to:
(a) US$60,000,000, if the Actual EBITDA Valuation is less than or
equivalent to US$60,000,000; or
(b) the Actual EBITDA Valuation, if Actual EBITDA Valuation is
greater than US$60,000,000 but less than US$89,000,000; or
(c) US$89,000,000, if Actual EBITDA Valuation is equivalent to or
greater than US$89,000,000.
For purposes of clarification and to avoid any ambiguity, the Purchase
Price shall in no event and under no circumstances be lower than
US$60,000,000.
2.3 The Purchase Price shall be divided into Upfront Payment and Earn-Out
Payment and be paid to the Sellers according to Clause 2.4 below. The
Upfront Payment and Earn-Out Payment shall be calculated and paid as
follows:
2.3.1 "Upfront Payment" is equivalent to US$60,000,000 and shall be
paid by the Buyer to the Sellers according to Clause 2.4.1 and
Clause 2.4.2 below.
2.3.2 "Earn-out Payment" is equivalent to:
(a) the positive difference between the Purchase Price and the
Upfront Payment (that is, Purchase Price minus Upfront
Payment), if the Purchase Price is greater than the Upfront
Payment; or
(b) 0, if the Purchase Price is equivalent to the Upfront Payment,
and shall be paid to the Sellers according to Clause 2.4.3 below.
2.4 In consideration for the sale and transfer by the Sellers of the Sale
Shares, the Buyer agrees to pay to the Sellers the Purchase Price in the
following manner, subject to the satisfaction or written waiver by the
Buyer of each of the Conditions set forth in Clause 3 below:
2.4.1 15% of the Upfront Payment (the "Retained Payment") shall be
jointly deposited by the Buyer and the Sellers into the Escrow
Account on Completion and shall be released to the Sellers or
Buyer in accordance with Clause 13 and the Escrow Agreement;
2.4.2 85% of the Upfront Payment (the "Completion Payment") shall be
paid out to an account designated jointly by the Sellers on
Completion; and
2.4.3 The Earn-out Payment shall be paid to the Sellers in the
following manner:
(a) if the situation under Clause 2.3.2(a) occurs, the Buyer
shall, within thirty (30) days of the determination of the
FY2007 Actual EBITDA, pay such Earn-out Payment to the Sellers
by wire transfer into an account designated jointly by the
Sellers; and
(b) if the situation under Clause 2.3.2(b) occurs, the Buyer shall
not be obligated to pay any Earn-out Payment.
2.5 For the avoidance of doubt, the Buyer shall be deemed to have fully
discharged its obligations to each Seller under this Clause 2 if it has
made payments to the Escrow Account and to the account(s) designated
jointly by the Sellers according to this Clause 2.
3. CONDITIONS
3.1 Buyer's obligation to proceed with Completion is conditional on the
following Conditions being satisfied to the satisfaction of or waived
(in whole or in part) by the Buyer, on or before 12:00PM on the
Completion Date:
3.1.1 The Warranties made by each Seller and each Warrantor and
qualified by the Disclosure Letter shall have been true, correct
and not misleading in all respects when made, and shall remain
true, correct and not misleading in all material respects as of
the Completion Date with the same force and effect as if they had
been made on and as of such date, subject to changes contemplated
by this Agreement and the Ancillary Documentation and disclosed
in the updated Disclosure Letter (or if any such representation
or warranty is expressly stated to have been made on a specific
date, on and as of such specific date).
3.1.2 Each Seller and Warrantor shall have performed and complied with
in all material respects and to the reasonable satisfaction of
the Buyer, all agreements, obligations, covenants and conditions
contained in this Agreement and the Ancillary Documentation which
are required to be performed or complied with by it on or before
the Completion Date.
3.1.3 All corporate and other proceedings of the Sellers, Warrantors
and/or any Group Company in connection with the transactions
contemplated hereby and all documents and instruments incidental
to such transactions shall have been taken and be reasonably
satisfactory in substance and form to the Buyer, and the Buyer
shall have received certified copies of all such documents as it
may reasonably request.
3.1.4 Each Seller shall have obtained all requisite approvals, consents
and waivers necessary for consummation of the transactions
contemplated by this Agreement and all such approvals, consents
and waivers shall remain in full force and effect.
3.1.5 Each Seller and Warrantor shall cause the Company to possess and
continue to possess all material Permits and waivers required
from PRC, Cayman Islands and all other relevant governmental or
regulatory authorities for the operation of the Company as a
going concern.
3.1.6 The Buyer shall have received a certificate of good standing
issued by the Registrar of Companies of the Cayman Islands dated
no earlier than fifteen (15) days prior to the Completion Date in
respect of the Company, certifying that the Company was duly
incorporated, has paid all required fees and is validly existing
and in good standing under the laws of the Cayman Islands.
3.1.7 The Sellers shall have procured, to the reasonable satisfaction
of Buyer, that (i) all instruments for the replacement of all
directors and secretary of the Company have been duly executed by
the appropriate parties for filing and registration with
Registrar of Companies of the Cayman Islands with effectiveness
upon the Completion; (ii) all instruments for the replacement of
all directors and supervisors of each Group Company incorporated
in the PRC have been duly executed by the appropriate parties for
filing and registration with the competent governing PRC
authorities with effectiveness upon the Completion. Each director
and supervisor resigning from a Group Company shall have executed
a written statement with the Group Company confirming such
resigning director or supervisor has no claim against such
company for compensation or loss or otherwise.
3.1.8 The Shareholders' Agreement between the Sellers, Warrantors and
the Company dated 15 August 2005 and the Supplementary
Shareholders' Agreement dated 2nd September 2005 shall both be
terminated and have no further effect and evidence thereof shall
been provided to Buyer in form and substance reasonably
satisfactory to the Buyer.
3.1.9 Each action pending Completion set forth in Schedule 5 shall have
been performed in all material aspect and to the reasonable
satisfaction of the Buyer.
3.1.10 The Sellers shall have provided consolidated financial statements
(including profit and loss statement, cash flow statement,
balance sheet and relevant schedules) prepared, reviewed and
confirmed by the Company's Accountant in accordance with the then
applicable IFRS for the period from 1 January 2007 up to and as
of the Last Accounting Date and as of the last day of the month
immediately preceding the Completion Date in respect of each
Group Company and the Group in form and substance to the
reasonable satisfaction of the Buyer.
3.1.11 The Buyer shall have received from Cayman Islands, Hong Kong and
PRC counsels to the Group legal opinions in relation to due
incorporation, authorization, valid existence, good standing,
incumbency, enforceability corporate power, no conflict or
violation, approvals and filings, no litigation and such other
matters as to each Group Company as the Buyer may reasonably
request, addressed to the Buyer, dated the Completion Date, and
in form and substance reasonably satisfactory to the Buyer.
3.1.12 Each Key Personnel shall have executed an employment,
confidentiality and non-compete agreement with a Group Company
designated by the Buyer for a term no less than 3 years and in
form and substance as set forth in Schedule 10 of this Agreement.
3.1.13 The Sellers and the Warrantors shall have executed a Tax Deed in
form and substance as set forth in Schedule 8 of this Agreement;
and the Sellers shall have executed the Escrow Agreement.
3.1.14 The Sellers shall have obtained a letter of understanding to the
reasonable satisfaction of the Buyer from Procter & Xxxxxx
Guangzhou Co., Ltd. under which Procter & Xxxxxx Guangzhou Co.,
Ltd. (i) waives its rights of 90 days advance notice with respect
to the proposed transaction which may result in the change of
control of Chic SCM; (ii) waives its rights of "pre-emptive
purchase rights" of the proposed transaction; and (iii) waives
its rights to terminate its contracts with Chic SCM during the
180 days following the receipt of notice regarding the proposed
transaction.
3.1.15 The relevant Group Company(ies) shall have renewed the existing
service contracts with each of ICI and Xxxxxx on substantially
same terms and conditions.
3.1.16 A new business license of Chic S&T reflecting that the Warrantors
have transferred all their equity interests in Chic S&T to Chic
Logistics at nominal price shall have been issued by the
competent Chinese government authorities and delivered to Buyer
with all transfer documentation in form and substance to its
reasonable satisfaction.
3.1.17 Each of Xxxxx and Chic S&T shall have duly executed appropriate
legal documentation for the transfer of all their equity
interests in New Chic to Chic Logistics at nominal price, duly
completed such transfer and shall have caused such documentation
and the necessary applications in connection therewith been duly
filed with the competent Chinese government authorities. A new
business license of New Chic reflecting such equity transfer
shall have been issued by the competent Chinese government
authorities and delivered to Buyer with all transfer
documentation in form and substance to its reasonable
satisfaction.
3.1.18 Chic S&T and Chic SCM shall have terminated the Service and
Undertakings Agreement signed between them in December 2006.
3.1.19 Chic's Mart Trading Co., Ltd. shall have entered into a non-
disclosure and non-compete agreement with the Company in form and
substance as set forth in Schedule 11 of this Agreement.
3.1.20 The receipt by the Buyer of evidence reasonably satisfactory to
the Buyer that: upon Completion, (i) any and all agreements and
arrangements by either of the Sellers, Warrantors or Group
Companies to grant share options or warrants (or to give similar
rights) to any Employees of any Group Companies; and (ii) any and
all share options or warrants granted (or similar rights given)
to any Employees of any Group Companies have been released,
cancelled, waived and surrendered by each relevant Employee of
all Group Companies in favour of the Group Companies. Without
limiting the generality of the forgoing, the Sellers and the
Warrantors shall have procured that (i) all existing warrants
issued by Prosper Field to Employees other than Xxxx Xxxx, Xxxxx
Xxxxx, Xx Xxx and Xxxx Xxxx have not been exercised and have been
cancelled and invalidated in return for the arrangement that the
proceeds from the sale of shares which would otherwise be granted
under such warrants are paid to the warrant holders according to
the following schedule: 40% proceeds to be paid on Completion,
30% proceeds to be paid one (1) year after Completion and 30%
proceeds to be paid two (2) years after Completion; (ii) all
existing warrants issued by Prosper Field to each of Xxxx Xxxx,
Waley Jiang, Xx Xxx and Xxxx Xxxx have not been exercised and
have been cancelled and invalidated in return for the arrangement
that the proceeds from the sale of shares which would otherwise
be granted under such warrants are paid to each of these four (4)
employees according to the same schedules and proportions
pursuant to which Prosper Field is entitled to receive its
portion of Purchase Price under this Agreement; and (iii) all
warrants (if any) issued by Swingside have been cancelled and
invalidated.
3.1.21 Chic S&T and Shanghai Venus Software Co., Ltd. shall have
executed an amendment to the Technology Development Contract
dated July 9, 2002 to the reasonable satisfaction of the Buyer
whereby all affiliates companies of Chic S&T, including without
limitation Chic Logistics, Chic SCM and New Chic will be allowed
to use the logistics management program (including its upgrades
and add-ons) jointly owned by Chic S&T and Shanghai Venus
Software Co., Ltd. without any additional consideration and
without time limits or other restrictions.
3.1.22 The Sellers shall have procured that each of the relevant
Subsidiary(ies) maintains with a well-established and reputable
insurer adequate insurance against all risks usually and
customarily insured against by comparable companies carrying on
the same or a similar business for all assets of an insurable
nature leased, owned or controlled by such Subsidiary(ies).
3.1.23 The Sellers and Warrantors shall deliver to the Buyer a joint
closing certificate, dated the Completion Date, certifying that
(i) each condition specified in Clause 3.1 of this Agreement have
been fulfilled; (ii) each Warranty is true, accurate and not
misleading in all material respects, without giving effect to any
amendment or supplement to the Disclosure Letter after the date
of this Agreement; (iii) each covenant of the Sellers to be
performed prior to Completion under this Agreement has been duly
fulfilled; and (iv) there has been no Material Adverse Change
since the date of this Agreement.
3.1.24 No order, injunction or decree issued by any court or agency of
competent jurisdiction or other legal restraint or prohibition
preventing the Completion or any of the transactions contemplated
by this Agreement or the Ancillary Documentation shall be in
effect and on proceeding initiated by any governmental entity
seeking an injunction shall be pending. No statute, rule,
regulation, order, injunction or decree shall have been enacted,
entered, promulgated or enforced by any governmental entity which
prohibits, restricts or makes illegal the Completion or any of
the transactions contemplated by this Agreement or the Ancillary
Documentation.
3.1.25 All Sellers shall have issued a consent and waiver to the Buyer
in form and substance reasonably satisfactory to the Buyer
certifying that it irrevocably waives any and all rights of pre-
emption, first refusal and other rights or restrictions on the
transfer of the Sale Shares to the Buyer according to any
applicable law, corporate documents or charter documents of the
Company, or any contracts, agreements, covenants or other
documents governing the sale and purchase of Sale Shares and
shall procure that all such rights conferred on any other person
are waived no later than Completion so as to permit the sale and
purchase of the Sale Shares.
3.2 Sellers' obligation to proceed with Completion is conditional on the
following Conditions being satisfied to the reasonable satisfaction of
or waived by the Sellers, on or before the Completion Date:
3.2.1 Each Buyer's Warranty contained in Part C of Schedule 4 hereof
shall remain true, correct and not misleading in all material
respects when made and as of the Completion Date with the same
force and effect as if it had been made on and as of such date,
subject to changes contemplated by this Agreement or otherwise
disclosed by the Buyer in writing.
3.2.2 The Buyer's purchase of the Sale Shares pursuant to this
Agreement shall remain exempt from the registration and/or
qualification requirements under all applicable securities laws,
including, without limitation, the US federal securities laws and
any state blue sky laws.
3.2.3 The Buyer shall have obtained from its board of directors the
necessary approval of the transactions contemplated under this
Agreement.
3.2.4 No order, injunction or decree issued by any court or agency of
competent jurisdiction or other legal restraint or prohibition
preventing the Completion or any of the transactions contemplated
by this Agreement or the Ancillary Documentation shall be in
effect and on proceeding initiated by any governmental entity
seeking an injunction shall be pending. No statute, rule,
regulation, order, injunction or decree shall have been enacted,
entered, promulgated or enforced by any governmental entity which
prohibits, restricts or makes illegal the Completion or any of
the transactions contemplated by this Agreement or the Ancillary
Documentation.
3.3 Each Seller and Warrantor shall make all reasonable efforts to achieve
satisfaction of the Conditions set out in Clause 3.1 as soon as possible
after the date of this Agreement and in any event not later than 12:00
p.m. on the Completion Date.
3.4 The Buyer shall make all reasonable efforts to achieve satisfaction of
the Condition set out in Clause 3.2 as soon as possible after the date
of this Agreement and in any event not later than 12:00 p.m. on the
Completion Date.
3.5 If, at any time, any Party becomes aware of a fact or circumstance that
might prevent a Condition being satisfied, it shall immediately notify
the other parties in writing.
3.6 At any time on or before 12:00 p.m. on the Completion Date the Buyer may
waive any Condition set out in Clause 3.1 by written notice to the
Sellers on any terms it may decide in its sole discretion. At any time
on or before 12:00 p.m. on the Completion Date the Sellers may waive any
Condition set out in Clause 3.2 by written notice to the Buyer on any
terms they may decide in their sole discretion.
3.7 If a Condition set out in Clause 3.1 has not been waived by the Buyer
pursuant to Clause or has not been satisfied by 12:00 p.m. on 17
October 2007 or such other date as the parties hereto may agree, or if a
Condition set out in Clause 3.2 has not been waived by the Sellers
pursuant to Clause or has not been satisfied by 12:00 p.m. on 17
October 2007 or such other date as the parties hereto may agree, this
Agreement shall automatically terminate with immediate effect, and shall
become null and void and be of no further force and effect whatsoever
and all the obligations and liabilities of the parties hereunder shall
cease and terminate (save for any antecedent breaches of this Agreement
and the confidentiality obligations of the Parties under Clause 10).
4. COMPLETION
4.1 Subject to the Conditions having been fulfilled (or waived as provided
Clause 3.6) Completion shall take place at the offices of the Buyer's
Legal Counsel at Suite 2208, 22nd Floor, Xxxxxxx Xxxxx, 0 Xxxxxxxxx
Xxxxx, Xxxxxxx, Xxxx Xxxx on the Completion Date (or such other place
and/or time as the Sellers and the Buyer may agree).
4.2 At Completion each Seller shall do all those things respectively
required of it in Schedule 2.
4.3 The Buyer will not be obliged to complete its obligations or the
purchase of any Sale Shares under this Agreement unless:
4.3.1 each of the Sellers and Warrantors complies with all its
obligations required to be performed before Completion under this
Agreement; and
4.3.2 the sale and purchase of all the Sale Shares is completed
simultaneously.
4.4 If Completion does not take place on the Completion Date because any of
the Sellers fails to comply with any of its obligations under this
Agreement (whether such failure by such Seller amounts to a repudiatory
breach or not), the Buyer may by notice to the Sellers:
4.4.1 proceed to Completion to the extent reasonably practicable (but
if the Buyer exercises its right pursuant to this Clause ,
Completion of the purchase of some of the Sale Shares will not
affect the Buyer's rights with respect to the other Sale Shares);
4.4.2 postpone Completion to a date not more than 30 Business Days
after the Completion Date and not later than 17 October 2007 or
such other date agreed by all Parties in writing; or
4.4.3 terminate this Agreement.
4.5 If the Buyer postpones Completion to another date in accordance with
Clause , the provisions of this Agreement shall apply as if that other
date is the Completion Date.
4.6 If the Buyer terminates this Agreement pursuant to Clause , each party's
further rights and obligations cease immediately on termination, but
termination does not affect a party's accrued rights and obligations at
the date of termination.
5. WARRANTIES AND PRE-COMPLETION CONDUCT
5.1 The Sellers and Warrantors jointly and severally represent and warrant
to the Buyer that, subject to the matters disclosed in the Disclosure
Letter (in the form delivered as of the date of this Agreement), each
Warranty is true, accurate and not misleading in all material aspects at
the date of this Agreement. Immediately before Completion, the Sellers
and Warrantors are deemed to jointly and severally to represent and
warrant to the Buyer that, subject to the matters disclosed in the
Disclosure Letter, each Warranty is true, accurate and not misleading in
all material respects by reference to the facts and circumstances as at
Completion. For this purpose only, where there is an express or implied
reference in a Warranty to the "date of this Agreement", that reference
is to be construed as a reference to Completion.
5.2 Each Seller and Warrantor acknowledges that the Buyer is entering into
this Agreement in reliance on each Warranty (each of which has also been
given as a representation) and with the intention of inducing the Buyer
to enter into and perform its obligations under this Agreement.
5.3 The Warranties are qualified by the facts and circumstances disclosed in
the Disclosure Letter. No other knowledge relating to any Group Company
(actual, constructive or imputed) prevents or limits a claim made by the
Buyer for breach of Clause . None of the Sellers shall invoke the
Buyer's knowledge (actual, constructive or imputed) of a fact or
circumstance which might make a Warranty untrue, inaccurate or
misleading as a defense to a claim for breach of Clause .
5.4 Reference to any facts and circumstances being disclosed as exceptions
to the Warranties shall be deemed to be a reference to them being fully,
fairly, specifically and accurately disclosed in the Disclosure Letter
in such a manner that:
5.4.1 in the context of the disclosures contained in the Disclosure
Letter:
(a) the significance of the information disclosed and its
relevance to a particular Warranty ought reasonably to be
appreciated by a similarly situated buyer, taking into account
the paragraphs or subject matters in relation to which the
information was disclosed;
(b) there is not omitted from the information disclosed any
information which would have the effect of rendering the
information so disclosed misleading in any respect; and
5.4.2 in the context of any document treated as disclosed by the
Disclosure Letter, the matter disclosed is reasonably apparent
from the terms of the document,
and nothing disclosed by the Sellers to the Buyer other than in the
Disclosure Letter and in accordance with the provisions of this Clause
shall constitute disclosure as exceptions to the Warranties for the
purposes of this Agreement.
5.5 Conditional upon and subject to the Completion, each Seller and
Warrantor undertakes not to make any claim against any Group Company or
any director, officer or employee of any Group Company other than the
Warrantors which it may have in respect of a misrepresentation,
inaccuracy or omission in or from information or advice provided by such
Group Company or a director, officer or employee of such Group Company
other than the Warrantors for the purpose of assisting the Seller to
make a representation, give a Warranty or prepare the Disclosure Letter.
5.6 Each Warranty is to be construed independently and (except where this
Agreement provides otherwise) is not limited by a provision of this
Agreement or another Warranty.
5.7 Between the execution of this Agreement and Completion the Sellers and
Warrantors shall:
5.7.1 ensure that each Group Company complies with Schedule 5;
5.7.2 notify the Buyer immediately if it becomes aware of a fact or
circumstance which constitutes or which would or might constitute
a breach (whether repudiatory in nature or not) of Clause or or
which would or might cause a Warranty to be untrue, inaccurate or
misleading if given in respect of the facts or circumstances as
at Completion.
5.8 The Buyer warrants to the Sellers that each Buyer's Warranty is true,
accurate and not misleading at the date of this Agreement. Immediately
before Completion, the Buyer is deemed to warrant to the Sellers that
each Buyer's Warranty is true, accurate and not misleading by reference
to the facts and circumstances as at Completion, subject to changes
contemplated by this Agreement or otherwise disclosed by the Buyer in
writing. For this purpose only, where there is an express or implied
reference in a Warranty to the "date of this Agreement", that reference
is to be construed as a reference to Completion.
6. THE BUYER'S REMEDIES AND THE SELLER'S REMEDIES
6.1 The Sellers and the Warrantors hereby jointly and severally agree with
the Buyer to indemnify the Buyer as provided in this Clause 6. As used
in this Clause 6:
6.1.1 the term "Damages" shall mean all losses, claims, damages, costs
and expenses (including reasonable legal expenses), liabilities
and reduction in value which a Buyer Indemnitee (as defined in
Clause 6.5) may sustain, suffer or incur which arises out of or
in connection with this Agreement including, without limitation,
each loss, claim, damage, liability, cost and expense (including
legal fees) incurred as a result of defending or settling a
Relevant Claim; and
6.1.2 the term "Third Party Claim" shall mean any claim, action, suit
or like matter which is asserted by a party other than the
parties hereto against the Buyer or any Group Company with
respect to such Group Company's business and operations or the
transactions contemplated under this Agreement, provided however,
that a claim from a Tax Authority under the Tax Deed shall not be
regarded as a Third Party Claim and shall be governed under the
Tax Deed.
6.2 If, at any time before Completion, the Buyer reasonably considers that
any Seller or Warrantor is in breach of any provision of this Agreement
(whether such breach amounts to a repudiatory breach or not) or if any
of the Sellers gives a notice under Clause , the Buyer may, by notice in
writing to Sellers, elect to proceed to Completion or terminate this
Agreement.
6.3 If the Buyer terminates this Agreement pursuant to Clause 6.2, each
party's further rights and obligations shall cease immediately on
termination, but termination will not affect a party's accrued rights
and obligations at the date of termination.
6.4 If the Buyer elects to proceed to Completion pursuant to Clause 6.2,
then the parties should discuss in good faith and seek acceptable terms
and conditions in writing.
6.5 Subject to the limitations and conditions set forth in this Clause 6,
the Sellers and Warrantors shall jointly and severally indemnify, save
and keep the Buyer, its officers, directors, shareholders and agents and
each and all the Group Companies (each a "Buyer Indemnitee" and
collectively the "Buyer Indemnitees") harmless against and from all
Damages sustained or incurred by any Buyer Indemnitee arising from or in
connection with:
6.5.1 any breach of any Warranty of the Sellers or Warrantors;
6.5.2 any breach or default of, or failure to comply with, any of the
covenants, obligations or agreements of the Sellers or Warrantors
under this Agreement, the Tax Deed, any other Ancillary
Documentation and/or in any document or certificate delivered
pursuant thereto; and
6.5.3 any claims in connection with or arising from the use of
warehouses without appropriate title certificates prior to
December 31, 2007.
6.6 Subject to Clause 6.9 below, the indemnification obligations of the
Sellers and Warrantors pursuant to the provisions of Clause 6 are
subject to the following limitations:
6.6.1 The Buyer Indemnitee(s) shall not be entitled to recover under
Clause 6:
(a) unless a claim has been asserted by written notice, specifying
the grounds for indemnification and delivered to the Sellers'
Representatives;
(b) until the aggregate amount of all asserted Damages exceed
US$350,000, but at such point the Sellers and Warrantors shall
be liable for the whole of such amount and not just the
excess; provided also that in calculating the US$350,000, all
Damages shall be aggregated, and not just the Damages that
exceed US$350,000;
(c) to the extent the Buyer Indemnitees received the proceeds of
any insurance held by the Group Company covering the subject
matter; and
(d) any additional amount of the Damages from any Sellers or
Warrantors, if Damages recovered under this Agreement have
exceeded the Purchase Price.
6.6.2 Preferred Share Seller will not be liable for any Relevant Claim
unless the Sellers' Representatives have received written notices
regarding the Relevant Claim from the Buyer prior to the second
anniversary of the Completion. For the avoidance of doubt, the
Preferred Share Seller will be liable for a Relevant Claim if the
Buyer Indemnitee(s) has given written notices to the Sellers'
Representatives regarding a Relevant Claim prior to the second
anniversary of the Completion but final resolution regarding such
Relevant Claim occurs only after the second anniversary of the
Completion.
6.6.3 Notwithstanding anything to the contrary in this Agreement but
subject to Clause 6.9, CVDS' liability under this Agreement shall
in no event and under no circumstances exceed the US$3,005,100 it
contributes to the Retained Amount and deposits into the Escrow
Account pursuant to the Escrow Agreement, SEAVI's liability under
this Agreement shall in no event exceed the US$1,730,700 it
contributes to the Retained Amount and deposits into the Escrow
Account pursuant to the Escrow Agreement, and Fortis' liability
under this Agreement shall in no event exceed the US $519,300 it
contributes to the Retained Amount and deposits into the Escrow
Account pursuant to the Escrow Agreement, provided however that
such limitation shall not in any way prejudice the rights of the
Buyer Indemnitee(s) to recover from the Ordinary Share Sellers
and Warrantors under this Agreement.
6.7 Promptly after receipt by a Buyer Indemnitee under this Clause 6 of
notice of any Third Party Claim, and in any event within the time period
necessary to respond to such pleading, the Buyer shall deliver to
Sellers' Representatives a written notice setting forth with reasonable
specificity the facts and circumstances of which such Buyer Indemnitee
has received such Third Party Claim and the basis upon which the Buyer
Indemnitee's claim for indemnification is asserted. Upon receipt of such
notice, each of the Sellers and Warrantors shall have the right to
participate in, and, to the extent any Sellers and Warrantors so
desires, jointly with any other Sellers and Warrantors similarly noticed
(if any), to assume control of the defense thereof at its own expense
and with counsel of its own choice; provided, however, that the Sellers
and Warrantors shall diligently pursue such defense. If in the
reasonable opinion of the Buyer, the Sellers and Warrantors cannot
diligently pursue such defense or cannot reach internal consensus on
ways to pursue such defense, the Buyer may, after giving written notice
to the Sellers' Representatives, assume control of the defense. For the
avoidance of doubt no Buyer Indemnitee shall settle any Third Party
Claim without consent of any of the Sellers and Warrantors. The Sellers
and Warrantors or the Buyer Indemnitee, as the case may be, shall in
good faith cooperate with and assist the defending party in the defense
of such Third Party Claim.
6.8 Except in respect of claims based upon fraud and subject to other terms
and conditions of this Agreement, the indemnification accorded by this
Clause 6 shall be the sole and exclusive remedy of the Buyer under this
Agreement in respect of any misrepresentation or inaccuracy in, or
breach of, any representation or warranty or any breach or failure in
performance of any covenant or agreement made in this Agreement, the
Ancillary Documentation, and/or in any document or certificate delivered
pursuant thereto. Notwithstanding the foregoing, in the event of any
breach or failure in performance after the Completion of any covenant or
agreement, the Buyer shall also be entitled to seek specific
performance, injunctive or other equitable relief.
6.9 Notwithstanding any other provision hereof, nothing in this Clause 6
shall limit, in any manner, any remedy at law or equity, to which the
Buyer may be entitled as a result of (i) fraud by any Seller or
Warrantor committed to the Buyer; or (ii) any misrepresentations
relating to the title to the Sale Shares.
6.10 Subject to each limitation and condition set forth in Clause 6.11 below,
the Buyer agrees to indemnify and hold harmless the Sellers against all
damages sustained or incurred by the Sellers arising from or in
connection with any breach or default of, or failure to comply with any
of Buyer's Warranties and any covenants, obligations or agreements of
the Buyer under this Agreement:
6.11 The Sellers shall not be entitled to recover from the Buyer and the
Buyer shall not be obligated to indemnify the Sellers under Clause 6.10:
(a) unless a claim has been asserted by written notice, specifying
the grounds for indemnification and delivered to the Buyer
prior to the second anniversary of the Completion;
(b) until the aggregate amount of all asserted damages exceed
US$350,000, but at such point the Buyer shall be liable for
the whole of such amount and not just the excess; provided
also that in calculating the US$350,000, all damages shall be
aggregated, and not just the damages that exceed US$350,000;
(c) to the extent the Seller received the proceeds of any
insurance maintained by it; and
(d) in respect of any additional amount of the damages from the
Buyer, if damages recovered under this Agreement from the
Buyer have exceeded the Retained Payment.
7. FURTHER UNDERTAKINGS BY THE SELLERS
7.1 Subject to Clause 7.2, each of the Sellers and Warrantors undertakes to
the Buyer that it will not do any of the following things:
7.1.1 for a period of 3 years starting on the Completion Date, either
alone or jointly with, through or as adviser to, or agent of, or
manager for, any person directly or indirectly carry on or be
engaged, concerned or interested in or assist a business in the
PRC which competes, directly or indirectly, with a business of a
Group Company as carried on at the date of this Agreement or at
any time in the twelve months prior to that date;
7.1.2 for a period of 3 years starting on the Completion Date, on its
own account or in conjunction with or on behalf of any other
person in respect of the services of a business of a Group
Company either seek to obtain orders from, or do business with,
or encourage directly or indirectly another person to obtain
orders from or do business with, a person who has been a customer
of that business at any time during the twelve months prior to
the date of this Agreement for the products or services of that
business in its territory of operation; or
7.1.3 for a period of 3 years starting on the Completion Date directly
or indirectly solicit or initiate contact with, with a view to
his engagement or employment by another person, a director,
officer, employee or manager of a Group Company or a person who
was a director, officer, employee or manager of a Group Company
at any time during the twelve months prior to the date of this
Agreement, in either case where the person in question either has
Confidential Information or would be in a position to exploit a
Group Company's trade connections.
7.2 Notwithstanding anything to the contrary in Clause 7.1 and for purposes
of clarification, but subject to such Sellers' confidentiality
obligations hereunder, the provisions of Clause 7.1 shall not apply to
equity investment conducted or to be conducted by any Preferred Share
Seller, in each case, in its capacity as an institutional private equity
investor; nor shall any competitive conduct by any of its portfolio
companies set forth in Clause 7.1 above be attributed to such
institutional private equity investor.
7.3 In addition to the actions pending Completion set forth in Schedule 5,
from the date of this Agreement to Completion, each Seller and Warrantor
shall not, directly or indirectly:
7.3.1 enter into or engage in any discussion or negotiation with any
person except the Buyer in connection with the sale of any Group
Company or the business or any part of the business of or (except
in the usual course of business or as contemplated under this
Agreement and the Ancillary Documentation) any of the assets of
the business of any Group Company;
7.3.2 enter into an agreement or arrangement with any person except the
Buyer or any person designated by the Buyer in connection with
the sale of any Group Company or the business or any part of the
business of or (except in the ordinary course of business or as
contemplated under this Agreement and the Ancillary
Documentation) any of the assets of any Group Company; or
7.3.3 make available to any person except the Buyer, its directors,
officers, duly authorised representatives, advisers or agents any
information relating to the sale of any Group Company or the
business or any part of the business of or (except in the usual
course of business or as contemplated under this Agreement and
the Ancillary Documentation) any of the assets of any Group
Company.
7.4 On and immediately after Completion, each Warrantor and Seller shall use
their reasonable best efforts to assist the Buyer to procure:
(a) that all filings and registrations for the replacement of all
directors and secretary of the Company, and for the
replacement of all directors and supervisors of each Group
Company incorporated in the PRC be completed within one month
after Completion;
(b) that each Group Company has filed the change of bank
signatories and other mandates to the satisfaction of the
Buyer for all of its RMB and foreign exchange bank accounts
within 15 days after Completion;
(c) that Chic's Mart Trading Co., Ltd. shall have repaid all its
outstanding loans owed to the Subsidiaries within 15 Business
Days after Completion;
(d) that no new Employee Benefit Plan of the Group be introduced,
amended or discontinued during the period from Completion to
31 December 2007; and
(e) during the period from Completion to 31 December 2007, (i)
that the business of each Group Company is operated in the
usual way and according to its existing 2007 budgetary and
business plan of the Group so as to maintain that business as
a going concern, (ii) that sufficient working capital is
maintained for the purposes of continuing to carry on the
business of each Group Company in its present form and at its
present level of turnover, and (iii) that the turnovers of any
Group Company be managed in a way consistent with its good
faith practice in the past two years prior to the Completion.
7.5 Prosper Field agrees to release proceeds to each warrant holder pursuant
to Clause 3.1.20 of this Agreement.
7.6 Each Warrantor agrees to remain employed by a Subsidiary and shall
procure that each Key Personnel remains employed by a Subsidiary for a
term of no less than three (3) years after Completion and to devote
sufficient business efforts and time to the Group Companies.
7.7 Each Warrantor agrees to duly file all requisite changes and discharge
all requisite obligations in connection with the transaction
contemplated in this Agreement under the Circular on Issues Relevant to
Foreign Exchange Administration with Respect to Fund Raising and Round-
trip Investment by Domestic Residents Through Offshore Special Purpose
Vehicles and its interpreting rules.
7.8 Each undertaking in this Clause 7 constitutes an entirely independent
undertaking and shall bind the applicable Sellers and Warrantors.
7.9 On receiving the Buyer's reasonable request each Seller and Warrantor
shall (at its cost):
7.9.1 do and execute, or arrange to be done and executed, each act,
document and thing necessary to implement this Agreement and the
Ancillary Documentation;
7.9.2 give to the Buyer all information it possesses or to which it has
access relating to a Group Company's business and allow the Buyer
to copy any document containing that information; and
7.9.3 procure each Group Company to do the same.
8. UNDERTAKINGS BY THE BUYER
8.1 From the Completion Date to December 31, 2007:
8.1.1 subject to matters reserved for the approval of the Joint
Management Committee, Buyer shall minimize its participation and
involvement in the daily management of the Group and its
operations unless necessary for maintaining the Group Companies'
normal course of businesses; Buyer shall not modify the existing
2007 budgetary and business plan of the Group Companies without
the consent of all members of the Joint Management Committee;
8.1.2 in the event Buyer proposes any significant expenditure or
investment (capital or operational) to be made by the Group, such
proposal shall be subject to the consent of all members of the
Joint Management Committee unless such expenditure or investment
is required for the implementation of new or existing customer
contracts;
8.1.3 Buyer shall not incur costs or expenses for or on half of the
Group and may not otherwise divert revenues or profits of the
Group to its other affiliates through transfer pricing or
otherwise;
8.1.4 in the event the integration of existing logistics business of
Buyer or its affiliates in the PRC is carried out prior to
December 31, 2007, such business integration shall not adversely
affect the operations of the Group without the consent of all
members of the Joint Management Committee; and
8.1.5 Buyer shall not replace the current management team or otherwise
make significant personnel changes without the consent of all
members of the Joint Management Committee unless the related
management team member is in serious breach of labour contract or
violation of law.
8.2 For the avoidance of doubt, nothing contained in Clause 8.1 shall
restrict Buyer's right as the shareholder of the Company to exercise
ultimate control over the Company and its Subsidiaries in any respect,
including, without limitation, the hiring or termination of employees,
the incurrence of expenses and requiring compliance with Buyer's and its
Affiliates' internal controls, corporate governance policies and
procedures, legal and regulatory compliance standards and consumer data
guidelines and privacy rules and regulations.
8.3 If so requested by the Sellers, Buyer shall procure that the Company
provide to the Sellers, promptly when available, (i) the unconsolidated
balance sheet of the Company as of Completion and December 31, 2007; and
(ii) the unconsolidated profit and loss of the Company for the period
from January 1, 2007 to Completion and to December 31, 2007.
8.4 From the date of this Agreement to Completion, on receiving the Sellers'
reasonable request Buyer shall (at its cost) do and execute, or arrange
to be done and executed, each act, document and thing necessary to
implement this Agreement and the Ancillary Documentation.
9. JOINT TRANSITIONAL MANAGEMENT COMMITTEE
9.1 The parties agree to establish a joint transitional management committee
with due authorization from all shareholders of each Group Company to
approve the matters set forth in Clause 9.2 of this Agreement during the
period from Completion to 31 December 2007 (the "Joint Management
Committee"). The Joint Management Committee shall have three (3) members
being Xxxxxxx Xxxx and two (2) members appointed by the Buyer. The
Preferred Share Sellers may jointly appoint one (1) observer to attend
all meetings of the Joint Management Committee in a non-voting observer
capacity and subject to appropriate confidentiality undertakings.
9.2 The parties agree that during the period referred to in Clause 9.1 the
following matters with regards to or in connection with any Group
Company shall require the prior written approval of the simple majority
of all members of the Joint Management Committee:
9.2.1 creating, altering or changing the rights, preferences,
privileges, classification of the shares or equity interest;
9.2.2 increase or decrease of the authorized or outstanding number of
the shares or registered capital;
9.2.3 amendment or waiver of any provisions of the memorandum of
association and articles of association;
9.2.4 changing the authorized size of the board of directors or board
of shareholders;
9.2.5 any share or equity transfer, merger or consolidation of such
Group Company;
9.2.6 the formation, reorganization or dissolution of any subsidiary or
joint venture;
9.2.7 any transaction between any Group Company and/or its shareholder,
employees, officers, directors or their respective affiliates;
and
9.2.8 the appointment and removal of auditors of any Group Company or
any material change in, or deviation to, the 2007 budgetary or
business plan, or the accounting and financial policies of any
Group Company.
9.3 The parties agree that during the period referred to in Clause 9.1 the
following matters with regards to or in connection with any Group
Company shall require the prior written approval of all members of the
Joint Management Committee:
9.3.1 capital expenditures other than those (i) contemplated in the
existing 2007 budgetary and business plan of the Group or (ii)
required for the implementation of new or existing customer
contracts;
9.3.2 changing the existing 2007 budgetary and business plan of the
Group;
9.3.3 the hiring and removal of the senior management of any Group
Company or changes to their salaries;
9.3.4 changing any Employee Benefit Plan or making any awards under any
Employee Benefit Plan;
9.3.5 declaration or payment of any dividends;
9.3.6 borrowing any loans or incurring any debt, contingent or other
liability in a single transaction in excess of US$150,000;
9.3.7 commencing or settling any material litigation;
9.3.8 any transfer of any assets of any Group Company or any transfer
or licensing of any Intellectual Property Rights with a value in
excess of US$150,000 or outside the ordinary course of business;
9.3.9 steps towards the winding up, dissolution or liquidation;
9.3.10 integrating any existing logistics business of Buyer or its
affiliates in the PRC with that of any Group Companies;
9.3.11 any material departure from business in the ordinary course; and
9.3.12 any other action that may have a Material Adverse Change on any
Group Company.
9.4 The Warrantors shall procure that the management team of the Group
submit the matters set forth in Clauses 9.2 and 9.3 for the approval of
the Joint Management Committee.
10. CONFIDENTIAL INFORMATION
10.1 Each Seller and Warrantor undertakes to the Buyer that after Completion
each of the Sellers and Warrantors shall:
10.1.1 not use or disclose to any person Confidential Information it has
or acquires; and
10.1.2 use its reasonable best efforts to prevent the unlawful or
prohibited use or disclosure of Confidential Information.
Each Warrantor undertakes to the Buyer that after Completion that it
shall use best efforts to ensure that each Group Company complies with
Clauses 10.1.1 and 10.1.2.
10.2 Clause 10.1 does not apply to disclosure of Confidential Information:
10.2.1 to a director, officer or employee of the Buyer or of a Group
Company whose function requires him to have the Confidential
Information provided that such disclosure is essential for his
function and is on the basis that Clause 10.1 applies to the
disclosure by such director, officer or employee;
10.2.2 required to be disclosed by law, by a rule of a listing authority
by which a Seller's shares are listed, a stock exchange on which
a Seller's shares are listed or traded or by a governmental
authority or other authority with relevant powers to which the
Seller is subject or submits, whether or not the requirement has
the force of law provided that the disclosure shall so far as is
practicable be made after consultation with the Buyer and after
taking into account the Buyer's reasonable requirements as to its
timing, content and manner of making or despatch; or
10.2.3 to an adviser for the purpose of advising the Seller in
connection with the transactions contemplated by this Agreement
provided that such disclosure is essential for these purposes and
is on the basis that Clause 10.1 applies to the disclosure by the
adviser.
11. ANNOUNCEMENTS
11.1 Subject to Clause 11.2, neither party may, before or after Completion,
make or send a public announcement, communication or circular concerning
the transactions referred to in this Agreement unless it has first
obtained the other parties' written consent, which may not be
unreasonably withheld or delayed.
11.2 Clause 11.1 does not apply to a public announcement, communication or
circular:
11.2.1 made or sent by the Buyer after Completion to a customer, client
or supplier of a Group Company informing it of the Buyer's
purchase of the Sale Shares; or
11.2.2 required by law, by a rule of a listing authority by which a
party's shares are listed, a stock exchange on which a parties'
shares are listed or traded or by a governmental authority or
other authority with relevant powers to which either party is
subject or submits, whether or not the requirement has the force
of law, provided that the public announcement, communication or
circular shall, so far as is practicable, be made after
consultation with the other parties and after taking into account
the reasonable requirements of the other parties as to its
timing, content and manner of making or despatch.
12. COSTS
Except where this Agreement or the relevant document provides otherwise,
each party shall pay its own costs relating to the negotiation,
preparation, execution and performance by it of this Agreement and of
each document referred to in it.
13. ESCROW ACCOUNT
13.1 If the Buyer desires to use any of the Retained Payment in the Escrow
Account in settling any Relevant Claim:
13.1.1 the Buyer shall notify the Sellers' Representatives in writing of
the Relevant Claim ("Notice of Claim"), stating in reasonable
details the nature of the Relevant Claim and the amount claimed
in respect of the Relevant Claim (the "Amount Claimed");
13.1.2 within five days of receipt of Notice of Claim, the Sellers shall
notify the Buyer in writing indicating:
(a) whether or not the Sellers accept responsibility for the
Relevant Claim; and
(b) whether or not the Sellers agree to assume responsibility for
the Amount Claimed and if they do not, the part of the Amount
Claimed they are willing to assume responsibility;
13.1.3 if the Sellers fail to notify the Buyer in accordance with
Clause , the Amount Claimed shall be paid to the Buyer out of the
Retained Payment standing to the credit of the Escrow Account;
13.1.4 without prejudice to Clause , if the Sellers accept liability in
respect of a Relevant Claim but accept part only of the Amount
Claimed, that part of the Amount Claimed which is accepted shall
be paid to the Buyer out of the Retained Payment standing to the
credit of the Escrow Account; and
13.1.5 if the Sellers accept the Amount Claimed or, in the event the
Sellers do not accept liability, do not accept the Amount Claim
or do not accept part of the Amount Claimed, there is a
determination of the amount payable in respect of the Relevant
Claim by a court or arbitration tribunal of competent
jurisdiction against which no appeal has been lodged or is
incapable of being lodged within the statutory time limit or all
appeals have been exhausted, the amount so accepted or determined
(in the latter case less any money previously paid under Clause
in respect of the Relevant Claim) shall be paid to the Buyer out
of the Retained Payment standing to the credit of the Escrow
Account.
13.2 To the extent that a payment to the Buyer out of the Escrow Account is
made in partial satisfaction of an Amount Claimed, such payment is
deemed to be a payment on account of the amount finally agreed or
determined to be payable in respect of the Amount Claimed.
13.3 Subject to the limitation of liabilities as set forth in Clause 6 of
this Agreement, the Sellers' liability in respect of Relevant Claims
shall not be limited by the amount of the Retained Payment standing to
the credit of the Escrow Account from time to time.
13.4 The balance in the Escrow Account shall be released according to the
following schedule:
13.4.1 On the date which is one week after the Group's consolidated
Accounts for the financial year ending on 31 December 2008 are
made available, two thirds of the Retained Payment after
deducting the total of the then outstanding Amounts Claimed in
respect of which payment has not been made under Clause , plus
all interest accrued as of the date thereof, shall be paid to the
Sellers by wire transfer of such amount to an account jointly
designated by the Sellers.
13.4.2 On the second anniversary of the Completion Date, all the
remaining amounts after deducting the total of the then
outstanding Amounts Claimed in respect of which payment has not
been made under Clause from the balance of the Escrow Account;
plus interest accrued as of the date thereof, shall be
automatically released from the Escrow Account and paid to the
Sellers by wire transfer of such amount to an account jointly
designated by the Sellers.
13.4.3 After the second anniversary of the Completion Date (but without
prejudice to Clause ), to the extent that the balance of the
Escrow Account from time to time exceeds the total of the then
outstanding Amounts Claimed in respect of which payment has not
been made under Clause , that remaining part of the balance shall
be paid to the Sellers on a pro-rata basis to their shareholdings
in the Company immediately prior to Completion.
13.5 On the second anniversary of the Completion Date and simultaneously with
the release of amounts according to Clause 13.4.2 above, the Buyer shall
pay to the Sellers on a pro-rata basis to their shareholdings in the
Company immediately prior to Completion an amount equivalent to the
product of (i) the balance remaining in the escrow account immediately
prior to the second anniversary of the Completion Date; and (ii) the
percentage increase in EBITDA for the financial year ending on 31
December 2008 over the financial year ending on 31 December 2007 as
indicated in the Accounts, provided however, if the EBITDA for the
financial year ending on 31 December 2008 is equivalent to or less than
the EBITDA for the financial year ending on 31 December 2007, the Buyer
will not need to make any such payment to the Sellers.
13.6 If the Sellers or the Buyer are entitled to money from the Escrow
Account, the Buyer and the Sellers shall jointly, or under Clause 13.1.3
or Clause 13.1.5, the Buyer shall individually, within seven days of the
date on which the entitlement arises (the "Due Date") instruct the
Escrow Agent in writing to release the money to the Sellers or the
Buyer, as the case may be.
13.7 Interest accruing from time to time on the balance of the Retained
Payment standing to the credit of the Escrow Account shall be added to
the Retained Payment standing to the credit of the Escrow Account and
shall form part of it for the purposes of this Clause .
13.8 The Sellers and the Buyer shall each pay one half of the Escrow Agent's
costs in respect of any work done pursuant to this Clause .
13.9 The Buyer and the Sellers acknowledge that the Escrow Agent may withdraw
from the Escrow Account an amount of tax on the interest earned in
respect of money held in the Escrow Account for which it is or may
become liable.
13.10All payments of an Amount Claimed made to the Buyer by the Escrow Agent
under this Clause shall be made gross and without deduction or
withholding of any kind other than any deduction or withholding required
by law.
13.11If a payment to the Buyer under this Clause will be or has been subject
to Tax, the Escrow Agent shall on demand from the Buyer pay to the Buyer
from the Escrow Account the amount (after taking into account Tax
payable in respect of the amount) that will ensure that the Buyer
receives and retains a net sum equal to the sum it would have received
had the payment not been subject to Tax.
13.12This Clause 13 shall be in addition to and without prejudice to all
other rights and remedies available to the Buyer pursuant to the terms
and provisions of this Agreement.
13.13Notwithstanding anything to the contrary in this Clause 13, if there is
any discrepancy between this Clause 13 and the Escrow Agreement, the
Escrow Agreement shall control and prevail to the extent of discrepancy.
14. GENERAL
14.1 A variation of this Agreement is valid only if it is in writing and
signed by or on behalf of each party.
14.2 The failure to exercise or delay in exercising a right or remedy
provided by this Agreement or by law does not impair or constitute a
waiver of the right or remedy or an impairment of or a waiver of other
rights or remedies. No single or partial exercise of a right or remedy
provided by this Agreement or by law prevents further exercise of the
right or remedy or the exercise of another right or remedy.
14.3 The parties' rights and remedies contained in this Agreement are
cumulative and not exclusive of rights or remedies provided by law.
14.4 Except to the extent that they have been performed and except where this
Agreement provides otherwise, the obligations contained in this
Agreement remain in force after Completion.
14.5 All payments made by the Sellers under Clauses 6 and 13 shall be made
gross, free of right of counterclaim or set off and without deduction or
withholding of any kind other than any deductions or withholding
required by law.
14.6 Any date or period mentioned in this Agreement may be varied or extended
by written agreement of all the parties hereto, but, as regards any date
or period so varied or extended as aforesaid, or not having been so
varied or extended, time shall be of the essence of this Agreement.
14.7 Any provision of this Agreement being prohibited by or unlawful or
unenforceable under any applicable law actually applied by any court of
competent jurisdiction shall, to the extent required by such law, be
severed from this Agreement and rendered ineffective so far as is
possible without modifying the remaining provisions of this Agreement.
14.8 The parties agree that this Agreement is jointly drafted by all the
parties. Accordingly, the parties further agree that any and all rules
of construction that ambiguity is construed against the drafting party
is not applicable in any disputes concerning the terms, meaning and
interpretation of this Agreement.
15. ENTIRE AGREEMENT
This Agreement and each document referred to in it/describe related
agreements constitute the entire agreement and supersede any previous
agreement between the parties relating to the subject matter of this
Agreement.
16. ASSIGNMENT
This Agreement is personal to each Seller. Accordingly, each Seller
shall not assign, transfer, declare a trust of the benefit of or in any
other way alienate any of its rights under this Agreement whether in
whole or in part.
17. NOTICES
17.1 A notice or other communication under or in connection with this
Agreement (a "Notice") shall be:
17.1.1 in writing;
17.1.2 in the English language; and
17.1.3 delivered personally or sent by courier or by fax to the party
due to receive the Notice to the address set out in Clause or to
an alternative address, person or fax number specified by that
party by not less than 7 days' written notice to the other party
received before the Notice was despatched.
17.2 Unless there is evidence that it was received earlier, a Notice is
deemed given if:
17.2.1 delivered personally, when left at the address referred to in
Clause 17.1.3;
17.2.2 sent by courier, four Business Days after posting it; and
17.2.3 sent by fax, when confirmation of its transmission has been
recorded by the sender's fax machine.
17.3 The address referred to in Clause is:
-----------------------------------------------------------------------------
|Name of party|Address |Facsimile |
| | |No. |
-----------------------------------------------------------------------------
|CV |0/0 ChinaVest Services Limited, X.X.Xxx 9955 GPO, |+852-2845-|
|Distribution |Hong Kong |2949 |
|Services Ltd.| | |
-----------------------------------------------------------------------------
|Swingside |5705 00xx Xxxxx, Xxx Xxxxxx, 00 Xxxxx'x Xxxx |+86-21- |
|Limited |Central, Hong Kong |6160-1198 |
-----------------------------------------------------------------------------
|SEAVI Advent |Attention: Xx Xxxxxxx Xxx Meow Xxxx / Mr Hoe Boon |+ 65-6339-|
|CHL |Kwee |8247 |
|Investments |c/o 000 Xxxxx Xxxxxx Xxxx, #00-00 Xxxxx Xxxxxx, | |
|Ltd. xXxxxxxxxx, 000000 | |
-----------------------------------------------------------------------------
|Fortis |Attention: Xx Xxxxxxx Xxx Meow Xxxx / Mr Hoe Boon |+ 65 6339 |
|Private |Kwee |8247 |
|Equity Asia |c/o 000 Xxxxx Xxxxxx Xxxx, #00-00 Xxxxx Xxxxxx, | |
|Fund N.V. xXxxxxxxxx, 000000 | |
-----------------------------------------------------------------------------
|Prosper Field|Kingston Xxxxxxxx, P. X. Xxx 000, Xxxx Xxxx, |+86-21- |
|Holdings |Tortola, British Virgin Islands |6160-1198 |
|Limited | | |
-----------------------------------------------------------------------------
|Xxxxxxx Xxxx xXx.000, Xxxx 0000 Xxxxx Xxxx, Xxxxxxxx Xxxxxxxx, |+86-21- |
|Qiwei xXxxxxxxx XXX, 000000 |6160-1198 |
-----------------------------------------------------------------------------
|Xxxxx Xxxx |Room101, 139 Lijiang Shanshui, 000 Xxxxxxx Xxxx, |+86-21- |
|Jimin |Xuhui Xxxxxxxx, Xxxxxxxx XXX, 000000 |6160-1198 |
-----------------------------------------------------------------------------
|Menlo |To each of: |To each |
|Worldwide, |(i) Xx. Xxxxxxxx X. Xxxxxxx, Senior Vice |of: |
|LLC |President, General Counsel and Secretary, Con-Way |(i) +1- |
| |Inc. |650-378- |
| |2855 Xxxxxx Xxxxx, Xxxxx 000 |5464 |
| |San Xxxxx, XX 00000 |(ii) +852-|
| |USA |2737-2611 |
| | | |
| |(ii) Xx. Xxxxx X. Xxxxx, Director, Strategic | |
| |Acquisitions, Con-Way, Inc. | |
| |2855 Xxxxxx Xxxxx, Xxxxx 000 | |
| |San Xxxxx, XX 00000 | |
| |USA | |
-----------------------------------------------------------------------------
18. FORCE MAJEURE.
Neither party shall be liable to the other for any default or delay in
performing any of its obligations if caused, directly or indirectly, by
fire, flood, earthquake, acts of God, strikes, riots or civil disorders,
unavoidable casualty, governmental order or state of war, accidents,
interruptions of transportation facilities or delays in transit, supply
shortages, failure of computers or equipment to properly process dates,
or any cause beyond the reasonable control of a party. Should a force
majeure event occur and affect a party's ability to perform its
obligations hereunder, the party so affected shall notify its
counterparty of the happening of any such event within a reasonable
period of time. If due to such cause performance by the party is
delayed, the period for performance shall be extended for a reasonable
period of time to allow for completion of performance.
19. GOVERNING LAW AND JURISDICTION
19.1 This Agreement is governed by Hong Kong law, without regard to its
conflict of laws rules.
19.2 Any dispute, controversy or claim arising out of or in connection with
this Agreement, or the breach, termination or invalidity thereof
("Dispute"), shall be settled by arbitration in accordance with the
UNCITRAL Arbitration Rules as at present in force and as may be amended
by the rest of this Clause. The appointing authority shall be the Hong
Kong International Arbitration Centre. There shall be three (3)
arbitrators. The Buyer shall be entitled to appoint one (1) arbitrator.
The Warrantors and Sellers shall be entitled to jointly appoint one (1)
arbitrator. The third arbitrator who shall be of a different nationality
from any of the parties shall be agreed upon by the two party appointed
arbitrators within thirty (30) days of the appointment of the second
arbitrator or, in default thereof, be appointed by the Chairman of the
Hong Kong International Arbitration Centre. The place of arbitration
shall be Hong Kong. The language in the arbitration proceedings shall be
English. The arbitral tribunal may not award exemplary, punitive,
multiple or any form of non-compensatory damages. The decision and award
of the arbitral tribunal shall be final and binding on the Parties and
may be entered and enforced in any court having jurisdiction, and the
Parties irrevocably and unconditionally waive any and all rights to any
form of appeal, review or recourse to any state or other judicial
authority, insofar as such waiver may be validly made. Notwithstanding
the foregoing, the Parties shall have the right to seek interim
injunctive relief or other interim relief from a court of competent
jurisdiction, before the arbitral tribunal has been appointed. Without
prejudice to such provisional remedies as maybe available under the
jurisdiction of a national court, the arbitral tribunal shall have full
authority to grant provisional remedies or order the parties to request
that a court modify or vacate any temporary or preliminary relief issued
by such court, and to award damages for the failure of any party to
respect the arbitral tribunal's orders to that effect.
19.3 The parties agree that the documents which start any proceedings
relating to a Dispute and any other documents required to be served in
relation to such proceedings may be served on the Seller in accordance
with Clause . These documents may, however, be served in any other
manner allowed by law. This Clause applies to all proceedings wherever
started.
20. GOVERNING LANGUAGE
20.1 Each notice, demand, request, statement, instrument, certificate or
other communication given, delivered or made by a party to any other
party under or in connection with this Agreement shall be:
20.1.1 in English; or
20.1.2 if not in English, accompanied by an English translation made by
a translator, and certified by such translator to be accurate.
20.2 The receiving party shall be entitled to assume the accuracy of and rely
upon any English translation of any document provided pursuant to
Clause 20.1.2.
21. FURTHER ASSURANCES
21.1 Subject to Completion, each of the Sellers agrees with and undertakes to
the Buyer that at any time and from time to time upon the written
request of the Buyer, it shall do, execute and perform such further
acts, deeds, documents and things as the Buyer may reasonably require:
21.1.1 to effectively vest beneficial ownership of the Sale Shares in
the Buyer or as it may direct free from all encumbrances;
21.1.2 to give the full effect of this Agreement and confer the full
benefit of this Agreement on the Buyer (or such other person as
it may direct); and
21.1.3 for the purpose of enforcing the Buyer's rights under this
Agreement against any third party.
21.2 Subject to Completion, the Buyer agrees with and undertakes to the
Sellers that at any time and from time to time upon the written request
of the Sellers' Representatives, it shall do, execute and perform such
further acts, deeds, documents and things as the Sellers may reasonably
require:
21.2.1 to give the full effect of this Agreement and confer the full
benefit of this Agreement on the Sellers (or such other person as
it may direct); and
21.2.2 for the purpose of enforcing the Sellers' rights under this
Agreement against any third party.
22. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which shall be considered one and the same agreement and shall become
effective when two or more counterparts have been signed by each of the
parties and delivered to the other parties.
SCHEDULE 1 INFORMATION ABOUT THE SELLERS, COMPANY AND THE SUBSIDIARIES
PART A: THE SELLERS
-----------------------------------------------------------------------------
|(1) Seller |(2) Sale Shares |(3) Percentage of Total Outstanding |
| | |Shares of the Company |
| |--------------------| |
| |Preferred |Ordinary | |
| |Sale |Sale | |
| |Shares |Shares | |
-----------------------------------------------------------------------------
|CV Distribution |446,119 |N/A |33.39% |
|Services Ltd. |Preferred | | |
| |A Shares | | |
| | | | |
| |30,556 | | |
| |Preferred | | |
| |B Shares | | |
-----------------------------------------------------------------------------
|SEAVI Advent CHL|274,525 |N/A |19.23% |
|Investments Ltd.|Preferred | | |
| |B Shares | | |
-----------------------------------------------------------------------------
|Fortis Private |82,357 |N/A |5.77% |
|Equity Asia Fund|Preferred | | |
|N.V. |B Shares | | |
-----------------------------------------------------------------------------
|Swingside |N/A |449,222 |31.46% |
|Limited | |Ordinary | |
| | |Shares | |
-----------------------------------------------------------------------------
|Prosper Field |N/A |144,999 |10.15% |
|Holdings Limited| |Ordinary | |
| | |Shares | |
-----------------------------------------------------------------------------
PART B: THE COMPANY
Chic Holdings Limited
1. Registered number: MC-89785
2. Place of incorporation: Cayman Islands
3. Address of registered office: the offices of Xxxxxx and Xxxxxx,
Attorneys-at-Law, Xxxxxx House, P.O.
Box 309, Xxxxxx Town, Grand Cayman,
Cayman Islands, British West Indies
4. Authorised share capital: US$50,000
5. Issued share capital: 446,119 Series A Preference Shares,
387,438 Series B Preference Shares,
594,221 Ordinary Shares
6. Directors: Xxxxxx Xxxxxxx, Xxxxxxx Xxx and
Xxxxxxx Xxxx
7. Secretary: N/A
8. Accounting reference date: December 31
9. Auditors: Deloitte Touche Tohmatsu Huayong
Public Accountants Co., Ltd.
PART C: THE SUBSIDIARIES
(a) Shanghai Chic Logistics Co., Ltd.
1. Registered number: Qiduhuzongzi No. 032505 (Putuo)
2. Place of incorporation: Shanghai, China
3. Address of registered office: Xx. 00, Xxxx 000, Xx Xxxx Xxxx,
Xxxxx Xxxxxxxx
0. Total investment US$ 15,000,000
5. Registered capital: US$ 8,500,000
6. Paid-in capital: US$ 8,500,000
7. Directors: Xxxxxxx Xxxx, Xxxx Xx, and Xxxx Xxx
Yui Xxxxx
(b) Shanghai Chic Supply Chain Management Co., Ltd.
1. Registered number: No. 3101152025477
2. Place of incorporation: Shanghai
3. Address of registered office: Section L, the 0xx Xxxxx, Xx.00
Xxxxxxxx,Xxxx Xxxx, Xxxxxxxx
Xxxxxxxxxx Free Trade Zone
4. Registered capital: RMB 10,000,000
5. Paid-in capital: RMB 10,000,000
6. Directors: Xxxxxxx Xxxx, Xxxx Xx, and Xxxx
Xxx Yui Xxxxx
(c) Shanghai Chic Storage and Transportation Co., Ltd.
1. Registered number: No.310227000543077
2. Place of incorporation: Shanghai
3. Address of registered office: Xinmin Development Zone, Songjiang
District
4. Registered capital: RMB 8,000,000
5. Paid-in capital: RMB 8,000,000
6. Executive Director: Xxxxxxx Xxxx
(d) Shanghai New Chic Logistics Co., Ltd.
1. Registered number: No. 3102292103686
2. Place of incorporation: Shanghai
3. Address of registered office: Xx. 0-000, Xxxxxxx Xxxx, Xxxxx
Xxxx, Xxxxxx Xxxxxxxx, Xxxxxxxx
0. Registered capital: RMB500,000
5. Paid-in capital: RMB500,000
6. Executive Director: Xxxxxxx Xxxx
SCHEDULE 2 COMPLETION REQUIREMENTS
1. Sellers' obligations
1.1 At Completion the Sellers and Warrantors shall deliver to the Buyer's
Legal Counsel:
1.1.1.a closing certificate, dated the Completion Date, certifying
that (i) each condition specified in Clause 3.1 of this
Agreement has been fulfilled; (ii) each Warranty is true,
accurate and not misleading; (iii) each covenant of the Sellers
to be performed prior to Completion under this Agreement has
been duly fulfilled; and (iv) there has been no Material Adverse
Change since the date of this Agreement;
1.1.2.written resolutions of the board of directors of the Company as
referenced to in Clause 1.2 of this Schedule;
1.1.3.duly executed transfer(s) in respect of the Sale Shares to the
Buyer and the share certificate(s) for the Sale Shares issued to
the Buyer;
1.1.4.updated Register of Members and Register of Directors certified
by the Company;
0.0.0.xx evidence of the authority of each person executing a document
referred to in this Schedule 2 on a Seller's behalf:
(a) a copy of the minutes of a duly held meeting of the directors
of the Seller (or a duly constituted committee thereof)
authorising the execution by the Seller of the document and,
where such execution is authorised by a committee of the board
of directors of the Seller, a copy of the minutes of a duly
held meeting of the directors constituting such committee or
the relevant extract thereof; or
(b) a copy of the power of attorney conferring the authority,
in each case certified to be a true copy by a director or the
secretary of the Seller;
1.1.6.the common seal, company seal and finance seal (if any) of each
Group Company; each register, minute book and other book
required to be kept by each Group Company under relevant laws or
regulations made up to the Completion Date; and each certificate
of incorporation, certificate of approval and road
transportation license for each Group Company;
1.1.7.share certificates for all issued shares or investment
certificates (or certificate of verification of capital
contribution issued by such firm of certified public accounts
qualified to issue the same) for all equity interests in the
registered capital of each Subsidiary and executed but
uncompleted transfers and declarations of trust by the
registered owner in respect of all those shares or equity
interests that are beneficially owned by but not registered in
the name of a Group Company;
1.1.8.the Ancillary Documentation duly executed by all parties to such
Ancillary Documentation;
1.1.9.letter of resignations in the agreed form from each director,
supervisor (if applicable) and secretary (as the case may be) of
each Group Company expressed to take effect from the end of the
meeting held at Completion pursuant to paragraph 1.2 with a
statement confirming that the director, secretary or supervisor
(as the case may be) has no claim against such company for
compensation or loss of office or otherwise;
1.1.10.all documentation relating to the Intellectual Property Rights
including (without limitation) the original registration and
renewal certificate for each of the Intellectual Property Rights
which are registered or pending as at Completion;
1.1.11.the certificate of good standing as referenced to in Clause
3.1.6 of the Agreement;
1.1.12.copy of all executed instruments for replacement of the
directors and supervisors as required under Clause 3.1.7 of the
Agreement;
1.1.13.copy of all executed written statement confirming such resigning
director or supervisor has no claim against such company for
compensation or loss of office or otherwise;
1.1.14.copy of the termination agreement as required under Clause 3.1.8
of the Agreement;
1.1.15.the financial statement as referenced to in Clause 3.1.10 of
the Agreement;
1.1.16.the legal opinions as referenced to in Clause 3.1.11 of the
Agreement;
1.1.17.copies of the agreements as referenced to in Clause 3.1.12 of
the Agreement;
1.1.18.the Tax Deed and the Escrow Agreement as referenced to in
Clause 3.1.13 of the Agreement;
1.1.19.copy of the letter of understanding as referenced to in Clause
3.1.14 of the Agreement;
1.1.20.copy of the renewed service contracts with each of ICI and
Xxxxxx as referenced to in Clauses 3.1.15 of the Agreement;
1.1.21.evidence of effective completion of the transactions as
referenced to in Clauses 3.1.16 and 3.1.17 of the Agreement;
1.1.22.copy of the termination agreement as referenced to in Clause
3.1.18 of the Agreement;
1.1.23.copy of the non-disclosure and non-compete agreement as
referenced to in Clause 3.1.19 of the Agreement;
1.1.24.copy of the cancellation and arrangement documents as
referenced to in Clause 3.1.20 of the Agreement;
1.1.25.copy of the amendment agreement as referenced in clause 3.1.21
of the Agreement;
1.1.26.copy of the insurance policies as referenced to in Clause
3.1.22 of the Agreement;
1.1.27.original of the joint closing certificate as referenced to in
Clause 3.1.23 of the Agreement; and
1.1.28.original of the consent and waiver as referenced in clause
3.1.25 of the Agreement.
1.2 The Sellers shall ensure that at Completion a meeting of the board of
directors of the Company is held at which the directors resolve to:
1.2.1.approve the transactions contemplated under this Agreement;
1.2.2.approve this Agreement for each Seller transferring shares to
the purchaser,
1.2.3.approve the entry in the register of members and the issue of a
certificate or certificates under the name of the Buyer,
1.2.4.authorise the appointment of the new directors as nominated by
the purchaser,
1.2.5.confirm their resignation as directors following the closing of
the board meeting, and
1.2.6.confirm the change of registered office to a place nominated by
the Buyer along with change of company secretary.
1.3 If required by the Buyer, the Sellers shall ensure that immediately
after the board meeting referred to in paragraph , a meeting of the
board of directors of each Subsidiary is held to deal with any matter
referred to in paragraph 1.2.
SCHEDULE 3 ACCOUNTING PRINCIPLES
The FY2007 Actual EBITDA to be used in the Earn-Out Payment calculation
shall be prepared in accordance with the IFRS in force on 31 December
2007, subject to the following adjustments:
(a) inclusion in revenue of subsidy income which is currently
included in the financial statements as "Other Operating Income"
and is related to any recurrent Tax refunds (including but not
limited to any enterprise income tax business tax subsidies)
granted by the local government for transportation and storage
enterprises or for foreign invested companies but such subsidy
income shall not exceed RMB2,600,000 for the calculation of the
FY2007 Actual EBITDA;
(b) inclusion of all revenues and expenses related to the Group's
business incurred by Chic S&T and New Chic during FY2007,
including the period prior to Completion;
(c) exclusion from the Company's expenses of verifiable expenses
incurred by the Sellers or the Group related to the proposed
transactions contemplated in this Agreement up to US$200,000;
(d) inclusion in the Company's costs and expenses of all costs and
expenses incurred or to be incurred by the Group in relation to
the termination of the Service and Undertakings Agreement signed
between Chic SCM and Chic S&T in December 2006; and
(e) inclusion in the Company's costs and expenses of expenses related
to execution of the Group Companies' Employee Benefit Plan.
Should any disagreement arise between the Buyer and the Sellers relating
to this Schedule 3, such matter will be resolved pursuant to the dispute
resolution process set forth in Clause 19.2 of this Agreement.
SCHEDULE 4 WARRANTIES
All Warranties contained herein are made subject to the exceptions with
respect thereto which are noted in the schedules delivered by the Sellers and
Warrantors to the Buyer concurrently herewith and identified as the
"Disclosure Letter" and further, with respect to Warranties contained in
clauses 8, 10, 11, 13, 14, 16, 20, 21 22, 23, 24, 25 and 26, when made by the
Preferred Share Sellers, each in its capacity as a Seller, such Warranties
are qualified by the knowledge of such Seller.
PART A - WARRANTIES IN RESPECT OF THE GROUP COMPANIES
1.Corporate Organisation. Each Group Company is a company duly organized,
validly existing and in good standing under the laws of the jurisdiction
in which it was incorporated. Each Group Company and their respective
branch companies so registered have received all Permits necessary for
their establishment and the conduct of their business as such, including
but not limited to appropriate Business Licenses and Road Transport
Operation Permits (if applicable). The Warranties in this item 1 with
respect to branch companies made by the Preferred Share Sellers are
subject to their knowledge.
2.Corporate Actions. The transactions contemplated herein have been duly
authorized by the applicable Group Company.
3.Capitalization. The Sale Shares comprise the whole of the Company's
allotted and issued share capital and have been properly allotted and
issued and are fully paid; the registered capital of the Subsidiaries
has been fully paid up by its immediate investors and duly verified by
PRC certified accountants. Each Group Company has taken no action to
issue any of the authorised but unissued share capital of the Group
Company and except as disclosed in the Disclosure Letter, there are no
outstanding: (i) options, warrants or other rights to purchase or
subscribe to investment interests in the Group Company; or (ii)
agreements or arrangements in force which provide for the present or
future issue, allotment or transfer of or grant to any person the right
(whether conditional or otherwise) to call for the issue, allotment or
transfer of any share or interest of the Group Companies (including any
option or right of pre-emption or conversion).
4.Ownership of the Group Company. The Sellers are the legal, recorded and
beneficial owners of the Sale Shares, free and clear of all
Encumbrances. The Company is the legal, recorded and beneficial owner of
100% of the equity interest of Chic Logistics, free and clear of all
Encumbrances. Chic Logistics is the legal, recorded and beneficial owner
of 100% of the equity interest of each of Chic SCM and Chic S&T, free
and clear of all Encumbrances. After the consummation of the transfer
contemplated under Clause 3.1.17, Chic Logistics is the legal, recorded
and beneficial owner of 100% of the equity interest of New Chic, free
and clear of all Encumbrances. Other than the Sale Shares, the Sellers,
the Warrantors or any third parties do not legally or beneficially own
or control any other shares/equity interest or convertible debentures,
options, warrants, rights, calls, commitments, conversion rights or
other instruments or agreements providing for the purchase, issuance or
sale of any shares of any Group Company.
5.Subsidiaries and Affiliates. Each Group Company has no subsidiaries and
branch companies other than the subsidiaries and branch companies
disclosed in this Agreement and the Disclosure Letter and does not own,
directly or indirectly, any capital stock or other equity or ownership
or proprietary interest in any corporation, partnership, association,
trust, joint venture or other entity other than the subsidiaries and
branch companies disclosed in this Agreement and the Disclosure Letter.
Each Group Company has received all Permits necessary for its
investments in and for the conduct of business of the subsidiaries and
branch companies disclosed in this Agreement and the Disclosure Letter
Each Subsidiaries and each of their branch companies disclosed in this
Agreement and the Disclosure Letter is validly existing and in good
standing. The Warranties in this item 5 with respect to branch companies
made by the Preferred Share Sellers are subject to their knowledge.
0.Xx Violation. Neither the execution and delivery of this Agreement, any
Ancillary Documentation nor the consummation of the sale and purchase of
the Sale Shares contemplated hereby will violate any provision of the
constitutive documents of the Company or will violate, or be in conflict
with, or constitute a default (or an event, which, with notice or lapse
of time or both, would constitute a default) under, or result in the
termination of or give any other person the right to terminate, any
contract, indenture, mortgage, deed of trust, loan agreement or any
other agreement, contract or instrument, which violation, conflict,
default or termination would reasonably be expected to have a material
adverse effect on any Group Company, or violate any applicable law or
any final judgment of any court with competent jurisdiction over any
Group Company and the subject matter, which violation would reasonably
be expected to have a material adverse effect on any Group Company.
7.Accounts. The Accounts and the Group's consolidated accounts, each for
the financial year ended 31 December 2006, 31 December 2005 and 31
December 2004 , have been prepared and audited on a proper and
consistent basis in accordance with IFRS and based on the opinion of the
Company's auditors of international professional reputation (which
opinion is issued on the basis of the true and complete books, records
and other materials provided by each Group Company), show a true and
complete view of the assets and liabilities (whether actual or
contingent) and trading position of each Group Company and the Group at
the specific time stated therein, and of the profits and losses and cash
flows for time period stated therein. The management accounts for the
period from January 1 2007 to the relevant management account dates have
been prepared by the Company's Accountants on a proper and consistent
basis in accordance with IFRS and show a true and complete view of the
assets and liabilities (whether actual or contingent) and trading
position of the Company on the relevant management account dates and of
the profits and losses and cash flows for the the relevant management
account periods. Notwithstanding the foregoing, neither SEAVI nor Fortis
makes any representations or warranties with respect to the Accounts and
the Group's consolidated accounts for the financial year ended 31
December 2004 and the Warranties in this item 7 with respect to the
management accounts for the period from January 1 2007 to the relevant
management account dates are subject to best knowledge of the Preferred
Share Sellers.
8.Sales Growth and Financial Projections. There are no existing or
imminent matters in any Group Company that will impede the
sustainability of any Group Company's sales growth and profitability and
the Financial Projections were prepared by the management of the Company
with due care and diligence based on proper and reasonable assumptions
and were properly reviewed by the board of directors of the Company.
9.Absence of Changes. Since the Last Accounting Date, other than for
purposes of effectuating transactions contemplated under this Agreement
and the Ancillary Documentation: (i) Each Group Company's business has
been operated in the usual way so as to maintain it as a going concern;
(ii) there has been no Material Adverse Change in the financial or
trading position of any Group Company or the Group; and (iii) no
material change has occurred in the assets and liabilities shown in the
Accounts and there has been no material reduction in the value of the
net tangible assets of any Group Company on the basis of the valuations
used in the Accounts. Without limiting the foregoing, since the Last
Accounting Date, other than the transactions contemplated under this
Agreement and the Ancillary Documentation, there has not occurred: (i)
any material change in: (a) any accounting, financial reporting or tax
practice or policy of any Group Company; or (b) any method of
calculating any bad debt, contingency or other reserve of any Group
Company for accounting, financial reporting or tax purposes, or any
change in the fiscal year of any Group Company; (ii) any change in the
general pricing practices or policies of any Group Company except in the
ordinary course of business; (iii) except in the ordinary course of
business, any acquisition or disposition of any assets or properties of
any Group Company; (iv) any declaration or payment of any dividend or
distribution save as provided in the Accounts; (v) no substantial
supplier or customer of the business of any Group Company has (a)
stopped or indicated an intention to stop, trading with the business,
(b) reduced or indicated an intention to reduce, substantially its
trading with any Group Company, or (c) changed or indicated an intention
to change, substantially the terms on which it is prepared to trade with
any Group Company.
10.Assets, Equipment and Stock. Each Group Company owns or has the right
to use each asset essential for the effective operation of its business
without any disturbance and subject to exceptions disclosed in the
Disclosure Letter, self-owned assets are assets of such Group Company
free of any Encumbrance. All material warehouses, plant, vehicles and
equipment owned or used by each Group Company is in reasonably good
condition and has been properly maintained. No Group Company has
provided any service which is or was in any material respect below
industry standard. All trucks and other vehicles owned, leased or
controlled by each Group Company have the appropriate vehicle licenses
and road transport licenses suitable for the activities they are engaged
in. The drivers contracted with each Group Company have the appropriate
drivers' licenses, business qualifications and operation license for
handling of dangerous goods (if applicable) necessary for the activities
they are engaged in.
11.Intellectual Property. The Intellectual Property Rights are legally,
beneficially and exclusively owned by a Group Company, without any
Encumbrance, restriction on use, and is not subject to a claim or
opposition from any other party as to title, validity, enforceability,
entitlement, assignment or otherwise, or validly granted to such Group
Company subject a licensing agreement. Any and all fees required of such
Group Company for the maintenance of the Intellectual Property Rights
have been paid by such Group Company, and all actions required of such
Group Company to maintain and protect the registered Intellectual
Property Rights have been taken by such Group Company. There is no
pending or threatened proceeding or dispute by or against such Group
Company in respect of the Intellectual Property Rights. Each Group
Company has not granted and is not obliged to grant a license or
assignment or other right in respect of any of the Intellectual Property
Rights. The Intellectual Property Rights constitute all of the material
intellectual property required and essentially used in the business of
each Group Company as it was carried on before the date of this
Agreement.
12.Taxes. Except as otherwise disclosed in the Disclosure Letter, each
Group Company has properly, appropriately and duly completed and filed
all tax reports, returns, information, notices and statement that are
required to be filed by it under the applicable law and has properly and
duly paid, deducted or withheld all Taxes and other charges required to
be paid, deducted or withheld (including but not limited to any related
party transactions) in respect of all periods covered by such returns,
report or statements by any competent Tax Authority. Each Group Company
does not have any tax obligations or penalties outstanding, pending or
threatened. Each Group Company has not engaged in, or been a party to,
any transaction or series of transactions or scheme or arrangement of
which the main purpose, or one of the main purposes, was or could be
construed to be the illegal evasion of Taxes. Each Group Company has not
been the subject of an investigation, discovery or order by or involving
any Tax Authority and there are no circumstances existing which make it
likely that an investigation, discovery or order will be made. There are
no known pending or threatened disputes, audits or investigations
relating to any Taxes for which any Group Company may be held liable.
13.Contracts. Each material contract agreement, arrangement or obligation
to which any Group Company is a party ("Material Agreement") is in full
force and effect, and there exists no default or event of default or
event, occurrence, condition or act which, with the giving of notice,
the lapse of time or the happening of any other event or condition,
would become a default or event of default thereunder, which default or
event of default would be reasonably expected to have a Material Adverse
Effect on the Group Companies. No approval or consent of any party is
needed for all of the Material Agreements to continue to be in full
force and effect within and in accordance with the terms contained
therein. There are no agreements, understandings or proposed
transactions between a Group Company and any of its Affiliates or the
Sellers' Affiliates.
00.Xxxxxxxxx. Each Group Company has in place all material policies of
insurance customary and sufficient for the conduct of its business as
currently operated, for the material warehouses, offices and other
essential properties owned or leased by it, and for compliance with all
relevant requirements of law or regulations; such policies are in full
force and effect; and all premiums due and payable with respect thereto
have been paid, and no notice of cancellation or termination has been
received with respect to any such policies, and each Group Company has
complied in all material respects with the terms and conditions of such
policies.
00.Xxxxx Compliance. Each Group Company is in compliance in all material
respects with all legal requirements (including, but not limited to, all
applicable Environmental Laws) applicable to or affecting its business
as undertaken up until the date of this Agreement, the non-compliance of
which would be reasonably expected to have a Material Adverse Effect on
the Group Companies, and each Group Company has not received any notice
from any government authority of non-compliance with any legal
requirement, nor is the Company subject to any proceeding currently
pending, or threatened with respect to any alleged violation thereof.
No act or transaction has been effected by or on behalf of any Group
Company, nor any of their directors, officers or senior management
staff, involving the illegal making or authorising of any payment, or
the giving of anything of value, to any government official, party
official, or any potential or existing client for the purpose of
influencing the recipient in his official capacity in order to obtain
business, retain business or direct business to any Group Company or
other person.
16.Litigation. There is no employee, director or officer claim, legal
action, suit, inquiry, proceeding or investigation by or before any
court, governmental or regulatory body pending by or against any Group
Company. There are no facts or circumstances in existence that would
reasonably be expected to give rise to such employee, director or
officer claim, legal action, suit, inquiry, proceeding or investigation.
No injunction, writ, temporary restraining order, decree or any order of
any nature has been issued by any court or other governmental authority
purporting to enjoin or restrain the execution, delivery or performance
of this Agreement or the Ancillary Documentation. Each of Ordinary
Share Sellers and CVDS represents that each Group Company is not subject
to, nor has it, during the five (5) years prior to the date of this
Agreement, been subject to, any judgment, order or decree entered in any
lawsuit or proceeding. Each of SEAVI and Fortis represents that each
Group Company is not subject to, nor has it, during the two (2) years
prior to the date of this Agreement, been subject to, any judgment,
order or decree entered in any lawsuit or proceeding.
(a)None of the Sellers and the Group Companies is a plaintiff or
defendant in or otherwise a party to any litigation, arbitration or
administrative proceedings which are in progress or threatened or
pending by or against or concerning any of the Group Companies or
any of its assets.
(b) So far as any of the Sellers is aware, no governmental or official
investigation or inquiry concerning any of the Group Companies is
in progress or pending.
(c) None of the Sellers is aware of any circumstances which are
likely to give rise to any such proceeding, investigation or
inquiry as is referred to in paragraph (a) or paragraph (b).
(d) There is no action, suit, proceeding, claim, arbitration or
investigation ("Action") pending (or, to the best knowledge of each
of the Group Companies and each of the Sellers, currently
threatened) against any of any of the Group Companies, any Group
Companies activities, properties or assets or, to the best of
knowledge of any of the Group Companies and the Sellers, against
any officer, director or employee of any of the Group Companies in
connection with such officer's, director's or employee's
relationship with, or actions taken on behalf of any of the Group
Companies. To the best knowledge of any of the Group Companies and
any of the Sellers, there is no factual or legal basis for any such
Action that might result, individually or in the aggregate, in any
material adverse change in the business, properties, assets,
financial condition, affairs or prospects of the Companies. There
are no Actions pending or, to the best knowledge of any of the
Group Companies and any of the Sellers, threatened (or any basis
therefor), relating to the prior employment of any of the Group
Companies employees or consultants, their use in connection with
any of the Group Companies business of any information, technology
or techniques allegedly proprietary to any of their former
employers, clients or other parties, or their obligations under any
agreements with prior employers, clients or other parties. None of
the Group Companies is a party to or subject to the provisions of
any order, writ, injunction, judgment or decree of any court or
government agency or instrumentality and there is no Action by any
of the Group Companies currently pending or which it intends to
initiate.
(e) There is no dispute in Cayman Islands, the PRC or elsewhere, in
relation to the affairs of any of the Group Companies, the outcome
of which would be reasonably expected to have a material adverse
effect on the Group Companies, and to the best information and
belief of each of the Sellers and the Group Companies there are no
facts which may give rise to any dispute.
(f) There is no unsatisfied judgment order or decree of any court
tribunal or any governmental agency outstanding against any of the
Group Companies, which may have a material adverse effect upon any
of the Group Companies or its business, operations, assets or
liabilities or any part of the same.
(g) No event has occurred causing, or which upon intervention or
notice by any third party may cause, any floating charge created by
any of the Group Companies, to crystallise or any charge created by
it to become enforceable, nor has any such crystallisation occurred
nor is such enforcement in process.
17.Insolvency/Winding Up. Other than for purposes of effectuating
transactions contemplated under this Agreement and the Ancillary
Documentation, (i) no government order has been made, legal petition
presented or board/shareholder resolution passed for the winding up,
dissolution or liquidation of any Group Company or for the appointment
of a provisional or other liquidator or for the appointment of a
custodian or trustee for all or substantially all of the property or
assets of any Group Company, (ii) no Group Company has commenced any
other proceeding for itself under any bankruptcy, reorganisation,
composition, insolvency, liquidation, or similar law of any
jurisdiction, and there has not been commenced against any Group Company
any such proceeding, (iii) no receiver or manager has been appointed for
whole or in part of the business, and (iv) no distress, execution or
other process has been levied on any Group Company's assets.
18.Approvals and Permits. Each Group Company has obtained and is in
compliance with the terms and conditions of all material Permits
(including, any Permits required under Environmental Laws), which are
essential to the lawful operation of the business of the Group Company
as currently being conducted and the failure to obtain which or the
incompliance with which would be reasonably expected to have a Material
Adverse Effect on the Group Company.
19.Brokers. Neither the Seller, the Warrantor nor any of their Affiliates
has entered into any agreement or had any discussion with any third
party regarding any proposed sale of any of the Sale Shares which could
result in Buyer or the Company having any liability to such third party.
20.Books and Records. All accounts, books, ledgers and other records of a
significant nature related to each Group Company's business have been
properly and accurately kept and completed in all material respects, and
there are no material inaccuracies or discrepancies of any kind
contained or reflected therein.
21.Real Property. Schedule 6 set forth an accurate and complete list of
all material real properties leased in whole or in part by the Group
Companies for their operations and includes the name of the record title
holder thereof. Each Group Company has no owned real properties. The
landlord of the Property has good and marketable title to all the real
property leased to the Group Company, free and clear of all
Encumbrances, charges or other restrictions of any kind or character,
and such lease has been duly approved and registered with competent
land/building authorities. None of such buildings or structures (or any
equipment therein), nor the operation or maintenance thereof, violates
any restrictive covenant or any provision of any law, ordinance, rule or
regulation, or encroaches on any property owned by others. No
condemnation proceeding is pending or threatened, which would preclude
or impair the use of any such property by the Group Company for which it
is currently used. All leases of each Group Company are in full force
and effect not subject to any pre-emptive right, and no person has a
right to terminate that lease before it is due to expire; and all rents
and material additional payments due to date on each such lease have
been paid. Each Group Company has not violated any of the terms or
conditions under any such lease in any material respect. The office,
warehouses and other real properties leased by each Group Company is in
a state of good operating condition, good maintenance and repair and is
adequate and suitable for the purposes for which it is presently being
used, except for ordinary wear and tear.
22.Employment Relations and Employee Benefit Plans. Except as otherwise
disclosed in the Disclosure Letter, each Group Company has complied in
all aspects with all applicable laws relating to the employment of
labor, including without limitation, those relating to wages, social
welfare, hours, no-competition arrangement and Employee Benefit Plan.
Each Group Company has not experienced any material work stoppage or any
other labor difficulty during the past three (3) years. The Accounts
adequately reflect amounts paid, or have adequate provisions, for all
Employee claims (if any). Each Group Company has paid all amounts
required or has made adequate provision in the Accounts for all Employee
Benefit Plans. No Employee has exercised any warrants or options granted
by any Sellers or any Group Company under any Employment Benefit Plans.
Each Group Company has not been delinquent in making any payment to or
for the benefit of any current or former employee, officer, consultant,
independent contractor or agent with respect to statutory social welfare
funds and housing funds operated under PRC laws. All contributions and
payments required to be made by any employees of each Group Company in
connection with such statutory social welfare funds and housing funds
have been fully deducted and paid to the relevant governmental
authority, and no such deductions have been challenged or disallowed by
any governmental authority or any employee of any Group Company.
23.Information. All information provided by the Sellers with respect to
the Group Companies or set out in this Agreement and the Ancillary
Documentation are true, accurate and not misleading in all material
aspects. The Disclosure Letter and its updates (if any) has fully,
fairly, specifically and accurately disclosed the information that
constitutes qualification to the Warranties.
24.Environmental Compliance. Each Group Company has complied in all
material aspects with all Environmental Laws in force, relevant or
applicable to it in any relevant jurisdiction and there is nothing in,
on, over or under the Property the presence, existence or condition of
which constitutes a material breach of such Environmental Laws nor is
there or has there been any manufacturing, storage, generation,
servicing, treatment, disposal or other process carried on at the
Property in such a way as to amount to a material breach of the same. No
toxic industrial waste or toxic substance (as defined in any
Environmental Law) or any other Hazardous Substance, including without
limitation, polychlorinated biphenyls, radioactive material, lead,
asbestos-containing material, incinerator, landfill, septic, wastewater
treatment or other disposal system or underground or above-ground
storage tank (active or inactive) is or has been present at, on or
under, or has been spilt, leaked, released, deposited, discharged or
disposed in the soil or water in, under, around or upon the Property or
any property previously owned, leased or operated by any Group Company.
Each Group Company is not subject to any environmental investigation or
proceedings. There are no liabilities of or relating to the business of
any Group Company of any kind whatsoever, whether accrued, contingent,
absolute, determined, determinable or otherwise, arising under or
relating to any Environmental Laws (including any liability to make
good, repair, re-instate or clean up land or another asset owned,
occupied, possessed or used by any Group Company on or before the date
of this Agreement) and there are no facts, conditions, situations or set
of circumstances which could reasonably be expected to result in or be
the basis for any such liability.
(a)Each of the Group Companies is in compliance in all material
aspects with the Environmental Laws, which compliance includes, but
is not limited to, the possession by each of the Group Companies of
all permits and other government authorizations required under
applicable Environmental Laws and compliance with the terms and
conditions thereof. No Group Companies has received any
communication (written or oral), from a governmental authority that
alleges that it is not in such full compliance and, to the best
knowledge of each the Group Companies and each of the Sellers,
there are no circumstances that may prevent or interfere with such
compliance in the future.
(b)There is no Environmental Claim (as defined below) pending or
threatened against any Group Companies
(c)There are no past or present actions, activities, circumstances,
conditions, events, or incidents, including, without limitation,
the release, emission, discharge, presence, or disposal of any
Material of Environmental Concern (as defined below), that could
form the basis of any Environmental Claim against any Group
Companies
In this Agreement, "Environmental Claim" means any claim, action, cause
of action, investigation, or notice (written or oral) by any person or
entity alleging potential liability (including, without limitation,
potential liability for investigation costs, cleanup costs, governmental
response costs, natural resources damages, property damages, personal
injuries, or penalties) arising out of, based on, or resulting from:
(i) the presence, or release into the environment, of any Material of
Environmental Concern at any location, whether or not owned or operated
by any party; or (ii) circumstances forming the basis of any violation,
or alleged violation, of any Environmental Law. "Materials of
Environmental Concern" means chemicals, pollutants, contaminants,
wastes, toxic substances, Hazardous Substances, petroleum, and petroleum
products.
00.Xxxxx. Each Group Company has not, nor has it agreed to, create or
incur loan capital, borrowings or indebtedness in the nature of
borrowings with any third party which are not reflected in the Accounts.
26.Guarantees and Indemnities. Each Group Company is not a party to and
does not have any liability (including without limitation, any
contingent liability) under any guarantee, indemnity or other agreement
to secure, or otherwise incur financial or other obligations with
respect to, an obligation of a third party, which is not reflected in
the Accounts.
PART B - WARRANTIES IN RESPECT OF THE SELLERS
1. Corporate Authority and Existence. Each Seller is an entity duly
organised and validly existing under the laws in which it was organized,
and has all requisite power and authority to enter into this Agreement
and Ancillary Documentation to which such Seller is a party and to carry
out the transactions contemplated by this Agreement and Ancillary
Documentation to which such Seller is a party. The Seller's investment
in the Company and holding of Sale Shares does not violate any
applicable law.
2. Authorisation of this Agreement and Related Transaction Documents. All
actions, approvals and other proceedings, corporate or otherwise,
including the board of directors' approval (if applicable), taken by
each Seller necessary for, or in connection with: (i) the execution,
delivery and performance of this Agreement and Ancillary Documentation
to which the Seller is a party, (ii) the legality, validity, binding
effect or enforceability of this Agreement and Ancillary Documentation
to which the Seller is a party, and (iii) the consummation of any
transactions contemplated under this Agreement and Ancillary
Documentation to which the Seller is a party have been duly completed or
obtained, except as may be limited by bankruptcy and other similar laws
affecting creditors' rights generally and limitations on the
availability of equitable remedies. This Agreement shall constitute its
legal, valid and binding obligations on such Seller.
3. No Conflict or Violation. Neither the execution, delivery or
performance by any Seller of this Agreement and Ancillary Documentation
to which it is a party, nor compliance by the Seller with the terms,
provisions and conditions thereof, (i) will contravene any provision of
any law, statute, rule or regulation or any order, injunction or decree
of any court or governmental instrumentality to which the Seller is
subject, (ii) will violate or conflict or be inconsistent with or result
in any breach of any of the terms, covenants, conditions or provisions
of, or constitute a default (or give rise to any right or termination,
cancellation to create or impose) of any Encumbrance upon the property
or assets may be subject, (iii) will violate any provisions of the
constitutional or other governing documents of the Seller and (iv) will
be subject to any statutory, contractual or other limitations or require
consents or approvals of any persons.
4. No Government Approvals. No governmental regulatory approvals or third
party approvals or consents are required to be obtained by any Seller in
connection with: (i) the execution, delivery and performance of this
Agreement or Ancillary Documentation to which the Seller is a party,
(ii) the legality, validity, binding effect or enforceability of this
Agreement or Ancillary Documentation to which the Seller is a party or
(iii) the consummation of any transactions contemplated under this
Agreement or Ancillary Documentation to which the Seller is a party.
5. Each Seller is the legal and record owner of the relevant Sale Shares as
set out against its name in column (2), Part A of Schedule 1 and has
full and unrestricted rights to sell the relevant Sales Shares to the
Buyer under this Agreement.
PART C - WARRANTIES IN RESPECT OF THE BUYER
1.Corporate Authority and Existence. The Buyer is a company duly
organized and validly existing under the laws of Delaware, and has all
requisite corporate power and authority to enter into this Agreement and
Ancillary Documentation to which the Buyer is a party and to carry out
the transactions contemplated by this Agreement and Ancillary
Documentation to which the Buyer is a party.
2.Authorisation of this Agreement and Ancillary Documentation. All
actions, approvals and other proceedings, corporate or otherwise,
including the board of directors' approval, taken by the Buyer necessary
for, or in connection with: (i) the execution, delivery and performance
of this Agreement and Ancillary Documentation to which the Buyer is a
party; (ii) the legality, validity, binding effect or enforceability of
this Agreement and Ancillary Documentation to which the Buyer is a
party; or (iii) the consummation of any transactions contemplated under
this Agreement and Ancillary Documentation to which the Buyer is a
party, have been duly completed or obtained, except as may be limited by
bankruptcy and other similar laws affecting creditors' rights generally
and limitations on the availability of equitable remedies. This
Agreement shall constitute legal, valid and binding obligations on the
Buyer.
0.Xx Conflict or Violation. Neither the execution, delivery or
performance by the Buyer of this Agreement and Ancillary Documentation
to which it is a party, nor compliance by the Buyer with the terms,
provisions and conditions thereof, (i) will contravene any provision of
any law, statute, rule or regulation or any order, injunction or decree
of any court or governmental instrumentality to which the Buyer is
subject, (ii) will violate or conflict or be inconsistent with or result
in any breach of any of the terms, covenants, conditions or provisions
of, or constitute a default (or give rise to any right or termination,
cancellation to create or impose) of any Encumbrance upon the property
or assets may be subject, (iii) will violate any provisions of the
constitutional or other governing documents of the Buyer and (iv) will
be subject to any statutory, contractual or other limitations or require
consents or approvals of any persons.
0.Xx Government Approvals. No governmental, regulatory approvals or third
party approvals or consents are required to be obtained by the Buyer in
connection with: (i) the execution, delivery and performance of this
Agreement or Ancillary Documentation to which the Buyer is a party; (ii)
the legality, validity, binding effect or enforceability of this
Agreement or Ancillary Documentation to which the Buyer is a party; or
(iii) the consummation of any transactions contemplated under this
Agreement or Ancillary Documentation to which the Buyer is a party.
5.Brokers. Buyer has not entered into any agreement or had any discussion
with any broker (except for Latitude Capital Group) regarding any
proposed purchase of any of the Sale Shares which could result in
Sellers or the Company having any liability to such third party.
6.Accounts. Buyer has received the Group Companies' Accounts for fiscal
year 2006 along with a draft auditors' report.
SCHEDULE 5 ACTION PENDING COMPLETION
Each Seller shall ensure that each Group Company will: except for the purpose
of effectuating the sale and purchase of the Sale Shares pursuant to this
Agreement or otherwise contemplated under this Agreement or the Ancillary
Documentation,
1.operate its business in the usual way so as to maintain that business as
a going concern; having regard to existing bank and other facilities,
maintain sufficient working capital for the purposes of continuing to
carry on its business in its present form and at its present level of
turnover for the foreseeable future and for the purposes of performing
in accordance with their respective terms all orders, projects and
contractual obligations which have been placed with, or undertaken by,
such Group Company, in a manner consistent with its past practice in the
two years prior to the Completion;
2.not amend its organizational documents; not issue, sell, transfer,
pledge, dispose of or encumber any shares or equity interests (including
the Sale Shares being purchased by the Buyer), or securities convertible
into or exchangeable for, or options, warrants, calls, commitments or
rights of any kind to acquire, any shares or equity interests;
3.not create, allot, issue, acquire, repay or redeem any share capital or
agree, arrange or undertake to do any of those things or acquire or
agree to acquire, an interest in a corporate body or merge or
consolidate with a corporate body or any other person, enter into any
demerger transaction or participate in any other type of corporate
reconstruction;
4.not acquire or dispose of, or agree to acquire or dispose of, any
revenues, assets, business or undertakings except in the ordinary course
of its business or assume or incur, or agree to assume or incur, a
liability, obligation or expense (actual or contingent) except in the
ordinary course of its business;
5.not make, or agree to make, capital expenditure exceeding in total
US$100,000 (or its equivalent at the time) or incur, or agree to incur,
a commitment or commitments involving capital expenditure exceeding in
total US$100,000 (or its equivalent at the time) other than pursuant to
its business plan and budget previously approved by the board of
directors;
6.not declare, pay or make a dividend or distribution;
7.not pass a shareholders' resolution except in the ordinary course of its
business;
8.not create, or agree to create or amend, an Encumbrance over the
Property or another asset or redeem, or agree to redeem, an existing
Encumbrance over the Property or another asset other than pursuant to
its business plan and budget previously approved by the board of
directors;
0.xx relation to the Property: (i) not change its existing use; (ii) not
terminate, or give a notice to terminate, a lease, tenancy or licence;
(iii) not apply for consent to do something requiring consent under a
lease, tenancy or licence; or (iv) not agree a new rent or fee payable
under a lease, tenancy or licence, other than in the ordinary course of
its business or otherwise pursuant to its business plan or budget
approved previously by the board of directors;
10.not enter into a long-term, onerous, unusual or material agreement,
arrangement or obligation in each case, involving consideration,
expenditure or liabilities in excess of US$100,000 other than in the
ordinary course of business or pursuant to its business plan or budget
approved previously by the board of directors;
11.not amend or terminate a material agreement, arrangement or obligation
to which it is a party other than in the ordinary course of business or
pursuant to its business plan or budget approved previously by the board
of directors;
12.not amend the terms and conditions of employment or engagement of a
director, other officer or employee (except in the usual course of its
business) or provide, or agree to provide, a gratuitous payment or
benefit to a director, officer or employee (or any of their dependants)
or employ, engage or terminate the employment or engagement of, a person
with aggregate annual compensation package in excess of US$ 50,000;
13.not amend, or agree to amend, the terms of its borrowing or
indebtedness in the nature of borrowing or create, incur, or agree to
create or incur, borrowing or indebtedness in the nature of borrowing;
14.not give, or agree to give, a guarantee, indemnity or other agreement
to secure, or incur financial or other obligations with respect to,
another person's obligation;
15.not establish, modify or discontinue (wholly or partly) an Employee
Benefit Plan or discontinue (wholly or partly) an Employee Benefit Plan;
not issue any new shares, options, warrants or other securities under
the Employee Benefit Plan, in each case, other than as contemplated
under this Agreement and the Ancillary Documents;
16.not pay any benefits under an Employee Benefit Plan other than in
accordance with the terms of the documents governing an Employee Benefit
Plan and not under any discretionary power;
17.not commence litigation or arbitration proceedings without notification
to the Buyer in writing;
18.conduct its business in all material respects in accordance with all
applicable legal, regulatory and administrative requirements in any
applicable jurisdiction;
19.not enter into an agreement, arrangement or obligation (whether legally
enforceable or not) in which a director or former director of a Group
Company or a person connected with any of them is interested;
20.protect, defend, enforce, maintain and renew each of the Intellectual
Property Rights and continue any pending application for the
Intellectual Property Rights;
00.xxx and discharge in accordance with the present practice of such Group
Company as at the date of this Agreement (i) all Taxes, assessments,
levies, fees and charges imposed upon it or upon or in relation or in
connection with the Properties and other assets and (ii) all lawful and
valid claims which, if unpaid, might by law become a lien upon the
Properties and other assets, and maintain such reserves in respect of
Taxes, assessments, levies, fees and charges as are required under
generally accepted accounting principles, standards and practices
generally accepted in Cayman Islands and PRC (as the case may be) and
consistently applied with the consequences that as at the Completion
Date, all Taxes payable by any Group Company have been paid and/or
discharged in full and/or moneys have been set aside for the same (and
all adequate provisions for deferred Taxes have been made in the
relevant Accounts);
22.allow the Buyer and its agents access to, and to take copies of, the
books and records of each Group Company including, without limitation,
the statutory books, minute books, leases, licences, contracts, details
of receivables, intellectual property, supplier lists and customer lists
in the possession or control of each Group Company subject to their
confidentiality obligations;
23.not take, or agree to or commit to take, any action that would or is
reasonably likely to result in any of the Conditions not being
satisfied, or would make any Warranty of the Sellers or the Company
contained herein inaccurate in any respect;
24.complete registration of the 8 permanent sites located at Huhehot,
Jiangmen, Lanxi, Xiamen, Wuhan, Kelamayi, Chongqing, Kunming and the
5 permanent sites in Shanghai as branch companies at the local AICs;
25.complete renewal of the following leases for the offices located at:
Heilongjiang, Tianjin, Guangzhou, Haikou, Quanzhou, Suzhou, Wenzhou,
Lanxi, Xuzhou, Wuhan,Changsha, Zhenzhou, Wulumuqi, Kuerle, Chengdu
and provide to the Buyer the renewed business licenses of all
branch companies of each Subsidiary which indicate that they have all
passed 2006 annual review;
26.amend the business scope of Chic SCM and obtain new business license
entitling it to carry on transportation and warehousing business
covering all of the regions in the PRC;
27.procure each Key Personnel to execute the employment agreement as
referenced to in Clause 3.1.12 of the Agreement;
28.obtain the letter of understanding from Procter & Xxxxxx Guangzhou Co.,
Ltd. as required under Clause 3.1.14 of the Agreement;
29.procure the relevant Group Companies to renew the contracts as
referenced to in Clause 3.1.15 of the Agreement;
30.complete the transactions as referenced to in Clauses 3.1.16 and 3.1.17
of the Agreement;
31.procure Chic S&T and Chic SCM to terminate the Service and Undertakings
Agreement as required under Clause 3.1.18 of the Agreement;
32.procure Chic's Mart Trading Co., Ltd to enter into the non-disclosure
and non-compete agreement as referenced to in Clause 3.1.19 of the
Agreement;
33.procure the Group Companies to make arrangements with respect to the
options and/or the warrants as referenced to in Clause 3.1.20 of the
Agreement;
34.procure Shanghai Venus Software Co., Ltd. to enter into an amendment to
the Technology Development Contract as required under Clause 3.1.21 of
the Agreement; and
35.procure the Subsidiaries to maintain such insurance policies as
referenced to in Clause 3.1.22 of the Agreement.
SCHEDULE 6 REAL PROPERTY
(1) WAREHOUSE LEASE
Warehouse Name Warehouse Address Staring Date Ending Date Total Area Rent (monthly)
(m2)
------------------- -------------------- -------------- -------------- ------------- ----------------
XxxxxxxxXxxxxxx 000 Xxxxxx Xxxx, 2006-11-28 2007-11-27 4,814 111,315
Guangming Warehouse Shanghai
Shanghai Songjiang 000 Xxxxxxxxx Xxxx, 0000-0-0 2008-3-30 16,859 210,201
Jiuting Warehouse Jiuting,Songjiang
District, Shanghai
Road
Shanghai Songjiang 000 Xxxxxxx Xxxx, 0000-0-0 2010-8-31 23,696 381,995
Xinqiao Warehouse Xinqiao, Songjiang
District, Shanghai
Wuhan Gongxiao No 2 New Warehouse, 2007-5-1 2008-4-30 8,107 89,177
Agricultural Shazui,Tuoluokou,
Production Materials Dongxihu District,
Warehouse Wuhan
Wuhan Shitong 000 Xxxxxxxxx Xxxxxx, 0000-0-0 2007-9-30 1,000 13,700
Warehouse Xxxxx Port, Wuhan
Wuhang Jieli 00 Xxxxxxxx Xxxx, 0000-0-00 2008-9-22 2,300 30,110
Warehouse Qiaokou District,
Wuhan
Chengdu Warehouse Xinguanghua Industry 2006-4-1 2011-3-31 16,164 190,631
Park of Yongquan
Street, Wenjiang
District, Chengdu
Kunming Warehouse Shilipu, Liangting, 2006-11-26 2007-11-25 990 15,073
Eastern Suburb,
Kunming
Xi'an Warehouse No 1 Warehouse, 188 2006-2-15 2008-2-14 7,716 94,797
Jianzhang Road, Xi'an
Urumqi 0 Xxxxx Xxxx 0000-0-00 2007-9-14 2,821 23,721
warehouse
Guangzhou Wenjia Road 2006-11-1 2009-10-31 3,900 60,840
QiaohaiWarehouse North, Yitang
Village, Fengle Road
North, Huangpu
District,Guangzhou
Guangzhou Shenglai Jianshe Yitang 2006-10-1 2007-9-30 3,280 39,360
Warehouse Warehouse,Fengle Road
North,Huangpu
District,Guangzhou
Shenzhen Huanancheng 2007-1-1 2007-12-31 15,390 277,560
Huanancheng Warehousing Quarter,
Warehouse Fuan Avenue
South, Pinghu Town,
Longgang District,
Shenzhen
Beijing Xizhihe Xizhihe Village, 2004-8-16 2009-8-15 20,560 281,178
Warehouse Shibalidian Township,
Xxxxxxxx Xxxxxxxx,
Xxxxxxx
Xxxxxxx Xxxxxxx Xxxxxxx Xxxxxxx, 0000-0-0 2007-12-31 10,668 176,030
Warehouse Shibalidian Township,
Xxxxxxxx Xxxxxxxx,
Xxxxxxx
Xxxxxxx Xxxxxxx Xxxxxxx Xxxxxxx, 0000-0-00 2009-8-15 800 13,383
Warehouse Shibalidian Township,
Chaoyang District,
Beijing
Tianjin CTX 000 Xxxxxxx Xxxxxx, 0000-0-0 0000-0-00 1,500 22,500
Warehouse Tianjin Free Trade
Zone
Tianjin Hub Zhendong Group, Xu 2007-3-14 2007-9-13 420 7,161
Village, Dongli
District, Tianjin
Shenyan PVM No 2 Warehouse, 11 2007-8-1 2008-7-31 3,870 62,020
Warehouse Fuminnan Street,
Hunnanxin District,
Shenyang, Liaoning
Shenyan MK 00 Xxxxxxx Xxxx, 2006-10-15 2007-10-14 2,100 29,400
Warehouse Dadong District (warm seasons)
52,500
(winter)
2) OFFICE LEASE
Branches Address Duration Starting Date Ending Date Annual Rent
(year) (RMB Yuan)
---------- --------------------- ---------- --------------- --------------- -------------
Beijing Room 1703, Building 2 2006-9-26 2008-9-25 96000/year
0, Xxxxxxx Xxxx,
Xxxxxxxx Xxxxxxxx,
Xxxxxxx
Baotou 1/Floor, Conference 2 2006-8-16 2008-8-25 23000/year
Room, 0 Xxxxx Xxxx,
Xxxxxxxx Xxxxxxxx,
Baotou
Yantai Xxxx 000, Xxxxx X, 0 0000-0-0 2009-7-31 34000/year
Eastern Paris
Xxxxxxx Xxxxxx, 0
Xxxxxxx Xxxx, Xxxxx
Xxxxxxxx, Xxxxxx,
Xxxxxxxxx
Shenyan 2/Floor, Western 1 2006-4-1 2007-9-30 7200/year
Office Building, 00
Xxxxxxx Xxxx,
Xxxxxx Xxxxxxxx,
Xxxxxxx
Jilin 2/F, Transporation 1 2006-11-1 2007-10-31 25000/year
Hotel, 6 Zhongkan
Road, Jilin City,
Jilin Province
Zibo Tianlin Tower 1 2006-4-15 2008-4-15 10680/year
Taian Taishan Resturant, 1 2006-9-16 2007-9-16 16800/year
Taian
Xxxxx Room 215, Section 1 2006-11-20 2007-11-19 12000/year
B, Daxing
International
Shopping Park,
Dalate Road,
Dongsheng District,
Xxxxx
Dongying 270 Jinan Road, 2 2006-5-1 2008-4-30 13000/year
Dongying District
Xxxxxxx Xxxx 000, Xxxxxxx 1 2006-12-25 2007-12-24 21315/year
Tower, Weifang
Linyi (2/F) Ruyi Jie, 2 2006-12-16 2008-12-15 15000/year
Lantian Xxxxxxxxxx
Xxxxxx, Xxxxx
Xxxxxxx 0 Xxxxxxx Xxxx, 2 2006-11-15 2008-11-14 35000/year
0/X, Xxxxxxx
Xxxxxxxx, 000 Xxxxx
Xxxx, Xxxxxx
Xxxxxxxx, Baoding
Xxxxxxxx 000, 0/X, Xxxxxxxxx 0 0000-0-0 2008-5-31 11520/year
Building, Tangshan
Branch of China
Coal Research
Institute (21
Xxxxxxxx Xxxx)
Xxxxxx 0/X Xxxxx, Xxxx 0 0000-0-0 2008-6-30 40000/year
000, Xxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxx
Xxxxxxxxxxxx Rooms B420-B422, 1 2007-3-15 2008-3-14 52116/year
Yinban Shangzhu,
000 Xxxxxxxxxxxxx
Xxxxxx,
Xxxxxxxxxxxx
Daqing Conference Room 1 2007-3-24 2008-3-23 24000/year
4/F, Daqin Jungong
Guest House, 53
Huizhan Street,
Sartu District,
Haerbin,
Helongjiang
Taiyuan 00 Xxxxxxx Xxxx 1 2007-4-20 2008-4-19 50000/year
North, Xxxxxxx
Xxxxxxx 00/X, Xxxxx X, 0 0000-0-00 2008-6-19 27500.04/year
Xxxxx Xxxxx,
Xxxxxxx Xxxxxx,
Xxxxxxx District,
Haerbin
Changchun Room 503, Tianting 1 2007-7-14 2008-7-13 50000/year
Tower, 169 Puqing
Road, Chaoyang
District, Changchun
Jinan Rooms 601 & 603, 2 2006-4-1 2008-3-31 56160/year
Suite A, Dashun
Commercial Tower,
00 Xxxxxx Xxxx,
Xxxxxxxxx
Qingdao 1002 Room, Dongli 2 2007-6-1 2009-5-31 40000/year
Apartment Building,
00 Xxxxxxxxx Xxxx,
Xxxxxx Xxxxxxxx,
Xxxxxxx
Handan 000 Xxxxxxx Xxxxxx, 2 2007-2-1 2009-1-31 7200/year
H&an
Tianjin 1-A-610 Shiji 1 2007-7-1 2008-6-30 30000/year
Garden, Nanmenwai
Street, Nankai
District, Tianjin
Guangzhou 5606 Room, CITIC 2 2007-1-1 2008-12-31 478571.16/year
Xxxxx Xxxxxx
Xxxxxxxx, 000
Xxxxxx Xxxx Xxxxx,
Guangzhou
Guangzhou A264 (Former A 2 Xi 1 2007-5-20 2008-5-19 6000/year
18), 000 Xxxxxxxxx
Xxxxx Xxxxxx,
Qingnian Road, the
Development Zone,
Guangzhou
Guangzhou Xxxx 000, 0/X, 0 0000-0-0 2007-12-31 11400/year
Building 9,
Tearchers' Village,
Yunningju,
Xxxxxxxxx
Xxxxxxx 00X, Suite A, 1 2006-12-1 2007-11-30 21600/year
Jinlong Tower,
Xxxxxx Xxxx Xxxx,
Xxxxxx Xxxxxxxx,
Xxxxxxx
Xxxxxxxx 0000 Room, Suite 1 2007-4-8 2008-4-7 20400/year
East, Baihuo Plaza
Tower, 123 Shennan
Road East, Shenzhen
Zhongshan Section 1, 3/F, 2 2006-5-15 2008-5-14 32364/year
Commercial Plaza,
Buffalo, 389 Fuhua
Road, West
District, Zhongshan
Shunde The First Floor, 9 2 2006-3-1 2008-2-28 15600/year
Ronggui Fengan
Street, Shunde
District, Fushan
Nanning Room 3018, Tenglong 2 2006-1-7 2008-1-7 32400/year
Ge, Jubao Garden, 8
Minsheng Road,
Nanning
Quanzhou Room 207, Xxxxx 1 2007-6-20 2008-6-20 14400/year
Building, Huxin
Road, Fengze
District, Quanzhou
Xxxxxx Xxxx 000, 00 Xxxxx 0 0000-0-00 2008-1-24 28800/year
Road, Haikou
Xxxxxxxx Xxxx 000, Xxxxx X, 0 0000-0-00 2007-8-20 36192/year
Jinao Garden
(Fangzhou Tower),
00 Xxxxxxxx
Xxxxxxxxx Xxxxxx,
Xxxxxxxx
Xxxxxx Office Building 2 2006-12-15 2008-12-14 36000/year,
1801A, Haicheng 39600/year for
Tower, 183 the third year
Fenghuang Road,
Zhuhai
Shaoguan Store 6, First 2 2006-8-16 2008-8-15 19200/year
Floor, Suite B,
Dongfeng Garden,
Xinjian Road,
Wujiang District,
Shaoguan
Guangzhou Room 1705, 7 Qinghe 1 2007-3-1 2008-2-28 48000/year
Road, Guangzhou
Economic
Development Xxxx
Xxxxxxx 00X, Jinyang 0.5 2007-4-1 2007-9-30 20430/year
Building, 00 Xxxx
Xxxxxx, Xxxxxxxx
Xxxxxxxx, Xxxxxxx
Chengdu X0 Xxxxxxx, 0/X, 0xxxx and 2006-8-21 2007-11-20 27360/year
Shunji Tower, 252 3 months
Xxxxxxxxx Xxxxxx,
Xxxxxxx
Xxxxxxxxx Xxxx 000, 175 1 2006-1-17 2007-12-31 00000/xxxx
Xxxxxxxx Xxxx,
Xxxxxxxxx
Xxxxxxxxx Xxxx 0, 10/F, 1 2006-9-22 2007-12-31 45492/year
Xxxxxx Xxxxx, 000
Xxxxxx Xxxx,
Xxxxxxx District,
Chongqing
Neijiang 9-2 Tiancheng Xxxxx 1 2007-1-1 2007-12-31 14400/year
Hotel, 000 Xxxx
Xxxx, Xxxxx
Xxxxxxxx, Xxxxxxxx
Guiyang Rooms 6-8, 8/F, 1 2007-1-1 2007-12-31 27048/year
Qiaoliang Tower, 36
Qianling Road West,
Yunyan District,
Guizhou
Kunming Room 1205, 12/F, 4 2007-3-5 2011-12-31 42432/year
Jida Plaza, 289
Renmin Road East,
Kunming
Leshan 12-1 Land 1 2007-1-1 2007-12-31 9000/year
Xxxxxxxxxxxxxx
Xxxxxxxx, 00 Xxxxx
Xxxx, Xxxxx
Xxxxxxxx, Xxxxxx
Wuhan Suite B, 14/F, 1 2007-4-20 2008-4-19 52738.08/year
Xxxxxxxx Xxxxx, 000
Xxxxxx Xxxx, Xxxxx
Xxxxx Xxxx 0000, Hubei 1 2006-12-18 2007-12-17 54096/year
Xxxxxxxxxx Xxxxx, 0
Xxxxxxx Xxxx,
Xxxxxxx Xxxxxxxx,
Xxxxx
Xxxxxxx Suite B, 13/F, 1 2006-10-1 2007-9-30 14800/year
Xxxxxxxx Xxxxx, 0
Xxxxxxxxx Xxxx
Xxxx, Xxxxxxx
Xxxxxxx Rooms 317 - 319, 1 2006-11-15 2007-12-31 15300/year
Xxxxxxx Xxxxx, 00
Xxxx Xxxx Xxxxx,
Xxxxxx Xxxxxxxx,
Xxxxxxx
Pingxiang Room 5028, 1 2007-1-1 2007-12-31 10800/year
Xxxxxxxxx Xxxxx, 00
Xxxxxx Xxxx North,
Pingxiang
Zhenzhou 159 Jiankang Road, 1 2007-3-25 2008-3-24 60225/year
Zhenzhou
Zhuzhou Room 1205, Tianshun 1 2005-8-25 2006-8-24 26400/year
Xxxxxxxx, 00 Xxxxxx
Xxxx West, Zhuzhou
Nanchang Xxxx 0, Xxxx Xxxxx, 0 0000-0-00 2008-6-10 22200/year
00 Xxxxxxxxxx Xxxx
Xxxxx, Xxxx
Xxxxxxxx, Xxxxxxxx
Changsha Room 806, Lianhe 1 2007-6-8 2008-6-7 49200/year
Commercial
Building, 549 Wuyi
Avenue, Changsha
Xi'an Xxxx 000, 00/X, 2 2007-4-20 2009-4-19 37980/year
Weilan
International, 0
Xxxxxx Xxxx, Xxxxxx
Xxxxxxxx, Xi'an
Xi'an Rooms 1002 & 1004, 2 2007-5-1 2009-4-30 48240/year
00/X, 00
Xxxxxxxxxxx Xxxxxx,
Xxxxxx Xxxxxxxx,
Xx'xx
Yinchuan Room 4, 10F/F, 1 2006-8-26 2007-8-26 23928/year
Suite X, Xxxxxx
Xxxxx, 0 Xxxxxx
Xxxxxx Xxxx,
Xxxxxxxx
Xxxxxx 0/X, 00 Xxxxxx Xxxx 2 2005-10-29 2007-11-15 43500/year
South, Urumqi
Lanzhou 1001 Room, Mianma 2 2006-11-1 2008-10-31 25200/year
Tower, 00 Xxxxxxxxx
Xxxx, Xxxxxxx
Taiyuan 00 Xxxxxxx Xxxx 1 2007-4-20 2008-4-19 50000/year
North, Taiyuan
Kelamay 1001 Room, 169 1 2006-12-2 2007-12-1 11218.28/year
Xxxxx Xxxx, Xxxxxxx
Xxxxx Xxxx 0000, 1 2007-3-27 2008-3-26 15276/year
Zhonghuan Hotel, 1
Yingda Road, Hi-
Tech Development
Zone, Baoji
Xining Room 1205, 26 1 2007-4-1 2008-3-30 18357.6/year
Xxxxx Xxxxxx,
Xxxxxxxxxx
Xxxxxxxx, Xining
Xxxxx Xxxxxxxxxx Xxxxx, 0 0000-0-0 2008-6-30 10560/year
Renmin Road, Korla
Suzhou 0 Xxxxxxx Xxxx, 1 2007-3-18 2008-3-17 40000/year
Ganjiang Road West,
Pingjiang District,
Suzhou
Jinhua Store, First Floor, 1 2006-11-25 2007-12-31 18000/year
000 Xxxxx Xxxxxx,
Xxxxxx
Xxxxx Xxxx 000, Haiya 1 2006-12-29 2007-12-28 33170.4/year
Office Buidling,
Xxxxx
Xxxxxxxx Xxxx 000, Xxxxxxxx 0 0000-0-0 2007-12-31 10980/year
City, 230 Lane,
Yunhe Road West,
Yangzhou
Nantong Stores 4 & 5, 1 2007-1-1 2007-12-31 72576/year
Building 00,
Xxxxxxx Xxxxxx,
Xxxxxxx
Taizhou Store 41, Haiwan 1 2007-2-17 2007-12-31 13100/year
Langqin, Taizhou
Economic
Development Zone
Changzhou Room 807A, 20 2.5 2007-5-8 2009-12-31 24800/year
Guanghua Street,
Changzhou
Nantong Stores 4 & 5, 1 2007-5-1 2008-4-30 0000/xxxx
Xxxxxxxx 00,
Xxxxxxx Xxxxxx,
Xxxxxxx
Zhenjiang Room 209, Jingcheng 1 2007-5-19 2008-5-18 0000/xxxx
Xxxxx 0, 00 Xxxxxxx
Xxxx, Xxxxxxxxx
Xxxxx Home of Zhao 1 2007-7-20 2008-7-19 6000/year
Xiezhi, Gengtoufan
Village, Lingdong
Town, Lanxi
Xuzhou Rooms 301 & 302, 95 1 2007-7-1 2008-6-30 19200/year
Pengcheng Road,
Xuzhou
Wuxi Xxxx 000, 00 Xxxxxx 0 0000-0-0 2008-1-31 31000/year
Xin Village,
Jiefang Road East,
Wuxi
Nanping Room 101, Guangyu 2 2005-11-29 2007-11-28 18000/year
Xincheng, Xxxxxxx
Xxxx, Xxxxxxx
Xxxxxx 0X-0, Xxxxx X, Xxxx 0 2006-11-1 2007-10-31 33600/year
Tower, 0 Xxxx
Xxxxxx, Xxxxxx
Wenzhou Room 406, Huasheng 1 2007-6-24 2008-6-23 00000/xxxx
Xxxxx, Xxxxx Xxxx,
Xxxxxxx
Xxxxxxxx Xxxx 0000, Lianyin 2 2006-10-22 2008-10-21 86544/year
Tower, 00 Xxxxxxxxx
Xxxx, Xxxxxxxx
Xxxxxx Xxxx 0-00, 4/F, 1 2007-8-12 2008-7-31 43200/year
Zhongshan Dadi, 26
Lane 000, Xxxxxxxxx
Xxxx Xxxx, Xxxx
Xxxxxxxx, Ningbo
Xiamen Xxxxx 00 & 00, 0/X, 0 0000-0-0 2009-2-1 30660/year
Xinxin Jindi Tower,
396 Jiahe Road,
Huli District,
Xiamen
SCHEDULE 7 INTELLECTUAL PROPERTY RIGHTS
(a) The trademark of "Chic" used by the Group Company was registered in the
name of Chic S&T in the category of class 39 on 14 March 2001.
(b) Software
No. Software name Developer Description of Right to Right to
development contract use the use the
(date, term and material software software
terms) by the by Group
developer Company
-----------------------------------------------------------------------------
1 Transportation Shanghai July,2007~Sep., 2005 NO Yes
management Venus
system software
co.
0 XX XXX XXXX Xxx.,0000x NO Yes
(CDC & RDC) Software
3 GPS Dichain Jan.,2006~Mar.,2007 Yes Yes
DTS
4 SAP Excel-SH Yes Yes
SCHEDULE 8 TAX DEED
DEED OF TAX INDEMNITY
THIS DEED OF TAX INDEMNITY (this "Deed") is dated [*], 2007
BY:
(1) CV Distribution Services Ltd., a company incorporated in the
Cayman Islands, whose registered office is at Xxxxxx House,
South Church Street, Xxxxxx Town, Grand Cayman, Cayman Islands;
(2) Swingside Ltd., a company incorporated in Hong Kong SAR, whose
registered office is at 5705 00xx Xxxxx, Xxx Xxxxxx, 00 Xxxxx'x
Xxxx Xxxxxxx, Xxxx Xxxx ;
(3) Seavi Advent CHL Investments Ltd., a company incorporated
British Virgin Islands, whose registered office is at P.O. Box
957, Offshore Incorporations Centre, Road Town, Tortola,
British Virgin Islands ;
(4) Fortis Private Equity Asia Fund N.V., a company incorporated in
Belgium, whose registered office is at Xxxxxxxxxxx 0, 0000,
Xxxxxxxx, Xxxxxxx ;
(5) Prosper Field Holdings Limited, a company incorporated in the
British Virgin Islands whose registered office is at Kingston
Xxxxxxxx, P. O. Box 173, Road Town, Tortola, British Virgin
Islands ;
(Each party set out in paragraphs (1) to (5) above is referred to as a
"Seller" and together, the "Sellers". Each party set out in paragraphs (3) to
(5) above is referred to as a "Preferred Share Seller" and together,
"Preferred Share Sellers".)
(6) Xx. Xxxxxxx Xxxx Xxxxx, a PRC citizen (holder of PRC ID
Number: 310104196411064078), whose address is at No.190, Lane
0000 Xxxxx Xxxx, Xxxxxxxx Xxxxxxxx, Xxxxxxxx XXX, 000000; and
(7) Xx. Xxxxx Xxxx Xxxxx, a PRC citizen (holder of PRC ID
Number: 310107671123281), whose address is at Xxxx000, 000
Xxxxxxx Xxxxxxxx, 000 Xxxxxxx Xxxx, Xxxxx Xxxxxxxx, Xxxxxxxx
XXX, 000000;
(Each party set out in paragraphs (1) to (7) above is referred to as a
"Covenanter" and together, the "Covenanters".)
IN FAVOUR OF:
(8) Menlo Worldwide, LLC, a company incorporated in the State of
Delaware whose primary business office is at 0000 Xxxxxx
Xxxxx, Xxxxx 000 Xxx Xxxxx, XX 00000-0000, Xxxxxx Xxxxxx of
America ("Buyer ");
(9) Chic Holdings Limited, a company incorporated in Cayman
Islands, with its registered office at c/x Xxxxxx & Calder,
Xxxxxx House, P.O. Box 309, Xxxxxx Town, Grand Cayman, Cayman
Islands ("Company"); and
(10)each Subsidiary as stated and defined in the Agreement (as
defined below) (together with the Company, the "Group
Companies").
(Each party set out in paragraphs (8) to (10) above is referred to as a
"Covenantee" and together, the " Covenantees".)
WHEREAS :-
(A) This Deed is made pursuant to an agreement dated 7 September 2007 (the
"Agreement") between the Covenanters and the Buyer to which this Deed
is attached as Schedule 8 providing, inter alia, for the acquisition by
the Buyer from the Sellers of the entire issued share capital in the
Company.
(B) Each Covenanter has agreed to provide each Covenantee with an indemnity
in respect of taxation on the terms and conditions of this Deed.
EACH COVENANTER HEREBY AGREES as follows :
1. DEFINITIONS
1.01 In this Deed, in addition to the above definitions, the following words
and expressions shall have the following meanings:-
"Claim" means any assessment, notice, demand or other government paper
issued or action taken by or on behalf of any Tax Authority pursuant
to which any Group Company is liable or is sought to be made liable for
any Taxation or for any payment arising from the retroactive depravation
of any form of Relief which Relief has already been granted to and
enjoyed by the Group Company(ies) prior to Completion and would, but for
the Claim, have not been clawed back from relevant Group Company(ies) ;
"PRC" means the People's Republic of China which for the sole purpose of
this Deed shall exclude Hong Kong, Macau and Taiwan;
"Relief" includes any relief, allowance, set-off or deduction in
computing profits or credit or right to repayment of Taxation enjoyed by
any Group Company on or prior to Completion pursuant to any legislation
concerning or relating to Taxation;
"Taxation" means (a) all taxes, or similar governmental levy or
imposition imposed on any Group Company arising from its activities on
or prior to Completion whether of the PRC or the Cayman Islands, however
denominated, which will include, without limiting the generality of the
foregoing, all customs duties, corporate and individual income taxes,
employee withholding taxes, withholding tax on other service providers,
withholding tax on capital gains, social security taxes, sales and use
taxes, value added taxes, real and personal property taxes, stamp taxes,
transfer taxes, other governmental charges, and other government
obligations of the same or of a similar nature to any of the foregoing,
which are required by law to be paid, withheld or collected by the Group
Companies; (b) any liability for amounts referred to in (a) as a result
of any obligations to indemnify another person; (c) any amount or
amounts in respect of any Group Company as is referred to in Clause 1.03
and (d) all interest, penalties, fines, costs, charges and expenses
incidental or relating to the liability to Taxation or the deprivation
of any Relief which is the subject of this Deed to the extent that the
same is payable or suffered by any Group Company;
"Tax Authority" means any taxing or other legitimate authority in the
PRC or Cayman Islands competent to impose any liability of Taxation
pursuant to the then effective laws of the relevant jurisdiction.
1.02 In this Deed, references to Clauses and Schedules are to clauses and
schedules of this Deed, words importing the singular include the plural
and vice versa, words importing a gender include any gender, references
to persons include bodies corporate or unincorporate and the headings to
the Clauses in this Deed are for convenience only and have no legal
effect.
1.03 In the event of any deprivation of any Relief already enjoyed and
accounted for by the Group Companies, liability arising from such
deprivation shall be treated as an amount of Taxation by applying the
relevant rates of Taxation in force in the period or periods in respect
of which Relief would have applied or (where the rate has at the
relevant time not been fixed) the last known rate and assuming that
Relief was capable of full utilization by the relevant company.
1.04 Words and phrases defined in the Agreement shall have the same meaning
when used in this Deed unless otherwise defined herein.
2. INDEMNITY
2.01 The Covenanters hereby jointly and severally covenant and agree with
each Covenantee that the Covenanters shall unconditionally, fully and
effectually indemnify and at all times keep unconditionally, fully and
effectually indemnified each Covenantee from and against:
(a) the amount of any and all Taxation falling on any Covenantee
resulting from or by reference to any income, profits, gains,
transactions, events, matters or things of the Group Companies
earned, accrued, received, entered into or occurring up to
Completion with respect to which Taxation should have been paid
but have not been paid pursuant to the requirement of law by such
Covenantee on or prior to Completion;
(b) without limiting the generality of Section 2.01(a) above, the
amount of any and all Taxation falling on any Covenantee resulting
from or by reference to the following taxations, claims,
penalties, fines or other monetary and non-monetary tax
liabilities of any Group Companies occurring up to Completion with
respect to which Taxation should have been paid but have not been
paid pursuant to the requirement of law by such Covenantee on or
prior to Completion:
(i) any tax liabilities due to the recognition of sales revenues
upon the issuance of invoices rather than on an accrual
basis;
(ii) any tax liabilities due to any equity transfers of any Group
Companies (including without limitation the transfers of
equity interests of Shanghai Chic Storage and Transportation
Co., Ltd. and Shanghai New Chic Logistics Co., Ltd. to
Shanghai Chic Logistics Co., Ltd.), or any business or assets
transfers or any service and undertakings agreement entered
into between Group Companies;
(iii)any tax liabilities due to any claims by any Subsidiary for
corporate income tax deduction for expenses incurred by the
Company;
(iv) any tax liabilities due to any related parties' transactions
between any Group Company and its Affiliate(s);
(v) any tax liabilities due to not withholding appropriate
individual income taxes for the employees of any Group
Company and not withholding appropriate corporate and/or
individual income tax in transactions with any third parties;
(vi) any tax liabilities due to non-compliance with competent
local or state tax authorities either by any Group Company or
any of its branch company;
(vii)any tax liabilities incurred by any Group Company due to
issuance of tax deductible invoices used in the
transportation industry for transportation services provided
by subcontractors; and
(viii)any tax liabilities incurred by the Company due to the
implementation of the Employee Benefit Plan.
(c) any and all costs (including all legal costs), expense or other
liabilities which any Covenantee may incur in connection with:-
(i) the settlement of any claim under this Deed;
(ii) any legal proceedings in which any Covenantee claims under or
in respect of this Deed and in which judgment is given for
any Covenantee; or
(iii)the enforcement of any such settlement or judgment.
2.02 For the avoidance of doubt, the Covenanters shall unconditionally, fully
and effectually indemnify and at all times keep unconditionally, fully
and effectually indemnified each Covenantee as set forth in Section 2.01
even if the Covenanters have disclosed to the Convenantee(s) the facts
in connection with such Taxation or depravation of Relief.
3. CLAIMS
3.01 If any Covenantee receives a Claim which may give rise to a liability on
the part of the Covenanters to make a payment under this Deed, the Buyer
shall:
(i) within twenty (20) business days of becoming aware of such Claim,
give to the Covenanters by written notice details of the circumstances
of such Claim. The Covenanters and the Buyer shall discuss with each
other in good faith in respect of such Claim, and Buyer shall keep the
Covenanters informed of all material developments relating to such
Claim;
(ii) if so reasonably requested by the Covenanters, take all reasonable
steps or proceedings as the Covenanters may reasonably consider
necessary in order to mitigate, avoid, resist, appeal, dispute,
contest, remedy, compromise or defend such Claim and for this purpose
take necessary proceedings in the name of the relevant Group Company
subject to the Buyer being indemnified by the Covenanters against all
reasonable costs and expenses incurred in connection therewith;
(iii) at ordinary working hours allow the Covenanters access to and to
inspect and take copies of all necessary books and records of the
relevant Group Company in respect of matters prior to Completion and
associated with the Claim (subject always to keeping the same
confidential other than necessary disclosures in connection with any
such Claim);
(iv) obtain the assistance of the personnel of the relevant Group
Company to provide statements and proofs of evidence, and to attend at
any hearing to give evidence or otherwise, and to provide other
reasonable assistance to enable the Covenanters to reasonably mitigate,
avoid, resist, appeal, dispute, contest, remedy, compromise or defend
any such Claim on the basis that the Covenanters shall be responsible
for all reasonable expenses incurred by the Company and/or the Buyer in
providing such assistance;
(v) save with the prior written consent of the Covenanters (which
consent shall not be unreasonably withheld or delayed), not admit
liability in respect of or compromise or settle any such Claim or
volunteer any alleged circumstances in the course of disputing any
claim likely to affect the amount thereof or the future Taxation
liability of any Covenantee. Notwithstanding the foregoing, if the
Buyer has given a written notice of a proposed admission, compromise or
settlement of Claim, and has not within 21 days thereafter received an
instruction in writing from the Covenanters indicating its objection to
such proposal, then the Covenanters shall be deemed to have given a
prior written consent to such proposed admission, compromise or
settlement of Claim.
3.02 Upon receipt of a notice, the Covenanters shall have the right to
jointly rather than individually participate in the defense of the Claim
at its own expense and with counsel of its own choice; provided,
however, that the Covenanters shall diligently pursue such defense.
3.03 Where a deadline to pay the Taxation is provided in a Claim, an order of
the Tax Authority or under applicable laws which deadline is not
extendable upon filing a dispute, the Covenanters shall pay to the Buyer
or a Group Company designated by the Buyer an amount equal to the full
amount of the Taxation on or before the third business day prior to such
deadline, and the Buyer or the designated Group Company shall pay the
Taxation within three business days thereafter to the Tax Authority,
provided however that such payments shall not be deemed as admission of
liability or a compromise or settlement to the Claim and shall not
prejudice the parties' right to seek final adjudication regarding the
Claim. If under the final adjudication regarding the Claim, any
compensation is adjudicated to be paid to a Group Company, the Group
Company should pay to the Covenanter an amount equivalent to such
compensation within 3 days upon receipt of such compensation.
3.04 Where there is no deadline to pay the Taxation, the Covenanters shall
pay to the Buyer or a Group Company designated by the Buyer according to
the final adjudication regarding the Claim (if any) on or before three
business days following the issuance of such final adjudication.
4 Exclusions and Limitations
4.01 The Covenanters shall have no obligations under the covenant contained
in clause 2.1 in respect of any liability for Taxation:
(i) to the extent that provision or reserve for such liability for
Taxation has been made in the Accounts; or
(ii) to the extent that the Buyer has made recovery in respect of such
liability for Taxation under the Warranties or any other provisions of
the Agreement; or
(iii) to the extent that such liability for Taxation would not have
arisen but for or is increased as a consequence of any voluntary act,
omission, transaction or arrangement carried out or effected by the
Buyer or a Group Company at any time after Completion, other than where
such voluntary act, omission, transaction or arrangement takes place
pursuant to a legally binding commitment created on or before
Completion by the Covenanter or the Group Company, is required by law
or takes place in the ordinary course of business of the Group Company;
or
(iv) to the extent that such liability for Taxation would not have
arisen but for or is increased by reason of:
(a) a disclaimer, claim or election made or notice or consent given
after Completion by the Buyer or a Group Company otherwise than
at the direction of the Covenanters under the provisions of this
Deed or pursuant to law; or
(b) the failure or omission by a Group Company to make any claim,
election, surrender or disclaimer or give any notice or consent
or do any other thing after Completion the making giving or
doing of which was taken into account or assumed in computing
the provision for Taxation (including the provision for deferred
Taxation) in the Accounts and full details of which are given in
the Disclosure Letter; or
(v) which arises from any change in accounting policy affecting the
Company, introduced or having effect on or after Completion, other than
those changes introduced or effected pursuant to and in compliance with
law; or
(vi) to the extent that any Relief (other than a Buyer's or the
Company's Relief) is available to set against or otherwise mitigate
such liability for Taxation; or
(vii) to the extent that such liability for Taxation arises or is
increased as a consequence of the failure by the Buyer or the Company
after Completion to comply with its obligations under this Deed.
4.02 Except for any liabilities based on fraud, the liability of the
Preferred Share Sellers under this Deed shall not extend to any Claim
notice of which was given by the Buyer in writing later than the second
anniversary of the Completion, provided however, the Covenanters shall
remain liable for the Taxation with respect to which the Buyer has given
a written notice regarding the relevant Claim within the second
anniversary of the Completion but the final adjudication regarding such
Claim occurs only after the second anniversary of the Completion.
4.03 The liability of the Covenanters under this Deed is subject to the
limitations set forth in Section 6.6.3 of the Agreement.
4.04 To the extent permitted by law and solely for Covenanters' tax filing
purposes, any amount paid by the Covenanters under this Deed shall be
treated as a reduction in the consideration paid by the Buyer for the
Sale Shares.
5. NOTICES
5.01 The provisions of Clause 17 of the Agreement (mutatis mutandis) shall be
incorporated in and be deemed to be part of this Deed.
6. BINDING EFFECT
6.01 This Deed shall enure to the benefit of and be binding on each party and
its respective successors and assigns.
7. ENTIRETY OF DEED AND SEVERABILITY
7.01 The terms and conditions contained in the Agreement and this Deed
constitute the entire agreement between the parties hereto relating to
the subject matter hereof and shall supersede and previous
communications, oral or written, between the parties hereto with respect
to the subject matter hereof which are inconsistent with the provisions
of this Deed.
7.02 Any provision of this Deed prohibited by or unlawful or unenforceable
under any applicable law actually applied by any court of competent
jurisdiction shall, to the extent required by such law, be severed from
this Deed and rendered ineffective so far as is possible without
modifying the remaining provisions of this Deed. Where, however, the
provisions of any such applicable law may be waived, they are hereby
waived by the parties hereto to the full extent permitted by such law to
the end that this Deed shall be valid, binding and enforceable in
accordance with its terms.
8. AMENDMENT
8.01 This Deed may be varied, amended or modified only by agreement under
seal of all parties.
9. RELEASE OF OBLIGATIONS
9.01 Any liability of the Covenanters under this Deed may, in whole or in
part, be released, compounded or compromised by the Covenantees jointly,
in their sole and absolute discretion, or time or other indulgence may
be granted to the Covenanters by the Covenantees jointly, in their sole
and absolute discretion, without in any way prejudicing or affecting any
of its other rights, powers or remedies against the Covenanters under
any other liability hereunder.
10. TIME
10.01Time shall be of the essence of this Deed.
11. LAW AND JURISDICTION
11.01This Deed is governed by Hong Kong law, without regard to its conflict
of laws rules.
11.02Any dispute, controversy or claim arising out of or in connection with
this Deed, or the breach, termination or invalidity thereof ("Dispute"),
shall submitted to the Hong Kong International Arbitration Centre and be
settled by arbitration in accordance with UNCITRAL Arbitration Rules as
at present in force and as may be amended by the rest of this Clause..
There shall be three (3) arbitrators. The Covenantees shall be entitled
to jointly appoint one (1) arbitrator. The Covenanters shall be entitled
to jointly appoint one (1) arbitrator. The third arbitrator who shall be
of a different nationality from any of the parties shall be agreed upon
by the two party appointed arbitrators within thirty (30) days of the
appointment of the second arbitrator or, in default thereof, be
appointed by the Chairman of the Hong Kong International Arbitration
Centre. The place of arbitration shall be Hong Kong. The language in the
arbitration proceedings shall be English. The arbitral tribunal may not
award exemplary, punitive, multiple or any form of non-compensatory
damages. The decision and award of the arbitral tribunal shall be final
and binding on the Parties and may be entered and enforced in any court
having jurisdiction, and the Parties irrevocably and unconditionally
waive any and all rights to any form of appeal, review or recourse to
any state or other judicial authority, insofar as such waiver may be
validly made. Notwithstanding the foregoing, the Parties shall have the
right to seek interim injunctive relief or other interim relief from a
court of competent jurisdiction, before the arbitral tribunal has been
appointed. Without prejudice to such provisional remedies as maybe
available under the jurisdiction of a national court, the arbitral
tribunal shall have full authority to grant provisional remedies or
order the parties to request that a court modify or vacate any temporary
or preliminary relief issued by such court, and to award damages for the
failure of any party to respect the arbitral tribunal's orders to that
effect.
11.03The parties agree that the documents which start any proceedings
relating to a Dispute and any other documents required to be served in
relation to such proceedings may be served on the Covenanter in
accordance with Clause 17 of the Agreement. These documents may,
however, be served in any other manner allowed by law. This Clause
11.03 applies to all proceedings wherever started.
IN WITNESS whereof this Deed has been executed under seal the date first
above written.
Signed by [ ]
for and ob behalf of
CV DISTRIBUTION SERVICE LTD.
in the presence of:
Signed by [ ]
for and on behalf of
SWINGSIDE LTD.
in the presence of:
Signed by [ ]
for and on behalf of
SEAVI ADVENT CHL INVESTMENTS LTD.
in the presence of:
Signed by [ ]
for and on behalf of
FORTIS PRIVATE EQUITY ASIA FUND N.V.
in the presence of:
Signed by [ ]
for and on behalf of
PROSPER FIELD HOLDINGS LIMITED
in the presence of:
Signed by [ ]
XXXXXXX XXXX QIWEI
Signed by [ ]
XXXXX XXXX JIMIN
SCHEDULE 9 KEY PERSONNEL
1. Xxxxxxx Xxxx
2. Xxxxx Xxxx
3. Xxx Xxx Hong
4. Xxxxx Xx
5. Xxxx Xxxx
6. Waley Jiang
SCHEDULE 10 FORM EMPLOYMENT, CONFIDENTIALITY AND NON-COMPETE AGREEMENT
Notes: (i) With respect to Xxxxxxx Xxxx, an appropriate employment agreement
in form and substance substantially in the form as set forth below, subject
to any supplements/amendments satisfactory to the Employer (as defined
below), Buyer and Xxxxxxx Xxxx shall be negotiated and entered into prior to
Completion, which employment agreement shall reflect the terms set forth in
the letter dated August _ 2007 from duly authorized representative of Buyer
and shall contain other provisions customary and appropriate for the
occasion. (ii) With respect to other Key Personnel, an employment agreement
substantially in the form as set forth below shall be negotiated and entered
into prior to Completion:
This Employment, Confidentiality and Non-competition Agreement (the
"Agreement") is entered into on [*] by and between:
(1) [INSERT COMPANY'S NAME] (the "Employer"), a corporation organized under
the laws of the People's Republic of China (the "PRC") with its registered
address of [*] and legal representative of [*].
And
(2) [NAME] (the "Employee"), a [*] citizen with ID Card No. [*], whose
residence address is [*].
The Employer and the Employee are hereinafter referred to collectively as the
"Parties" and individually as a "Party".
WHEREAS,
(A) the Employer desires to employ the Employee in accordance with the
terms and conditions of this Agreement; and
(B) the Employee is willing to enter into such employment with the Employer.
NOW THEREFORE, the Employer and the Employee agree as follows:
ARTICLE 1 EMPLOYMENT
1.1 Agreement to Employment
The Employer hereby employs the Employee for the Term (as defined in
Section 1.2 hereof) to render exclusive and full-time services in an
exclusive capacity to the Employer, and the Employee hereby accepts such
employment and agrees to render such services to the Employer, upon the
terms and subject to the conditions contained in this Agreement.
1.2 Term of Employment
Subject to the terms and conditions of this Agreement, the term of
employment of the Employee by the Employer pursuant to this Agreement
shall be [*] years (the "Term"), with the initial commencing from [*],
200[*].The first [*] months of the Term, that is, the period Commencing
on [*] and ending [*], shall be the probational period. The Term is
subject to renewal based on mutual agreement if reached one month prior
to the expiration date of the Term.
1.3 Position and Duties
(1) Position. The Employer shall employ the Employee as the Employer's
[Position] during the Term. The Employer may, depending on necessity to
its operation and/or the Employee's performance, change or adjust the
Employee's position.
(2) Duties. The Employee agrees to perform faithfully the duties as
Employee under the Articles of Association, employee handbook and other
internal rules of the Employer to be amended from time to time, the
powers, authority and responsibilities vested in and the resolutions of
the Board of the Employer (the "Board") and any applicable laws and
regulations, to the best of the Employee's ability, experience and
talent, and to submit to the Board prompt, complete, and accurate
reports of the Employee's work and expenses as requested.
(3) Prohibited Activities. In carrying out the Employee's duties under the
Agreement, the Employee will not pay, offer or promise to pay, or
authorize the payment directly or indirectly, of any monies or anything
of value to any government official or employee or any political party
or candidate for political office for the purpose of influencing any act
or decision of such official or of the government to obtain or retain
business, or direct business to any person. In no event shall the
Employer or its affiliates be obligated under this Agreement to take any
action or omit to take any action that the Employer believes, in good
faith, would cause it to be in violation of any applicable law,
including the laws of the PRC, or of the United States, including
without limitation the U.S. Foreign Corrupt Practices Act.
1.4 Place of Employment; Devotion of Time to Business
(1) Place of Employment. The Employee hereby agrees to perform his duties
as [position] at the Employer's place of business in [Shanghai], but
the Employee will travel on temporary trips to such other place or
places as may be required from time to time to perform his duties
hereunder.
(2) Devotion of Time to Business. The Employee agrees to render exclusive
and full-time services to the Employer, which shall be eight (8) hours
per working day. As determined by the particularity of the nature of
the Employee's position and responsibilities, he may extend the work
time beyond the normal work schedule of working eight (8) hours a day
based on the business requirements of the Employer for purpose of
achieving his job objectives. The Employer and the Employee hereby
acknowledge that the Employee's efforts so made are due to the
Employee's job function which has been fully taken into consideration by
the Employer and the Employee when agreeing to the compensation to the
Employee hereunder and have been completely compensated under Article
1.5 hereof. The Employee acknowledges that the compensation and income
under Article 1.5 hereof include all the reasonable compensation for all
extra work as may be required due to the nature of his job, and the
Employee expressly acknowledge that he will not otherwise request any
overtime payment from the Employer for such extra work.
1.5 Remuneration and Benefits
(1) Remuneration. As compensation for all services to be rendered pursuant
to this Agreement or at the request of the Employer, the Employer will
pay the Employee a salary at the rate of RMB [*] per annum. This salary
will be wired, in equal monthly instalments, pay on the [*] day of each
month, to the account designated by the Employee.
(2) Benefits. The Employer will contribute to accounts of social security
of the Employee as required by applicable labor law.
The Employee shall be entitled to all statutory PRC holidays, annual
paid leave of [*] days per calendar year during the Term (provided that
the entitled annual paid leave will be pro-rated for 2007), and other
benefits in accordance with the Employer's standard policies as
currently in effect and as may be amended from time to time.
(3) Labor Protections, Labor Conditions and Protections against Vocational
Perils. The Employer shall provide labor protections, labor conditions
and protections against vocational perils compatible with the duties
performed by the Employee and in accordance with PRC laws.
(4) Tax. The Employee shall be fully and ultimately liable for any tax
payable to the relevant tax authorities by the Employee on his/her
remuneration and benefits received from the Employer. The Employer
shall have the right to withhold such individual income tax under the
applicable law.
(5) Entire Compensation. The Employee hereby expressly agrees that, unless
otherwise agreed by both parties in writing, the salary and bonus (if
any) as set forth herein constitute the full payment in consideration of
all services provided by the Employee hereunder and all compensation
entitled to the Employee under this Agreement.
ARTICLE 2 CONFIDENTIALITY
2.1 Confidential Information
"Confidential Information" means all information which is used in or
otherwise relates to the business, customers or financial or other affairs of
the Employer, its subsidiaries and its affiliated companies including,
without limitation, information relating to:
(a)the marketing of goods or services including, without limitation,
customer names and lists and other details of customers, sales targets,
sales statistics, market share statistics, prices or any other
financial data, market research reports and surveys, and advertising or
other promotional materials; or
(b)future projects, business development or planning, commercial
relationships and negotiations, or
(c)any transactions in relation to or in connection with the Employer.
2.2 Confidentiality Obligation
(1) In view of the fact that the Employee's work as [position] of the
Employer will give the Employee contact with or access to the
Confidential Information, the Employee hereby agrees that during the
Term and at any time after the termination of the employment
relationship, the Employee shall abide by the confidentiality rules
formulated by the Employer.
(a)Without the Employer's prior written consent, the Employee shall not,
directly or indirectly:
(i) use Confidential Information for any purpose other than
performance of his/her duties;
(ii) disclose in whatsoever form any Confidential Information to any
third parties;
(iii) acquire Confidential Information by any improper methods or allow
third parties to do the same;
(iv) use or allow third parties to use any Confidential Information so
acquired.
(b)The Employee is obliged to use his/her best efforts to prevent any
third party from stealing the Confidential Information.
(2) For the purpose of this Article 2, the phrase "acquire by any improper
methods" referred to under Article 2.2(1) includes stealing, fraud,
threat, bribery, unauthorized reproduction, breach of confidentiality
obligations, persuasion of others to breach the confidentiality
obligation or similar methods of the same nature.
(3) The obligations under Article 2.2(1) shall not apply to the following
information which:
(a)the Employee can prove has entered into the public domain;
(b)has been disclosed other than by the Employee's breach of the
provisions of this Article 2.2(1);
(c)the Employee can prove is acquired from a third party who does not
assume confidentiality obligations; or
(d)has been disclosed by the Employee as required by any applicable law
or court order, under which circumstance, the Confidential
Information shall be disclosed only to the extent as expressly
specified by such applicable law or court order.
(4) The Employee understands and agrees that the Employer may from time to
time receive confidential information of third parties which would
require the Employer to maintain such information in confidence. The
Employee agrees to maintain such information in confidence for the
Employer and such third parties and in no event disclose to any party
other than the Employer and such third parties such confidential
information.
(5) If the Employer suffers any loss from the Employee's breach of Article
2.2 hereof, the Employee must indemnify the Employer for any losses or
damages of the Employer arising from the Employee's breach of Article
2.2 hereof in accordance with this Agreement and assume any other legal
liabilities under PRC laws.
(6) Nothing in this Agreement shall be deemed to exclude, weaken or waive
any rights related to the protection of trade secrets that the Employer
may have under PRC laws (including but not limited to the PRC Anti-
Unfair Competition Law).
ARTICLE 3 NON-COMPETITION
3.1 Competitive Position
In this Article 3:
"Competitive Position" shall mean serving as an employee, consultant, advisor
or otherwise, for any other person that engages in the business competitive
or similar to the Principal Business.
"Principal Business" means the following businesses: warehousing and storage,
package, encasement and consignment, stacking and cargo packing up, package
and freight forwarding agency, domestic express delivery service, road cargo
transportation of ordinary and dangerous goods, multimodal transportation,
cargo and technology import and export, commercial simple processing, goods
display, and commercial consultation services.
3.2 Non-competition by the Employee
(1) The Employee hereby irrevocably covenants and undertakes that during the
Term and within 3 years after the Employee leaves his/her employ
("Employee Departure Date"), the Employee shall not, directly or
indirectly, and whether or not for compensation, either on his or her
own behalf or as an employee, officer, agent, consultant, director,
owner, partner, shareholder, investor, or in any other capacity (except
in the capacity of an employee of the Employer acting for the benefit of
the Employer),
(a)serve in a Competitive Position;
(b)engage in activities contrary or harmful to the interest of the
Employer or any of its subsidiaries and affiliates, including but not
limited to:
(i)employ or recruit any present, former or future employee of the
Employer or any of its subsidiaries and affiliates to serve in a
Competitive Position;
(ii)own equity (other than as the holder of not more than 1% of total
outstanding shares of a publicly-held company) in any other company
that engages in Principal Business; or
(iii)participate in a hostile takeover attempt of the Employer or any of
its subsidiaries and affiliates.
(c)assist in any way any person or entity whose activities are
competitive with or otherwise similar to the Principal Business; or
(2) The Employer may, at any time either before or after the Employee
Departure Date, shorten, or waive, the period for its non-competition
obligation under Article 3.2 (1) above by giving notice to the Employee
thereof. If, at any time either before or after the Employee Departure
Date, the Employer does not require the Employee to perform any non-
competition obligations hereunder, the period for the Non-competition
obligation may be shortened to zero, and the Employer does not need to
pay any economic compensation to the Employee.
(3) In full consideration of the Employee's performance of the non-
competition obligations under Article 3.2(1) above, the Employer agrees,
subject to Article 3.2(2) above, from the Employee Departure Date to the
expiry of the Employee's non-competition obligations, pay to the
Employee an economic compensation at a rate set out in Article 3.2 (4)
hereunder, for the enforcement of such obligations of non-competition
herein imposed on the Employee.
(4) The full economic compensation for the Employee set forth in Article
3.2(3) above shall be [*]% of the aggregate remuneration (excluding any
benefits) in the 12 consecutive months prior to the Employee Departure
Date divided by 12 and shall be paid at the end of each month after the
Employee Departure Date to the bank account of the Employee for receipt
of salaries under this Agreement. The Employee shall be fully and
ultimately liable for any tax payable to the relevant tax authorities by
the Employee on such economic compensation set forth in this Article
3.2(4). The Employer shall have the right to withhold such individual
income tax under the applicable law.
(5) Upon receipt of each payment of the economic compensation from the
Employer, the Employee shall provide the Employer with an executed
receipt by the Employee indicating the payment date.
(6) If the Employer fails to pay to the Employee the economic compensation
in a full and timely manner as set out in Articles 3.2(3) and 3.2(4)
(unless otherwise notified pursuant to Article 3.2(2)), and still fails
to do so within 30 days of receipt of the Employee's written notice, the
Employee will be discharged from his/her obligations under Article
3.2(1).
3.3 Non-Solicitation
(1) The Employee hereby agrees that, during the Term and for a period of [3
years] after the Employee Departure Date, the Employee will not,
directly or indirectly, and whether or not for compensation, either on
his or her own behalf or as an employee, officer, agent, consultant,
director, owner, partner, shareholder, investor, or in any other
capacity,
(a)induce or attempt to induce any employee, consultant, sales agent,
supplier, customer or independent contractor of the Employer to end
his or her relationship with the Employer; or
(b)employ, retain as a consultant or contractor, or cause to be so
employed or retained, any employee (or former employee within 12
months after the date such former employee ceases to be employed by
the Employer), consultant, sales agent, or independent contractor of
the Employer; or
(c)accept or solicit investment capital, directly or indirectly, from
any individual (other than the general public) or entity, or from an
officer, partner, or principal of any entity, from which the Employer
has accepted investment capital, or with which, prior to the Employee
Departure Date, the Employer has held discussions regarding the
possibility of securing investment capital; or
(d)enter into or attempt to enter into a business relationship with any
individual or entity with which, prior to the Employee Departure
Date, the Employer had a business relationship, or with which, prior
to the Employee Departure Date, the Employer had held discussions
regarding the possibility of entering into such an relationship, if
such relationship would be competitive with or otherwise deleterious
to the interests of the Employer; or
(e)do or say anything which is harmful to the reputation of the
Employer, or which may lead any person to cease to deal with the
Employer on substantially equivalent terms as before or at all.
ARTICLE 4 AMENDMENT, TERMINATION AND RESCISSION OF THIS AGREEMENT
4.1 Amendment to the Agreement
(1) This Agreement can be amended under any of the following circumstances:
(a) upon agreement of the Parties through consultation; or
(b)if there is any change in the laws, regulations and administrative
rules on which this Agreement is based at the time of its execution,
the relevant content of the Agreement shall be adjusted accordingly.
(2) Either Party who wishes to amend the provisions of this Agreement for
any reason (including the case where a major change in the objective
circumstances under which the Agreement was drawn up has rendered this
Agreement impossible to be performed) shall inform the other Party with
a thirty (30) days prior written notice. The other Party shall reply
within fifteen (15) days upon receipt of the notice. The failure to
reply within the said period, the other Party shall be deemed as
disapproval of the amendment and the Parties shall continue to perform
this Agreement unless otherwise stipulated by applicable laws and
regulations.
(3) The Agreement may be amended only by a written agreement executed by the
Parties hereto.
4.2 Termination upon Consultation
The Agreement may be terminated upon mutual agreement by the Parties.
4.3 Early Termination by the Employer
(1) Dismissal without Notice. The Employer may dismiss the Employee at any
time without notice if the Employee:
(a)the Employee has been proven unable to meet the employment criteria
of the Employer during the probation period;
(b)the Employee has seriously or persistently breached the rules of
employment or work disciplines of the Employer as promulgated by the
Employer;
(c)the Employee has been seriously derelict in duties or engaged in
misconduct for selfish ends or personal gain, against the best
interests of the Employer;
(d)the Employee maintains labor relationship with other employer(s),
which leads to adverse impact on his/her performance of duties
assigned by the Employer, or which he/she refuses to rectify when
notified by the Employer;
(e)the Employee has been charged and found guilty of a criminal offense,
or punished with detention or rehabilitation through labor for
his/her violation of laws and regulations;
(f)the Employee enters into or amends this Agreement against the
Employer's autonomy of will or by means of fraud, intimidation or
taking advantage of the Employer's precarious position; or
(g)the Employee has provided untrue, false information to the Employer
or has willfully withheld or concealed information which would
otherwise have impacted the Employer's decision.
(2) Dismissal with Notice. The Employer may dismiss the Employee with 30
days prior written notice or payment of one month's salary of the
Employee in lieu of the notice if:
(a)the Employee suffers from a non-occupational disease or has sustained
an injury that is not work-related, and is unable to resume his/her
original work or other work assigned by the Employer upon the
conclusion of medical treatment;
(b)the Employee is incapable of performing the duties of his/her
position and continues to be incapable of achieving an adequate level
of performance after training or transfer to a different position;
(c)a major change in the objective circumstances pursuant to which this
Agreement was entered into has rendered the Agreement incapable of
being performed and the Parties have failed to reach agreement on the
amendment of the Agreement; or
(d)the Employer needs to reduce the number of its personnel in response
to any of the following situations: (i) carrying out restructuring
according to the PRC Enterprise Bankruptcy Law; (ii) encountering
serious difficulty in its production or operation, (iii) changing way
of production, material technical innovation or adjustment of
business mode which, after amending relevant labor contracts, still
give rise to the need of reducing personnel, or (iv) encountering a
major change in the objective economic circumstances pursuant to
which this Agreement was entered into which change has rendered the
Agreement incapable of being performed, and has consulted with the
Employer's trade union or employees and complied with relevant legal
requirements.
The Parties hereby agrees that if the Employer fails to serve a prior
written notice to the Employee pursuant to this Article 4.3(2), the
Employer can terminate this Agreement by way of paying one-month
salary to the Employee in lieu of notice in accordance with
applicable law.
(3) No Dismissal. The Employee shall not be dismissed pursuant to Article
4.3(2) (except for the circumstance where the termination is agreed by
the Parties through consultation) if:
(a)the Employee suffers from an occupational disease or has sustained
work-related injuries, and has been confirmed to have lost or has
partially lost the capacity to work;
(b)the Employee is on prescribed medical leave due to a disease or an
injury;
(c)the Employee is a woman who is pregnant, on maternity leave, or
nursing a baby; or
(d)an applicable law or regulation otherwise prohibits the termination
of the Agreement.
4.4 Early Termination by the Employee
(1) Resignation with Notice. The Employee may, at any time during the Term,
with or without cause, upon not less than 30 days' prior written notice,
terminate the employment with the Employer. In such event, the Employer
shall have no obligation to pay any compensation to the Employee for
termination of this Agreement. If the Employee fails to serve the
Employer a 30 days prior written notice pursuant to this Article 4.4(1),
the Employee shall compensate the Employer for the shortfall calculated
based on his/her daily salary rate. , Notwithstanding anything herein
to the contrary, however, this Agreement should not be terminated by the
Employee with 30 days prior written notice in the event the Employer
suffers any economic losses caused by the Employee and such losses have
not been fully compensated (including any outstanding training fees) by
the Employee, or the Employee fails to assume his/her liabilities for
breach of agreement under this Agreement.
(2) Resignation without Notice. Notwithstanding the provisions of Article
4.4(1) above, the Employee may resign at any time without notice:
(a)if the Employer has coerced him into entering into this Agreement; or
(b)if the Employer fails to pay remuneration in accordance with the
terms of this Agreement or to provide working conditions pursuant to
labour laws.
4.5 Mandatory Rescission
The Agreement shall be immediately rescinded under any of the following
circumstances:
(a)the Agreement expires upon the expiry of its term (unless the Parties
have renewed the Agreement in accordance with Article 1.2). Prior to
the expiry of the Agreement, the Employer shall inform the Employee
with thirty (30) days prior written notice and proceed with
procedures for the termination of this Agreement;
(b)the Employee has been entitled to basic pension insurance treatments
as stipulated by PRC laws;
(c)the Employee dies or has been declared to be missing or dead by a
court;
(d)the Employer has been shut down, dissolved, wound up, terminated by
agreement, or declared bankrupt;
(e)either Party has de facto ceased to perform this Agreement for thirty
(30) days in succession; or
(f)the Employee has suffered from an occupational disease or work-
related injury and has been confirmed to have lost part of his/her
working ability, and the Employer has paid the Employee a lump sum
disability compensation in accordance with laws and regulations upon
mutual agreement by the Parties;
4.6 Events of Termination
Unless otherwise agreed in writing by the Employer, when the Agreement is
early terminated or expired, the Employee must:
(a) immediately cease to undertake all the activities in the name of the
Employer, or complete any unfulfilled matters as per the Employer's
request;
(b)transfer all works conducted by him/her in the name of the Employer
during his/her employment with the Employer in their entirety and
without any omission;
(c)immediately return to the Employer, in an intact and good status,
everything, such as archives, records and other Confidential
Information, phones, computers and other office devices, books and all
other properties of the Employer that are under the Employee's
possession or custody or under the Employee's control. Unless
otherwise agreed by the Employer in writing, the Employee may not take
anything of the Employer (including but not limited to the above
items) away from the Employer's office; and
(d)If the Employer suffers any losses from the Employee's failure to
deliver any of the above documents (including copies) or items to the
Employer, the Employee shall assume the relevant liabilities and
compensate the Employer for such losses, under which circumstance the
Employer may deduct an appropriate amount from the last payment of
salary payable to the Employee, and shall have the right to take any
other measures to protect its own legitimate rights and interests.
ARTICLE 5 LIABILITIES FOR COMPENSATION
5.1 Employer's Compensation
The Employer shall provide economic compensations to the Employee
according to applicable PRC laws and regulations at the time of economic
compensations.
5.2 The Employee's Compensation
(1) In the event of the Employee's violation of PRC laws or breach of this
Agreement, the Employer is entitled to impose disciplinary and/or
economic punishment on the Employee, and/or claim economic compensation
(if any) against the Employee and pursue any other remedies available
for such violation or breach pursuant to PRC laws and this Agreement,
(2) In case the Employee terminates this Agreement in violation of PRC laws
or provisions hereof and causes losses to the Employer, he/she shall
fully compensate the Employer for:
(a) expenses incurred by the Employer for recruiting the Employee;
(b) training fees paid by the Employer for the Employee;
(c) direct economic losses caused to the Employer's business and
operation.
(3) If the Employee breaches his/her confidentiality and non-
competition obligations as set forth in Article 2 and 3, and causes
losses to the Employer, the Employee shall pay to the Employer an amount
of RMB[*] as liquidated damages in addition to any other remedies
available to the Employer under PRC law and this Agreement. In
addition, the Employee shall return all economic compensations already
paid by the Employer in accordance with Article 3 above.
ARTICLE 6 GENERAL PROVISIONS
6.1 Labour Discipline
The Employee shall comply with all aspects of the Employer's rules
relating to labour discipline and other work rules and procedures of the
Employer contained in the employee handbook or otherwise issued by the
Employer. The employee handbook of the Employer, as amended from time
to time, and other rules and materials issued by the Employer from time
to time shall form part of the terms and conditions of the Agreement.
6.2 Waiver of Breach
The waiver by the Employer of a breach of any term of this Agreement is
not a waiver of any subsequent breach.
6.3 Severability
If any provision of this Agreement, or any part of any provision, is
held to be invalid or unenforceable, that provision is deemed to be
amended to apply to the extent enforceable and the balance of the
Agreement shall be valid and binding.
6.4 Effective Day
This Agreement shall come into effect when it is signed by the Parties.
6.5 Entire Agreement
The terms and conditions of this Agreement constitute the entire
agreement between the Employee and the Employer and supersede any
previous agreements as to the subjects covered by the Agreement. In
particular, the Employer and Employee agree that the employment
agreement between them dated [*] shall immediately expire and have no
further effect upon the effectiveness of this Agreement.
6.6 Governing Law and Dispute Resolution
This Agreement shall be governed and construed in accordance with PRC
laws and any dispute under this Agreement shall be resolved according to
PRC laws. Any dispute, controversy or claim arising out of or in
connection with this Agreement, or the breach, termination or invalidity
thereof ("Dispute"), shall be submitted to the competent labour dispute
tribunal or people's court for resolution.
6.7 The Employee Representation
The Employee represents that the Employee is not party to or bound by
any agreement, or other legal limitation, that prohibits the Employee
from entering into this Agreement or fulfilling its obligations.
6.8 Full Acknowledgement
At the time of the execution hereof, the Employee has carefully read
this Agreement, various rules and regulations of the Employer and the
employee handbook and fully understands their contents. The Employee
hereby agrees to accept and comply with this Agreement.
6.9 Notices
Notices under this Agreement shall be given in writing to the relevant
Party at the address stated herein (or to such other address as it shall
have notified the other Party previously in writing).
If to the Employer: [Name]
[Address]
If to the Employee: [Name]
[Address]
6.10 Survival of Agreement
Article 2, Article 3, Article 5.2(3) and Article 6.6 shall survive the
termination of this Agreement.
IN WITNESS WHEREOF, the undersigned have hereunto caused this Agreement to be
executed as of the day and year first above written.
[Employer]
_______________________________
By:
Title:
[Employee]
_______________________________
SCHEDULE 11 NON-DISCLOSURE AND NON-COMPETE AGREEMENT
CONFIDENTIALITY AND NON-COMPETITION AGREEMENT
THIS CONFIDENTIALITY AND NON-COMPETITION AGREEMENT (the "Agreement") is made
on [*] by and between:
(i) Chic Holding Limited, a limited liability company incorporated [*],
whose registered office is at [*] (the "Chic Holdings");
(ii) Shanghai Chic Logistics Co., Ltd., a limited liability
company incorporated in the People's Republic of China ("PRC"), whose
registered office is at [*] (the "Chic Logistics")
(iii)Shanghai Chic Supply Chain Management Co., Ltd., a company
incorporated in the PRC, whose registered office is at [*] (the "Chic
SCM");
(iv) Shanghai Chic Storage and Transportation Co., Ltd., a
company incorporated in the PRC, whose registered office is at [*] (the
"Chic S&T");
(v) Shanghai New Chic Logistics Co., Ltd., a company
incorporated in the PRC, whose registered office is at [*] (the "New
Chic") ; and
(vi) Chic's Mart Trading Co., Ltd., a company incorporated in
the PRC, whose registered office is at [*] ("Chic's Mart").
Chic Holdings, Chic Logistics, Chic SCM, Chic S&T and New Chic are
hereinafter referred to collectively as the "Group Companies" and
individually as a "Group Company". Chic's Mart and each Group Company are
hereinafter referred to collectively as the "Parties" and individually as a
"Party".
Whereas,
(a)Xx. Xxxxxxx Xxxx Xxxxx (holder of PRC ID Number: 000000000000000000) and
Xx. Xxxxx Xxxx (holder of PRC ID Number: 310107671123281) (the "Founders")
are shareholders of both the Group Companies and Chic's Mart at the date
of this Agreement.
(b)The Founders, together with all other shareholders of Chic Holdings,
entered into an Agreement for the Sale and Purchase of the Entire Issued
and Outstanding Share Capital of Chic Holdings Limited on [*] (the "SPA"),
to which the form of this Agreement is attached as Schedule 11. Pursuant
the SPA, the Group Companies will be directly or indirectly sold to
certain buyer subject to the satisfaction of certain condition precedents.
(c)The buyer makes it a condition precedent to the completion of the
transaction contemplated under the SPA that Chic's Mart and the Group
Companies should enter into this Agreement to define their rights and
obligations regarding the protection of Confidential Information (as
defined below) and the avoidance of competitive activities after the
completion of the transaction contemplated under the SPA.
NOW THEREFORE, upon mutual consultation and adhering to the principle of good
faith, each Group Company and Chic's Mart hereby agree to perform the terms
of this Agreement set out as follows:
ARTICLE 1 DEFINITION
In this Agreement:
"Affiliate" means a person that directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common control
with, a specified person, where "control" means the power and ability to
direct the management and policies of the controlled person through ownership
of voting shares of the controlled person or by contract or otherwise;
"Principal Business" means the warehousing and storage, package, encasement
and consignment, stacking and cargo packing up, package and freight
forwarding agency, domestic express delivery service, road cargo
transportation of ordinary and dangerous goods, multimodal transportation,
cargo and technology import and export, commercial simple processing, goods
display, commercial consultation services.
"Confidential Information" means all information which is used in or
otherwise relates to any Group Company's business, customers or financial or
other affairs including, without limitation, information relating to: (a) the
marketing of goods or services including, without limitation, customer names
and lists and other details of customers, sales targets, sales statistics,
market share statistics, prices, market research reports and surveys, and
advertising or other promotional materials; or (b) pending projects, business
development or planning, commercial relationships and negotiations, or (c)
any transactions under the SPA or the Ancillary Documentation.
Other capitalized words used in this Agreement, unless otherwise defined
herein, have the same meanings as those defined in the SPA.
ARTICLE 2 NON-COMPETITION
2.1 Non-competition
During a period of 3 years from the Completion Date, Chic's Mart agrees
that, it will not, either alone or in conjunction with, through or as
shareholder or adviser to, or agent of, or manager for, any company or
individual directly or indirectly carry on or be engaged, concerned or
interested in or assist a business which competes, directly or
indirectly, with the Principal Business.
2.2 Solicitation of Business
During a period of 3 years from the Completion Date, Chic's Mart will
not on its own account or in conjunction with or on behalf of any other
person, either seek to obtain orders from or do business with (which
orders or business are similar to those conducted by any Group Company),
or encourage directly or indirectly another person to do the same, a
person who has been a customer of the Principal Business at any time
during the twelve months prior to the Completion Date for the products
or services of that business in its territory of operation.
2.3 Solicitation of Employee
During a period of 3 years from the Completion Date, Chic's Mart will
not directly or indirectly solicit or contact with a view to his
engagement or employment by another person, a director, officer,
employee or manager of a Group Company or a person who was a director,
officer, employee or manager of a Group Company at any time during the
twelve months prior to the Completion Date, in either case where the
person in question either has Confidential Information or would be in a
position to exploit a Group Company's trade connections.
2.4 Solicitation of Professionals
During a period of 3 years from the Completion Date, Chic's Mart
will not directly or indirectly solicit or encourage any consultant,
sales agent, accountant, auditor, agent, supplier, customer, or
independent contractor then under contract with the any of the Group
Companies to cease work for any of the Group Companies.
ARTICLE 3 CONFIDENTIALITY
3.1 Confidentiality Obligation
(1) Chic's Mart agrees that it should respect and keep confidential all
Confidential Information. At any time after the date of the SPA, without
any Group Company's prior written consent, Chic's Mart shall,
(a) not, directly or indirectly, use or disclose to any third party
Confidential Information it has or acquires;
(b) use its best efforts to prevent the use or disclosure of
Confidential Information;
(c) not acquire Confidential Information by any improper methods or
allow third parties to do the same; and
(d) use or allow third parties to use any Confidential Information so
acquired.
(2) For the purpose of this Agreement, "acquire by any improper methods"
referred to under above section 3.1(1) above includes stealing, fraud,
threat, bribery, unauthorized reproduction, breach of confidentiality
obligations, persuasion of others to breach the confidentiality
obligation or similar methods of the same nature.
(3) If any of the Group Companies suffers loss from Chic's Mart's breach of
Section 3.1 (1) hereof, Chic's Mart must compensate such Group Company
or Companies for the loss according to the relevant provisions of this
Agreement and assume any other legal liabilities under PRC laws.
3.2 Exception to Confidentiality Obligation
The obligations under Section 3.1 shall not apply to the following
information which:
(1) has entered into the public domain;
(2) has been disclosed other than by Chic's Mart's breach of the provisions
of this Agreement;
(3) is acquired from a third party who does not assume confidentiality
obligations; or
(4) has been disclosed by Chic's Mart as required by any applicable law or
court order, under which circumstance, the Confidential Information
shall be disclosed only to the extent as expressly specified by such
applicable law or court order.
ARTICLE 4 LIABILITY FOR BREACH
If Chic's Mart breaches, or threatens to commit a breach of, any of the
provisions of this Agreement (the "Restrictive Covenants"'), the relevant
Group Company will have the following rights and remedies, each of which will
be in addition to, and not in lieu of, any other rights and remedies
available to the Group Company under applicable law or in equity:
(1) Specific Performance. The right and remedy to have the Restrictive
Covenants specifically enforced or to have any actual or threatened breach
enjoined by any court having equity jurisdiction, all without the need to
post a bond or any other security, or to prove any amount of actual
damage, or that money damages would not provide an adequate remedy, it
being acknowledged and agreed that any such breach or threatened breach
will cause irreparable injury to the Group Company and that monetary
damages will not provide an adequate remedy to the Group Company; and
(2) Accounting and Indemnification. The right and remedy to require Chic's
Mart:
(i) to account for and pay over to the Group Company all compensation,
profits, monies, accruals, increments or other benefits derived or
received by Chic's Mart or any associated party deriving such benefits
as a result of any such breach of the Restrictive Covenants; and
(ii) to indemnify the Group Company against any other losses, damages
(including special and consequential damages), costs and expenses,
including actual attorney's fees and court costs, which may be incurred
by them and which result from or arise out of any such breach or
threatened breach of the Restrictive Covenants.
ARTICLE 5 MISCELLANEOUS
5.1 Scope of Restrictions
Chic's Mart's restrictions of non-competition and confidentiality as
contained in Articles 2 and 3 hereof shall extend to and for the benefit
of each Group Company and its Affiliate and to the nature and extent of
their respective businesses. Where reference is made to the business of
a particular Group Company, such term shall include any business of the
Group Company and its Affiliate.
5.2 Effective Day.
This Agreement shall come into effect on the Completion Date.
5.3 Governing Law
This Agreement, and all matters relating hereto, including any matter or
dispute arising out of the Agreement, shall be interpreted, governed,
and enforced according to the laws of the PRC, without regard to its
conflict of laws rules.
5.4 Dispute Resolution
Any dispute, controversy or claim arising out of or in connection with
this Agreement, or the breach, termination or invalidity thereof
("Dispute"), shall submitted to the Hong Kong International Arbitration
Centre and be settled by arbitration in accordance with the Arbitration
Ordinance in force on the date of referral to arbitration. There shall
only be one (1) arbitrator, who shall be appointed by the Hong Kong
International Arbitration Centre. The place of arbitration shall be Hong
Kong. The language in the arbitration proceedings shall be English. The
decision of the arbitral tribunal shall be final and binding on the
Parties and the Parties irrevocably and unconditionally waive any and
all rights to any form of appeal, review or recourse to any state or
other judicial authority, insofar as such waiver may be validly made.
Notwithstanding the foregoing, the Parties shall have the right to seek
interim injunctive relief or other interim relief from a court of
competent jurisdiction, both before and after the arbitral tribunal has
been appointed, at any time up until the artbitral tribunal has made its
final award.
5.5 Governing Language
Each notice, demand, request, statement, instrument, certificate or
other communication given, delivered or made by a party to any other
party under or in connection with this Agreement shall be:
(1) in Chinese; or
(2) if not in Chinese, accompanied by an Chinese translation made by a
translator, and certified by such translator to be accurate.
The receiving party shall be entitled to assume the accuracy of and rely
upon any English translation of any document provided pursuant to this
Section 5.5(2).
5.6 Variation
A variation of this Agreement is valid only if it is in writing and
signed by or on behalf of each party.
5.7 Waiver
The failure to exercise or delay in exercising a right or remedy
provided by this Agreement or by law does not impair or constitute a
waiver of the right or remedy or an impairment of or a waiver of other
rights or remedies. No single or partial exercise of a right or remedy
provided by this Agreement or by law prevents further exercise of the
right or remedy or the exercise of another right or remedy.
5.8 Survival
Any provision of this Agreement being prohibited by or unlawful or
unenforceable under any applicable law actually applied by any court of
competent jurisdiction shall, to the extent required by such law, be
severed from this Agreement and rendered ineffective so far as is
possible without modifying the remaining provisions of this Agreement.
5.9 Entire Agreement
This Agreement and each document referred to in it/describe related
agreements constitute the entire agreement and supersede any previous
agreement between the parties relating to the subject matter of this
Agreement.
5.10 Assignment
Each Party shall not assign, transfer, declare a trust of the benefit of
or in any other way alienate any of its rights under this Agreement
whether in whole or in part without the consent of the other Parties.
5.11 Notices
Notices under this Agreement shall be given in writing to the relevant
Party at the address stated herein (or to such other address as it shall
have notified the other Party previously in writing).
If to any Group Company:
If to Chic's Mart:
IN WITNESS whereof this Agreement has been duly executed on the date first
above written.
Signed by [___________]
for and on behalf of
CHIC HOLDING LIMITED
Signed by [___________]
for and on behalf of
SHANGHAI CHIC LOGISTICS CO., LTD.
Signed by [___________]
for and on behalf of
SHANGHAI CHIC SUPPLY CHAIN MANAGEMENT CO., LTD.
Signed by [___________]
for and on behalf of
SHANGHAI CHIC STORAGE AND TRANSPORTATION CO., LTD.
Signed by [___________]
for and on behalf of
SHANGHAI NEW CHIC LOGISTICS CO., LTD.
Signed by [___________]
for and on behalf of
CHIC'S MART TRADING CO., LTD.
SCHEDULE 12 DISCLOSURE LETTER
IN WITNESS whereof this Agreement has been duly executed on the date first
above written.
Signed by _____________ )
for and ob behalf of )
CV DISTRIBUTION SERVICES LTD. )
in the presence of _____________ )
Signed by _____________ )
for and on behalf of )
SWINGSIDE LTD. )
in the presence of _____________ )
Signed by _____________ )
for and on behalf of )
SEAVI ADVENT CHL INVESTMENTS LTD. )
in the presence of _____________ )
Signed by _____________ )
for and on behalf of )
FORTIS PRIVATE EQUITY ASIA FUND N.V. )
in the presence of _____________ )
Signed by _____________ )
for and on behalf of )
PROSPER FIELD HOLDINGS LIMITED )
in the presence of _____________ )
Signed by _____________ )
XXXXXXX XXXX QIWEI )
in the presence of _____________ )
Signed by _____________ )
XXXXX XXXX JIMIN )
in the presence of _____________ )
Signed by _____________ )
for and on behalf of )
MENLO WORLDWIDE, LLC )
in the presence of _____________ )
