Acquisition Agreement
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Party
A I: Xxx Xxx
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National
ID#:410104197207120042;
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Party
A II: Xx Xxx
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National
ID#:411223197311257511;
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Party
B: Zhengzhou Yulongkang Travel Agency Co., Ltd
Address:
Xxxxx 0000, 0000, Xxxxxx Xxxxxxxx #0 Xxxxxxxxxxxxxxxxxxxxxxxxxx, #90 Daxue Road
North, Er’qi Dist., Zhengzhou City
Legal
Representative: Xxx Xxx
Party
C: Shenzhen Universal Travel Co., Ltd
Address:
Xxxxx 000, 0xx Xxx,
Xxxxxxx Xxxxxxxx, #2008 Shennan Road Central, Shenzhen
Legal
Representative: Xx Xxxxx
Whereas: Party A I and Party A
II are the shareholders of Party B and Party A I has 59% of shares of Party B
and Party A II has 41% of shares of Party B;
Party B
is an enterprise professed in domestic travel businesses;
Party C
is an enterprise professed in domestic travel businesses.
Whereas:
1: Party
C plans to acquire Party B.
2: Party
B is co-owned by Party A I and Party A II and Party A I and Party A II own the
properties of Party B.
3: After
mutual negotiation, Party A I and Party A II and Party B agree to be acquired by
Party C.
4: This
acquisition gets, if any, third-party approval from Party B’s creditors,
partners, suppliers and franchisees.
In order
to specify the rights and obligations of Party A I, Party A II, Party B, Party C
and to ensure the smooth progress of this acquisition, Party A I, Party A II,
Party B and Party C enter into the contract to comply with based on the
principles of equality, voluntariness and fairness and equivalence and according
to the relevant laws and regulations and rules.
I:
Warranties of Party A I, Party A II, Party B (Including but not limited
to)
1:
Warrant that Party B is set up legally and its foundation papers, business
licenses are genuine. Party B has legally passed the annual survey and operated
in normal;
2:
Warrant the legitimacy and authenticity of the transferred stock rights or
assets and the authenticity of the statement of the rights spectrum and
limitations of the transferred stock rights or the legally owned
assets;
3:
Warrant the authenticity of the statement of the enterprise assets and
liabilities (no short-term bank liabilities and long-term
liabilities);
4:
Warrant the authenticity of the statement of contract relationships concerning
Party B;
5:
Warrant the authenticity of the statement of labor relations;
6:
Warrant the authenticity of the statement of the insurance;
7:
Warrant the authenticity of the statement of environmental protection problems
concerning Party B;
8:
Warrant the authenticity of the statement of Party B's contingent
liabilities;
9:
Warrant the authenticity of the statement of the current operation
status;
10:
Warrant the authenticity of the statement of its employees including the number
of the active and retired employees, position set and the payment of the social
security fund;
11:
Warrant the authenticity of the statement of its taxation and the legitimacy of
its taxation;
12:
Warrant the authenticity of the statement of the material litigation,
arbitration and administrative penalty concerning Party B;
13:
Special Warranty
13.1: The
stock rights owned by Party A I, Party A II, Party B are not defective; the
stockholders’ willingness is not manipulated by any other individuals, parties
and units. Party A I, Party A II, Party B has made this clear;
13.2:
Every and each individual, unit and party involved with the rights and interests
of Party A I, Party A II, Party B has no unclosed litigations and unexecuted
verdict. And the above-mentioned parties should inform Party C all the involving
litigations prior to the striking of the contracts;
13.3: The
financial data provided by Party A I, Party A II, Party B is complete and
comprehensive. Party A I, Party A II, Party B should disclose and be confirmed
in written form by Party C any individual, unit and party that may raise demand
of Party A I, Party A II, Party B’s assets.
II:
Party C Warranty
1:
Warrants that Party C is legally set up and exists in reality;
2:
Warrants the authenticity and legitimacy of its acquisition
motivation;
3:
Warrants the authenticity of the statement of its good will and management
ability;
4:
Warrants the authenticity of the statement of its healthy financial status and
financial strength.
III:
Confidential Terms
Party A
I, Party A II, Party B, Party C must not disclose the business secrets and other
confidential information in any form to any third parties during their
cooperation. If the information disclosure is necessary with the progress of the
programs, it must get the written consent from the counterpart. Any of the
breach party should be responsible for various kinds of the direct or indirect
losses incurred on the counterpart.
IV:
Disposal of Enterprise Liability
1: Party
A I, Party A II, Party B, Party C all agree that the base date of the ownership
of the liabilities and claims should be settled on the closing date of the
ownership transferring. The claims prior to the base date belong to Party A I,
Party A II, Party B and the liabilities prior to the base date and the
reasonable fees paid by Party C to dispose the claims and liabilities before the
base date should share by Party A I, Party A II, Party B.
2: Party
A I, Party A II, Party B guarantee that there are no other liabilities except
for the liabilities listed in the liability schedule.
V:
Acquisition Price
The
historic financial datas from 2007 to present audited by the public accounting
firm designated by Party C are as following:
The
audited revenue amount in 2007 is 58MM RMB and the net profit is 3.5MM
RMB;
The
audited revenue amount in 2008 is 61MM RMB and the net profit is 5.9MM
RMB;
The
audited revenue amount in 2009 is 74MM RMB and the net profit is 6.0MM
RMB;
After the
reasonable evaluation of the price of the acquired assets or stock rights, we
confirmed the aggregate acquisition price is 39MM RMB (Capital Form: RMB 39MM
only).
VI:
Payment Schedule
The Party
C plans to pay Party A I and Party A II the Universal Travel Group common stocks
with the value equivalent to 10% of the aggregate acquisition price and the
stock price is based on the average closing price of 15 market days before the
signature of the formal agreement. And 90% of the cash will be paid to Party A I
and Party A II. The 45% of the cash will be paid within 10 days of the
acquisition announcement and 25% of the cash will be paid within 10 days of the
clearance of share exchange formality in local business registration, and the
remaining 20% of the cash will be paid within 10 days after the closing of the
entire transaction. And the stock will be paid within 90 days of the company’s
closing acquisition announcement.
VII:
Arrangement of the Transition Period
Between
the signature of the acquisition agreement and the settlement of the
implementation of the agreement, Party A I, Party A II, Party B must maintain
the status quo of the target enterprise and cannot amend the charters or grant
any share dividend or bonuses. Also Party A I, Party A II, Party B cannot
resale, transfer or vouch the going-to-be sold assets or the
shares.
VIII:
Risk Sharing
The Party
A I, Party A II, Party B should share the contingent liabilities found after the
settlement if Party A I, Party A II, Party B misstated, whether out of
deliberation or negligence.
IX:
Trust Operation
By
executing this agreement, Party A I and Party A II agree to serve as
professional operators of Party B, and be responsible for completing the
operational goals of Party B for the next 5 fiscal years, details as
follow:
The
audited net income of Party B for fiscal 2010 should be no less than 7.2MM
RMB;
The
audited net income of Party B for fiscal 2011 should be no less than 8.6MM
RMB;
The
audited net income of Party B for fiscal 2012 should be no less than 10.3MM
RMB;
The
audited net income of Party B for fiscal 2013 should be no less than 12.1MM
RMB;
The
audited net income of Party B for fiscal 2014 should be no less than 14.4MM
RMB;
X:
Force Majeure
1: Force
majeure:
Force
majeure means conditions that are unforeseeable, unavoidable and unvanquishable.
The force majeure may arise from natural reasons or human factors. The natural
reasons can be earthquake, flooding, drought and sudden outbreak of the
epidemics and the human factors can be war, government prohibition, strike and
riots and so on.
2: Duty
Exemption
The party
incurred force majeure accidents should present the accident reports and proven
papers to another party in written form within 3 days of the occurrence of the
accidents. If the contract can’t be fulfilled because of the force majeure, the
contract can be terminated. If the contract can't be fulfilled temporarily, then
it can be delayed to be fulfilled. Whenever the force majeure happens, if the
party concerned exhausts its efforts to remedy but to no avail, it is free from
any compensation duty.
XI:
Contract Termination
1: Under
the consensus of the Party A I, Party A II, Party B, Party C, the contract can
be terminated.
2: Party
C is entitled to terminate the contract unilaterally if the contract cannot be
fulfilled because of the material breach of the contract by Party A I, Party A
II, Party B.
3: Party
A I, Party A II, Party B are entitled to terminate the contract if the contract
cannot be fulfilled due to the material breach of the contract by Party
C.
XII:
Liabilities of Breach of Contract
1: If
Party A I, Party A II or Party B breach the contract, terminate the contract or
unfulfil the contract terms, Party A I, Party A II or Party B should return the
full acquisition consideration received to Party C. Besides Party A I, Party A
II or Party B should pay Party C the penalties at the amount of 1 million USD
dollars.
2: If
Party C breaches the contract, terminates the contract or unfulfils the contract
terms, Party C should pay Party A I, Party A II and Party B the penalties at the
amount of 1 million USD dollars.
XIII:
Dispute Settlement
Any
dispute or discrepancy arising or relating to this contract should submit to the
Shenzhen Arbitration Center and get settled according to the local arbitrational
regulations and rules, or submit to local people’s court for
settlement.
XIV: This contract will come
into effect on the day of sign and seal offs of Party A I, Party A II and Party
B and Party C.
XV: This contract is in
quadruplicates and Party A I, Party A II and Party B hold two copies and Party C
holds two copies with the same legal binding.
signature
page(no straight matter on this page)
Party A
I: s/Xxx
Xxx
Party A
II: s/Xx
Xxx
Party
B: s/ Zhengzhou
Yulongkang Travel Agency Co., Ltd
Party
C: s/ Shenzhen
Universal Travel Co., Ltd
March 29,
2010
