EXHIBIT 2.02
DATE June 29th, 2004
(1) HARTCOURT CHINA INC AND XX. XXX XX XXXX
(as Vendors)
AND
(2) FIRST INFORMATION TECHNOLOGY LIMITED
(as Purchaser)
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A G R E E M E N T
FOR SALE AND PURCHASE OF SHARES IN
HOPEFUL INTERNET TECHNOLOGIES LIMITED
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This AGREEMENT is entered into on June 29th, 2004
AMONG:
(1) HARTCOURT CHINA INC, a company incorporated in the British Virgin
Islands and whose registered address is P O Box 957, Offshore
Incorporations Centre, Road Town, Tortola, British Virgin Islands and
whose business address is Suite B, 19/F., Ritz Plaza, 000 Xxxxxx Xxxx,
Xxxxxxxxxxx, Xxxx Xxxx ("HARTCOURT"); and
(2) XX. XXX XX XXXX (PERSONAL IDENTITY CARD NO. __________) WHOSE
RESIDENTIAL ADDRESS IS SITUATED AT
("Xx Xxx", together with Hartcourt the "Vendors"); and
(3) FIRST INFORMATION TECHNOLOGY LIMITED, a company incorporated in the
British Virgin Islands and whose registered address is P O Box 957,
Offshore Incorporations Centre, Road Town, Tortola, British Virgin
Islands and business address is 19/F., Wing Xx Xxxxx, Xx. 00 Xxx Xxxxx
Xxxx Xxxxxxx, Xxxx Xxxx (the "PURCHASER").
RECITALS:
A. The Company is established under the laws of the British Virgin Islands
whose particulars are set out in Schedule 1.
B. The Vendors are the legal and beneficial owners of the Company.
C. The Vendors are desirous to sell and the Purchaser is desirous to
purchase the entire equity capital of the Company on the terms and
conditions set out in this Agreement.
NOW IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Agreement, unless the context otherwise requires, the following
words and expressions shall have the following meanings:
"Accounting Date" means 31st December, 2003;
"Accounts" means the audited consolidated accounts of
the Company comprising the balance sheet of
the Company and the consolidated balance
sheet of the Company as at the Accounting
Date, the profit and loss account of the
Company and the consolidated profit and loss
account of the Company for the financial
year ended on the Accounting Date, the notes
thereto and the directors' and auditors'
reports thereon;
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"Business Day" means a day on which banks in Hong Kong are
open for business (except Saturdays,
Sundays, public holidays in Hong Kong and a
day when the typhoon signal number 8 is
raised or black rain storm warning is issued
and is not lowered before 2 p.m. of such
alert);
"BVI" means the British Virgin Islands;
"Company" means Hopeful Internet Technologies Limited,
a company established under the laws of the
BVI;
"Companies Ordinance" means the Companies Ordinance (Cap. 32 of
the Laws of Hong Kong);
"Completion" means the completion of the sale and
purchase of the Sale Shares pursuant to
Clause 6;
"Completion Date" means the seventh (7th) Business Day after
the conditions set out in Clause 4.1 are
fulfilled (or such other date as the Vendors
and the Purchaser may agree in writing prior
to Completion);
"Consideration" means HK$3,622,881, the consideration for
the Sale Shares which is to be settled in
the manner set out in Clause 5;
"Consideration Shares" means 2,179 ordinary shares of US$0.01 each
in the share capital of the Purchaser to be
issued to the Vendors on Completion,
pursuant to Clause 5;
"Director" means a director from time to time appointed
by the Company;
"Disclosure Letter" means the letter of even date issued by the
Vendors to the Purchaser in the agreed form;
"Encumbrances" means and includes any option, right to
acquire, right of pre-emption, mortgage,
charge, pledge, lien, hypothecation, title
retention, right of set off, counterclaim,
trust arrangement or other security or any
equity or restriction;
"HK$" means Hong Kong dollars, the lawful currency
of Hong Kong;
"Hong Kong" means the Hong Kong Special Administrative
Region of the PRC;
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"Intellectual Property means the rights in respect of any patents,
Rights" trade marks, service marks, applications for
any of the foregoing, copyright, design
rights, know-how, confidential information,
trade secrets, trade and business names and
any other similar protected rights owned by
or belonging to the Company and its
subsidiaries from time to time in any
country;
"Listing Rules" means the Rules Governing the Listing of
Securities on the Stock Exchange;
"PRC" or "China" means the People's Republic of China, for
the purpose of this Agreement, excluding
Hong Kong, Macau and Taiwan;
"US$" means United States dollars, the lawful
currency of the United States of America;
"Sale Shares" means all the equity capital of the Company;
"Stock Exchange" means The Stock Exchange of Hong Kong
Limited;
"Taxation" means and includes all forms of tax, rate,
levy, duty, charge, impost, fee, deduction
or withholding of any nature now or
hereafter imposed, levied, collected,
withheld or assessed by any taxing or other
authority in the PRC and includes any
interest, additional tax, penalty or other
charge payable or claimed in respect
thereof;
"Warranties" means the warranties, representations and
undertakings given by the Vendors pursuant
to Clause 7 and set out in Schedule 2 and
any other representations, warranties and
indemnities made by or on behalf of the
Vendors in this Agreement.
1.2 Interpretation
In this Agreement unless the context otherwise requires:
(a) reference to any statute or statutory provision includes a
reference to that statute or statutory provision as from time
to time amended, extended or re-enacted;
(b) words and phrases the definitions of which are contained or
referred to in the Companies Ordinance shall be construed as
having the meaning thereby attributed to them but excluding
any statutory modification thereof not in force on the date of
this Agreement;
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(c) words importing the singular include the plural, words
importing any gender include every gender, and words importing
persons include bodies corporate and unincorporated; and (in
each case) vice versa;
(d) all warranties, representations, indemnities, covenants,
agreements and undertakings given or entered into by more than
one person are given or entered into jointly and severally,
unless otherwise specified;
(e) where any Warranty is qualified by being given or made to the
best of the knowledge, information or belief of any person
giving or making the same or so far as that person is aware or
is qualified in any similar way such qualification shall be
deemed to be followed by the words "having made due and
careful enquiry";
(f) references to the Parties, Recitals, Clauses and Schedules
refer to the parties, the recitals, clauses of and schedules
to this Agreement;
(g) references to a document being in the "agreed form" or "agreed
terms", means a document the terms of which have been approved
by or on behalf of the Vendors and the Purchaser and a copy of
which has been signed for the purpose of identification by or
on behalf of the Vendors and the Purchaser;
(h) headings used in this Agreement are for convenience only and
shall not affect its interpretation.
1.3 This Agreement include the Recitals, all Clauses and Schedules as may
be amended, varied or revised from time to time.
1.4 Time shall be of the essence in this Agreement.
2. SALE AND PURCHASE OF SALE SHARES
2.1 Subject to the terms of this Agreement, the Vendors as legal and
beneficial owner shall sell and transfer or procure the transfer of the
Sale Shares free from Encumbrances and the Purchaser shall purchase the
Sale Shares upon Completion.
2.2 The Sale Shares are sold together with all rights attached or accruing
thereto and together with all dividends declared and paid in respect of
periods commencing on or after the Completion Date.
2.3 The Purchaser shall not be obliged to purchase any of the Sale Shares
unless the sale of all the Sale Shares is completed simultaneously.
2.4 Subject to the terms of this Agreement, the Vendors covenant to do and
execute all such acts and things as may be reasonably necessary to vest
the Sale Shares in the Purchaser and to place the Purchaser in full
control of the Sale Shares as from the Completion Date.
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3. TRANSFER OF METASTOCK
3.1 Subject to the terms of this Agreement, upon Completion (or as soon as
reasonably practicable thereafter), the Vendors shall make effective
transfer to the Purchaser all its Intellectual Property Rights of the
Chinese translation of the software "Metastock" and its distribution
right in the PRC. Consideration for the Metastock Project has been
included in the total number of Consideration Shares to be issued by
the Purchaser to the Vendors on Completion.
4. CONDITIONS PRECEDENT
4.1 Completion is conditional upon:
(a) the passing of a resolution by the board of directors of
Hartcourt China Inc approving the sale of the Sale Shares to
the Purchaser and all terms in this Agreement and the
implementation thereof;
(b) the passing of resolutions by the board of directors and
shareholders of the Purchaser approving the purchase of the
Sale Shares, the issue and allotment of the Consideration
Shares and all terms in this Agreement and the implementation
thereof;
(c) all necessary authorizations, orders, grants, consents,
permissions and approvals for all transactions contemplated by
this Agreement (including transfer of the Sale Shares to the
Purchaser) having been obtained from, and all filings and
registrations having been performed with, all applicable
authorities, departments and bodies in the PRC, including
without the limitation to the government approval, consent and
permissions required in the PRC in respect of the Company,
from appropriate governments, governmental, supranational or
trade agencies and regulatory bodies and all such
authorizations, and such authorizations, orders, grants,
consents, permissions and approvals remaining in full force
and effect.
4.2 The parties shall use their respective best endeavours to ensure that
the conditions set out in CLAUSE 4.1 are fulfilled by 5:00 p.m. (Hong
Kong time) on or before the date referred to in CLAUSE 4.3.
4.3 If the conditions set out in CLAUSE 4.1 have not been fulfilled by 5:00
p.m. (Hong Kong time) on 15th July, 2004 or such later date as the
parties may agree in writing, this Agreement and everything herein
contained shall, subject to the liability of any party to the other in
respect of any antecedent breaches of the terms hereof, be null and
void and of no effect.
5. CONSIDERATION
5.l The Consideration shall be settled by the Purchaser by the issue of the
Consideration Shares to the Vendors. The Consideration Shares shall be
issued and allotted, credited as fully paid and free from Encumbrances
to the Vendors in the following ratio: (Hartcourt 51%, Xx.Xxx 49%.)
Upon Completion, the Consideration Shares issued to the Vendors shall
constitute 21.79% of the entire issued share capital of the Purchaser
as enlarged by the issue of the Consideration Shares.
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5.2 The Consideration Shares issued to the Vendors shall rank pari passu in
all respects with the all other existing issued and allotted shares of
the Purchaser and the Vendors shall be entitled to all rights attached
or accruing thereto including all dividends declared and paid on or
after Completion.
6. COMPLETION
6.1 Completion of the sale and purchase of the Sale Shares shall take place
on the Completion Date at the offices of the Purchaser in accordance
with Schedule 3.
6.2 No party shall be obliged to complete the sale and purchase of the Sale
Shares unless the other party complies fully with the requirements set
out in Schedule 3 applicable to them respectively.
6.3 Without prejudice to any other remedies available to any party, if in
respect of the provisions of this Agreement and in particular Schedule
3 are not complied with by either the Vendors on the one part or by the
Purchaser on the other part on or before the Completion Date, the party
not in default may:
(a) defer Completion to a date not more than 28 days following the
Completion Date (and so that the provisions of this Clause 6.3
(a) shall apply to Completion as so deferred);
(b) proceed to Completion so far as practicable (but without
prejudice to its rights hereunder); or
(c) rescind this Agreement without prejudice to any of its other
rights in respect of such default.
7. WARRANTIES, REPRESENTATIONS, AND UNDERTAKINGS
7.1 Save as disclosed in the Disclosure Letter, each of the Vendors hereby
warrant, represent and undertake to the Purchaser the Warranties and
acknowledges that the Purchaser is entering into this Agreement in
reliance on the Warranties and that the Purchaser may treat them as
conditions of this Agreement.
7.2 Save as except in this Agreement, the Vendors agree to indemnify and
keep indemnified the Purchaser (for itself and as trustee for the
Company) against all losses, damages, costs, actions, proceedings,
claims, demands and expenses suffered by the Purchaser or the Company
or its subsidiaries as a result of or in connection with any breach of
any of the Warranties.
7.3 Each of the Warranties is without prejudice to each and every other
Warranty.
7.4 The Vendors undertake to the Purchaser that it will forthwith notify
the Purchaser in writing of any matter or thing which may arise or
become known to them after the date of this Agreement and prior to
Completion which is a breach of or inconsistent with any of the
Warranties or other provisions contained in this Agreement.
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7.5 In the event of the aforesaid notice is given to the Purchaser or the
Purchaser otherwise becoming aware or it becoming apparent on or before
Completion that any of the Warranties or any other term of this
Agreement is incorrect or breached in any material respect, the
Purchaser may rescind this Agreement by notice in writing to the
Vendors without prejudice to any rights it may have in respect of the
alleged breach or rescission hereof.
7.6 The Warranties shall remain in full force and effect after and
notwithstanding Completion.
7.7 The Warranties are given subject to the matters disclosed in the
Disclosure Letter, no other information relating to the Company which
the Purchaser has knowledge whether actual or constructive shall
prejudice any claim made by the Purchaser under the Warranties or
operate to reduce any amount recoverable.
7.8 It is agreed between the parties that (without limitation or prejudice
to any rights accruing to the Purchaser pursuant to any of the
provisions of this Agreement) in the event of there being discovered a
breach of any Warranty which was not disclosed in the Disclosure
Letter, any damages or compensation to which the Purchaser may be
entitled may, if the Purchaser so elects, be calculated on the
following basis, that is to say there shall be paid to the Purchaser
such sum as shall represent the diminution in the value of the Sale
Shares as a result of such breach, plus any and all expenses and costs,
including without limitation attorney's fees and expenses, to enforce
this provision and to collect such sum.
7.9 The Purchaser may take action for any breach or non-fulfillment of any
of the same before or after Completion and in the event of action taken
after Completion. Completion shall not in any way constitute a waiver
of the Purchaser's rights notwithstanding that such rights may have
been arisen or known to the Purchaser before Completion.
7.10 Notwithstanding anything contained in this CLAUSE 7 or any other
provision of this Agreement:
(a) no liability shall in any event arise in respect of any claim
under the Warranties unless:
(i) the amount of a single claim exceeds HK$100,000; or
(ii) the amount of a single claim (when aggregated with
the amount of any other claim then or previously made
hereunder against the Vendors) exceed HKD$100,000 in
which event the whole of such claim and all previous
claims shall be recovered in full within one year.
(b) the aggregate liability of the Vendors in respect of all
breaches under the Warranties shall not exceed the amount of
the Consideration; and
(c) (i) the Vendors shall not be liable for any breaches of the
Warranties unless on or before 3 months from the date of this
Agreement, the Purchaser shall have given written notice to
that Vendors of any claim, such notice to comply with the
provisions of Clause 7.10 (c) (ii);
(ii) Any notice of a claim for any breach of the
Warranties given by the Purchaser to the Vendors
shall specify (in reasonable detail) the matters
which give rise to the breach, the nature of the
breach and an estimate of the amount claimed in
respect thereof ;
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7.11 Purchaser's warranties
The Purchaser represents and warrants to the Vendors that:
(a) it is a company duly incorporated and subsisting under the
laws of BVI and has the corporate power and, subject to the
fulfillment of the conditions in Clause 4.1, has obtained all
necessary approvals, authorizations and consents to enter into
and perform its obligations under this Agreement and has taken
all necessary corporate and other action to authorize the
entering into and performance of this Agreement;
(b) this Agreement constitutes the legal, valid and legally
binding obligations of the Purchaser and are and will be fully
enforceable against the Purchaser in accordance with their
respective terms;
(c) the execution and delivery of ,and the performance by the
Purchaser of its obligations under this Agreement will not:
(i) result in a breach of any provision of the memorandum
and articles of association or bye-laws of the
Purchaser; or
(ii) result in a breach of, or constitute a default under,
any instrument or agreement or contract or deed to
which the Purchaser is a party or by which the
Purchaser is bound (including any shareholder's
agreement between its members in respect of the
Purchaser);or
(iii) result in a breach of any law, rule or regulation or
any order, judgment or decree of any court or
governmental, regulatory, judicial or administrative
body to which the Purchaser is a party or by which
the Purchaser is bound;
(d) the Purchaser through its wholly owned subsidiaries holds
219,999,999 shares (ie.78.57% equity interest) in GTI
Financial Information Limited ("GTI");
(e) subject to the fulfillment of the conditions in Clause 4.1,
the Consideration Shares to be issued pursuant to the terms of
the Agreement and have been duly authorized by the Purchaser
and will be validly issued, credited as fully-paid and
unencumbered and free and clear of any security interests,
claims (including pre-emptive rights and other restrictions on
disposals of the Consideration Shares), liens or encumbrances
and will be freely transferable and will rank PARI PASSU in
all respects with all other issued shares in the capital of
the Purchaser then in issue;
(f) save for the matters and transactions contemplated in this
Agreement, there are no ( and there will be none up to and on
the Completion Date) outstanding options, warrants, rights
(including conversion or preemptive rights) or agreements for
the purchase, subscription, issue and allotment or acquisition
from the Purchaser of any of its capital shares. Except for
the existing memorandum and articles of association of the
Purchaser as at the date hereof, the existing shareholder's
agreement dated 3rd January 2000 between Hu Qing Shan, Xx
Xxxx, Xxxx Xxx and Xxxxx Xxxx Feng as Party A, Illumination
International Limited as Party B, Twin Tiger Limited as Party
C, Shenzhen Genius Information Technologies Limited as Party
D, GTI as Party E and Shenzhen Ju Lie Information Consulting
Limited as Party F respectively and the matters and
transactions contemplated in this Agreement, the Purchaser
and/or any existing shareholder of the Purchaser is not a
party or subject to any agreement or understanding which
affects or relates to the voting or giving of written consents
with respect to any shares of the Purchaser or by a director
of the Purchaser (and will not be a party or subject to any of
the aforesaid up to and on the Completion Date). Except the
matters and transactions contemplated in this Agreement, there
is no other agreement or understanding (and there will be none
up to and on the Completion) between any persons and/or
entities, which affects or relates to the voting or giving of
written consents with respect to any shares of the Purchaser
or by a director of the Purchaser;
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(g) the particulars of the Purchaser contained in Schedule 5 are
true and accurate in all respects;
(h) all returns particulars resolutions and other documents
required to be filed with the relevant authorities in Hong
Kong by the Purchaser have been duly filed and the Purchaser
has complied with all legal requirements in connection with
its formation and with all issues of its shares;
(i)
7.12 The Purchaser shall not do or allow and shall procure that no act or
omission shall occur before Completion which would constitute a breach
of any of the Warranties, representations and undertakings given by the
Purchaser in this Agreement if they were given at Completion or which
would make any of such warranties inaccurate or misleading if they were
so given.
7.13 In the event of it being found prior to Completion that any of the
warranties, representations and undertakings given by the Purchaser in
this Agreement are untrue or incorrect, or in the event of any matter
or thing arising or becoming known or being notified to the Vendors
which is inconsistent with any of such warranties, representations and
undertakings, the Vendors shall not be bound to complete the sale and
purchase of the Sale Shares and may by written notice rescind this
Agreement without liability on its part. The right conferred upon the
Vendors by this Clause is in addition to and without prejudice to any
other rights of the Vendors (including any rights to claim damages or
compensation from the Purchaser by reason of any such breach or
non-fulfilment) and failure to exercise it shall not constitute a
waiver of any such rights.
7.14 The Purchaser hereby undertakes to indemnify and keep indemnified the
Vendors against any loss or liability suffered by the Vendors as a
result of or in connection with any breach of any of the warranties,
representations and undertakings given by the Purchaser in this
Agreement and against any costs and expenses incurred in connection
therewith provided that the indemnity contained in this Clause shall be
without prejudice to any other rights and remedies of the Vendors in
relation to any such breach. The aggregate liability of the Purchaser
in respect of all breaches under the Warranties shall not exceed the
amount of the Consideration, and the Purchaser shall not be liable for
any breach of the Warranties unless on or before 3 months from the date
of this Agreement, the Vendors shall have given written notice to that
Purchaser of any claim, such notice shall specify (in reasonable
detail) the matters which give rise to the breach, the nature of the
breach and an estimate of the amount claimed in respect thereof.
7.15 The rights conferred upon the Purchaser by this Clause 7 are in
addition to and without prejudice to any other rights of the Purchaser
and failure to exercise it shall not constitute a waiver of any such
rights notwithstanding that such breach or non-fulfillment may have
been known to or discoverable by the Purchaser before Completion.
7.16 The Vendors hereby waive any and all claims against the Company and all
its subsidiaries and their respective officers, employees, servants,
agents and representatives in respect of any information supplied by
any of them to the Vendors on or before the date hereof in connection
with any of the Warranties or any matters which have been disclosed to
the Purchaser or otherwise howsoever in relation to the business or
affairs of the Company or any of its subsidiaries.
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8. CONFIDENTIALITY
8.1 Subject to the fulfilment of Clause 4.1, the Vendors undertake at all
reasonable times, notwithstanding Completion, it will at the request of
the Purchaser promptly give to the Purchaser such Information (defined
in Clause 8.3) in its possession.
8.2 Subject to the fulfilment of Clause 4.1, the Vendors further undertake
to the Purchaser that they will not and will procure all their
respective officers, employees, servants, agents and representatives
will not at any time after Completion for their own benefit or on
behalf of any other person take away, make use of or disclose to any
person (except as may be necessary to comply with any statutory
obligation or order of any court or statutory tribunal of competent
jurisdiction) any Information are confidential in any way relating to
the business or affairs of the or to any customer, client, agent,
supplier or any other person who has or has had any dealings with the
Company.
8.3 In this Clause 8, "Information" refers to all information in the
possession of or within the control of the Vendors or their respect
officers, employees, servants, agents and representatives concerning
the business, dealings, transactions or affairs of the Company and all
claims made or threatened against the Company.
8.4 The Purchaser hereby undertakes with the Vendors that it will not,
prior to Completion and save as required by law, make use of or
disclose or divulge any confidential information relating to the
Company obtained by it or its representatives pursuant to this
Agreement and the transactions contemplated thereby to any person other
than its own officers, employees or professional advisors.
9. NON-COMPETITION AND NON-SOLICITATION
9.1 Subject to the fulfilment of Clause 4.1, the Vendors undertake from the
Completion Date to the expiry of 12 months after the Completion Date,
it will not and will procure all its respective officers, employees,
servants, agents, associates and representatives will not for their own
benefit or on behalf of any other person without the prior written
consent of the Purchaser:
(a) carry on (whether alone or in partnership or joint venture
with anyone else) or be concerned with or interested any
business carried by the Company in the PRC at any time within
12 months prior to the Completion Date or directly or
indirectly competitive with such business of the Company in
the PRC save and except as a shareholder (for investment
purposes only) holding not more than 5% directly or indirectly
of the securities of a company listed on a recognized stock
exchange;
(b) whether as principal, agent or servant canvass or solicit
business from any person who was a customer, client, agent or
supplier of the Company in the PRC during the period of 12
months immediately prior to Completion;
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(c) offer employment to any person who at the date of this
Agreement or within 12 months prior to the Completion Date, is
or had been an employee of the Company in the PRC and for so
long thereafter as such employee shall remain in the
employment of the Company in the PRC or for a period of 6
months after leaving such employment; or
(d) offer any inducement or encouragement to any such employee to
cease to be so employed or to seek employment with any other
employer or to become self-employed or to go into any
partnership or business on his own account in the PRC.
9.2 Each of the restrictions contained in Clause 9.l is separate and
distinct and is to be construed separately from the other restrictions.
The Vendors hereby acknowledge that he/it considers such restrictions
to be reasonable both individually and in aggregate and that the
duration, extent and application of each of such restrictions are no
greater than is necessary for the protection of the legitimate
interests of the Purchaser and that the Consideration paid by the
Purchaser under the terms of this Agreement takes into account and
adequately compensates them for any restriction or restraint imposed
hereby. However, in the event that any such restriction shall be found
to be void or unenforceable but would be valid or enforceable if some
part or parts thereof were deleted or the period or area of application
reduced, the Vendors hereby agree that such restriction shall apply
with such modification as may be necessary to make it valid.
10. CONDUCT OF THE COMPANY UP TO COMPLETION
10.1 Pending Completion, the Vendors undertake with the Purchaser to procure
that the Company and its subsidiaries will NOT:
(a) enter into any commitment, contract or arrangement other than
in the ordinary and proper course of its business;
(b) dispose of or create or permit any Encumbrances over any of
its assets or agree so to do, other than a disposal of its
stock in trade in the ordinary and proper course of its
business;
(c) incur any material liabilities other than in the ordinary and
proper course of its business;
(d) hire any new employee other than those general staff, alter
the remuneration or conditions of employment or superannuation
of any employee (except under the requirements of any award,
industrial agreement, service contract or law) or terminate
the employment of any employee (except for fraud or
misconduct);
(e) allot or issue or agree to allot or issue any shares or any
loan capital or any security convertible into share capital;
(f) declare or pay any dividend or make any other distribution of
its profits;
(g) alter its memorandum or articles of association other than for
the purpose of transferring the Sale Shares to the Purchaser
and in the agreed terms; or
(h) change its name.
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10.2 Up to Completion the Vendors shall cause the Company, at all reasonable
times, to make all premises, plant, stock, Accounts and records
available for the Purchaser's inspection for the purposes of this
Agreement and allow copies of such records to be taken.
11. INDEMNITY
11.1 The Vendors shall indemnify and hold harmless the Purchaser against
each proceeding, judgment, loss, damage, cost, expense or liability
suffered, incurred by or brought or made or recorded against the
Purchaser, as a direct or indirect consequence of:
(a) any breach by the Vendors or any other person of any of the
Warranties;
(b) any Warranty not being true and correct or being misleading as
at the Completion Date; or
(c) any failure by the Vendors to duly perform any of the
obligations imposed upon them by this Agreement.
11.2 The Vendors further acknowledge that the aforesaid indemnity:
(a) extends to all costs, expenses and other amounts incurred or
paid by the Purchaser in the enforcement or purported or
attempted enforcement of such indemnity or for the
preservation of or in any manner in reference to the rights
conferred upon the Purchaser by this Agreement, including
legal costs as between solicitor and client;
(b) will not be abrogated, modified, prejudiced, affected or
considered as wholly or partially discharged by any one or
more of:
(i) any time, credit, indulgence or concession extended
by the Purchaser or the Company to the Vendors or any
other person;
(ii) any compounding, compromise, release, abandonment,
waiver, variation, relinquishment or renewal of any
rights of the Purchaser or the Company against the
Vendors or any other person;
(iii) the neglect or omission of the Purchaser or the
Company to enforce any of those rights or any delay
in the enforcement of any of those rights; and
(iv) the winding up, bankruptcy or death of any of the
Vendors.
(c) is continuing and irrevocable and the obligations of the
Vendors will be absolute and unconditional in all
circumstances; and
(d) will be in addition to and not in substitution for any other
indemnity provided under this Agreement or any other rights
which the Purchaser or the Company may have against the
Vendors from time to time and will not merge on Completion.
13
11.3 The Purchaser shall indemnify and hold harmless at all times the
Vendors against each proceeding, judgment, loss, damage, cost, expense
or liability suffered, incurred by or brought or made or recorded
against the Vendors, whether before or after Completion or in respect
of any period before or after Completion, as a direct or indirect
consequence of:
(a) any breach by the Purchaser of any of the Warranties;
(b) any Warranty given by the Purchaser not being true and correct
or being misleading as at the Completion Date; or
(c) any failure by the Purchaser to duly perform any of the
obligations imposed upon them by this Agreement.
11.4 The Purchaser further acknowledges that the aforesaid indemnity:
(a) extends to all costs, expenses and other amounts incurred or
paid by the Vendors in the enforcement or purported or
attempted enforcement of such indemnity or for the
preservation of or in any manner in reference to the rights
conferred upon the Vendors by this Agreement, including legal
costs as between solicitor and client;
(b) will not be abrogated, modified, prejudiced, affected or
considered as wholly or partially discharged by any one or
more of:
(i) any time, credit, indulgence or concession extended
by the Vendors or the Company to the Purchaser or any
other person;
(ii) any compounding, compromise, release, abandonment,
waiver, variation, relinquishment or renewal of any
rights of the Vendors or the Company against the
Purchaser or any other person;
(iii) the neglect or omission of the Vendors or the Company
to enforce any of those rights or any delay in the
enforcement of any of those rights; and
(iv) the winding up, bankruptcy or death of any of the
Purchaser.
(c) is continuing and irrevocable and the obligations of the
Purchaser will be absolute and unconditional in all
circumstances; and
(d) will be in addition to and not in substitution for any other
indemnity provided under this Agreement or any other rights
which the Vendors or the Company may have against the
Purchaser from time to time and will not merge on Completion.
12. CONTINUING OBLIGATIONS
12.1 The Vendors must do nothing to discourage the Company's or its
subsidiaries' current clients and new clients to utilize the goods and
service of the Company's or its subsidiaries' business.
14
12.2 The Vendors must provide all reasonable assistance including access to
any documents in their possession or under their power or control in
relation to any dispute between the Company or its subsidiaries and any
person.
12.3 Each obligation and warranty of a party to this Agreement (except an
obligation fully performed at Completion) continues in force despite
Completion.
12.4 Default
(a) No party to this Agreement shall be entitled to enforce any
rights or remedies under this Agreement or at common law
arising out of the default of any other party in performing or
observing any of the terms and conditions of this Agreement
(other than the right of any party to xxx for any moneys
already due) UNLESS the non defaulting party has given to the
party in default ("DEFAULTING PARTY") a written notice
specifying the default and stating his intention to enforce
his rights and remedies unless the default is made good within
14 days and the Defaulting Party fails within that period to
remedy the default. If the default is not so rectified then
the non-defaulting party may:
(i) demand immediate payment to it of all moneys to be
paid to it by the defaulting Party pursuant to this
Agreement;
(ii) suspend compliance with its obligations under this
Agreement until the default is so rectified; and
(iii) xxx for damages or seek specific performance of this
Agreement or any other remedy to which it might be
entitled.
13. COSTS
13.1 Each party shall bear its own legal and other costs and expenses
arising directly or indirectly with respect to the preparation,
execution, completion and performance of this Agreement or any other
related documentation.
13.2 Notwithstanding the foregoing, the Vendors and the Purchaser shall bear
any stamp duty payable in respect of the transfer of the Sale Shares in
equal shares.
14. NOTICE
14.1 Delivery
All notices, demands or other communications which are required to be
given under this Agreement shall be in writing in English and sent to:
15
(a) in the case of the Vendors:
Vendors' Address : Suite 0000 Xxxxx VentureTech Plaza,
819 Xxx Xxxx Xx Xxxx, Xxxxxxxx,
XXX, 000000
Facsimile number : in PRC :- 86 21 5213 0664
Attention : Mr Xxxxx Xxxx
(b) in the case of the Purchaser:
Address : 19/F., Wing Xx Xxxxx, 00 Xxx Xxxxx
Xxxx Xxxxxxx, Xxxx Xxxx
Facsimile number : 852-28106070
Attention : Xx Xxxxxxx Xxxxx
or to such other address or facsimile number or marked for the
attention of such other person as the recipient may designate by notice
given in accordance with the provisions of this Clause 14.
14.2 Receipt
Any such notice may be delivered personally or by prepaid post or sent
by facsimile transmission and shall be deemed to have been effectively
served:
(a) on the day of receipt, where any personally delivered letter
or facsimile message is received on any Business Day before or
during normal working hours;
(b) on the following Business Day, where any personally delivered
letter or facsimile message is received either on any Business
Day after normal working hours or on any day which is not a
Business Day;
(c) on the third Business Day following the day of posting, upon
despatch from within Hong Kong of any posted letter to the
address of a recipient in Hong Kong, unless actually received
sooner; or
(d) on the seventh Business Day following the day of posting, upon
despatch from within Hong Kong of any posted letter to the
address of an overseas recipient (and vice-versa), unless
actually received sooner.
15. GENERAL
15.1. Assignment
The Parties shall not be permitted to assign or transfer or purport to
assign or transfer any of their rights or obligations under this
Agreement without the prior written consent of the other party.
15.2. Waiver
(a) A failure or delay in exercising or the partial exercise of
any provision of, or right, election or discretion under, this
Agreement is not a waiver of that provision, right, election
or discretion.
16
(b) A waiver of any such provision, right, election or discretion
or of any breach or default under this Agreement must be in
writing and signed by the party granting the waiver.
15.3 Variation
A variation of any term of this Agreement must be in writing and signed
by all Parties.
15.4 Cumulative rights
The rights or remedies conferred on any party by this Agreement are in
addition to all rights and remedies of that party at law or in equity.
15.5 Further assurance
Each party will sign execute and complete all further documents
necessary to effect, perfect or complete the provisions of and the
transactions contemplated by this Agreement.
15.6 Severability
If any part of this Agreement is or becomes illegal, invalid or
unenforceable in a jurisdiction, the legality, validity or
enforceability of the remainder of this Agreement will not be affected
and this Agreement will be read as if that part had been deleted.
15.7 Entire understanding
This Agreement contains the entire understanding and agreement between
the Parties as to the subject matter of this Agreement.
15.8 Survival
All agreements, obligations covenants and representations contained in
this Agreement which have not been fulfilled shall unless otherwise
expressly stated survive the execution and consummation of this
Agreement and the transactions in relation thereto.
16. GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by and construed in accordance with
the laws of Hong Kong and each party shall submit to the non-exclusive
jurisdiction of the courts of Hong Kong.
17
IN WITNESS whereof this Agreement has been duly executed the day and year first
before written.
The Vendors
SIGNED by )
for and on behalf of Hartcourt China Inc. )
)
in the presence of : )
SIGNED by )
Xx. Xxx Luping )
)
in the presence of : )
The Purchaser
SIGNED by )
for and on behalf of )
First Information Technology Limited )
in the presence of: )
18
SCHEDULE 1
PARTICULARS OF THE COMPANY
A. THE COMPANY
1. Name : Hopeful Internet Technologies Limited
2. Registered Office : X.X. Xxx 000, Xxxxxxxx Xxxxxxxxxxxxxx Xxxxxx,
Xxxx Xxxx, Xxxxxxx, XXX
0. Date of Incorporation : January 11, 2000
4. Place of Incorporation : BVI
5. Directors : Xxxxxxx Xxxx
6. Authorised Capital : US$50,000
Issued Capital US$
7. Shareholders : Hartcourt China Inc 51%
Xxx Xx Xxxx 49%
8. Nature of business : The holding of 100% equity interest in
Shanghai Sinobull Information Corporation
Limited which is a wholly foreign owned
enterprises incorporated in Shanghai, PRC and
its business is economic information and data
distribution, computer information and data
collection, network technical services,
transfer of technology, technical supports,
software development and consultation, sales
of self developed products.
19
SCHEDULE 2
WARRANTIES, REPRESENTATIONS AND UNDERTAKINGS
The Vendors hereby represent, warrant and undertake to and with the Purchaser in
title in the following terms:-
l. CAPACITY
--------
1.1 The Vendors have full power and capacity to enter into and perform this
Agreement and this Agreement will, when executed, constitute binding
obligations on each Vendor in accordance with their terms.
1.2 All necessary authorization for the Vendors to enter into this
Agreement has been duly obtained.
2. ACCOUNTS AND RECORDS
--------------------
2.l Books and Records
-----------------
2.l.l The Company and its subsidiaries have at all times fully, properly and
accurately maintained all books, accounts and records required by law
to be maintained all of which books, accounts and records are in its
possession.
2.l.2 The books, accounts and records of the Company and its subsidiaries
duly and accurately record all matters required by law to be entered
therein and accurately present and reflect in accordance with generally
accepted accounting principles and standards the assets and liabilities
(actual and contingent) of the Company and its subsidiaries and all
transactions to which it is or has been a party.
2.2 Accounting Matters
------------------
2.2.l The Accounts were prepared in accordance with the historical cost
convention and the bases and policies of accounting adopted for the
purpose of preparing the Accounts are the same as those adopted in
preparing the audited accounts of the Company and its subsidiaries in
respect of the last three preceding accounting periods of the Company
and its subsidiaries.
2.2.2 The Accounts:-
2.2.2.l give a true and fair view of the assets and liabilities of the
Company and its subsidiaries at the Accounting Date and its
profits for the twelve months period ended on that date;
2.2.2.2 comply with the requirements of the relevant regulations and
legislation;
2.2.2.3 have been prepared in accordance with good accounting practice
in the PRC and comply with all current standard accounting
practices applicable to a PRC company;
20
2.2.2.4 are not affected by any extraordinary, exceptional or
non-recurring item;
2.2.2.5 properly reflect the financial position of the Company and its
subsidiaries as at their date;
2.2.2.6 fully disclose all the assets and liabilities of the Company
and its subsidiaries as at their date;
2.2.2.7 make full provision or reserve in accordance with good
accounting practice in PRC for all liabilities and capital
commitments of the Company and its subsidiaries outstanding at
the Accounting Date including contingent, unquantified or
disputed liabilities;
2.2.2.8 make full and proper provision or reserve in accordance with
the principles set out in the notes included in the Accounts
for all Taxation liability to be assessed on the Company and
its subsidiaries or for which it may be accountable in respect
of the twelve months period ended on the Accounting Date and
such provision shall be sufficient to cover all Taxation
assessed or liable to be assessed on the Company and its
subsidiaries or for which the Company is or may become
accountable in respect of profits, income, earnings, receipts,
transfers, events and transactions up to and including the
Accounting Date.
2.2.3 No amount included in the Accounts in respect of any fixed or current
asset exceeds its purchase price or production cost at the Accounting
Date.
2.2.4 No amount included in the Accounts in respect of any current assets
exceeds its net realisable value at the Accounting Date.
2.3 Stock-in-trade and work in progress
-----------------------------------
2.3.l In the Accounts the stock-in-trade and work in progress of the Company
and its subsidiaries have been treated strictly in accordance with
standard accounting practices applicable to a PRC company.
2.3.2 In the Accounts all redundant, obsolete and slow moving stock-in-trade
has been written off or written down as appropriate.
2.4 Depreciation
------------
In the Accounts the fixed assets of the Company and its subsidiaries
have been depreciated in accordance with standard accounting practices
applicable to a PRC company.
2.5 Deferred taxation
-----------------
Where provision for deferred Taxation is not made in the Accounts full
details of the amounts of such deferred Taxation must be disclosed in
the Disclosure Letter.
21
2.6 Book debts
----------
2.6.l No part of the amounts included in the Accounts or subsequently
recorded in the books of the Company as owing by any debtor is or shall
at the Completion Date be overdue by more than 12 weeks or has been
released on terms that any debtor pays less than the full book value of
his debt or has been written off or has proved to any extent to be
irrecoverable or is now regarded by the Company and its subsidiaries as
irrecoverable in whole or in part.
2.6.2 All amounts due to the Company and its subsidiaries from debtors as at
the Completion Date (less the amount of any provision or reserve
determined on the same basis as that applied in the Accounts and
disclosed in writing to the Purchasers) shall be recoverable in full in
the ordinary course of business (and in any event not later than 12
weeks after the Completion Date) and none of such debts is or shall at
the Completion Date be subject to any counter-claim or set off except
to the extent of any such provision or reserve.
2.7 Treatment in the Accounts
-------------------------
There are no material differences between the accounting and taxation
treatment of any item in the Accounts.
2.8 Memorandum and articles of association and statutory books
----------------------------------------------------------
2.8.1 The copy of the memorandum and articles of association of the Company
provided by the Vendors to the Purchaser is accurate and complete in
all respects
2.9 Documents filed
---------------
2.9.l All returns, particulars, resolutions and documents required by the
relevant legislation to be filed with the relevant government authority
in respect of the Company and its subsidiaries have been duly filed and
were correct and due compliance has been made with all the provisions
of the relevant regulations and legislation and other legal
requirements in connection with the formation of the Company and its
subsidiaries.
2.9.2 All charges created by the Company and its subsidiaries have (if
appropriate) been registered in accordance with the provisions of the
relevant legislation
3. MATTERS SINCE THE ACCOUNTING DATE
---------------------------------
3.l Since the Accounting Date:-
3.l.l no distribution of capital or income has been declared, made
or paid or agreed or resolved to be declared, made or paid;
3.l.2 no loans have been made by the Company and its subsidiaries
and no loan capital or loan has been or become liable to be
repaid by the Company and its subsidiaries in whole or in
part;
3.l.3 the Company and its subsidiaries have not borrowed, raised or
taken any money or any financial facility;
22
3.l.4 the business of the Company and its subsidiaries have been
carried on in the ordinary and usual course both as regards
the nature, scope and manner of conducting the same and so as
to maintain the same as a going concern;
3.l.5 the Company and its subsidiaries have not entered into any
capital commitments or any transaction or agreement for the
disposal of any asset (including all forms of intellectual and
industrial property rights) or under which it has incurred or
shall incur (otherwise than in the ordinary and usual course
of carrying on its business) any liabilities (including
contingent liabilities) nor has it disposed of or realised any
material assets or any interest therein;
3.l.6 no resolutions have been (whether in general meeting or
otherwise) passed by the Company and its subsidiaries or any
class of their respective members;
3.l.7 nothing has been done in the conduct or management of the
affairs of the Company and its subsidiaries which would be
likely to prejudice the interests of the Purchaser as a
prospective purchaser of the Shares; and
3.l.8 no sum has been paid or voted to any director or employee (or
ex-director or ex-employee) of the Company and its
subsidiaries by way of remuneration or otherwise in excess of
the rates paid to him by the Company and its subsidiaries at
the Accounting Date and no new services agreements have been
made by the Company and its subsidiaries.
3.2 Since the Accounting Date the business of the Company and its
subsidiaries has not been adversely affected by the loss of or material
reduction in orders from any important customer or the loss of or
material reduction in any source of supply or by any abnormal factor
affecting similar businesses to a like extent and after making due and
careful enquiries none of the Vendors is aware of any facts which are
likely to give rise to any such adverse effect.
3.3 Since the Accounting Date there has been no material adverse change in
the financial position or trading prospects of the Company and its
subsidiaries nor is any such material change expected.
4. FINANCE
-------
4.l Bank and other borrowings
-------------------------
4.l.l Full details of all limits on the Company's and its subsidiaries' bank
overdraft facilities have been accurately disclosed in the Disclosure
Letter to the Purchaser.
4.l.2 The total amount borrowed by the Company and its subsidiaries from its
bankers does not exceed its overdraft facilities.
4.l.3 The total amount borrowed by the Company and its subsidiaries (as
determined in accordance with the provisions of the relevant
instrument) does not exceed any limitation on its borrowing power
contained in its articles of association or in any debenture or other
deed or document binding upon it.
23
4.l.4 The Company and its subsidiaries have no outstanding loan capital, nor
has it agreed to create or issue any, or factored any of its debts nor
borrowed any money which it has not repaid save for borrowings not
exceeding the amounts shown in the Accounts.
4.l.5 The Company and its subsidiaries have not since the Accounting Date
repaid or become liable to repay any loan or indebtedness in advance of
its stated maturity.
4.2 Loans by and debts due to the Company and its subsidiaries
----------------------------------------------------------
The Company and its subsidiaries have not lent any money (including
shareholders' loan) which has not been repaid to it, nor owns the
benefit of any debt (whether or not due for payment) other than debts
owing to it in the ordinary course of its business, and the Company and
its subsidiaries have not made any loan or quasi-loan contrary to the
relevant legislation.
4.3 Liabilities
-----------
There are no liabilities (including contingent liabilities) which are
outstanding on the part of the Company and its subsidiaries other than
those liabilities disclosed in the Accounts or incurred in the ordinary
and proper course of business since the Accounting Date.
4.4 Bank accounts
-------------
4.4.l A statement of the bank accounts of the Company and its subsidiaries
and of the credit or debit balances thereon as at a date not more than
seven days before the date of Completion has been supplied to the
Purchaser.
4.4.2 Since such statement there have been no payments out of any such
accounts except of payments in the ordinary course of business and the
balance on current accounts at the Completion Date shall not be
substantially different from the balances shown on such statement.
4.5 Working capital
---------------
Having regard to existing bank and other facilities the Company and its
subsidiaries have sufficient working capital for the purposes of
continuing to carry on its business in its present form and at the
increased levels of turnover contemplated herein following the
Completion Date and for the purposes of executing, carrying out and
fulfilling in accordance with their terms all orders, projects and
contractual obligations which are binding upon the Company and its
subsidiaries and remain outstanding.
4.6 Continuance of facilities
-------------------------
4.6.l In relation to debentures, acceptances, credits, overdrafts, loans or
other financial facilities outstanding or available to the Company and
its subsidiaries:-
4.6.l.l full details thereof and true and accurate copies of all
documents relating to such facilities have been disclosed in
the Disclosure Letter and the enclosures thereof; and
24
4.6.l.2 there has been no contravention of or non-compliance with any
provision of any such document.
4.7 Grants
------
4.7.l Full particulars have been disclosed of all grants, allowances, loans
or financial aids of any kind applied for or received or receivable by
the Company and its subsidiaries from any governmental department,
board, body or agency or any other supranational or national or local
authority body or agency.
4.7.2 No act or transaction has been effected or omitted in consequence of
which:-
4.7.2.l the Company or its subsidiaries is or may become liable to
refund wholly or partly any of the grants, allowances, loans
or aids referred to in CLAUSE 4.7.l; or
4.7.2.2 any application made by the Company and its subsidiaries for
the aforesaid grants, allowance, loans or aids shall be
rejected, deferred or not accepted in full.
5. TAXATION
--------
5.l Provision for Taxation
----------------------
The provision for Taxation in the Accounts shall be sufficient (on the
basis of the law as presently existing) to cover all Taxation assessed
or liable to be assessed on the Company and its subsidiaries or for
which the Company is, may be or may become accountable in respect of
profits, income, earnings, receipts, transfers, events and transactions
up to the Accounting Date.
5.2 Obligation to account
---------------------
The Company and its subsidiaries has duly complied with its obligations
to account to the Commissioner of Inland Revenue and all other
authorities for all amounts for which it is or may become accountable
in respect of Taxation.
5.3 Returns and clearances
----------------------
All returns in connection with Taxation that should have been made by
the Company and its subsidiaries have been made and have been made
correctly and on a proper basis making full disclosure of all matters
relevant to the assessment of the Company's and its subsidiaries'
liability to Taxation. No such return is likely to be disputed and
there are no facts known or which would on reasonable enquiry be known
to the Company and its subsidiaries, its Directors or the Vendors which
may give rise to any dispute or to any claim for any Taxation or the
deprivation of any relief or advantage that might have been available
to the Company and its subsidiaries under any relevant legislation.
25
5.4 Disclosure
----------
There are no assessments or charges to Taxation against the Company and
its subsidiaries which are the subject of any present dispute with the
relevant government tax authority or any relevant statutory authority
whether such amounts of Taxation have been paid or not and regardless
of which form such dispute is being or is to be heard.
6. ASSETS
------
6.l Ownership of Assets
-------------------
6.l.l The Company and its subsidiaries were at the Accounting Date the owner
with good and marketable title of all the assets included in the
Accounts and now so owns and has in its possession and under its
control all such assets (save for current assets subsequently disposed
of in the ordinary course of its business). Save as disclosed in the
Disclosure Letter, all the existing assets and assets acquired by the
Company and its subsidiaries after the Accounting Date are free from
any charge, lien, encumbrance or equity and no other person has or
claims any rights in relation to any of such assets.
6.l.2 The fixed and loose plant, machinery, furniture, fixtures, fittings and
equipment, vehicles and other movable assets used in connection with
the business of the Company and its subsidiaries are in the possession
and control and are the sole and absolute property of the Company and
its subsidiaries free from any charge, lien, encumbrance, hire
purchase, leasing or rental agreement or agreement for payment on
deferred terms or xxxx of sale and are in good repair and condition and
satisfactory working order and comprise all assets necessary for the
continuation of the business of the Company and its subsidiaries as
carried on at the Completion Date.
6.2 Stocks
------
6.2.l The stocks of raw materials, packaging materials and finished goods now
held are not excessive and are adequate in relation to the current
business requirements of the business of the Company and its
subsidiaries and none of such stock is obsolete, unusable, unmarketable
or inappropriate or of limited value in relation to the current
business of the Company and its subsidiaries and no contracts are
outstanding which are likely to result in the foregoing not being true.
6.2.2 The stock-in-trade of the Company and its subsidiaries are in good
condition and is capable of being sold by the Company and its
subsidiaries in the ordinary course of its business in accordance with
the current price list without rebate or allowance to a purchaser.
6.3 Retention of title
------------------
The Company and its subsidiaries have not purchased or agreed to
purchase any stock, goods, materials or assets on terms that property
therein does not pass until full payment is made or all indebtedness
discharged.
26
6.5 Insurance
---------
6.5.1 The Company and its subsidiaries is fully covered by valid insurances
against all risks normally insured against by persons carrying on the
same business as that carried on by the Company and its subsidiaries
and in particular all assets are and have at all material times been
insured to the full replacement or reinstatement value thereof against
fire and such other risks as aforesaid and the Company is and has at
all material times been adequately covered against accident, damage,
injury, third party loss (including product liability), loss of profits
and other risks normally insured against by persons carrying on the
same business as that carried on by the Company and its subsidiaries.
6.5.2 Full particulars have been disclosed of all such insurances and there
are no outstanding claims or circumstances likely to give rise to a
claim thereunder and nothing has been done or omitted to be done which
has made or could make any policy of insurance void or voidable or
whereby the premium is likely to be increased.
6.5.3 None of the policies are subject to any special or unusual terms or
restrictions or to the payment of any premium in excess of the normal
rate.
7. INTELLECTUAL PROPERTY
---------------------
7.1 The Company and its subsidiaries are entitled to carry on its present
business in the manner in which it is presently carried on and such
business does not and is not likely to infringe or conflict with any
right (and in particular any industrial or intellectual property right)
of any other person.
7.2 All trademarks, patents, designs, business names, trade names,
copyright, know-how and other similar industrial, commercial or
intellectual rights used by the Company and its subsidiaries in
connection with its business have been disclosed in the Disclosure
Letter and are in the sole beneficial ownership of the Company and its
subsidiaries and to the extent to which the same are capable of
registration are registered in the name of the Company and its
subsidiaries as sole proprietor and are valid and enforceable and none
of them is being used, claimed, opposed or attacked by any other person
nor has anything been done or omitted whereby they or any of them might
cease to be valid and enforceable or used, claimed, opposed or attacked
as aforesaid.
7.3 No licence or other authority has been granted or agreed to be granted
by the Company and its subsidiaries to any person to use in any manner
or to do anything which would or might otherwise infringe any of the
rights referred to (specifically or in general terms) in clause 7.2 and
the Company and its subsidiaries have not permitted to be disclosed or
agreed to disclose to any person other the Purchaser any of its
know-how, trade secrets, confidential information, technical processes
or lists of customers or suppliers.
7.4 All licences and authorities from any other person under which any of
the rights referred to (specifically or in general terms) in clause 7.2
are used by the Company and its subsidiaries and are in full force and
effect and the Vendors are not aware of any breach by the Company and
its subsidiaries of the terms and conditions of any such licence or
authority or of any circumstances whereby the same may be prematurely
terminated or rescinded.
27
7.5 There is no infringement of any Intellectual Property Rights in the
operation of any business of the Company and its subsidiaries and all
products and properties of the Company and its subsidiaries are not
subject to any third party's Intellectual Properties Rights.
8. COMMITMENTS AND CONTRACTS
-------------------------
8.1 The Company and its subsidiaries are not a party to or subject to any
liability (existing or contingent) under any contract or arrangement
not entered into in the ordinary and usual course of business or any
contract or arrangement of an unusual, onerous or long term nature or
which is not of an arms' length nature.
8.2 All contracts for the purchase by the Company and its subsidiaries of
raw materials, goods or services or for the supply of goods or services
by the Company and its subsidiaries are on a formal arms' length basis.
8.3 All obligations of the Company and its subsidiaries to buy foreign
exchange are against known commitments to pay for stock to be imported
and paid for in foreign currency and any forward sales of foreign
currency by the Company are against known receipts of the currency to
be sold and the Company has no commitments in foreign exchange which
are not covered by a forward purchase or sale as appropriate of the
relevant currency.
8.4 The Company and its subsidiaries are not and have not agreed to become
bound by any debenture, guarantee or contract of indemnity or
suretyship and there is not now outstanding any guarantee or contract
for indemnity or suretyship given for the accommodation of or in
respect of any obligation on the part of the Company and its
subsidiaries.
8.5 The Company and its subsidiaries have not given any power of attorney
which remains in force.
8.6 The Company and its subsidiaries have not entered into or agreed to
enter not any selling, purchasing, manufacturing or licensing agreement
or arrangement or any agreement or arrangement which in any way
restricts the freedom of the Company and its subsidiaries to carry on
its business or any part thereof in any part of the world in such
manner as it thinks fit.
8.7 The Company and its subsidiaries do not owe any debts or other monies
to the Vendors or any of the Directors or any person connected with the
Vendors or the Directors or any of them respectively.
9. EMPLOYMENT
----------
9.1 Employment and terms of employment
----------------------------------
9.1.1 Full particulars of the identities, dates of commencement of employment
or appointments to office and terms and conditions of employment of all
the employees and officers of the Company and its subsidiaries
including without limitation profit sharing schemes or commission or
discretionary bonus arrangements have been fully and accurately
disclosed in the Disclosure Letter to the Purchaser.
28
9.1.2 There are no agreements or other arrangements whether or not legally
binding between the Company and its subsidiaries and any trade union or
other body representing its employees.
9.2 Bonus schemes
-------------
Save as disclose in the Disclosure Letter, there are no schemes in
operation by or in relation to the Company and its subsidiaries
whereunder any employee of the Company and its subsidiaries is entitled
to a commission or remuneration of any sort calculated by reference to
the whole or part of the turnover profits or sales of the Company and
its subsidiaries.
9.3 Changes in remuneration
-----------------------
9.3.1 Since the date of the Disclosure Letter:-
9.3.1.1 no change has been made in the rate of remuneration or the
emoluments or pension benefits of any officer, ex-officer or
senior executive of the Company and its subsidiaries (a senior
executive being a person in receipt of remuneration in excess
of HK$5,000.00 per annum);
9.3.1.2 no change has been made in the terms of employment of any such
officer or senior executive; and
9.3.1.3 no additional officers or senior executives have been
appointed.
9.3.2 The Company and its subsidiaries are not bound or accustomed to pay any
monies other than in respect of remuneration or emoluments of
employment or pension benefits to or for the benefit of any officer or
employee of the Company and its subsidiaries.
9.4 Termination of contracts of employment
--------------------------------------
9.4.1 All subsisting contracts of service to which the Company or its
subsidiaries is a party are determinable on 12 months' notice or less
without compensation.
9.4.2 No senior executive of the Company and its subsidiaries and no officer
of the Company and its subsidiaries has given or received notice
terminating his employment except as expressly contemplated in this
Agreement and no such executive or officer will be entitled to give
such notice as a result of the provisions of this Agreement.
9.5 Industrial disputes and employee claims
---------------------------------------
9.5.1 Neither the Company and its subsidiaries nor its employees are involved
in any industrial dispute and there are no facts known or which should
on reasonable enquiry be known to the Company, its Directors or the
Vendors which might suggest that there may be any such industrial
dispute or that any of the provisions of this Agreement may lead to any
such industrial dispute.
9.5.2 There is no outstanding claim against the Company and its subsidiaries
by any person who is now or has been an officer or employee of the
Company and its subsidiaries or any dispute between the Company and its
subsidiaries and a material number or class of its employees.
29
9.6 Redundancies
------------
No employee of the Company and its subsidiaries shall become redundant
and be entitled to a redundancy payment as a result of any provision of
this Agreement.
9.7 Pensions
--------
9.7.1 Other than required by the relevant legislations the Company and its
subsidiaries are not under any legal or moral liability or obligation
or a party to any ex-gratia arrangement or promise to pay pensions,
gratuities, superannuation allowances or the like to any of its past or
present officers or employees or their dependents.
9.7.2 Full particulars of the Company's and its subsidiaries' retirement
benefits scheme ("Scheme") have been disclosed in the Disclosure Letter
including without limitation true copies of the trust deeds and the
latest actuarial report and full and accurate particulars of the assets
funding arrangements, rules and current membership.
9.7.3 The assets, investments or policies held by the trustees of the Scheme
are sufficient to satisfy the liabilities and obligations (both current
and contingent) which the Scheme owes to its members at the date
hereof.
10. LITIGATION, DISPUTES AND WINDING-UP
-----------------------------------
10.1 Claims
------
There are no outstanding claims against the Company and its
subsidiaries in respect of defects in quality or delays in delivery or
completion of contracts or deficiencies design or performance of
equipment or otherwise relating to liability for goods or services
supplied or to be supplied by the Company and its subsidiaries and no
such claims are threatened or anticipated and the Company and its
subsidiaries have not given otherwise than in the ordinary course of
business any guarantee or warranty in relation to any goods or services
supplied or to be supplied by the Company and its subsidiaries.
10.2 Litigation
----------
10.2.1 The Company and its subsidiaries are not engaged in any litigation or
arbitration proceedings as plaintiff or defendant; there are no
proceedings pending or threatened either by or against the Company and
its subsidiaries and there are no circumstances which are or may be
likely to give rise to any litigation or arbitration.
10.2.2 There is no dispute with any revenue or other official department in
Shanghai or elsewhere in relation to the affairs of the Company and its
subsidiaries and there are no facts which may give rise to any dispute.
10.2.3 No order has been made or petition presented or resolution passed for
the winding up of the Company and its subsidiaries nor has any
distress, execution or other process been levied in respect of the
Company and its subsidiaries which remains undischarged nor is there
any unfulfilled or unsatisfied judgement or court order outstanding
against the Company and its subsidiaries.
30
10.3 Compliance with legislation
---------------------------
10.3.1 Neither the Company nor its subsidiaries nor its officers, agents or
employees (during the course of their duties to the Company and its
subsidiaries) has committed or omitted to do any act or thing the
commission or omission of which is or could be in contravention of any
applicable laws and regulations (whether of Shanghai or elsewhere)
giving rise to any fine, penalty, default proceedings or other
liability on its part.
10.3.2 The Company and its subsidiaries has conducted and is conducting its
business in all respects in accordance with all applicable laws and
regulations whether of Shanghai or elsewhere.
10.4 Documents stamped
-----------------
All documents which in any way affect the right, title or interest of
the Company and its subsidiaries in or to any of its property,
undertaking or assets or to which the Company or its subsidiaries is a
party and which attract stamp duty have been duly stamped within the
requisite period for stamping.
10.5 Business names
--------------
The Company and its subsidiaries do not use a name for any purpose
other than its full corporate name.
10.8 Powers of attorney and authorities
----------------------------------
10.8.1 There are not in force any powers of attorney given by the Company and
its subsidiaries.
10.8.2 There are not outstanding any authorities whether express or implied by
which any person may enter into any contract (other than the Agreement)
or commitment to do anything on behalf of the Company and its
subsidiaries.
10.9 Licences and consents
---------------------
10.9.1 The Company and its subsidiaries have obtained all necessary licences
and consents from any person, authority or body for the proper
operation of its business.
10.9.2 The Company and its subsidiaries are not in breach of any of the terms
or conditions of any such licences or consents which are all valid and
subsisting and there are no factors that might in any way prejudice the
continuation or renewal of any of them.
11. CAPITAL OF THE COMPANY
----------------------
11.1 The authorised and issued share capital of the Company is as set out in
Schedule 1.
11.2 The issued capital has been fully paid.
11.3 There is not now any loan capital of the Company nor any agreement,
arrangement or option under which any person may now or at any time
hereafter call for the creation, allotment, issue, sale or transfer of
any loan or share capital of the Company or require to be put under
option any loan or share capital of the Company.
31
11.4 The Company:-
11.4.1 is not the holder or beneficial owner of and has not agreed to
acquire any share or loan capital of any other company or
corporation (whether incorporated in Shanghai or elsewhere);
and
11.4.2 has neither a branch outside Shanghai nor any permanent
establishment outside Shanghai.
12. OTHER OPERATIONS
----------------
12.1 The Company and its subsidiaries do not have and has never had any
interest in or agreed to enter into any partnership, consortium, joint
venture or similar arrangement with any other entity save as disclosed
in this Agreement.
13. RECITALS, SCHEDULES AND DISCLOSURES
-----------------------------------
The information and circumstances relating to the Company and its
subsidiaries which are known or ought on reasonable enquiry to be known
to the Vendors and which are material to be known by the Purchaser have
been accurately and completely disclosed in [the Disclosure Letter and]
the recitals to the Agreement the contents of all the schedules and all
matters disclosed in the Disclosure Letter and other information
relating to the Company given by the Vendors or their accountants to
the Purchaser are accurate and complete in every respect and there is
no fact or matter undisclosed which renders any such matters or
information untrue, incomplete or misleading.
14. EFFECT OF AGREEMENT
-------------------
14.1 No person is entitled to receive from the Company and its subsidiaries
any finder's fee, brokerage or commission in connection with the sale
of the Shares to the Purchaser.
14.2 There are no contracts or arrangements (whether written or oral) to
which the Company and its subsidiaries are a party which shall by their
terms be determinable as a result of the provisions of this Agreement
or which shall or may be determined by performance or Completion of
this Agreement.
14.3 The execution and delivery of this Agreement and the fulfilment and
performance of the compliance with the terms thereof by the Vendors do
not and shall not:-
14.3.1 conflict with, violate or result in a breach by the Company
and its subsidiaries or the Vendorss of the terms, provisions
or conditions of:-
14.3.1.1 any agreement,
14.3.1.2 any law, undertaking to or judgement order,
injunction or decree of any court, or
32
14.3.1.3 the memorandum and articles of association of the
Company and its subsidiaries;
14.3.2 relieve any person of any contractual or other obligation to
the Company and its subsidiaries or entitle any person to
terminate any such obligation;
14.3.3 terminate or make subject to termination or adversely affect
from the Company's and its subsidiaries' point of view the
enjoyment of any present or future benefit or privilege;
14.3.4 result in any customer or supplier of the Company and its
subsidiaries ceasing to deal or substantially reducing the
level of his dealings with the Company and its subsidiaries;
14.3.5 result in any indebtedness present or future of the Company
and its subsidiaries becoming due or capable of being declared
due and payable prior to the stated maturity date; or
14.3.6 give rise to any contractual or other obligation of the
Company and its subsidiaries to any person or entitle any
person to require the performance of or compliance with any
existing contractual or other obligation of the Company and
its subsidiaries.
33
SCHEDULE 3
COMPLETION REQUIREMENTS
On the Completion Date, the Vendors and the Purchaser shall have the following
obligations:
1. Tax Deed of Indemnity
---------------------
Each party to this Agreement shall cause to be executed the Tax
Indemnity Deed in substantially the form specified in Schedule 4.
2. Obligations of the Vendors
--------------------------
2.1 The Vendors shall hand to or to the order of the Purchaser the
following:
(a) the statutory books and record duly made up to the Completion
Date and common seal(s) and chops of the Company and all its
subsidiaries;
(b) the written resignations of all the directors of the Company
in which the relevant director shall acknowledge that he/she
has no claim or right of action against the Company or any of
it subsidiaries for compensation for loss of office,
termination of employment or otherwise;
(c) the share certificates in respect of the Sales Shares and
documents to the reasonable satisfaction of the Purchaser
evidencing that the Company has been duly established under
the BVI law and is wholly owned by the Vendors;
(d) an assignment or other document in the agreed form duly signed
by the Vendors transferring the Intellectual Property Rights
of the Metastock Project to the Purchaser;
2.2 The Vendors shall procure that a board meeting of the Company be held
at which:
(a) it shall be resolved that the transfer of Sale Shares be
approved as the Purchaser may direct;
(b) nominees of the Purchaser be appointed as directors of the
Company.
3. Obligations of the Purchaser
----------------------------
3.1 The Purchaser shall procure that a board meeting of the Purchaser be
held at which a resolution approving the allotment of the Consideration
Shares to the Vendors pursuant to the terms of this Agreement be
passed.
3.2 The Purchaser shall deliver or cause to be delivered to the Vendors:
(a) the share certificates in respect of the Consideration Shares,
issued in the name of the Vendors or as it may direct in
writing prior to Completion and a certified true copy of the
register of members of the Purchaser showing the Vendors'
ownership of the Consideration Shares; and
34
(b) certified true copy of the written resolutions of the board of
directors and shareholders of the Purchaser (i) approving the
purchase of the Sale Shares, (ii) the issue and allotment of
the Consideration Shares and all terms in this Agreement and
the implementation thereof; and (iii) the appointment of one
director nominated by the Vendors to the board of directors of
the Purchaser.
35
SCHEDULE 4
TAX INDEMNITY DEED
THIS DEED is made the 30th day of June, 2004.
BETWEEN
(l) HARTCOURT CHINA INC AND XX XXX XX XXXX (the "VENDORS"); and
(2) FIRST INFORMATION TECHNOLOGY LIMITED, a company incorporated in the
British Virgin Islands and whose registered office is P O Box 957,
Offshore Incorporations Centre, Road Town, Tortola, British Virgin
Islands and business address is 19/F., Wing Xx Xxxxx, Xx. 00 Xxx Xxxxx
Xxxx Xxxxxxx, Xxxx Xxxx (the "PURCHASER"); and
(3) Hopeful Internet Technologies Limited, a company incorporated in the
British Virgin Islands whose registered office is P O Box 957, Offshore
Incorporations Centre, Road Town, Tortola, British Virgin Islands and
business address is Suite B, 19/F., Ritz Plaza, 122 Austin Road,
Tsimshatsui, Hong Kong (the "COMPANY").
WHEREAS pursuant to an agreement for the sale and purchase of shares in the
Company dated June 29th, 2004, the Vendors and the Purchaser have today
completed the sale and purchase of all the issued shares of the Company
in reliance (inter alia) upon the undertaking of the Vendors to enter
into this deed and upon the indemnities by the Vendors hereinafter
contained.
NOW THIS DEED made in pursuance of the aforesaid undertaking and in
consideration of the aforesaid purchase of shares WITNESSETH as
follows:-
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
"Accounts" means the audited management accounts of the
Company and its subsidiaries comprising the
balance sheet as at the Management
Accounting Date, the profit and loss account
for the twelve-month period ended on the
Management Accounting Date and the notes
thereto;
"Agreement" means the agreement for the sale and
purchase of the Sale Shares dated June 29th,
2004 under which the Vendors agreed to sell
and the Purchaser agreed to purchase the
entire share capital of the Company;
36
"Claim for Taxation" includes:-
(1) any notice, demand, assessment
letter or other document issued or
action taken by or on behalf of the
relevant tax authorities in the PRC
or any other statutory or
governmental authority or body
whatsoever in any part of the world
whereby it appears that the Company
or its subsidiaries is or may be
liable to make any payment of any
Taxation whether or not the same is
primarily payable by the Company or
its subsidiaries and whether or not
the Company or its subsidiaries has
or may have any right of
reimbursement;
(2) the loss or counteracting or
clawing back of any Relief which
would otherwise have been available
to the Company or its subsidiaries;
and
(3) the nullifying or cancellation or
set-off of a right to repayment of
Taxation which would have been
available to the Company or its
subsidiaries;
"Completion" means the completion of the sale and
purchase of the Sale Shares pursuant to the
Agreement;
"Final Determination" in relation to a Claim for Taxation where
there is an appeal against that assessment,
means:-
(1) an agreement under section 64(3) of
the Inland Revenue Ordinance (Cap.
112 of the Laws of Hong Kong) or
any legislative provision
corresponding to that section; or
(2) a decision of a court or tribunal
from which either no appeal lies or
in respect of which no appeal is
made within the prescribed time
limit;
"Indemnified Person" means the Purchaser and the Company, and
their respective successors and assigns;
"Liability to Taxation" means any liability to make a payment in
respect of Taxation;
"Management Accounting Means 31st December 2003;
Date"
37
"Relief" includes any relief, allowance, exemption,
set-off or deduction in computing or against
profits, income or gains of any description
or from any source or credit against
Taxation;
"Sale Shares" means 2,179 shares of the Company registered
in the name of and legal and beneficially
owned by the Vendors which have been or are
to be sold to the Purchaser pursuant to the
Agreement; and
"Taxation" means and includes all forms of tax, rate,
levy, duty, charge, impost, fee, deduction
or withholding of any nature now or
hereafter imposed, levied, collected,
withheld or assessed by any taxing or other
authority in any part of the world / the PRC
and includes any interest, additional tax,
penalty or other charge payable or claimed
in respect thereof.
1.2 Interpretation
In this Deed unless the context otherwise requires all expressions used
in the Agreement shall have the same meanings in this Deed and the
definitions and interpretation contained in the Agreement shall be
deemed to be incorporated herein.
1.3 Headings
The headings contained in this Deed are for convenience only and shall
have no legal effect nor shall they affect the construction and
interpretation of this Deed.
2. INDEMNITY
2.1 Subject as hereinafter provided the Vendors hereby jointly and
severally covenant with the Purchaser (for itself and for its
successors and assigns) and the Company (for itself and for its
successors and assignors) and as a separate covenant with the each of
them that the Vendors and their respective representatives will
indemnify the Purchaser and the Company and keep the Purchaser and the
Company indemnified against any loss arising from time to time from a
Claim for Taxation which imposes or seeks to impose on the Company or
its subsidiaries and/or the Purchaser a Liability to Taxation as a
consequence of any one or more events occurring on or before Completion
and (without prejudice to the generality of the foregoing) against:-
(a) the amount of any settlement of a Claim for Taxation;
(b) any depletion of or diminution in the net tangible assets or any
increase in the amount of the net liabilities of the Company or its
subsidiaries or any loss by the Company or its subsidiaries of any
benefit or advantage subsisting or which might reasonably have been
supposed to subsist at Completion and arising by reason of or in
consequence of or in connection with any Liability to Taxation;
38
(c) the costs and expenses from time to time reasonably and properly
incurred by the Company or its subsidiaries in relation to any demands,
actions, proceedings and claims in respect of Liability to Taxation or
Claim for Taxation; and
(d) estate duty in respect of the death (whether before or after) of any
person whereby a liability in respect of estate duty may fall on the
Company or its subsidiaries by reason of any transfer of property or
other circumstances occurring prior to or at Completion.
2.2 No delay or omission on the part of an Indemnified Person in the
exercise of any right, power or privilege hereunder shall impair such
right, power or privilege or be construed as a waiver thereof and any
single or partial exercise of any such right, power or privilege shall
not preclude the further exercise of that or any other right, power or
privilege.
2.3 All sums payable by the Vendors to the Purchaser and/or the Company or
its subsidiaries and/or any of their respective successors or assigns
hereunder shall be paid insofar as is lawful free and clear of all
deductions and withholdings whatsoever and in the event that a
deduction or withholding is lawfully made the Vendors shall pay such
greater sum which after any lawful deduction or withholding therefrom
results in a net payment equal to the amount due under the indemnity
provided for in Clause 2.1.
2.4 If a sum payable by the Vendors hereunder attracts a Liability to
Taxation (or would have done so but for the availability of some
Relief) then the Vendors shall pay such further amount so that the net
receipts of the Company or its subsidiaries after Taxation in respect
of the payment shall be as if the payment were not subject to Taxation
in the hands of the Company or its subsidiaries.
2.5 The Vendors shall be liable under the indemnity in Clause 2.1
notwithstanding any Reliefs, rights or repayment or other rights or
claims of a similar nature which may be available to any person
entitled to the benefit of such indemnity to set against or otherwise
mitigate any liability arising from any Claim for Taxation so that the
indemnity in Clause 2.1 shall take effect as though no such Reliefs,
rights or repayment or other rights or claims were available.
3. LIMITATION OF LIABILITY
3.1 The Vendors shall not incur liability under the indemnities
hereinbefore contained by reason of a Liability to Taxation or Claim
for Taxation imposed on the Company or its subsidiaries and/or the
Purchaser:-
(a) to the extent that full provision or reserve in respect thereof was
specifically made in the Accounts;
(b) to the extent that the Liability to Taxation or Claim for Taxation
arises or is increased as a result only of any increase in rates of
Taxation made after Completion with retrospective effect;
(c) to the extent that the liability to make such payment would not have
arisen but for a voluntary act, transaction or omission carried out
(other than pursuant to a legally binding commitment created on or
before Completion) by the Company or its subsidiaries after Completion
and otherwise than in the ordinary course of business; and
39
(d) to the extent that the liability to make such payment is in respect of
Taxation for which the Company or its subsidiaries is primarily liable
arising as a result of transactions carried out by them in the
ordinary course of business after Completion.
4. NOTICE OF CLAIMS
If the Purchaser and/or the Company or its subsidiaries shall become
aware of any Claim for Taxation relevant for the purposes of this Deed
it shall as soon as reasonable and practicable give written notice
thereof to the Vendors and shall (if the Vendors shall indemnify and
secure the Purchaser and/or the Company or its subsidiaries as the case
may be to their reasonable satisfaction against all losses, costs,
damages, charges and expenses including interest, fines, penalties and
interest on overdue tax which may be incurred hereby) take such action
and give such information and assistance in connection with the affairs
of the Company or its subsidiaries as the Vendors may reasonably and
promptly by written notice request to avoid, resist, appeal or
compromise such Claim for Taxation PROVIDED THAT the Purchaser and the
Company or its subsidiaries shall not be obliged to appeal against any
Claim for Taxation made on them if after the Vendors have been given
written notice of such claim pursuant hereto they have not within 15
days thereafter received from the Vendors instructions in writing to do
so and PROVIDED FURTHER THAT in the final event any action taken shall
be at the discretion of the Purchaser or the Company or its
subsidiaries (as the case may be) and shall not interfere with the
ordinary course of their businesses and/or which in their opinions is
likely to prejudice their businesses and/or their relationships with
the relevant taxing, fiscal or other appropriate authority.
5. ASSIGNMENT
The whole of or any part of the benefit of this Deed may be assigned by
the Purchaser or the Company to the extent that the indemnities given
by this Deed shall ensure to the benefit of such party's successors and
assigns.
6. NOTICES
6.1 Delivery
All notices, demands or other communications which are required to be
given under this Deed shall be in writing in English and sent to:
(a) in the case of the Vendors:
Address : Xxxxx X, 00/X, Xxxx Xxxxx,000 Xxxxxx
Xxxx Xxxxxxxxxxx, Xxxx Xxxx
Facsimile number : 8621-52138870
Attention : Mr. Xxxxx Xxxx
40
(b) in the case of the Purchaser:
First Information Technology Limited
Address : 19/F., Wing Xx Xxxxx, 00 Xxx Xxxxx
Xxxx Xxxxxxx Xxxx Xxxx
Facsimile number : (000) 0000-0000
Attention : Xx. Xxxxxxx Xxxxx
(c) in the case of the Company:
Address : 19/F., Wing Xx Xxxxx, 00 Xxx Xxxxx
Xxxx Xxxxxxx Xxxx Xxxx
Facsimile number : (000) 0000-0000
Attention : Xx. Xxxxxxx Xxxxx
or to such other address or facsimile number or marked for the
attention of such other person as the recipient may designate by notice
given in accordance with the provisions of this Clause 6.
6.2 Receipt
Any such notice may be delivered personally or by prepaid post or sent
by facsimile transmission and shall be deemed to have been effectively
served:
(a) on the day of receipt, where any personally delivered letter
or facsimile message is received on any Business Day before or
during normal working hours;
(b) on the following Business Day, where any personally delivered
letter or facsimile message is received either on any Business
Day after normal working hours or on any day which is not a
Business Day;
(c) on the third Business Day following the day of posting, upon
despatch from within Hong Kong of any posted letter to the
address of a recipient in Hong Kong, unless actually received
sooner; or
(d) on the seventh Business Day following the day of posting, upon
despatch from within Hong Kong of any posted letter to the
address of an overseas recipient (and vice-versa), unless
actually received sooner.
6.4 Nothing in this Clause 6 shall preclude the service of communication or
the proof of such service by any other mode permitted by law.
7. GOVERNING LAW
7.1 This Deed shall be governed by and construed in accordance with the
laws of Hong Kong.
7.2 Each party irrevocably and unconditionally submits to the non-exclusive
jurisdiction of the courts of Hong Kong and courts of appeal from them.
Each party waives any right it has to object to an action being brought
in those courts, to claim that the action has been brought in an
inconvenient forum, or to claim that those courts do not have
jurisdiction.
41
8. PROCESS AGENT
8.1 The Vendors hereby irrevocably appoint First Shanghai Management
Services Limited of 19/F, Wing Xx Xxxxx, 00 Xxx Xxxxx Xxxx Xxxxxxx,
Xxxx Xxxx as its/his process agent to receive on its/his behalf service
of process in any proceedings in Hong Kong with respect to this
Agreement. Service shall be deemed completed on delivery to such
process agent for Vendors (whether or not such service is forwarded to
or received by the Vendors).
8.2 The Company hereby irrevocably appoints First Shanghai Management
Services Limited of 19/F, Wing Xx Xxxxx, 00 Xxx Xxxxx Xxxx Xxxxxxx,
Xxxx Xxxx as its process agent to receive on its behalf service of
process in any proceedings in Hong Kong with respect to this Agreement.
Service shall be deemed completed on delivery to such process agent for
the Company (whether or not such service is forwarded to or received by
the Company).
8.3 If for any reason the process agent for Vendors or the process agent
for the Company ceases or fails to act as process agent, the Vendors or
the Company (as the case may be) agree to appoint their respective
substitute process agent acceptable to other parties and to deliver to
other parties proof of the newly appointed process agent's acceptance
of such appointment within 7 calendar days.
IN WITNESS whereof this Deed has been duly executed the day and year first
before written.
42
The Vendors
SIGNED under seal by )
)
and SIGNED by )
for and on behalf of )
HARTCOURT CHINA INC )
in the presence of: )
Xx Xxx Xx Xxxx )
Passport No: )
SIGNED by )
in the presence of : )
The Purchaser
SIGNED by )
for and on behalf of )
FIRST INFORMATION TECHNOLOGY LIMITED )
in the presence of: )
The Company
SIGNED by )
for and on behalf of )
HOPEFUL INTERNET TECHNOLOGIES LIMITED )
in the presence of: )
43
SCHEDULE 5
(PARTICULARS OF THE PURCHASER)
1. Name : First Information Technology Limited
2. Place of Incorporation : British Virgin Islands
3. Company Incorporation No : 324414
4. Date of Incorporation : 12th May 1999
5. Authorised Share Capital : US$50,000.00 divided into 5,000,000
ordinary shares of US$0.01 each
6. Number of Issued Shares : 7,821 ordinary shares of US$0.01 each
7. Shareholder and number of
Shares held : First Shanghai Investments Limited held
7,821 ordinary shares of US$0.01 each
44
