English Translation) June 4, 2007
(English
Translation)
June
4, 2007
| Transferor: |
XXX,
XXX XXXX XXXX
|
| Transferee: |
CHINA
SAFETECH HOLDINGS LIMITED
|
| Party C: |
CHINA
SECURITY & SURVEILLANCE TECHNOLOGY, INC.
|
|
of
All
Issued Shares
of
ALLIED
RICH LIMITED
|
This
Equity Transfer Agreement (the “Agreement”)
is
entered into by and among the following parties on June 4, 2007:
|
(1)
|
|
(2)
|
CHINA
SAFETECH HOLDINGS LIMITED,
a
company incorporated in British Virgin Islands, whose address
is
X00, Xxxxx Xxxxx, Xxxxxxx Xxxxxx Special Zone, Futian District, Shenzhen
(hereinafter
referred to as “Transferee”);
|
| (3) |
CHINA
SECURITY & SURVEILLANCE TECHNOLOGY, INC.,
a
company incorporated in Delaware, United States, whose address is
X00,
Xxxxx Xxxxx, Xxxxxxx Xxxxxx Special Zone, Futian District, Shenzhen
(hereinafter
referred to as “Party
C”);
|
The
Transferor, the Transferee and Party C above shall be individually referred
to
as a “Party”
and
collectively referred to as the “Parties”.
WHEREAS
ALLIED
RICH LIMITED,
a
limited liability company legally organized and validly existing under
the
Company Ordinance of Hong Kong, whose information is listed as Exhibit
I
(hereinafter referred to as “Allied
Rich”),
and
whose all issued shares are beneficially held by the
Transferor.
| WHEREAS |
Allied
Rich invests and acquires Changzhou
Minking Electronics Co., Ltd.,
a
wholly foreign owned company legally organized and validly existing
under
the laws of People’s Republic of China, whose information is listed as
Exhibit III (hereinafter referred to as “Minking”),
and whose all shares are beneficially held by Allied
Rich.
|
| WHEREAS |
The
Transferee desires to purchase from the Transferor and the Transferor
desires to transfer to the Transferee 100% issued shares of Allied
Rich.
Upon completion of the transfer under this Agreement, the Transferee
shall
indirectly and fully acquire 100% shares and control power of
Minking.
|
NOW,
THEREFORE,
the
Parties hereby agree as follows:
Article
1 Definitions
| 1.1 |
Unless
otherwise defined in this Agreement, the following terms shall have
the
meanings indicated as follow:
|
|
“Company
Ordinance”
|
means
Chapter 32 Company Ordinance of the laws of Hong Kong;
|
|
|
“Shares
for Transfer”
|
means
10,000 common share of Allied Rich owned by the Transferor to be
transferred from the Transferor to the Transferee under this Agreement,
constituting 100% issued and outstanding stock of Allied Rich (for
details
please refer to Exhibit II - Part A);
|
|
|
“Share
Transfer”
|
means
100% issued shares of Allied Rich to be transferred from the Transferor
to
the Transferee under Article 2.1 hereof;
|
|
|
“Balance”
|
shall
have the meaning as provided in Article 3.2.1(2);
|
|
|
“Total
Transfer Price”
|
means
total price paid to the Transferor by the Transferee under Article
3.1
hereof;
|
|
|
“Closing
Date”
|
June
4, 2007;
|
|
|
“Accounts
of Allied Rich”
|
means
management and financial statements of Allied Rich as of March 31,
2007,
the copies of which are attached as Exhibit A hereof;
|
|
|
“Minking
Accounts”
|
means
management and financial statements of Minking as of March 31, 2007
the
copies of which are attached as Exhibit B hereof;
|
|
|
“Business
Day and Working Hours”
|
||
|
“PRC”
|
means
People’s Republic of China;
|
|
|
means
Hong Kong Special Administrative Region of PRC;
|
||
|
“HKD”
|
means
legal currency of Hong Kong;
|
|
|
“USD”
|
means
legal currency of United States;
|
|
|
“RMB”
|
means
legal currency of PRC.
|
2
| 1.2 |
In
this Agreement:
|
|
(i)
|
Any
rule or law involved herein shall include any and all amendments,
supplements or reenactments thereof from time to
time;
|
|
(ii)
|
Words
and terms contained in Companies Ordinance shall be interpreted according
to definitions stipulated in Companies Ordinance except as otherwise
defined or stated in this Agreement, however, any amendment or change
to
Companies Ordinance shall be excluded which is not enforced before
or on
the date to execute this Agreement.
|
|
(iii)
|
Single
word also includes plural meaning; word referred to any gender also
includes the other gender and neuter, word referred to person also
includes groups (legal person or non-legal person) and (under every
circumstance), vice versa;
|
|
(iv)
|
The
parties, descriptions, exhibits, appendices and terms and conditions
mentioned herein shall be respectively referred to the parties,
descriptions, exhibits, appendices and terms and conditions hereof;
and
|
|
(v)
|
The
headings and table of contents in this Agreement are provided for
reference only and will not affect its construction or
interpretation.
|
Article
2 Share Transfer
| 2.1 |
According
to the provisions in this Agreement, the Transferor, as the beneficial
owner of all issued and outstanding shares of Allied Rich (for more
details please refer to Part A, Exhibit II), will transfer such Shares
for
Transfer to the Transferee (for more details please refer to Part
B,
Exhibit II). After such transfer, the Transferee will own 100% issued
and
outstanding shares of Allied Rich.
|
| 2.2 |
Upon
the completion of transaction hereunder, Shares for Transfer shall
be free
and clear of any mortgage, lien or property encumbrances of any form,
and
Shares for Transfer shall be transferred with all rights attached
or
accumulated thereto, including all dividends and profits accumulated
and
distributed from the completion date and the investment in Minking
by
Allied Rich.
|
Article
3 Transfer Price
| 3.1 |
Transfer
Price
|
The
Transferor and the Transferee agree, the Transferor shall transfer to the
Transferee Shares for Transfer. In return, the Transferee shall pay to the
Transferor the Total Transfer Price of RMB 200,000,000, consisting of RMB
100,000,000 in cash and the OTCBB listed shares of Party C with the value of
RMB
100,000,000.
3
| 3.2 |
Method
of Payment
|
| 3.2.1 |
The
Transferee shall pay the Total Transfer Price to the Transferor as
follows:
|
| (1) |
The
Transferee has paid to the Transferor USD3,952,555
before the Closing Date.
|
| (2) |
The
Transferee shall pay the remaining price of USD8,900,915 (“Balance”)
upon the execution of this
Agreement.
|
| (3) |
The
Transferee (through its parent company, Party C) shall issue restricted
shares equal to RMB100,000,000
to the
Transferor or its designees within
ninety days after the execution date of this Agreement, and the share
value shall be calculated based
on the average of the closing price of Party C’s common stock on the OTCBB
for the 20 trading days prior to January 29, 2007 (USD13.27/share),
which means that the Transferee shall issue 968,611 shares to the
Transferor. The Transferor shall pledge certain shares to the Transferee
as provided under Article 5.2
hereof.
|
| 3.2.2 |
The
Transferee shall remit the Balance to the bank accounts designated
by the
Transferor, the information of which will be provided
otherwise.
|
| 3.3 |
Exchange
Rate
|
Cash
of
the total transfer price shall be paid by the Transferee to the Transferor
in
USD. Exchange Rate of RMB against USD shall be 1:7.78.
Article
4 Closing
| 4.1 |
The
Share Transfer shall be completed on the Closing Date at the place
stipulated by both parties in accordance with Exhibit
V.
|
| 4.2 |
Terms
and conditions to be performed hereof shall remain in force after
the
Closing Date.
|
| 4.3 |
From
the Closing Date, debts and credits and all risks of Allied Rich
and
Minking shall be promptly borne by the Transferee (except otherwise
undertaken by the Transferor in Exhibit
IV).
|
| 4.4 |
From
the Closing Date, the Transferee shall have the right to consolidate
profits of Allied Rich and Minking with the Transferee group. At
the
meantime, the Transferee shall have the right to appoint manager
or
financial person, or authorize to appoint existing personnel of Allied
Rich and Minking to take charge of management and operation of Allied
Rich
and Minking as well as all files, materials, financial documents
and so
on. The Transferor shall not enjoy any shareholder right and/or interest
of Allied Rich and Minking from the Closing Date because of such
Share
Transfer, provided
however,
the Transferor shall be liable for all obligations that are required
to be
borne by the Transferor under applicable laws and this
Agreement.
|
4
Article
5 Warrants, Representations and Covenants of the
Transferor
| 5.1 |
In
addition to the information disclosed in this Agreement, the Transferor
warrants, represents and covenants to the Transferee under terms
and
conditions stipulated in Exhibit IV, which also constitute the base
for
the Transferee to accept the Shares for
Transfer.
|
| 5.2 |
The
Transferor covenants to the Transferee that the profits after tax
in 2007
audited by US Auditors shall reach three levels: RMB20,000,000,
RMB22,500,000 and RMB25,000,000. If profits after tax reach RMB20,000,000,
the Transferee shall release pledged shares equivalent to USD1,100,000
to
the Transferor
or its designee;
if Minking reaches profits after tax of RMB22,500,000, the Transferee
shall release pledged shares equivalent to USD2,200,000 to the Transferor
or its designee; and if Minking reaches profits after tax of
RMB25,000,000, the Transferee shall release pledge shares equivalent
to
USD3,213,368 to the Transferor or its designee. The Transferor also
covenants to the Transferee that Minking’s profits after tax in 2008 which
are audited by US Auditors shall reach three levels: RMB30,000,000,
RMB32,500,000, and RMB35,000,000. If Minking reaches profits after
tax of
RMB30,000,000, the Transferee shall release pledged shares equivalent
to
USD1,100,000 to the Transferor or its designee; if Minking reaches
profits
after tax of RMB32,500,000, the Transferee shall release pledged
shares
equivalent to USD22,000,000 to the Transferor or its designee; and
if
Minking reaches profits after tax of RMB35,000,000, the Transferee
shall
release pledged shares equivalent to USD3,213,367 to the Transferor
or its
designee.
|
Article
6 Warrants, Representations and Covenants of the Transferee and Party
C
| 6.1 |
The
Transferee covenants to keep the organization structure of Allied
Rich and
Minking after the Share Transfer, expand its brand influence, fully
support business development of Allied Rich and Minking. The Transferee
shall also provide financial support as required by business based
on the
real situation according to relevant laws and
regulations.
|
| 6.2 |
The
Transferee covenants that existing employees of Allied Rich and Minking
shall remain employed given that they are willing to stay and their
stay
will not impede development of companies after Share Transfer; arrangement
of senior management and technical staff and the operation rights
and
benefits of such persons shall be governed by separate agreements
to be
entered after the Share Transfer. In addition, the Transferee covenants
that benefits of such persons shall not be lower than their previous
benefits.
|
5
| 6.3 |
The
Transferee shall provide appropriate operation funds to Allied Rich
and
Minking in order to support the Transferor to realize profits after
tax
for 2007 and 2008, dates and amounts of providing such funds shall
be
otherwise stipulated.
|
| 6.4 |
Party
C shall file relevant reports with the U.S. Securities and Exchange
Committee (“SEC”) according to law and issue shares to the Transferor
under Article 3.2.1(3) hereof after the execution of this
Agreement.
|
Article
7 Governing Law
This
Agreement shall be governed and construed by rules and laws of Hong
Kong.
Article
8 Settlement of Disputes and Agent of Receiving Legal Procedure
Documents
| 8.1 |
Any
dispute arising out of or relating to this Agreement, shall be settled
by
friendly negotiation and discussion. If no agreement is reached through
friendly negotiation and discussion, such dispute shall be finally
arbitrated by Hong Kong International Arbitration Center(HKIAC) in
accordance with HKIAC Arbitration Rules then in effect. Unless otherwise
provided in the arbitration rules of HKIAC then in effect, the arbitration
shall be the sole and exclusive method and procedure of any dispute
arising out of or relating to this
Agreement.
|
| 8.2 |
The
Parties to this Agreement agree that unless not permitted by the
applicable laws and rules, the arbitration terms hereto shall be
interpreted as and constitute the currently effective arbitration
agreement in writing with legal effect, and shall be granted with
such
effect. The Parties to this Agreement hereby expressly waive any
right of
possibly requested local administrative, judicial or alternative
dispute
settlement methods, as the conditions of any settlement procedure
which
arising out of this Agreement.
|
| 8.3 |
The
Parties to this Agreement expressly represent that the award made
according to Article 8 hereof shall be final award binding upon the
Parties. In addition, the Parties to this Agreement hereby waive
the right
to appeal the award made according to Article 8 hereof. The Article
8
shall constitute the most comprehensive exclusive agreement to the
extent
permitted by the applicable laws.
|
| 8.4 | (1) |
The
Transferee irrevocably entrusts BOYU ENTERPRISE CONSULTING CO., LIMITED,
whose address is Xxxx X0, 0/X, Xxxxxx Xxxxx Xxxxxxxxxx Xxxxxxxx,
000-000
Xxxxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx (“Agent”),
to receive legal procedure documents and to be on behalf of the Transferee
to receive claims arising out of or relevant to the Agreement or
the legal
procedures in Hong Kong (including but not limited to, claims for
reimbursement, summons, arbitration application and arbitration award)
(“Legal Procedure Documents”).
|
6
| (2) |
Transferee
undertakes to consecutively entrust the Agent as the agent of receiving
Legal Procedure Documents, in order to on behalf of the Transferee
receive
Legal Procedure Documents in Hong Kong and immediately notify the
Transferor in writing if the Agent or its address is
modified.
|
| (3) |
The
Transferee agrees and confirms that Legal Procedure Documents which
have
been sent to its Agent shall be deemed as having been sent to any
Transferee.
|
Article
9 Liabilities for Breach of Contract
| 9.1 |
If
any statement or warrants made by any Party in this Agreement is
untrue or
false, it shall be deemed as breach of contract by the
Party.
|
| 9.2 |
Any
Party to this Agreement changes minds on purpose and cause the failure
of
the share transfer, it shall be deemed as breach of contract by the
Party.
|
| 9.3 |
The
breaching party shall, in addition to performance of other obligations
under this Agreement, compensate the observant party all losses,
damages,
expenses suffered by the observant party due to breach of contract
caused
by breaching party.
|
| 9.4 |
If
the Transferor changes minds on purpose and cause that the shares
cannot
be transferred to the Transferee or the shares is forfeited after
transfer, the Transferee shall have the right to terminate the Agreement,
and The Transferor shall return the share transfer price or the shares
and
assume liabilities under Article 9.3 of this
Agreement.
|
Article
10 Force Majeure and Change of Circumstances
| 10.1 |
If
any Party to this Agreement cannot perform any part or all of the
terms
hereto directly or indirectly because of events such as fire, flood,
earthquake or other unforeseeable, unavoidable and/or uncontrollable
events, the Party shall be exempted from liabilities to the extent
as
affected by force majeure.
|
| 10.2 |
If
any Party or Parties lose(s) its/their interests under this Agreement
because of legislation, or administration order or specific administration
act of government, any Party shall have the right to terminate this
Agreement and to restore to the conditions before the execution of
this
Agreement.
|
| 10.3 |
Any
Party affected by force majeure shall deliver the other Party the
written
notice regarding the occurrence of force majeure within 12 days after
the
occurrence of the force majeure
event.
|
7
| 10.4 |
After
the occurrence of force majeure event, the Parties to this Agreement
shall
immediately consultant and decide whether to delay the performance
of this
Agreement to a day in the future agreed by the Parties or to terminate
this Agreement.
|
| 10.5 |
If
any Party delays or unable to perform all or part of the terms of
this
Agreement for more than 30 days as a result of force majeure, the
other
Party shall have the right to rescind this Agreement, and the Parties
shall take all necessary actions to restore the rights and obligations
of
all parties to their respective original
positions.
|
Article
11 Miscellaneous
| 11.1 |
This
Agreement and its involved relevant documents constitute the full
understanding of the Parties regarding the share transfer, and replace
any
previous intention, expression and understanding of the
Parties.
|
| 11.2 |
If
any term of this Agreement is regarded as illegal, invalid or
unenforceable at any time, the validity, effectiveness and enforceability
of other terms of this Agreement shall not affected or impaired in
any way
and shall remain the full validity.
|
| 11.3 |
This
Agreement shall bind the Parties and their respective successors
and
assignees. The interests of this Agreement shall be assigned to the
Parties hereto and their respective successors and assignees. Without
the
permission of the Parties in writing, any Party shall not amend,
modify or
revise this Agreement.
|
| 11.4 |
This
Agreement shall be effective upon
signing.
|
| 11.5 |
Without
the permission of the Parties in writing (the relevant permission
shall
not be withheld without reasonable reasons), the Parties hereto shall
not
transfer any rights or obligations under this
Agreement.
|
| 11.6 |
The
Parties agree to bear all the cost and expense in respect of the
negotiation, preparation, execution and performance of the Agreement
and
the taxes arising from the transfer of Shares for Transfer. The stamp
tax
and all other tax and expenses arising out of the transfer of Shares
for
Transfer (including but not limited to, arising out of in China or
in any
other areas), shall be borne and paid by the
Transferor.
|
| 11.7 |
Unless
provided and required by laws, regulations, order or judgments by
the
competent authorities or courts (including, but not limited to, applicable
regulation of security exchanges), without the previous permission
of the
other Party in writing (the relevant permission shall not be withheld
without reasonable reasons), any Party shall not make or distribute
any
related press statement or
announcement.
|
8
| 11.8 |
Without
the prior permission of the other Party in writing, any Party shall
not
disclose the Agreement or any content or material in connection with
any
transaction of this Agreement, excluding the following
disclosure:
|
|
(1)
|
the
disclosure is made according to the provisions of applicable laws,
regulations and rules (including, but not limited to, regulations
of
security exchanges) or requirements of relevant government authorities
or
supervision authorities, or court
orders;
|
|
(2)
|
the
disclosure is made to Allied Rich, Minking, or its higher competent
authorities or approval and examination authorities, or to contacted
bank
or professional consultant of the disclosing
Party;
|
|
(3)
|
the
disclosure is made by the Transferor to the company of its company
group
or senior management thereof.
|
| 11.9 |
If
any term of this Agreement is or becomes illegal, invalid or unenforceable
at any time in any respect, other terms of this Agreement shall not
be
affected or impaired.
|
| 11.10 |
Any
notice required to be sent under this Agreement shall be sent in
writing.
The notice shall be delivered to the following address or fax number
or
other address or fax number that the recipient designates according
to
this Agreement:
|
|
(1)
|
Transferor:
|
XXX,
XXX XXXX XXXX
|
|
Address:
|
Flat
B3107, Man Wah House,
Lok
Wah Estate,
Ngau
Tau Kok,
Kowloon,
Hong Kong
|
|
|
Telephone:
|
(000)
0000 0000
|
|
|
Fax:
|
(000)
0000 0000
|
|
|
(2)
|
Transferee:
|
CHINA
SAFETECH HOLDINGS LIMITED
|
|
Address:
|
Xxxxx
00, Xxxxx Xxxxx, Xxxxxxx Xxxxxx Special Zone, Futian District,
Shenzhen
|
|
|
Telephone:
|
(00-000)
0000 0000
|
|
|
Fax:
|
(00-000)
0000 0000
|
|
|
(3)
|
Party
C:
|
CHINA
SECURITY & SURVEILLANCE TECHNOLOGY, INC.
|
|
Address:
|
Xxxxx
00, Xxxxx Xxxxx, Xxxxxxx Xxxxxx Special Zone, Futian District,
Shenzhen
|
|
|
Telephone:
|
(00-000)
0000 0000
|
|
|
Fax:
|
(00-000)
0000 0000
|
| 11.11 |
Any
notice can be sent by mail with postage pre-paid, personal delivery,
courier with good reputation or by facsimile, and shall be deemed
as
delivered at the following time:
|
9
| (1) |
two
days (seven days if sending by airmail with postage prepaid) after
post
(the date of postmark is the posting date) for those sent by mail
with
postage prepaid;
|
| (2) |
the
next business day for those sent by
fax;
|
| (3) |
the
receiving time for those sent by courier or personal
delivery.
|
Any
notice to the Transferee, when properly delivered to any Transferee, shall
be
regarded as delivered to the other Transferee.
| 11.12 |
This
Agreement shall be written in Chinese in three copies with each Party
holding one copy.
|
10
IN
WITNESS WHEREOF,
this
Agreement has been executed by the Parties on the date first above written
and
the Parties confirm that the Parties have carefully reviewed and fully
understand all the provisions of the Agreement.
|
The
Transferor
XXX,
XXX XXXX XXXX
|
||
|
Signature
:
/s/
XXX, XXX XXXX XXXX
|
||
|
Place
of Signature :
Shenzhen
|
Witness
:
XXXX
Xxxxxxxx
The
Transferee
|
TU
Guoshen
for and on behalf of
CHINA
SAFETECH HOLDINGS LIMITED
|
||
|
Signature
: /s/
Tu Guoshen
|
||
|
Place
of Signature :
Shenzhen
|
Witness :
LUO
Ganqi
|
Party
C
To
execute, chop and deliver
TU
Guoshen
for and on behalf of
CHINA
SECURITY & SURVEILLANCE TECHNOLOGY, INC.
|
||
|
Signature
: /s/
Tu Guoshen
|
||
|
Place
of Signature :
Shenzhen
|
||
|
Witness
:
LUO
Ganqi
|
11
Exhibit
I
Information
of Allied Rich
| Name in English : |
ALLIED
RICH INVESTMENT LIMITED
|
| Place of Registration : |
Hong
Kong
|
| Registered Address : |
Xxxx
X0, 0/X, Xxxxxx Xxxxx Xxxxxxxxxx Xxxxxxxx, 000-000 Xxxxxxxx Xxxx,
Xxxxxxx,
Xxxx Xxxx
|
| Date of Registration and Establishment : |
February
23, 2007
|
| Company Form : |
Limited
Liability Company
|
| Director : |
XXX,
XXX XXXX XXXX
|
| Company Secretary : |
JPS
CONSULTING LIMITED
|
| Shares : Legally : |
HKD10,000,
divided into 10,000 shares with face value of HKD1.00 per share
|
| Issued and fully paid : |
HKD10,000,
divided into 10,000 share with face value of HKD1.00 per
share
|
12
Exhibit
II
Part
A
Information
of Shares for Transfer
|
Company
|
Registered
Shareholder
|
Quantity
of Common Shares
|
Face
Value Per Share
|
Percent
of Issued Shares
|
|
|
|
|||
|
Allied
Xxxx
|
XXX,
SIU XXXX XXXX
|
10,000
|
HKD
1 yuan
|
100%
|
Part
B
Information
of the Recipient of Shares for Transfer
|
The
Transferee
|
Amount
of Share to Be Transferred
|
|
CHINA
SAFETECH HOLDINGS LIMITED
|
10,000
|
13
Exhibit
III
Information
of Minking
|
Name
|
:
|
Changzhou
Minking
Electronics Co., Ltd.
|
|
Legal
Address
|
:
|
Xx.
00-00, Xxxxxxxx Xxxx, Xxxxxxxx Economic Development Zone, Changzhou,
Jiangsu Province
|
|
Enterprise
Type
|
:
|
Wholly
Foreign Owned Enterprise
|
|
Date
of Establishment
|
:
|
February
23, 2001
|
|
Business
License No.
|
:
|
Qi
Xx Xx Xxxxx Xxxx Xx Xx Xx. 000000
|
|
Operational
Term
|
:
|
20
years
|
|
Total
Investment
|
:
|
RMB16
million Yuan
|
|
Registered
Capital
|
:
|
RMB8
million Yuan
|
|
Investor
|
:
|
ALLIED
RICH INVESTMENT LIMITED
|
|
Legal
Representative
|
:
|
XXX,
XXX XXXX XXXX
|
|
Directors
|
:
|
XXX,
XXX XXXX XXXX
|
|
Business
Scope
|
:
|
To
develop and manufacture digital cable TV system equipment, digital
recorder, digital audio/video encoding equipment, software products;
to
manufacture and process security productive products, equipment
for
electronic products; to engage in design and construction business
of
security and protection project; to sale self-produced
products.
|
14
Exhibit
IV
Representations
and Warranties
| 1. |
Allied
Rich and Minking are companies legally established and validly existing
under the laws of their respective places of
establishment.
|
| 2. |
Allied
Rich and Minking have been authorized and qualified to conduct business
within the jurisdiction of their existing
businesses.
|
| 3. |
The
operation businesses and their operation of Allied Rich and Minking
have
been in material compliance with the relevant
laws.
|
|
4.
|
Accounts
of Allied Rich and Minking have been properly recorded in accordance
with
the account categories and the generally accepted account principles,
standards and laws of their establishment place, which have truly
represented and reflected the status of Allied Rich and Minking
respectively for the fiscal year or the period ending on the date
of the
relevant book account.
|
| 5. | (a) |
Exhibit
I has listed all the directors and company secretaries of Allied
Rich
before the completion of the transaction as of the Closing
Date.
|
| (b) |
Exhibit
III has listed the legal representative and all the directors of
Minking
before the completion of the transaction as of the Closing
Date.
|
| (c) |
There
has not been any shareholder resolution adopted to liquidate Allied
Rich
and Minking before the completion of the transaction as of the Closing
Date.
|
|
6.
|
The
register of shareholders of Allied Rich has truly and correctly recorded
the date and the changes of shareholders from the establishment to
the
completion date and before the completion of the
transition.
|
|
7.
|
Any
share warrant has not been sent or given to any person in respect
of any
share of Allied Rich and Minking by the Transferor, Allied Rich and
Minking.
|
| 8. | (a) |
Allied
Rich has not conducted any business activities other than holding
shares
of Minking.
|
| (b) |
Allied
Rich has Minking as its only one subsidiary company. Minking has
no
subsidiary companies.
|
|
9.
|
Articles
of associations of Allied Rich and duplicate of articles of associations
of Minking have been delivered to Transferee, which shall be true
and
complete.
|
|
10.
|
If
any thing conflicts or is inconsistent with foregoing warrants before
the
closing date, the Transferee agrees to immediately notify the Transferor
in writing.
|
15
|
11.
|
Allied
Rich has fully paid the issued shares. Minking has fully contributed
the
registered capital.
|
|
12.
|
The
Transferor shall be the solely and legal beneficial owner of the
Shares
for Transfer. The Shares for Transfer shall not be imposed of any
mortgage, lien or property
encumbrances.
|
|
13.
|
Allied
Rich owns 100% of shares of Minking. Allied Rich shall be the solely
and
legal beneficial owner of the shares. The shares shall not be imposed
of
any mortgage, lien or property
encumbrances.
|
|
14.
|
The
Transferor shall have the authority to execute the Agreement and
can sell
any shares for transfer without any third party’s permission. The
Agreement shall be legally binding on the
Transferor.
|
|
15.
|
Except
for the ongoing litigations disclosed to the Transferee, Allied Rich
and
Minking have not currently been involved in any material litigation
or a
party to any litigation and/or any unexecuted verdict, and have not
been
subject to any ongoing material injunction or
order.
|
|
16.
|
Up
to the Closing Date, all or part of the assets or businesses of Allied
Rich and Minking have not been entrusted to take over by any person,
and
there are not any orders or applications before court or adopted
solutions
to close down Allied Rich and
Minking.
|
| 17. |
Except
for debts (including the outstanding tax fees)disclosed by the Transferor,
the Agreement or accounts of Allied Rich and Minking, Allied Rich
and
Minking shall not have any other debts and/or outstanding tax fees
as of
the Closing Date, which shall be assumed by the Transferor (if
any).
|
| 18. |
Except
for the information disclosed by the Transferor, the Agreement or
accounts
of Allied Rich and Minking, Allied Rich and Minking shall not have
other
unperformed material contracts.
|
| 19. |
The
net assets in 2006 audited by the US auditor and verified by
a third party
appraiser shall be more than RMB 35,000,000, the amount of sales
shall be
no less than RMB 100,000,000 and the net profits shall be no
less than RMB
16,000,000.
|
| 20. |
The
shareholders and the meeting of board of directors according to the
Company Law have reached a resolution to approve the share transfer
for
the issue of the share transfer under the
Agreement.
|
| 21. |
The
existing and outstanding legal liabilities of Allied Rich and Minking
before the Closing Date such as labor compensation disputes, bad
debts and
losses of bad assets, debt disputes and/or risks of contingent debts
shall
be assumed by the Transferor. For the losses which can be calculated
into
money, if the net assets of the target company are less than
RMB35,000,000, the Transferor shall be obliged to make it up to
RMB35,000,000.
|
16
|
22.
|
The
Transferor shall be fully responsible for all civil and criminal
liabilities of Allied Rich and Minking before and on the Closing
Date.
|
| 23. |
The
Transferor shall not manipulate any adverse change to the operations
of
Allied Rich and Minking on purpose (excluding the normal operation
and
force majeure) as of execution of this Agreement. The Transferor
shall
immediately inform the Transferee if there is any thing causing the
material change to the operation of Allied Rich and
Minking.
|
| 24. |
The
Transferor undertakes to assign WANG Qinghan to continue to be the
CEO of
Allied Rich and Minking for another five years and maintain the stability
of Allied Rich and Minking.
|
| 25. |
The
Transferor undertakes that XXXXX Xxx, XXXX Qinghan and XXXX Xxxx
and their
direct relatives (parents, spouse or children) shall not engage in
security and protection industry or operation in similar industry
in five
years.
|
17
Exhibit
V
Provisions
for the Closing
|
1.
|
Liabilities
of the Transferee
|
| (i) |
The
Transferee shall pay the Balance of the total price to the Transferor
according to Article 3.2.1 (2) of the Agreement and submit the proof
document of payment to the
Transferor.
|
| (ii) |
The
Transferee shall provide a consent letter executed by two persons
to be
the directors of Allied Rich and a consent letter executed by two
persons
to be the directors of Minking.
|
|
2.
|
Liabilities
of the Transferor
|
After
the
transferor confirms that its bank account under Article 3.2.2 of the Agreement
has received all the payment by the Transferee under Article 3.2.1, the
Transferor shall deliver and arrange the following to the
Transferee:
| (i) |
The
transfer documents (subject to official execution by the registered
shareholders of Allied Rich) and instruments for sale along with
shares in
connection with the Shares for Transfer;
|
| (ii) |
The
original copy of resignation executed by two current directors of
Minking
with stating that there are not any claims against
Minking;
|
| (iii) |
All
account books, registration certificates, business registration
certificates, articles of association, meeting records, statutory
books,
application forms, seals, offset printing, steel seals and all documents
relevant to the company businesses (if any) of Allied Rich controlled
by
the Transferor;
|
| (iv) |
The
Transferor shall incentive Allied Rich and Minking to hold a board
meeting
to approve (1) the transfer of the Shares for Sale relevant to Allied
Rich, and registration after payment of appropriate stamp taxes;
(2)
appointment of the persons nominated by the Transferee according
to law
and who are qualified to be directors of company under laws as the
two new
directors of Allied Rich and the two new directors of Minking under
the
written instruction of the Transferee; (3) after the completion of
the
foregoing (2), acceptance of resignation of the two directors of
the
Minking under the above (ii); and (4) suspension and change of the
operation of the bank accounts of Allied Rich and Minking, and appointment
of the person nominated by the Transferee as the authorized person
to
execute the bank accounts of Allied Rich and Minking under the written
instruction of the Transferee at least before two business
days;
|
| (v) |
The
original copy of records of the board meeting held for the issue
of the
above (iv) executed and confirmed by the directors of Allied Rich
and
Minking;
|
18
| (vi) |
The
documents controlled by Minking (refer to the list of Exhibit C);
|
| (vii) |
The
original resignation letter of the legal representative duly signed
by the
transferor with stating that there are not any claims against Minking;
and
|
| (viii) |
Legal
opinion reports issued by Hong Kong law firms and China law
firms.
|
| 3. |
The
Transferor and the Transferee shall make obvious marks on the seals
and
enter into the delivery memorandum to present the differences between
the
new users and the old users, while transferring
Minking.
|
19
