EXHIBIT 10.1
AGREEMENT AMONG
(1) PACIFICNET STRATEGIC INVESTMENT HOLDINGS LIMITED, AND PACIFICNET INC.
(2) GUANGZHOU YUESHEN TAIYANG TECHNOLOGY LIMITED
(3) GUANGZHOU YUESHEN ELECTRONIC TECHNOLOGY CO., LTD
(4) SHANGHAI CLASSIC GROUP LIMITED
(5) AVATAR TRADING LTD
(6) LI, YANKUAN
(7) XX, XXXXX
FOR THE SALE AND PURCHASE OF SHARES IN
SHANGHAI CLASSIC GROUP LIMITED
THIS AGREEMENT is made on April 12, 2004.
AMONG:
(1) PACIFICNET STRATEGIC INVESTMENT HOLDINGS LIMITED (Chinese Company Name
"chinese characters here"), a company existing under the laws of the
British Virgin Islands whose principal place of business is at Xxxx 0000,
Xxxx Xxxx Xxxxx, 000 Xxxxxxxxx Xxxx Xxxx, Xxxx Xxxx. (hereafter referred
as the "PURCHASER"). The Purchaser is a wholly owned subsidiary of
PacificNet Inc. ("PACT"), a company incorporated under the laws of the
State of Delaware in the United States of America whose principal office
is situate at 000 Xxxx Xxxxxxx Xxxx, Xxxxx 000, Xxxxx, XX 00000-0000, the
United States of America, the shares of which are listed on the NASDAQ
stock exchange in the United States of America under the trading symbol
of "PACT".
(2) GUANGZHOU YUESHEN TAIYANG TECHNOLOGY LIMITED (Chinese Company Name
"chinese characters here"), a company incorporated in Guangzhou, China
whose principal place of business is No 602 FL6 Huagong Building 808 East
Xxxxxxxx Xxxx Xxxxxxxxx Xxxxxxxxx 000000, Xxxxx (hereinafter referred to
as the "COMPANY");
(3) GUANGZHOU YUESHEN ELECTRONIC TECHNOLOGY CO., LTD (Chinese Company Name
"chinese characters here"), a company incorporated in Guangzhou, China
whose principal place of business is at No 602 FL6 Huagong Building 808
East Xxxxxxxx Xxxx Xxxxxxxxx Xxxxxxxxx 000000, Xxxxx (hereinafter jointly
referred to as the "SHAREHOLDER COMPANY");
(4) SHANGHAI CLASSIC GROUP LIMITED, a company existing under the laws of the
British Virgin Islands whose principal place of business is No 602 FL6
Huagong Building 808 East Xxxxxxxx Xxxx Xxxxxxxxx Xxxxxxxxx 000000, Xxxxx
and (hereinafter referred to as the "HOLDING COMPANY");
(5) LI, YANKUAN AIN (PRC ID: 440112195706120967), XX, XXXXX IAOAIA (PRC ID:
440106196412220919), and GUANGZHOU YUESHEN ELECTRONIC TECHNOLOGY CO., LTD
(Chinese Company Name "(chinese characters here"), a company Incorporated
in Guangzhou, China whose principal place of business is at No 602 FL6
Huagong Building 808 East Xxxxxxxx Xxxx Xxxxxxxxx Xxxxxxxxx 000000, Xxxxx
(hereinafter jointly referred to as the "WARRANTOR"); and
(6) LI, YANKUAN AIN and AVATAR TRADING LTD, a company existing under the laws
of the British Virgin Islands whOSE principal place of business is No 602
FL6 Huagong Building 808 East Xxxxxxxx Xxxx Xxxxxxxxx Xxxxxxxxx 000000,
Xxxxx (hereinafter jointly referred to as the "SELLER").
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WHEREAS:
A. The Company is a private company incorporated under the laws of the
People's Republic of China whose principal place of business is No 602
FL6 Huagong Building 808 East Xxxxxxxx Xxxx Xxxxxxxxx Xxxxxxxxx 000000,
Xxxxx
B. The Shareholder Company has an authorized capital of RMB 1,030,000,
representing the entire capital of the Company (the "SHARES"), and is
beneficially owned by shareholder as set out in Part I of Schedule 1.
C. The Shareholder Company owns an operation that engages in the wholesale
and retail of phone cards in China with the People's Republic of China
Registered Trademark RenWoXing ("(Y)oss.U|ae"), the domain name
xxxxx.xxx, and other liceNSEs to resell 263 and other Internet dialup
accounts and board-band Internet accounts. (the "Business");
D. The Holding Company owns 51% of the Company, whereas the Shareholder
Company owns 49% of the Company. Li, YanKuan and Xx, XxXxx owns 80% and
20% of the Shareholder Company, respectively. The Seller Li, YanKuan and
Avatar Trading Ltd owns 60% (=51/85) and 40% (=34/85) of the Holding
Company, respectively.
E. The Holding Company wish to sell to the Purchaser, and the Purchaser
wishes to purchase from Holding Company, 100% of the shares of Holding
Company (the "SALE SHARES"), and the Holding Company agrees to subscribe
from the Company the Subscription Shares (details of which are set out in
Part III of Schedule 1) all upon the terms and subject to the conditions
set forth herein.
F. The Purchaser requires the Warrantor to give such representations,
warranties, covenants and undertakings as are set out herein as a
condition to the Purchaser's entry into this Agreement.
NOW, THEREFORE, in consideration of the promises and the mutual
agreements and covenants hereinafter set forth, and intending to be
legally bound hereby, the parties to this Agreement hereby agree as
follows:
1. INTERPRETATION
1.1 The Recitals and Schedules form part of this Agreement and shall have the
same force and effect as if expressly set out in the body of this
Agreement and any reference to this Agreement shall include the Recitals
and Schedules.
2.2 In this Agreement except where the context otherwise requires the
following words and expressions shall have the following meanings:
"BVI" The British Virgin Islands;
"COMPLETION" completion of the sale and purchase of the Sale Shares
in accordance with Clause 5 of this Agreement;
"COMPLETION DATE" April 30, 2004 on or before 6 p.m. Beijing Time (or
such later date as the parties shall agree in writing);
"CONDITIONS" the conditions contained or referred to in Clause 4;
"CONSIDERATION" the consideration payable for the sale and purchase of
the Sale Shares to the Holding Company pursuant to
Clause 3 [as adjusted by clause 6];
"HONG KONG" Hong Kong Special Administrative Region of the PRC;
"HK$" Hong Kong dollars
"RMB" Chinese Renminbi
"PACT SHARES" Ordinary shares of PACT;
"PRC" People's Republic of China;
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"SALE SHARES" the 85 ordinary shares of US$1.00 each in the capital
of the Holding Company being held by the Seller and
such shares being beneficially owned by and registered
in the name of the Seller in the proportions inter se
set out in Part III of Schedule 1;
"SUBSCRIPTION SHARES" the 1,020,000 ordinary shares of RMB1.00 each in the
capital of the Company being 51% of entire issued share
capital of the newly registered Company to be issued to
the Holding Company;
"US$" United States dollars;
"UNITED STATES" United States of America;
1.3 Words and phrases (not otherwise defined in this Agreement) the
definitions of which are contained or referred to in the Companies
Ordinance (Cap. 32) shall be construed as having the meanings thereby
attributed to them.
1.4 References in this Agreement to ordinances and to statutory provisions
shall be construed as references to those ordinances or statutory
provisions as respectively as modified (on or before the date hereof) or
re-enacted (whether before or after the date hereof) from time to time
and to any orders, regulations, instruments or subordinate legislation
made under the relevant ordinances or provisions thereof and shall
include references to any repealed ordinance or provisions thereof which
has been so re-enacted (with or without modifications).
1.5 The headings are for convenience only and shall not affect the
construction of this Agreement.
1.6 All representations, undertakings, warranties, indemnities, covenants,
agreements and obligations given or entered into by more than one person
are given or entered into jointly and severally.
1.7 Except where the context otherwise requires words denoting the singular
include the plural and vice versa; words denoting any one gender include
all genders; words denoting persons include incorporations and firms and
vice versa.
1.8 Reference to clauses, sub-clauses, paragraphs and schedules are (unless
the context requires otherwise) to clauses, sub-clauses, paragraphs and
schedules of this Agreement.
1.9 The expressions the "Holding Company", the "Company", the "Seller" and
the "Purchaser" shall unless the context requires otherwise shall include
their successors, personal representatives and permitted assigns.
1.10 The schedules and appendices form part of this Agreement.
2. SALE OF SHARES
2.1 Subject to the terms of this Agreement the Seller shall sell as
beneficial owner and the Purchaser (relying on the representations,
warranties, agreements, covenants, undertakings and indemnities
hereinafter referred to) shall purchase the SALE SHARES free from all
options, liens, charges, pledges, claims, agreements, encumbrances,
equities and other third party rights of any nature whatsoever and
together with all rights of any nature whatsoever now or hereafter
attaching or accruing to it including all rights to any dividends or
other distribution declared paid or made in respect of them after the
date of this Agreement.
2.2 The Sale Shares shall be allotted and issued fully paid, and shall rank
pari passu in all respects among themselves and with the Shares in issue
on the date of allotment and issue, including the right to receive all
dividends, distributions and other payments made or to be made the record
date for which falls on or after the date of such allotment and issue.
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3. CONSIDERATION
3.1 The Consideration below for the Sale Shares of the Holding Company shall
be settled in accordance with the following provisions that the Purchaser
will pay the Seller:
a) USD $616,195 (approximately RMB 5,100,000 using exchange rate of
1USD= 8.27660 RMB) in payable in PACT Shares: equivalent to
106,240 Restricted PACT Shares (the "Escrow Shares") based on a
valuation of $5.80 per PACT share, payable to LI, YANKUAN or her
nominee(s) for 51 out of a total of 85 Sale Shares, in accordance
with the following:
o Within 30 days of the signing of this agreement, PURCHASER
shall deliver to the Escrow Agent (designated by the
Purchaser) the Escrow Shares, to be held under the terms of
an escrow agreement to be entered into with the Escrow
Agent, being the remaining payment of the purchase
consideration
In exchange, LI, YANKUAN will transfer to the Purchaser 51 out of
a total of 85 outstanding shares of the Holding Company, and;
b) USD $338,303.17 (approximately RMB 2,800,000 using exchange
rate of 1USD= 8.27660 RMB) payable to Avatar Trading Ltd
for 34 out of a total of 85 Sale Shares within 30 days
after the Completion as defined in Clause 5 of this
Agreement. In exchange, Avatar Trading Ltd will transfer to
the Purchaser 34 out of a total of 85 outstanding shares of
the Holding Company, and;
c) USD $241,645.12 (approximately RMB 2,000,000 using exchange
rate of 1USD= 8.27660 RMB) payable to the Company through
the Holdings Company for the Subscription Shares within 30
days after the Completion as defined in Clause 5 of this
Agreement, and;
d) A Common Stock Purchase Warrant to purchase 50,000 shares
("Warrant Shares") of PACT Common Stock, par value $0.0001
per share. The purchase price of one share of Common Stock
(the "Exercise Price") under this Warrant shall be the
5-Day Volume Weighted Average Price of the common stock of
PACT before the signing date of this Agreement, exercisable
within 3 years from the date of issuance.
3.2 In the event that:
(a) the Purchaser fails to receive any required regulatory approvals
by the SEC, NASDAQ, or fails to receive the approval of the
Shareholders of PACT if required; or
(b) the conditions set out in Clause 5 shall not have been fulfilled
by the Completion Date or such other date as the parties hereto
may agree in writing; or
(c) the transaction is not completed for any reason by April 30, 2004,
or if the;
the Escrow Agreement shall provide that the Escrow Shares shall be
returned to the Purchaser within ten (10) days following the date on
which the Purchaser rescinds this Agreement.
3.3 Escrow Arrangement for Consideration Shares
Warrantor hereby agrees and acknowledges that the total Consideration
payable by PACT is based on Warrantor's warranty in respect of the Net
Income of the Company as described in this section. In this regard
Warrantor hereby agrees to allow the Purchaser to appoint the Escrow Agent
upon the terms of the Escrow Agreement in the agreed terms to hold all the
Escrow Shares to be issued in accordance with the Escrow Agreement and this
Agreement on Completion and Warrantor undertakes that it shall not either
sell, transfer, charge, encumber, grant options over or otherwise dispose
of, or of any legal or beneficial interest in any of the Consideration
Shares until such part of the Consideration Shares are released by the
Escrow Agent to Warrantor in accordance with the following schedule :
-------------------------------------------------------- ---------------- ---------------------------------
Release Date Number of Release Criteria based on
(If receiving funds by April 5, 2004, assuming receipt Shares to be Accumulated Net Income
by PACT Auditors of certification that the auditor's Released
review relating to Company and its business is
acceptable and can be consolidated into PACT's audited
accounts, balance sheet and financial statements, in
accordance with the US GAAP.)
-------------------------------------------------------- ---------------- ---------------------------------
3.3.1. 45 days after closing. 26,560
restricted
PACT Shares
-------------------------------------------------------- ---------------- ---------------------------------
3.3.2. Within 30 days from the receipt of the 26,560 Company has achieved Net Income
Auditors certification of the Net Income for the 9 restricted for the 9 months ending on months
ending on September 30, 2004. PACT Shares September 30, 2004 not less than
RMB 800,000.
-------------------------------------------------------- ---------------- ---------------------------------
3.3.3. Within 30 days from the receipt of the 26,560 Company has achieved Net Income
Auditors certification of the Net Income for the 12 restricted for the 12 months ending on
months ending on December 31, 2004. PACT Shares December 31, 2004 not less than
RMB 1,300,000.
-------------------------------------------------------- ---------------- ---------------------------------
3.3.4. Within 30 days from the receipt of the 26,560 Company has achieved Net Income
Auditors certification of the Net Income for the 3 restricted for the 12 months ending on
months ending on March 31, 2005. PACT Shares December 31, 2004 plus the 3 months
ending on March 31, 2005 not less
than RMB 1,800,000.
-------------------------------------------------------- ---------------- ---------------------------------
TOTAL NUMBER of PACT Shares to be released from the 106,240 Company will be entitled to the
Escrow restricted entire escrow shares if it has
PACT Shares achieved Net Income for the 12 months
ending on December 31, 2004 plus the 3
months ending on March 31, 2005 not
less than RMB 1,800,000
-------------------------------------------------------- ---------------- ---------------------------------
Purchaser agrees that on the relevant release date (as referred to in
the above schedule) LI, YANKUAN or her nominee(s) will collect the
relevant portion of the Escrow Shares from the Escrow Agent (if the
Release Criteria has been met).
3.4 Net Income Warranty By Warrantor and Penalty
3.4.1 Warrantor warrants, represents and undertakes that:
(i) the total Net Income for the 12 months ending on
December 31, 2004 plus the 3 months ending on March
31, 2005 ("First Term") will not be less than RMB
1,800,000.
(ii) the total Net Income for the 12 months ending on
December 31, 2004 plus the 3 months ending on March
31, 2005 ("First Term") will not be less than RMB
2,500,000, if the Company receives the short-term
credit-line bank facility of RMB 10,000,000 by
September 1, 2004.
(iii) the total Net Income of COMPANY for the period from
April 1, 2005 to March 31, 2006 ("Second Term") will
not be less than RMB 3,500,000.
3.4.2 PENALTY IN CASE OF SHORTFALL OF NET INCOME BELOW RMB 1,800,000
FOR THE PERIOD 12 MONTHS AFTER RECEIVING FUNDS: In the event
that Company produces only a portion of the annual Net Income
warranted by Warrantor for the 12 months after receiving
funds, then Seller shall return to Purchaser the number of
PACT shares equivalent to the dollar amount of the shortfall
of the Net Income divided by US$5.80 (the original per share
price of the PACT stock at the closing).
3.5 Purchaser will not object to the Company to apply for a short-term
credit-line bank facility of RMB 10,000,000.
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3.6 USE OF PROCEEDS: Shareholder Company will pay back RMB 3,000,000 of third
party loan within 6 months after closing of the transaction. The
remaining cash from Purchaser to Company will be used for general
operation mainly to acquire calling cards in bulk from China Telecom,
China Mobile, and China Unicom. Purchaser will appoint financial
controller to Company.
3.7 In case of any stock split or reverse stock split by PACT, the number of
PACT shares to be issued, awarded, or returned will be adjusted according
to the stock split ratio.
3.8 Option Agreement for the Purchaser to Maintain 51% Ownership:
All parties hereby agree that upon Completion, the Company and
Shareholder Company shall immediately grant an option or warrant to the
Purchaser to purchase additional shares at the same price and
consideration as in Clause 3.1 of this Agreement, in order for the
Purchaser (and subsequent Holding Company) to maintain a 51% ownership in
the Company and Shareholder. Such option or warrant shall be immediately
exercisable upon any dilution caused by any new issuance of shares by the
Company and Shareholder Company for the purpose of fund raising, private
placement, public offering, or other corporate activity.
4 CONDITIONS
4.1 Any of the obligation of Purchaser hereunder is conditional upon:
4.1.1 the Purchaser being satisfied in its sole and absolute discretion
with the results of a legal and financial due diligence review to
be conducted by it on the Holding Company and the Company;
4.1.2 if required, the relevant stock exchange, government and
securities authority and regulator in the United States granting
listing of the PACT Shares to be issued herein;
4.1.3 if required, a resolution at a meeting of the Directors of PACT
approving this Agreement, the purchase of the Sale Shares,
creating and giving authority for the issue of the Escrow Shares,
the implementation of the transactions contemplated hereunder and
all other matters incidental hereto in accordance with the
provisions of PACT's articles of association and Bylaws and such
rules, regulations and laws in force from time to time in the
United States and which apply to PACT;
4.1.4 if required, the shareholders of PACT at a meeting of shareholders
approving this Agreement, the purchase of the Sale Shares,
creating and giving authority for the issue of the Escrow Shares,
the implementation of the transactions contemplated hereunder and
all other matters incidental hereto in accordance with the
provisions of PACT's articles of association and Bylaws and such
rules, regulations and laws in force from time to time in the
United States and which apply to PACT;
4.1.5 all amounts outstanding to the Seller by the Holding Company and
the Company have been either repaid to the Holding Company and the
Company or otherwise waived; and
4.1.6 the Purchaser being satisfied that the accounts of the Holding
Company and the Company can be consolidated into PACT's audited
financial statement, including balance sheet and income statements
in accordance with the US GAAP.
4.2 The Seller, the Holding Company, and the Company undertakes to disclose
in writing to the Purchaser anything which will or may prevent any of the
conditions from being satisfied at or prior to Completion, as applicable,
immediately upon the Seller and/or the Holding Company and/or the Company
becoming aware of such a situation.
4.3 From the date of this Agreement until Completion, except for the
transactions described herein or otherwise with the prior written consent
of the Purchaser:
(a) The Warrantor warrants and undertakes that they will cause the
Holding Company and the Company to:
(i) conduct its Business in the ordinary course and
consistent with past practices;
(ii) use its best efforts to maintain in full force and
effect the existence of the Holding Company and the
Company;
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(iii) promptly and timely prepare and file any financial
reports and franchise tax returns and pay all taxes
and assessments, if any, required to maintain the
existence of the Holding Company and the Company;
(iv) keep records in which true and correct entries will
be made of all material transactions by and with the
Holding Company and the Company;
(v) duly observe all material requirements of
governmental authorities unless contested in good
faith by appropriate proceedings with the consent of
the Purchaser;
(vi) promptly pay and discharge, or cause to be paid and
discharged, when due and payable, all lawful taxes,
assessments and governmental charges or levies
imposed upon the income, profits, property or
business of the Holding Company and the Company
unless contested in good faith by appropriate
proceedings with the consent of the Purchaser;
(vii) at all times comply with the provisions of all
contracts, agreements and leases to which the Holding
Company and the Company is a party, unless contested
in good faith by appropriate proceedings with the
consent of the Purchaser; and
(viii) to use best endeavors to procure that the employees
of the Holding Company and the Company at the date of
this Agreement remain and continue as employees after
completion;
(b) The Warrantor warrants and undertakes to cause the Holding
Company and the Company not to:
(i) modify its [Memorandum or Articles of Association]
[Bylaws];
(ii) cause or permit its liquidation or dissolution;
(iii) institute, or permit to be instituted against it, any
proceeding, which remains undismissed for a period of
[30] days after the filing thereof, seeking to
adjudicate it as bankrupt or insolvent, or seeking
liquidation, winding-up, reorganization, arrangement,
adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or
seeking the entry of any order or relief or the
appointment of receiver, trustee or other similar
official for it or for any substantial part of its
property;
(iv) make a general assignment for the benefit of its
creditors;
(v) except as agreed in this Agreement, declare or pay
any dividend or make any distribution to any of its
shareholders;
(vi) issue, redeem, sell or dispose of, or create any
obligation to issue, redeem, sell or dispose of, any
shares of its capital stock (whether authorized but
unissued or held in treasury);
(vii) effect any stock split, reclassification or
combination;
(ix) modify its agreements and other obligations with
respect to its long-term indebtedness, including but
not limited to its loan agreements, indentures,
mortgages, debentures, notes and security agreements;
4.4 Until Completion, the Warrantor, the Holding Company and the Company
shall procure that the Purchaser, its agents and representatives are
given reasonable access to such documents relating to the Holding Company
and the Company, as the Purchaser shall request. The Holding Company and
the Company will assist the Purchaser's auditor to complete the audit
report of the Holding Company and the Company in accordance with the US
GAAP by April 30, 2004.
4.5 The Warrantor warrants, represents and undertakes that there shall have
been no Material Adverse Change in the assets or the business, prospects,
financial condition or results of operations of the Holding Company and
the Company.
4.6 The Purchaser shall be entitled to rescind this Agreement by notice in
writing to the Seller, the Holding Company and the Company if prior to
Completion it appears that any of the Warranties is not or was not true
and accurate in all respects or if any act or event occurs which, had it
occurred on or before the date of this Agreement, would have constituted
a breach of any of the Warranties or if there is any material non
fulfillment of any of the Warranties which (being capable of remedy) is
not remedied prior to Completion.
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5 COMPLETION
5.1 Subject to the terms of this Agreement and subject to the approval of the
board of directors of the Purchaser, Completion shall take place pursuant
to this clause at the offices of the Purchaser's Legal Counsel on the
Completion Date.
5.2 Upon Completion the Seller and the Holding Company shall:
(a) deliver to the Purchaser:
(i) duly completed and signed transfers of the Sale
Shares by the registered holders thereof in favor of
the Purchaser or as it may direct together with the
relative bought/sold notes and share certificates;
(ii) duly completed, executed and validly issued share
certificates of the Sale Shares in favor of the
Purchaser or as it may direct;
(iii) certified true copies of the minutes of meetings of
the Holding Company's board of directors and
shareholders approving the transfer, assignment and
allotment of the Sale Shares to the Purchaser;
(iv) certified true copies of the minutes of meetings of
the Holding Company Shareholder's board of directors
and shareholders approving this Agreement and all
matters herein contemplated and the transfer and
assignment of its Sale Shares to the Purchaser.
6 REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
6.1 The Holding Company, Shareholder Company, Seller, and the Warrantor
jointly and severally, represents, warrants and undertakes to the
Purchaser (to the intent that the provisions of this clause shall
continue to have full force and effect notwithstanding completion) that:
6.1.1 each of the Warranties is true and accurate in all respects and
not misleading at the date of this Agreement and will continue to
be true and accurate in all respects and not misleading up to and
including the Completion Date;
6.1.2 the Holding Company, Shareholder Company and the Seller have and
will have full power and authority to enter into and perform this
Agreement and the Deed of Indemnity which constitute or when
executed will constitute binding obligations on them in accordance
with their respective terms;
6.1.3 the Sale Shares will constitute 100 percent of the entire issued
and allotted capital of the Holding Company on a fully diluted
basis,
6.1.4 the Holding Company owns 51 percent of the entire issued and
allotted capital of the Company on a fully diluted basis;
6.1.5 there have been no options, warrants, pledges, bonds or any
instrument or agreement of the like whatsoever granted to any
third party by any of the Seller in favor of any third party in
respect of any shares in the Company or the Holding Company;
6.1.6 there is and at completion will be no pledge, lien or other
encumbrance on, over or affecting the Sale Shares and there is and
at completion will be no agreement or arrangement to give or
create any such encumbrance and no claim has been or will be made
by any person to be entitled to any of the foregoing;
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6.1.7 the Seller will be entitled to transfer the full legal and
beneficial ownership of the Sale Shares to the Purchaser on the
terms of this Agreement without the consent of any third party;
6.1.8 the Seller is an "accredited investor" as defined pursuant to
Regulation D of the Securities Act of 1933, as amended. The Seller
acknowledges that the Escrow Shares have not been registered and
are "restricted securities";
6.1.9 the Company listed in Part I of Schedule 2 are all the present
subsidiaries of the Holding Company and the Shareholder Company;
6.1.10 the information in Schedule 2 relating to the Holding Company and
the Company is true and accurate in all respects;
6.1.11 the Holding Company is the 51% beneficial owner the shares in the
Company free from any encumbrance, and the Seller is the 100%
beneficial owner the shares in the Holding Company free from any
encumbrance;
6.1.12 the contents of the Disclosure Letter and of all accompanying
documents are true and accurate in all respects and fully, clearly
and accurately disclose every matter to which they relate;
6.1.13 each of the Holding Company and the Subsidiary are duly
incorporated and validly existing in its relevant jurisdiction of
incorporation;
6.1.14 the Seller, the Company, the Shareholder Company and the Warrantor
will transfer from Shareholder Company to the Company all assets,
contracts, business operations, human resources, government
licenses, trademarks, logos, and intellectual properties
subtracting all liabilities and obligations for a consideration of
RMB 1.
7 RESTRICTIONS
7.1 The Seller, the Company, and the Warrantor undertakes to the Purchaser
that they shall not without the prior written consent of the Purchaser
for a period of 2 years after Completion either solely or jointly with or
on behalf of any other person, firm, company, trust or otherwise whether
as director, shareholder, employee, partner, agent or otherwise:
(a) carry on or be engaged or interested directly or indirectly in any
capacity (except as the owner of shares or securities listed or
dealt in on a stock exchange in Hong Kong, PRC, and USA or
elsewhere held by way of investment only) in any business which
shall be in competition within Hong Kong, PRC, and USA with the
Company or its subsidiaries in the current business of the Company;
(b) solicit or entice or endeavor to solicit or entice away from the
Company or its subsidiaries any employee, officer, manager,
consultant (including employees who are directors) of the Company
or its subsidiaries or any persons whose services are otherwise
made available to the Company or its subsidiaries;
(c) deal with, canvass, solicit or approach or cause to be dealt with,
canvassed or solicited or approached for business in respect of any
trade or business carried on or service provided by the Company or
its subsidiaries any person, firm or company who at Completion or
within two years prior to Completion was a customer, supplier,
client, representative, agent of or in the habit of dealing under
contract with the Company or the Subsidiaries;
7.2 The Seller, the Company, and the Warrantor further undertake to the
Purchaser that:
(a) they will not at any time hereafter make use of or disclose or
divulge to any person other than to officers or employees of the
Company whose province it is to know the same any information
relating to the Company or the subsidiaries other than any
information properly available to the public or disclosed or
divulged pursuant to an order of a court of competent jurisdiction;
(b) they will not at any time hereafter in relation to any trade,
business or company use a name, or internet domain name including
the word [or symbol, or logo design] RenWoXing ("(Y)oss.U|ae") or
any similar word [or symBOL] in such a way as to be capable of or
likely to be confused with the name of the Company [or any
subsidiary] and shall use all reasonable endeavors to procure that
no such name shall be used by any person, firm or company with
which [it is/they are] connected;
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(c) they will procure that its subsidiaries, holding company and any
other affiliated companies and its employees will observe the
restrictions contained in this Clause 7;
(d) they shall not do anything which might prejudice the goodwill of
the Company or its subsidiaries.
7.3 Each and every obligation under this clause shall be treated as a
separate obligation and shall be severally enforceable as such and in the
event of any obligation or obligations being or becoming unenforceable in
whole or in part such part or parts as are unenforceable shall be deleted
from this clause and any such deletion shall not affect the
enforceability of all such parts of this clause as remain not so deleted.
7.4 The restrictions contained in this clause 7 are considered reasonable by
the parties but in the event that any such restriction shall be found to
be void but would be valid if some part thereof were deleted or the area
of operation or the period of application reduced such restriction shall
apply with such modification as may be necessary to make it valid and
effective.
7.5 Nothing in this Clause 7 shall apply to:
(a) the continuing involvement or any involvement by any of the Seller,
the Company, and the Warrantor in any business in which he is on
the date of this Agreement directly or indirectly interested; or
(b) the direct or indirect holding of any securities listed on a
recognized stock exchange where the total voting rights exercisable
at general meetings of the company concerned as represented by such
holding do not exceed 10 per cent of the total voting rights
attaching to the securities of the same class as that held by the
Seller, the Company, and the Warrantor; or
(c) the holding by the Seller, the Company, and the Warrantor of any
securities of any member of the Group; or
(d) the use or disclosure of any information in the public domain
(otherwise than in consequence of any breach by any of the Seller,
the Company, and the Warrantor of any provisions of this
Agreement).
8 RIGHT OF FIRST REFUSAL
8.1 Before any shares in the Company may be sold or otherwise transferred or
disposed of by any of the Shareholders of the Company ("Selling
Shareholder", including but not limited to the Seller), the Purchaser
shall have a right of first refusal ("Right of First Refusal") to
purchase such shares ("Offered Securities") in accordance with Clauses
(8.2) and (8.3) below.
8.2 Before the transfer or disposal of any Offered Securities, the Selling
Shareholder shall deliver to the Purchaser and the Company a written
notice ("Transfer Notice") stating :-
(a) the Selling Shareholder's intention to sell or otherwise dispose
of such Offered Securities;
(b) the name of each proposed purchaser or other transferee (a
"Proposed Transferee");
(c) the number of Offered Securities to be transferred to each
Proposed Transferee; and
(d) the cash price and/or other consideration for which the Selling
Shareholder proposes to transfer the Offered Securities to the
Proposed Transferee ("OFFERED PRICE").
The Transfer Notice shall certify that the Selling Shareholder has
received a firm offer from the Proposed Transferee(s) and in good faith
believes a binding agreement for the Disposal is obtainable on the terms
set forth in the Transfer Notice. The Transfer Notice shall also include
a copy of any written proposal, term sheet or letter of intent or other
agreement relating to the proposed disposal. The Transfer Notice shall
constitute an irrevocable offer by the Selling Shareholder to sell the
Offered Securities to the Purchaser.
10
8.3 The Purchaser shall have a right, upon notice to the Selling Shareholder
at any time within 15 calendar days after receipt of the Transfer Notice,
to purchase all, any or a portion of such Offered Securities at (a) such
price per share of the Offered Securities as (i) determined by an
independent international appraiser experienced in the valuation of such
shares and business of the Company as chosen by the Purchaser or (ii) the
Offered Price, which ever shall be lower ("Purchaser Offer Price"); and
(b) upon the same terms (or as similar as reasonably possible), upon
which the Selling Shareholder is proposing or is to dispose of such
Offered Securities, save the sale/purchase price shall be the Purchaser
Offer Price, and the Selling Shareholder shall, upon receipt of the
notice of purchase from the Purchaser, sell such Offered Securities to
the Purchaser pursuant to such terms, with such closing to take place
within 45 calendar days after delivery of the Transfer Notice ("Purchase
Right Period").
8.4 If any of the Offered Securities proposed in the Transfer Notice to be
transferred are not purchased by the Purchaser, then after expiry of the
Purchase Right Period, the Selling Shareholder may sell or otherwise
transfer or dispose of such Offered Securities which have not been
purchased by the Purchaser at the Offered Price or at a higher price,
provided that such sale or other transfer shall be completed and
consummated within 45 days after the expiry of Purchase Right Period, and
provided further that the Proposed Transferee agrees in writing that the
provisions of this Agreement and any shareholder's agreement between the
Purchaser and the Seller regulating their respective rights within the
Company (if any) shall continue to apply to the Offered Securities that
are transferred to the Proposed Transferee. If the Offered Securities
described in the Transfer Notice are not transferred to the Proposed
Transferee within such 45 day period, such Selling Shareholder will not
transfer or dispose of any Offered Securities unless such securities are
first re-offered to the Purchaser in accordance with Clauses (8.2) and
(8.3) above.
Notwithstanding the procedures set forth above, if one Party wishes to transfer
its ownership shares to its affiliate, the other Party shall promptly give
consent to such proposed transfer and waive the right of first refusal.
"Affiliate" shall mean any company which, through ownership of voting stock or
otherwise, is controlled by, under common control with, or in control of, a
Party; "control" shall mean ownership, directly or indirectly, of more than
fifty percent (50%) of the securities having the right to vote for the election
of directors in the case of a corporation, and more than fifty percent (50%) of
the beneficial interests in the capital in the case of a business entity other
than a corporation.
9 BOARD OF DIRECTORS, OPERATION AND MANAGEMENT
9.1 The board of directors of the Company shall be the highest authority of
the Company and shall determine all major issues of the Company.
9.2 The board of directors of the Company shall be nominated by the
shareholders and composed of Five (5) directors, 3 directors and the
Company Legal Representative to be nominated by Purchaser and 2 directors
to be nominated by the Shareholder Company.
9.3 The board of directors shall meet at least once every quarter. A Board
meeting may be called by any director.
9.4 The Company shall establish an operation and management structure to be
responsible for the daily operation and management of the Company. The
Company officers shall include one (1) General Manager, one (1) Vice
General Manager, and one Chief Financial Officer.
9.5 The task of the General Manager shall be to carry out the various
resolutions of the board of directors of the Company and organize and
direct the daily operation and management of the Company. The operation
and management structure may consist of certain departments, the managers
for which shall be responsible for the work of the relevant departments,
handle matters delegated by the General Manager and the Vice General
Manager, and report to the General Manager and the Vice General Manager.
9.6 In the event of graft or serious dereliction of duty, the General Manager
and the Vice General Manager may be removed and replaced by the board of
directors of the Company with a resolution at any time.
10 INDEMNITY
The Seller and the Warrantor will indemnify and will keep indemnified and save
harmless the Purchaser (for itself and as trustee for the Holding Company from
and against any and all losses, claims, damages (including lost profits,
consequential damages, interest, penalties, fines and monetary sanctions)
liabilities and costs incurred or suffered by the Purchaser by reason of,
resulting from, in connection with, or arising in any manner whatsoever out of
the breach of any Warranties or covenants or the inaccuracy of any
representation of the Seller or the Warrantor contained or referred to in this
Agreement or in any agreement, instrument or document delivered by or on behalf
of the Seller or the Warrantor in connection therewith including, but not
limited to, any dimunition in the value of the assets of and any payment made or
required to be made by the Purchaser or the Holding Company or any Subsidiary
and any costs and expenses incurred as a result of such breach provided that the
indemnity contained in this clause 9 shall be without prejudice to any other
rights and remedies available to the Purchaser;
11
11 COSTS
The Purchaser shall pay for all the due diligence costs, not exceeding
HK$50,000, including auditing and valuation appraisal costs, fairness opinion
letter, legal costs, and expenses and other incidental costs and disbursements
in relation to the negotiations leading up to the purchase of the Sale Shares
and to the preparation, execution and carrying into effect of this Agreement.
The costs exceeding the amount of HK$50,000 shall be borne equally by the Seller
and the Purchaser.
12 COMPLETE AGREEMENT
This Agreement represents the entire and complete agreement between the parties
in relation to the subject matter hereof and supersedes any previous agreement
whether written or oral in relation thereto. No variations to this Agreement
shall be effective unless made or confirmed in writing and signed by all the
parties hereto.
13 SEVERABILITY
In the event that any provision of this Agreement is held to be unenforceable,
illegal or invalid by any court of competent jurisdiction, the validity,
legality or enforceability of the remaining provisions shall not be affected nor
shall any subsequent application of such provisions be affected. In lieu of any
such invalid, illegal or unenforceable provision, the parties hereto intend that
there shall be added as part of this Agreement a provision as similar in terms
to such invalid, illegal or unenforceable provision as may be possible and be
valid, legal and enforceable.
14 COUNTERPARTS
This Agreement may be executed in counterparts with the same force and effect as
if executed on a single document and all such counterparts shall constitute one
and the same instrument.
15 NOTICES
Any notice required to be given under this Agreement shall be sufficiently given
if delivered in person, forwarded by registered post or sent by overnight
international couriers or facsimile transmission to the relevant party at its
address, or fax number set out below (or such other address as the addressee has
by five days prior written notice specified to the other parties) :
To the Purchaser :
Xxxxxx Xxxx, President
PacificNet Strategic Investment Holdings Limited and PacificNet Inc.
Xxxx 0000, Xxxx Xxxx Xxxxx, 000 Xxxxxxxxx Xxxx Xxxx, Xxxx Xxxx.
Tel: x000-00000000
Fax: x000-00000000
To the Company:
Attn: Xx. Xx, YanKuan, CEO & President
Guangzhou Yueshen Taiyang Technolgoy Limited
("chinese characters here")
Xx 000 XX0 Xxxxxxx Xxxxxxxx 808 East Xxxxxxxx Xxxx Xxxxxxxxx
Xxxxxxxxx 000000, Xxxxx
To the Shareholder Company:
Attn: Xx. Xx, YanKuan, CEO & President
Guangzhou Yueshen Electronic Technology Co., Ltd
("chinese characters here")
No 602 FL6 Huagong Building 808 East Xxxxxxxx Xxxx Xxxxxxxxx
Xxxxxxxxx 000000, Xxxxx
To the Holding Company and the Seller:
Attn: Xx. Xx, YanKuan, Director
Attn: Xx. Xx, YanKuan, Director, Avatar Trading Ltd
No 602 FL6 Huagong Building 808 East Xxxxxxxx Xxxx Xxxxxxxxx
Xxxxxxxxx 000000, Xxxxx
To the Warrantor:
Attn: Xx. Xx, YanKuan
Xx. Xx, XxXxx IaOaIA
No 602 FL6 Huagong Building 808 East Xxxxxxxx Xxxx Xxxxxxxxx
Xxxxxxxxx 000000, Xxxxx
12
16 SETTLEMENT OF DISPUTES
16.1 The formation of this Agreement and its Appendices and related
agreements, and the validity, interpretation, performance and settlement
of disputes thereof shall be governed by the laws of the Hong Kong SAR.
16.2 Any disputes arising out of or in connection with this Agreement shall be
resolved through friendly consultations by the Parties; if no agreement
can be reached through consultations within thirty (30) days after the
occurrence of such dispute, either Party shall have the right to submit
such dispute to the International Economic and Trade Arbitration
Commission Hong Kong Branch for arbitration in Hong Kong in accordance
with its procedures of arbitration. The arbitral award shall be final and
binding upon both Parties.
17 GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by and construed in accordance with the laws of
Hong Kong. The parties hereto hereby irrevocably submit to the non-exclusive
jurisdiction of the courts of Hong Kong.
IN WITNESS WHEREOF, each of the Purchaser, the Holding Company, the
Company, the Seller, and the Warrantor has duly executed, or has caused to be
duly executed by their respective officers thereunto duly authorized, this
Agreement as of the date first written above.
THE PURCHASER: PACIFICNET STRATEGIC INVESTMENT HOLDINGS LIMITED AND
PACIFICNET INC.
By: /s/ Xxxx Xxxx
------------------------------------------
Name: Xxxx Xxxx
Title: CEO
THE COMPANY: GUANGZHOU YUESHEN TAIYANG TECHNOLOGY LIMITED
("chinese characters here")
By: /s/ Li, YanKuan
------------------------------------------
Name: Xx. Xx, YanKuan
Title: President & CEO
By: /s/ Xx, XxXxx
------------------------------------------
------------------------------------------
Name: Xx. Xx, XxXxx
Title: Chairman
THE SHAREHOLDER COMPANY: GUANGZHOU YUESHEN ELECTRONIC TECHNOLOGY CO., LTD
("chinese characters here")
By: /s/ Li, YanKuan
------------------------------------------
Name: Xx. Xx, YanKuan
Title: President & CEO
By: /s/ Xx, XxXxx
------------------------------------------
Name: Xx. Xx, XxXxx
Title: Chairman
13
THE HOLDING COMPANY (Shanghai Classic Group Limited) AND THE SELLER:
By: /s/ Li, YanKuan
------------------------------------------
Name: Xx. Xx, YanKuan
By: /s/ Li, YanKuan
------------------------------------------
Name: Xx. Xx, YanKuan
AVATAR TRADING LTD
THE WARRANTOR:
By: /s/ Li, YanKuan
------------------------------------------
Name: Xx. Xx, YanKuan
By: /s/ Xx, XxXxx
------------------------------------------
Name: Xx. Xx, XxXxx
SCHEDULE 1
PART I
THE COMPANY SHAREHOLDERS AND SHARES
Company Name: Guangzhou Yueshen Taiyang Technolgoy Limited
("chinese characters here")
Name of Shareholder (2) Percentage of Shares held by the Shareholder
----------------------- --------------------------------------------
Guangzhou Yueshen Electronic 49%
Technology Co., Ltd
("chinese characters here")
Shanghai Classic Group Limited 51%
PART II
THE SHAREHOLDER COMPANY SHAREHOLDER AND SHARES
Company Name: Guangzhou Yueshen Electronic Technology Co., Ltd
("chinese characters here")
Name of Shareholder (2) Percentage of Shares held by the Shareholder
----------------------- --------------------------------------------
Li, YanKuan 80%
Xx, XxXxx 20%
PART III
THE HOLDING COMPANY SHAREHOLDERS AND SHARES
Company Name: SHANGHAI CLASSIC GROUP LIMITED
Name of Shareholder (2) Number of Shares held by the Shareholder (85)
----------------------- ---------------------------------------------
Li, YanKuan 51
Avatar Trading Ltd 34
14
Li, YanKuan
PacifcNet, Inc. ("PACT") [USA] Xx, XxXxx
PacificNet Strategic Investment Holdings Limited |
| |100%
| 100% |
| Guangzhou Yueshen Electronic
Shanghai Classic Group Limited [BVI] Technology Co., Ltd.
| |
| 51% |49%
| |
Guangzhou Yueshen Taiyang Technolgoy Limited----------------
16
SCHEDULE 2
PART I
THE COMPANY
NAME : Guangzhou Yueshen Taiyang Technolgoy Limited
("chinese characters here")
INCORPORATED IN : People's Republic of China
AUTHORIZED SHARE CAPITAL : 2,000,000 RMB
NO. ISSUED SHARES : 2,000,000 SHARES
NOMINAL SHARE VALUE : 1 RMB
ISSUED SHARE CAPITAL : 2,000,000 RMB
REGISTERED OFFICE : No 602 FL6 Huagong Building 808 East Xxxxxxxx
Xxxx
Xxxxxxxxx Xxxxxxxxx 000000, Xxxxx
BENEFICIAL SHAREHOLDERS : Guangzhou Yueshen Electronic Technology Co., Ltd
("chinese characters here")
Shanghai Classic Group Limited
REGISTERED SHAREHOLDERS : Guangzhou Yueshen Electronic Technology Co., Ltd
("chinese characters here")
Shanghai Classic Group Limited
DIRECTORS : Li, YanKuan
Xx, XxXxx
16
PART II
THE SHAREHOLDER COMPANY
NAME : Guangzhou Yueshen Electronic Technology Co., Ltd
("chinese characters here")
INCORPORATED IN : People's Republic of China
AUTHORIZED SHARE CAPITAL : 1,030,000 RMB
NO. ISSUED SHARES : 1,030,000 SHARES
NOMINAL SHARE VALUE : 1 RMB
ISSUED SHARE CAPITAL : 1,030,000 RMB
REGISTERED OFFICE : No 602 FL6 Huagong Building 808 East Xxxxxxxx
Xxxx
Xxxxxxxxx Xxxxxxxxx 000000, Xxxxx
BENEFICIAL SHAREHOLDERS : Li, YanKuan
Xx, XxXxx
REGISTERED SHAREHOLDERS : Li, YanKuan
Xx, XxXxx
DIRECTORS : Li, YanKuan
Xx, XxXxx
17
PART III
THE HOLDING COMPANY
NAME : Shanghai Classic Group Limited
INCORPORATED IN : British Virgin Islands
AUTHORIZED SHARE CAPITAL : US$50,000.00
NO. ISSUED SHARES : 85 SHARES
NOMINAL SHARE VALUE : US$1
ISSUED SHARE CAPITAL : US$85
REGISTERED OFFICE : Xxxxxxxx Xxxxx
X.X. Xxx 000, Xxxx Xxxx,
Xxxxxxx, Xxxxxxx Xxxxxx Xxxxxxx
BENEFICIAL SHAREHOLDERS : Li, YanKuan
Avatar Trading Ltd
REGISTERED SHAREHOLDERS : Li, YanKuan
Avatar Trading Ltd
DIRECTORS : Xx. Xx, YanKuan
18
SCHEDULE 3
CONFIDENTIALITY AND NON-COMPETITION AGREEMENT
This Confidentiality and Non-Competition Agreement (the "Agreement") is made as
of this 1st day of December 2003 ("Effective Date") by and between Guangzhou
Yueshen Taiyang Technolgoy Limited ("chinese characters here") and Guangzhou
Yueshen Electronic Technology Co., Ltd ("chinese characters here")(the
"Company") and Li, YanKuan and Xx, XxXxx (the "Director"). The Company and the
Director are hereinafter referred to individually as a "Party" and collectively
as the "Parties."
WHEREAS, the Director is a member of the Company's board of directors, and also
a principal shareholder of most of the related entities of the Company in China
(excluding the Company's subsidiaries) (collectively, the "Related Chinese
Entities");
WHEREAS, both the Director and the Company expressly acknowledge and agree that
the sole purpose of the Related Chinese Entities is to further the business
purposes of the Company; and
WHEREAS, in light of the Director's fiduciary relationship with the Company and
in consideration for the Director's agreement to enter into this Agreement with
the Company, the Company has assisted and will assist in the capitalization and
operation of the Related Chinese Entities.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements set forth below, the Parties agree as follows:
I. CONFIDENTIALITY
1.1 The Director shall keep secret and shall not at any time use for Director's
own or any third party's advantage, or reveal to any person, company,
organization or any other entity, and shall use the Director's best endeavors to
prevent the publication or disclosure of, any and all Confidential Information
(as defined below).
1.2 If the Director breaches his obligation of confidentiality hereunder, the
Director shall be liable to the Company for all damages (direct or
consequential) incurred as a result of the Director's breach.
1.3 The restrictions in this Article I shall not apply to any disclosure or use
authorized by the Company or required by law.
1.4 "Confidential Information" shall mean information relating to the business,
customers, products and affairs of the Company (including without limitation,
marketing information) deemed or treated confidential by the Company, or which
the Director knows or ought reasonably to have known to be confidential, and
trade secrets, including without limitation designs, processes, pricing
policies, methods, inventions, technology, technical data, financial information
and know-how relating to the business of the Company.
1.5 For purposes of Articles I and II of this Agreement, the Company shall
include all subsidiaries of the Company as well as the Related Chinese Entities.
II. NON-COMPETITION
2.l The Director agrees that he shall not engage in any business directly
competitive with that carried on by the Company, provided that nothing in this
clause shall preclude the Director from holding or being otherwise interested in
any shares or other securities of any company, any part of which is listed or
dealt in on any stock exchange or recognized securities market anywhere, and the
Director shall notify the Company in writing of his interest in such shares or
securities in a timely manner and with such details and particulars as the
Company may reasonably require.
2.2 In consideration of the Company's assistance in the capitalization and
operation of the Related Chinese Entities, the Director hereby agrees that
during the period he is a shareholder of any of the Related Chinese Entities and
for a period of two (2) years following the termination of this Agreement:
(a) Director shall not approach clients, customers, suppliers or contacts of the
Company or other persons or entities introduced to Director in Director's
capacity as a director or shareholder of the Company for the purposes of doing
business with such persons or entities and will not interfere with the business
relationship between the Company and such persons and/or entities;
(b) unless expressly consented to by the Company, Director will not provide
services as a director or otherwise for any competitor of the Company in China,
or engage, whether as principal, partner, licensor or otherwise, in any business
which is in direct or indirect competition with the business of the Company; and
(c) unless expressly consented to by the Company, Director will not seek
directly or indirectly, by the offer of alternative employment or other
inducement whatsoever, to solicit the services of any employee of the Company
employed as at the date of termination of this Agreement, or in the year
preceding such termination.
2.3 The provisions provided in Article II shall be separate and severable and
enforceable independently of each other and independent of any other provision
of this Agreement. In the event that any provision of this Article II should be
found to be void under applicable laws and regulations but would be valid if
some part thereof were deleted or the period or area of application reduced,
such provisions shall apply with such modification as may be necessary to make
them valid and effective.
III. TERM.
This Agreement shall remain in full force and effect until both Parties hereto
agree to terminate it in writing.
IV. MISCELLANEOUS
4.1 Binding Effect. This Agreement will be binding upon and inure to the benefit
of any successor of the Company. Any such successor of the Company will be
deemed substituted for the Company under the terms of this Agreement for all
purposes. For this purpose, "successor" means any person, company, organization
or other entity which at any time, whether by purchase, merger or otherwise,
directly or indirectly acquires all or substantially all of the assets or
business of the Company.
4.2 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of Hong Kong SAR without conflicts of laws principles
thereof.
4.3 Severability. In the case that any one or more of the provisions contained
in this Agreement shall be held invalid, illegal or unenforceable in any respect
under any applicable law, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.
4.4 Entire Agreement. This Agreement constitutes the entire agreement and
understanding between the Parties and supersedes all other oral and written
agreements between the Company and the Director regarding the subject matter
hereof. The Director acknowledges that he has not entered into this Agreement in
reliance upon any representation, warranty or undertaking which is not set forth
in this Agreement.
4.5 Notice. Any notice to be given under this Agreement to the Director may be
served by being handed to Director personally or by being sent by recorded
delivery first class post to Director at Director's usual or last known address;
and any notice to be given to the Company may be served by being left at or by
being sent by recorded delivery first class post to its registered office. Any
notice served by post shall be deemed to have been served on the day (excluding
Sundays and statutory holidays) next following the date of posting and in
proving such service it shall be sufficient proof that the envelope containing
the notice was properly addressed and posted as a prepaid letter by recorded
delivery first class post.
4.6 Headings. The headings in this Agreement are for the convenience of the
Parties hereto and shall not be deemed a substantive part of this Agreement.
4.7 Amendment. No amendment to the terms of this Agreement shall be valid unless
in writing and signed by both Parties hereto.
4.8 Counterparts. This Agreement may be signed in two (2) counterparts and each
counterpart shall be deemed to be an original.
IN WITNESS WHEREOF this Agreement has been executed on the date first above
written.
Guangzhou Yueshen Taiyang Technolgoy Limited ("chinese characters here")
Guangzhou Yueshen Electronic Technology Co., Ltd ("chinese characters here")
By: /s/ Li, YanKuan By: /s/ Xx, XxXxx
----------------------------- ---------------------------------
Name: Xx. Xx, YanKuan Name: Xx. Xx, XxXxx
Title: President & CEO & Director Title: Chairman
20
