English Translation) May 11, 2007
Exhibit
10.1
(English
Translation)
May
11,
2007
|
The
Transferor:
|
LI
Yi
|
|
The
Transferee:
|
CHINA
SAFETECH HOLDINGS LIMITED
|
|
Party
C:
|
CHINA
SECURITY & SURVEILLANCE TECHNOLOGY,
INC.
|
|
of
All
Issued Shares
of
Link
Billion Investment Limited
|
This
Equity Transfer Agreement (the “Agreement”)
is
entered into by and among the following parties on May 11, 2007:
|
(1)
|
LI
Yi
whose address is Flat 616, Xxxxxx Xxxx House, Sheung Tak Estate,
Xxxxxx
Xxxx O, Kowloon, Hong Kong (hereinafter referred to as “Transferor”);
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|
(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
|
LINK
BILLION INVESTMENTS 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 “Link
Billion”),
and whose all issued shares are beneficially held by the
Transferor.
|
|
WHEREAS
|
Link
Billion invests and establishes HiEasy
Electronic Technology Development 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 “HiEasy”),
and whose all shares are beneficially held by Link
Billion.
|
|
WHEREAS
|
The
Transferee desires to purchase from the Transferor and the Transferor
desires to transfer to the Transferee 100% issued shares of Link
Billion.
Upon completion of the transfer under this Agreement, the Transferee
shall
indirectly and fully acquire 100% shares and control power of
HiEasy.
|
|
WHEREAS
|
The
Transferor and the Transferee have entered into Letter of Intent
of Share
Transfer (hereinafter referred to as “Letter
of Intent”)
on October 9, 2006.
|
NOW,
THEREFORE,
the
Parties hereby agree as follows:
Article
1 Definitions
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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;
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|
“Shares
for Transfer”
|
means
10,000 common share of Link Billion owned by the Transferor to
be
transferred from the Transferor to the Transferee under this
Agreement,
constituting 100% issued and outstanding stock of Link Billion
(for
details please refer to Exhibit II - Part
A);
|
|
“Share
Transfer”
|
means
100% issued shares of Link Billion 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);
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|
“Total
Transfer Price”
|
means
total price paid to the Transferor by the Transferee under Article
3.1
hereof;
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“Closing
Date”
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May
11, 2007;
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“Accounts
of Link Billion”
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means
management and financial statements of Link Billion as of December
31,
2007, the copies of which are attached as Exhibit A
hereof;
|
|
“HiEasy
Accounts”
|
means
financial statements of HiEasy as of December 31, 2007 verified
by PRC
auditors, the copies of which are attached as Exhibit B
hereof;
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|
“Business
Day and Working Hours”
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|
“PRC”
|
means
People’s Republic of China;
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2
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“HKD”
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means
legal currency of Hong Kong;
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|
“USD”
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means
legal currency of United States;
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|
“RMB”
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means
legal currency of PRC.
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1.2
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In
this Agreement:
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|
(i)
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Any
rule or law
involved herein shall include any and all amendments, supplements
or
reenactments hereof from time to
time;
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|
(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)
|
Hereabove
mentioned the parties, descriptions, exhibits, appendices and
terms and
conditions shall be respectively referred to the parties, descriptions,
exhibits, appendices and terms and conditions hereof;
and
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|
(v)
|
The
headings and table of contents in this Agreement are provided
for
reference only and will not affect its construction or
interpretation.
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Article
2 Share Transfer
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2.1
|
As
per stipulations in this Agreement, the Transferor, as the owner
of all
issued and outstanding shares of Link Billion (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 Link Billion.
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|
2.2
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Upon
the completion of transaction hereunder, Shares for Transfer
shall not be
attached with 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, profits, the investment
in
HiEasy by Link Billion and relevant benefits accumulated and
distributed
from the completion date.
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3
Article
3 Transfer
Price
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3.1
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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 Total Transfer Price of RMB80,000,000, consisting
of RMB
40,000,000 in cash and shares of Party C with the value of RMB
40,000,000.
|
|
3.2
|
Method
of Payment
|
|
3.2.1
|
The
Transferee shall pay the Total Transfer Price to the Transferor
as
follows:
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|
(1)
|
The
Transferee has paid to the Transferor RMB32,292,750
before the Closing Date.
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|
(2)
|
The
Transferee shall pay the remaining price of RMB7,707,250 (“Balance”)
upon the execution of this
Agreement.
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(3)
|
The
Transferee (through its parent company, Party C) shall issue
restricted
shares equal to RMB40,000,000
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 closing price
(USD6.4015/share) of twenty trading days before October 9, 2006,
which
means that the Transferee shall issue 811,804 shares to the Transferor.
The Transferor shall pledge certain shares to the Transferee
as provided
under Article 5.2 hereof.
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|
3.2.2
|
The
Transferee shall remit the Balance to the following bank accounts
designated by the Transferor:
|
USD
Account
Account
Name:
Account
No.:
Bank:
Address
of the bank:
SWIFT:
4
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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
1:7.76971.
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Article
4 Closing
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4.1
|
The
Share Transfer shall be completed on the Closing Date at the
place
stipulated by both parties in accordance with Exhibit
V.
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4.2
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Terms
and conditions to be performed hereof shall remain in force
after the
Closing Date.
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4.3
|
From
the Closing Date, debts and credits and all risks of Link Billion
and
HiEasy shall be promptly borne by the Transferee (except otherwise
undertaken by the Transferor in Exhibit
IV).
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4.4
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From
the Closing Date, the Transferee shall have the right to consolidate
profits of Link Billion and HiEasy 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 Link
Billion and HiEasy to take charge of management and operation
of Link
Billion and HiEasy as well as all files, materials, financial
documents
and so on. The Transferor shall not enjoy any right and/or interest
as
shareholder of Link Billion and HiEasy from the Closing Date
because of
such Share Transfer, provided that all relevant obligations shall
be borne
by the Transferor under law and this
Agreement.
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Article
5 Warrants,
Representations and Covenants of the Transferor
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5.1
|
In
addition to the information disclosed in this Agreement, the
Transferor
shall warrant, represent and covenant to the Transferee under
terms and
conditions stipulated in Exhibit IV, which also constitute the
base for
the Transferee to accept such shares for
transfer.
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5.2
|
The
Transferor covenants that the Transferee’s profits after tax in 2007
audited by US Auditors shall reach three levels: RMB6,000,000,
RMB8,000,000 and RMB10,000,000. If profits after tax reach RMB6,000,000,
the Transferee shall release shares pledge of the Transferor
equivalent to
RMB5,000,000; if Link Billion and HiEasy reach profits after
tax of
RMB8,000,000, the Transferee shall release shares pledge of the
Transferor
equivalent to RMB7,000,000; and if Link Billion and HiEasy reach
profits
after tax of RMB10,000,000, the Transferee shall release shares
pledge of
the Transferor equivalent to RMB10,000,000. The Transferor also
covenants
that the Transferor’s profits after tax in 2008 which are audited by US
Auditors shall reach three levels: RMB11,000,000, RMB13,000,000,
and
RMB15,000,000. If Link Billion and HiEasy reach profits after
tax of
RMB11,000,000, the Transferee shall release shares pledge of
the
Transferor equivalent to RMB7,500,000; if Link Billion and HiEasy
reach
profits after tax of RMB13,000,000, the Transferee shall release
shares
pledge of the Transferor equivalent to RMB10,000,000; and if
Link Billion
and HiEasy reach profits after tax of RMB15,000,000, the Transferee
shall
release shares pledge of the Transferor equivalent to
RMB15,000,000.
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5
Article
6 Warrants,
Representations and Covenants of the Transferee and Party
C
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6.1
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The
Transferee covenants to keep the organization structure of
Link Billion
and HiEasy after the Share Transfer, expand its brand influence,
fully
support business development of Link Billion and HiEasy. The
Transferee
shall also provide financial support as required by
business.
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6.2
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The
Transferee undertakes that existing employees of Link Billion
and HiEasy
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.
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6.3
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The
Transferee shall provide appropriate operation funds to Link
Billion and
HiEasy 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.
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6.4
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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.
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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
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8.1
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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.
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8.2
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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 our of this
Agreement.
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6
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8.3
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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.
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8.4
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(1)
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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”).
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(2)
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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.
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(3)
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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.
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Article
9 Liabilities
for Breach of Contract
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9.1
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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.
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9.2
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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.
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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.
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9.4
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If
the Transferor changes minds on purpose and cause that the shares
can not
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.
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7
Article
10 Force
Majeure and Change of Circumstances
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10.1
|
If
any Party to this Agreement can not 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.
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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.
|
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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.
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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.
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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.
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Article
11 Miscellaneous
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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.
|
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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.
|
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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.
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8
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11.4
|
This
Agreement shall be effective upon
signing.
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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.
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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.
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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.
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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:
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(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;
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(2)
|
the
disclosure is made to Link Billion, HiEasy,
or its higher competent authorities or approval and examination
authorities, or to contacted bank or professional consultant
of the
disclosing Party;
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(3)
|
the
disclosure is made by the Transferor to the company of its
company group
or senior management thereof.
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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.
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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)
|
The
Transferor:
|
LI
Yi
Address:
Flat 616, Xxxxxx Xxxx House, Sheung Tak Estate, Xxxxxx Xxxx
O, Kowloon,
Hong Kong
Telephone: (000)
0000 0000
Fax: (000)
0000 0000
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9
|
(2)
|
The
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
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|
(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
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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:
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(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;
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(2)
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the
next business day for those sent by
fax;
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(3)
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the
receiving time for those sent by courier or personal
delivery.
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Any
notice to the Transferee, when properly delivered to any Transferee,
shall be
regarded as delivered to the other Transferee.
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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.
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The
Transferor
LI
Yi
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||
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Signature:
/s/
Li Yi
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||
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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.
|
||
|
Place
of Signature: Shenzhen
Witness:
LUO
Ganqi
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11
Exhibit
I
Information
of Link Billion
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Name
in Chinese
|
:
|
[Chinese
Language]
|
|
Name
in English
|
:
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LINK
BILLION 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
26, 2007
|
||
|
Company
Form
|
:
|
Limited
Liability Company
|
|
Registered
No.
|
:
|
1112061
|
|
Director
|
:
|
LI
Yi
|
|
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 Share for Transfer
|
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|
Percent
of
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||||
|
Company
|
|
|
Registered
Shareholder
|
|
|
Quantity
of Common Shares
|
|
|
Face
Value Per Share
|
|
|
issued
Shares
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
Link
Billion
|
|
|
LI
Yi
|
|
|
10,000
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|
|
HKD
1 yuan
|
|
|
100%
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Part
B
Information
of the Recipient of Share for Transfer
|
The
Transferee
|
Amount
of Share to Be Transferred
|
|
CHINA
SAFETECH HOLDINGS LIMITED
|
10,000
|
13
Exhibit
III
Information
of HiEasy
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Name
|
:
|
HiEasy
Electronic Technology Development Co., Ltd.
|
|
Legal
Address
|
:
|
Xx.
000, Xxxxx Xxxx, Xxxxxxxx Xxxxxx, Xxxxxxxx
District,
Wuhan, PRC
|
|
Enterprise
Type
|
:
|
Wholly
Foreign Owned Enterprise
|
|
Date
of Establishment
|
:
|
January
16, 2001
|
|
Business
License No.
|
: |
|
|
Operational
Term
|
:
|
10
years
|
|
Total
Investment
|
:
|
RMB10
million Yuan
|
|
Registered
Capital
|
:
|
RMB10
million Yuan
|
|
Investor
|
:
|
LINK
BILLION INVESTMENT LIMITED
|
|
Legal
Representative
|
:
|
XXXX
Xxxx
|
|
Directors
|
:
|
XXXX
Xxxx, XX Xxxxxxxx, XXX Xxxxxxxx
|
|
Business
Scope
|
:
|
To
research and develop, manufacture, and distribute computer equipments,
electronic products; system integration of electronic products;
maintenance service for cultural office equipments and
computers.
|
14
Exhibit
IV
Representations
and Warranties
|
1.
|
Link
Billion and HiEasy are companies legally established and validly
existing
under the laws of their respective places of
establishment.
|
|
2.
|
Link
Billion and HiEasy have been authorized and qualified to conduct
business
within the jurisdiction of their existing
businesses.
|
|
3.
|
The
operation businesses and their operation of Link Billion and
HiEasy have
been materially in compliance with the relevant
laws.
|
|
4.
|
Accounts
of Link Billion and HiEasy 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 Link Billion and HiEasy
respectively for the fiscal year or the period ending on the
date of the
relevant book account.
|
|
5.
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(a)
|
Exhibit
I has listed all the directors and company secretaries of Link
Billion
before the completion of the transaction as of the Closing
Date.
|
|
(b)
|
Exhibit
III has listed the legal representative and all the directors
of HiEasy
before the completion of the transaction as of the Closing
Date.
|
|
(c)
|
There
has not been any shareholder resolution adopted to liquidate
Link Billion
and HiEasy before the completion of the transaction as of the
Closing
Date.
|
|
6.
|
The
register of shareholders of Link Billion 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 Link Billion and HiEasy by the Transferor, Link Billion
and
HiEasy.
|
|
8.
|
(a)
|
Link
Billion has not conducted any business activities other than
holding
shares of HiEasy.
|
|
(b)
|
Link
Billion has HiEasy as its only one subsidiary company. HiEasy
has no
subsidiary companies.
|
|
9
|
Articles
of associations of Link Billion and duplicate of articles of
associations
of HiEasy have been delivered to Transferee, which shall be true
and
complete.
|
15
|
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.
|
|
11.
|
Link
Billion has fully paid the issued shares. HiEasy has fully contributed
the
registered capital.
|
|
12.
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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.
|
Link
Billion owns 100% of shares of HiEasy. Link Billion 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, Link
Billion and
HiEasy 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 Link
Billion and HiEasy 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 Link Billion and
HiEasy.
|
|
17.
|
Except
for debts (including the outstanding tax fees)disclosed by the
Transferor,
the Agreement or accounts of Link Billion and HiEasy, Link Billion
and
HiEasy 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 Link Billion and HiEasy, Link Billion and HiEasy 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 10,000,000, and the net profits
shall be
no less than RMB 5,000,000.
|
|
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 Link Billion and
HiEasy
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
RMB10,000,000, the Transferor shall be obliged to make it up
to
RMB10,000,000.
|
16
|
22.
|
The
Transferor shall be fully responsible for all civil and criminal
liabilities of Link Billion and HiEasy before and on the Closing
Date.
|
|
23.
|
The
Transferor shall not manipulate any adverse change to the operations
of
Link Billion and HiEasy 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 Link Billion and
HiEasy.
|
|
24.
|
The
Transferor undertakes to continue to be the CEO of Link Billion
and HiEasy
for another five years and maintain the stability of Link Billion
and
HiEasy.
|
|
25.
|
The
Transferor undertakes that the Transferor and its 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 Link Billion and a consent letter executed by
two persons
to be the directors of HiEasy.
|
|
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 Link Billion) 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 HiEasy
with stating that there are not any claims against
HiEasy;
|
|
(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 Link Billion controlled
by
the Transferor;
|
18
|
(iv)
|
The
Transferor shall incentive Link Billion and HiEasy to hold a
board meeting
to approve (1) the transfer of the Shares for Sale relevant to
Link
Billion, 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 Link Billion and the two new directors of HiEasy
under the
written instruction of the Transferee; (3) after the completion
of the
foregoing (2), acceptance of resignation of the two directors
of the
HiEasy under the above (ii); and (4) suspension and change of
the
operation of the bank accounts of Link Billion and HiEasy, and
appointment
of the person nominated by the Transferee as the authorized person
to
execute the bank accounts of Link Billion and HiEasy 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 Link Billion
and
HiEasy;
|
|
(vi)
|
The
documents controlled by HiEasy (refer to the list of Exhibit
C);
and
|
|
(vii)
|
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 and the old.
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19
