1
EXHIBIT 10.22
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DATED 25 AUGUST 2000
CONTINENTAL AIR EXPRESS (HK) LIMITED
CONTINENTAL CONTAINER LINES LIMITED
UNION-TRANSPORT (HK) LIMITED
XXXXX XXXX KOK XXXXX
XXX XXXX XXX
XXXXX XXXXX XXXXXXXX
XXXXXXX XXXXXXX XXXXX
XXXXXX XXXXXXX XXXXXXX
XXXX XX XXXX
XXXX XXXX HANG
XXXX XXX CHEONG
XXXXX XXXX LUNG
XX XXXX XX
XX XXX XXXX
UTI WORLDWIDE INC.
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ASSET PURCHASE AGREEMENT
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XXXXX & XXXXXXXX
00XX XXXXX XXXXXXXXX XXXXX
XXXX XXXX
TELEPHONE: (000) 0000-0000
FAX: (000) 0000-0000
REF: PT/CST/32109600-000001/CST02042.EXE.DOC
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CONTENTS
Number Clause Headings Page
------ --------------- ----
1. Definitions and Interpretation..........................................2
2. Sale of Assets.........................................................15
3. Payment of Purchase Price..............................................15
4. Conditions.............................................................19
5. Pre-Completion Obligations.............................................20
6. Completion.............................................................21
7. Assignment or Novation of Leased Properties............................24
8. Apportionments.........................................................24
9. Transfer of Businesses (Protection of Creditors) Ordinance
(Chapter 49 of the Laws of Hong Kong)..................................25
10. Responsibility for Liabilities.........................................25
11. Third Party Consents...................................................27
12. Employees..............................................................28
13. Retirement Scheme......................................................30
14. Warranties.............................................................30
15. Restriction of Covenantors.............................................33
15A. Investor Representations and Covenants of Lai and Xxxxxxx Xxxxx........35
16. Independent Accountants................................................36
17. Further Obligations and Intentions.....................................37
18. Restriction on Announcements...........................................40
19. Costs..................................................................40
20. General................................................................41
21. Notices................................................................42
22. Governing Law and Submission to Jurisdiction...........................45
Schedules
Schedule 1 Warranties......................................................48
Schedule 2 Excluded Assets...................................................
Schedule 3 The Properties....................................................
Schedule 4 Intellectual Property.............................................
Schedule 5 Leasing Agreements................................................
Schedule 6 Machinery and Equipment...........................................
Schedule 7 Transferring Employees............................................
Schedule 8 Purchased Contracts...............................................
Schedule 9 Letter to Employees...............................................
Schedule 10 Retirement Scheme................................................
Schedule 11 Notice of Transfer of Business...................................
Schedule 12 Insurances.......................................................
Schedule 13 Guarantees.......................................................
Schedule 14 Service Agreement................................................
Schedule 15 Xxxxx Xxxxx Service Agreement....................................
Execution.....................................................................
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Annexures
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Annexure 1 CO Air Accounts...................................................
Annexure 2 CO Container Accounts.............................................
Annexure 3 Xxxxx December Accounts...........................................
Annexure 4 Customer List.....................................................
Annexure 5 CO Air Management Accounts........................................
Annexure 6 CO Container Management Accounts..................................
Annexure 7 Xxxxx March Accounts..............................................
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DATE: 25 August 2000
PARTIES:
(1) CONTINENTAL AIR EXPRESS (HK) LIMITED, a company incorporated in Hong
Kong whose registered office is at 6th and 7th Floors, Leahander
Centre, 28 Wang Wo Tsai Street, Tsuen Wan, New Territories, Hong Kong
("CO AIR (HK)").
(2) CONTINENTAL CONTAINER LINES LIMITED, a company incorporated in Hong
Kong whose registered office is at 6th and 7th Floors, Leahander
Centre, 28 Wang Wo Tsai Street, Tsuen Wan, New Territories, Hong Kong
("CO CONTAINER (HK)"; CO Air (HK) and CO Container (HK) are
collectively referred to herein as the "VENDORS" and singly as the
"VENDOR").
(3) UNION-TRANSPORT (HK) LIMITED (TO BE RENAMED AS UTI (HK) LIMITED), a
company incorporated in Hong Kong with registered number 319402 whose
registered office is at 14th Floor, COL Tower, World Trade Square, 123
Hoi Bun Road, Xxxx Xxxx, Kowloon, Hong Kong (the "PURCHASER").
(4) XXXXX XXXX XXX XXXXX of 00X, Xxxxx X, Xxx Xxxxxxxx, 00 Xxxxxxxx Xxxx
Xxxx, Xxxxxxx, Xxxx Xxxx ("XXXXX XXXXX").
(5) XXX XXXX FAI of Xxxx X0, Xxxxx X, 0xx Xxxxx, Xxxxxxx Xxxx, 0 Xxxxxxxxx
Xxxx, Xxxx Xxxx ("LAI"; the Vendors, Xxxxx Xxxxx and Xxx are
collectively referred to herein as the "WARRANTORS" and singly as the
"WARRANTOR").
(6) XXXXX XXXXX XXXXXXXX of 0000 Xxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx
00000, Xxxxxx Xxxxxx of America ("XXXXXXXX").
(7) XXXXXXX XXXXXXX XXXXX of 000-00 000xx Xxxxxx, Xxxxxxx, XX 00000, Xxxxxx
Xxxxxx of America ("BELLO").
(8) XXXXXX XXXXXXX XXXXXXX of 00 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, XX
00000, Xxxxxx Xxxxxx of America ("CATALDO").
(9) XXXX XX MING of 6th and 7th Floors, Leahander Centre, 28 Wang Wo Xxxx
Xxxxxx, Xxxxx Xxx, Xxx Xxxxxxxxxxx, Xxxx Xxxx ("XXXX XXXX").
(10) XXXX XXXX HANG of 6th and 7th Floors, Leahander Centre, 28 Wang Wo Xxxx
Xxxxxx, Xxxxx Xxx, Xxx Xxxxxxxxxxx, Xxxx Xxxx ("XXXXX XXXX").
(11) XXXX XXX CHEONG of 6th and 7th Floors, Leahander Centre, 28 Wang Wo
Xxxx Xxxxxx, Xxxxx Xxx, Xxx Xxxxxxxxxxx, Xxxx Xxxx ("XXXX").
(12) XXXXX XXXX LUNG of 6th and 7th Floors, Leahander Centre, 28 Wang Wo
Xxxx Xxxxxx, Xxxxx Xxx, Xxx Xxxxxxxxxxx, Xxxx Xxxx ("XXXXXXX XXXXX").
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(13) NG XXXX XX of 00000 X. Xxxxxx Xxxxxx, Xxxx X, Xxx Xxxxxxx, XX 00000,
United States of America ("XXX XX").
(14) NG XXX XXXX of 000-00 000xx Xxxxxx, Xxxxxxx, XX 00000, Xxxxxx Xxxxxx of
America ("XXX XX"; Xxxxx Xxxxx, Lai, Barnhill, Bello, Cataldo, Xxxx
Xxxx, Xxxxx Xxxx, Xxxx, Xxxxxxx Xxxxx, Xxx Xx and Xxx Xx are
collectively referred to herein as the "KEY EMPLOYEES" and singly as
the "KEY EMPLOYEE", the Vendors and the Key Employees are collectively
referred to herein as the "COVENANTORS" and singly as the
"Covenantor").
(15) UTI WORLDWIDE INC., a company incorporated in the British Virgin
Islands whose registered office is at 9 Columbus Centre, Pelican Drive,
Tortola, British Virgin Islands ("UTI WORLDWIDE").
RECITALS:
(A) The Vendors carry on the business of customs brokerage, freight
forwarding, warehousing and distribution and other related services.
The Vendors wish to sell and the Purchaser wishes to purchase the
business, and the assets used in it, as a going concern on the terms
and conditions set out in this Agreement.
(B) The Purchaser requires the Warrantors who have requested the Purchaser
to enter into this Agreement, to give such covenants and undertakings
as are set out herein as a condition of the Purchaser's entry into this
Agreement.
(C) The US Vendors (as hereinafter defined), the US Purchaser (as
hereinafter defined) and the Key Employees have executed
contemporaneously with this Agreement an agreement (the "US AGREEMENT")
for the sale and purchase of the business (and the assets used in it)
carried on by the US Vendors on the terms and conditions set out
therein.
(D) UTi Worldwide has agreed to guarantee the performance by the Purchaser
of its obligations under Clauses 3.1.2.2 to 3.1.2.4.
TERMS AGREED:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement where the context so admits the following words and
expressions shall have the following meanings:
"ACCOUNTING DATE" 31 December 1999;
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"ACCOUNTS" the CO Air Accounts, the CO Container
Accounts and the Xxxxx December Accounts;
"ACCOUNTS RECEIVABLE" all book debts, trade and other debts, notes
receivable and other rights to payment
arising from the operation of the Business
before the Completion Date (including the
right to receive payment for services
rendered before the Completion Date but not
invoiced before such date) and including the
benefit of all guarantees and security in
respect thereof;
"ASSETS" the Goodwill, the benefit of the Insurances,
Intellectual Property, Machinery and
Equipment, Leased Properties, the benefit of
the Purchased Contracts, Sales
Documentation, the Xxxxx Interest, Books and
Records (other than minute books relating to
directors' and shareholders' meetings and
statutory books), the Customer List and all
other rights and assets used in the Business
immediately prior to Completion, but not
including the Excluded Assets;
"ASSOCIATED COMPANY" (i) in relation to a company, any
company which is its holding company
or a subsidiary of it or of its
holding company, as those terms are
defined in section 2 of the Companies
Ordinance;
(ii) in relation to an individual, any
company:
(aa) in which such individual:
(1) controls the composition
of the board of
directors;
(2) controls more than half
of the voting power of
such company; or
(3) holds more than half of
the issued share capital
(excluding any part of
it which carries no
right to participate
beyond a specified
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amount in a distribution
of either profits or
capital); or
(bb) which is a subsidiary (as
such term is defined in
section 2 of the Companies
Ordinance) of a company which
falls within any of the
categories listed in
paragraph (ii)(aa) above;
"BOOKS AND RECORDS" originals and copies in whatever form and
upon whatever media they may be recorded of
all registers, books, reports,
correspondence, files, records, accounts,
documents and other material relating to or
used in connection with the Business, the
Assets, the Transferring Employees and the
customers on the Customer List;
"BUSINESS" the business of customs brokerage, freight
forwarding, warehousing and distribution and
other related services as carried on by the
Vendors immediately prior to Completion
including that carried on at the Properties
under the names "Continental Air Express
(HK) Limited" and "Continental Container
Lines Limited" and, where the context
permits, shall include the Assets;
"BUSINESS DAY" a day (other than a Saturday or a Sunday) on
which banks are generally open for business
in Hong Kong;
"CASH FLOAT" the cash balance including all cash-in-hand
and at bank, held by the Vendors immediately
prior to Completion for the purposes of the
Business;
"CHINESE PARTY" the PRC joint venture party holding a 49%
equity interest in Xxxxx;
"CLASS A LICENCE" the air transportation sales agency business
operation approval certificate (category 1
cargo transportation) issued by the Civil
Aviation Administration of China and the PRC
international cargo transportation agency
enterprise approval certificate issued by
the Ministry of Foreign Trade and Economic
Co-operation of the PRC;
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"CO AIR ACCOUNTS" the audited financial statements of CO Air
(HK) as at and for the accounting period
which ended on the Accounting Date
(comprising a balance sheet, profit and loss
account, statement of total recognised gains
and losses, statement of source and
application of funds, notes and directors'
and auditors' report), a copy of which is
annexed hereto as Annexure 1 and initialled
for the purposes of identification by the
Vendors and the Purchaser;
"CO AIR (CHINA)" Continental Air Express (China) Co. Ltd., a
company incorporated in the British Virgin
Islands;
"CO AIR MANAGEMENT
ACCOUNTS" the unaudited balance sheet as at 30 April
2000 and the unaudited profit and loss
account for the period ending on such date
of CO Air (HK) Hong Kong office, CO Air (HK)
Shanghai representative office, CO Air (HK)
Guangzhou representative office, CO Air (HK)
Qingdao representative office and CO Air
(HK) Tianjin representative office and the
unaudited balance sheet as at 30 April 2000
and the unaudited profit and loss account
for the period from 1 April 2000 and ending
on 30 April 2000 of CO Air (HK) Beijing
representative office, copies of which are
annexed hereto as Annexure 5 and initialled
for the purposes of identification by the
Vendors and the Purchaser;
"CO CARGO (CA)" Continental Cargo Logistics Inc., a company
incorporated in the State of California,
USA;
"CO CARGO (NY)" Continental Cargo Logistics Inc., a company
incorporated in the State of New York, USA;
"CO CONTAINER ACCOUNTS" the audited financial statements of CO
Container (HK) as at and for the accounting
period which ended on the Accounting Date
(comprising a balance sheet, profit and loss
account, statement of source and application
of funds, notes and directors' and auditors'
report), a copy of which is annexed hereto
as Annexure 2 and initialled for the
purposes of identification by the Vendors
and the Purchaser;
"CO CONTAINER the unaudited balance sheet as at 30 April
2000,
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MANAGEMENT
ACCOUNTS" and the unaudited profit and loss account
for the period from 1 April 2000 and ending
on such date of CO Container (HK), a copy of
which is annexed hereto as Annexure 6 and
initialled for the purposes of
identification by the Vendors and the
Purchaser;
"CO CONTAINER (US)" Continental Container Line, Inc., a company
incorporated in the State of New York, USA;
"COMPANIES ORDINANCE" the Companies Ordinance (Chapter 32 of the
Laws of Hong Kong);
"COMPANY" a company or body corporate wherever
incorporated;
"COMPLETION" completion of the sale and purchase of the
Business pursuant to Clause 6;
"COMPLETION DATE" 1 September 2000 (or such other date as the
Parties may agree in writing);
"CONDITIONS" the conditions specified in Clause 4.1;
"CUSTOMER LIST" the list of customers of the Vendors set out
in Annexure 4, as supplemented by written
notice to the Purchaser by the Vendors up to
and including the Completion Date by the
addition of persons with whom the Vendors
have transacted business between the date
hereof and the Completion Date;
"XXXXX XXXXX SERVICE the service agreement to be entered into
AGREEMENT" between the Purchaser and Xxxxx Xxxxx
substantially in the form set out in
Schedule 15;
"DISCLOSURE LETTER" the letter of today's date from the Vendors
to the Purchaser in the approved terms;
"ENCUMBRANCES" all pledges, charges, liens, mortgages,
security interests, pre-emption rights,
options and any other encumbrances or third
party rights or claims of any kind (other
than repairmens' and similar liens arising
or incurred in the ordinary course of the
Business and securing obligations not
material in amount and provisions
constituting reservation and retention of
title clauses entered into in the ordinary
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course of the Business in favour of
suppliers of goods purchased in the ordinary
course of the Business);
"EXAMINATION AND the Ministry of Foreign Trade and Economic
APPROVAL AUTHORITY" Co-operation of the PRC or its relevant
branch which has the authority to approve
the transfer of the Xxxxx Interest from CO
Air (HK) to the Purchaser;
"EXCLUDED ASSETS" those assets used in or relating to the
Business which are excluded from the sale
and purchase and which are identified in
Schedule 2;
"GOODWILL" the goodwill of the Vendors in connection
with the Business including the exclusive
right for the Purchaser to represent itself
as carrying on the Business in succession to
the Vendors;
"HONG KONG" the Hong Kong Special Administrative Region
of the PRC;
"HONG KONG DISCLOSURE the bundle of documents annexed to the
BUNDLE" Disclosure Letter marked "Hong Kong
Disclosure Bundle" and initialled for
purposes of identification by the
Purchaser's Solicitors and the Vendors'
Solicitors;
"INSURANCES" the policies of assurance and insurance,
particulars of which are set out in Schedule
12;
"INTELLECTUAL PROPERTY" the following rights arising or used in
connection with the Business (including but
not limited to those listed in Schedule 4):
(i) all patents, registered designs,
design rights, trade marks, service
marks, copyrights, Internet domain
names of any level, rights in circuit
layouts, topography rights, trade and
business names, including the benefit
of all registrations of and
applications to register and rights
to apply for registration of any of
the aforesaid items, and all rights
in the nature of any of the aforesaid
items, anywhere in the world;
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(ii) rights in the nature of unfair
competition rights and rights to xxx
for passing off;
(iii) all trade secret, confidentiality and
other proprietary rights, including
all rights to know-how and other
technical information;
(iv) the benefit of all licences and
permissions granted to or enjoyed by
the Vendors in respect of any of the
foregoing;
"KEY HK/PRC Xxxxx Xxxxx, Xxx, Xxxx Xxxx, Xxxxx Xxxx and
EMPLOYEES" Xxxxxxx Xxxxx;
"LEASED PROPERTIES" the properties occupied by the Vendors, for
the purposes of the Business, which are
described in Schedule 3 Part 2;
"LEASES" all the leases, sub-leases, tenancy
agreements, sub-tenancy agreements, licences
or other documents (including any options
for extension or renewal relating thereto)
granted or agreed to be granted to either of
the Vendors or pursuant to which either of
the Vendors holds or occupies any property
for the purposes of the Business, details of
which are set out in Schedule 3;
"LEASING AGREEMENTS" the leasing and hire purchase agreements
listed in Schedule 5;
"LOGISTICS MANAGEMENT" The Logistics Management Group Limited, a
company incorporated in the British Virgin
Islands;
"MACHINERY AND the movable plant, machinery, vehicles,
EQUIPMENT" office and warehouse equipment, computer
hardware and software, furniture and
furnishings, together with all spare parts,
accessories and consumable supplies therefor
owned or used by the Vendors in the Business
immediately prior to Completion (excluding
the Excluded Assets and any items which are
not owned by the Vendors but for which the
Vendors have a right of user pursuant to a
Purchased Contract) including without
limitation those items which are described
in Schedule 6;
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"MANAGEMENT ACCOUNTS" the CO Air Management Accounts and the CO
Container Management Accounts;
"MONTH" calendar month;
"OCCUPATIONAL an occupational retirement scheme within the
RETIREMENT SCHEME" meaning given to that term in section 2 of
the Occupational Retirement Schemes
Ordinance (Chapter 426 of the Laws of Hong
Kong);
"OWNED PROPERTIES" the properties, short particulars of which
are set out in Schedule 3 Part 1;
"PARTIES" the named parties to this Agreement and
their respective successors, personal
representatives and permitted assigns;
"PATENTS" the patents, xxxxx patents and registered
designs and applications therefor listed in
Schedule 4 Part 1;
"PRC" the People's Republic of China but
excluding, for the purposes of this
Agreement, Hong Kong, Macau and Taiwan;
"PROPERTIES" the Owned Properties and the Leased
Properties;
"PURCHASE PRICE" the total price to be paid by the Purchaser
under Clause 3.1 of this Agreement;
"PURCHASED CONTRACTS" (i) the Leasing Agreements; (ii) all
contracts for the supply of services by the
Vendors in connection with the Business
which are in existence at the date hereof
and which are not fully performed prior to
commencement of business on the Completion
Date (a list of those contracts which are in
writing is set out in Schedule 8 Part 1);
(iii) all the written purchase orders or
contracts for the purchase by the Vendors of
supplies in connection with the Business
which are in existence at the date hereof in
respect of which delivery has not been made
on or before the commencement of business on
the Completion Date (a list of which is set
out in Schedule 8 Part 2); (iv) all licences
granted by the Vendors in relation to the
Intellectual Property which are in existence
at the date hereof (a list of which is set
out in Schedule 8 Part 3); (v) all
agreements with airlines, shipping
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lines, transportation companies and
warehouses in connection with the Business
which are in existence at the date hereof
and have not been fully performed (a list of
which is set out in Schedule 8 Part 4); and
(vii) other than leases under which the
Vendors occupy the Leased Properties, all
other contracts entered into in the course
of carrying on the Business to which either
of the Vendors is a party and which have not
been fully performed prior to commencement
of business on the Completion Date which
relate to the Business and which (a) if
entered into prior to the date hereof are
listed in Schedule 8 Part 5 or (b) if
entered into after the date hereof are
approved by the Purchaser under Clause 5.1;
"PURCHASER'S SOLICITORS" Xxxxx & XxXxxxxx of 14th Floor, Xxxxxxxxx
House, 00 Xxxxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx;
"RELATED COMPANY" in relation to the Vendors, a company in
which one or more directors or substantial
shareholders of either of the Vendors and/or
its holding company either have a beneficial
interest or are in a position to exercise
significant influence therein;
"RETAINED PURCHASE the retained purchase price to be paid by
PRICE" the Purchaser pursuant to Clause 3.1.2;
"RETIREMENT SCHEME" the Continental Air Express (HK) Limited
Retirement Scheme registered under the
Occupational Retirement Schemes Ordinance
(Chapter 426 of the Laws of Hong Kong) with
registration number X000000(X), which was
established by a deed of participation dated
5 July 1996 and all rules and regulations
made in connection therewith;
"SALES DOCUMENTATION" all sales publications, advertising and
promotional materials, printed terms and
conditions of sale, business forms,
instructional material and other technical
and sales materials which relate to the
Business, together with any plates, blocks,
negatives, computer discs or tapes and
similar items relating to them;
"SECURITIES ACT" The United States Securities Act of 1933 (as
amended);
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"SERVICE AGREEMENTS" the service agreements substantially in the
form set out in Schedule 14;
"XXXXX" Xxxxx International Transportation Service
Co., Ltd. (a Sino-foreign equity joint
venture company established under the laws
of the PRC;
"XXXXX BUSINESS" the business of customs brokerage, freight
forwarding, warehousing and distribution and
other related services as carried on by
Xxxxx immediately prior to Completion;
"XXXXX DECEMBER the audited financial statements of Xxxxx as
ACCOUNTS" at and for the accounting period which ended
on the Accounting Date (comprising a balance
sheet, profit and loss account and auditors'
report), a copy of which is annexed hereto
as Annexure 3 and initialled for the
purposes of identification by the Vendors
and the Purchaser;
"XXXXX INTEREST" CO Air (HK)'s 51% equity interest in Xxxxx;
"XXXXX MARCH ACCOUNTS" the audited financial statements of Xxxxx as
at 31 March 2000 and for the period from 1
April 1999 to 31 March 2000 (comprising a
balance sheet, profit and loss account and
auditors' report), a copy of which is
annexed hereto as Annexure 7 and initialled
for purposes of identification by the
Vendors and the Purchaser;
"TAX" all forms of taxation, estate duties,
deductions, withholdings, duties, imposts,
levies, fees, charges, social security
contributions and rates imposed, levied,
collected, withheld or assessed by any
local, municipal, regional, urban,
governmental, state, federal or other body
in Hong Kong or elsewhere and any interest,
additional taxation, penalty, surcharge or
fine in connection therewith;
"THIRD PARTY RIGHTS" the rights given or granted to the Vendors
by third parties for the use by the Vendors
of the trade marks, service marks, trade
names, patents, designs and copyright as
listed in Part 4 of Schedule 4 and know-how
and confidential information owned by such
third parties and any other rights given to
the
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Vendors under any agreements including but
not limited to, licence, distribution,
marketing or sales agreements, for use in or
relating to the Business and which rights
are assignable from the Vendors to the
Purchaser;
"TRADE MARKS" the registered trade marks and trade xxxx
applications listed in Schedule 4 Part 2;
"TRANSFER CONTRACT" a contract to be signed by CO Air (HK) and
the Purchaser for effecting the transfer of
the Xxxxx Interest in form and substance
satisfactory to the Purchaser;
"TRANSFERRING EMPLOYEES" all of the employees of the Vendors whose
employment is to be transferred to the
Purchaser, a list of whom appears in
Schedule 7;
"US BUSINESS" the business of customs brokerage, freight
forwarding, warehousing and distribution and
other related services as carried on by the
US Vendors immediately prior to Completion
(as defined in the US Agreement) including
that carried on under the names "Continental
Container Line, Inc." and "Continental Cargo
Logistics Inc.";
"US PURCHASER" Union-Transport Corporation, a company
incorporated in the State of New York, USA;
"US VENDORS" CO Container (US), CO Cargo (NY) and CO
Cargo (CA);
"USA" United States of America;
"UTI GROUP" UTi Worldwide and its subsidiaries;
"VENDORS' SOLICITORS" Xxxxx, Xxxx & Xxxx of 16th Floor, Wing Xx
Xxxxx, 00 Xxx Xxxxx Xxxx Xxxxxxx, Xxxx Xxxx;
"WARRANTIES" the representations, warranties and
undertakings contained or referred to in
Clause 14 and Schedule 1;
"YEAR-ONE NET PROFIT" subject as provided in Clause 3.2, the net
profit before tax of the Business, the Xxxxx
Business and
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the US Business for the 12-month period
immediately after Completion;
"YEAR-TWO NET PROFIT" subject as provided in Clause 3.2, the net
profit before tax of the Business, the Xxxxx
Business and the US Business for the
12-month period commencing on the date
immediately after the expiration of 12
months after Completion and ending on the
date falling 24 months after Completion;
"YEAR-THREE NET PROFIT" subject as provided in Clause 3.2, the net
profit before tax of the Business, the Xxxxx
Business and the US Business for the
12-month period commencing on the date
immediately after the expiration of 24
months after Completion and ending on the
date falling 36 months after Completion;
"YEARLY NET PROFITS" the Year-one Net Profit, Year-two Net Profit
and Year-three Net Profit;
"HK$" Hong Kong dollars, the lawful currency of
Hong Kong;
"RMB" Renminbi, the lawful currency of the PRC;
and
"US$" United States dollars, the lawful currency
of the USA.
1.2 Save where the context otherwise requires words and phrases
the definitions of which are contained or referred to in the
Companies Ordinance shall be construed as having the meaning
thereby attributed to them.
1.3 Any references, express or implied, to statutes or statutory
provisions shall be construed as references to those statutes
or provisions as respectively amended or re-enacted or as
their application is modified from time to time by other
provisions (whether before or after the date hereof) and shall
include any statutes or provisions of which they are
re-enactments (whether with or without modification) and any
orders, regulations, instruments or other subordinate
legislation under the relevant statute or statutory provision.
References to sections of consolidating legislation shall
wherever necessary or appropriate in the context be construed
as including references to the sections of the previous
legislation from which the consolidating legislation has been
prepared.
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1.4 References in this Agreement to Clauses, Schedules, Annexures
and Attachments are to clauses in and schedules, annexures and
attachments to this Agreement (unless the context otherwise
requires). The Recitals, Schedules, Annexures and Attachments
to this Agreement shall be deemed to form part of this
Agreement.
1.5 Headings are inserted for convenience only and shall not
affect the construction of this Agreement.
1.6 The expressions "CO Air (HK)", "CO Container (HK)", "the
Vendors", "the Purchaser", "Xxxxx Xxxxx", "Xxx", "Xxxxxxxx",
"Bello", "Xxxxxxx", "Xxxx Xxxx", "Xxxxx Xxxx", "Xxxx",
"Xxxxxxx Xxxxx", "Xxx Xx", "Xxx Xx", "the Key Employees", "the
Covenantors", "UTi Worldwide" and "the Warrantors" shall,
where the context permits, include their respective
successors, personal representatives and permitted assigns.
1.7 References to "persons" shall include bodies corporate,
unincorporated associations and partnerships (whether or not
having separate legal personality).
1.8 References to writing shall include any methods of producing
or reproducing words in a legible and non-transitory form.
1.9 The masculine gender shall include the feminine and neuter and
the singular number shall include the plural and vice versa.
1.10 All warranties, representations, indemnities, covenants,
agreements and obligations given or entered into by more than
one person are given or entered into jointly and severally.
1.11 A document expressed to be "in the approved terms" means a
document the terms of which have been approved by or on behalf
of the Vendors and the Purchaser and a copy of which has been
signed for the purposes of identification by or on behalf of
those Parties.
1.12 In construing this Agreement:
1.12.1 the rule known as the ejusdem generis rule shall
not apply and, accordingly, general words
introduced by the word "other" shall not be given
a restrictive meaning by reason of the fact that
they are preceded by words indicating a
particular class of acts, matters or things; and
1.12.2 general words shall not be given a restrictive
meaning by reason of the fact that they are
followed by particular examples intended to be
embraced by the general words.
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2. SALE OF ASSETS
2.1 Subject to the terms of this Agreement, each of the Vendors
shall sell as beneficial owner, and the Purchaser shall
purchase, the Business carried on by each of the Vendors
respectively as a going concern and all of the Assets relating
to the Business carried on by each of the Vendors respectively
free from all Encumbrances. The sale and purchase shall take
effect from the Completion Date subject to Completion.
2.2 Nothing in this Agreement shall operate to transfer from the
Vendors, nor to impose any obligation or liability on the
Purchaser in respect of, any of the Excluded Assets nor any
other assets or liabilities of the Vendors except as
specifically provided in this Agreement.
3. PAYMENT OF PURCHASE PRICE
3.1 The Purchase Price shall be satisfied by the Purchaser as
follows:
3.1.1 the sum of US$ *** shall be paid on account of the
Purchase Price at Completion as provided in Clause 6;
3.1.2 the Retained Purchase Price shall be payable as
follows:
3.1.2.1 the sum of US$ *** shall be payable (subject
to the proviso below in this Clause 3.1.2)
in cash on or before 31 October 2000;
3.1.2.2 subject to any adjustment pursuant
to Clause 3.3, a sum equal to ***
of *** times the Year-one Net
Profit shall be payable in cash
within 14 months after Completion;
3.1.2.3 subject to any adjustment pursuant
to Clause 3.3, a sum equal to ***
of *** times the Year-two Net
Profit shall be payable in cash
within 26 months after Completion;
and
3.1.2.4 subject to any adjustment pursuant
to Clause 3.3, a sum equal to ***
of *** times the Year-three Net
Profit shall be payable in cash
within 38 months after Completion,
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* Information omitted and filed separately with the Commission for confidential
treatment.
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in each case by delivery to each of the Vendors of a banker's
draft for the amount of payment payable in US dollars to the
Vendors in the proportion of *** to CO Air (HK) and *** to
CO Container (HK) (or to such other person and in such other
proportion as the Vendors in writing may direct) or by such
other method as may be agreed by the Vendors and the Purchaser
in writing,
Provided That if the ordinary shares of UTi Worldwide ("UTI
SHARES") are listed on any stock exchange in the USA through
an underwritten public offering before 31 October 2000, then
the amount of payment payable to the Vendors pursuant to
Clause 3.1.2.1 shall be made by way of the allotment and issue
to Lai and Xxxxxxx Xxxxx (as provided below) in the aggregate
of such number of new unregistered, restricted UTi Shares (the
"CONSIDERATION SHARES") to be calculated by dividing the said
amount of payment by the offer price per share of the UTi
Shares in the said public offering (by rounding down to the
nearest integral number of shares, if applicable), with any
balance (not exceeding the amount of such offer price per
share) arising from such rounding down being payable in cash
to CO Air (HK). Each of the Vendors, Lai and Xxxxxxx Xxxxx
hereby agrees that once the number of Consideration Shares
have been determined, then the Consideration Shares shall be
allotted and issued to Lai and Xxxxxxx Xxxxx in the proportion
as nearby as possible to 60:40. For the avoidance of doubt,
allotment and issue to Lai and Xxxxxxx Xxxxx of the
Consideration Shares and the payment of the balancing amount
to CO Air (HK) in accordance with this proviso to Clause 3.1.2
shall constitute payment, satisfaction and discharge in full
of the amount payable to the Vendors pursuant to Clause
3.1.2.1.
3.2 For the purposes of the calculation of each of the Yearly Net
Profits:
3.2.1 any cost savings arising from synergies of the
Business with other businesses of the Purchaser or
synergies of the US Business with other businesses of
the US Purchaser as agreed between the Vendors and
the Purchaser shall be split *** respectively between
the Business and the other businesses of the
Purchaser or between the US Business and the other
businesses of the US Purchaser, as the case may be;
3.2.2 the Purchaser agrees that it will not charge the
Business, the Xxxxx Business or the US Business for
the use of the Purchaser's own internally designed
information technology software systems. However, any
information technology or related costs specifically
incurred in connection with the Business, the Xxxxx
Business or the US
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* Information omitted and filed separately with the Commission for confidential
treatment.
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Business will be charged to the Business, the Xxxxx
Business and the US Business at cost;
3.2.3 the Purchaser agrees that no head office management
fees will be charged to the Business, the Xxxxx
Business or the US Business; and
3.2.4 amounts in RMB and in Hong Kong dollars shall be
translated into US dollars at:
3.2.4.1 the average of the relevant spot buying and
selling rates prevailing at or around noon
(Hong Kong time) on the last business day in
the relevant 12-month period covered by the
relevant Yearly Net Profit as quoted by The
Hongkong and Shanghai Banking Corporation
Limited ("The Hongkong Bank") as may be
displayed on the Hexagon System of The
Hongkong Bank or such other system of The
Hongkong Bank as may replace the Hexagon
System for the purpose of displaying spot
buying and selling rates of RMB against US
dollars or Hong Kong dollars against US
dollars (as the case may be) of The Hongkong
Bank; and
3.2.4.2 if the relevant rate described in Clause
3.2.4.1 is unavailable, the relevant spot
buying rate for RMB against US dollars or
Hong Kong dollars against US dollars (as the
case may be) on the last business day in the
relevant 12-month period covered by the
relevant Yearly Net Profit displayed on the
Reuters Business Briefing system,
Provided That in the event that the Purchaser is
unable to calculate any of the Yearly Net Profits due
to a subsequent merger or acquisition, then the
amount of such Yearly Net Profit shall be deemed to
be US$5,400,000 (five million four hundred thousand
United States dollars) for the purposes of Clause
3.1.2.
3.3 The unaudited net profit before tax ("UNAUDITED NET PROFIT")
of CO Container (US), CO Cargo (NY) and CO Cargo (CA) for the
12-month period ended 31 December 1999 as shown in the
respective management accounts for such period are US$778,267,
US$609,805 and US$84,403 respectively. The Warrantors
undertake to use their best endeavours to deliver to the
Purchaser, no later than the date falling 14 months after
Completion, audited financial statements (the "US ACCOUNTS")
of each of the US Vendors as at and for the accounting period
ended on 31 December 1999. The Retained Purchase Price shall
be adjusted as follows:
3.3.1 if any of the US Accounts are delivered to
the Purchaser as provided above and the
total audited net profit before tax ("TOTAL
AUDITED
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FIGURE") of those US Vendors (the "AUDITED
US VENDORS") in respect of which the US
Accounts are so delivered, as shown by the
relevant US Accounts (which shall be
calculated by adding all such net profit
figures for each US Vendor and deducting any
net loss figure for any US Vendor, and which
total amount may therefore be either
positive or negative), shall be less than
the sum of the Unaudited Net Profit figures
for the Audited US Vendors, the Retained
Purchase Price payable pursuant to Clauses
3.1.2.2 to 3.1.2.4 shall be reduced by an
amount equal to *** times the arithmetic
difference between: (1) the sum of the
Unaudited Net Profit figures for the Audited
US Vendors and (2) the Total Audited Figure;
and
3.3.2 if the US Accounts for any US Vendor are not
delivered to the Purchaser as provided
above, the Retained Purchase Price payable
pursuant to Clauses 3.1.2.2 to 3.1.2.4 shall
be reduced by an amount equal to US$***
for each US Vendor whose US Accounts are not
delivered to the Purchaser as provided
above,
Provided That the adjustments to the Retained Purchase Price
in this Clause 3.3 shall: (1) first be made to the Retained
Purchase Price payable pursuant to Clause 3.1.2.2; (2) only be
made to the Retained Purchase Price payable pursuant to Clause
3.1.2.3 to the extent that the amount of adjustment is greater
than the original Retained Purchase Price payable pursuant to
Clause 3.1.2.2 (before adjustment); and (3) only be made to
the Retained Purchase Price payable pursuant to Clause 3.1.2.4
to the extent that the amount of adjustment is greater than
the sum of the original Retained Purchase Price payable
pursuant to Clauses 3.1.2.2 and 3.1.2.3 (both before
adjustment).
3.4 In consideration of the Vendors entering into this Agreement,
UTi Worldwide hereby irrevocably guarantees to each of the
Vendors the due and punctual performance and observance by the
Purchaser of its obligations under Clauses 3.1.2.2 to 3.1.2.4.
If the Purchaser defaults in the performance of any one or
more of its obligations under Clauses 3.1.2.2 to 3.1.2.4, UTi
Worldwide shall forthwith perform, guarantee the performance
of and satisfy the obligation or liability in regard to which
such default has been made in the manner prescribed in this
Agreement.
3.5 The guarantees given by UTi Worldwide in Clause 3.4 shall be a
continuing security and shall be in addition to and without
prejudice to all other legal rights and remedies which the
Vendors may have against the Purchaser under this Agreement.
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* Information omitted and filed separately with the Commission for confidential
treatment.
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3.6 UTi Worldwide acknowledges that the Vendors rely and act upon
the guarantees of UTi Worldwide under Clauses 3.4 and 3.5 in
their decision to enter into this Agreement in the terms
herein contained.
3.7 Subject as provided below in this Clause, any amounts owing by
either of the Vendors to the Purchaser may be set-off by the
Purchaser against any amount payable by the Purchaser to the
Vendors hereunder. For the avoidance of doubt, but without
limiting the generality of the foregoing, any amounts owing by
either of the Vendors to the Purchaser pursuant to Clause 10
may be set-off by the Purchaser against the Retained Purchase
Price, provided that amounts exceeding HK$500,000 owing by
either of the Vendors to the Purchaser other than pursuant to
Clause 10.1.1 shall have been verified and acknowledged in
writing by the relevant Vendor.
4. CONDITIONS
4.1 The sale and purchase of the Assets is conditional upon:
4.1.1 completion of the sale and purchase of the US
Business (and the assets used in it) becoming
unconditional in accordance with the terms and
conditions set out in the US Agreement;
4.1.2 each of the Vendors having complied fully with the
obligations set out in Clause 5;
4.1.3 delivery by the Vendors to the Purchaser of the
Service Agreements for each of the Key HK/PRC
Employees (other than Xxxxx Xxxxx) (providing for
remuneration for each of them substantially on the
same terms as set out against each of them
respectively in Schedule 7) duly executed by the Key
HK/PRC Employees (other than Xxxxx Xxxxx); and
4.1.4 delivery by the Vendors to the Purchaser of the Xxxxx
Xxxxx Service Agreement duly executed by Xxxxx Xxxxx.
4.2 The Purchaser may waive all or any of the Conditions at any
time by notice in writing to the Vendors' Solicitors.
4.3 The Vendors shall use their best endeavours to procure the
fulfilment of the Conditions on or before the Completion Date.
4.4 In the event that any of the Conditions shall not have been
fulfilled (or waived pursuant to Clause 4.2 by the Purchaser)
on the Completion Date, then the Purchaser shall not be bound
to proceed with the purchase of the Assets and, save for the
provisions of Clauses 1, 4, 18, 19.1, 20.1, 20.2, 20.4, 20.6,
20.7, 20.9, 21 and 22 of this Agreement and save in respect of
any antecedent breach of this
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Agreement, all rights and liabilities of the Parties hereunder
shall cease and no Party shall have any claim against any
other Parties.
5. PRE-COMPLETION OBLIGATIONS
5.1 Between the date hereof and the Completion Date, the Vendors
shall carry on the Business in the usual and ordinary course
consistent with prior practice so as to maintain the same as a
going concern (using its best endeavours to preserve its
assets, customer and supplier relations, employee relations,
business and organisation) and shall ensure that without the
prior written consent of the Purchaser:
5.1.1 there will be no change, other than changes in the
ordinary day-to-day course of business, in the assets
or liabilities of the Business;
5.1.2 there will be no expenditure of a capital nature
exceeding HK$500,000 in value;
5.1.3 there will be no acquisition or sale or other
disposition of, or creation of any Encumbrance over,
any asset used or for use in the Business other than
in the ordinary course of the Business;
5.1.4 no contracts exceeding 1 month in duration, or which
could have a value or liability arising for the
Vendors thereunder which could exceed HK$1,000,000
will be entered into, varied or terminated;
5.1.5 there will be no variation of, or agreement to
terminate, any of the Purchased Contracts;
5.1.6 there will be no grant or entry into of any licence,
franchise or other agreement or arrangement
concerning any part of the Intellectual Property;
5.1.7 no change will be made to the terms of employment of
any of the Transferring Employees, no Transferring
Employee will be dismissed and no one will be hired
for employment in the Business;
5.1.8 there shall be no variation of terms of any of the
Leases or grant of any lease or third party right in
respect of any of the Leased Properties;
5.1.9 no change will be made in the practices of ordering
supplies, shipping goods, invoicing customers and
collecting debts to those adopted in relation to the
Business prior to the commencement of the
negotiations which lead to the execution of this
Agreement;
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5.1.10 no changes in management policy of a significant
nature will be instituted; and
5.1.11 no agreement, conditional or otherwise, to do any of
the foregoing shall be made.
5.2 As from the date of this Agreement, the Vendors will ensure
that the Purchaser and any person authorised by it shall be
given such access to the Properties and to any other premises
from which the Business is carried on, managed or administered
and to all the Books and Records as the Purchaser may
reasonably request and be permitted to take copies of any such
Books and Records. Each of the Vendors will procure that its
directors and employees provide the Purchaser promptly during
this period all such information and explanations requested by
the Purchaser, and any person authorised by it, in relation to
the Business or the Assets.
5.3 The Purchaser hereby undertakes and warrants that it will not
prior to Completion, save as required by law or by the rules
of any supervisory or regulatory body or securities exchange
to which it is subject, divulge any confidential information
relating to the Business obtained by it pursuant to this
Agreement to any person other than its own officers, employees
or professional advisers, provided that the Purchaser and UTi
Worldwide may, without obtaining the prior consent of the
other Parties, disclose the contents hereof or the matters
contemplated herein to any person (including, but not limited
to, the underwriters of UTi Worldwide's shares or their
counsel) in respect of or in connection with the proposed
registration and listing of the ordinary shares of UTi
Worldwide on a stock exchange in the USA.
5.4 The Vendors shall procure that the Purchaser's interest is
noted on all Insurances with effect from the Completion Date,
and in the event of any loss or damage arising which is
covered by such Insurance will take all steps within its power
at the request and direction of the Purchaser to recover from
the insurers and, subject to Completion, account to the
Purchaser for any payment received.
6. COMPLETION
6.1 Subject to the provisions of Clause 4, Completion shall take
place on the Completion Date at the offices of the Purchaser's
Solicitors when all (but not some only) of the following
events shall occur:
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6.1.1 the Vendors shall:
6.1.1.1 place the Purchaser in possession of all of
the Machinery and Equipment, all information
embodying the Intellectual Property, the
Sales Documentation and the Customer List
(in whatever form and upon whatever media
they may be recorded);
6.1.1.2 place the Purchaser in possession of all the
Books and Records (other than minute books
relating to directors' and shareholders'
meetings and statutory books);
6.1.1.3 deliver to the Purchaser a written
confirmation that the Warrantors are not
aware of any matter or thing which is a
breach of or inconsistent with any of the
Warranties;
6.1.1.4 deliver to the Purchaser a certified copy of
a resolution of the board of directors of
each of the Vendors and a certified copy of
a resolution of the shareholders of CO Air
(HK), in each case approving the sale of the
Assets on the terms of this Agreement and
authorising Mr. Xxxxx Xxxxx to execute it
for and on behalf of the relevant Vendor;
6.1.1.5 deliver to the Purchaser proxies (in such
form as the Purchaser may require) executed
by each of the directors appointed to the
board of directors of Xxxxx by CO Air (HK)
in favour of such person(s) as may be
nominated by the Purchaser;
6.1.1.6 subject to Clause 17.4, deliver to the
Purchaser duly executed assignments or
transfer documents (as the case may be) in
the approved terms in respect of the
assignment or transfer of the licences and
permits granted to or enjoyed by the Vendors
in respect of the Business to the Purchaser;
6.1.1.7 deliver to the Purchaser a declaration of
trust by CO (Air) HK in favour of the
Purchaser in respect of the Xxxxx Interest
in form and substance reasonably
satisfactory to the Purchaser; and
6.1.1.8 deliver to the Purchaser a release and
waiver by each of Logistics Management and
CO Air (China) in favour of the Purchaser in
respect of all past, present and future
commissions, fees, expenses and other
payments whatsoever arising from the
carrying on of the Business, in
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form and substance reasonably satisfactory
to the Purchaser; and
6.1.2 the Purchaser:
6.1.2.1 shall deliver to each of the
Vendors a banker's draft payable to
the Vendors in the proportion of
*** to CO Air (HK) and *** to CO
Container (HK) (or to such other
person and in such other proportion
as the Vendors in writing may
direct) for the sum of US$*** on
account of the Purchase Price or
pay such amount to the Vendors (or
to such other person and in such
proportion as the Vendors in
writing may direct) by such other
method as may be agreed by the
Vendors and the Purchaser in
writing;
6.1.2.2 shall deliver to the Vendors'
Solicitors a certified copy of a
resolution of the board of
directors of the Purchaser
approving the purchase of the
Business on the terms of this
Agreement and authorising Xx. Xxxx
Xxxxxx to execute it for and on
behalf of the Purchaser; and
6.1.2.3 shall deliver to the Vendors'
Solicitors a certified copy of a
resolution of the board of
directors of UTi Worldwide
approving the terms of and the
guarantees provided by it under
this Agreement and authorising a
specified person(s) to execute this
Agreement for and on behalf of UTi
Worldwide.
6.2 Without prejudice to any other remedies available to the
Purchaser:
6.2.1 if in any respect the provisions of Clause 6.1 are
not complied with by either of the Vendors on the
Completion Date, the Purchaser may proceed to
Completion so far as practicable (without prejudice
to its rights under this Agreement); or
6.2.2 if the provisions of Clause 6.1.1.4 is not complied
with by either of the Vendors on the Completion Date,
the Purchaser may rescind this Agreement.
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* Information omitted and filed separately with the Commission for confidential
treatment.
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7. ASSIGNMENT OR NOVATION OF LEASED PROPERTIES
Each of the Vendors shall procure the consent or approval of any person
who is not a party to this Agreement (including but not limited to the
reversioners or mortgagees of the Leased Properties) for the assignment
or novation of the Leases in respect of the Leased Properties and shall
assign or novate the same to the Purchaser on the terms set out in
Schedule 3 Part 4.
8. APPORTIONMENTS
8.1 The following items of expenditure and income shall be
apportioned such that the cost of items of expenditure
accrued, or referable to periods, prior to the Completion Date
shall be borne by the Vendors and thereafter by the Purchaser
and the benefit of items of income accrued, or referable to
periods, prior to the Completion Date shall belong to the
Vendors and thereafter to the Purchaser:
8.1.1 all rents, rates, gas, water, electricity and
telephone charges and other outgoings relating to or
payable in respect of the Leased Properties;
8.1.2 all rents, royalties and other periodical payments
receivable in respect of the Business;
8.1.3 all vehicle licence fees payable in respect of any
motor vehicles included in the Machinery and
Equipment;
8.1.4 all salaries, wages, accrued holiday pay entitlement,
and other emoluments and all statutory contributions,
salaries tax and employer's contributions to the
Retirement Scheme relating to the employment of the
Transferring Employees in the Business;
8.1.5 all pre-payments made, and all deposits received, by
the Vendors under the Purchased Contracts; and
8.1.6 all rents, royalties, licence fees and other
periodical payments in respect of the Business.
8.2 The Vendors and the Purchaser shall use all reasonable
endeavours to draw up and agree a statement of the
apportionments referred to in Clause 8.1, and the balance
owing by either the Vendors or the Purchaser to one another,
as soon as practicable after the Completion Date. If such
statement has not been prepared and agreed within 30 days
after the Completion Date, either the Vendors or the Purchaser
may refer the matter for resolution in accordance with the
procedure in Clause 16. Payment of the balance agreed, or
determined under Clause 16 to be due, shall be made within 14
days after agreement or determination (as the case may be)
together with interest on the amount due from and including
the Completion Date down to but not including the date of
payment at the rate of 2%
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above the best lending rate from time to time of The Hongkong Bank,
compounded on the last days of March, June, September and December in
each year.
9. TRANSFER OF BUSINESSES (PROTECTION OF CREDITORS) ORDINANCE (CHAPTER 00
XX XXX XXXX XX XXXX XXXX)
As soon as practicable after Completion, the Parties shall procure that
a notice of transfer relating to the sale and purchase of the Business
is published in accordance with the provisions of the Transfer of
Businesses (Protection of Creditors) Ordinance. The publication costs
in relation thereto shall be borne equally between the Vendors on the
one hand and the Purchaser on the other hand. Any such notice shall be
in the form set out in Schedule 11 and shall be given without prejudice
to the rights and obligations of the Parties, as against each other,
under this Agreement.
10. RESPONSIBILITY FOR LIABILITIES
10.1 Without prejudice to the Warranties, the Vendors shall be
responsible for, and shall keep the Purchaser fully and
effectively indemnified against:
10.1.1 all debts, obligations and liabilities arising from
the carrying on of the Business prior to the
Completion Date including, for the avoidance of
doubt, all liabilities arising (whether before or
after the Completion Date) by virtue of the Transfer
of Businesses (Protection of Creditors) Ordinance and
all liabilities arising (whether before or after the
Completion Date) in respect of warranties given to
purchasers of services from the Vendors;
10.1.2 all claims by and liabilities to third parties in
respect of any negligent act or omission or breach of
obligation of the Vendors prior to the Completion
Date;
10.1.3 all liabilities or obligations to banks or other
non-trade creditors, and all Tax liabilities of the
Vendors;
10.1.4 all obligations and liabilities accrued or falling to
be performed under, or arising out of the manner of
performance of, the Purchased Contracts up to (but
excluding) the Completion Date; and
10.1.5 all commissions, fees, expenses, debts, obligations
and liabilities owed to Logistics Management and CO
Air (China) arising from the carrying on of the
Business (whether before or after the Completion
Date). The Vendors represent and warrant that no
commissions, fees, expenses or any other payments
whatsoever arising from the carrying on of the
Business shall be payable to Logistics Management or
CO Air (China) on or after the Completion Date.
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10.2 With effect from the Completion Date the Purchaser shall:
10.2.1 observe and perform or procure to be observed and
performed all the obligations of the Vendors under
the Purchased Contracts and Leases except insofar as
such obligations should have been performed before
the Completion Date;
10.2.2 assume responsibility for payment for all goods
delivered to, or services received by, the Purchaser
under the Purchased Contracts and Leases on or after
the Completion Date whether the invoices for such
goods or services are received before or after the
Completion Date; and
10.2.3 keep the Vendors fully and effectively indemnified
against any liability howsoever arising from the
failure of the Purchaser to perform its obligations
under Clauses 10.2.1 and 10.2.2.
10.3 Each of the Vendors agrees with the Purchaser that it will, in
accordance with its normal practice, pay, satisfy or discharge
all debts, liabilities and obligations relating in any way to
the Business which are not expressly assumed by the Purchaser
hereunder. If the Purchaser becomes aware that either of the
Vendors has failed to discharge any such liabilities and
believes that this failure may damage the goodwill of the
Business as carried on by the Purchaser after Completion, it
may give notice of that fact to the relevant Vendor. If the
relevant Vendor does not provide reasonable evidence that the
liability in question is disputed, the Purchaser may satisfy
such liability on the relevant Vendor's behalf and shall be
entitled to immediate reimbursement from the relevant Vendor
of the amount paid by the Purchaser, together with interest
thereon at the rate of 2% above the best lending rate from
time to time of The Hongkong Bank, compounded on the last days
of March, June, September and December in each year from and
including the date of payment to but not including the date of
reimbursement Provided that the said entitlement of the
Purchaser to reimbursement shall not arise unless and until
the said notice has been duly served on the relevant Vendor
with reasonable evidence in support of the Purchaser's claim
therein.
10.4 With effect from the Completion Date all complaints received
by the Vendors or the Purchaser from customers of the Business
in relation to services rendered prior to the Completion Date
shall be dealt with as follows:
10.4.1 all such complaints shall be referred in the first
instance to the Purchaser who will endeavour to
resolve them in accordance with the procedures and
practices previously employed by the Vendors in the
Business;
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10.4.2 if any complaint cannot be resolved by the Purchaser,
it shall be referred to the Vendors who shall be
responsible at its own expense for resolving the
same;
10.4.3 each Party will provide any information or assistance
reasonably requested by another Party in dealing with
complaints under this Clause 10.4;
10.4.4 the Vendors will reimburse to the Purchaser on demand
all reasonable expenses and costs incurred in dealing
with complaints under this Clause 10.4 including,
without limitation, the full cost of its employees'
time involved;
10.4.5 the Purchaser will not make any admission of
liability in relation to any complaint without the
relevant Vendor's prior consent (which shall not be
unreasonably withheld or delayed) but shall otherwise
be free to deal with complaints in a manner
consistent with prior practice so as to maintain and
preserve the goodwill of the Business.
11. THIRD PARTY CONSENTS
11.1 If any consent or approval of any person who is not a party to
this Agreement is required for the transfer to the Purchaser
of the benefit of any of the Purchased Contracts and any such
consent or approval has not been received at or prior to
Completion:
11.1.1 this Agreement shall not constitute an assignment or
attempted assignment of any such Purchased Contract
whose terms would be broken by an assignment or
attempted assignment;
11.1.2 the assignment of each such Purchased Contract shall
be conditional upon such consent which the Vendors
shall use their best endeavours to obtain as soon as
practicable; and
11.1.3 until such time as such consent or approval is
received to the satisfaction of the Purchaser, the
Vendors shall be deemed to be holding the benefit
thereof in trust for the Purchaser.
11.2 The Transfer Contract and the amendment contract referred to
in Clause 17.9.3 shall be conditional upon the approvals of
the Examination and Approval Authority and the Civil Aviation
Administration of China referred to in Clause 17.10 and shall
take effect from the date of obtaining the same or from such
other date(s) as may be specified in such approvals.
11.3 Upon Completion and until such time as the approvals referred
to in Clause 17.10 are obtained, to the satisfaction of the
Purchaser:
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11.3.1 the Warrantors shall, subject to receipt of a Request
referred to in Clause 15.2 to change the name of CO
Air (HK), procure that CO Air (HK) shall remain
validly in existence in the same name as that at the
date hereof and CO Air (HK) shall be deemed to be
holding the Xxxxx Interest in trust for the
Purchaser;
11.3.2 CO Air (HK) shall, and shall procure the Chinese
Party and Xxxxx to, carry on the business of Xxxxx in
the usual and ordinary course so as to maintain the
same as a going concern (using their respective best
endeavours to preserve the assets, customer and
supplier relations, permits and licences, employee
relations, business and organisation of Xxxxx); and
11.3.3 the Purchaser shall reimburse and indemnify CO Air
(HK) on a full indemnity basis from and against all
costs, proceedings, claims, demands and expenses
which may be incurred by CO Air (HK) in connection
with and incidental to its holding of the Xxxxx
Interest in trust for the Purchaser after the
Completion Date otherwise than due to the negligence,
wilful default or fraud on the part of CO Air (HK) or
its directors, officers and agents.
11.4 Once the approvals referred to in Clause 17.10 have been
obtained, the Vendors shall, and shall procure the Chinese
Party and Xxxxx to, attend to the amendment of all existing
permits and licences held by Xxxxx (including, without
limitation, the Class "A" Licence) to reflect the change in,
inter alia, the foreign joint venture party from CO Air (HK)
to the Purchaser and all other matters incidental thereto.
12. EMPLOYEES
12.1 The Purchaser agrees that the Transferring Employees shall be
offered employment with the Purchaser with effect from the
Completion Date on terms no less favourable than those then
enjoyed with the relevant Vendor.
12.2 On the date hereof, the Vendors and the Purchaser will jointly
inform each of the Transferring Employees, whose employment is
subject to and governed by Hong Kong law, in writing of the
sale of the business hereby agreed and will issue a joint
letter in the terms set out in Schedule 9 to each such
Transferring Employee giving notice of termination of his
employment with the relevant Vendor and containing an offer by
the Purchaser of re-engagement of such employee on terms no
less favourable than his then existing terms of employment.
12.3 The Vendors shall use all reasonable endeavours to persuade
the Transferring Employees to accept employment with the
Purchaser on such terms as aforesaid.
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12.4 The Vendors shall fully indemnify and keep indemnified the
Purchaser against any claim for wrongful dismissal or
unreasonable dismissal, redundancy or otherwise that may
hereafter be made against the Purchaser by any person who was
at any time an employee of the Vendors in connection with the
Business, other than those Transferring Employees who accept
employment with the Purchaser, including any claims arising
out of their terms of employment or under the Employment
Ordinance (Chapter 57 of the Laws of Hong Kong) and against
any other claims arising from the termination of their
employments provided however that the Vendors shall also
indemnify and keep indemnified the Purchaser against any such
claims brought by any Transferring Employees who accept
employment with the Purchaser to the extent that such claims
relate or are referable to a period or periods of employment
before the Completion Date.
12.5 Save with the prior consent in writing of the Purchaser the
Vendors shall not terminate the employment or make any
variation in the terms of employment of any of the
Transferring Employees (whether immediate, conditional or
prospective) at any time after the signing hereof and before
the Completion Date.
12.6 Notwithstanding Clause 12.4, the Vendors hereby agree and
undertake to indemnify the Purchaser at all times from and
against all actions, proceedings, costs, claims, damages,
demands, expenses and liabilities:
12.6.1 arising out of or in any way connected with the
Transferring Employees during the period when they
were in the relevant Vendor's employ on or before the
Completion Date, including without prejudice to the
generality of the foregoing:
12.6.1.1 any breach by the relevant Vendor of any
obligation under or in connection with their
contracts of employment;
12.6.1.2 any breach by the relevant Vendor of any
other obligation or any duty (whether
statutory or otherwise) owed by the relevant
Vendor to any of the Transferring Employees
or to any trade union(s) or employee
representatives in respect of the
Transferring Employees; and
12.6.2 arising out of or in relation to any claims brought
by the Transferring Employees (or any of them) under
the Sex Discrimination Ordinance (Chapter 480 of the
Laws of Hong Kong), the Disability Discrimination
Ordinance (Chapter 487 of the Laws of Hong Kong) or
the Family Status Discrimination Ordinance (Chapter
527 of the Laws of Hong Kong) or any other laws
conferring protection against discrimination,
harassment, victimisation or vilification by reason
of age, gender, race, religion, family circumstances
or disability, insofar as such claims relate in whole
or in part to the period when the
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Transferring Employees were in the employ of the
relevant Vendor (or any predecessor of the relevant
Vendor).
13. RETIREMENT SCHEME
The Retirement Scheme operated in respect of the Transferring Employees
shall be dealt with in accordance with Schedule 10.
14. WARRANTIES
14.1 The Warrantors jointly and severally represent, warrant and
undertake to and with the Purchaser that each of the
Warranties is now and will at Completion be true and accurate.
14.2 The Warranties are given subject to matters fully, fairly and
specifically disclosed in the Disclosure Letter but no other
information relating to the Business of which the Purchaser
has knowledge (actual or constructive) and no investigation by
or on behalf of the Purchaser shall prejudice any claim made
by the Purchaser under the Warranties or operate to reduce any
amount recoverable and liability in respect thereof shall not
be confined to breaches discovered before Completion. No
letter, document or other communication shall be deemed to
constitute a disclosure for the purposes of this Agreement
unless the same is accepted as such by the Purchaser and is
expressly referred to in the Disclosure Letter.
14.3 The Warrantors acknowledge that the Purchaser has entered into
this Agreement in reliance upon the Warranties and has been
induced by them to enter into this Agreement.
14.4 Without restricting the rights of the Purchaser or otherwise
affecting the ability of the Purchaser to claim damages on any
other basis available to it, the Warrantors hereby jointly and
severally undertake to indemnify the Purchaser at all times
from and against all and any diminution in the value of the
Business or the Assets and all and any losses, damages,
interest, costs or expenses whatsoever suffered or incurred by
the Purchaser as a result of any breach of any of the
Warranties including any costs (including legal costs on a
solicitor and own client basis), expenses or other liabilities
which the Purchaser may incur either before or after the
commencement of any action in connection with (i) any legal
proceedings in which the Purchaser claims that any of the
Warranties has been broken or is untrue or misleading and in
which judgment is given for the Purchaser or (ii) the
enforcement of any settlement of, or judgment in respect of
such claim.
14.5 Each of the Warranties shall be separate and independent and,
save as expressly provided to the contrary, shall not be
limited by reference to or inference from any other Warranty
or any other term of this Agreement nor by anything in the
Disclosure Letter which is not expressly referenced to the
Warranty concerned.
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14.6 Where any statement in the Warranties or any confirmation or
certificate given by the Vendors or the Warrantors under or
pursuant to this Agreement is qualified by the expression "so
far as the Warrantors are aware", "so far as the Vendors are
aware", "to the best of the Warrantors' knowledge and belief"
or "to the best of the Vendors' knowledge and belief" or any
similar expression, that statement shall be deemed to include
an additional statement that it has been made after due and
careful enquiry.
14.7 The Warrantors hereby agree with the Purchaser to waive any
rights which they may have in respect of any misrepresentation
or inaccuracy in, or omission from, any information or advice
supplied or given by any of the Transferring Employees in
connection with the giving of the Warranties and the
preparation of the Disclosure Letter.
14.8 The Warrantors shall not, and shall procure that (save only as
may be necessary to give effect to this Agreement) none of
their respective Associated Companies shall, do, allow or
procure any act or omission before Completion which will cause
the Warrantors to be in breach of any of the Warranties when
given at Completion.
14.9 The Warrantors hereby agree to disclose promptly to the
Purchaser in writing immediately upon becoming aware of the
same, any matter, event or circumstance (including any
omission to act) which may arise or become known to it after
the date of this Agreement and before Completion which:
14.9.1 constitutes a breach of or is inconsistent with any
of the Warranties or will constitute a breach of any
of the Warranties when given at Completion; or
14.9.2 has, or is likely to have, an adverse effect on the
financial position or prospects of the Business.
14.10 The Vendors shall give to the Purchaser and its solicitors and
accountants both before and after Completion all such
information and documentation relating to the Business and the
Assets as the Purchaser shall reasonably require to enable it
to satisfy itself as to the accuracy and due observance of the
Warranties.
14.11 The liability of the Warrantors under the Warranties:
14.11.1 shall save in relation to paragraphs 1.7, 2.1 to 2.11
and 7.6 of Schedule 1 (the "ENDURING WARRANTIES")
cease after 2 years except in respect of matters
which have been the subject of a written claim made
before such date by the Purchaser or the Purchaser's
Solicitors to the Vendors;
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14.11.2 shall in relation to the Enduring Warranties cease
after 3 years except in respect of matters which have
been the subject of a written claim made before such
date by the Purchaser or the Purchaser's Solicitors
to the Vendors;
14.11.3 shall be limited to a maximum amount equal to the
aggregate amount of the Purchase Price,
unless in any case the relevant claim or claims has arisen by
reason of fraud, wilful concealment, dishonesty or deliberate
non-disclosure on the part of any of the Warrantors or any
Associated Company of the Vendors or in any case where the
relevant claim(s) is/are material and such claim(s) has/have
arisen by reason of fraud, wilful concealment, dishonesty or
deliberate non-disclosure on the part of any of their
respective agents, officers or employees, in which event there
shall be no limit under this Agreement on the amount
recoverable by the Purchaser from the Warrantors in respect of
such claim or claims or the time within which such claim or
claims may be brought.
14.12 The provisions of this Clause 14.12 shall operate to limit the
liability of the Warrantors in respect of any claim under or
in connection with the Warranties and references to "claim" or
"claims" shall be construed accordingly. The Purchaser and the
Warrantors agree as follows:
14.12.1 in the event that the Purchaser is entitled to
recover any sum (whether by payment, discount,
credit, set-off or otherwise) from any third party in
respect of any matter for which a claim has been made
against the Warrantors pursuant to this Clause 14 and
in respect of which it has received payment from the
Warrantors, the Purchaser shall as soon as reasonably
practicable account to the Warrantors in respect of
any amount so recovered from such third party (after
deduction of all reasonable costs and expenses of the
recovery);
14.12.2 in the event that a claim against the Warrantors
arises as a result of or in connection with a
liability to or a dispute with any third party, the
Purchaser shall notify the Warrantors in writing of
any such third party claim and take such action as
the Warrantors may reasonably require to avoid,
resist, contest or compromise any such claim,
provided that:
14.12.2.1 the Purchaser is indemnified to its
reasonable satisfaction by the Warrantors
against any reasonable cost and expenses
and any liabilities, penalties and fines
which may be incurred by the Purchaser in
taking such action; and
14.12.2.2 the Purchaser shall not, in any event, be
required to take any steps which would
affect the future conduct of the Business,
the business of the Purchaser or any member
of
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the UTi Group or affect the rights or
reputations of any of them;
14.12.3 any claim made by the Purchaser for breach of
Warranty shall be reduced by the amount of any
payment made by the Warrantors in respect of the same
facts or circumstances pursuant to the other
provisions of this Agreement;
14.12.4 nothing in this Agreement shall limit or restrict the
Purchaser's general obligation at law to take
reasonable steps to mitigate any loss or damage which
it may incur in consequence of any matter giving rise
to a potential claim under this Agreement;
14.12.5 the Vendors shall be under no liability in respect of
a breach of any of the Warranties unless the Vendors
shall have received written notice thereof from the
Purchaser; and
14.12.6 the Vendors shall be under no liability in respect of
any breach of the Warranties if such liability would
not have arisen but for something voluntarily done or
omitted to be done (other than required by law or
pursuant to a legally binding commitment created on
or before Completion) by the Purchaser after the
Completion Date and otherwise than in the ordinary
course of business.
14.13 The Warranties together with any provisions of this Agreement
which shall not have been fully performed at Completion shall
remain in force notwithstanding Completion.
14.14 If any sum payable by the Warrantors under this Clause 14
shall be subject to Tax (whether by way of deduction or
withholding or direct assessment of the person entitled
thereto) such payment shall be increased by such an amount as
shall ensure that after deduction, withholding or payment of
such Tax the recipient shall have received a net amount equal
to the payment otherwise required hereby to be made.
15. RESTRICTION OF COVENANTORS
15.1 Each of the Covenantors undertakes with the Purchaser that,
except with the consent in writing of the Purchaser, it shall
not and shall procure that each Associated Company of the
Covenantors shall not, either on its own account or in
conjunction with or on behalf of any person, firm or company:
15.1.1 for the period of 5 years after Completion, within
any country in which the Business has been carried on
during the year preceding the date hereof carry on or
be engaged, concerned or interested, directly or
indirectly, whether as a shareholder, director,
employee, partner, agent
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or otherwise in carrying on any trade, business or
undertaking which is in competition with the Business
(other than as a holder of not more than 5% of the
issued shares or debentures of any company listed on
a stock exchange);
15.1.2 for the period of 5 years after Completion canvass,
solicit or entice away from the Purchaser or any
Associated Company of the Purchaser the custom of any
person, firm, company or organisation who shall at
any time within the year preceding the Completion
Date have been a customer, client, identified
prospective customer or client, representative,
agent, or correspondent of the Business or in the
habit of dealing with the Business or enter into any
contract for sale and purchase or accept business
from any such person, firm, company or organisation
in competition with the Business as carried on after
Completion by the Purchaser or any of its Associated
Companies;
15.1.3 for the period of 5 years after Completion employ,
solicit, entice away from the Purchaser any of the
Transferring Employees whether or not such person
would commit a breach of contract by reason of
leaving such employment;
15.1.4 save only for the purposes of preparing its accounts,
financial statements and Tax returns, at any time
hereafter make use of or disclose or divulge to any
person (other than to officers or employees of the
Purchaser whose province it is to know the same) any
information (other than any information properly
available to the public or disclosed or divulged
pursuant to an order of a court of competent
jurisdiction) relating to the Business, the identity
of its customers and suppliers, its products,
finance, contractual arrangements, business or
methods of business and shall use its best endeavours
to prevent the publication or disclosure of any such
information;
15.1.5 at any time hereafter in relation to any trade,
business or company (other than any trade or business
carried on by the Purchaser or other members of the
UTi Group) use a name or trade xxxx including the
word or symbol "Continental" or its Chinese
equivalent or any word or symbol confusingly similar
thereto in such a way as to be capable of or likely
to be confused with the name or any trade xxxx of the
Business;
15.1.6 attempt, counsel, procure or otherwise assist any
person to do any of the acts referred to in Clauses
15.1.1 to 15.1.5.
15.2 The Warrantors agree to procure the passing by the
shareholders of each of the Vendors of a special resolution
changing the name of the relevant Vendor to a name which does
not include "Continental" or its Chinese equivalent, upon
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request in writing by the Purchaser to the relevant Vendor
(the "REQUEST"). The Warrantors shall deliver to the Purchaser
not later than 30 days after the date of the relevant Request
a certified copy of the certificate of change of name issued
by the Companies Registry giving effect to such change of
name.
15.3 Each of the Covenantors acknowledges that:
15.3.1 the undertakings given in Clause 15.1 are material to
the Purchaser's decision to enter into this
Agreement; and
15.3.2 the restrictions contained in Clause 15.1 are:
15.3.2.1 fair and reasonable with regard to subject
matter, area and duration; and
15.3.2.2 reasonably required by the Purchaser to
protect the Business and the Assets.
15.4 While the restrictions contained in Clause 15.1 are considered
by the Parties to be reasonable in all the circumstances, it
is recognised that restrictions of the nature in question may
fail for technical reasons and accordingly it is hereby agreed
and declared that if any of such restrictions shall be
adjudged to be void as going beyond what is reasonable in all
the circumstances for the protection of the interests of the
Purchaser but would be valid if part of the wording thereof
were deleted or the periods thereof reduced or the range of
activities or area dealt with thereby reduced in scope the
said restriction shall apply with such modifications as may be
necessary to make it valid and effective.
15A. INVESTOR REPRESENTATIONS AND COVENANTS OF LAI AND XXXXXXX XXXXX
Each of Lai and Xxxxxxx Xxxxx jointly and severally represents,
warrants and covenants to the Purchaser and for the benefit of UTi
Worldwide as follows:
15A.1 Neither Lai nor Xxxxxxx Xxxxx is a citizen or resident of the
USA. Each of Lai and Xxxxxxx Xxxxx made the investment
decision to accept Consideration Shares at their respective
addresses set out in Clause 21 and such addresses are their
respective addresses.
15A.2 Each of Lai and Xxxxxxx Xxxxx is aware of UTi Worldwide's
business affairs and financial condition, and has acquired
sufficient information about UTi Worldwide, with the
assistance of management of UTi Worldwide, to reach an
informed and knowledgeable decision to acquire the
Consideration Shares. Each of Lai and Xxxxxxx Xxxxx is capable
of evaluating the merits and risks of its acquisition of the
Consideration Shares.
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15A.3 Each of Lai and Xxxxxxx Xxxxx is acquiring the Consideration
Shares for his own account, for investment purposes only and
not with a view to, or for the resale in connection with, any
"distribution" of the Consideration Shares for purposes of the
Securities Act. Lai and Xxxxxxx Xxxxx understand that the
Consideration Shares are offered and sold pursuant to an
exemption from registration under the Securities Act based in
part upon Lai's and Xxxxxxx Xxxxx'x representations and
covenants in this Clause 15A.
15A.4 Each of Lai and Xxxxxxx Xxxxx understands, that, as of the
date of allotment and issue of the Consideration Shares, the
Consideration Shares have not been registered under the
Securities Act and that the Consideration Shares will not be
registered. Lai and Xxxxxxx Xxxxx also understand and agree
that they will not receive registration rights in connection
with the Consideration Shares.
15A.5 Each of Lai and Xxxxxxx Xxxxx is an "accredited investor" as
defined in Regulation D under the Securities Act and can
afford the financial risk of the complete loss of his
investment in the Consideration Shares.
15A.6 Lai and Xxxxxxx Xxxxx understand that the Consideration Shares
are not transferable and must be held indefinitely unless
subsequently registered under the Securities Act or unless an
exemption from registration is otherwise available. In
addition, the certificates representing the Consideration
Shares to be issued to Lai and Xxxxxxx Xxxxx will be imprinted
with a customary legend under the Securities Act restricting
transfer without an opinion of counsel as to an available
exemption from registration in connection with the transfer.
Each of Lai and Xxxxxxx Xxxxx further understands and agrees
that, to the extent requested or required by any underwriter
in a underwritten public offering, each of Lai's and Xxxxxxx
Xxxxx'x Consideration Shares will be subject to any remaining
term of any applicable "market stand-off" or "lock-up"
agreement related to that public offering.
16. INDEPENDENT ACCOUNTANTS
If any difference of opinion arises between the Vendors and the
Purchaser or their respective accountants, in relation to any provision
of this Agreement in respect of which either the Vendors or the
Purchaser is expressed to have the right to refer such matter for
determination pursuant to this Clause 16, subject to any time period
referred to in the relevant provision during which either the Vendors
or the Purchaser must seek to resolve the dispute before referring it
for determination pursuant to this Clause 16 having expired, either the
Vendors or the Purchaser may refer the matter to an independent firm of
accountants for resolution as follows:
16.1 the independent firm shall be jointly agreed by the Vendors
and the Purchaser or, if no agreement is reached within 10
days after either the Vendors or the Purchaser notifies the
other that it wishes to appoint a firm under this Clause 16,
shall be appointed at the request of either the Vendors or the
Purchaser by the President of the Hong Kong Society of
Accountants;
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16.2 the independent firm shall be requested to resolve the matter
in dispute applying the terms of this Agreement;
16.3 the determination of the independent firm shall be final and
binding on the Vendors and the Purchaser in the absence of
manifest error;
16.4 the costs of the independent firm shall be shared by the
Vendors on the one part and the Purchaser on the other part
equally.
17. FURTHER OBLIGATIONS AND INTENTIONS
17.1 If at any time within 38 months after Completion there is a
change in the ownership or control, direct or indirect, of
shares carrying more than 50% of the voting rights attaching
to the issued share capital of the Purchaser (except within
the group of companies of which the Purchaser is a member at
the date hereof), the Purchaser undertakes to procure that the
acquirer of such ownership or control guarantees to the
Vendors the due and punctual performance by the Purchaser of
its obligations hereunder.
17.2 In the event that any of the Key HK/PRC Employees is given
diminished responsibilities during the period of 36 months
after Completion, his base salary and benefits will not be
reduced during this period.
17.3 In the event that any of the Key HK/PRC Employees is required
to relocate, then his reasonable relocation costs will be paid
and compensation will be made in his remuneration package for
tax differentials.
17.4 Each of the Vendors undertakes that it will use its best
endeavours to obtain all necessary approvals in respect of the
transfer or assignment to the Purchaser of all licences and
permits granted to or enjoyed by the relevant Vendor in
respect of the Business (including, and without limiting the
generality of the foregoing, the IATA licence held by CO Air
(HK)) and to transfer or assign (as the case may be) all such
licences and permits to the Purchaser at Completion (if no
approval is required in respect of such transfer or
assignment) or, where such approval is required, within 30
days after attainment of the same Provided That the Purchaser
shall reimburse the Vendors for all reasonable costs and
expenses incurred by the Vendors in connection with such
approval, transfer and assignment.
17.5 CO Air (HK) undertakes that it will use its best endeavours to
obtain all necessary approvals in respect of the transfer or
assignment by CO Air (HK) to the Purchaser of the ISO 9002:
1994 accreditation given by Lloyd's Register Quality Assurance
to it for the provision of air import freight forwarding
services and to transfer or assign the same to the Purchaser
within 30 days after obtaining such approval (unless the same
is waived by the Purchaser) Provided That the Purchaser shall
reimburse the Vendors for all reasonable costs and expenses
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incurred by the Vendors in connection with such approval,
transfer and assignment.
17.6 Within 120 days after the Completion Date (or such longer time
as shall be agreed between the Vendors and the Purchaser):
17.6.1 the Vendors shall:
17.6.1.1 deliver to the Purchaser duly executed
assignments in the approved terms of the
Trade Marks, Patents, other Intellectual
Property and the Purchased Contracts;
17.6.1.2 complete the assignment or novation to the
Purchaser of the Leases in respect of the
Leased Properties in accordance with the
terms contained or referred to in Schedule 3
Part 4; and
17.6.2 the Purchaser shall:
17.6.2.1 subject to receipt of the documents referred
to in Clause 17.6.1.1 from the Vendors,
deliver to the Vendors' Solicitors as soon
as reasonably practicable thereafter duly
executed counterparts of such documents; and
17.6.2.2 subject to receipt of the documents referred
to in Clause 17.6.1.2 from the Vendors,
deliver to the Vendors' Solicitors as soon
as reasonably practicable thereafter the
documents required to be delivered by it on
completion of the assignment or novation of
the Leases in respect of the Leased
Properties in accordance with the terms
contained or referred to in Schedule 3 Part
4.
17.7 The Purchaser shall use its best endeavours to procure the
release of the guarantees and indemnities given to carriers in
respect of the Business within 120 days after the Completion
Date, the particulars of which are set out in Schedule 13.
17.8 As soon as is reasonably practicable after the Completion
Date, the Vendors shall use their reasonable endeavours to
make enquiries in relation to the costs and procedures
involved for obtaining: (1) a written consent and waiver
issued by the Chinese Party acknowledging its consent to the
transfer of the Xxxxx Interest by CO Air (HK) to the Purchaser
and waiving its pre-emptive right to purchase such interest;
(2) the approval by the Examination and Approval Authority of
the Transfer Contract and the transactions contemplated
therein and the amendment contract referred to in Clause
17.9.3; and (3) the approval by the Civil Aviation
Administration of China for the change in the foreign joint
venture party of Xxxxx,
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and to give notice thereof promptly to the Purchaser. The
Purchaser may in its absolute discretion decide if, given the
costs and procedures involved, the said consent and waiver and
approvals should be obtained, and shall give notice of its
decision to the Vendors. If the Purchaser gives notice to the
Vendors that the said consent and waiver and approvals should
be obtained, the Purchaser agrees and undertakes to be
responsible for and reimburse CO Air (HK) for all reasonable
costs and expenses incurred by CO Air (HK) in respect thereof
Provided That the amount of such costs and expenses shall not
exceed the same amounts set out in the notice to the Purchaser
of the Vendors' said enquiries (unless the prior written
approval of the Purchaser is obtained).
17.9 If the Purchaser gives the notice referred to in Clause 17.8
to the Vendors that the said consent and waiver and approvals
should be obtained, the Vendors shall use their best
endeavours to deliver to the Purchaser as soon as is
reasonably practicable thereafter and in any event no later
than 30 days thereafter:-
17.9.1 the Transfer Contract which has been duly executed by
CO Air (HK), in form and substance satisfactory to
the Purchaser;
17.9.2 a written consent and waiver issued by the Chinese
Party acknowledging its consent to the transfer of
the Xxxxx Interest by CO Air (HK) to the Purchaser
and waiving its pre-emptive right to purchase such
interest, in form and substance satisfactory to the
Purchaser;
17.9.3 an amendment contract duly executed by CO Air (HK)
and the Chinese Party to amend the Joint Venture
Contract and the Articles of Association of Xxxxx, in
form and substance satisfactory to the Purchaser;
17.9.4 a unanimous resolution of the board of directors of
Xxxxx in the approved terms approving, inter alia:
17.9.4.1 the sale of the Xxxxx Interest by CO Air
(HK) to the Purchaser pursuant to the terms
of the Transfer Contract;
17.9.4.2 the amendment of the Joint Venture Contract
and the Articles of Association of Xxxxx in
the manner contemplated in the amendment
contract referred to in Clause 17.9.3;
17.9.4.3 the Transfer Contract; and
17.9.4.4 the amendment contract referred to in Clause
17.9.3.
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17.10 The Vendors shall as soon as is reasonably practicable after
delivery of the documents to the Purchaser in accordance with
Clause 17.9 and in any event no later than 30 days thereafter
apply, and shall procure the Chinese Party and Xxxxx to apply,
to the Examination and Approval Authority for approval of the
Transfer Contract and the transactions contemplated therein
and the amendment contract referred to in Clause 17.9.3 and to
submit thereto such additional documents as they may require
and to comply with all demands and requests thereof and to
apply to the Civil Aviation Administration of China for
approval of the change in the foreign joint venture party of
Xxxxx.
17.11 The Vendors shall, and shall procure the Chinese Party and
Xxxxx to, deliver to the Purchaser forthwith upon receipt
thereof:
17.11.1 evidence of approval by the Examination and Approval
Authority of the Transfer Contract, the amendment
contract referred to in Clause 17.9.3 and the
transactions contemplated in the Transfer Contract
and such amendment contract, respectively (including,
but not limited to, official reply, amended approval
certificate and amended business licence of Xxxxx);
17.11.2 evidence of approval by the Civil Aviation
Administration of China of the change in the foreign
joint venture party of Xxxxx; and
17.11.3 all permits and licences held by Xxxxx and amended
pursuant to Clause 11.4.
18. RESTRICTION ON ANNOUNCEMENTS
Each of the Parties undertakes that prior to Completion it will not
(save as required by law or by any securities exchange or any
supervisory or regulatory body to whose rules any party to this
Agreement is subject) make any announcement in connection with this
Agreement unless the other Parties shall have given their respective
consents to such announcement (which consents may not be unreasonably
withheld or delayed and may be given either generally or in a specific
case or cases and may be subject to conditions).
19. COSTS
19.1 Save as otherwise provided herein, each Party shall pay its
own costs of and incidental to this Agreement and the sale and
purchase hereby agreed to be made.
19.2 All stamp duty, registration fees, notarisation fees, consent
fees, approval charges and other fees, charges and costs
properly payable by the Vendors to any government authorities
and third parties in connection with or incidental to the
transfer, assignment, novation and other rights of the Vendors
to the Purchaser so as to give effect and place control of the
Business in the hands of the Purchaser shall, subject to the
prior approval of the Purchaser before any such payment is
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made by the Vendors, be borne and paid wholly by the
Purchaser. For the avoidance of doubt, the said fees, charges
and costs shall not include capital gain taxes, profits taxes
and other forms of taxation levied on the Vendors, which taxes
shall be borne and paid solely by the Vendors themselves.
20. GENERAL
20.1 This Agreement shall be binding upon and enure for the benefit
of the estates, personal representatives, successors and
permitted assigns of the Parties.
20.2 This Agreement (together with any documents referred to herein
or executed contemporaneously by the Parties in connection
herewith) constitutes the whole agreement between the Parties
and supersedes any previous agreements or arrangements between
them or between the Vendors and the Purchaser relating to the
subject matter hereof and the proposal letter dated 13 April
2000 from the Union Transport Group to the Continental Group;
it is expressly declared that no variations hereof shall be
effective unless made in writing signed by duly authorised
representatives of the Parties.
20.3 All of the provisions of this Agreement shall remain in full
force and effect notwithstanding Completion (except insofar as
they set out obligations which have been fully performed at
Completion).
20.4 Any right of rescission conferred upon the Purchaser hereby
shall be in addition to and without prejudice to all other
rights and remedies available to it (and, without prejudice to
the generality of the foregoing, shall not extinguish any
right to damages to which the Purchaser may be entitled in
respect of any breach of this Agreement) and no exercise or
failure to exercise such a right of rescission shall
constitute a waiver by the Purchaser of any such other right
or remedy.
20.5 Upon and after Completion the Vendors shall do and execute and
deliver or procure to be done and executed and delivered all
such further acts, deeds, documents, instruments of
conveyance, assignment and transfer and things, if applicable,
to give effect to the terms of this Agreement, to place
control of the Business in the hands of the Purchaser and as
the Purchaser may request in order effectively to convey,
transfer, vest and record title to each of the Assets in the
Purchaser and pending the doing of such acts, deeds, documents
and things the Vendors shall as from Completion hold the legal
estate in each of the Assets in trust for the Purchaser to the
extent that it shall not have transferred to the Purchaser.
20.6 No failure of the Purchaser to exercise, and no delay or
forbearance in exercising, any right or remedy in respect of
any provision of this Agreement shall operate as a waiver of
such right or remedy.
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20.7 If any provision or part of a provision of this Agreement
shall be, or be found by any authority or court of competent
jurisdiction to be, invalid or unenforceable, such invalidity
or unenforceability shall not affect the other provisions or
parts of such provisions of this Agreement, all of which shall
remain in full force and effect.
20.8 The Vendors shall after Completion give all such assistance
and provide access for the Purchaser to all such information,
documents, accounting books and other records of the Business
as the Purchaser may reasonably require for the purpose of
enabling the Purchaser to respond to enquiries of or make
returns to any Tax authority and to negotiate any liability to
Tax.
20.9 This Agreement may be executed in one or more counterparts,
and by the Parties on separate counterparts, but shall not be
effective until each Party has executed at least one
counterpart and each such counterpart shall constitute an
original of this Agreement but all the counterparts shall
together constitute one and the same instrument.
21. NOTICES
Any notice required to be given by any Party to any other shall be
deemed validly served by hand delivery or by prepaid registered letter
sent through the post (airmail if to an overseas address) or by
facsimile transmission to its address or facsimile number given below
or such other address or facsimile number as may from time to time be
notified for this purpose and any notice served by hand shall be deemed
to have been served on delivery, any notice served by facsimile
transmission shall be deemed to have been served when sent and any
notice served by prepaid registered letter shall be deemed to have been
served 48 hours (72 hours in the case of a letter sent by airmail to an
address in another country) after the time at which it was posted and
in proving service it shall be sufficient (in the case of service by
hand and prepaid registered letter) to prove that the notice was
properly addressed and delivered or posted, as the case may be, and in
the case of service by facsimile transmission to prove that the
transmission was confirmed as sent error-free by the originating
machine.
To the Vendors : Continental Air Express (HK) Limited/
Continental Container Lines Limited
6th and 7th Floors, Leahander Centre
28 Wang Wo Xxxx Xxxxxx
Xxxxx Xxx
Xxx Xxxxxxxxxxx
Xxxx Xxxx
Fax no. : (000) 0000 0000
Attention : Xxxxx Xxxxx/Xxxxx Xxxxx
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To the Purchaser : Union-Transport (HK) Limited
00xx Xxxxx, XXX Xxxxx
Xxxxx Xxxxx Xxxxxx
000 Xxx Xxx Xxxx
Xxxx Xxxx
Xxxxxxx
Xxxx Xxxx
Fax no. : (000) 0000 0000
Attention : Xxxxxx Xxxx
To Xxxxx Xxxxx : Xxxxx Xxxx Xxx Xxxxx
6th and 7th Floors, Leahander Centre
28 Wang Wo Xxxx Xxxxxx
Xxxxx Xxx
Xxx Xxxxxxxxxxx
Xxxx Xxxx
Fax no. : (000) 0000 0000
To Lai : Xxx Xxxx Fai
6th and 7th Floors, Leahander Centre
28 Wang Wo Xxxx Xxxxxx
Xxxxx Xxx
Xxx Xxxxxxxxxxx
Xxxx Xxxx
Fax no. : (000) 0000 0000
To Xxxxxxxx : Xxxxx Xxxxx Xxxxxxxx
0000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx
Xxxxx 00000
Xxxxxx Xxxxxx of America
To Bello : Xxxxxxx Xxxxxxx Xxxxx
000-00 000xx Xxxxxx
Xxxxxxx
XX 00000
Xxxxxx Xxxxxx of America
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To Xxxxxxx : Xxxxxx Xxxxxxx Xxxxxxx
00 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx
XX 00000
Xxxxxx Xxxxxx of America
To Xxxx Xxxx : Xxxx Xx Ming
6th and 7th Floors, Leahander Centre
28 Wang Wo Xxxx Xxxxxx
Xxxxx Xxx
Xxx Xxxxxxxxxxx
Xxxx Xxxx
Fax no. : (000) 0000 0000
To Xxxxx Xxxx : Xxxx Xxxx Hang
6th and 7th Floors, Leahander Centre
28 Wang Wo Xxxx Xxxxxx
Xxxxx Xxx
Xxx Xxxxxxxxxxx
Xxxx Xxxx
Fax no. : (000) 0000 0000
To Xxxx : Xxxx Xxx Cheong
6th and 7th Floors, Leahander Centre
28 Wang Wo Xxxx Xxxxxx
Xxxxx Xxx
Xxx Xxxxxxxxxxx
Xxxx Xxxx
Fax no. : (000) 0000 0000
To Xxxxxxx Xxxxx : Xxxxx Xxxx Lung
6th and 7th Floors, Leahander Centre
28 Wang Wo Xxxx Xxxxxx
Xxxxx Xxx
Xxx Xxxxxxxxxxx
Xxxx Xxxx
Fax no. : (000) 0000 0000
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REDACTED
To Xxx Xx : Ng Xxxx Xx
00000 X. Xxxxxx Xxxxxx, Xxxx X
Xxx Xxxxxxx
XX 00000
United States of America
To Xxx Xx : Ng Xxx Xxxx
000-00 000xx Xxxxxx
Xxxxxxx
XX 00000
Xxxxxx Xxxxxx of America
To UTi Worldwide : UTi Worldwide Inc.
00000 Xxxxxx Xxxx Xxxx
Xxxxx #000
Xxxxxx Xxxxxxxxx
XX 00000
United States of America
Fax no. : 0 (000) 000 0000
Attention : Xxxxxxxx Xxxxxxx
22. GOVERNING LAW AND SUBMISSION TO JURISDICTION
22.1 This Agreement shall be governed by and construed in
accordance with the laws of Hong Kong and the Parties hereby
irrevocably submit to the non-exclusive jurisdiction of the
courts of Hong Kong for the purpose of enforcing any claim
arising hereunder.
22.2 UTi Worldwide hereby irrevocably appoints B. & McK. Nominees
Limited c/o Baker & XxXxxxxx of 1401 Xxxxxxxxx Xxxxx, 00
Xxxxxxxx Xxxx, Xxxx Xxxx as its agent to receive and
acknowledge on its behalf service of any writ, summons, order,
judgment or other notice of legal process in Hong Kong. If for
any reason the agent named above (or its successor) no longer
serves as agent of UTi Worldwide for this purpose, UTi
Worldwide shall promptly appoint a successor agent
satisfactory to the Vendors, notify the Vendors thereof and
deliver to the Vendors a copy of the new process agent's
acceptance of appointment Provided that until the Vendors
receive such notification, they shall be entitled to treat the
agent named above (or its said successor) as the agent of UTi
Worldwide for the purposes of this Clause 22.2. UTi Worldwide
agrees that any such legal process shall be sufficiently
served on it if delivered to such agent for service c/o Baker
& XxXxxxxx at its address for the time being in Hong Kong
(marked for the
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attention of Xx. X. X. Xxxxxxx/Xx. Xxxx Xxx/Xx. Xxxxx Xxxx)
whether or not such agent gives notice thereof to UTi
Worldwide.
22.3 Xxxxxxxx hereby irrevocably appoints Xx. Xxxxx Xxxxx of 6th
and 7th Floors, Leahander Centre, 28 Wang Wo Xxxx Xxxxxx,
Xxxxx Xxx, Xxx Xxxxxxxxxxx, Xxxx Xxxx as his agent to receive
and acknowledge on his behalf service of any writ, summons,
order, judgment or other notice of legal process in Hong Kong.
If for any reason the agent named above (or its successor) no
longer serves as agent of Xxxxxxxx for this purpose, Xxxxxxxx
shall promptly appoint a successor agent satisfactory to the
other Parties, notify the other Parties thereof and deliver to
the other Parties a copy of the new process agent's acceptance
of appointment Provided that until the other Parties receive
such notification, they shall be entitled to treat the agent
named above (or its said successor) as the agent of Xxxxxxxx
for the purposes of this Clause 22.3. Xxxxxxxx agrees that any
such legal process shall be sufficiently served on him if
delivered to such agent for service at its address for the
time being in Hong Kong whether or not such agent gives notice
thereof to Xxxxxxxx.
22.4 Bello hereby irrevocably appoints Xx. Xxxxx Xxxxx of 6th and
7th Floors, Leahander Centre, 28 Wang Wo Xxxx Xxxxxx, Xxxxx
Xxx, Xxx Xxxxxxxxxxx, Xxxx Xxxx as his agent to receive and
acknowledge on his behalf service of any writ, summons, order,
judgment or other notice of legal process in Hong Kong. If for
any reason the agent named above (or its successor) no longer
serves as agent of Bello for this purpose, Bello shall
promptly appoint a successor agent satisfactory to the other
Parties, notify the other Parties thereof and deliver to the
other Parties a copy of the new process agent's acceptance of
appointment Provided that until the other Parties receive such
notification, they shall be entitled to treat the agent named
above (or its said successor) as the agent of Bello for the
purposes of this Clause 22.4. Bello agrees that any such legal
process shall be sufficiently served on him if delivered to
such agent for service at its address for the time being in
Hong Kong whether or not such agent gives notice thereof to
Bello.
22.5 Xxxxxxx hereby irrevocably appoints Xx. Xxxxx Xxxxx of 6th and
7th Floors, Leahander Centre, 28 Wang Wo Xxxx Xxxxxx, Xxxxx
Xxx, Xxx Xxxxxxxxxxx, Xxxx Xxxx as his agent to receive and
acknowledge on his behalf service of any writ, summons, order,
judgment or other notice of legal process in Hong Kong. If for
any reason the agent named above (or its successor) no longer
serves as agent of Xxxxxxx for this purpose, Xxxxxxx shall
promptly appoint a successor agent satisfactory to the other
Parties, notify the other Parties thereof and deliver to the
other Parties a copy of the new process agent's acceptance of
appointment Provided that until the other Parties receive such
notification, they shall be entitled to treat the agent named
above (or its said successor) as the agent of Xxxxxxx for the
purposes of this Clause 22.5. Xxxxxxx agrees that any such
legal process shall be sufficiently served on him if delivered
to such agent for service at its address for the time being in
Hong Kong whether or not such agent gives notice thereof to
Xxxxxxx.
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22.6 Xxx Xx hereby irrevocably appoints Xx. Xxxxx Xxxxx of 6th and
7th Floors, Leahander Centre, 28 Wang Wo Xxxx Xxxxxx, Xxxxx
Xxx, Xxx Xxxxxxxxxxx, Xxxx Xxxx as his agent to receive and
acknowledge on his behalf service of any writ, summons, order,
judgment or other notice of legal process in Hong Kong. If for
any reason the agent named above (or its successor) no longer
serves as agent of Xxx Xx for this purpose, Xxx Xx shall
promptly appoint a successor agent satisfactory to the other
Parties, notify the other Parties thereof and deliver to the
other Parties a copy of the new process agent's acceptance of
appointment Provided that until the other Parties receive such
notification, they shall be entitled to treat the agent named
above (or its said successor) as the agent of Xxx Xx for the
purposes of this Clause 22.6. Xxx Xx agrees that any such
legal process shall be sufficiently served on him if delivered
to such agent for service at its address for the time being in
Hong Kong whether or not such agent gives notice thereof to
Xxx Xx.
22.7 Xxx Xx hereby irrevocably appoints Xx. Xxxxx Xxxxx of 6th and
7th Floors, Leahander Centre, 28 Wang Wo Xxxx Xxxxxx, Xxxxx
Xxx, Xxx Xxxxxxxxxxx, Xxxx Xxxx as his agent to receive and
acknowledge on his behalf service of any writ, summons, order,
judgment or other notice of legal process in Hong Kong. If for
any reason the agent named above (or its successor) no longer
serves as agent of Xxx Xx for this purpose, Xxx Xx shall
promptly appoint a successor agent satisfactory to the other
Parties, notify the other Parties thereof and deliver to the
other Parties a copy of the new process agent's acceptance of
appointment Provided that until the other Parties receive such
notification, they shall be entitled to treat the agent named
above (or its said successor) as the agent of Xxx Xx for the
purposes of this Clause 22.7. Xxx Xx agrees that any such
legal process shall be sufficiently served on him if delivered
to such agent for service at its address for the time being in
Hong Kong whether or not such agent gives notice thereof to
Xxx Xx.
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SCHEDULE 1
WARRANTIES
1. THE ACCOUNTS
1.1 The Accounts have been prepared in accordance with the
requirements of all relevant laws and generally accepted
statements of standard accounting practice and are complete
and accurate in all respects and show a true and fair view of
the state of affairs of the Vendors and Xxxxx (as the case may
be) (the "RELEVANT ENTITY") and of its results and profits for
the financial period ending on the Accounting Date and
depreciation of the fixed assets of the Relevant Entity has
been made at a rate sufficient to write down the value of such
assets to nil not later than the end of their useful working
lives.
1.2 The Accounts disclose and make full provision or reserve for
all actual liabilities of the Relevant Entity.
1.3 The Accounts disclose and make full provision or reserve for
or note all contingent, unquantified or disputed liabilities
and capital or burdensome commitments of the Relevant Entity.
1.4 The bases and policies of accounting of the Relevant Entity
(including depreciation and valuation of stock and work in
progress) adopted for the purpose of preparing the Accounts
are the same as those adopted for the purpose of preparing the
audited accounts of the Relevant Entity for each of the last 3
preceding accounting periods.
1.5 The profits and losses of the Relevant Entity shown by the
Accounts and for the last 3 preceding accounting periods have
not in any material respect been affected by any unusual or
non-recurring or exceptional item or by any other matter which
has rendered such profits or losses unusually high or low.
1.6 The Business and the Xxxxx Business (the Business and the
Xxxxx Business are herein referred to as the "WARRANTED
BUSINESS") have no liabilities, obligations or contingencies
of any kind, whether absolute, contingent, unaccrued, asserted
or unasserted, or otherwise, except liabilities, obligations
or contingencies that were in existence on the Accounting Date
and are fully accrued or reserved in the Accounts, or that
have been incurred after such date in the ordinary course of
the Warranted Business.
1.7 The Accounts contain full provision for all Tax in relation to
the Warranted Business including deferred or provisional
taxation liable to be assessed on the Relevant Entity for the
accounting period ended on the Accounting Date or for any
subsequent period (on the basis of the rates of Tax and
taxation statutes in force at the Accounting Date) in respect
of any transaction, event or omission
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52
occurring or any income or profits or gains earned, accrued or
received by the Relevant Entity on or prior to the Accounting
Date or for which the Relevant Entity is accountable up to
such date and all contingent liabilities for Tax have been
provided for or disclosed in the Accounts.
1.8 The Management Accounts have been prepared in accordance with
the accounting policies of the Relevant Entity which are set
out in the relevant Accounts and on a consistent basis with
the monthly management accounts of the Relevant Entity and
show a fair view of the assets and liabilities and profits or
losses of the Business as at and to 30 April 2000.
1.9 The Xxxxx March Accounts have been prepared in accordance with
the accounting policies of Xxxxx which are set out in the
Xxxxx December Accounts and on a consistent basis with the
Xxxxx December Accounts and show a fair view of the assets and
liabilities and profits or losses of Xxxxx as at and to 31
March 2000.
2. TAXATION MATTERS
2.1 Since the Accounting Date no further liability or contingent
liability for Tax in relation to the Warranted Business has
arisen otherwise than as a result of commercial activities in
the ordinary course of its business.
2.2 All returns of the Vendors and Xxxxx (collectively the
"WARRANTED ENTITIES" and singly the "WARRANTED ENTITY") made
for Tax purposes were when made and remain correct and on a
proper basis and all other information supplied to the Inland
Revenue Department or other fiscal authority for such purpose
was when supplied and remains correct and on a proper basis
and such returns include all returns and information which the
Warranted Entities ought to have made or given.
2.3 Each Warranted Entity is not a party to any action or
proceeding for the assessment or collection Tax and, to the
best of the Warrantors' knowledge and belief, no such action
or proceeding is likely. Each Warranted Entity is not involved
in any dispute with any Tax authority concerning any matter
likely to affect the conduct of the Warranted Business after
Completion or any of the Assets and no such dispute is likely.
Each Warranty Entity has disclosed to the Purchaser all
correspondence between each of them and any governmental
agency regarding Tax.
2.4 Each Warranted Entity has paid all Tax in relation to the
Warranted Business for which it is liable to account to the
Inland Revenue Department or other fiscal authority on the due
date for payment thereof and is under no liability to pay any
penalty or interest in connection therewith.
2.5 Each Warranted Entity has made all deductions and withholdings
in respect, or on account, of any Tax from any payments made
by it which it is obliged or entitled
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to make and has accounted in full to the appropriate authority
for all amounts so deducted or withheld.
2.6 All remuneration, compensation payments, payments on
retirement or removal from an office or employment and other
sums paid or payable to employees or officers or former
employees or officers of the Warranted Entities in connection
with the Warranted Business and all interest, annuities,
royalties, rent and other annual payments paid or payable by
the Warranted Entities in connection with the Warranted
Business (whether before or after the date hereof) pursuant to
any obligation in existence at the date hereof are and will
(on the basis of the Tax legislation in force at the date
hereof) be deductible for profits tax purposes either in
computing the profits of the Warranted Entities or as a charge
on the income of the Warranted Entities.
2.7 Each Vendor has complied with its reporting obligations to the
Inland Revenue Department or other fiscal authority, in
respect of any benefits provided to any of the Transferring
Employees.
2.8 To the best of the Warrantors' knowledge and belief, all
returns and information made or given by each Warranted Entity
to any relevant authorities in connection with the import or
export of any products in relation to the Warranted Business
are correct and each Warranted Entity has complied with all
legislation relating to the import and export of products and
to all customs and excise matters.
2.9 To the best of the Warrantors' knowledge and belief, all
duties payable upon the importation of goods, and all customs
and excise duties payable in respect of the Assets have been
paid in full, and none of the Assets is liable to confiscation
or forfeiture.
2.10 All documents (other than those which have ceased to have any
legal effect) which are material to the title to any of the
Assets have been duly stamped.
2.11 There is no unsatisfied liability to estate or death duties or
inheritance tax attached or attributable to any of the Assets
and there is no charge or potential charge on any of the
Assets under section 18 of the Estate Duty Ordinance (Chapter
111 of the Laws of Hong Kong).
3. CORPORATE AND JOINT VENTURE MATTERS
3.1 Each Warranted Entity has been duly incorporated, organised or
established and is validly existing under the laws of the
jurisdiction of its place of incorporation, organisation or
establishment and no order has been made or petition presented
or resolution passed for the winding up of the Warranted
Entities and no distress, execution or other process has been
levied on any of its assets. Each Warranted Entity is not
insolvent or unable to pay its debts for the purposes of
section l78 of the Companies Ordinance (or similar legislation
under the laws of the PRC) and
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no receiver or receiver and manager has been appointed by any
person of its business or assets or any part thereof and no
power to make any such appointment has arisen.
3.2 Each Warranted Entity does not have any place of business or
branch or permanent establishment relating to the Warranted
Business outside its jurisdiction of incorporation.
3.3 Accurate and complete copies of the Memorandum and Articles of
Association (or equivalent constitutive documents) of each
Warranted Entity have been provided to the Purchaser. Each
Warranted Entity has complied with its Memorandum and Articles
of Association (or equivalent constitutive documents) in all
material respects and none of the activities, agreements,
commitments or rights of the Warranted Entities relating to
the Warranted Business nor (in the case of the Vendors) this
Agreement is ultra xxxxx or unauthorised.
3.4 Each Vendor has all the requisite corporate power to execute,
deliver and perform, and has taken all necessary corporate or
other action to authorise the execution, delivery and
performance of, this Agreement. This Agreement constitutes a
legal, valid and binding obligation of the Vendors enforceable
in accordance with its terms.
3.5 All Books and Records:
(a) are true and accurate; and
(b) do not contain or reflect any material discrepancies.
4. THE ASSETS
4.1 The Vendors have good and marketable title to all their
respective Assets free from any Encumbrances, other third
party rights, hire or hire purchase agreements, credit sale
agreements, agreements for payment on deferred terms or bills
of sale and any rights of any person to call for any of the
same. All of the Assets are in the possession or under the
control of the Vendors. The Assets comprise all of the assets
necessary to carry on the Business as carried on by the
Vendors.
4.2 All of the items of Machinery and Equipment are in good repair
having regard to their age.
4.3 The Machinery and Equipment comprise all the movable plant,
machinery, vehicles, office and warehouse equipment, computer
hardware and software, furniture and furnishings used in the
carrying on of the Business.
5. THE PURCHASED CONTRACTS
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5.1 The Purchased Contracts do not include:
5.1.1 any contract for the purchase or use by the Vendors
of materials, supplies or equipment which is in
excess of the requirements of the Business for its
normal operating purposes or at prices higher than
current market prices or requires expenditure in
excess of HK$500,000;
5.1.2 any contract for supply of services by the Vendors
which contains warranties or conditions in favour of
the purchaser substantially broader in scope than
warranties and conditions implied by law or as
specified in the Vendors' standard conditions of sale
or supply (a copy of which has been provided to the
Purchaser) or incorporates unreasonable discounts,
commissions or prices calculated otherwise than in
accordance with the Vendor's standard pricing
structure;
5.1.3 any unusual or onerous contract nor any contract
which cannot be terminated without penalty or
compensation on less than 12 months' notice;
5.1.4 any contract restricting either of the Vendors'
freedom of action in relation to the normal
activities of the Business;
5.1.5 any contract not made in the ordinary course of the
Business;
5.1.6 any agency, distribution, marketing, purchasing,
franchising or licensing agreement.
5.2 Each of the Purchased Contracts is in full force and effect
and constitutes a legal, valid, binding and enforceable
obligation of every party thereto, and none of the terms of
the Purchased Contracts or compliance with any of them has
been waived.
5.3 With respect to each of the Purchased Contracts:
5.3.1 the relevant Vendor has duly performed and complied
in all material respects with each of its obligations
thereunder;
5.3.2 there has been no delay, negligence or other default
on the part of the relevant Vendor and no event has
occurred which, with the giving of notice or passage
of time, may constitute a default thereunder;
5.3.3 the relevant Vendor is under no obligation which
cannot readily be fulfilled, performed or discharged
by it from the resources and Assets
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of the Business on time and without undue or unusual
expenditure or effort;
5.3.4 the relevant Vendor has within the Business the
technical and other capabilities and the human and
material resources to enable it to fulfil, perform
and discharge all its outstanding obligations in the
ordinary course of the Business;
5.3.5 there are no grounds for rescission, avoidance,
repudiation or termination and the relevant Vendor
has not received any notice of termination; and
5.3.6 none of the other parties thereto is in default
thereunder.
5.4 None of the Purchased Contracts is one in which any of the
Associated Companies of the Vendors or any shareholder or
director of the Vendors or of any of its Associated Companies
is in any way interested.
5.5 None of the Purchased Contracts nor any of the arrangements or
practices of the Business is void, illegal, unenforceable,
registrable or notifiable under or in contravention of any
laws or regulations.
5.6 Other than the Purchased Contracts, there are no contracts,
agreements or arrangements relating to the Business which is
likely to be material to a purchaser of the Business and the
Assets.
6. SERVICES
6.1 The Warranted Entities have not provided any services in the
course of the Warranted Business which, to the best of the
knowledge of the Warrantors, have been provided in a negligent
manner or in any other manner which would entitle the
recipient of such services to claim damages against the
Warranted Entities.
6.2 There has been no claim in respect of personal injury or
damage to property arising from use of any services supplied
in the course of the Warranted Business during the period of 6
years prior to the Completion Date.
7. GENERAL COMMERCIAL MATTERS
7.1 The Vendors have provided to the Purchaser a list of all
outstanding guarantees, performance bonds, letters of credit
or similar instruments given by the Warranted Entities or any
of its Associated Companies or any other person in respect of
the Warranted Business, and all agreements under which any
finance has been provided to the Warranted Entities in
relation to the Warranted Business.
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7.2 To the best of the Warrantors' knowledge and belief, so far as
the Warrantors and Xxxxx are aware, following a change in the
ownership of the Business and the Assets, the customers of or
suppliers to the Warranted Business will remain customers or
suppliers of the Purchaser to the same extent and upon terms
no less favourable than the terms of their dealings with the
Vendors prior to the date of this Agreement. Within the period
of 90 days preceding the date of this Agreement the Warrantors
have not received any notice or indication (either in writing
or orally) from any customer or supplier of the Warranted
Business that it intends to change in any respect the nature
of its relationship (including, without limitation, the terms
of its dealings) with the Warranted Business.
7.3 Neither the Warranted Entities, their predecessors in title,
nor any person for whose acts or defaults the Warranted
Entities may be vicariously liable, has committed any criminal
offence or any tort or any breach of legislation, regulation
or other requirement having force of law, relating to the
Warranted Business.
7.4 The Vendors have obtained all authorisations, licences and
consents necessary for the carrying on of the Business. All
such authorisations, licences and consents are valid and
subsisting.
7.5 As at the date of signing of this Agreement, the Warranted
Entities do not carry on the Warranted Business under any name
other than its own.
7.6 To the best of the Warrantors' knowledge and belief, the
Warranted Entities are not the subject of any official
investigation or inquiry and is not aware of any facts which
are likely to give rise to any such investigation or inquiry.
7.7 None of the shareholders or directors of the Vendors, the
Vendors nor any Associated Company of the Vendors is either
alone or with any other person or persons engaged in any
business or concerned or interested in any way whatsoever in
any business of a similar nature to or competitive with the
Business.
7.8 There are no obligations, agreements, arrangements or
concerted practices relating to or affecting the Business to
which either of the Vendors is a party or by which either of
the Vendors is bound and there are no practices in which
either of the Vendors is engaged which relate to or affect the
Business which are void, illegal, unenforceable, registrable
or notifiable under or which contravene any anti trust or
similar legislation anywhere in Hong Kong (all such laws being
referred to as "the anti trust rules" in this paragraph). The
Warrantors have received no complaint or threat to complain
under or referring to the anti trust rules from any person and
has not received any request for information, investigation or
objections or been the addressee of or party to any decision,
judgment, undertaking or settlement relating to the anti trust
rules or to any proceedings in which the anti trust rules were
pleaded or relied upon which in any case related to or
affected the Business.
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7.9 The books and records of the Warranted Business accurately
present and reflect all transactions entered into in relation
to the Warranted Business, and have been properly maintained,
in accordance with generally accepted accounting principles
and applicable legislation in Hong Kong and the PRC, as
applicable. Such books and records are up to date and
complete.
7.10 (a) The Vendors have at all times complied in relation to
the Business with all of its obligations under the
Personal Data (Privacy) Ordinance (Chapter 486 of the
Laws of Hong Kong) ("PDPO"), including the data
protection principles forming Schedule 1 of the PDPO,
in connection with the collection, holding,
processing and use of personal data as defined in the
PDPO. (In this Schedule, "PERSONAL DATA" means any
data relating to a living individual from which it is
practicable to ascertain the identity of that
individual and which is in a form in which it is
practicable to access or process that data).
(b) The Vendors have also followed and complied in
relation to the Business with all of the
recommendations contained in any applicable code of
practice approved or issued by the Privacy
Commissioner for Personal Data in relation to the
PDPO.
(c) In particular and without prejudice to the generality
of the foregoing each of the Vendors has in relation
to the Business observed all of its obligations in
relation to:
(i) use of personal data for "matching"
procedures (being comparison of personal
data collected for one purpose with other
personal data for the purpose of taking
adverse action against data subjects); and
(ii) transfer of personal data outside Hong Kong.
7.11 Xxxxx has and is maintaining all approvals, sanctions,
consents, licences, permissions, authorisations, filings and
registrations ("APPROVALS") issued by the appropriate and
authorised national, provincial, municipal, local or foreign
regulatory bodies or agencies necessary for its establishment
and operation and to enable it to carry on Xxxxx Business as
currently carried on (including, without limitation, the Class
"A" Licence) and are not in breach of any provisions of any
law, rule, regulation, guideline, opinion, notice, circular,
order, judgement, decree or ruling of any court, government,
or governmental or regulatory authority ("LAW") governing such
Approvals or terms or conditions thereof, and none of such
Approvals is subject to revocation or withdrawal or (except to
an immaterial or beneficial extent) amendment and the
Warrantors and Xxxxx are not aware of any reason why such
revocation, withdrawal or amendment should occur.
7.12 Xxxxx has all requisite power and authority, and has obtained
all necessary Approvals, of and from all public, regulatory or
governmental agencies and
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bodies, to own its assets and conduct the Xxxxx Business; no
such Approval contains a materially burdensome restriction on
the ability of Xxxxx to own its assets and conduct the Xxxxx
Business and the Warrantors and Xxxxx are not aware of any
breach by Xxxxx of the provisions of any Laws governing any
such Approval or of any other factor, which, in either case,
could be the basis for the withdrawal, cancellation or
impairment of such Approval or the creation of any material
liability of Xxxxx in connection with such Approval not
otherwise expected in the absence of such breach of other
factor.
8. INTELLECTUAL PROPERTY
8.1 Save in respect of those Third Party Rights pursuant to
agreements described in Part 3 of Schedule 8, the relevant
Vendor is and has been at all times since its creation the
sole legal and beneficial owner, free from all Encumbrances,
capable of transferring the same as beneficial owner and,
where registered, the sole registered proprietor of all the
Intellectual Property.
8.2 The material particulars as to registration (and applications
therefor) of the Intellectual Property, including priority and
renewal dates, are set forth in Schedule 4. Each of those
registrations is valid.
8.3 The Intellectual Property, and the validity or subsistence of
the relevant Vendor's right, title and interest therein, is
not the subject of any current pending or threatened
challenge, claim or proceeding, including for opposition,
cancellation, revocation or rectification, and has not during
the period of 6 years prior to Completion been the subject of
any such challenge, claim or proceeding, and there are no
facts or matters which might give rise to any such challenge,
claim or proceeding.
8.4 All registration and/or renewal fees regarding the
Intellectual Property due on or before Completion have been
paid in full.
8.5 The relevant Vendor has not in Hong Kong and the PRC entered
into any agreement, arrangement or understanding (whether
legally enforceable or not) for the licensing or otherwise
permitting the use or exploitation of the Intellectual
Property or which prevents, restricts or otherwise inhibits
its freedom to use and exploit the Intellectual Property.
8.6 None of the Intellectual Property is currently being
infringed, misused or used without authorisation in Hong Kong
and PRC by any third party or has been so infringed, misused
or used without authorisation during the 6 year period
preceding Completion and no third party has threatened any
such infringement, misuse or unauthorised use and the
Warrantors are aware of no allegations of the same.
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8.7 The Vendors are not engaged in any activities involving the
Business which infringe or otherwise involve the misuse or
unauthorised use of any patents, xxxxx patents, know-how,
trade secrets, technical processes, lists of customers or
suppliers and other confidential information, registered
designs, copyrights, performer's rights, rights in Internet
domain names of any level, plant variety rights, design
rights, rights in circuit layouts, topography rights, trade
marks, business names, rights in the nature of any of the
aforesaid or rights in the nature of unfair competition rights
belonging to any third party or which give any third party the
right to xxx for passing off. None of the Intellectual
Property has been wrongfully or unlawfully acquired by the
Vendors. Complete and accurate copies of all documentation by
which the Vendors acquired from any third party ownership of
any of the Intellectual Property have been disclosed to the
Purchaser, and no claim under any warranty contained in such
documentation has been made or intimated nor are there any
grounds on which any such claim could be made.
8.8 The relevant Vendor has taken all steps open to it to preserve
the Intellectual Property including, but not limited to taking
all reasonable steps to preserve the confidentiality of all
know-how, confidential information and trade secrets used in
the Business, including ensuring that all such know-how,
information and secrets are fully documented and held in a
secure location in the possession or control of the relevant
Vendor, are only disclosed to such employees and other persons
to whom disclosure is necessary in the normal conduct of the
Business and who are aware of, and accept in writing an
obligation to maintain, the confidentiality thereof.
9. COMPUTER SYSTEMS AND SOFTWARE
9.1 In this paragraph 9, the expression "THE SOFTWARE" means all
of the computer programs identified and briefly described in
Schedule 4 Part 4.
9.2 The Software includes all computer programs and software used
or supplied in or in connection with the Business during the
period of 6 years prior to Completion (whether owned by the
Vendors or licensed or sub-licensed to the Vendors by a third
party pursuant to a licence agreement from the third party).
9.3 Save as otherwise provided herein, the Vendors do not have any
title and right to and copyright in any item of the Software
including source code and object code, user and other manuals,
tapes, indices, descriptive memoranda, original listings,
development working papers, calculations and all other
relevant documents, media and confidential information.
9.4 The relevant Vendor is entitled to assign to the Purchaser and
to use and, where indicated, to grant sub-licences to third
parties to use the Software described in Section B of Schedule
4 Part 4 pursuant to licences and/or consents granted to the
relevant Vendor by the owner or licensee of such Software,
true and complete
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copies of such licences having been disclosed to the Purchaser
and being in full force and effect. All royalties and other
payments have been paid when due and there has been no act or
default by the relevant Vendor or, where appropriate, its
sub-licensees or any other person which may in any way result
in such licences being terminated or the relevant Vendor being
unable to obtain any benefit under such licences.
9.5 The relevant Vendor has not at any time had any dispute with
any person relating to proprietary or other rights in or to
the Software. All licences relating to the Software granted by
the relevant Vendor are in full force and effect and the
relevant Vendor is not aware of any breach of any terms of any
such licences. The relevant Vendor has on the termination of
any licence granted by it either recovered or secured the
destruction of all copies of the Software in the possession
custody or control of the licensee or other contracting party
at the date of such termination.
9.6 The Software is fit in all respects for its intended purpose,
of satisfactory quality, performs in all respects in
accordance with its specifications and user or other manuals
or documentation and does not contain any defect or feature
which does or may adversely affect its performance or the
performance of any other software, hardware or system. The
relevant Vendor has not at any time had any dispute with any
person relating to the functionality, quality or fitness for
purpose of the Software or relating to its compliance with its
specifications or with any warranties given by the relevant
Vendor or any other person relating to it.
9.7 (a) All computer software, hardware and equipment owned
or used by the Vendors in relation to the Business or
used or operated by third parties on behalf of the
Vendors in relation to the Business, which performs
or is or may be required to perform functions
involving dates or the computation of dates or
containing date related data, has the programming,
design and performance capabilities to ensure that:
(i) it will not suffer or cause a Malfunction;
and
(ii) it will not be adversely affected by, nor
require changes in inputting or operating
practices nor produce invalid or incorrect
output or results, nor cause any abnormal
ending scenario or suffer any diminution in
functionality or performance as a result of
the date change at the end of the twentieth
century or the input, processing, storage or
use of dates up to and including 31 December
2001.
(b) All date related data stored electronically by or on
behalf of the Vendors in relation to the Business is
in such a form that its input, processing, storage or
use by or on behalf of the Vendors in relation to the
Business will not,
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directly or indirectly, cause a Malfunction in any software,
hardware or equipment.
(c) For the purposes of this Warranty, a "MALFUNCTION"
means failure:
(i) accurately to recognise dates falling
before, upon and after the year 2000;
(ii) accurately to record, store, retrieve and
process data input and date information;
(iii) to function in a manner which does not
create any ambiguity as to century; and
(iv) accurately to manage and manipulate single
century and multi-century formulae,
including leap year calculations.
9.8 The Vendors have security procedures in place to prevent the
unauthorised access, amendment or damage to, or use of, the
Vendors' data or data of third parties held on the Vendors'
computer systems or Software by any third party, and no such
unauthorised access, amendment, damage or use has taken place
during the 6 years preceding Completion.
9.9 The Vendors have access to the source code of Software
licensed or sub-licensed to it in terms of source code deposit
agreements between the owner(s) of the copyright in such
Software and reputable deposit agents, true and complete
copies of which agreements have been disclosed to the
Purchaser.
10. THE PROPERTIES
10.1 In this paragraph 10 unless the context otherwise requires:
10.1.1 "DEVELOPMENT CONTROL LAWS" includes any law or
statute from time to time in effect relating to
or regulating town and country planning,
building, development and/or use of property;
10.1.2 "FINANCIAL ENCUMBRANCES" include any debenture,
mortgage, charge, pledge, lien, encumbrance,
assignment of rent or any security interest or
other security arrangement of any kind granted or
agreed to be granted over or in respect of the
Properties;
10.1.3 "LIABILITIES" include all liabilities (whether or
not contingent) incurred or to be incurred by
each of the Vendors, all damage or loss suffered
by it, all claims, demands, actions and
proceedings made or brought against it and all
costs and disbursements incurred by it and
Liability shall be construed accordingly;
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10.1.4 "OBLIGATIONS" include covenants, conditions,
agreements, stipulations, restrictions,
contractual requirements or other obligations
(whether positive or negative) of a similar
nature;
10.1.5 "OCCUPANCY DOCUMENTS" include any lease,
sub-lease, tenancy agreement, sub-tenancy
agreement, licence or other document granted or
agreed to be granted by either of the Vendors or
its predecessors in title giving any person a
right to use, possess or occupy the Properties;
10.1.6 "OCCUPANCY RIGHTS" include any right to use,
possess or occupy any of the Properties, granted
by either of the Vendors or its predecessors in
title or otherwise acquired or in the course of
being acquired;
10.1.7 "RIGHTS" include any easement, way leave,
licence, quasi-easement, privilege, contractual
right or other rights of a similar nature;
10.1.8 "UTILITY" includes provision for sewage disposal,
water, electricity, gas, television,
telecommunications and information and
"UTILITIES" shall be construed accordingly;
10.1.9 Any reference to the Properties or the Leased
Properties shall (as appropriate) be deemed to
include reference to each of them and each and
every part of them.
10.2.0 The Properties comprise all the land, buildings
and premises currently owned, occupied or used by
the Vendors in relation to the Business or in
respect of which the Vendors have any estate,
interest, right or title and the descriptions of
the Properties set out in Schedule 3 are correct
and not misleading.
10.2.1 The Vendors have exclusive and unfettered
possession and occupation of the Leased
Properties and there are no Occupancy Rights or
Financial Encumbrances in favour of third parties
affecting them except any disclosed in Schedule
3.
10.2.2 All Obligations to which the Leased Properties
are subject and all obligations under Financial
Encumbrances have been observed and performed and
there are no circumstances which could give rise
to the restriction or termination of the
continued possession, occupation, use or
enjoyment of the Leased Properties or to the
exercise of any powers under any Financial
Encumbrances or to any Liabilities whatever.
10.2.3 All Obligations from which the Leased Properties
benefit have been observed and performed and no
breach of such Obligations has been waived or
acquiesced in.
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10.2.4 The Leased Properties have the benefit of all
Rights required to comply with fire regulations
and to maintain adequately the Leased Properties,
and all other Rights, Utilities and facilities
reasonably required for the continued full and
free use and enjoyment of the Leased Properties
for the duration of the Vendors' interest in the
relevant Property and such Rights are held on
terms which do not entitle any person to
terminate, curtail or charge for the Rights.
10.2.5 There are no outstanding claims, disputes,
complaints, notices, orders or proceedings
relating to or affecting the Leased Properties or
which have given or might give rise to any
Liabilities.
10.2.6 All laws, statutes and subsidiary legislation
relating to the use of the Leased Properties, the
employment of persons or the use or storage of
machinery, materials, consumables or chattels in
the Leased Properties have been complied with and
all consents, licences or permits required
thereunder have been obtained and any conditions
or restrictions imposed by such consents,
licences or permits have been observed and
performed.
10.2.7 The present use of the Leased Properties is the
permitted use for the purpose of the Development
Control Laws and the relevant Government land
grant and is not a temporary or personal use or a
use subject to restrictions or conditions giving
rise to expenditure or affecting the Vendors' use
or enjoyment of the Leased Properties and all
necessary occupation permits have been obtained
and complied with.
10.2.8 No demolition, development or construction work
has been carried out in relation to the Leased
Properties which would require any consent under
the Development Control Laws or the relevant
Government land grant without such consent having
been properly obtained and any conditions or
restrictions imposed upon the giving of such
consent have been observed and performed.
10.2.9 There are no unauthorised structures on or
unauthorised alterations to any of the Leased
Properties.
10.2.10 No application by the Vendors under the
Development Control Laws or relevant Government
land grant in relation to demolition, development
or construction work or for change of use at the
Leased Properties has been submitted or a
decision in relation thereto appealed which
application or appeal (as appropriate) is still
pending and no such application has been
submitted and refused.
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10.2.11 There are no circumstances or matters which would
prevent any development, change of use,
demolition or construction work at any of the
Leased Properties for which consent under the
Development Control Laws or the relevant
Government land grant has been obtained.
10.2.12 There has been no flooding, subsidence or heave
affecting the Leased Properties, there are no
structural or material defects in or affecting
the Leased Properties and the Leased Properties
are in good and substantial repair and condition
and will not require substantial expenditure in
the foreseeable future.
10.2.13 The Vendors have not entered into any agreements
with any Utility authority or company for the
supply to or discharge from the Leased Properties
of any Utility or for mains or other equipment
laying and has not deposited any money with any
such authority or company as security therefor.
10.2.14 The Occupancy Documents are on terms negotiated
at arm's length and the rent or fees payable
under the Occupancy Documents were the best that
could reasonably be obtained in the open market
(at the time of the grant of the relevant
Occupancy Document or the last rent or fee review
under the relevant Occupancy Document (as the
case may be)) and the rent and fees are as
disclosed to the Purchaser in writing.
10.2.15 All rent, fees and other payments due under the
Occupancy Documents or in respect of any
Occupancy Rights have been promptly paid on the
due date and no such rent, fees or other payments
have been commuted, waived or paid more than
monthly in advance.
10.2.16 Where any Occupancy Documents contain provisions
for rent or fee review or rights of renewal, such
review or renewal shall be at the best rent or
fee that could reasonably be obtained in the open
market assuming willing parties but otherwise on
the same terms as the relevant Occupancy Document
(other than the option for renewal where
appropriate) and the terms of the Occupancy
Documents relating to the assessment of the new
rent or fee shall have the effect of realising
the highest yield for the Leased Properties
reasonably obtainable and there are no building
alterations or improvements which are to be
disregarded for rent or fee review purposes.
10.2.17 The Vendors are not engaged in any rent or fee
review negotiations, process, proceedings or
determination under any legislation or Leases or
Occupancy Documents and there is no outstanding
rent or fee review under any Leases or Occupancy
Documents.
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10.2.18 If any rent or fee review negotiations, process,
proceedings or determination is continuing under
any legislation or Leases or Occupancy Documents,
all notices, counter notices and applications to
the Court, Lands Tribunal or any relevant
arbitrator or independent expert have been served
within any requisite time limits so as to comply
with the provisions of any applicable legislation
or the relevant Lease or Occupancy Document and
full particulars of all such notices,
counter-notices and applications have been
disclosed to the Purchaser.
10.2.19 Copies of all of the Occupancy Documents have
been supplied to the Purchaser and are true and
complete and details of the terms of any
subsisting oral Occupancy Rights or Occupancy
Rights subsisting by reason of conduct have been
supplied to the Purchaser and are true and
complete and do not contain any unusual
provisions and no collateral assurances,
undertakings, concessions or agreements for
surrender have been made by any party to any
Occupancy Documents or Occupancy Rights.
10.2.20 Any consents required for the grant of any
Occupancy Documents or Occupancy Rights have been
obtained.
10.2.21 Notices pursuant to the Landlord and Tenant
(Consolidation) Ordinance (Chapter 7 of the Laws
of Hong Kong) in respect of the grant of
Occupancy Documents or Occupancy Rights of any
residential Leased Properties have been lodged
with and endorsed by the Commissioner of Rating
and Valuation and the endorsed notices are in the
possession of the Vendors.
10.2.22 The Vendors will not create, grant or agree to
grant any Occupancy Rights in respect of the
Leased Properties before Completion except with
the prior written consent of the Purchaser.
10.2.23 Copies of all Financial Encumbrances have been
supplied to the Purchaser and are true and
complete.
10.2.24 Policies of insurance relating to any Liabilities
of the Vendors to third parties deriving in any
way from the Leased Properties or their use have
been effected by the Vendors, are current and
valid, cover the reasonably foreseeable Liability
of the Vendors and are not subject to any special
or unusual terms or restrictions or to the
payment of any premia in excess of the normal
rate for policies of the same kind.
10.3.1 The relevant Vendor possesses the right to occupy
the Leased Properties pursuant to the terms of
the relevant Leases.
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10.3.2 The Leases of each of the Leased Properties are
head leases, are properly completed and stamped
with any applicable stamp duty and are in the
possession and under the control of the relevant
Vendor.
10.3.3 All necessary consents for the grant of the
Leases were obtained before such grant and the
landlords named in the Leases were the registered
legal owners of the Leased Properties at the time
of the grant of the relevant Lease.
10.3.4 The Leases contain no unusual or onerous
provisions.
10.3.5 The Leased Properties are not subject to any
outgoings other than general and water rates,
rent, management charges of a non-capital nature
and Utility charges and the relevant Vendor is
not responsible for payment of Government rent.
10.3.6 The Leases are not subject to any options or
rights of pre-emption or first refusal in favour
of any third parties.
10.3.7 Where the relevant Vendor is responsible for
maintaining insurance of the Leased Properties,
the policy conforms in all respects with the
requirements of the relevant Lease.
10.3.8 Policies of insurance relating to the interior of
the Leased Premises and their fixtures, fittings
and contents have been effected by the relevant
Vendor, are current and valid, cover the full
reinstatement value thereof and are not subject
to any special or unusual terms or restrictions
or to the payment of any premia in excess of the
normal rate for policies of the same kind.
10.3.9 The relevant Vendor knows of no reason why the
existing leases of the Leased Properties will not
be or are likely not to be renewed on their
expiry on similar terms to those in the existing
Leases (save as regards reasonable commercial
increases in rent).
11. LITIGATION
Neither the Vendors, Xxxxx nor any person for whose acts or defaults
the Vendors or Xxxxx may be vicariously liable is engaged whether as
plaintiff or defendant or otherwise in any civil, criminal or
arbitration proceedings or any proceedings before any tribunal in
relation to the Warranted Business (save for debt collection by the
Vendors and Xxxxx in the ordinary course of the Warranted Business for
amounts which are not material) and there are no proceedings threatened
or pending against the Vendors or Xxxxx in relation to the Warranted
Business including proceedings in respect whereof either of the Vendors
and Xxxxx is liable to indemnify any party concerned therein and there
are no facts which are likely to give rise to any such litigation or
proceedings. There is no unfulfilled or
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unsatisfied judgment or court order outstanding against the Vendors,
Xxxxx or the Assets in relation to the Warranted Business or the
Assets.
12. EMPLOYEES
12.1 There has been no past and there is no existing or threatened
or pending industrial or trade dispute involving either of the
Vendors and any of its employees, including without
limitation, the Transferring Employees. There are no
agreements or arrangements (whether oral or in writing or
existing by reason of custom and practice) between either of
the Vendors and any trade union or other employees'
representatives concerning or affecting any of the
Transferring Employees and there are no trade unions or other
employees' representatives whom either of the Vendors
recognises to any extent, in relation to the Transferring
Employees, for collective bargaining purposes.
12.2 Each of the Vendors has neither given notice of any
redundancies or lay offs nor started consultations with any
independent trade union or employees' representatives within
the period of 1 year prior to the date of this Agreement in
relation to any of the Transferring Employees. No
circumstances have arisen under which either of the Vendors is
likely to be required to pay damages for wrongful dismissal or
breach of contract, to make any contractual or statutory
redundancy, severance or long service payment or make or pay
any compensation in respect of unreasonable dismissal, to make
any other payment under any employment protection legislation
or to reinstate or re-engage any former employee who was
employed in the Business. So far as the Warrantors are aware,
there are no pending or threatened claims of any type against
it by any existing or former employees who are or were
employed in the Business. No circumstances have arisen under
which either of the Vendors is likely to be required to pay
damages or compensation, or suffer any penalty or be required
to take corrective action or be subject to any form of
discipline under the Sex Discrimination Ordinance, the
Disability Discrimination Ordinance, the Family Status
Discrimination Ordinance or any other laws conferring
protection against discrimination, harassment, victimisation
or vilification by reason of age, gender, race, religion,
family circumstances or disability. So far as the Warrantors
are aware, there are no current, pending or threatened claims
of any type against it by any existing or former employees.
Each of the Vendors has never breached and is not in breach of
any industrial award or determination applicable to the
Transferring Employees.
12.3 There are no existing service or other agreements between
either of the Vendors and any of the Transferring Employees
which cannot be lawfully terminated by 3 calendar months'
notice or less without giving rise to any claim for damages or
compensation other than a statutory redundancy or severance or
long service payment, and the relevant Vendor has complied
with all its obligations under all legislation, regulations,
and other requirements having force of law (including without
limitation codes, orders and awards) in connection with the
Transferring
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Employees and any trade unions and employee representatives
and with all collective agreements with respect to trade
unions or any Transferring Employees.
12.4 Schedule 7 contains full and accurate particulars of the
following in relation to all of the Transferring Employees:
(i) name, date of birth and commencement of employment;
(ii) details of all remuneration payable (including any
bonus or commission entitlements) and any other
benefits provided or which the relevant Vendor is
bound to provide (whether now or in the future) to
all such persons; and
(iii) details of any other material terms and conditions of
employment of such persons,
all of which information is true and complete.
12.5 There are no persons working full-time in the Business other
than those listed in Schedule 7.
12.6 Other than the Retirement Scheme, there are no Occupational
Retirement Schemes, retirement benefits, pension, provident,
superannuation, share option, share incentive, life assurance,
disability or similar schemes, arrangements or obligations of
the Vendors or any Associated Company of the Vendors for any
Transferring Employees or any of their spouses or dependants.
Save pursuant to the Retirement Scheme, the Vendors have no
obligation (whether legally binding or established by custom)
to pay any pension, allowance or gratuity or make any other
payment on termination of service, death or retirement or to
make any payment for the purpose of providing any similar
benefits to or in respect of any Transferring Employee or any
spouse or dependant of any such person and is not a party to
any scheme or arrangement having as its purpose or one of its
purposes the making of such payments or the provision of such
benefits. The Vendors have not announced any proposals to
establish any such schemes, arrangements or obligations.
12.7 The Retirement Scheme complies with and has at all times
complied with all laws, including (without limitation) the
Occupational Retirement Schemes Ordinance and all rules and
regulations made thereunder and the requirements of the
Registrar of Occupational Retirement Schemes of Hong Kong. The
Retirement Scheme has been funded in accordance with the
governing rules of the Retirement Scheme, the requirements of
the Occupational Retirement Schemes Ordinance and to the
extent recommended by the scheme actuaries. The Vendors and
the trustees of the Retirement Scheme have duly complied with
their respective obligations under the trust deeds and the
rules thereof and under all relevant laws and requirements.
All amounts due to the trustees thereof or to any
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insurance company in connection therewith have been paid. All
recommendations in any reports, actuarial or otherwise,
relating to the Retirement Scheme which have been received by
the Vendors or the trustees within the 3 years immediately
preceding the date hereof have been complied with in full.
Complete and accurate copies of all such reports have been
supplied to the Purchaser.
12.8 Complete and accurate copies of the rules and all booklets and
announcements describing the benefits (or any proposed changes
to the benefits) of the Retirement Scheme and all other
documents, records and materials relating to the establishment
and operation of the Retirement Scheme (including all annual
returns, reports, statements and certificates submitted to the
Registrar of Occupational Retirement Schemes in the past 3
years) have been supplied to the Purchaser prior to the date
hereof.
12.9 The Vendors have been duly admitted to participate in the
Retirement Scheme and have fulfilled all of their obligations
thereunder (including any obligation to pay contributions
thereto).
12.10 The Retirement Scheme is duly registered under section 18 of
the Occupational Retirement Schemes Ordinance, the Registrar
of Occupational Retirement Schemes has not proposed to cancel
the registration of the Retirement Scheme and neither the
trustees thereof (or the insurance company) nor the Vendors
have taken any action, or made any omission, which would
prejudice the continued registration of the Retirement Scheme
under that Section.
12.11 To the best of the Warrantors' knowledge and belief, neither
the Vendors nor the trustees or other administrator of any
Occupational Retirement Scheme is engaged in any litigation or
arbitration proceedings in respect of the Retirement Scheme or
any other Occupational Retirement Scheme or any benefit
provided thereunder in relation to the Transferring Employees
or any former employees of the Vendors and no such litigation
or arbitration proceedings are pending or have been
threatened.
12.12 No Occupational Retirement Scheme in which any of the
Transferring Employees participate or have participated has
been or is in the process of being (or is proposed to be)
wound up (in whole or in part) or closed to new entrants (in
whole or in part).
12.13 No power to increase or augment benefits under the Retirement
Scheme or any other Occupational Retirement Scheme in which
any Transferring Employees participate or have participated
has been exercised within the period of 3 years ending on the
date hereof and full details of all exercises of any such
powers have been disclosed to the Purchaser.
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13. MATTERS SINCE THE ACCOUNTING DATE
Since the Accounting Date:
13.1 there has been no interruption or alteration in the nature,
scope or manner of the Warranted Business, which has been
carried on lawfully and in the ordinary and usual course so as
to maintain it as a going concern;
13.2 there has been no material adverse change in the customer
relations of the Warranted Business or in the financial
condition, prospects, assets or liabilities of the Warranted
Business as compared with the position disclosed by the
Accounts and no damage, destruction or loss (whether or not
covered by insurance) affecting the Warranted Business or the
Assets;
13.3 no substantial customer or supplier being a customer or
supplier accounting for contribution to gross profits of more
than HK$500,000 of the Warranted Business for the accounting
period ending on the Accounting Date has:
13.3.1 indicated that it is likely to cease trading with or
supply to the Warranted Business;
13.3.2 indicated that it is likely to reduce substantially
its trading with or supplies to the Warranted
Business; or
13.3.3 indicated that it is likely to change substantially
the terms upon which it is prepared to trade with or
supply the Warranted Business (other than normal
price and minor changes);
13.4 the Warranted Entities have continued to pay its creditors in
the ordinary course of the Warranted Business. No unusual
trade discounts or other special terms have been incorporated
into any contract entered into by the Warranted Entities;
13.5 each Warranted Entity has not acquired, sold, transferred or
otherwise disposed of any assets of the Warranted Business of
whatsoever nature or cancelled, waived, released or discounted
in whole or in part any rights, debts or claims of or
connected with the Warranted Business, except in each case in
the ordinary course of the Warranted Business in a manner
consistent with prior practice;
13.6 each Warranted Entity has not hired or dismissed any employee
employed in the Warranted Business earning an annual rate of
remuneration, including fringe benefits, in excess of
HK$500,000;
13.7 no sum or benefit has been paid, applied or voted to any of
the Transferring Employees by way of remuneration, bonus,
incentive or otherwise in excess of the amounts payable to
them by the relevant Vendor at the Accounting Date so as to
increase their total remuneration and no new service
agreements have been made
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or entered into by the relevant Vendor with any of the
Transferring Employees since the Accounting Date and the
relevant Vendor is not under any contractual or other
obligation to, and the relevant Vendor will not, change the
terms of service of any Transferring Employee prior to
Completion;
13.8 the relevant Vendor has not acquired or disposed of or granted
any right or created any Encumbrance over any of the Leased
Properties or any land or buildings or any estate or interest
therein or parted with possession of the whole or any part
thereof or agreed to do any of the same;
13.9 each Warranted Entity has not made any purchase or sale or
introduced any method of management or operation in respect of
the Warranted Business or the Assets except in the ordinary
course of the Warranted Business in a manner consistent with
prior practice; and
13.10 each Warranted Entity has not incurred or become subject to
any liability or obligation (absolute, contingent or
otherwise) in relation to the Warranted Business except
current liabilities and obligations incurred under contracts
entered into in the ordinary course of the Warranted Business
and consistent with past practice.
14. ACCURACY OF INFORMATION PROVIDED
14.1 All information contained in the Recitals and Schedules to
this Agreement is true and accurate in all respects and not
misleading in any respect.
14.2 All written information regarding the Warranted Entities and
the Warranted Business provided by the Vendors or any of its
professional advisers to the Purchaser or any of its
professional advisers during the negotiations prior to this
Agreement is and was when given true and accurate in all
respects and not misleading in any respect.
14.3 There is no material fact or matter concerning the Warranted
Entities and the Warranted Business which has not been
disclosed to the Purchaser which would reasonably be expected
to influence the decision of the Purchaser to proceed with the
purchase of the Business on the terms of this Agreement.
14.4 All forecasts and projections relating to the Warranted
Business given to the Purchaser or its advisers by or on
behalf of the Vendors have been prepared with all due care and
prudence and on a reasonable basis on the assumption that the
Warranted Business will be conducted by Purchaser in the same
manner as the Vendors. There are no material facts or
circumstances known, or which ought to be known, to the
Warrantors which would lead a prudent person to revise those
forecasts or projections.
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15. GENERAL
The execution, delivery and performance of this Agreement will not
result in the breach, cancellation and/or termination of any of the
terms or conditions of or constitute a default under any of the
Purchased Contracts or any agreement by which the Assets may be bound
or affected or give rise to a right of any other party to terminate or
cancel any of the Purchased Contracts or any such agreement or violate
any legislation, regulation or other requirement having force of law or
any order, writ, injunction or decree of any court, administrative
agency or governmental body affecting the Warranted Business or the
Assets or give rise to the revocation, withdrawal or amendment of any
Approval.
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SCHEDULES 2 THROUGH 15 OMITTED.
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IN WITNESS WHEREOF the Parties have executed this Agreement on the date
appearing at the head hereof.
SIGNED by Xxxxx Xxxx Xxx Xxxxx )
for and on behalf of )
CONTINENTAL AIR EXPRESS )
(HK) LIMITED )
in the presence of: )
SIGNED by Xxxxx Xxxx Xxx Xxxxx )
for and on behalf of )
CONTINENTAL CONTAINER )
LINES LIMITED )
in the presence of: )
SIGNED by Xxxx Xxxxxx )
for and on behalf of )
UNION-TRANSPORT (HK) LIMITED )
in the presence of: )
SIGNED, SEALED and DELIVERED by )
XXXXX XXXX XXX XXXXX )
in the presence of: )
SIGNED, SEALED and DELIVERED by )
XXX XXXX FAI )
in the presence of: )
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SIGNED, SEALED and DELIVERED by )
XXXXX XXXXX XXXXXXXX )
in the presence of: )
SIGNED, SEALED and DELIVERED by )
XXXXXXX XXXXXXX XXXXX )
in the presence of: )
SIGNED, SEALED and DELIVERED by )
XXXXXX XXXXXXX XXXXXXX )
in the presence of: )
SIGNED, SEALED and DELIVERED by )
XXXX XX MING )
in the presence of: )
SIGNED, SEALED and DELIVERED by )
XXXX XXXX HANG )
in the presence of: )
SIGNED, SEALED and DELIVERED by )
XXXX XXX CHEONG )
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in the presence of: )
SIGNED, SEALED and DELIVERED by )
XXXXX XXXX LUNG )
in the presence of: )
SIGNED, SEALED and DELIVERED by )
NG XXXX XX )
in the presence of: )
SIGNED, SEALED and DELIVERED by )
NG XXX XXXX )
in the presence of: )
THE COMMON SEAL of )
UTI WORLDWIDE INC. )
was hereunto affixed )
in the presence of: )
