DISPOSAL AGREEMENT
EXHIBIT
10.2
THIS
AGREEMENT dated October 31, 2006 is made
BETWEEN:--
(1)
PHYSICAL SPA & FITNESS INC., a Delaware corporation whose business address
is at 40/F., Tower One, Times Square, 0 Xxxxxxxx Xxxxxx, Xxxxxxxx Xxx, Xxxx
Xxxx
(the "Vendor");
and
(2)
Xx.
XXXX XXXXX XXX, whose corresponding address is at Flat A, 5/F., Mei Foo Sun
Cheun, 000 Xxxxxxxx, Xxxxxxx, Xxxx Xxxx (the "Purchaser").
WHEREAS
the Vendor has agreed to sell and the Purchaser has agreed to purchase the
Disposing Shares subject to the terms and conditions hereinafter set
out.
IT
IS
HEREBY AGREED:--
1.
INTERPRETATION
(A)
In
this Agreement and the Recitals hereto, unless the context otherwise
requires:--
"Business
day" means a day other than a Saturday on which banks are open for business
in
Hong Kong;
"Company"
means Physical Beauty & Fitness Holdings Limited, details of which are set
out in Schedule 1;
"Completion"
means the time fixed for completion pursuant to Clause 3(B) and where the
context requires also means the performance by the parties of their
respective obligations in accordance with the provisions of Clause
3;
"Condition"
means the condition set out in Clause 3(A);
"Disposing
Shares" means the one share of US$1.00 of the Company which represents the
entire issued share capital of the Company;
"Share
Exchange Agreement" means the agreement of even date between the Vendor and
the
Purchaser;
"US$"
means
dollars of the United States of America.
(B)
In
this Agreement, words importing the singular include the plural and vice versa,
words importing gender or the neuter include both genders and the neuter and
references to persons include bodies corporate or unincorporate.
(C)
References in this Agreement to statutory provisions are references to those
provisions as respectively amended or re-enacted from time to time (if and
to
the extent that the provisions as amended or re-enacted are for the purposes
hereof equivalent to those provisions before such amendment or re-enactment)
and
shall include any provision of which they are re-enactments (if and to the
extent aforesaid) and any subordinate legislation made under such
provisions.
(D)
References herein to "Clauses" and "Schedules" are to clauses of and schedules
to this Agreement respectively and a reference to this Agreement includes a
reference to each Schedule hereto.
(E)
The
headings and table of contents in this Agreement are for convenience only and
shall not affect its interpretation.
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2.
TRANSFER, CONVEYANCE, AND ASSIGNMENT OF THE DISPOSING
SHARES
Subject
to satisfaction of the Condition, the Vendor as beneficial owner shall transfer,
convey, and assign and the Purchaser shall accept and assume of the Disposing
Shares (to be completed at Completion pursuant to Clause 3) free from all rights
of pre-emption options, liens, claims, equities, charges, encumbrances or
third-party rights of any nature and with all dividends, benefits and other
rights now or hereafter being attached or accruing thereto as from the date
of
this Agreement.
3.
COMPLETION
(A)
Completion of this Agreement is conditional upon the shareholders of the Vendor
having approved this Agreement as required under Delaware law and a Definitive
Information Statement on Schedule 14C having been filed with the U.S. Securities
and Exchange Commission (the “Commission”) and been mailed to shareholders, and
twenty days have elapsed since such filing and mailing.
(B)
Completion shall take place immediately after the closing pursuant to the Share
Exchange Agreement, provided that if closing pursuant to the Share Exchange
Agreement does not take place, Completion shall not take place. Completion
shall
take place at the offices of 40/F., Tower One, Times Square, 0 Xxxxxxxx Xxxxxx,
Xxxxxxxx Xxx, Xxxx Xxxx when all (but not part only) of the following businesses
set out in sub-clauses (C) and (D) shall be transacted.
(C)
The
Vendor shall procure that before Completion a board meeting of the Company
is
held and that at such meeting resolutions are passed to approve of the transfer
of the Disposing Shares to the Purchaser or its nominee upon presentation of
duly executed transfers.
(D)
At
Completion:--
(a) the Vendor shall deliver or procure the delivery to the Purchaser
of:--
(i) instruments of transfer in respect of the Disposing Shares
duly executed by the registered and beneficial
owner thereof in favor of the Purchaser and/or its nominee;
(ii) the share certificates in respect of the Disposing
Shares;
(iii) certified true copies of any power of attorney or other authority pursuant
to which this Agreement and any
document referred to in (i) above may have been executed;
(b) the Vendor shall deliver to the Purchaser in respect of the
Company:--
(i) the corporate seal, cheque books, chops and all copies of the
memorandum and articles of association of the Company;
(ii) the statutory books of the Company duly made up to date and any unissued
share certificates and such
other records (including all title documents to the assets including
financial records) of the Company as may exist;
(iii) all current insurance policies, books and records, title documents of
the
Company, all contracts to which
the Company is a party and such licenses, authorizations and registrations
granted to or owned by the Company.
(E)
The
Purchaser shall not be obliged to complete the purchase of the Disposing Shares
or perform any obligations hereunder unless the Vendor complies fully with
its
obligations under Sub-Clauses (C) and (D).
(F)
For
avoidance of doubt, this Agreement shall automatically terminate if the Share
Exchange Agreement is terminated and the parties shall in such event be released
from all their obligations hereunder and shall have no claims against each
other
for such termination.
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4.
SET-OFF
The
parties agree that upon Completion, the Vendor shall be deemed to be released
from all assets and properties of the Company; and all liabilities and
obligations of the Vendor relating to the Company.
5.
CLAIMS
(A)
The
Vendor hereby waives and agrees to waive all claims which it may have against
the Company or in respect of any assets of the Company.
(B)
For
the purpose hereof "Claims" means any and all rights and claims, contingent
or
otherwise and whether or not known to the parties or any of them, which the
Vendor and may have against the Company subsisting at or before Completion,
together with any such rights or claims arising out of any events or omissions
at or before Completion.
6.
THE PURCHASER INDEMNITY
It
is
being understood that the Purchaser is fully familiar with the operation of
the
Company. The Purchaser shall indemnify and hold harmless the Vendor (i) from
any
obligation and liabilities arising from this transaction, and (ii) any claim
by
or any obligation or liability to any third party arising out of or in relation
to the Company or any assets of the Company, whether known or unknown, actual
or
contingent, to the extent the same are arisen on or before the closing under
the
Share Exchange Agreement, provided that notice of any claim under this Clause
6
by the Vendor must be delivered by the Vendor to the Purchaser within 2 years
from Completion.
7.
TAX INDEMNITY
(A)
Subject to other provisions of this clause, the Purchaser hereby covenants
with
and undertakes to indemnify and keep indemnified the Vendor against any loss
and
liability suffered by the Vendor and costs and expenses reasonably incurred
as a
result of or in connection with any claim by any fiscal authorities falling
on
the Vendor resulting from or by reference to or arising out of the Disposing
and
purchase of the Disposing Shares herein.
(B)
If
the Vendor shall become aware of a claim relevant for the purpose of this clause
the Vendor shall forthwith give written notice thereof to the Purchaser at
the
address given in this Agreement (or such other address or addresses as the
Purchaser may from time to time notify the Vendor for the purpose of this
Agreement) and shall take such action as the Purchaser may reasonably request
and at the costs of the Purchaser to avoid, resist or compromise any such
claim.
(C)
The
liabilities of the Purchaser under this clause shall cease after 24 months
from
Completion except in respect of matters which have been the subject of a bona
fide written claim made within the said period by the Vendor to the
Purchaser.
8.
ANNOUNCEMENTS AND CONFIDENTIALITY
(A)
Each
of the parties hereby undertakes to the other that it will not, at any time
after the date of this Agreement, divulge or communicate to any person other
than to their respective professional advisers, or when required by law, or
to
their respective officers or employees whose province it is to know the contents
of this Agreement or the negotiations in respect thereof and that it will not,
at any time after Completion, divulge or communicate to any person other than
to
their respective professional advisers, or when required by law or to their
respective officers or employees whose province it is to know, any confidential
information concerning the business, accounts, finance or contractual
arrangements or other dealings, transactions or affairs of the Company which
may
be within or may come to its knowledge and that it shall prevent the publication
or disclosure of any such confidential information concerning such matters
provided that the parties' obligations under this Sub-Clause (A) shall cease
and
determine upon Completion.
(B)
No
public announcement or communication of any kind shall be made in respect of
the
subject matter of this Agreement unless specifically agreed between the parties
or unless an announcement is required pursuant to relevant law or statutory
requirements. Any announcement by either party required to be made pursuant
to
any relevant law or statutory requirements shall be issued only after such
prior
consultation with the other party as is reasonably practicable in the
circumstances.
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9.
NOTICES
Each
notice, demand or other communication given or made under this Agreement shall
be in writing and delivered or sent by post or airmail or by facsimile
transmission to the relevant party at its address or fax number set out below
(or such other address or fax number as the addressee has by five (5) days'
prior written notice specified to the other parties):--
To
the Purchaser:
Flat
A,
5/F., Mei Foo Sun Chuen
000
Xxxxxxxx,
Xxxxxxx,
Xxxx Xxxx
Fax
Number: 000.0000.0000
Attention:
Xx. Xxxx Xxxxx Xxx
To
the Vendor:
00/X.,
Xxxxx Xxx, Xxxxx Xxxxxx
0
Xxxxxxxx Xxxxxx,
Xxxxxxxx
Xxx, Xxxx Xxxx
Fax
Number: 000.0000.0000
Attention:
Xx. Xxxxxx Xxx
Any
notice, demand or other communication so addressed to the relevant party shall
be deemed to have been delivered (a) if given or made by letter, 3 business
days
after the date of dispatch, and (b) if given or made by fax, when
dispatched.
10.
MISCELLANEOUS
(A)
The
provisions of this Agreement shall, so far as they are capable of being
performed or observed, continue in full force and effect notwithstanding
Completion except in respect of those matters then already
performed.
(B)
If at
any time one or more provisions hereof is or becomes invalid, illegal
unenforceable or incapable of performance in any respect under the laws of
any
relevant jurisdiction, the validity, legality, enforceability or performance
in
that jurisdiction of the remaining provisions hereof or the validity, legality,
enforceability or performance under the laws of any other relevant jurisdiction
of these or any other revisions hereof shall not thereby in any way be affected
or impaired.
(C)
Time
shall be of the essence of this Agreement.
(D)
Each
party shall bear its own legal and professional fees, costs and expenses
incurred in connection with this Agreement.
(E)
This
Agreement shall be binding on and shall enure for the benefit of the successors
and assigns of the parties hereto but shall not be capable of being assigned
by
any party without the written consent of the other party.
(F)
This
Agreement sets forth the entire agreement and understanding between the parties
or any of them in relation to the Disposing and purchase of the Disposing Shares
the other transactions contemplated by this Agreement and supersedes and cancels
in all respects all previous agreements, letters of intent, correspondence,
understandings, agreements and undertakings (if any) between the parties hereto
with respect to the subject matter hereof, whether such be written or
oral.
(G)
This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument and each of which shall
be
binding on and enforceable against the party who shall have executed
it.
(H)
No
variation or amendment to or waiver of any of the provisions of this Agreement
shall be valid or effective unless in writing and signed by or on behalf of
each
party.
(I)
Each
of the parties to this Agreement shall cooperate with the other and shall
execute and deliver to the other such other instruments and documents and take
such other action as may reasonably be requested from time to time by that
other
party in order to carry out, evidence and confirm their respective rights and
the intended purpose of this Agreement.
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11.
GOVERNING LAW AND JURISDICTION
(A)
This
Agreement is governed by and shall be construed in accordance with the laws
of
Hong Kong and the parties hereto hereby submit to the non-exclusive jurisdiction
of Hong Kong in connection herewith.
(B)
The
submission to the jurisdiction of the courts of Hong Kong shall not (and shall
not be construed so as to) limit the right of either of the parties hereto
to
take proceedings against the other in any court of competent jurisdiction nor
shall the taking of proceedings by either of the parties hereto in any one
or
more jurisdictions preclude it from taking proceedings in any other jurisdiction
(whether concurrently or not) if and to the extent permitted by applicable
law.
IN
WITNESS WHEREOF,
each of
the parties hereto has executed this Agreement as of the date first set forth
above.
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Physical
Spa & Fitness Inc.
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(The
Vendor)
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By:
/s/ Xxxxxx Xxx
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Name:
Xxxxxx Xxx
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Its:
Chief Financial Officer
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Ngai
Xxxxx Xxx
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(The
Purchaser)
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By:
/s/ Ngai Xxxxx Xxx
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Name:
Ngai Xxxxx Xxx
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(In
His Individual Capacity)
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