EXHIBIT 10.1
Ownership Shares Transfer Agreement
Seller: Panyu Tian Le Electrical Manufacturing Co., Ltd. (Tian
Le)
Legal Address: Nan De Highway, South side, Zhi Village, Dashi town,
Panyu Municipality, Guangdong Province
Legal Representative: Mr Su Xxx Xxxx
Buyer: D.V.S. H.K. Limited (DVS)
Legal Address: Xxxx 00-00X, Xxxxx 00, Xxxxxxxx Xxxxx, 00 Lung Xxx
Xxxxxx, Xxxxxx Xxxx, Xxx Xxxxxxxxxxx, Xxxx Xxxx
Legal Representative: Dr Edmund Sun
Tian Le and DVS entered a Joint Venture Contract in August, 1997, pursuant to
which the Panyu D.V.S. Electrical Appliances Manufacturing Co., Ltd. was formed
(Joint Venture). For the purpose of Joint Venture's proper operation concerning
the matter of transferring ownership shares, both parties had depth discussion.
Now, have reached the agreement as follows:
1. Tian Le agrees to sell its Panyu D.V.S. Electrical Appliances Manufacturing
Co., Ltd. entire 49% shares (interest) with full consideration of $100 RMB.
One time payment shall be paid by D.V.S. to Tian Le within five days after
signing of this agreement.
2. D.V.S. having 10% of its interest will be held by Tian Le, which is
responsible to hold this interest temporarily for the benefit of D.V.S.'s
new Joint Venture partner until DVS has designated a new Joint Venture
partner to replace Tian Le as a member of the Joint Venture. When the new
Joint Venture partner has been approved by any required governmental
agencies and admitted to the Joint Venture, Tian Le's name will be withdrawn
and removed from the Joint Venture automatically, if DVS notifies Tian Le
that DVS will be the only member of the Joint Venture. Tian Le is
responsible for its full cooperation in the process of replacement and for
its withdrawal, DVS is responsible for all of its costs.
3. From the date of signing this Agreement, beginning December 1st, 1997, Tian
Le is not entitled to receive any payment for its interest in the Joint
Venture, nor responsible for loss of the Joint Venture. Tian Le is no longer
participating the operation and management of Joint Venture.
4. At the time of Transferring Ownership Shares (interest), Tian Le/DVS shall
send staffs to audit Joint Venture's property, so that confirming its
ownership and belongings, except property listed under the lease agreement
and its supplement are agreed by both parties. If the properties belong to
Tian Le and not listed or purchased by JV, then, Tian Le is entitled to
take away from the premises, DVS will not interfere with.
5. From the date of signing this agreement, effective immediately, DVS shall
designate the General Manager, Deputy General Manager, Financial
Controller, and the head of all departments of the Joint Venture as well as
the Chairman of the Board and members of Board of Directors. Effective
immediately, all Tian Le's members of Directors, management and other Tian
Le employees shall be removed from the premises of the Joint Venture, shall
not participate the operation and management of Joint Venture.
6. Trademarks owned by Tian Le and its licensing (Rights to use) (see separate
trademark licensing contract).
7. Resolving problem concerning Video CD materials, part and finished goods
inventory:
DVS will base on market condition reconfirm the prices of Video CD's
materials, parts and finished goods inventory after Tian Le's approval and
its accounting. Tian Le guarantees that the Video CD Inventory is free and
clear of all liens, claims and encumbrances and is in good physical
condition and is not obsolete. The audit of inventory must be completed
within two weeks after Joint Venture's take over, deduct the entitlement of
DVS, and Joint Venture, and pay off debts owed to Carnival Honour
Development Ltd. (shall base on the audited list to be made and signed by
the representatives of both parties.) Both parties shall sales the net
balances within 2 weeks after the clearance of stock take.
8. Indemnification
From the date of signing this agreement Tian Le guarantees to the Joint
Venture that there has not incurred any contingent liabilities (including
without limitation, for the payment of VAT, other taxes or customs or
duties, or for product liability or warranty repairs or products shipped
prior to the date of this agreement). Tian Le shall indemnify the Joint
Venture against any such contingent liabilities (including any legal fees
or other costs resulting from such liabilities as the accrual of such
liabilities.) In additional to any other remedies that DVS may
have, DVS may offset the amount of any indemnification under this agreement
or for any other breach of any representation or warranty made by Tian Le
in this agreement against the next rental payments then still outstanding
under the lease agreement.
9. Accounting Records
Tian Le must provide the actual financial records of Joint Venture prior to
the ownership transfer to audit its profit and loss to determine Tian Le's
liability to the Joint Venture.
10. All uncovered areas, shall be resolved through friendly negotiations
between the parties. If negotiations are unsuccessful, the dispute shall be
submitted to the China International Economic and Trade Arbitration
Commission for arbitration according to its provisional rules of
arbitration procedure. The arbitration award shall be final and binding on
both parties. The required costs (including legal fees) shall be borne by
the losing party. During the arbitration proceeding, this agreement shall
continue to be performed except for the portion which is subject to of the
dispute under arbitration.
11. All disputes of this agreement, shall apply the rule of laws of China.
12. This agreement pertaining both Chinese and English versions. There are two
(2) original copies of each version, both parties shall keep Chinese and
English versions.
13. This agreement is executed in both Chinese and English versions shall be
equally binding.
14. This agreement is binding upon signing by the legal representatives of both
parties.
Sellers: Panyu, Tian Le Electrical Buyer: D.V.S. H.K. Limited
Appliance Manufacturing Co., Ltd.
[SEAL] [SEAL OF D.V.S. H.K. LIMITED]
By: /s/ Su Xxx Xxxx By: /s/ Dr. Edmund Sun
--------------------------------------- --------------------------------
Mr. Su Xxx Xxxx Dr. Edmund Sun
December 27, 1997
