EXHIBIT E(1)
TRUST AGREEMENT
China Food & Beverage Company, hereafter referred to as Party A, and
Tinacheng (China) Co., Ltd., hereafter referred to as Party B, as a result of
friendly discussions on the planned purchase of beer breweries and beverage
manufacturers on the Chinese mainland, have reached agreements as follows:
1. Party B accepted Party A's trust to provide services for
compensation to purchase beer breweries and beverage manufacturers on behalf on
Party A.
The scope of the trust is as follows;
(1) To search for those beer breweries and beverage manufacturers
who agree to raise capital by increase of shares and/or transfer of shares
(Hereafter referred to as "the above mentioned enterprises"). The shares so
acquired shall be more that 50% of its total shares. A written agreement along
with its current Balance Sheet and its background information shall be provided
to Party A. The number of "the above mentioned enterprises" ranges from 2 to 8,
which shall be finalized based on their sizes;
(2) To investigate the production and sales operations of " the
above mentioned enterprises" and prepare written reports to be submitted to
Party A for reviewing and screening purposes;
(3) The minimum criteria for assets profit ratio is 20%. Those
eligible enterprises finalized by Party A shall be reorganized to form a
foreign/domestic joint venture and foreign capital controlled structure. Party B
shall, based on this perspective, help to reorganize and spin-off their assets
structure;
(4) To obtain the qualified accounting firms in China to evaluate
the assets structure of the enterprises to reorganized of spin-off as mentioned
in the preceding paragraph and obtain permits, as required, from governmental
agencies;
(5) To assist "the above mentioned enterprises" to re-adjust their
accounting records and have them audited by the accountant in China and have the
audit report to be submitted to Party A;
(6) To negotiate with "the above mentioned enterprises" based on
Party A's capital raising requirements so as to execute the legal
foreign/domestic joint venture agreement or purchase agreement and required
relevant documents;
(7) To consistently assist to complete all the procedures in
connection with verifying the capital commitment and filing the relevant
applications so as to ensure the approval and issuance of all the required
business permits and licenses of the joint venture in question.
2. Party A agreed that the total capital invested by both parties
(including the assets of "the above mentioned enterprises") shall be 6 folds of
it's 1997 annual earnings. Party A's investment capital shall be calculated
proportionately based on its shares owned (above 50%). The balance, if any,
shall be the sole responsibility of Party B (that is to say that if there is any
shortage, is shall be made up by Party B, or, if there is any surplus, it shall
be kept by Party B).
3. Party A guarantees that when Party B has satisfactorily completed
all the jobs as listed up to article 7 paragraph 1 above, Party A shall, in
compliance with provisions as stipulated by "The Law Governing the
Foreign/Domestic Joint Venture Operations of the People's Republic of China",
remit at least US$2,000,000.00 to the Capital Investment of Account opened by
"the above mentioned enterprises" in a bank in China. The balance and procedures
shall be completed by Party B until the issuance of business permits. In case
that Party A fails to remit the foresaid US$1,000,000.00 and, as a result, the
business permit is jeopardized, Party A shall be responsible.
4. Party A agreed to pay Party B US$150,000.00 as partial payment for
Party B's services. Party A shall also pay 500,000 of its marketable shares as
additional compensation and commission payment. After completion of all the jobs
of this agreement, if the market price of its share is below US$5.00, Party A
shall pay Party B the difference, Party A also guarantees that the total value
of the 500,000 shares paid to Party B shall be no less that US$2,500,000.00.
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5. Party A's installment payment plan is as follows:
(1) During the execution period of article 1 of paragraph 1 as
mentioned above, to be more specifically, within two business days after Party B
provided the Balance Sheet, background information and written agreement to
increase or transfer shares with the prospect enterprises, Party A shall remit
US$20,000.00 to Party B's bank account.
(2) Within two business days after the execution of article 1
of paragraph 1 for the third enterprises of after Party B's written notice to
Party A of its start of the assets reorganization or spinning-off procedures for
the first enterprise, Party A shall remit US$30,000.00 to Party B's bank
account.
(3) Within two business days after the completion of article 1
of paragraph 1 or after written notice by Party B to Party A of the start of
adjustment of accounts and assets evaluation for the first enterprise, Party A
shall remit US$50,000.00 to Party B's bank account.
(4) Within two business days after written notice by Party B.
To Party A of the application for business permit and government approval or the
start of assets reorganization of spinning-off for the second enterprise, Party
A shall remit the remaining US$50,000.00 to Party B's bank account.
Party B's bank account is as the following:
TIANCHENG (CHINA) CORP., LTD.
Standard Chartered Bank 570-2-158595-1
Mongkok bank Centre Branch
000-000 Xxxxx xxxx Xxxxxxx
Xxxxxxx Hongkong
(5) Upon the delivery by Party B to Party A of the business
permit for the first foreign/domestic joint venture enterprise, Party A shall at
the same time deliver it 50,000 marketable shares to Party B.
(6.) Party B agreed, as requested by Party A, to use the name
of Victoria Beverage Company Limited (VBCL) in the Chinese mainland to sign the
investment or share purchase agreements with the above mentioned enterprises and
the foreign/domestic joint venture agreements including their related documents.
And, in order to coordinate with the fund raising efforts on the part or Party
A, Party B agreed to separately sign agreement in the name of VBCL with Party A
in advance to transfer all the shares of the above mentioned enterprises.
7. This agreement shall be under the jurisdiction of the laws of the
People's Republic of China.
8. This agreement shall be executed on both English and Chinese
languages. In case of variations, Chinese copy shall prevail.
9. This agreement shall be made duplicate and become effective upon
execution by both parties.
PARTY A: CHINA FOOD AND BEVERAGE PARTY B: TIANCHENG (CHINA)
COMPANY CO., LTD.
REPRESENTATIVE /s/ Xxxxx Xxxxxx REPRESENTATIVE /s/ Wang Qingzhang
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Xxxxx Xxxxxx Wang Qingzhang
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