LEASE
(General, Long Form)
1. PARTIES:
This Lease is made and entered into this 9th day of April, 1996 by and
between Xxxxx X. Xxxxxx (hereinafter referred to as "Landlord") and
HARTCOURT COMPANIES (hereinafter referred to as "Tenant").
2. PREMISES:
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord,
on the terms and conditions hereinafter set forth, that certain real
property and the building and other improvements located thereon
situated in the City of Artesia, State of California commonly known as
00000 X. Xxxxxxx Xxxx., Xxxxxxx, XX and described as Xxx 00 xxx 00 xx
Xxxxx Xx. 0000 xx the City of Artesia, County of Los Angeles, State of
California as per map recorded in Book 74 page 35 of maps, in the office
of County Recorder of said County (said real property is hereinafter
called the "Premises").
3. TERM: The terms of this Lease shall be for Five years, commencing on
June l, 1996 and ending on May 31, 2001.
4. RENT:
Rent shall be payable without notice or demand and without any
deduction, off-set, or abatement in lawful money of the United States to
the Landlord at the address stated herein for notices or to such other
persons or such other places as the Landlord may designate to Tenant in
writing.
Tenant shall pay to the Landlord as rent for the Premises, the following sums:
$1230. per month from June l, 1996 to May 31, 1997.
$1640. per month from June 1, 1997 to May 31, 1998.
$2050. per month from June l, 1998 to May 31, 2001.
Tenant to pay before possession $1230.00 for first month's rent and $2050.00 for
last month's rent. The first month of 4th year and 5th year will be free rents.
Exhibit 10.01
Page 1
99
5. TAXES:
(a) Real Property Taxes Landlord shall pay all real property taxes and
general assessments levied and assessed against the Premises during the term of
this Lease.
(b) personal Property Taxes. Tenant shall pay prior to the delinquency all
taxes assessed against and levied upon the trade fixtures, furnishings,
equipment and other personal property of Tenant contained in the Premises.
6. UTILITIES:
Tenant shall make all arrangements and pay for all water, gas, heat, light,
power, telephone and other utility services supplied to the Premises together
with any taxes thereon and for all connection charges.
7. ALTERATIONS AND ADDITIONS:
Tenant shall not, without the Landlord's prior written consent, make any
alterations, improvements or additions in or about the Premises.
8. HOLD HARMLESS:
Tenant shall indemnify and hold Landlord harmless from and against any and all
claims arising from Tenant's use or occupancy of the Premises or from the
conduct of its business or from any activity, work, or things which may be
permitted or suffered by Tenant in or about the Premises including all damages,
costs, attorney's fees, expenses and liabilities incurred in the defense of any
claim or action or proceeding arising therefrom. Except for Landlord's willful
or grossly negligent conduct, Tenant hereby assumes all risk of damage to
property or injury to person in or about the Premises.
9. ASSIGNMENT AND SUBLETTING:
Tenant shall not voluntarily or by operation of law assign, transfer, sublet,
mortgage, or otherwise transfer or encumber all or any part of Tenant's interest
in this Lease or in the Premises without Landlord's prior written consent which
consent shall not be unreasonably withheld.
10. DEFAULT:
It is agreed between the parties hereto that if any rent shall be due hereunder
and unpaid, or if Tenant shall default and breach any other covenant or
provision of the Lease, then the Landlord, after giving the proper notice
required by law, may re-enter the Premises and remove any property and any and
all persons therefrom in the manner allowed by law. The Landlord may, at its
option, either maintain this Lease in full force and effect and recover the rent
and other charges as they become due or, in the alternative, terminate this
Lease. In addition, the Landlord may recover all rentals and any other damages
and pursue any other rights and remedies which the Landlord may have against the
Tenant by reason of such default as provided by law.
Exhibit 10.01
Page 2
100
11. SURRENDER:
On the last day of the term of this Lease, Tenant shall surrender the Premises
to Landlord in good condition, broom clean, ordinary wear and tear and damage by
fire and the elements excepted.
12. HOLDING OVER:
If Tenant, with the Landlord's consent, remains in possession of the Premises
after expiration or termination of the term of this Lease, such possession by
Tenant shall be deemed to be a tenancy from month-to-month at a rental in the
amount of the last monthly rental plus all other charges payable hereunder, and
upon all the provisions of this Lease applicable to such a month-to-month
tenancy.
13. BINDING ON SUCCESSORS AND ASSlGNS:
Each provision of this Lease performable by Tenant shall be deemed both a
covenant and a condition. The terms, conditions and covenants of this Lease
shall be binding upon and shall inure to the benefit of each of the parties
hereto, their heirs, personal representatives, successors and assigns.
14. NOTICES:
Whenever under this Lease a provision is made for any demand, notice or
declaration of any kind, it shall be in writing and served either personally or
sent by registered or certified United States mail, postage prepaid, addressed
at the address as set forth below:
TO LANDLORD AT:
Xxxxx Xxxxxx
P. O. Xxx 0000
Xxxxxxxxx, XX 00000
TO TENANT AT:
Xxxx X. Xxxx
0000 Xxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Such notice shall be deemed to be received within forty-eight (48) hours from
the time of mailing, if mailed as provided for in this paragraph.
15. WAIVERS:
No waiver by Landlord of any provision hereof shall be deemed a waiver of any
other provision hereof or of any subsequent breach by Tenant of the same or any
other provisions.
16. TIME:
Time is of the essence of this Lease.
Exhibit 10.01
Page 3
101
Tenant shall have an option to purchase the property for $300,000 during the
lease term.
Landlord will complete the following:
- Central air conditioning and heating.
- Carpet and tiles, as agreed.
- All doors and windows must be fixed.
- All partitions, as agreed.
- Chain link fence.
The parties hereto have executed this Lease on the date first above written.
LANDLORD: TENANT:
By: /s/ Xxxxx Xxxxxx By: Hartcourt Co's.
--------------------- ----------------------------
By: /s/ Xxxx Xxxx, President
Exhibit 10.01
Page 4
102
NOTICE TO CHANGE TERMS OF LEASE
(Civil Code Section 827)
To Tenants in Possession: Hartcourt Companies
All Terms of Said Lease are to remain the same, only the dates are to change as
follows:
1. Said Lease to begin on July l, 1996.
2. The June l, 1996 to June 30, 1996, rent to be free.
3. Rental rates to begin from July 1, 1996.
4. Possession was taken on May 16, 1996.
5. Rent will not be charged from May 16 1996, to May 30, 1996.
/s/ Xxxx X. Xxxx /s/ Xxxxx Xxxxxx
----------------- -----------------
Xxxx X. Xxxx Xxxxx Xxxxxx
6/1/96 5/23/96
----------------- -----------------
Date Date
Exhibit 10.01
Page 5
103
LEASE
COMPLETE LEGAL NAME AND FULL NAME AND FULL ADDRESS OF THE
ADDRESS OF LESSEE ("LESSEE") SUPPLIER OF EQUIPMENT ("LESSOR")
Harcourt Investments (USA), Inc. Anja Engineering Corporation
00000 Xxxxx Xxxx 00000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000 Xxxxxxx, XX 00000
Taxpayer I.D. No.
SCHEDULE OF EQUIPMENT LEASED ("EQUIPMENT")
(Include make, year, model, identification and model
numbers or marks)
SEE SCHEDULE
EQUIPMENT TO BE DELIVERED AND LOCATED AT:
SEE SCHEDULE
("Equipment Location")
1. SCHEDULE OF LEASE PAYMENTS
Lease term number of months: 120
Number of payments: 10 Annual Payments
Amount of each lease payment:
Lease: $50,000.00
Tax: Included
Other: None
Total annual lease payment: $50,000.00
Advance lease payment representing:
1 years $ 50,000.00 Total advance lease payment
2. LEASE. Lessor leases to Lessee and Lessee leases from Lessor for the
lease term specified above and for any extension or renewal thereof
(collectively "Term") and on the terms and conditions stated in this
agreement ("Lease") the Equipment identified above and in any schedule
("Schedule") incorporating this Lease by reference that the parties
agree in writing to make a part of this Lease.
Exhibit 10.02
104
3. LEASE PAYMENTS. The obligation to make Lease Payments begins on the date
(as determined by Lessor) when Lessee accepts Equipment for shipment to
its final destination. Lessee shall make Lease Payments, in advance, on
the date or dates specified by Lessor in a notice to Lessee. Lease
Payments shall be paid at the office of Lessor or at any other place
specified by Lessor. Any Security Deposit and/or Advance Lease Payment
is due on signing of the lease specifying such amount. If any part of a
payment is more than five days late, Lessee shall pay a late charge of
10% of the payment, all or a portion of which is late. Lessor shall not
be required to perform any maintenance and/or service obligations.
Lessee will provide separate purchase orders for any maintenance and/or
service. Lessee's obligation to make Lease Payments shall remain
unconditional.
4. NO WARRANTIES. The Equipment is leased '"AS IS". Lessee has selected the
Equipment from Supplier prior to requesting Lessor to manufacture it and
lease it to Leesee. Lessor agrees to allow SGS Industrial Sevives to
inspect the equipment at Anja's,Fontana facility and issue a Certificate
of Quality as required. Lessee agrees to pay for the full cost of such
an Inspection. LESSOR MAKES NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR
WITH RESPECT TO PATENT OR COPYRIGHT INFRINGEMENT, TITLE, OR THE LIKE.
5. INSURANCE. Lessee agrees, at Lessee's sole cost and expense, to procure
and deliver to Lessor simultaneously with or prior to delivery to Lessee
of the equipment to be leased hereunder, and to keep in full force and
effect during the entire term of the Agreement, a policy or policies of
Insurance satisfactory to the Lessor as to the insurer and amount of
coverage, protecting the Lessor against all losses and damages it may
sustain or suffer due to any of the reasons stated above with a combined
single limit of one million dollars ($1,000,000.00) for personal injury
liability and property damage.
Lessee will deliver, as required by the Lessor, to the Lessor a valid
certificate of insurance, naming Lessor as additional insured and loss
payee covering the lease term and any applicable extensions, and
including the period up to the return of the equipment, which will
become part of this Agreement.
Exhibit 10.02
105
6. INDEMNITIES. Lessee agrees and warrants that the machine leased
hereunder will not be operated by any person other than agents or
employees of Lessee, each of whom the Lessee warrants to be a careful,
dependable operator not under the influence of alcohol or drugs. Lessee
further agrees and warrants that Lessee or Lessee's agent will not
permit the machinery to be used or operated in violation of any
applicable national, federal, state or local law, ordinance or
regulation and shall hold Lessor harmless from any fine, forfeiture, or
penalty for any such violation.
7. BANKRUPTCY, Etc. This Agreement shall terminate without notice if Lessee
shall have filed a voluntary petition in bankruptcy, shall have made an
assignment for the benefit of creditors, shall have been voluntarily or
involuntarily adjudicated a bankrupt by any court of competent
jurisdiction, or if a petition for reorganization of Lessee, or for an
arrangement with creditors is filed by or against Lessee, or if a
receiver shall have been appointed for Lessee's business, or if Lessee
shall have permitted or suffered any distress, attachment, levy or
execution to be made or levied against any or all of the property of
Lessee.
In the event this Agreement shall have been terminated as provided above,
the Lessee shall comply with and the Lessor shall be entitled to damages herein
liquidated for all purposes including claims or suits against the Lessee'e
assets in bankruptcy or reorganization, if any, as follows:
Thirty-five percent (35%) of all lease payments due for the full contract
term of this Agreement unbilled as at the date of termination representing the
Lessor's cost for administration, contract set-up, machinery procurement,
delivery, machinery modification, all of which would have been amortized over
the full term of the Agreement together with one hundred percent (100%) of all
billed and unpaid invoices which are applicable to this Agreement prior to the
date of termination, repair charges for machinery together with interest
relating thereto.
8. DEFAULT. In the event any material act or thing required of Lessee
hereunder shall not be done and performed in the manner and at the time
or times required by this Agreement, Lessee shall thereby be and become
in default under this Agreement thereby vesting in Lessor the right,
exercisable
Exhibit 10.02
106
at the discretion of the Lessor without prejudice to any other right or
remedy which the Lessor may have in relation to such default and,
without notice of demand to declare all unpaid lease payments due or to
become due hereunder payable forthwith together with all other charges
provided herein and in any addenda now or hereafter made a part hereof,
and enter any premises where equipment provided hereunder shall be and
remove end retain same, or otherwise obtain possession thereof, without
being liable to any suit, action, defense or other proceeding, free of
all rights of Lessee without any further liability or obligations and
indemnities provided hereunder, including but not limited to Lessee's
obligation for the lease payments provided herein. Any such repossession
shall not constitute a termination of this Agreement unless Lessor so
notifies Lessee in writing and Lessor shall have the right, at its
option, to lease, rent or sell machinery to any person or persons upon
such terms and conditions as Lessor shall determine. Lessee shall pay to
Lessor all costs and expenses, including reasonable legal fees, incurred
by Lessor in collecting payments due from Lessee or in enforcing any of
the Lessor's rights pursuant to this Agreement.
9. TITLE TO EQUIPMENT. It is expressly understood and agreed that this is a
leasing contract only. Lessee acknowledges and agrees that it shall not,
by virtue of this Agreement or the possession or use of the equipment by
Lessee under or pursuant to this Agreement or of anything permitted to
be done by Lessee hereunder in respect to the equipment acquire right,
title or interest to any equipment leased hereunder. If the registered
owner of the equipment is other than the Lessor, then the Lessee under
this Agreement shall become sub-lessee and be subject and subordinate to
the provisions of any written agreements covering the equipment,
including the owner's rights of repossession. such agreements being
available to the sub-lessee upon written request to Lessor.
10. LIENS AND ALTERATION. Lessee will keep the leased equipment free from
any liens, claims or encumbrances and Lessee will not, without prior
written consent thereto, make or suffer any changes, alterations, or
improvements in or to said lease equipment or remove therefrom any
parts, accessories, attachments or other equipment.
Exhibit 10.02
107
11. DELIVERY AND ACCEPTANCE. Supplier will ship the Equipment directly to a
location designated by the Lessee. Lessee shall be deemed to have
irrevocably accepted the Equipment under the lease upon the earlier of
A) delivery to Lessor of the signed Delivery and Acceptance Receipt; or
B) 10 days after delivery of the Equipment, if Lessee has not prior to
such 10th day, delivered with the foregoing. Lessor and Lessee shall be
relieved of all obligations or liabilities under the lease. Lessor shall
retain any Advance Lease Payment as liquidated damages for loss of
bargain and not as a penalty, and Lessee shall be responsible for paying
for the Equipment and fulfilling all other obligations of the buyer
under any applicable purchase order. The validity of the lease will not
be affected by any delay in Lessee's receipt of the Equipment.
12. ENTIRE AGREEMENT. The parties agree that this Agreement together with
the Schedule(s) and Addendum(s) attached hereto and any additional
Schedule(s) and Addendum(s) which may be added at a later date and which
are signed by a duly authorized representative of the Lessee and by a
Corporate Officer of the Lessor constitute the entire agreement between
the parties hereto and supersede all prior agreements and understandings
of the parties relating to the subject matter hereof but without
prejudice to the Lessor's right on any antecedent breaches by the Lessee
under any such prior Agreements, and shall be binding upon the
respective parties and their respective representatives, successors, and
assignees. The Agreement and the Schedules and Addenda now or hereafter
made a part hereof may not be amended or altered in any manner unless
such amendment or alteration is in writing and signed by a duly
authorized representative of the Lessee and a Corporate Officer of the
Lessor.
13. WAIVER. The failure of either party hereto, in any or more than one
instance, to insist upon the performance of any of the terms, covenants,
or conditions of this Agreement or to exercise any right of privilege
herein, or the waiver by either party of any breach of any of the terms,
covenants or conditions of this Agreement, shall not be construed as
thereafter waiving any such terms, covenants, conditions, rights or
privileges, but the same shall continue and remain in full force and
effect the same as if no such forbearance or waiver had occurred.
Exhibit 10.02
108
14. SAVING CLAUSE.The form of this agreement is intended for general use in
the Continental United States and in the event that any of the terms and
provisions hereof are in violation of or prohibited by any law, statue
or ordinance of the state or county, of in the city where it is used,
such terms and provisions shall be deemed amended to conform to such
law, statute or ordinance without invalidating any other terms and
provisions of this Agreement.
15. SECTION HEADINGS.All section headings are inserted for convenience only
and shall not affect any construction or interpretation of this
Agreement.
Lessee agrees to all terms and conditions of this Lease, that they are a
complete and exclusive statement of its lease agreement with Lessor and that
they may be modified only by written agreement signed by an executive officer of
Lessor and not by course of performance: provided, however, that Lessee
authorizes Lessor, without notice, to supply omitted information and correct
patent errors in any document executed by or on behalf of Lessee. LESSEE
REPRESENTS AND WARRANTS THAT THE EQUIPMENT WILL BE USED FOR BUSINESS PURPOSES
ONLY AND NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES. LESSEE CERTIFIES THAT
IT HAS READ AND RECEIVED A COPY OF THIS LEASE. LESSOR AND LESSEE HAVE ENTERED
INTO THIS LEASE INTENDING TO BE BOUND BY THE TERMS AND CONDITIONS SET FORTH IN
THIS LEASE AND ON ALL SCHEDULES OR ADDENDUMS. ALL LEASES HEREUNDER SHALL BE
NONCANCELLABLE NET LEASES.
Anja Engineering Corporation Harcourt Investments (USA) Inc.
/s/ /s/
------------------------- ------------------------------
Xxxxx Xxxxxxxx - President Xxxx X. Xxxx - Chief Executive
Officer
4/4/94 4/4/94
------ ------
Date Date
Exhibit 10.02
109
STOCK EXCHANGE AGREEMENT
This agreement was entered on August 8, 1994 by and between:
(1) Eastern Rocester Limited, a Hong Kong corporation, located at Xxxxxx
Xxxxx,00 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxx, Xxxx Xxxx, represented by
Xx. Xxx Goek Ser, President, (herein referred to as "Party A"); and,
(2) Harcourt Investment (USA) Inc., a Nevada corporation, located at 00000
Xxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxx 00000, represented by Xx. Xxxx X. Xxxx,
President, (herein referred to as "Party B").
WHEREAS, Party A, who owns 60% interest in a Chinese corporation, called Xinhui
Harchy Modern Pens Ltd. , located at X.X. Xx. 000000, Xxxxxxxxxx, Xxxxxx,
Xxxxxxxxx, Xxxxx (herein referred to as "Party C") would like to transfer this
asset to Party B, in exchange for shares of Party B, under the following terms
and conditions;
(1) Party A will cause Party C to transfer the 60% share of Party B as of
September 1, 1994.
(2) In exchange, Party B will tender 20,000 shares of Party B to Party A
(out of the 25,000 total outstanding), as consideration for above
transaction.
(3) Party A will have the option to purchase the remaining shares of 5,000
to Party B at a set price of $60 per share. The option is valid from
today up to 12/31/96.
(4) The two parties have studied diligently the books and records of all
parties involved, including books and records of Party C.
(5) All parties agreed that the transaction does not: involve any monetary
consideration and will hold each other harmless and indemnify each other
against any legal claims and proceedings.
(6) All parties agreed that there is no representation of any fact other
than those books and records examined by all parties concerned.
Exhibit 10.03
110
(7) This transaction will take Place on September 1, 1994.
(8) Should there be any dispute in respect to the performance of either
party, the business law and regulations of Hong Kong will apply. All
arbitration, and legal proceedings shall be conducted in Hong Kong.
WHEREAS, two Parties do hereby affix their signatures to confirm this agreement.
BY: HARCOURT INVESTMENT (USA), INC.
/s/ Xxxx X. Xxxx
-----------------------
Xxxx X. Xxxx, President
BY: EASTERN ROCESTER LIMITED
/s/ Tan Goek Ser
-----------------------
Tan Goek Ser, President
Exhibit 10.03
111
THE HARTCOURT COMPANIES, INC.
1995 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN. The purpose of The Hartcourt Companies, Inc.,
("Company") 1995 Stock Option Plan ("PLAN") is to encourage ownership of the
common stock of Company, by eligible key employees, directors, and officers
providing service to the Company and its subsidiaries and licensees, and to
provide increased incentive for such employees and other persons to render
services to the Company and its subsidiaries in the future and to exert maximum
effort for the success of the business of the Company and its subsidiaries.
2. DEFINITIONS. As used herein, and in any Option granted hereunder, the
following definitions shall apply:
a) "Board" shall mean the Board of Directors of the Company.
b) "Common Stock" shall mean the common stock of the Company or any
other class of shares of capital stock which has the right to
participate in assets available for distribution to shareholders
after the preferences of all other classes of capital stock has
been satisfied.
c) "Company" shall mean The Hartcourt Companies, Inc.
d) "Committee" shall mean the Committee appointed by the Board in
accordance with paragraph (a) Section 3 of the Plan. If no
Committee is appointed, the term "Committee" shall refer to the
Board.
e) "Continuous Employment" or "Continuous Status as an Employee"
shall mean the absence of any interruption or termination of
employment by the Company or any Subsidiary. Continuous
Employment shall not be considered interrupted in the case of
sick leave, military leave or any other leave of absence approved
by the Company or in the case of transfers between locations of
the Company or between the Company, its Subsidiaries or its
successor.
f) "Employee" shall mean any person, including officers, directors,
employees and consultants, employed by the Company or any
Subsidiary on either a full-time or part-time basis.
g) "Incentive Stock Option" shall mean any Option granted under this
Plan, or any other option granted to an Employee, which complies
with the
Exhibit 10.04
Page 1
112
provisions of Xxxxxxx 000X xx xxx Xxxxxx Xxxxxx Internal Revenue
Code of 1986, as amended from time to time (herein called the
"Code").
h) "Non-Qualified Stock Option" shall mean any Option granted under
this Plan which does not qualify in whole or in part as an
"incentive stock option" under the provision of Section 422A of
the Code.
i) "Option" shall mean a stock option granted pursuant to the Plan.
j) "Optioned Shares" shall mean the Common Stock subject to an
Option granted pursuant to the Plan.
k) "Optionee" shall mean a person who receives an Option under the
plan.
l) "Plan" shall mean this 1995 Stock Option Plan.
m) "Share" shall mean a share of the Common Stock as adjusted in
accordance with Section 6(i) of the Plan.
n) "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at
the time of the granting of the Option, each of the corporations
other than the last corporation in the unbroken chain owns stock
possessing 50 percent or more of the total combined voting power
of all classes of stock in one of the other corporations in such
chain.
3. ADMINISTRATION OF THE PLAN.
a) PROCEDURE. The Plan shall be administered by the Board. The Board
may appoint a Committee consisting of not less than three members
of the Board to administer the Plan on behalf of the Board,
subject to such terms and conditions as the Board may prescribe.
Once appointed, the Committee shall continue to serve until serve
until otherwise directed by the Board. From time to time, the
Board may increase the size of the Committee and appoint
additional members thereof, remove members (with or without
cause) and appoint new members in substitutions therefore,fill
vacancies, however caused, and remove all members of the
Committee and, thereafter, directly administer the Plan.
Members of the Board or Committee who are either eligible for
Options or have been granted Options may vote on any matters
affecting the administration of the Plan or the grant of any
Options pursuant to the Plan; provided that no such member shall
act upon the granting, amendment or modification of an Option to
himself, but any such member may be counted in determining the
existence of a quorum at any meeting of the Board or the
Committee during which action is taken with respect to the
granting of an Option to him.
Exhibit 10.04
Page 2
113
b) POWERS OF THE COMMITTEE. Subject to the provisions of the Plan,
the Committee shall have the authority: (i) to determine, upon
review of relevant information, the fair market value of the
Common Stock; (ii) to determine the exercise price of Options to
be granted (which price, in the case of Incentive Stock Options,
shall be not less than the minimum specified in Section 6(b)
hereof), the Employees to whom and the time or times at which
Options shall be granted, and the number of Shares to be
represented by each Option; (iii) to interpret the Plan; (iv) to
prescribe, amend and rescind rules and regulations relating to
the Plan, (v) to determine the terms and provisions of each
Option granted under the Plan (which need not be identical and,
with the consent of the holder thereof, to modify or amend any
Option; (vi) to authorize any person to execute on behalf of the
Company any instrument required to effectuate the grant of an
Option previously granted by the Committee, and (vii) to make all
other determinations deemed necessary or advisable for the
administration of the Plan.
c) EFFECT OF COMMITTEE'S DECISION. All decisions, determinations and
interpretations of the Committee shall be final and binding on
all Optionees and any other holders of any other holders of any
Options granted under the Plan.
4. STOCK RESERVED FOR THE PLAN. Subject to adjustment as provided in
paragraph 6(h) and 6(1) hereof and to the provisions of Section 9 hereof, a
total of two million (2,000,000) shares of Common Stock shall be subject to the
Plan. The Shares subject to the Plan shall consist of unissued shares or
previously issued shares reacquired and held by the Company, and such amount of
shares shall be made available (for sale for such purpose. Any of such shares
which may remain unsold and which are not subject to outstanding Options at the
termination of the Plan shall cease to be reserved (for the purpose of the Plan,
but until termination of the Plan the Company shall make available a sufficient
number of shares to meet the requirements of the Plan, but until termination of
the Plan shall cease to be reserved for the purpose of the Plan, but until
termination of the Plan the Company shall make available a sufficient number of
shares to meet the requirements of the Plan. Should any Option expire or be
canceled prior to its exercise in full, the shares theretofore subject to such
Option may again be made subject to an Option under the Plan.
5. ELIGIBILITY.
a) Incentive Stock Options under the Plan may be granted only to
Employees for a reason connected with their employment by the
Company or any Subsidiary. Non- Qualified Stock Options may be
granted under the Plan to Employees for reason connected with
their employment or other service to the Company or any
Subsidiary. An Employee who has been granted an Incentive Stock
Option or a Non- Qualified Stock Option, if he or she is
otherwise eligible, may be granted additional Incentive Stock
Options or Non-Qualified Stock Options.
Exhibit 10.04
Page 3
114
b) The aggregate fair market value (determined at the time an
Incentive Stock Option is granted) of the Common Stock with
respect to which any Incentive Stock Option may be exercisable
for the first time by an Optionee during any calendar year (under
this Plan and any other stock option plans of the Company and its
Subsidiaries) shall not exceed $100,000.
The Plan shall not confer upon any Optionee any right with respect to
continuation of employment by the Company, (or shall it interfere in any way
with his right or the Company's right to terminate his employment or other
position at any time.
6. TERMS AND CONDITIONS. Each Option granted under the Plan shall be
evidenced by an agreement, in a form approved by the Committee, which shall be
subject to the following express terms and conditions and to such other terms
and conditions as the Committee may deem appropriate.
a) OPTION PERIOD. Each option agreement shall specify the period
(for which the Option thereunder is granted (which in no event
shall exceed ten years from the date of grant) and shall provide
that the Option shall expire at the end of such period. In the
outstanding stock of the Company (determined in accordance with
Section 425(d) of the Code) on the date the Incentive Stock
Option is granted to him, the option period shall not exceed five
years from the date of grant.
b) OPTION PERIOD. The purchase price of each share of Common Stock
subject to each Option granted pursuant to the Plan shall be
determined by the Committee at the time the Option is granted. In
the case of Incentive Stock Options, such purchase price shall
not be less that the fair market value of a share of Common Stock
on the date the Option is granted, as determined by the
Committee; provided, however, that in the case of an Incentive
Stock Option granted to an Optionee who owns more than ten
percent (10%) of the outstanding stock of the Company (determined
in accordance with Section 425(d) of the Code) on the date Option
is granted to him, the option price shall not be less that 110%
of the fair market value of a share of Common Stock on such date.
c) EXERCISE PERIOD. No part of any Option may be exercised until the
optionee shall have remained in the employ of the Company or any
of its Subsidiaries for such period after the date on which the
Option is granted as the Committee may specify in the option
agreement.
d) PROCEDURE FOR EXERCISE. Options shall be exercised by the
delivery of written notice to the Company setting forth the
number of shares with respect to which the Option is to be
exercised. An Option may not be exercised for fractional shares.
Unless stock of Company is used to acquire such shares in
accordance with paragraph 6(k), such notice shall be accompanied
by cash or certified check, bank draft, or postal or express
money order payable to the order of the Company for an amount
Exhibit 10.04
Page 4
115
equal to the Option price of such shares and specifying the
address to which the certificates for such shares are to be
mailed. As promptly as practicable after receipt of such written
notification and payment, the Company shall deliver to the
Optionee certificates for the number of shares with respect to
which such Option has been so exercised, issued in the Optionee's
name; provided, however, that such delivery shall be deemed
effected for all purposes when a stock transfer agent of the
Company shall have deposited such certificates in the United
States mail, addressed to the Optionee, at the address specified
pursuant to this paragraph 6(d). Until the issuance of the stock
certificates, no right to vote or receive dividends or any other
rights as a stockholder shall exist with respect to the optioned
shares.
e) Termination of Employment. If an Optionee to whom an Option has
been granted ceases to be employed by the Company or any of it's
Subsidiaries for any reason other than death or disability, the
options granted to him shall thereupon terminate except as
otherwise provided in any written contract of employment entered
into between the Optionee and the Company or any Subsidiary prior
to the termination of employment.
f) Disability or Death of Optionee. In the event of the disability
or death of the holder of an Option under the plan while he is
employed by the Company or any of its Subsidiaries, the Options
previously granted to him may be exercised (to the extent he
would have been entitled to do so at the date of his disability
or death) at any time and from time to time, within a period of
one year after his disability or death, by the Optionee, by the
executor or administrator of his estate or by the person or
persons to whom his rights under the Option shall pass by ill or
the laws of descent and distribution, but in no event may the
Option be exercised after its expiration. An employee shall be
deemed to be disabled if, in the opinion of a physician selected
by the Committee, he is incapable of performing services for the
Company or any of its subsidiaries by reason of any medically
determinable physical or mental impairment which can be expected
to result in death or to be of long, continued and indefinite
duration lasting not less than 12 months.
g) No Rights as Stockholder. No Optionee shall have any rights as a
stockholder with respect to shares covered by an Option until the
date of issuance of a stock certificate for such shares; except
as provided in paragraphs 6(h) or 6(i), no adjustment for
dividends, or otherwise, shall be made if the record date
therefore is prior to the date of issuance of such certificate.
h) Extraordinary Corporate Transactions; Adjustment for
Recapitalization, Merger. etc. If the Company is dissolved or
liquidated, or is merged or consolidated into or with another
corporation, other than by a merger or consolidation in which the
Company is the surviving corporation, the then exercisable but
Exhibit 10.04
Page 5
116
unexercised Options granted under the Plan shall not be
exercisable after date of such dissolution, liquidation, merger
or consolidation, unless such other surviving corporation makes
provision for adoption of the Plan and the assumption of the
Company's obligations thereunder.
Notwithstanding any provision of this Plan, the Committee is authorized to
take such action as it determines to be necessary or advisable, and fair and
equitable to Optionees, with respect to Option held by Optionees in the event of
a sale or transfer of all or substantially all of the Company's assets, or
merger or consolidation (other than a merger or consolidation in which the
Company is the surviving corporation and no shares are converted into or
exchanged for securities, cash or any other thing of value). Such action may
include (but is not limited to) the following:
(A) Accelerating the vesting of any Option to permit its exercise in
full during such period as the Committee in its sole discretion
shall prescribe following the public announcement of a sale or
transfer of assets or merger or consolidation.
(B) Permitting an Optionee, at any time during such period as the
Committee in its sole discretion shall prescribe following the
consummation of such a merger, consolidation or sale or transfer
of assets, to surrender any Option (or any portion thereof to the
Company for cancellation.
(C) Requiring any Optionee, at any time following the consummation of
such a merger, consolidation or sale or transfer of assets, if
required by the terms of the agreements relating thereto, to
surrender any Option (or any portion thereof) to the Company in
return for a substitute Option which is issued by the corporation
surviving such merger or consolidation or the corporation which
acquired such assets (or by an affiliate of such corporation) and
which the Committee, in its sole discretion, determines tohave a
value to the Optionee substantially equivalent to the value to
the Optionee of the Option (or portion thereof) so surrendered.
Subject to any action which the Committee may take pursuant to the
provisions o( this paragraph 6(h) and paragraph 6(i), in the event of any
merger, consolidation or sale or transfer of assets referred to in this
paragraph 6(h) or paragraph 6(i), upon any exercise thereafter of an Option, an
Optionee shall, at no additional cost other than payment of the exercise price
of the Option, be entitled to receive in lieu of Shares, (1) the number and
class of Shares or other security, or (2) the amount of cash, or (3) property,
or (4) a combination of the foregoing, to which the Optionee would have been
entitled pursuant to the terms of such merger, consolidation or sale or transfer
of assets, if immediately prior thereto the Optionee had been the holder of
record of the number of Shares for which such Option shall be so exercised.
(i) Changes in Company's Capital Structure. The existence of
outstanding Options shall not affect in any way the right or
power of the Company or its stockholders to make or authorize any
Exhibit 10.04
Page 6
117
or all adjustments, recapitalization, reorganization or other
changes in the Company's capital structure or its business, or
any merger or consolidation of the Company, or any issuance of
Common Stock or subscription rights thereto, or any issuance of
bonds, debentures, preferred or prior preference stock ahead of
or affecting the Common Stock or the rights thereof, or the
dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character
or otherwise. Provided, however, that if the outstanding shares
of common Stock of the Company shall at any time be changed or
exchanged by declaration of a stock dividend, stock split,
combination of shares, or recapitalization, the number and kind
of shares subject to the Plan or subject to any Options
theretofore granted, and the option prices, shall be
appropriately and equitably adjusted so as to maintain the
proportionate number of shares without changing the aggregate
option price.
(j) Investment Representation. Each option agreement shall contain an
agreement that, upon demand by the Committee for such a
representation, the Optionee [or any person acting under
paragraph 6(f)] shall deliver to the Committee at the time of any
exercise of an Option a written representation that the shares to
be acquired upon such exercise are to be acquired for investment
and not for resale or with a view to the distribution thereof.
Upon such demand, delivery of such a representation prior to the
delivery of any shares issued upon exercise of an Option and
prior to the expiration of the option period shall be a condition
precedent to the right of the Optionee or such other person to
purchase any shares.
k) Payment with Stock. Subject to approval of the Committee, an
Employee may pay for any shares of Common Stock with respect to
which an Option has been exercised by tendering to the Company
other shares of Common Stock at the time of the exercise of such
Option, provided, however. that at the time of such exercise, the
Company shall have a Committee consisting of three or more
disinterested directors who shall approve the payment for option
shares with other shares. The certificates representing such
other shares of Common Stock must be accompanied by a stock power
duly executed with signature guaranteed. The value of Common
Stock so tendered shall be determined by the Committee in its
sole discretion. The Committee may, in its sole and absolute
discretion, refuse any tender of shares of Common Stock, in which
case it shall deliver the tendered shares of Common Stock back to
the employee and notify the employee of such refusal.
l) Options Not Transferable. No Option or interest or right therein
or part thereof shall be liable for the debts, contracts or
engagements of the Optionee or his successors in interest or
shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means
Exhibit 10.04
Page 7
118
whether such disposition be voluntary or involuntary or by
operation of law by judgment, levy, attachment, garnishment or
any other legal or equitable proceedings (including bankruptcy)
and any attempted disposition thereof shall be null and void and
of no effect; provided, however, that nothing in this Section
6(l) shall prevent transfers by will or by the applicable laws of
descent and distribution, or transfers made with the express
written authorization of the Committee, whose authorization may
be withheld at its absolute discretion.
7. Amendments or Terminations. The Board of Directors may amend, alter or
discontinue the Plan, but not amendment or alteration shall be made which would
impair the rights of any participant under any Option theretofore granted
without his consent, or which without the approval of the shareholders, would:
(i) except as is provided in paragraphs 6(b) and 6(1) of the Plan, increase the
total number of shares reserved for the purposes of the Plan or decrease the
option price provided for in paragraph 6(b) of the Plan, (ii) change the class
of persons eligible to participate in the Plan as provided in paragraph 5 of the
Plan, (iii) extend the option period provided for in paragraph 6(a) of the Plan,
or (iv) extend the expiration date of this Plan set forth in paragraph 9 of the
Plan.
8. Compliance with Other Laws and Regulations The Plan, the grant and
exercise of Options thereunder, and the obligation of the Company to sell and
deliver shares under such Options, shall be subject to all applicable federal
and state laws, rules and regulations and to such approvals by the governmental
or regulatory agency as may be required. The Company shall not be required to
issue or deliver any certificates for shares of Common Stock prior to the
completion of any registration or qualification of such shares under any federal
or state law, or any ruling or regulation of any government body which the
Company shall, in its sole discretion, determine to be necessary or advisable.
Further, it is the intention of the Company that the Plan comply in all respects
with the provision of Rule 16b- 3 of the United States Securities and Exchange
Act of 1934, as amended. If any Plan provision is found or determined not to be
in compliance with such Rule 16b-3 of the United States Securities and Exchange
Act of 1934, as amended. If any Plan provision is found or determined not to be
in compliance with such Rule 16b-3 the provision shall be deemed null and void.
9. Effectiveness and Expiration of Plan. The Plan shall be effective on
March 23, 1995, the date the Board of Directors of the Company initially adopted
the Plan, subject to the express condition that stockholders of the Company
shall have approved and ratified the Plan within one year thereafter. For the
purpose of granting Options hereunder, this Plan. shall expire on March 23,
2005, ten years after the effective date of the Plan and thereafter no Option
shall be granted pursuant to the Plan.
10. Cancellation and Issuance. The Committee may, as it's sole discretion,
subject to the provision of the Plan, cancel outstanding Option and issue
replacement Options under the Plan under terms and at exercise prices it deems
beneficial to the Company and the Optionees, to further the purposes of the
Plan. Notwithstanding this paragraph 10, no Option may be canceled, or otherwise
amended or modified, without the written consent of the Optionee.
Exhibit 10.04
Page 8
119
THE HARTCOURT COMPANIES. INC.
STOCK OPTION AGREEMENT
UNDER 1995 INCENTIVE STOCK OPTION PLAN
---------------------
Date: _, 199_
The Hartcourt Companies, Inc., a Utah corporation (the "Company"), hereby
grants to ***** (the "optionee"), pursuant to the 1995 Incentive Stock Option
Plan of the Company (the "Plan"), a copy of which is appended hereto and made a
part hereof as Schedule I, an option to purchase a total of (______ shares of
Common Stock of the Company at a price of *****DOLLARS ($***) per share (subject
to adjustment as provided in Section 6(i) of the Plan), on the terms and
conditions set forth in the Plan and hereinafter. This option shall not be
exercisable later than on _______, 200___ (hereinafter referred to as the
"Expiration Date"), except as otherwise provided in paragraphs 6(e) and 6(f) of
the Plan in the event of termination of employment, death or disability of the
Optionee.
1. VESTING. Subject to the terms and conditions of this Agreement, the
shares subject to this option shall be exercisable at any time, in whole
or in part, on or after the date of grant of this option; provided,
however, that this option shall not be exercisable later than the
Expiration Date.
2. TERMINATION. Except as otherwise expressly provided in any contract of
employment between the Optionee and the Company, this option and all
rights hereunder to the extent such rights shall not have been exercised
shall terminate and become null and void after the Optionee ceases to be
an Employee of the Company or any of its subsidiaries or licensees
(whether by resignation, retirement, dismissal, death or otherwise);
provided, however, that in no event may this option be exercised after
the Expiration Date. Notwithstanding the foregoing, this option may in
no event be exercised by any one to any extent in the event of a
voluntary dissolution, liquidation or winding up of the affairs of the
Company or in the event of merger into, consolidation with, or sale or
transfer of all or substantially all of the assets of the Company,
except under the circumstances and pursuant to the terms and conditions
of Section 6(h) of the Plan.
3. EXERCISE. This option is exercisable with respect to all, or from time
to time with respect to any portion, of the shares then subject to such
exercise, by delivering written notice of such exercise, in the form
prescribed by the Stock Option Committee, to the principal office of the
Secretary of the Company. Each such notice shall be accompanied by
payment in full of the option purchase price of such shares. The Company
acknowledges that the Optionee may, if he so elects, exercise this
option by tendering shares of the Company's capital stock in payment of
the option exercise price as permitted by Section 6(k) of the Plan.
4. NON-TRANSFERRABLE. Unless otherwise expressly authorized by the Stock
Option Committee, which authorization may be withheld at the Stock
Exhibit 10.04
Page 9
120
Option Committee's absolute discretion, this option shall during the
Optionee's lifetime be exercisable only by him, and neither it nor any
right thereunder shall be transferable except by will or laws of descent
and distribution, or be subject to attachment, execution or other
similar process. In the event of any attempt by the Optionee to
alienate, assign, pledge, hypothecate or otherwise dispose of the option
or any right thereunder, except as provided for herein, or in the event
of the levy of any attachment, execution or similar process upon the
rights or interest hereby conferred, the Company may terminate the
option by notice to the Optionee and the option shall thereupon become
null and void.
5. MISCELLANEOUS
(a) Neither the granting of this option nor the exercise thereof
shall be construed as conferring upon the Optionee any right to
continue in the employment of the Company or any of its
subsidiaries, or as interfering with or restricting in any way
the right of such corporations to terminate such employment at
any time.
(b) Neither the Optionee, nor any person entitled to exercise his
rights in the event of his death, shall have any of the rights of
a stockholder with respect to the shares subject to the option,
except in the extent that certificates for such shares shall have
been issued upon exercise of the option as provided for herein.
(c) The Company is relieved from any liability for the non-issuance
or non-transfer of any delay in the issuance or transfer of any
shares of Common Stock subject to this option which results from
the inability of the Company to obtain, or in any delay in
obtaining, from each regulatory body having jurisdiction all
requisite authority to issue or transfer shares of Common Stock
of the Company in satisfaction of this option of counsel for the
Company deems such authority necessary for the lawful issuance or
transfer of any such shares.
(d) No capital stock acquired by exercise of this option shall be
sold or otherwise disposed of in violation of any federal or
state securities law or regulation.
(e) This option shall be exercised in accordance with such
administrative regulations as the Stock Option Committee may from
time to time adopt. All decisions of the Stock Option Committee
upon any question arising under the Plan or under this instrument
shall be conclusive and binding upon the Optionee and all other
persons.
THE HARTCOURT COMPANIES, INC.
By: /s/ ATTEST:
----------------------------
----------------------
Secretary
Exhibit 10.04
Page 10
121
PURCHASE CONTRACT
******
This contract was entered on 21 Mar 96 by and between:
1. Exceptional Specialty Products Inc., a California Corporation, located
at 000 Xxxxx Xxxxxxx Xxxxx Xx Xxxxx 000 Xxxxxxx Xxxxx, Xxxxxxxxxx 00000,
represented by Xxx. Xxxxxx Xxxx, its President, herein referred to as
SELLER: and
2. The Hartcourt Companies, a Utah corporation, located at 00000 Xxxxx Xx,
Xxxxxxxx, Xxxxxxxxxx 00000, represented by Xx. Xxxx X. Xxxx, its
President, herein referred to as BUYER.
WHEREAS:
Seller agreed to sell and Buyer agreed to buy, a complete line of cosmetics,
including inventory, marketed under the brand name of " Xxxxxxx St Xxxxxx",
under the following terms and conditions:
1. The products sold will include the inventory as listed under Attachment
A, the trademarked name of Xxxxxxx St Moritz, the promotional
literature, and the covenant not to compete from the principals.
2. Total and final payment for these products will be 60,000 units of free
trading common shares of Hartcourt (NASDAQ Symbol: HRCT) delivered to an
escrow account to be established by Buyer. The escrow will hold the
shares for a period of 24 months, not allowed to sell, before releasing
them to the rightful owner after this period
3. Buyer will have the right to repurchase the 60,000 shares at an unit
price of $7.00 cash, at the end of the 24- month period.
4. Seller will have the option to resell the shares to Buyer; and Buyer
will pay Seller $5.00 per share at the end of the 24 month period.
5. Seller hereby warrants to Buyer the following:
5a. All products are still in good conditions and completely safe to
consumers; and there is no existing or potential violation of the
laws and regulations of the FDA or other governmental
authorities.
5b. Seller holds free and clear title of the goods; and there is no
existing or future encumbrance from any source.
Exhibit 10.05
Page 1
122
5c. Seller and its principals will not compete for a period of 5
years by marketing similar products in the U.S.
6. Buyer warrants that all shares of Hartcourt are free-trading and have no
encumbrances or restrictions.
7. Buyer will deliver the share certificates to the escrow no later than 30
March 96 and Seller will ship all products and related materials within
24 hours of receiving the shares.
The two parties hereby affix their signatures as agreed.
/s/ Xxxx X. Xxxx /s/ Xxxxxx Xxxx
----------------- ----------------
BUYER SELLER
Exhibit 10.05
Page 2
123
ATTACHMENT A
Purchase Contract
Xxxxxxx St Xxxxxx
TOTAL RECAP
1. Finished Products (Quantity & Item Description
Per Page 1 & 2 Of Inventory Sheet) $ 186,475.00
2. Liquid Make Up In Bulk (Page 5) 3,180.00
3. Containers, Labels, Packaging (Pages 4 thru 9) 102,410.0
4. Stationary & Promotional Materials (estimated) 18,750,00
GRAND TOTAL $310,815.00
/s/ Xxxx X. Xxxx /s/ Xxxxxx Xxxx
----------------- ---------------
BUYER SELLER
Exhibit 10.05
Page 3
124
Ex 10-6
PURCHASE AND SALE AGREEMENT
DATED: August 8th, 1996
PARTIES :
1. "Hartcourt" The Hartcourt Companies, Inc., a corporation organized under
the laws of the United States, State of Utah.
2. "NuOasis" NUOASIS INTERNATIONAL INC., a corporation organized under the
laws of the Commonwealth of the Bahamas.
RECITALS:
1.1 NuOasis is the owner and developer of a commercial real estate
project located in mainland China commonly known as the Peony
Gardens Property, more fully described in Schedule "1" annexed
hereto (the "Property"); and,
1.2 Hartcourt wishes to purchase the Property.
OPERATIVE PROVISIONS:
1. Purchase and Sale
1.1 Upon the terms and subject to the conditions of this Agreement, on
the Closing Date, NuOasis agrees to sell and transfer the Property to
Hartcourt and Hartcourt agrees to purchase and accept the Property for
the consideration set forth in this Agreement.
1.2 In exchange for the Property, Hartcourt shall pay to NuOasis the sum
of Twenty Two Million Dollars (USD22,000,000), hereinafter referred to
as the "Purchase Price", consisting of a Convertible Secured Promissory
Note in the principal amount of Twelve Million Dollars (USD12, 000, 000)
in the form annexed ereto as Schedule 2 (the "Hartcourt Note") and the
greater of Ten Million (10, 000, 000) shares of Hartcourt common stock
or that number of shares of Hartcourt common stock having a market value
equal to Ten Million Dollars (USDIO,000,000) at Closing (the "Shares").
For the purpose of this Agreement, "Market Value" shall mean fifty
percent (5O%) of the thirty
Exhibit 10.06
Page 1
125
(30) days moving average closing "bid" price for Hartcourt common stock
as quoted by the United States National Association of Securities
Dealers Electronic Bulletin Board immediately preceding the Closing
Date.
2. Closing
2.1 The closing of the delivery and transfer of the Property (the
"Closing") shall occur at the offices of Hartcourt on a date
("Closing Date") to be mutually agreed upon by Hartcourt and
NuOasis after (i)
exchange of all books, records, financial information,
documents, andother materials deemed necessary to completion of
the transaction contemplated under this Agreement, and (ii)
completion of all review periods provided for in this Agreement .
Exchange of documents under this Agreement shall begin as soon as
possible after execution hereof. In any case, the Closing Date
shall be no later than 30th September 1996.
2.2 At the Closing, the following transactions shall occur and
documents shall be exchanged, all of which shall be deemed to
occur simultaneously:
2.2.1 NuOasis will deliver, or cause to be delivered, to
Hartcourt:
2.2.1.1 the documents necessary to establish the interest in
the Property and to transfer ownership of NuOasis'
right, title and interest in and to the Property to
Hartcourt, in form and substance acceptable to
Hartcourt;
2.2.1.2 such other documents, instruments, and/or
certificates, if any, as are required to be delivered
pursuant to the provisions of this Agreement, or which
are reasonably determined by the parties to be
required to effectuate the transactions contemplated
in this Agreement, or astherwise may be reasonably
requested by Hartcourt in furtherance of the intent of
this Agreement.
Exhibit 10.06
Page 2
126
2.2.1.3 certificates or other conveyance documents acceptable
to NuOasis transferring the Purchase Price to NuOasis;
2.3 From time to time after the Closing, upon the reasonable request
of any party, the party to whom the request is made shall deliver
such other and further documents, instruments, and/or
certificates as may be necessary to more fully vest in the
requesting party the consideration provided for in this Agreement
or to enable the requesting party to obtain the rights and
benefits contemplated by this Agreement.
3. Representations and Warranties of Hartcourt
Hartcourt represents and warrants to NuOasis that;
3.1 Hartcourt is a corporation, validly existing and in good standing
under the laws of the United States, State of Utah, with the
power and authority to carry on its business as now being
conducted. The execution and delivery of this Agreement and the
consummation of the transaction contemplated in this Agreement
have been, or will be prior to Closing, duly authorized by all
requisite action on the part of Hartcourt. This Agreement has
been duly executed and delivered by Hartcourt and the Hartcourt
Note the Shares to be issued by Hartcourt hereunder will
constitute validly issued shares and a binding, and enforceable
obligation of the corporation.
3.2 To the best of Hartcourt's knowledge and belief, the execution
and performance of this Agreement will not violate, or result in
a breach of, or constitute a default in, any provisions of
applicable law, any agreement, instrument, judgment, order or
decree to which Hartcourt is a party or to which it is subject so
as to give rise to a claim by anyone against the Hartcourt Note
or Shares which would in any way effect the enforceability or
validity of this Agreement or Hartcourt's ability to conclude the
transaction contemplated under this Agreement.
Exhibit 10.06
Page 3
127
3.3 The Shares. The Shares to be issued pursuant to this Agreement
will be issued at Closing, free and clear of liens, claim, and
encumbrances, and Hartcourt can issue such shares without the
consent or approval of any person, firm, corporation, or
government authority.
3.4 Capitalization. The capitalization of Hartcourt is attached
hereto and incorporated herein as Schedule "3".
3.5 Financial Information. Hartcourt has provided NuOasis, or will
provide prior to Closing, copies of its Annual Report containing
audited financial statements for the years ending 3lst December
1994 and 1995, and all other information included in such reports
or delivered to NuOasis pursuant to this Agreement, shall be
referred- to as the "Hartcourt Financials" . Except as set forth
in the Hartcourt Financials, Hartcourt has no obligations or
liabilities (whether accrued, absolute, contingent, liquidated or
otherwise, including without limitation any tax liabilities due
or to become due) which are not fully disclosed and adequately
provided for excepting current liabilities incurred and
obligations under agreements entered into in the usual and
ordinary course of business since the date of the Hartcourt
Financials, none of which (individually or in the aggregate) are
material except as expressly indicated their use is not a
guarantor or otherwise contingently liable for any material
amount of indebtedness. Except as indicated in the Hartcourt
Financials, there exists no default under the provisions of any
instrument evidencing any indebtedness or of any agreement in
relation thereto.
3.6 Litigation. To the best knowledge and belief of Hartcourt, except
as disclosed in the Hartcourt Financials or pursuant to this
Agreement, there is neither pending nor threatened, any action,
suit or arbitration to which its Hartcourt property, assets or
business is or is likely to be subject and in which an
unfavorable outcome, ruling or finding will or is likely to have
a material adverse effect on the condition, financial or
otherwise, or create a material liability on the part of
Hartcourt, or which would conflict with this Agreement or any
action taken or to be taken in connection with it.
Exhibit 10.06
Page 4
128
3.7 Tax Matter. To the extent that its tax filings, liabilities,
payments, or provisions for payment could give rise to a claim
against or affect the right of ownership to the Shares, Hartcourt
has filed or will file all federal, state, and local income,
excise, property, and other tax returns, forms, or reports, which
are due or required to be filed by it and has paid, or made
adequate provision for payment of all taxes, interest, penalty
fee, assessment, or deficiencies shown to be due or claimed to be
due or which have or may become due on or in respect of such
returns or reports.
3.8 Contracts. Except as disclosed pursuant to this Agreement, or in
the Hartcourt Financials, there are no contracts, actual or
contingent obligations, agreement, franchises, license
agreements, or other commitments between Hartcourt third parties
which are material to its business, financial condition, or
results of operation, taken as a whole. For purposes of the
preceding sentence, the term "material" refers to any obligation
or liability which by its terms calls for aggregate payments of
more than Ten Thousand Dollars (USD10,000).
3.9 Material Contract Breaches: Defaults. To the best of Hartcourt's
Knowledge and belief, it has not materially breached, nor has it
any knowledge of any pending or threatened claims or any legal
basis for a claim that it has materially breached, any of the
terms or conditions of any agreements, contracts, or commitments
to which it is a party or is bound and which might give rise to a
claim by anyone against the Note or the Shares, and there is no
event of default or other event which, with notice or lapse of
time or both, would constitute a default in any material rise to
a claim against the Note or the Shares in respect of which
Hartcourt has not taken adequate steps to prevent such a default
from occurring.
Exhibit 10.06
Page 5
129
3.10 Securities Laws. Hartcourt is a public company and represents
that, to the best of its knowledge, except as disclosed in the
Hartcourt Financials, it has no existing or threatened
liabilities, claims, lawsuits, or basis for the same with respect
to this original stock issuance to its founders, its initial
public offering, or any dealings with its stockholders, the
public, the brokerage community, the United States Securities And
Exchange Commission ("SEC"), any U.S. state regulatory agencies,
or other person. Hartcourt is currently a non-reporting company
and is not required to file quarterly or yearly reports.
Hartcourt is in the process of filing its Form 10 with the SEC.
Hartcourt is currently published in Standard and Poors and is
cleared therefore for secondary trading in Standard and Poors
approved states.
3.11 Brokers. Hartcourt has agreed to pay a finder's fee with respect
to the transaction contemplated in this Agreement to Asian
International Development Ltd. . ("AID" ) , its assignees or
nominees, and to Guangdong Investments Ltd. ("GIL"), its
assignees or nominees in an amount to be negotiated. To the best
of Hartcourt's knowledge, no other person or entity is entitled,
or intends to claim that it is entitled, to receive any fees or
commissions in connection with this transaction, further agrees
to indemnify and hold harmless NuOasis against liability to AID,
GIL or any broker claiming fees of any kind or nature.
3.12 Approvals. Except as otherwise provided in this Agreement, to
Hartcourt's best knowledge and belief no authorization, consent,
or approval of, or registration or filing with any governmental
authority, or any other person, is required to be obtained or
made by connection with Hartcourt's execution, delivery, or
performance of this Agreement.
3.13 Full disclosure. The information concerning set forth in this
Agreement, and in the Hartcourt Financials, is, to the best of
Hartcourt's knowledge and belief, complete and accurate in all
material respects and does not contain any untrue statement of a
material fact or omit to state a material fact required to make
the statements made, in light of the circumstances under which
they were made, not misleading.
Exhibit 10.06
Page 6
130
3.14 Date of Representations and Warranties. Each of the
representations and warranties of set forth in this Agreement is
true and correct at and as of the Closing Date, with the same
force and effect as though made at and as of the Closing Date,
except for changes permitted or contemplated by this Agreement.
4. Representations and Warranties of NuOasis
NuOasis represents and warrants to Hartcourt that;
4.1 NuOasis is the owner of the Property and will certify in form and
substance acceptable to Hartcourt at Closing.
4.2 NuOasis is a corporation duly incorporated, validly existing and
in good standing under the laws of the Commonwealth of Bahamas,
with the corporate power and authority to carry on its business
as now being conducted. In addition, NuOasis is duly qualified to
do business in each jurisdiction in which the nature of its
business requires it to be so qualified, except to the extent
that the failure to so qualify does not have a material adverse
effect on the business of NuOasis, taken as a whole. The
execution and delivery of this Agreement and the consummation of
the transactions contemplated in this Agreement have been, or
will be prior to Closing, duly authorized by all requisite
corporate actions on the part of NuOasis, to the extent, if any,
that such authorizations are necessary. This Agreement has been
duly executed and delivered by NuOasis and constitutes the valid,
binding, and enforceable obligation of NuOasis.
4.3 NuOasis has provided to Hartcourt, or will provide prior to
Closing, appraisals, construction costs and budgets, and all
other information related to the Property in the possession of
NuOasis, or available for NuOasis. Such information shall be
referred to as the "Property Reports" . All financial statements
and reports included in the Property Reports and prepared by
NuOasis, are prepared in accordance with generally acceptable
accounting standards and present fairly the condition of the
Property. Except as indicated, there exists no default under the
provisions of any instrument evidencing NuOasis' ownership of the
Exhibit 10.06
Page 7
131
Property and NuOasis is not a guarantor or otherwise contingently
liable for any material amount of indebtedness relating thereto.
4.4 To the best knowledge and belief of NuOasis, there is neither
pending nor threatened, any action, suit, arbitration, proceeding
(whether federal, state, local or foreign) or claim to which
NuOasis or the Property is or is likely to be named as a party in
which an unfavorable outcome, ruling or finding will or is likely
to have a material adverse effect on the condition, financial or
otherwise, of the Property, or create any material liability on
the part of owners of the Property, or which would conflict with
this Agreement or any action taken or to be taken in connection
with it.
4.5 To NuOasis's best knowledge and belief, no authorization,
consent, or approval of, or registration or filing with, any
governmental authority or any other person is required to be
obtained or made by NuOasis in connection with the execution,
delivery, or performance of this Agreement.
4.6 The information concerning NuOasis set forth in this Agreement
and in the Property Reports is, to the best of NuOasis's
knowledge and belief, complete and accurate in all material
respects and does not contain any untrue statement of a material
fact or omit to state a material fact required to make the
statements made, in light of the circumstances under which they
were made, not misleading.
5. Conditions Precedent to Obligations of NuOasis
All obligations of NuOasis under this Agreement are subject to the
fulfillment, prior to or as of the Closing Date, of each of the
following conditions:
5.1 The representations and warranties by Hartcourt set forth in this
Agreement shall be true and correct at and as of the Closing
Date, with the same force and effect as though made at and as of
the Closing Date, except for changes permitted or contemplated by
this Agreement.
Exhibit 10.06
Page 8
132
5.2 Hartcourt shall have performed and complied with all covenants,
agreements, and conditions required by this Agreement to be
performed or complied with by it prior to or at the Closing.
5.3 Hartcourt shall have taken all corporate and other action
necessary to issue the Shares and the Hartcourt Note constituting
the Purchase Price to NuOasis pursuant to this Agreement.
5.4 All instruments and documents delivered to NuOasis pursuant to
the provisions of this Agreement shall be satisfactory to NuOasis
and its legal counsel.
6. Conditions Precedent to Obligations of Hartcourt
All obligations of NuOasis under this Agreement are subject to the
fulfillment, prior to or as of the Closing Date, of each of the
following conditions:
6.1 The representations and warranties by NuOasis set forth in this
Agreement shall be true and correct with the same force and
effect as though made at and as of the Closing Date, except for
changes permitted or contemplated by this Agreement.
6.2 NuOasis shall have performed and complied with all covenants,
agreements, and conditions required by this Agreement to be
performed or complied with by it prior to or at the Closing.
6.3 NuOasis shall have taken all corporate and other action necessary
to transfer NuOasis ownership and title to the Property to
Hartcourt.
6.4 Before Closing, NuOasis will have delivered the Property Reports
to Hartcourt. NuOasis shall specifically provide to Hartcourt
schedules of all costs related to the Property as of 31st March,
1996 and all other documents necessary to substantiate to
Hartcourt's sole satisfaction the agreed value of not less than
Twenty Two Million Dollars (USD22,000,000). Upon receipt and
review of the Property Reports, Hartcourt shall have fifteen(15)
business days to raise objections to the information contained in
the Property Reports, which shall be accomplished by
Exhibit 10.06
Page 9
133
submission of a written list of such objections to NuOasis, and
to conduct a valuation of the Property. If there are objections,
or if the valuation of the Property, as determined by Hartcourt,
or a recognized independent appraiser acting for Hartcourt, is
less than Twenty-Two Million Dollars(USD22,000,000), then
Hartcourt shall have the option to terminate this Agreement
without penalty. Alternatively, Hartcourt may elect, in its sole
discretion, to waive objections and proceed with Closing.
6.5 All instruments and documents delivered to Hartcourt pursuant to
the provisions of this Agreement shall be satisfactory to
Hartcourt and its legal counsel. NuOasis shall provide to
Hartcourt prior to Closing evidence satisfactory to Hartcourt
that the representations of NuOasis herein and the interest in
the Property is legally created and duly enforceable.
7. Termination
7.1 This Agreement may be terminated at any time prior to the Closing
Date without liability on the part of either Hartcourt or
NuOasis:
7.1.1 by mutual consent of Hartcourt and NuOasis;
7.1.2 by Hartcourt or NuOasis, (unless the action or
proceeding referred to is caused by a breach or
default on the part of Hartcourt or NuOasis of any of
their representations, warranties, or obligations
under this Agreement) , if there shall be any actual
or threatened action or proceeding by or before any
court or any other governmental body which shall seek
to restrain, prohibit, or invalidate the transactions
contemplated by this Agreement and which, in the
judgment of Hartcourt or NuOasis, made in good faith
and based upon the advice of legal counsel, makes it
inadvisable to proceed with the transactions
contemplated by this Agreement;
7.1.3 by NuOasis or Hartcourt (as the case may be) if, as
provided herein upon Hartcourt's disapproval of the
Value of the Property or
Exhibit 10.06
Page 10
134
NuOasis' disapproval of the Value of the Shares or the
financial condition of Hartcourt, including but not
limited to its capitalization, at any time prior to
Closing.
8. Termination with Cause
If this Agreement is terminated for breach or otherwise for cause, the
non-breaching party shall be reimbursed by the other party of all
expenses and costs related to this Agreement in the amount of Fifty
Thousand Dollars (USD50,000).
9. Miscellaneous Provisions
9.1 All representations, warranties, and covenants made by any party
in this Agreement shall survive the Closing hereunder and the
consummation of the transactions contemplated hereby for three
(3) years from the Closing Date. Hartcourt and NuOasis are
executing and carrying out the provisions of this Agreement in
reliance on the representations, warranties, and covenants and
agreements contained in this Agreement or at the Closing of the
transactions herein provided for including any investigation upon
which it might have made or any representations, warranty,
agreement, promise, or information, written or oral, made by the
other party or any other person other than as specifically set
forth herein.
9.2 All costs and expenses in the proposed sale and transfer
described in this Agreement shall be borne by the following
manner:
9.2.1 each party has been represented by its own attorney(s)
in this transaction, shall pay the fees of its own
attorney(s), except as may be expressly set forth
herein to the contrary.
9.2.2 each party shall bear its reasonable shares of all
other Closing costs and expenses arising from this
Agreement.
Exhibit 10.06
Page 11
135
9.3 At any time and from time to time, after the effective date, each
party will execute such additional instruments and take such
action as may be reasonably requested by the other party to
confirm or perfect title to any property transferred hereunder or
otherwise to carry out the intent and purposes of this Agreement.
9.4 Any failure of any party to this Agreement to comply with any of
its obligations, agreements, or conditions hereunder may be
waived in writing by the party to whom such compliance is owed.
The failure of any party to this Agreement to enforce at any time
any of the provisions of this Agreement shall in no way be
construed to be a waiver of any such provision or a waiver of the
right of such party thereafter to enforce each and every such
provision. No waiver of any breach of or non- compliance with
this Agreement shall be held to be a waiver of any other or
subsequent breach or non- compliance.
9.5 A11 notices and other communications hereunder shall either be in
writing and shall be deemed to have been given if delivered in
person, sent by overnight delivery service or sent by facsimile
transmission, to the parties hereto, or their designees, as
follows:
To Hartcourt: The Hartcourt Companies, Inc.
00000 Xxxxxxx Xxxx.
Xxxxxxx, Xxxxxxxxxx 00000
Telephone: x0 000 000-0000
Facsimile: x0 000 000-0000
To NuOasis: NuOasis International Inc.
First Directors Limited
00 Xxxxxxxxx Xxxxxx
Xxxxxx, The Bahamas
Telephone: x00 0000 000000
Facsimile: x00 0000 000000
9.6 The section and subsection headings in this Agreement are
inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
Exhibit 10.06
Page 12
136
9.7 This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all
of which to gether shall constitute one and the same instrument.
9.8 Notwithstanding that this Agreement was negotiated and is being
contracted for in the Bahamas and any conflict-of-law provision
to the contrary, the Agreement shall be governed by the laws of
the Commonwealth of the Bahamas.
9.9 This Agreement shall be binding upon the parties hereto and inure
to the benefit of the parties, their respective heirs,
administrators, executors, successors, and assigns.
9.10 This Agreement contains the entire agreement between the parties
hereto and supersedes any and all prior agreements, arrangements,
or understandings between the parties relating to the subject
matter of this Agreement. No oral understandings, statements,
promises, or inducements contrary to the terms of this Agreement
exist. No representations, warranties, covenants, or conditions,
express or implied, other than as set forth herein, have been
made by any party.
9.11 If any part of this Agreement is deemed to be unenforceable the
balance of the Agreement shall remain in full force and effect.
9.12 This Agreement may be amended only by a written instrument
executed by the parties or their respective successors or
assigns.
9.13 A facsimile, telecopy or other reproduction of this Agreement may
be executed by one or more parties hereto and such executed copy
may be delivered by facsimile of similar instantaneous electronic
transmission device pursuant to which the signature of or on
behalf of such party can be seen, and such execution and delivery
shall be considered valid, binding and effective for all
purposes. At the request of any party hereto, all parties agree
to execute an original of this Agreement as well as any
facsimile, telecopy or other reproduction hereof.
Exhibit 10.06
Page 13
137
9.14 Time is of the essence of this Agreement and of each and every
provision hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and year
first above written.
THE HARTCOURT COMPANIES INC.
By: /s/ Xxxx Xxxx
----------------------------
Name: Xxxx Xxxx
Title: President
NuOasis INTERNATIONAL INC.
By: /s/ X. X. Xxxxx
----------------------------
Name: X. X. Xxxxx
Title: Director
For and on Behalf of
First Directors Limited
Exhibit 10.06
Page 14
138
ADDENDUM TO
PURCHASE AND SALE CONTRACT OF
AUGUST 8, 1996
BETWEEN
THE HARTCOURT COMPANIES, INC.,
AND
NUOASIS INTERNATIONAL,INC.
RECITALS
--------
On August 8, 1996 The Hartcourt Companies Inc. (Hartcourt) and NuOasis
Iternational, Inc. (NuOasis) entered into a Purchase and Sale Agreement
regarding the commercial real estate project located in mainland China, commonly
known as the Peony Gardens property.
The parties do hereby agree to enter into this addendum and to incorporate by
reference the Purchase and Sale Agreement executed on August 8, 1996.
The parties agree that the terms contained in this addendum shall modify those
terms contained in the Purchase and Sale Agreement of August 8, 1996 relating to
the sale of the Peony Gardens Property to the extent set forth herein. Any terms
and conditions not modified, altered and changed or referred to in this addendum
shall remain in full force and effect and this addendum shall have no effect
thereon.
The parties therefore agree as follows:
"1.2.2 Paragraph 1.2 is modified to the limited extent as follows: For the
purpose of this Agreement, in addition to the promissory note referred
herein, notwithstanding the formula set forth in paragraph l .2
herein, Hartcourt shall issue 4,000,000 shares of its common stock to
NuOasis upon Closing."
IN WITNESS WHEREOF, the parties have executed this agreement on the date set
forth herein.
THE HARTCOURT COMPANIES, INC. NUOASIS INTERNATIONAL INC
By: /s/ Xxxx Xxxx By: /s/ Xxxx X. Xxxx
----------------------------- ---------------------------
Xxxx Xxxx, President Xxxx X. Xxxx, its agent and
representative
Exhibit 10.06
Page 15
139
CONVERTIBLE SECURED PROMISSORY NOTE
U.S. $12,000,000
August 8, 0000
Xxxxxxx, Xxxxxxxxxx
FOR VALUE RECEIVED, The Hartcourt Companies, Inc., a corporation organized
under the laws of the United States, State of Utah, with its principal place of
business in Artesia, California ("Maker"), hereby promises to pay to NuOasis
International, Inc., a company organized under the laws of the Commonwealth of
the Bahamas ("Payee"or "Holder") the principal sum Twelve Million Dollars
(US$12,000,000) with principal and accrued interest at the rate of eight percent
(8%) per annum due and payable 30 days after demand or August 31, 1997,
whichever first occurs (the "Due Date"). This Convertible Secured Promissory
Note (the "Note") is issued by Maker pursuant to the Purchase and Sale Agreement
of even date (the "Purchase Agreement").
To secure the payment of this Note, Maker hereby grants to the Holder
ursuant to a Security Agreement dated of even date between Maker and Holder a
security interest in the property set forth, in Exhibit "A" hereto ("the
Collateral"). Upon default, the Holder may resort to any remedy against the
Collateral available to a secured party under the United States Uniform
Commercial Code, or laws of the Peoples Republic of China. Not withstanding
anything to the contrary therein, this Note is without recourse. Payee and
Holder agree to look solely to the Collateral for satisfaction in the event of
default.
All documents and instruments now, or hereafter evidencing and/or securing
the indebtedness evidenced hereby or any part thereof, including but not limited
to this Note and the Security Agreement of even date, are sometimes collectively
referred to herein as the "Security Documents."
All agreements in this Note are expressly limited so that in no contingency
or event whatsoever, whether by reason of acceleration of maturity of the
indebtedness evidenced hereby or otherwise, shall the amount agreed to be paid
hereunder for the use, forbearance or detention of money exceed the highest
lawful rate permitted under applicable usury laws. If, for any circumstance
whatsoever, fulfillment of any provision of this Note or any other Security
Document at the time performance of such provision shall be due shall involve
exceeding any usury limit prescribed by law which a court of competent
jurisdiction may deem applicable hereto, then ipso facto, the obligations to be
fulfilled shall be reduced to allow compliance with such limit, and if, from any
circumstance whatsoever, Payee shall ever receive as interest an amount which
would exceed the highest lawful rate, the receipt of such excess shall be deemed
a mistake and shall be canceled automatically or, if theretofore paid, such
excess shall be credited against the principal amount of the indebtedness
evidenced hereby to which the same may lawfully be credited, and any portion of
such excess not capable of being so credited shall be refunded immediately to
Maker. Maker and Payee affirm that the indebtedness evidenced represents the
partial consideration for the Property being acquired by Maker pursuant to the
Purchase Agreement.
Maker shall pay to Holder all reasonable costs, expenses, charges,
disbursements and attorneys' fees incurred by Holder following an Event of
Exhibit 10.07
Page 1
140
Default in collecting, enforcing or protecting this Note or any other Security
Document, whether incurred in or out of court, including appeals and bankruptcy
proceedings.
If Maker utilizes the Collateral in any way to secure financing, Maker
agreesto pay the net proceeds of such financing to Holder to the extent of the
principal balance of the Note, and all accrued and unpaid interest, before
distributing any of such financing proceeds for other purposes.
Conversion Features of the Note
This Note is convertible into shares of the Maker's common stock as
hereinafter provided. At the election of Holder, the Note is convertible into
the greater of that number of shares of common stock of Maker with a current
market value at the date of conversion equal to the unpaid principal balance due
on the Note. "Market Value" for the purpose of this Note shall mean fifty
percent (50%) of the moving average bid price of such shares for the ten (10)
business days immediately proceeding notice of conversion.
Extension of the Due Date
In the event the Maker hereof makes any principal reduction payments on
this Note on or before October 31, 1996, then the Due Date of this Note shall be
extended as follows: For each One Million, Dollars (US$1,000,000) of principal
reduction payments made on the Note, the Due Date shall be extended by thirty
(30) days.
Events of Default
Each of the following events or occurrences shall constitute an "Event of
Default" hereunder: (a) if default is made in the payment of any monetary amount
payable hereunder, under the terms of any Security Document, or under the terms
of any other obligation of Maker to Payee hereunder, within ten (10) days
following the date the same is due; (b) if default is made in the performance of
any other promise or obligation described herein, in any Security Document, or
in any other document evidencing or securing any indebtedness of Maker to Payee
following ten ( 10) days prior notice to Maker of such default and the failure
of Maker to cure such default within ten (10) day period; (c) if Maker shall
execute an assignment of any of its property for the benefit of creditors, fail
to meet any obligations herein described, be unable to meet its debts as they
mature, suspend its active business or be declared insolvent by any court,
suffer any judgment or decree to be rendered against it in an amount greater
than US$10,000, suffer a receiver to be appointed for any of its property,
voluntarily seek relief or have involuntary proceedings brought against it under
any provision now in force or hereinafter enacted of any law relating to
bankruptcy, or forfeit its charter, dissolve, or terminate its existence; (d) if
any writ of attachment, garnishment or execution shall be issued against Maker,
(e) if any tax lien be assessed or filed against Maker; (f) if any warranty,
representation or statement made or furnished to Payee by or on behalf of Maker,
including but not limited to any information provided to Payee in conjunction
with the Purchase Agreement.
Exhibit 10.07
Page 2
141
Upon the occurrence of any Event of Default, which is not cured within ten
(10) days after notice of such default is given, by Holder or at any time
thereafter when any Event of Default may continue, Holder may, at its option and
in its sole discretion, declare the entire balance of Note to be immediately due
and payable, and upon such declaration all sums outstanding and unpaid under
this Note shall become and be in default, matured and immediately due and
payable, without presentment, demand, protest or notice of any kind to Maker or
any other person, all of which are hereby expressly waived, anything in this
Note or any other Security Document to the contrary notwithstanding.
Payee and Maker hereby agree to trial by court and irrevocably agree to
waive jury trial in any action or proceeding (including but not limited to any
counterclaim) arising out of or in any way related to or connected with, this
Note or any other Security Document, the relationship created thereby, or the
origination, administration or enforcement of the indebtedness evidenced and/or
secured by this Note or any other Security Document.
This Note has been delivered to Payee and accepted by Payee in the
Commonwealth of the Bahamas and shall be governed and construed generally
according to the laws of said jurisdiction except to the extent that creation,
validity, perfection or enforcement of any liens or security interests securing
this Note are governed by the laws of another jurisdiction. Venue of any action
brought pursuant to this Note or any other Security Document, or relating to the
indebtedness evidenced hereby or the relationships created by or under the
Security Documents shall, at the election of the party bringing the action, be
brought in a United States federal court of appropriate jurisdiction located in
or having jurisdiction over the Maker. Maker and Payee each waives any objection
to the jurisdiction of or venue in, any such court and to the service of process
issued by such court and agrees that each may be served by any method of process
pursuant to the laws of the Commonwealth of the Bahamas or, if applicable, as
described in the United States Federal Rules of Civil Procedure. Maker and Payee
each waives the right to claim that any such court is an inconvenient forum or
any similar defense.
If, in any jurisdiction, any provision of this Note shall, for any reason,
be held to be invalid, illegal, or unenforceable in any respect, such holding
shall not affect any other provisions of this Note, and this Note shall be
construed, to the extent of such invalidity, illegality or unenforceability (and
only to such extent) as if any such provision had never been contained herein.
Any such holding of invalidity, illegality or unenforceability in
onejurisdiction shall not prevent valid enforcement of any affected provision if
allowed under the laws of another relevant jurisdiction.
As used in this Note, the term "person" shall include, but is not limited
to, natural persons, corporations, partnerships, trusts, joint ventures and
legal entities, and all combinations of the foregoing natural persons or
entities, and the term "obligation" shall include any requirement to pay any
indebtedness and/or perform any promise, term, provision, covenant or agreement
included or provided for in this Note or any other Security Document.
Exhibit 10.07
Page 3
142
This Note and any and all certificates issued in replacement thereof or in
exchange thereof, will bear a restrictive transfer legend in the following form:
"THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), BUT
HAVE BEEN ISSUED IN RELIANCE UPON REGULATIONS PROMULGATED BY THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION UNDER THE ACT. THE SECURITIES MAY NOT BE SOLD
OR OTHERWISE TRANSFERRED TO A "U.S. PERSON" (AS DEFINED IN REGULATIONS) OR TO
ANY PERSON WITH A UNITED STATES ADDRESS DURING THE RESTRICTED PERIOD FOLLOWING
ISSUANCE OF THE SECURITIES. FOLLOWING EXPIRATION OF THE RESTRICTED PERIOD. ANY
RESALE OR TRANSFER OF THE SECURITIES TO A U. S. PERSON OR INTO THE UNITED STATES
MUST BE MADE IN ACCORDNCE WITH REGULATIONS. PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT, OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE ACT. "
Executed by the undersigned the year and day first above written.
The Hartcourt Companies, Inc., a Utah corporation
By /s/ Xxxx X. Xxxx
-------------------------
Name: Xxxx X. Xxxx
Title: CEO, and President
Exhibit 10.07
Page 4
143
Ex 10-8
CONVERTIBLE SECURED PROMISSORY NOTE
U.S. $12,000,000 August 8th, 0000
Xxxxxxx, Xxxxxxxxxx
FOR VALUE RECEIVED, The Hartcourt Companies, Inc., a corporation organized
under the laws of the United States, State of Utah, with its principal place of
business in Artesia, California ("Maker"), hereby promises to pay to NuOasis
International, Inc., a corporation organized under the laws of The Commonwealth
of the Bahamas ("Payee" or "Holder") the principal sum of Twelve Million Dollars
(US$12,000,000) with principal and accrued interest at the rate of eight percent
(8%) per annum due and payable 30 days after demand or August 31, 1997,
whichever first occurs (the "Due Date"). This Convertible Secured Promissory
Note (the "Note") is issued by Maker pursuant to the Purchase and Sale Agreement
of even date (the "Purchase Agreement").
To secure the payment of this Note, Maker hereby grants to the Payee,
pursuant to a Security Agreement dated of even date between Maker and Holder a
security interest in the property set forth in Exhibit "A" hereto (the
"Collateral"). Upon default, the Holder may resort to any remedy against the
Collateral available to a secured party under the Uniform Commercial Code, or
laws of the People's Republic of China. Notwithstanding anything to the contrary
herein, this Note is without recourse. Payee and Holder agree to look solely to
the Collateral for satisfaction in the event of default.
All documents and instruments now or hereafter evidencing and/or securing
the indebtedness evidenced hereby or any part thereof, including but not limited
to this Note and the Security Agreement of even date, are sometimes collectively
referred to herein as the "Security Documents".
All agreements in this Note and all other Security Documents are expressly
limited so that in no contingency or event whatsoever, whether by reason of
acceleration of maturity of the indebtedness evidenced hereby or otherwise,
shall the amount agreed to be paid hereunder for the use, forbearance or
detention of money exceed the highest lawful rate permitted under applicable
usury laws. If, for any circumstance whatsoever, fulfillment of any provision of
this Note or any other Security Document at the time performance of such
provision shall be due shall involve exceeding any usury limit prescribed by law
which a court of competent jurisdiction may deem applicable hereto, then ipso
facto, the obligations to be fulfilled shall be reduced to allow compliance with
such limit, and if, from any circumstance whatsoever, Payee shall ever receive
as interest an amount which would exceed the highest lawful rate, the receipt of
such excess shall be deemed a mistake and shall be canceled automatically or, if
theretofore paid, such excess shall be credited against the principal amount of
the indebtedness evidenced hereby to which the same may lawfully be credited,
and any portion of such excess not capable of being so credited shall be
refunded immediately to Maker. Maker and Payee affirm that the indebtedness
evidenced represents the partial consideration for the Property being acquired
by Maker pursuant to the Purchase Agreement. Further, Holder agrees that, in the
event the Property acquired by Maker pursuant to the Purchase Agreement cannot
be completed for occupancy and the requisite permits and approval of the
transfer of title to Maker by the Due Date, and upon written demand by Maker
that Holder shall compensate Maker in the form of liquidated damages calculated
in the following manner: (a) Holder agrees to refund any and all monies
Exhibit 10.08
Page 1
144
previously paid to Holder by Maker (i) in furtherance of construction and
completion of the Property; or, (ii) as principal reduction payments applied to
the Note; and, (b) Holder agrees to cause the return of 4,000,000 shares of
Maker's common stock to Maker.
Maker shall pay to Holder all reasonable costs, expenses, charges,
disbursements and attorneys' fees incurred by Payee following an Event of
Default in collecting, enforcing or protecting this Note or any other Security
Document, whether incurred in or out of court, including appeals and bankruptcy
proceedings.
If Maker utilizes the Collateral in any way to secure financing, Maker
agrees to pay the net proceeds of such financing to Payee to the extent of the
principal balance of the Note, and all accrued and unpaid interest, before
distributing any of such financing proceeds for other purposes.
Conversion Features of the Note
This Note is convertible into shares of the Maker's common stock as
hereinafter provided. At the election of Holder, the Note is convertible into
the greater of that number of shares of common stock of Maker with a current
market value at the date of conversion equal to the unpaid principal balance due
on the Note. "Market Value" for the purpose of this Note shall mean fifty
percent (50%) of the moving average bid price of such shares for the ten (10)
business days immediately preceding notice of conversion.
Extension of the Due Date
In the event the Maker hereof makes any principal reduction payments on
this Note on or before October 31, 1996, then the Due Date of this Note shall be
extended as follows: For each One Million Dollars (US$1,000,000) of principal
reduction payments made on the Note, the Due Date shall be extended by thirty
(30) days.
Events of Default
Each of the following events or occurrences shall constitute an "Event of
Default" hereunder: (a) if default is made in the payment of any monetary amount
payable hereunder, under the terms of any Security Document, or under the terms
of any other obligation of Maker to Payee hereunder, within ten (10) days
following the date the same is due; (b) if default is made in the performance of
any other promise or obligation described herein, in any Security Document, or
in any other document evidencing or securing any indebtedness of Maker to Payee
following ten (10) days prior notice to Maker of such default and the failure of
Maker to cure such default within said ten (10) day period; (c) if Maker shall
execute an assignment of any of its property for the benefit of creditors, fail
to meet any obligations herein described, be unable to meet its debts as they
mature, suspend its active business or be declared insolvent by any court,
suffer any judgment or decree to be rendered against it in an amount greater
than US$10,000, suffer a receiver to be appointed for any of its property,
voluntarily seek relief or have involuntary proceedings brought against it under
any provision now in force or hereinafter enacted of any law relating to
bankruptcy, or forfeit its charter, dissolve, or terminate its existence; (d) if
Exhibit 10.08
Page 2
145
any writ of attachment, garnishment or execution shall be issued against Maker;
(e) if any tax lien be assessed or filed against Maker; (f) if any warranty,
representation or statement made or furnished to Payee by or on behalf of Maker,
including but not limited to any information provided to Payee in conjunction
with the Purchase Agreement.
Upon the occurrence of any Event of Default, which is not cured within ten
(10) days after notice of such default is given by Holder or at any time
thereafter when any Event of Default may continue, Holder may, at its option and
in its sole discretion, declare the entire balance of this Note to be
immediately due and payable, and upon such declaration all sums outstanding and
unpaid under this Note shall become and be in default, matured and immediately
due and payable, without presentment, demand, protest or notice of any kind to
Maker or any other person, all of which are hereby expressly waived, anything in
this Note or any other Security Document to the contrary notwithstanding.
Payee and Maker hereby agree to trial by court and irrevocably agree to
waive jury trial in any action or proceeding (including but not limited to any
counterclaim) arising out of or in any way related to or connected with this
Note or any other Security Document, the relationship created thereby, or the
origination, administration or enforcement of the indebtedness evidenced and/or
secured by this Note or any other Security Document.
This Note has been delivered to Payee and accepted by Payee in the
Commonwealth of the Bahamas and shall be governed and construed generally
according to the laws of said jurisdiction except to the extent that creation,
validity, perfection or enforcement of any liens or security interests securing
this Note are governed by the laws of another jurisdiction. Venue of any action
brought pursuant to this Note or any other Security Document, or relating to the
indebtedness evidenced hereby or the relationships created by or under the
Security Documents shall, at the election of the party bringing the action, be
brought in a United States federal court of appropriate jurisdiction located in
or having jurisdiction over the Maker. Maker and Payee each waives any objection
to the jurisdiction of or venue in any such court and to the service of process
issued by such court and agrees that each may be served by any method of process
pursuant to the laws of the Commonwealth of the Bahamas or, if applicable, as
described in the United States Federal Rules of Civil Procedure. Maker and Payee
each waives the right to claim that any such court is an inconvenient forum or
any similar defense.
If, in any jurisdiction, any provision of this Note shall, for any reason,
be held to be invalid, illegal, or unenforceable in any respect, such holding
shall not affect any other provisions of this Note, and this Note shall be
construed, to the extent of such invalidity, illegality or unenforceability (and
only to such extent) as if any such provision had never been contained herein.
Any such holding of invalidity, illegality or unenforceability in one
jurisdiction shall not prevent valid enforcement of any affected provision if
allowed under the laws of another relevant jurisdiction.
Exhibit 10.08
Page 3
146
As used in this Note, the term "person" shall include, but is not limited
to, natural persons, corporations, partnerships, trusts, joint ventures and
other legal entities, and all combinations of the foregoing natural persons or
entities, and the term "obligation" shall include any requirement to pay any
indebtedness and/or perform any promise, term, provision, covenant or agreement
included or provided for in this Note or any other Security Document.
This Note and any and all certificates issued in replacement thereof or in
exchange therefore, will bear a restrictive transfer legend in the following
form:
"THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), BUT
HAVE BEEN ISSUED IN RELIANCE UPON REGULATION S PROMULGATED BY THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION UNDER THE ACT. THE SECURITIES MAY NOT BE SOLD
OR OTHERWISE TRANSFERRED TO A "U.S. PERSON" (AS DEFINED IN REGULATIONS) OR TO
ANY PERSON WITH A UNITED STATES ADDRESS DURING THE RESTRICTED PERIOD FOLLOWING
ISSUANCE OF THE SECURITIES. FOLLOWING EXPIRATION OF THE RESTRICTED PERIOD, ANY
RESALE OR TRANSFER OF THE SECURITIES TO A U.S. PERSON OR INTO THE UNITED STATES
MUST BE MADE IN ACCORDANCE WITH REGULATIONS, PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT, OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE ACT."
Executed by the undersigned the year and day first above written.
The Hartcourt Companies, Inc.
a Utah corporation
By: /s/ Xxxx Xxxx
------------------
Name: Xxxx X. Xxxx
Title: President
NOT VALID WITHOUT ORIGINAL SEAL
This note replaces the previous note of the same date. It supersedes and cancels
the other note in its entirety.
Exhibit 10.08
Page 4
147
SALES AGREEMENT
RECITALS
The Hartcourt Companies, Inc., a Utah chartered company ("Purchaser") with
offices located at 00000 Xxxxx Xxxxxxx Xxxx. Xxxxxxx, Xxxxxxxxxx, its assigns,
nominees or transferees does hereby enter into this agreement regarding the
purchase of an undivided fifty percent (50%) interest in thirty four (34) State
of Alaska mineral lease gold lode claims, consisting of one hundred sixty (160)
acres each for a total of five thousand four hundred forty (5,440) acres, all
located in the Melozitna mining district near Tanana, Alaska, from Promed
International, Ltd., a Turks & Caicos chartered company ("Seller") with offices
located at 0X Xxxxxxx Xxxxx, 000 Xxxx Xxxxxx, Xxxxxxxxx, pursuant to the
following terms and conditions:
AGREEMENT
1. Hartcourt agrees to pay as consideration three million dollars
($3,000,000) in shares in The Hartcourt Companies, Inc. (HRCT), pursuant
to Regulation "S". The shares will be valued on the basis of the average
price per share over a 10 day period for the 10 days prior to the
execution of this agreement.
2. Seller warrants that the claims identified as Lodestar claims numbered
1-34 inclusive are legally owned by Seller, and that all claims are in
good standing with all regulatory authorities, with no liens claims or
encumbrances. Seller farther represents that it has the express right to
sell, hypothecate and/or convey such interest.
3. Seller warrants and represents that in order to maintain the claims in a
current status, maintenance and administrative costs must be incurred on
behalf of all the claims herein in an amount not to exceed twenty five
hundred dollars ($2,500) a year. Purchaser agrees to pay fifty percent
(50%) of any and all such administrative costs in order to maintain the
claims in a current, valid and good standing position with all
regulatory agencies.
4. The parties hereto acknowledge that in order to maintain the claims in
good order, at the end of 2 years an additional $25,000 is required to
be invested. At the end of two years Purchaser agrees to pay fifty
percent (50%) of no less than twenty five thousand dollars ($25,000)
required in order to maintain the claims in a current, valid and
position of good standing with all regulatory agencies in the state of
Alaska.
5. Both parties agree that each party has the right of first refusal to
acquire the interests of the other party in the event the other party
determines to sell their interests.
6. Seller agrees to keep Hartcourt informed on a timely basis of all
regulations, taxes, fees or other payments, or any requirements, by any
and all agencies in order to keep the claims in good standing.
Exhibit 10.09
Page 1
148
7. The parties hereto acknowledge that a current geological survey and
report is being prepared for presentation to the Purchaser and on behalf
of Seller by Xxxx Xxxxxx, Geologist and Professional Engineer.
8. The Seller warrants and represents that the 34 claims referenced herein
shall have a probable valuation of no less than $5,000,000, as evidenced
by the geological evaluation. If the geological evaluation relating to
the 34 claims indicates that the valuation of the property is not as
represented, or the claims are not as represented, that being a probable
value of no less than $5,000,000, either party may rescind this
transaction with no further notice.
In the event of rescission, any and all consideration previously paid by
thePurchaser shall be returned in full upon notice of intent to rescind by
Purchaser.
PURCHASER: THE HARTCOURT COMPANIES, INC.
/s/ Xxxx Xxxx Date: 9/17/96
-------------------- ---------------
Xxxx Xxxx, President
SELLER: PROMED INTERNATIONAL, INC.
/s/ Xxxxxx Xxxxxx Date 10/1/96
----------------------- ---------------
Xxxxxx Xxxxxx, Director
Exhibit 10.09
Page 2
149
EXH 10-10
SALES AGREEMENT
RECITALS
The Hartcourt Companies, Inc., a Utah chartered company ("Purchaser") with
ffices located at 00000 Xxxxx Xxxxxxx Xxxx. Xxxxxxx, Xxxxxxxxxx, its assigns,
nominees or transferees does hereby enter into this agreement regarding
thepurchase of an undivided fifty percent (50%) interest in thirty four (34)
State of Alaska mineral lease gold lode claims, consisting of one hundred sixty
(160) acres each for a total of five thousand four hundred forty (5,440) acres.
all located in the Melozitna mining district near Tanana, Alaska, from Mandarin
Overseas Investment Co., Ltd., a Turks & Caicos chartered company ("Seller")
with offices located at Suite 1-3 Kinwick Center, 00 Xxxxxxxxx Xxxx, Xxxxxxx
Xxxx Xxxx, pursuant to the following terms and conditions:
AGREEMENT
1. Hartcourt agrees to pay as consideration three million dollars
($3,000,000) in shares in The Hartcourt Companies, Inc. (HRCT), pursuant
to Regulation "S". The shares will be valued on the basis of the average
price per share over a 10 day period for the 10 days prior to the
execution of this agreement.
2. Seller warrants that the claims identified as Lodestar claims numbered
35-68 inclusive are legally owned by Seller, and that all claims are in
good standing with all regulatory authorities, with no liens claims or
encumbrances. Seller further represents that it has the express right to
sell, hypothecate and/or convey Such interest.
3. Seller warrants and represents that in order to maintain the claims in a
current status, maintenance and administrative costs must be incurred on
behalf of all of the claims herein in an amount not to exceed twenty
five hundred dollars ($2,500) a year. Purchaser agrees to pay fifty
percent (50%) of any and all such administrative costs in order to
maintain the claims in a current, valid and good standing position with
all regulatory agencies.
4. The parties hereto acknowledge that in order to maintain the claims in
good order, at the end of 2 years an additional $25,000 is required to
be invested. At the end of two years Purchaser agrees to pay fifty
percent (50%) of no less than twenty five thousand dollars ($25,000)
required in order to maintain the claims in a current, valid and
position of good standing with all regulatory agencies in the state of
Alaska.
5. Both parties agree that each party has the right of first refusal to
acquire the interests of the other party in the event the other party
determines to sell their interests.
6. Seller agrees to keep Hartcourt informed on a timely basis of all
regulations, taxes, fees or other payments, or any requirements, by any
and all agencies in order to keep the claims in good standing.
Exhibit 10.10
Page 1
150
7. The parties hereto acknowledge that a current geological survey and
report is being prepared for presentation to the Purchaser and on behalf
of Seller by Xxxx Xxxxxx, Geologist and Professional Engineer.
8. The Seller warrants and represents that the 34 claims referenced herein
shall have a probable valuation of no less than $5,000,000, as evidenced
by the geological evaluation. If the geological evaluation relating to
the 34 claims indicates that the valuation of the property is not as
represented, or the claims are not as represented, that being a probable
value of no less than $5,000,000, either party may rescind this
transaction with no further notice.
In the event of rescission, any and all consideration previously paid by the
Purchaser shall be returned in full upon notice of intent to rescind by
Purchaser.
PURCHASER: THE HARTCOURT COMPANIES. INC.
/s/ Xxxx Xxxx Date: 9/17/96
-------------------------- -------------
Xxxx Xxxx, President
SELLER: MANDARIN OVERSEAS INVESTMENT CO. LTD.
/s/ Xxxxx Xxxxxxxxxx Date: 9/17/96
-------------------------- --------------
Xxxxx Xxxxxxxxxx, Director
Exhibit 10.10
Page 2
151
PURCHASE & SALE AGREEMENT
DATE: 27 September 1996
PARTIES:
1. Hartcourt: The Hartcourt Companies, Inc., a Utah corporation, located at
00000 X. Xxxxxxx Xxxx., Xxxxxxx, XX 00000; and,
2. CKES: CKES Acquisitions Inc., a Nevada corporation, located at 000 X.
Xxxxxxxxxx, Xxx. 0000, Xxxxxxxxx, XX 00000.
WHEREAS:
Hartcourt owned 100% of 25,000 outstanding shares of a Nevada corporation
known as Harcourt Investments (USA) Inc. (herein referred to as "HIUI"). CKES
agree to purchase said HIUI shares, and Hartcourt agree to sell said shares to
CKES, under the following terms and conditions.
1. Purchase Price: CKES will pay Hartcourt a total amount of USD $3 million
for these 25,000 shares.
2. Payment Terms: CKES will pay said purchase price by tendering to
Hartcourt a Convertible Secured Promissory Note in the principal sum of
USD $3 million, as per attached Schedule A. The Note will be secured by
a Security Agreement, as per attached Schedule B of this Agreement.
3. Closing Date: The closing date is also the date of execution of this
Agreement and upon delivery of the 25,000 shares certificate in exchange
for the Promissory Note and the Security Agreement
4. Due Diligence: CKES has confirmed that all due diligence have been
completed and has received all financial operating statements from
Hartcourt and hereby approved all pertinent data. As such, CKES will
hold Hartcourt harmless and waive all claims against Hartcourt now and
in the future
5. Representations and Warrants: Hartcourt hereby represents, covenants and
warrants the following to CKES:
a. Title to the shares shall be transferred to CKES or its assignee,
free and clear of all exceptions.
Exhibit 10.11
Page 1
152
b. Hartcourt owns the shares in good, clear, recorded and marketable
title without any claims, past pending or future, from any third
party.
c. The person executing this Agreement on behalf of Hartcourt has
the authority to enter into this Agreement and to consummate the
contemplated transaction.
d. There is no pending or threatened litigation, public or private,
affecting any portion of the shares.
e. All members of the Board of Directors of HIUI will resign as of
today.
6. Hartcourt shall indemnify and hold CKES harmless from and against any
claims, damages or liabilities including, without limitation, attorneys
fees and court costs that CKES may incur by reason of any breach by
Hartcourt of any Hartcourt's representations, warrants or covenants.
7. If any part or portion of this Agreement is invalid or unenforceable as
determined by a court or other authority of competent jurisdiction, such
part or portion shall be severed from this Agreement to the extent
invalid or unenforceable and the remainder hereof shall remain in full
force and effect. Furthermore, the provisions of this Agreement and any
subsequent Agreement were negotiated by the parties hereto with said
Agreement being deemed to have drafted by the parties hereto.
8. Unless otherwise provided herein, any notice, tender or delivery to be
given hereunder by either party to the other shall be in writing and may
be affected by personal delivery or to be registered or certified US
mail, postage prepared, return receipt requested, and shall be deemed
communicated as of mailing. Notices shall be addressed as follows, but
each party may change its address by written notice received by other
party in accordance with this paragraph.
To Hartcourt: The Hartcourt Companies Inc.
00000 X. Xxxxxxx Xxxx.
Xxxxxxx, XX 00000
To CKES: CKES Acquisitions Inc.
000 X. Xxxxxxxxxx, Xxx. 0000
Xxxxxxxxx, XX 00000
Exhibit 10.11
Page 2
153
9. This Agreement shall be construed under the laws of the State of
California and, in the event of any dispute or action arises to enforce
this Agreement, the prevailing party shall be entitled to reasonable
attorneys fees and court costs.
CKES Acquisitions Inc.
By: /s/ Xxxxxxx Xxxxx
----------------------------
Xxxxxxx Xxxxx, Secretary
By: /s/ Xxxx Xxxxxxxx
----------------------------
Xxxx Xxxxxxxx, President
EXECUTED at Artesia, Los Angeles County, California, this 27th day of
September,1996 by Hartcourt.
The Hartcourt Companies inc.
By: /s/ Xxxx X. Xxxx
----------------------------
Xxxx X. Xxxx, President
Exhibit 10.11
Page 3
154
SECURED PROMISSORY NOTE
$3,000,000.00 September 27, 1996
FOR VALUE RECEIVED, CKES Acquisitions Inc., a Nevada corporation
("Debtor"), hereby promises to pay to The Hartcourt Companies Inc., a Utah
corporation, or its order ("Holder"), the principal sum of Three Million Dollars
($3,000,000.00), together with interest on the unpaid principal balance at the
rate of six percent (6%) per annum.
Provided there is no uncured default, then all principal and accrued
interest shall be paid as follows:
a) Monthly payments of principal only in the amount of Fifty Thousand
Dollars ($50,000.00), without interest, shall be made beginning on
October 1, 1998, and continuing thereafter on the first (1st) day of
each calendar month and shall continue for sixty (60) calendar months
thereafter;
b) Interest will accrue and be due with the final payment, and interest
shall compound at the above stated rate for the term of this Note; and,
c) All unpaid principal balance and all accrued interest shall be due and
payable on or before September 1, 2003
Debtor reserves the right to make payment of the principal sum and
accrued interest at any time, and from time to time, prior to maturity
without penalty.
All payments under this Note, whether of principal or interest, or both,
shall be made to Holder in lawful money of the United States at such
place as Holder shall designate in writing to Debtor.
Upon the occurrence of an uncured default (as defined below), the entire
unpaid balance of the principal debt together with any other sums due
hereunder, with accrued interest theretofore, shall at the option of
Holder, become immediately due and payable. The occurrence of any one or
more of the following shall constitute an uncured default:
a) Debtors third (3rd) failure, within any twelve (12) calendar month
period, to pay any installment of principal, whether in whole or in
part, when due hereunder, without regard to any cure period;
b) Debtors failure to pay any installment of principal, whether in whole or
in part, when due hereunder and following receipt by Debtor of written
notice and the failure by Debtor to cure within ten (10) calendar days
the default;
c) Debtor, severally or jointly, i) makes an assignment for the benefit of
its/his/her/her creditors or admits in writing its/his/her inability to
pay its/his/her debts generally as they become due, or ii) becomes
insolvent as that concept is
Exhibit 10.12
Page 1
155
commonly understood under either federal bankruptcy law or state
law, or iii) applies to any tribunal for the appoint of a trustee
or receiver of any substantial part of its/his/her assets, or iv)
commences any voluntary proceedings under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, or
v) becomes the subject of any such involuntary proceedings and
Debtor, severally or jointly, indicates it/his/her approval,
consent or acquiescence, or vi) becomes the subject of an order
appointing a trustee or receiver, adjudicating either bankruptcy
or insolvency, or approving a petition in any such involuntary
proceeding, and Debtor, severally or jointly, does not cure
within thirty (30) calendar days after written notice; or
d) Debtor i) engages in cessation of its business, whether in whole or in
part, ii) engages in liquidation of its business, whether in whole or in
part, or iii) Xxxxxxx Xxxxx and/or Xxxx Xxxxxxxx discontinues active,
full-time employment with Debtor.
If Debtor shall effect any reorganization or disposition of assets or
stock, with or without the prior written consent of Hartcourt, all obligations
under this Note, regardless of the maturity dates, shall automatically become
due and payable without demand or notice.
Except as provided herein, Debtors obligations under this Note shall be
paid and performed without any defenses, claims, setoffs, counterclaims,
recoupments, reductions, limitations, impairments or termination which Debtor
may now or hereafter have or could claim against Holder, and Debtor hereby
waives all of the same.
Except as set forth herein, demand, notice of demand, presentation for
payment, notice of non-payment or dishonor, protest, and notice of protest are
hereby waived by Debtor.
All notices, requests, demands and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given if delivered personally, given by prepaid telegram or mailed
first-class, postage prepaid, registered or certified mail, as follows:
If to Debtor: CKES Acquisitions Inc.
ATTN: Xxxxxxx Xxxxx, President
000 X. Xxxxxxxxxx, Xxx. 0000
Xxxxxxxxx, XX 00000
If to Holder: The Hartcourt Companies Inc.
ATTN: Xx. Xxxx X. Xxxx, President
00000 X. Xxxxxxx Xxxx.
Xxxxxxx, XX 00000
A Party may change its address of notice by complying with the terms of
this Section. It is a condition that legal counsel receive a copy of the notice
for the notice to be effective.
Exhibit 10.12
Page 2
156
Receipt shall be deemed to have occurred (regardless of actual receipt) on
the date served, if personally delivered, or three (3) business days after
mailing, if placed in the United States Mail, postage prepaid, by registered or
certified mail.
If any term or provision of this Note or the application thereof to any
person or circumstances shall, to any extent, be invalid or unenforceable, the
remainder of this Note, or the application of such term or provision to persons
or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision of
this Note shall be valid and be enforced to the fullest extent permitted by law.
Any waive of any default, condition, term or provision must be in writing
asssigned by the waiving party and such waiver shall not be construed as a
waiver of any subsequent event of default.
This Note shall bind Debtor and Holder, and their respective heirs,
successors, representative and assigns, and the benefits hereof shall inure to
each party and its successors, representatives and assigns.
This Note shall be governed by and construed in accordance with the laws of
the State of California. If any legal action is necessary to enforce or
interpret the terms and conditions of this Note, the parties hereby agree to and
consent to the jurisdiction of the State Court of California, Los Angeles,
County. for the bringing of an action.
This Note supersedes any prior written or oral agreement between the
Parties respecting the subject matter contained herein and constitutes the
Parties' entire Note.
This Note cannot be modeled or amended except by a writing signed by the
Parties hereto desiring to amend or modify their respective rights and
obligations.
If any legal action is necessary to enforce the terms and conditions of
this Note, Holder shall be entitled to recover all costs of suit and reasonable
attorney's fees as determined by the court.
Dated: September 27, 1996
DEBTOR:
CKES Acquisitions Inc.
a Nevada corporation
By: /s/ Xxxx Xxxxxxxx
----------------------------
Xxxx Xxxxxxxx, President
Exhibit 10.12
Page 3
157
