Acquisition Agreement
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Party
A : Xxxx Xxx
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National
ID#:530103197007011213;
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Xxxx
Xxxx
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National
ID#:530103197301211224;
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Xx
Xxxx
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National
ID#:530103197004270324;
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Liu
Hong
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National
ID#:530102196610192724;
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Party
B: Kunming Business Travel Agency Co., Ltd
Address:
Suit B1800,B1801,B1802,Golden Life Building B,Beijinglu
Square,Kunming
Legal
Representative: Xxxx Xxx
Party
C: Universal Travel International Agency Co., Ltd
Address:
Xxxxx 000, 0xx Xxx,
Xxxxxxx Xxxxxxxx, #2008 Shennan Road Central, Shenzhen
Legal
Representative: Xx Xxxxx
Whereas: Party A are the
shareholders of Party B and Party A have 100% of shares of Party B in
total;
Party B
is an enterprise professed in inbound travel, business conferences;
Party C
is an enterprise professed in domestic travel businesses.
Whereas:
1: Party
C plans to acquire Party B.
2: Party
B is co-owned by Party A and Party A own the properties of Party B.
3: After
mutual negotiation, Party A agree to be acquired by Party C.
4: This
acquisition gets, if any, third-party approval from Party B’s creditors,
partners, suppliers and franchisees.
In order to specify the rights and obligations of Party A,
Party B, Party C and to ensure the smooth progress of this acquisition, Party A
,Party B and Party C enter into the contract to comply with based on the
principles of equality, voluntariness and fairness and equivalence and according
to the relevant laws and regulations and rules.
I:
Warranties of Party, Party B (Including but not limited to)
1:
Warrant that Party B is set up legally and its foundation papers, business
licenses are genuine. Party B has legally passed the annual survey and operated
in normal;
2:
Warrant the legitimacy and authenticity of the transferred stock rights or
assets and the authenticity of the statement of the rights spectrum and
limitations of the transferred stock rights or the legally owned
assets;
3:
Warrant the authenticity of the statement of the enterprise assets and
liabilities (no short-term bank liabilities and long-term
liabilities);
4:
Warrant the authenticity of the statement of contract relationships concerning
Party B;
5:
Warrant the authenticity of the statement of labor relations;
6:
Warrant the authenticity of the statement of the insurance;
7:
Warrant the authenticity of the statement of environmental protection problems
concerning Party B;
8:
Warrant the authenticity of the statement of Party B's contingent
liabilities;
9:
Warrant the authenticity of the statement of the current operation
status;
10:
Warrant the authenticity of the statement of its employees including the number
of the active and retired employees, position set and the payment of the social
security fund;
11:
Warrant the authenticity of the statement of its taxation and the legitimacy of
its taxation;
12:
Warrant the authenticity of the statement of the material litigation,
arbitration and administrative penalty concerning Party B;
13:
Special Warranty
13.1: The stock rights owned by Party A are not defective; the stockholders’
willingness is not manipulated by any other individuals, parties and units.
Party A, Party B has made this clear;
13.2: Every and each individual, unit and party involved with the rights
and interests of Party A, Party B has no unclosed litigations and unexecuted
verdict. And the above-mentioned parties should inform Party C all the involving
litigations prior to the striking of the contracts;
13.3: The
financial data provided by Party A, Party B is complete and comprehensive. Party
A, Party B should disclose and be confirmed in written form by Party C any
individual, unit and party that may raise demand of Party A and Party B’s
assets.
II:
Party C Warranty
1:
Warrants that Party C is legally set up and exists in reality;
2:
Warrants the authenticity and legitimacy of its acquisition
motivation;
3:
Warrants the authenticity of the statement of its good will and management
ability;
4:
Warrants the authenticity of the statement of its healthy financial status and
financial strength.
III:
Confidential Terms
Party
A, Party B, Party C must not disclose the business secrets and other
confidential information in any form to any third parties during their
cooperation. If the information disclosure is necessary with the progress of the
programs, it must get the written consent from the counterpart. Any of the
breach party should be responsible for various kinds of the direct or indirect
losses incurred on the counterpart.
IV:
Disposal of Enterprise Liability
1: Party
A, Party B, Party C all agree that the base date of the ownership of the
liabilities and claims should be settled on the closing date of the ownership
transferring. The claims prior to the base date belong to Party A, Party B and
the liabilities prior to the base date and the reasonable fees paid by Party C
to dispose the claims and liabilities before the base date should share by Party
A and Party B.
2: Party
A and Party B guarantee that there are no other liabilities except for the
liabilities listed in the liability schedule.
V:
Acquisition Price
The
historic financial datas from 2007 to present audited by the public accounting
firm designated by Party C are as following:
The
audited revenue amount in 2007 is 49MM RMB and the net profit is 3.7MM
RMB;
The
audited revenue amount in 2008 is 40MM RMB and the net profit is 3.9MM
RMB;
The
audited revenue amount in 2009 is 65MM RMB and the net profit is 6.5MM
RMB;
After
the reasonable evaluation of the price of the acquired assets or stock rights,
we confirmed the aggregate acquisition price is 39MM RMB (Capital Form: RMB 39MM
only).
VI:
Payment Schedule
The Party
C plans to pay Party A the Universal Travel Group common stocks with the value
equivalent to 10% of the aggregate acquisition price and the stock price is
based on the average closing price of 15 market days before the signature of the
formal agreement. And 90% of the cash will be paid to Party A. The 45% of the
cash will be paid within 10 days of the the agreement signing and the remaining
45% of the cash will be paid within 10 days of the clearance of share exchange
formality in local business registration.And the stock will be paid within 90
days of the company’s closing acquisition announcement and circulated five years
later.
VII:
Arrangement of the Transition Period
Between
the signature of the acquisition agreement and the settlement of the
implementation of the agreement, Party A and Party B must maintain the status
quo of the target enterprise and cannot amend the charters or grant any share
dividend or bonuses. Also Party A and Party B cannot resale, transfer or vouch
the going-to-be sold assets or the shares.
VIII:
Risk Sharing
The Party
A and Party B should share the contingent liabilities found after the settlement
if Party A and Party B misstated, whether out of deliberation or
negligence.
IX:
Trust Operation
By
executing this agreement, Party A agree to serve as professional operators of
Party B, and be responsible for completing the operational goals of Party B for
the next 5 fiscal years, details as follow:
The
audited net income of Party B for fiscal 2010 should be no less than 7.8MM
RMB;
The
audited net income of Party B for fiscal 2011 should be no less than 9.3MM
RMB;
The
audited net income of Party B for fiscal 2012 should be no less than 11MM
RMB;
The
audited net income of Party B for fiscal 2013 should be no less than 13MM
RMB;
The
audited net income of Party B for fiscal 2014 should be no less than 15MM
RMB;
X:
Force Majeure
1:
Force majeure:
Force
majeure means conditions that are unforeseeable, unavoidable and unvanquishable.
The force majeure may arise from natural reasons or human factors. The natural
reasons can be earthquake, flooding, drought and sudden outbreak of the
epidemics and the human factors can be war, government prohibition, strike and
riots and so on.
2: Duty
Exemption
The party
incurred force majeure accidents should present the accident reports and proven
papers to another party in written form within 3 days of the occurrence of the
accidents. If the contract can’t be fulfilled because of the force majeure, the
contract can be terminated. If the contract can't be fulfilled temporarily, then
it can be delayed to be fulfilled. Whenever the force majeure happens, if the
party concerned exhausts its efforts to remedy but to no avail, it is free from
any compensation duty.
XI:
Contract Termination
1: Under
the consensus of the Party A, Party B, Party C, the contract can be
terminated.
2: Party
C is entitled to terminate the contract unilaterally if the contract cannot be
fulfilled because of the material breach of the contract by Party A, Party
B.
3: Party
A, Party B are entitled to terminate the contract if the contract cannot be
fulfilled due to the material breach of the contract by Party C.
XII:
Liabilities of Breach of Contract
1: If
Party A or Party B breach the contract, terminate the contract or unfulfil the
contract terms, Party A or Party B should return the full acquisition
consideration received to Party C. Besides Party A or Party B should pay Party C
the penalties at the amount of 1 million USD dollars.
2: If
Party C breaches the contract, terminates the contract or unfulfils the contract
terms, Party C should pay Party A and Party B the penalties at the amount of 1
million USD dollars.
XIII:
Dispute Settlement
Any
dispute or discrepancy arising or relating to this contract should submit to the
Shenzhen Arbitration Center and get settled according to the local arbitrational
regulations and rules, or submit to local people’s court for
settlement.
XIV: This contract will come
into effect on the day of sign and seal offs of Party A and Party B and Party
C.
XV: This
contract is in quadruplicates and Party A and Party B hold two copies and
Party C holds two copies with the same legal binding.
signature
page(no straight matter on this page)
Party A:
s/Liao
Xxx
Xxxx
Xxxx
Xx Xxxx
Xxx
Hong
Party
B:s/ Kunming Business
Travel Agency Co., Ltd
Party
C:s/ Universal Travel
International Agency Co., Ltd
June 28,
2010
