EXHIBIT 10.41
Dated
December 18, 1997
AMERICAN CRAFT BREWING INTERNATIONAL LIMITED
and
Gold Crown Management Limited
--------------------------------
AGREEMENT
for the sale and purchase of
all the issued share capital
of South China Brewing Company Limited
and
SCBC Distribution Company Limited
--------------------------------
CONTENTS
1. INTERPRETATION............................................... 1
2. SALE AND PURCHASE OF THE SHARES.............................. 3
3. CONSIDERATION................................................ 3
4. WARRANTIES................................................... 4
5. LIMITATION................................................... 5
6. COMPLETION................................................... 6
7. ANNOUNCEMENTS................................................ 7
8. NOTICES AND RECEIPTS......................................... 7
9. RESOLUTIONS AND WAIVERS...................................... 8
10. GENERAL...................................................... 8
11. WHOLE AGREEMENT.............................................. 9
12. GOVERNING LAW................................................ 9
THIS AGREEMENT is made on BETWEEN:
(1) AMERICAN CRAFT BREWING INTERNATIONAL LIMITED whose registered office is
at Xxx Xxxxxxxx Xxxx., Xxxxx 0000, Xxxxxxxx, XX 00000 XXX (the
"Se1ler"); and
(2) GOLD CROWN MANAGEMENT LIMITED (registered number 253702) whose
registered office is at X.X Xxx 000, Xxxxxxxx Incorporations Center,
Road Town Tortola, British Virgin Islands (the "Purchaser").
WHEREAS:
(A) South China Brewing Company Limited ("Brewing") is a private company
limited by shares short particulars of which. are set out in Schedule I
having an authorized capital of HK$10,000 divided into 10,000 shares of
HK$1.00 each, all of which have been issued fully paid or credited as
fully paid ("Brewing Shares").
(B) SCBC Distribution Company Limited ("SCB") is a private company limited
by shares short particulars of which are set out in Schedule 2 having an
authorized capital of HK$1,000 divided into 1,000 shares of HK$1.00
each, all of which have been issued fully paid or credited as fully paid
("SCB Shares")
(C) The Seller is the legal and beneficial owner of the Brewing Shares and
the SCB shares.
(D) The Seller wishes to sell and, in reliance upon (inter alia) the
representations, warranties and undertakings set out in this agreement,
the Purchaser wishes to purchase all the issued share capital of the
Brewing shares and SCB shares and the benefit or the Shareholder's Loans
on the terms set out in this agreement.
It Is AGREED as follows:
1. INTERPRETATION
(1) In this agreement:
"ACCOUNTS DATE" means October 31, 1997
"BREWING MANAGEMENT ACCOUNTS" means the balance sheet of Brewing as at
October 31 1997 and the profit and loss account of Brewing for the period
from November 1, 1996 to October 31, 1997 (a copy of each of which has
been annexed hereto and initialed for the purposes of identification);
"BREWING SHAREHOLDER'S LOAN" shall be the loans with all interest payable
thereon outstanding from Brewing to the Seller; as at completion.
"COMPLETION" means completion of the sale and purchase of the Brewing
Shares and SCB Shares and the Shareholder's Loans in accordance with
clause 6;
"DISCLOSED" means disclosed in this agreement (including the Schedules
and the Annexures) or in the Brewing Management Accounts or in the SCB
Management Accounts;
"DISTRIBUTION AGREEMENTS" shall be the distribution agreements and/or
supply agreements signed between the parties and in the form attached
hereto as Annexure 1;
"OPTION AGREEMENT" shall be the option agreement signed between the
parties and in the form attached hereto as Annexure 2;
"PREMISES" means the premises at Unit Al, 1/F and Unit 7/F Vita Tower,
29 Xxxx Xxxx Hang R9ad, Aberdeen, Hong Kong and subject to the tenancy
agreements dated December 12, 1994 and April 26, 1995 respectively
between Brewing and Ping Ping Investments Company Limited;
"PURCHASER'S GROUP" means the Purchaser and all its subsidiaries (other
than Brewing and SCB);
"SCB MANAGEMENT ACCOUNTS" means the balance sheet of SCB as at October
31, 1997 and the profit and loss account of SCB for the period from
November 1, 1996 to October 3l, 1997 (a copy of which has been annexed
hereto and initialed for the purposes of identification);
"SCB SHAREHOLDER'S LOAN" shall be the loans all interest payable thereon
outstanding from SCB to the Seller as at Completion;
"SELLER'S GROUP" means the Seller and all its subsidiaries (other than
Brewing and SCB);
"SHAREHOLDER'S LOANS" means the Brewing Shareholder's Loan and the SCB
Shareholder's Loan;
"SUBSIDIARY" means a subsidiary for the purposes of the Companies
Ordinance (Cap 32) of the laws of Hong Kong, SAR;
"WARRANTIES" means the representations and warranties on the part of the
Seller contained in clause 4(1).
(2) Any reference, express or implied, to an enactment Includes reference
to:
(a) that enactment as amended7 extended or applied by or under any
other enactment before or after this agreement;
(b) any enactment which that enactment re-enacts (with or without
modification); and
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(c) any subordinate legislation made (before or after this agreement)
under any enactment, including one within (a) or (b) above.
(3) Where any statement is qualified by the expression "so far as the Seller
is aware" or "to the best of the Seller's knowledge information and
belief" or any similar expression that statement shall be deemed to
include an additional statement that it has been made after due and
careful inquiry.
(4) Words denoting persons shall include bodies corporate and unincorporated
associations or persons.
(5) Subclauses (1) to (4) above apply unless the contrary intention appears.
(6) The headings in this agreement do not affect its interpretation.
(7) The schedules and the Annexures for an integral part of this agreement
and shall be construed and have the same full force and effect as if
expressly set out in the body of this agreement.
2. SALES AND PURCHASE OF THE SHARES AND THE SHAREHOLDER LOANS
(1) The Seller as legal and beneficial owner shall sell and the Purchaser
shall purchase the Brewing Shares and SCB Shares free from the liens,
charges, equities and encumbrances and together with all rights
attaching to them with effect from the date of Completion.
(2) The Seller as legal and beneficial owner shall assign to the Purchaser
the Shareholder's Loans free from all liens, charges, equities and
encumbrances with effect front the date of completion.
3. CONSIDERATION
The consideration for the sale of the Brewing Shares and SCB Shares and
the assignment or the shareholder's Loans shall be the sum or US$700,000
(being US$100 for the Brewing Shares, US$100 for the SCB Shares, US$100
for the Brewing Shareholder's Loan and US$699.700 for the SCB
Shareholder's Loan) payable in cash as follows.
(a) $500,000 shall be payable in cash at Completion;
(b) $200,000 shall be released and payable to Seller with interest,
as follows:
(i) US$50,000 upon delivery of proof of ownership shipment and the
insurance during shipment to Brewery of the Bottler and
Labeler from Germany; US$10,000 upon shipment to Brewery of
the Flow Meters; and US$40,000 upon arrival of the Bottler and
Labeler in Hong Kong, consent to these releases shall not be
unreasonably withheld.
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(ii) $100,000 to be used to fund any Customs (C&E) duty fees and
fines and the balance shall be release upon confirmation by Hong
Kong Customs and excise that they have satisfactory resolved all
outstanding issues with Xxxxxx and certification by Seller's Hong
Kong counsel of the settlement of Brewery's pending C&E legal
issues.
4. WARRANTIES
(1) The Seller represents and warrants to the purchaser that
a. the Seller is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has
requisite power and authority to own, lease and operate its properties
and to carry on its business as now being conducted
b. the Seller is the lawful and beneficial owner of all of the Brewing
Shares and the SCB Shares to be transferred to the Purchaser pursuant to
this agreement, free and clear of all liens, encumbrances, restrictions
and claims of every kind. The Company has full and legal right, power,
and authority to sell, assign, transfer and convey such shares in
accordance with the terms and subject to the conditions of this
agreement. The delivery to the Purchaser of the Brewing Shares and the
SCB Shares pursuant to this agreement on the date of Completion will
transfer to the Purchaser valid title thereto, free and clear of any and
all adverse claims.
c. The execution and delivery of this agreement by the Seller and the
delivery to the purchaser of the Brewing Shares and the SCB Shares
pursuant to this agreement on the date of Completion (i) will not
violate any provision of the memorandum of association or bye-laws of
the Seller (ii) to the knowledge of the Seller will not violate any
statute rule, regulation, order or decree of any governmental
authorities by which the Seller is bound or is binding upon any of its
properties or assets, and (iii) will not result in a violation or breach
of, or constitute a default under any material license, permit,
indenture, agreement or other instrument which the Seller or any of its
assets or properties is bound; excluding from clauses (ii) and (iii)
above violations. breaches or defaults which either individually or in
the aggregate, would not have a material adverse effect on the business
financial condition or results of the operations of the Seller.
d. The assets of Brewing and SCB are not pledged as collateral for any bank
or other facilities of sellers, its subsidiaries and associates.
is ture and accurate in all material respects as at the date of
Completion.
(2) Each of the Warranties made by the Seller in respect of each of Brewing
and SCB set out in Schedule 3 is separate and independent and except as
expressly provided to the contrary in the agreement is not limited;
(a) by reference to any other paragraph of Schedule 3; or
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(b) by anything in this agreement;
and none of the Warranties shall be treated as qualified by any actual or
constructive knowledge on the part of the Purchaser or any of its agents.
(3) Subject to clause 5 and without prejudice to any other remedy available
to the Purchaser or its ability to claim damages on any basis which is
available to it by reason of any of the Warranties being untrue or
misleading or being breached, the Seller undertakes with the Purchaser
(for itself and as trustee for Brewing and SCB) that it will, at the
direction of the Purchaser, pay to the Purchaser, Brewing or SCB (as
applicable) or (in the case of liability to another person which has not
been discharged) the person to whom the liability has been incurred an
amount equal to any deficiency or liability of Brewing or SCB which
arises from any of the Warranties being untrue, misleading or breached
and which would not have existed or arisen if the Warranty in question
had not been untrue, misleading or breached.
5. LIMITATION
5.1 (i) No claim or claims shall be made under or pursuant to this Agreement
against the Seller unless the aggregate amount of all such claims
shall exceed US$50,000;
(ii) The maximum liability of the Seller for all the claims under this
Agreement shall not exceed the aggregate consideration received by
the Seller hereunder; and
(iii) no claims shall be raised by the Purchaser against the Seller under
this agreement after a date of 12 months after Completion save any
claim for which the purchaser had no knowledge prior to the expiry
of this time period.
5.2 The Seller shall not be liable for any breach of the Warranties to the
extent that any depletion, diminution or reduction in the value or
amount of any of the assets of Brewing or SCB (as the case may be)
occurs as a result of or is otherwise attributable to any legislation
not In force at the date of Completion or any change or law or
administrative practice which takes effect retroactively or occurs as a
result of any increase in the rates of taxation in force at the date of
Completion or any voluntary act of Brewing or SCB (as the case maybe)
after the date of Completion at the direction of the Purchaser otherwise
than in the ordinary course of trading.
5.3 The Seller shall not be liable for any claim under this Agreement which
would not have arisen but for any act omission or transaction by the
Purchaser or Brewing or SCB (as the case may be) occurring after
Completion.
5.4 The Purchaser shall reimburse to The Seller an amount equal to any sum
paid by the Seller under this Agreement which is subsequently recovered
by or paid to the Purchaser or Brewing or SCB (as the case may be) by
any third party in relation to this Agreement and without prejudice to
the generality of the foregoing where a breach of any of the Warranties
shall be in respect of a matter where Brewing or SCB (as the case may
be) shall be insured against any loss or damage arising therefrom the
Purchaser shall not make any claim against the Seller for breach of any
warranty
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without first procuring that Brewing or SCB (as the case may be) shall
make a claim against their insurers for compensation for the loss or
damage suffered and thereafter; any claim against the Seller shall be
limited (in addition to the limitations on the Sellers liability
elsewhere referred to herein) to the amount by which the loss or damage
suffered by the Purchaser as a result of such breach shall exceed the
compensation paid by the said insurers to Brewing or SCB (as the cast
may be) without prejudice to the rights of subrogation of the relevant
insurers.
6. COMPLETION
(1) Completion shall take place at the offices of. ACL Asia Ltd., Two
Xxxxxxx Xxxxx, 00 Xxxxxxxxx, Xxxx Xxxx immediately after the signature
of this agreement
(2) At completion the Seller shall procure:
(a) the delivery to the Purchaser of:
(i) duly executed transfers and bought and sold notes in favour of
the Purchaser or its nominee(s) of all the Brewing Shares and
SCB Shares;
(ii) the share certificates representing the Brewing Shares and SCB
Shares (or an express indemnity in a form satisfactory to the
purchaser in the case of any found to be missing);
(iii) the certificate of incorporation, common seal, minute books,
statutory registers and share certificate books of Brewing and
SCB;
(iv) the resignations of all the directors and the secretary of
Brewing and SCB, in each case acknowledging under seal that he
has no claim against Brewing or SCB whether for loss of office
or otherwise;
(v) execution copies of the Distribution Agreements duly executed
by the seller;
(vi) an execution copy of the Options Agreement duly signed by
the Seller;
(vii) confirmation from the landlord of the Premises, in a form
acceptable to the Purchaser, that the existing tenancy shall
remain in place following change of ownership of Brewing and
SCB;
(viii) new contracts of employment, on terms approved by the
Purchaser, that have been entered into with the senior
management (as defined by the parties) Brewing and SCB; and
(ix) confirmation that all sums have been paid in relation to the
balance of the purchase price and shipping cost of the
bottler, labeler and pasteurizer and a shipping date has been
agreed.
(b) that a Board Meeting of Brewing and SCB is held at which it is resolved
that:
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(i) such persons as the Purchaser nominates are appointed as
additional directors and the secretary of Brewing and SCB;
(ii) the transfers referred to in paragraph (a) are approved for
registration; and
(iii) Brewing's and SCB's bank mandates are revised in such manner
as the Purchaser requires.
(c) an acknowledgment of the assignment of the Shareholders's Loans to
the Purchaser duly signed by Brewing and SCB.
(3) Upon Completion of all the matters referred to in subclause (2) the
Purchaser shall deliver to the Seller by with transfer the consideration
for the sale of the Brewing Shares and SCB Shares and the assignment of
the Shareholder's Loans pursuant to clause 3 hereof.
(4) Upon Completion, the Shareholder's Loans shall be deemed to have been
assigned hereby without any further act or document to be done or
executed by the Seller.
(5) If the transfers and the bought and sold notes are signed in Hong Kong
and within thirty days if they are signed outwith Hong Kong, the
Purchaser shall proceed with stamping the Brewing Shares and the SCB
Shares. The stamp duty shall be borne equally by the parties and the sum
of US$1,000 shall be withheld from the sum payable as consideration
pursuant to clause 3 in respect thereof
(6) If for any reason the provisions of subclause (2) are not finally
complied with as at the date of Completion the Purchaser may elect (in
addition and without prejudice to all other rights or remedies available
to it) to rescind this agreement or to fix a new date for Completion.
(7) The parties hereby agree that the bottling and labeling line currently
ordered will be paid for and shipped by the Seller to the purchaser in
Hong Kong. The Purchaser shall be responsible for installation and
commissioning, and it is agreed that the consideration in clause 3 shall
be reduced by US$5,000 upon release of the final payment under clause
3 (b) (1).
7. ANNOUNCEMENTS
No announcement concerning this sale and purchase or any ancillary
matter will be made before, on or after Completion by any member of the
Seller's Group or the purchaser's Group except as required by law or any
competent regulatory authority or with the written approval of the
Seller and the Purchaser (such approval not to be unreasonably withheld
or delayed).
8. NOTICES AND RECEIPTS
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(1) Any notice or other document to he served under this agreement may be
delivered or sent by first class recorded delivery post or facsimile
process to the party to be served at its address appearing in this
agreement or at such other address as it may have notified to the other
parties in accordance with this clause.
(2) Any notice or document shall be deemed to have been served:
(a) if delivered, at the time of delivery; or
(b) if posted, at 10.00 a.m. on the second business day after it was
put into the post; or
(c) if sent by facsimile process, at the expiration of 2 hours after
the time of dispatch, if dispatched before 3.00 p.m. or any
business day, and in any other case at 10:00 a.m. on the business
day following the date of dispatch.
(3) In proving service of a notice or document it shall be sufficient to
prove that delivery was made or that the envelope containing the notice
or document was properly addressed and posted as a prepaid first class
recorded delivery letter or that the facsimile message as properly
addressed and dispatched as the case may be.
9. RESOLUT1ONS, WAIVERS AND UNDERTAKINGS
(1) The Seller waives (and shall procure the waiver by its nominee(s)) of
all rights of preemption which it (or such nominee(s)) may have (whether
under Brewing's and SCB's articles of association or otherwise) in
respect of the transfer to the Purchaser (or its nominee(s)) of the
Brewing Shares and SCB Shares or any of them.
(2) For so long after Completion as it remains the registered holder of any
of the Brewing Shares and SCB Shares the Seller will hold them and any
distributions, property and rights deriving from them in trust for the
Purchaser and will deal with the Brewing Shares and SCD Shares and
distributions, property and rights deriving from them as the Purchaser
directs; in particular, the Seller will exercise all voting rights as
the Purchase directs or will execute an instrument of proxy or other
document which enables the Purchaser or its representative to attend and
vote at any meeting of Brewing and SCB.
(3) Save as disclosed and subject to the provisions of clause 5, the Seller
hereby undertakes to indemnify the purchaser against any claims for
which Brewing or SCB become liable up to completion (whether any
liability becomes due before or after Completion) in respect of any
investigation or inquiry by Hong Kong Customs and Excise or other Hong
Kong regulatory body. In particular it has been disclosed to the
Purchaser that there is presently a dispute with the Hong Kong tax
authorities. Notwithstanding the terms of this clause and clause 5 the
Seller hereby expressly indemnifies the Purchaser against any costs
involved with settling this dispute.
10. GENERAL
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(1) Each of the obligations, Warranties and undertakings set out in this
agreement which is not fully performed at Completion will continue in
force after Completion.
(2) This agreement shall be binding upon each party's successors and
assignees but, if the Brewing Shares and SCB Shares are sold or
transferred after Completion to any company within the Purchaser's
Group, the benefit of each of the obligations Warranties and undertaken
or given by the Seller shall not be assignable to the purchaser or
transferee of the Brewing Shares and SCB Shares unless with the written
consent of the Seller, which shall not be unreasonably withheld.
(3) Time is of the essence in relation to this agreement.
(4) Each party shall pay the costs and expenses incurred by it in
connection with the entering into and completion of this agreement. For
the avoidance of doubt the stamp duty payable hereunder shall be borne
equally between the parties subject to clause 6(5) above.
(5) This agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same agreement and
any party may enter into this agreement by executing a counterpart.
(6) For the purposes of this agreement, a document signed and transmitted
by facsimile machine ("faxed") is to be treated as an original
document. The faxed signature of any party is to be considered as an
original signature, and the faxed document has the same binding effect
as an original signature on an original document. At the request of any
party, a faxed document is to be re-executed in the original form by
the parties thereto. No party may raise the use of faxed signatures as
a defense to the enforcement of this agreement or the authenticity of
any document relating thereto.
(7) For the limited purpose of preparing Seller's audited financial
statements, Seller's auditors shall have reasonable access to the books
and records of Brewing and SCB for a period of no longer than six (6)
months from Completion.
11. WHOLE AGREEMENT
(1) This agreement and the documents referred to in it contain the whole
agreement between the parties relating to the transactions contemplated
by this agreement and supersede all previous agreements between the
parties relating to these transactions.
(2) Each of the parties acknowledges that in agreeing to enter into this
agreement it has not relied on any representation, warranty or other
assurance except those set out in this agreement.
12. GOVERNING LAW
(1) This agreement is governed by and shall be construed in accordance with
The laws at the State of Delaware without regard to its conflict of law
rules.
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13. ARBITRATION
Any and all disputes, controversies or claims arising out of or relating to
this agreement shall be referred to and finally resolved by arbitration under
the UNCITRAL Arbitration Rules then in force. The number of the arbitrators
shall be three (3). The place of arbitration shall be Hong Kong or such other
value as agreed by the parties. The arbitration shall be conducted in English.
As WITNESS the hands of the duly authorized officers of the Seller and the
Purchaser on the date which appears first on page 1.
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SCHEDULE 1
SOUTH CHINA BREWING COMPANY LIMITED
Registered number 479793
Registered office: Unit Al, 1/F Vita Tower,
00 Xxxx Xxxx Xxxx Xxxx,
Xxxxxxxx, Xxxx Xxxx
Date and place of
incorporation: May 26, 1994, Hong Kong
Directors: Xxxxx X. Xxx
Xxxxx X.X. Xxxxxxxx
Xxxxx Xxxxxx
Secretary: X.X. Xxxxx & Company, Ltd.
Auditors: Coopers & Xxxxxxx
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SCHEDULE 2
SCBC DISTRIBUTION COMPANY LIMITED
Registered number 447434
Registered office: Unit Al, 1/F Vita Tower,
00 Xxxx Xxxx Xxxx Xxxx,
Xxxxxxxx, Xxxx Xxxx
Date and place of
incorporation: August 31, 1993, Hong Kong
Directors: Xxxxx X. Xxx
Xxxxx X.X. Xxxxxxxx
Xxxxx Xxxxxx
Secretary: X.X. Xxxxx & Company, Ltd.
Auditors: Coopers & Xxxxxxx
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SCHEDULE 3
WARRANTIES
A. GENERAL
A.1 ACCURACY OF RECITALS AND SCHEDULES
The particulars relating to the Brewing and SCB set out in the recitals
and schedules l and 2 to this agreement are true and accurate.
A.2 MEMORANDUM AND ARTICLES OF ASSOCIATION, STATUTORY BOOKS AND RETURNS
(1) The copy of the memorandum and articles of association of Brewing and
SCB which have been given to the Purchaser are accurate and complete in
all respects and have been annexed or incorporated copies of all
resolutions or agreements required to be so annexed or incorporated.
(2) The register of members and other statutory books and registers of
Brewing and SCB have been properly kept and no notice or allegation that
any of them are incorrect or should be rectified has been received.
(3) All returns and particulars, resolutions and other documents which
Brewing and SCB are required by law to file with or deliver to the
registrar of companies have been correctly made up and duly filed or
delivered.
A.3 OWNERSHIP OF THE BREWING SHARES AND THE SCB SHARES
(1) The Brewing Shares and the SCB Shares constitute the whole of the
issued and allotted share capital of Brewing and SCB respectively.
(2) No person is entitled or has claimed to be entitled to require Brewing
or SCB to issue any share or loan capital either now or at any future
date and whether contingently or not.
(1) As of Completion, there is no option, right of pre-emption, right to
acquire, mortgage, charge, pledge, lien or other form of security or
encumbrance on, over or affecting any of the Brewing Shares or the SCB
Shares nor is there any commitment to give or create any of the
foregoing, and no person has claimed to be entitled to any or the
foregoing.
(4) The Seller is the beneficial owner of the Brewing Shares and the SCB
Shares and has full and legal right power and authority to sell and
procure the transfer of the full legal and beneficial ownership in the
Brewing Shares and the SCB Shares to the Purchaser on the terms set out
in this agreement. The delivery to the Purchaser of the Brewing Shares
and SCB Shares pursuant to this Agreement on the date of completion will
transfer to the Purchaser valid title thereto free and clear of any and
claims.
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A.4 OWNERSHIP OF ASSETS
(1) Brewing and SCB owned at the Accounts Data all the assets included in
the Brewing Management Accounts and SCB Management Accounts respectively
and has not acquired or agreed to acquire any fixed assets since the
Accounts Date.
(2) Neither Brewing nor SCB have since the Accounts Date disposed of any of
the assets included in the Brewing Management Accounts or SCB Management
Accounts respectively or any assets acquired or agreed to be acquired
since the Accounts Date which disposal or acquisition would have a
material adverse effect on the business financial condition or results
of the operation of Brewing and SCB respectively.
(3) None of the property, assets, undertakings, goodwill or uncalled capital
Brewing or SCB is subject to any encumbrance or any agreement or
commitment to give or create any of the foregoing
A.5 SUBSIDIARIES AND ASSOCIATIONS
Neither Brewing nor SCB:
(1) hold or beneficially own or have agreed to acquire any securities of any
other corporation (wherever incorporated); or
(2) is or has agreed to become a member of any partnership or other
unincorporated association, joint venture or consortium.
A.6 COMPLIANCE WITH STATUTES
So far as the Seller is aware, neither Brewing, SCB nor any of their
officers, agents or employees have (during the course of their duties),
done or omitted to do anything which is in contravention of any statute,
order, regulation or the like giving rise to any fine, penalty or other
liability or sanction on the part of Brewing or SCB.
A.7 LICENSES AND CONSENTS
Both Brewing and SCB have all Licenses (and in particular, hut without
limitation necessary to carry on brewing in Hong Kong) and consents
necessary to own and operate their assets and carry on their business as
they do at present and the Seller is not aware of anything (including,
without limitation, the consummation of the transactions contemplated
hereby) that might result in the revocation, Suspension or modification
of any of those licenses or consents or that might prejudice their
renewal.
A.8 INSURANCES
(1) All assets are insured in amounts representing their all replacement or
reinstatement value against fire and other risks normally insured by
owners of similar assets.
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(2) All insurance policies are currently in full force and effect, all
premiums payable thereunder have been paid and nothing has been done or
omitted to be done by Brewing or SCB which will make such policies void
or voidable and there are no claims outstanding under any such policy.
A.9 LITIGATION
(1) Neither Brewing nor SCB is engaged in any litigation or arbitration
proceedings and there are no such proceedings pending or threatened by
or against Brewing or SCB.
(2) The Seller does not know of anything which is likely to give rise to any
litigation or arbitration proceedings by or against Brewing or SCB.
(3) Except as has been disclosed to the Purchaser, neither Brewing nor SCB
is the subject of any investigation or inquiry by any governmental,
administrative or regulatory body nor is the Seller aware of any thing
which is likely to give rise to any such investigation or inquiry. In
particular nor is the Seller aware of any existing investigations or
inquiries regarding outstanding duties or licenses by Hong Kong Customs
and Excise department, nor is the Seller aware of anything that is
likely to give rise to such an investigation or inquiry.
A.1O INSOLVENCY
(1) No receiver or administrative receiver has been appointed in respect of
either Brewing or SCB nor in respect of the whole or any part of the
assets or undertakings of Brewing or SCB.
(2) No meeting has been convened at which a resolution will be proposed, no
resolution has been passed, no petition has been presented and no order
has been made for the winding-up of either Brewing or SCB.
(3) Neither Brewing or SCB have stopped or suspended payment of their debts,
become unable to pay their debts or otherwise become insolvent.
(4) No unsatisfied judgment, order or award is outstanding against Brewing
or SBC and no written demand has been made against Brewing or SCB and no
distress or execution has been levied on, or other process commenced
against, any asset of Brewing or SCB.
(5) No voluntary arrangement has been proposed in respect of Brewing or SCB.
(6) No circumstances have arisen which entitle any person to take any
action, appoint any person, commence proceedings or obtain any order of
the type mentioned in subparagraphs (1) to (5) above
A.11 CAPACITY AND CONSEQUENCES OR SALE
(1) The Seller has the requisite power and authority to enter into and
perform this
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agreement.
(2) This agreement constitutes binding obligations on the Seller an
accordance with its terms.
(3) Compliance with the terms of this agreement does not and will not:
(a) conflict with or constitute a default in any material respect
under any provision of:
(i) any agreement or instrument to which the Seller or Brewing or
SCB is a party; or
(ii) Brewing's or SCB's or the seller's memoranda or articles of
association; or
(iii) any lien, lease, order, judgment, award, injunction decree,
ordinance or regulation or any other restriction or any kind
or character by which the Seller or Brewing or SCB is bound;
or
(b) relieve any other party to a contract with Brewing or SCB of its
obligations or enable that party to vary or terminate its rights or
obligations under that contract; or
(c) result in the creation or imposition of any lien, charge or
encumbrance of any nature on any of the property or assets of
Brewing or SCB.
B. ACCOUNTS AND FINANCIAL
B.1 BOOKS AND RECORDS
All accounts, books, ledgers and other financial records of Brewing and
SCB:
(a) have been prepared in accordance with generally accepted accounting
principles and contain accurate records of all matters required to
be entered in them by all applicable statutes and regulations; and
(b) give a true and fair view or the matters which ought to appear in
them.
B.2 MANAGEMENT ACCOUNTS
The Brewing Management Accounts and the SCB Management Accounts give a
true and fair view in all material aspects the financial condition and
results of the operation of Brewing and SCB respectively for the period
ended on the Accounts Date.
B.3 POSITION SINCE ACCOUNTS DATE
Since the Accounts Date:
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(a) Brewing and SCB have conducted their business in a normal and
proper manner; and
(b) Brewing and SCB have not entered into any unusual contract or
commitment or otherwise departed from its normal course of trading.
B.4 DIVIDENDS AND DISTRIBUTIONS
No dividend or other distribution of profits or assets has been or agreed
to be declared, made or paid by Brewing and SCB since the Accounts Date.
B.5 LOAN CAPITAL AND GUARANTEES
Brewing and SCB do not have outstanding any loan capital or any money
borrowed or raised (other than the Shareholder's Loans) or any liability
(whether present or future, contingent or actual) in respect of any
guarantee or indemnity.
C. TAXATION
C.1 TAX RETURNS
No accounts, computations or returns are required to be submitted by
Brewing and SCB to any relevant taxation or excise authorities and no
taxation is payable by Brewing and SCB.
C.2 TAXATION LIABILITIES
Except as has been disclosed to the purchaser, all tax for which Brewing
and SCB are liable has been duly paid ([insofar as such taxation ought to
have been paid).
D. SHAREHOLDER'S LOANS
D.1 TITLE
The Seller is the beneficial owner of the Shareholder's Loans
D.2 ENCUMBRANCES
(1) The shareholder's Loans are free from any encumbrance (including,
without limitation, any debenture, mortgage, charge, lien or deposit by
way of security), any agreement or commitment to create any foregoing or
any waiver of the repayment of the Shareholder's Loans or any part
thereof or any agreement or commit to so waive.
(2) The Shareholder's Loans are not subject to any option or i\ght of
pre-emption.
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