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EXHIBIT 10.32
Assets and Staff Transfer Agreement among the Farming Bureau, HARC,
First Supply and Second Supply, dated as of October 1, 1996
(Certified English translation of original Chinese version.)
The undersigned officer of China Resources Development, Inc., hereby represents
that the following is a fair and accurate English translation of the original
Chinese version of the Assets and Staff Transfer Agreement among the Farming
Bureau, HARC, First Supply and Second Supply, dated as of October 1, 1996.
/s/ Xxxx Xxx On
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Xxxx Xxx On, Financial Controller
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ASSETS AND STAFF TRANSFER AGREEMENT
Hainan Agricultural Resources Co. Ltd. ("Party B") was legally established
on June 28, 1994. First Goods And Materials Supply And Sales Corporation
("Party C") and Second Goods And Materials Supply And Sales Corporation ("Party
D") are the wholly owned subsidiaries of Party B. The General Bureau of Hainan
State Farms ("Party A") is one of the shareholders of Party B. The above
parties come into an agreement on the transfer of assets and liabilities
together with the transfer of staff by Party C and Party D to Party A as
follows:
The headings used in this Agreement are given for convenience only and
shall not affect the interpretation of this Agreement.
Unless otherwise specified, the followings shall be referred as:
"Effective Date" are to the meaning of Article 8 of this Agreement.
"Base Date" are to September 30, 1996.
"Accepted Accounting Standard of PRC" are to the accounting standard, rules and
regulations as adopted in the PRC.
"Assets Fair Value" are to the meaning of the provison under Article 1.4 of
this Agreement.
"Transferors" are to Party B, Party C and Party D, collectively.
"Assets" are to the assets, rights, contracts, etc., which are transferred by
the Transferors to Party A. The details of which are listed out in the Exhibit
-Statement of Assets and Liabilities.
"Liabilities" are to all the liabilities which are transferred by the
Transferors to Farming Bureau. The details of which are listed out in the
Exhibit -Statement of Assets and Liabilities.
"Statement of Assets and Liabilities" are to the contents as shown in the
Exhibit.
"This Agreement" are to the provisions of this Agreement, including this
Agreement and its Exhibits.
"Party A" are to Party A and unless the context requires otherwise, includes
its directly and indirectly controlled subsidiaries, branches, divisions,
associated companies, joint ventures and legal entities.
"Records" are to the files, records, information, techniques or other
information with business value which relate to the assets transferred.
"Transferred Staff" are to the redundant staff of the Transferors who are taken
over by Party A.
"Accounts receivable" refers to the accounts receivable included in the Exhibit
- Statement of Assets and Liabilities to this Agreement.
"Accounts payable" refers to the accounts payable included in the Exhibit -
Statement of Assets and Liabilities to this Agreement.
"Other reseivables" refers to the other receivables included in the Exhibit -
Statement of Assets and Liabilities to this Agreement.
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"Other payables" refers to the other payables included in the Exhibit -
Statement of Assets and Liabilities to this Agreement.
"Long term investments" refers to the long term investments included in the
Exhibit - Statement of Assets and Liabilities to this Agreement.
"Fixed assets" refers to the fixed assets included in the Exhibit - Statement
of Assets and Liabilities to this Agreement.
"Inventories" refers to the inventories included in the Exhibit -
Statement of Assets and Liabilities to this Agreement.
"Contracts" are to all the written and verbal contracts transferred to Party A,
including the contracts between the Transferors and the Transferred Staff.
"Responsibilities and obligations" are to all the contractual and legal
responsibilities and obligations with respect to the assets, liabilities and
personnel transferred to Party A.
"Shareholders' Agreement on Business Operations Restructuring" are to the
shareholders' agreement on business operations restructuring as entered by
Party A, Party B and Billion Luck.
1 TRANSFER OF ASSETS AND LIABILITIES
1.1 According to the provisions of this Agreement, the parties in this
Agreement shall fulfill their respective obligations and responsibilities.
The Transferors shall transfer the assets and liabilities as shown in
Statement of Assets and Liabilities to Party A as of the Effective Date.
Party A shall purchase the assets and assume the corresponding liabilities
as of the Effective Date and shall bear all the responsibilities and
obligations inherent to the transfer since then.
1.2 Apart from the assumption of the responsibilities and obligations of the
liabilities corresponding to the assets transferred, Party A shall not
bear any other responsibilities and obligations that arises before the
transfer and which should be borne by the Transferors.
1.3 The transfer methods for all kinds of assets and liabilities should
follow all the legal procedures.
1.4 The value of the net assets transferred shall be based on fair value as
of the Base Date. Those fair values shall be determined by an independent
valuer jointly employed by the parties to this Agreement.
1.5 Party A shall be responsible for the recovery of all the accounts
receivable. If necessary, the Transferors shall provide any assistance and
records for the collection of the accounts receivable. All the costs and
expenses incurred thereon by the Transferors shall be borne by Party A.
1.6 Except for those disputes which have already been disclosed to Party A,
the Transferors shall be responsible for all the losses and expenses for
any disputes with third parties on the rights of ownership of the
transferred assets, if the disputes are related to the events occurred and
conditions existing before the Base Date which Party A are not
accountable. Any such losses incurred by Party A thereon shall also be
compensated by the Transferors. If the disputes are related to the events
occurred after the Base Date which are not the responsibilities of the
Transferors, then Party A shall be solely accountable and should bear all
the expenses and losses incurred thereon.
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1.7 Except for those mortgages and rights of lien which have already been
disclosed to Party A, the Transferors shall bear all the expenses and
losses incurred resulting from claims of any mortgages or rights of lien
on the transferred assets by third parties and if these mortgages or
rights of lien were created before the Base Date. Any expenses and losses
incurred by Party A thereon shall also be compensated by the Transferors.
If the mortgages or rights of lien on the transferred assets are created
after the Base Date, Party A shall bear all the expenses and losses
incurred thereon.
1.8 The Transferors shall not warrant to Party A the quality of any tangible
assets transferred, including but not limit to, fixed assets, consumable
stores, etc.. For those assets which are specifically excluded by Party A
before this Agreement becomes effective, they shall be handled separately
by mutual agreement of the parties involved.
1.9 Any losses resulting from litigations or government actions on the assets
transferred shall be borne by Party A if the results are not yet finalized
before the Base Date. For those assets which are specifically excluded by
Party A before this Agreement becomes effective, they shall be handled
separately by mutual agreement of the parties.
1.10 Notwithstanding other provisions in this Agreement, the bank loans owed
by the Transferors to the banks and the amounts owed by Party A's
subsidiary farms to the Transferors shall be transferred as follows: the
amounts receivable from the subsidiary farms and related companies of
Party A shall be transferred to Party A on the Base Date. Party A shall be
responsible to procure the consent of the banks for the transfer of bank
loans no later than March 31, 1997. Before the bank loans are formally
transferred to Party A, Party A shall be responsible for the repayment of
the principal outstanding and all the bank interest incurred commencing
from the Base Date. Any amount received or receivable from the subsidiary
farms and related conpanies by the Transferors after the Base Date shall
belong to Party A. The outstanding amount of the bank loans shall be used
to reduce the amounts payable by Party A to the Transferors when the bank
loans are formally transferred.
1.11 Farming Bureau represents and warrants to the Transferors that Farming
Bureau clearly understands and has carried out its own assessment to the
conditions and risks with respect to the assets and liablities to be
transferred by the Transferors pursuant to this Agreement. Farming Bureau
convenants to the Transferors that Farming Bureau shall bear all the
rights, rewards, risks and obligations of ownership of the transferred
assets and the corresponding liabilities immediately after the Base Date.
Farming Bureau shall not tender any claims and requests for compensation
with respect to any changes in the conditions and risks of the transferred
assets and liabilities that may arise after the Base Date.
2 PAYMENT
2.1 Except for the provision of Article 1.10 of this Agreement, Party A shall
pay to the Transferors in cash the amount equivalent to the fair value of
the net assets transferred in accordance with the provision of Article
1.4. In the event that the transfer is a net liabilities, the amount of
the net liabilities shall be used to reduce the amount due by Party A to
the Transferors.
2.2 In the event that the transfer is a net assets, Farming Bureau shall pay
to the Transferors the consideration for the fair value of the net assets
transferred in accordance to their respective instructions.
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2.3 Party A shall settle the consideration for the transfer of net assets
within 120 days upon the date of this Agreement.
2.4 Except for the obligations and responsibilities inherent to the said
transfer pursuant to this Agreement, Party A shall not bear any other
responsibilities and obligations which should be borne by the Transferors.
After the Effective Date, the Transferors shall not have any
responsibilities and obligations on matters in connection with the said
transfer that arises after the Base Date and are not in relation to
conditions existing before the Base Date. If any party incurs any losses
which shall be the responsibilities of the other party, the former shall
notice the latter in writing accompanied with the necessary proving
documents. The party who receives the notice shall indemnify the other
party within 30 days of receiving the notice.
2.5 Any other payments under the provisions of this Agreement shall also be
made within 30 days of receiving the notice from the other party.
3 TRANSFER OF STAFF
3.1 From the Effective Date onwards, all the redundant staff under this
Agreement shall be taken over by Party A. But the Transferors and Party A
shall take other appropriate procedures by mutual agreement to deal with
those staff whom Party A request not to take over before the Effective
Date.
3.2 The Transferors shall terminate the employment in accordance with the
employment contract terms with the staff and comply with all the legal
requirements. The Transferors and Party A shall take all the necessary
steps in obtaining the termination approval from the staff. Party A shall
also provide employment to the Transferred Staff on a reasonable term of
which the remuneration should not be less than the existing staff of Party
A with comparable grading and qualification.
3.3 In the event that the Transferred Staff are not willing to terminate the
employment relationship with the Transferors and, at the same time, the
Transferors is unable to legally terminate the employment contracts singly
as of the Effective Date, the Transferors shall continue to employ those
staff until the contracts can be terminated in accordance with the legal
requirements. Except for Article 3.1 provides otherwise, Party A shall
warrant to take over those staff within one year as from the Effective
Date.
3.4 The insurance contracts of the Transferred Staff shall also be
transferred to Party A at the same time when the staff are transferred.
Party A shall compensate the Transferors with equivalent monetary value of
the contracts.
3.5 After the transfer, Party A shall agree the Transferred Staff to carry on
any necessary work and allocate reasonable working schedules for a smooth
changeover of the Transferors.
3.6 According to the legal requirements and the employment contract terms,
any redundancy costs which the Transferors pay to the Transferred Staff
shall be reimbursed by Party A.
4 TRANSFER OF CONTRACTS
4.1 The Transferors shall transfer the contracts related to the assets
transferred to Party A.
4.2 The Transferors shall take all the reasonable steps to obtain the
confirmation from the third parties in respect to the transfer of
contracts. If the above confirmation
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cannot be obtained on or before the Effective Date, the Transferors
agree to continue to cooperate with Party A in obtaining the confirmation
and make the necessary arrangements for the fulfillment of contracts by
Party A. If the confirmation cannot be obtained eventually, the
Transferors shall fulfill the contracts in accordance with the
instructions of Party A. All the rights and responsibilities thereon shall
be borne by Party A.
4.3 After the Effective Date, all the rights and responsibilities of the
Transferors inherent from the contracts transferred shall be ended as of
the Base Date, even though the legal procedures for the transfer may not
yet be completed. After the Base Date, all the rights and responsibilities
of the contracts shall rest on Party A.
4.4 The Transferors shall have the obligations to provide all the details for
the performance of the contracts transferred to Party A, but shall not
have obligations to compensate Party A for any losses incurred by Party A
resulting from the performance or non-performance of such contracts. For
those which are specifically excluded by Party A before the Effective
Date, they shall be handled separately by mutual agreement of the parties.
5 RECORDS
5.1 The Transferors shall transfer all the relevant records related to the
assets and liabilities to Party A.
5.2 The records transferred shall only limit to those which are kept by the
Transferors as of the Effective Date. The Transferors shall not be held
responsible for the incompleteness and incorrectness of the records
transferred, but shall give reasonable assistance on their rectification
if requested by Party A. All the costs incurred thereon shall be borne by
Party A.
5.3 For the sake of continuation of the Transferors' business operations, the
Transferors may retain the duplicated copies of the records transferred
and shall inform Party A the details of the duplicated copies retained if
requested by Party A.
5.4 The parties shall cooperate to make any necessary changes to the records
for the fulfillment of transfer of rights of ownership of the assets in
accordance with the legal requirements.
6 TAXES AND CHARGES
6.1 All the taxes and government charges related to the holding or usage of
the assets, as derived in accordance with the Accepted Accounting Standard
of PRC, shall be borne by the Transferors, if those charges shall be
accounted for before the Base Date in accordance with the accounting
standard, or otherwise, shall be borne by Party A.
6.2 Any taxes and government charges in relation to the transfer of assets
shall be borne by the parties involved in accordance with the legal
requirements. All other charges shall be shared by the Transferors and
Party A on a reasonable basis.
7 INSURANCE
7.1 The beneficiary of the insurance contracts purchased by the Transferors
on the assets shall be changed to Party A. Before the completion of this
process, any insurance compensation received by the Transferors should be
paid to Party A.
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7.2 Party A shall inform the insurance companies of the changes and handle
the changing procedures. The Transferors shall provide any necessary
assistance for the changes.
7.3 The insurance premium which has been paid by the Transferors shall be
borne by the Transferors if those premium should be accounted for before
the Base Date in accordance with the Accepted Accounting Standard of PRC,
or otherwise, shall be borne by Party A.
8 EFFECTIVE DATE
This Agreement shall become effective and binding on October 1, 1996.
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9 TRANSFERORS' WARRANTIES BEFORE EFFECTIVE DATE
Unless otherwise stated, the Transferors shall warrant the following
before this Agreement becomes effective:
(1) If this Agreement becomes effective within 6 months from the
Base Date, the Transferors shall warrant to run the business with the
assets and liabilities in reasonable efficiency between the Base Date
and the Effective Date.
(2) If this Agreement becomes effective after 6 months from the
Base Date, the Transferors shall warrant not to use the assets for
pledges which are outside the normal course of business between the
Base Date and the Effective Date.
(3) As requested by Party A, the Transferors shall allow the
designated staff of Party A to inspect the accounting records and
operation information of the Transferors for the sake of protecting
Party A's interests.
10 ACTIONS AT EFFECTIVE DATE
10.1 As of the date this Agreement becomes effective, the Transferors shall
present the following documents to party A:
(1) In accordance with the Articles of Associations of the
Transferors and the legal requirements, this Agreement should be
signed by the shareholders, board of directors or other authorized
persons and accompanied with the photocopies of all the necessary and
signed documents in making this Agreement effective.
(2) The photocopies of other documents, certificates or approval
letters as are required in accordance with the laws and the
requirements of government authorities.
10.2 As of the date this Agreement becomes effective, Party A shall present
the following documents to the Transferors:
(1) In accordance with the Articles of Associations of Party A and
the legal requirements, this Agreement shall be signed by the
shareholders, board of directors or other authorized persons and
accompanied with the photocopies of all the necessary and signed
documents in making this Agreement effective.
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(2) The photocopies of other documents, certificates or approval
letters as are required in accordance with the laws and the
requirements of the relevant government authorities.
11 ALL PARTIES' WARRANTIES AFTER EFFECTIVE DATE
11.1 The parties shall cooperate to inform the third parties in relation to
the assets and liabilities transferred and make all the necessary
arrangements in obtaining their confirmation of the transfer.
11.2 The parties shall cooperate and be responsible to assure smooth
procedures for staff transfer and to avoid any unnecessary losses of the
staff as a result of transfer.
11.3 The Transferors shall sign all the necessary documents as requested by
Party A, and shall agree and take all reasonable steps to assist Party A
to develop its operations in relation to the assets transferred.
11.4 The Transferors shall not sign any agreements, make any written or verbal
contracts, or take any actions in relation to the assets transferred
without the prior consent of Party A.
11.5 When Party A takes any actions or sign any agreements in relation to the
assets, it shall not impair the Transferors' interests. In addition, when
Party A intends to take any actions or sign any agreements which involve
the Transferors, it should inform the Transferors and accept any advices
as reasonably raised by the Transferors.
11.6 After the Effective Date, the Transferors may still develop any kinds of
business with the customers who are related to the assets and liabilities
transferred. And Party A shall not object on it.
12 TRANSFERORS' REPRESENTATIONS AND WARRANTIES
12.1 The Transferors are the legally established persons and have the
authority to carry out businesses, to owe debts, to sign contracts and to
have the civil rights.
12.2 This transaction is not outside the scope of the businesses of the
Transferors.
12.3 The signatories of the Transferors have received proper authorization to
sign this Agreement.
12.4 The Transferors have paid reasonable efforts in providing the information
and messages related to the assets and liabilities transferred to Party A
in suitable means.
13 PARTY A'S REPRESENTATIONS AND WARRANTIES
13.1 Party A is a legally established person and has the authority to carry
out businesses, to owe debts, to sign contracts and to have the civil
rights.
13.2 This transaction is not outside the scope of the businesses of the
Transferors.
13.3 This Agreement are signed by the legally authorized persons only.
14 COMPENSATIONS
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14.1 The Transferors shall compensate Party A of any losses for the following
events, including but not limit to, direct economic losses, third parties
compensation and the corresponding legal fees and litigation costs:
(1) Any defaulting acts of the Transferors after the Effective
Date;
(2) Any default or failure of the Transferors in complying with the
provisions,
convenants and warranties of this Agreement.
14.2 Party A shall compensate the Transferors of any losses, including but not
limit to, direct economic losses, third parties compensation and the
corresponding legal fees and litigation costs for the following events:
(1) Any defaulting acts of Party A after the Effective Date;
(2) Any default or failure of Party A in complying with the
provisions, convenants and warranties of this Agreement.
14.3 If any events as mentioned in 14.1 and 14.2 occur which cause litigations
or claims against any party of this Agreement by the third parties, that
party shall inform the other party, which he considers to be responsible,
immediately for deciding the defensive actions.
14.4 The party who receives the compensation shall pay efforts to minimize his
losses incurred and shall assist the party who pay the compensation in
exercising the right to claim any other third parties to recover the
compensation.
15 LIABILITIES FREE BY DISCLOSURE
If any party of this Agreement informs and makes disclosure to the other
parties to this Agreement for any matters which accounts to a
non-compliance of that party with any provisions of this Agreement before
the Effective Date, that party shall not be held responsible for any
compensation for losses incurred unless that party is requested by the
any other parties of this Agreement in writing for providing
rectification means before the Effective Date.
16 CONFIDENTIALITY
In the process of restructuring, the parties in this Agreement shall not
disclose any information to third parties unless the disclosure is
required by laws.
17 OTHER STIPULATIONS
17.1 The rights and responsibilities of this Agreement are not transferable.
17.2 The notices as required by this Agreement shall be in the means of
ordinary mail, facsimile or direct delivery. The mailing address and
facsimile number shall be those used for ordinary business operation. The
notices should be deemed to be received after 3 days from the day of
issue.
17.3 The provisions of this Agreement overrule any other provisions among the
parties which contradict with the provisions of this Agreement.
17.4 The invalidation or non-executable of any provisions of this Agreement
shall not make the other provisions invalid, unless the parties are unable
to rectify it so as to make this Agreement becomes unfair.
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17.5 The Chinese version of this Agreement is the only valid version.
17.6 This Agreement is signed on November 29, 1996.
Party A : General Bureau of Hainan State Farms
/s/ Han Xxxx Xxxx
______________________________
Authorized Representative
Party B : Hainan Agricultural Resources Company
Ltd.
/s/ Li Fei Lie
______________________________
Authorized Representative
Party C : First Goods And Materials Supply And Sales Corporation
/s/ Xxxx Xx Xiang
______________________________
Authorized Representative
Party D : Second Goods And Materials Supply And Sales Corporation
/s/ Xxx Xxxx Jiao
______________________________
Authorized Representative
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