EXHIBIT 10(i)
THIS AGREEMENT made effective the
11th day of November 2003.
BETWEEN
| |
a
business corporation duly incorporated and validly existing under the laws of the State of
Nevada, with its business address at 0000 Xxxx 000 Xxxxx,
Xxxx Xxxx Xxxx Xxxx 00000 |
(“InvestNet”)
AND
AGrade Limited
Advance
Tech Asset Management Limited
(“Advance Tech
Warrantors”)
AND
Advance Tech (Asia) Ltd.
(“Advance
Tech”)
AND
Xx Xxxx Lung Xxxxxxx
WHEREAS:
| A. |
InvestNet is a business corporation whose common shares are traded on the Over
the Counter Bulletin Board of NASD (“OTCBB”); |
| B. |
Agrade Limited and Advance Tech Asset Management Limited are Advance Tech
Shareholders as set forth in Schedule I of this Agreement; and |
| C. |
Advance Tech (ASIA) Limited. (“Advance Tech”), a business corporation
incorporated in the British Virgin Islands, having a share capital of
US$10,000,000 divided into 10,000,000 shares of US$1.00 each of which 622 shares
have been issued and fully paid up. Advance Tech is a private limited company
and is engaged in providing real-time transaction solutions, customized
solutions and professional IT consulting services. |
| X. |
Xx Xxxx Lung Xxxxxxx, chairman of Advance Tech, be acting on behalf of the
remaining shareholders of Advance Tech in this Agreement subject to their final
approval. |
4
NOW, THEREFORE THIS AGREEMENT
WITNESSES that in consideration of the mutual covenants herein contained, and other good
and valuable consideration the receipt and sufficiency of which is hereby acknowledged by
the Parties, and intending to be legally bound, the Parties covenant and agree as follows:
Article One
Shares Exchange Between the Parties
| |
1.1 |
|
Subject to the terms and conditions set forth herein, Advance Tech agree to transfer (the
"Transfer") to InvestNet Inc. 100% of the shares of Advance Tech (the "Transferred Shares"), in
exchange for the common shares to be issued to Advance Tech by InvestNet Inc. as provided herein.
|
| |
1.2 |
|
To effect the transaction under this Agreement, InvestNet shall issue to Advance Tech
and/or their nominees a total of 22, 312, 500 common shares immediately upon presentation
of the share certificates representing the Transferred Shares. If there are any
shareholders, for whatever reasons, decline to tender their respective shares in Advance
Tech, the total number of shares to be issued by InvestNet in exchange for the actual
Transferred Shares will be reduced accordingly. |
| |
1.3 |
|
The closing of the transaction contemplated hereby (the “Closing”) shall take
place on a date and at such time as the parties may agree (the “Closing Date”)
but in any event not later than the 15th of December, 2003. Such Closing shall
take place at a mutually agreed time and place. At the Closing, or upon presentation of
the share certificates representing the Transferred Shares, InvestNet shall issue to
Advance Tech Shareholders the InvestNet shares. |
| |
1.4 |
|
To effect the transaction under this Agreement, Directors of the Board of Advance Tech
will pass a resolution authorizing Xx. Xxxxxxx Xx, the chairman of Advance Tech, to sign
on behalf of Advance Tech in this Agreement. |
| |
1.5 |
|
For the avoidance of doubt, the newly issued common shares to be issued to Advance Tech
under this Agreement shall be issued to Advance Tech Shareholders and/or their nominees
according to the ratio and percentage of subscription for shares by such Advance Tech
and/or their nominees as set forth in Schedule I of this Agreement. |
| |
1.6 |
|
Advance Tech shall have the right to appoint on the Closing Date of this Agreement seven
directors to InvestNet Board forming majority thereof. Advance Tech agrees to cause such
director(s) of InvestNet to be appointed as director(s) of Advance Tech, provided that the
majority directors of Advance Tech consist of majority directors of InvestNet, subsequent
to the transaction contemplated herein. |
| |
1.7 |
|
InvestNet may, with the prior approval of the Advance Tech Director, appoint two directors
and officers to InvestNet Board upon the execution of this Agreement for the purpose of
continuing the normal business of InvestNet. InvestNet shall not appoint any other
director to InvestNet Board thereafter unless with the written consent of Advance Tech
Director. |
5
Article Two
Representations
and Warranties of InvestNet
| |
2.1 |
|
Immediately prior to this Agreement, InvestNet has a total of 10, 500, 000 shares issued
and outstanding, all in one class of common shares. In addition, InvestNet has no options,
warrants or other instrument convertible into shares. |
| |
2.2 |
|
InvestNet represents and warrants to Advance Tech Shareholders that InvestNet is a
corporation duly organized, validly existing and in good standing in all aspect under the
laws of the State of Nevada and those of the United States applicable thereto, including
without limitation to, the laws, regulations, rules, provisions and policies applicable to
or in respect of the past and current compliance of InvestNet. |
| |
2.3 |
|
InvestNet represents and warrants that it is in good standing under the United States
Securities and Exchange Commission (“SEC”) and NASD rules and has been
consistently in compliance with all applicable foreign, federal, and state law, rules and
regulations, including, without limitation, the requirements of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) and the Securities Act of 1933, as
amended (the “Securities Act”) and SEC and NASD requirements for its common
shares to be and continue to be traded. |
| |
2.4 |
|
InvestNet represents and warrants that there is no action, claim, lawsuits, proceeding or
investigation pending or threatened against InvestNet or its business or propriety of the
transactions contemplated by this Agreement. Since the last audited Financial Statements
and the unaudited interim financial statements for the third quarter 2003, there has been
no change in liabilities or debt or change in circumstances of InvestNet that has had or
which InvestNet may expect to have material change or adverse effect on the business,
affairs and assets of InvestNet. InvestNet has no debts, liabilities to any third party
other than those expressly disclosed in its audited and unaudited financial statements
referenced hereto. For greater certainty, it has no indebtedness, liabilities or
commitment in favour of any third party in respect of any of its business or activities
which it pursued prior to this Agreement. |
| |
2.5 |
|
InvestNet represents and warrants that neither itself nor any of its current or former
directors, officers has been the subject of investigation or any disciplinary action by
the SEC or NASD for a minimum of five 5 years immediately prior to the execution of this
Agreement. |
| |
2.6 |
|
InvestNet has full power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby; all approval and consent required in respect of the
transactions hereunder have been given to and obtained by InvestNet, and no further
consent, approval or action or proceeding on the part of InvestNet, its shareholders or
its directors is required; the execution, delivery and performance of this Agreement by
InvestNet and its directors have been duly and validly approved by InvestNet, its
directors and shareholders pursuant to the Certificate of Incorporation and By-Laws of
InvestNet. |
6
| |
2.7 |
|
InvestNet’s common shares are quoted on the OTCBB under the symbol “XXXX”
and the Company will retain such quotation on the OTCBB until the Closing of the
transactions contemplated herein. The execution, delivery and performance of this
Agreement by InvestNet will not violate any laws, regulations, rules, provisions or
policies, including without limitation, SEC and NASD rules, provisions and policies.
Nothing contained and contemplated herein will adversely affect the current and
post-transaction listing status and privileges of InvestNet’s common shares traded on
OTCBB. |
| |
2.8 |
|
Since the last financial statements annexed hereto as Schedule II ending on September 30,
2003, there has been no change in circumstances that has had or InvestNet may expect to
have a material adverse effect on the assets, business and affairs of InvestNet. |
| |
2.9 |
|
InvestNet is not a party to any oral or written i) contract for the employment of any
director, officer or employee, ii) profit sharing, bonus, deferred compensation, stock
option, severance pay, pension benefit, or retirement plan, iii) agreement, contract, or
indenture relating to the borrowing of money, iv) guaranty of any obligation, for the
borrowing of money or otherwise, v) collective bargaining agreement; or vi) agreement with
any present or former officer or director of InvestNet. |
Article Three
Representations
and Warranties of Advance Tech
| |
3.1 |
|
Advance Tech are the owners of all the Transferred Shares in the capital stock of Advance Tech.
|
| |
3.2 |
|
Advance Tech is a business corporation duly incorporated and validly existing and in good
standing under the laws of the British Virgin Islands. |
| |
3.3 |
|
Advance Tech Warrantors have the full power and authority to enter into this Agreement and
to consummate the transactions contemplated hereby. All approval, consent required in
respect of the transaction hereunder have been given and have been obtained by Advance
Tech. No further consent, approval or action or proceeding on the part of Advance Tech is
required. |
| |
3.4 |
|
The transfer and assignment by each of Advance Tech of the Transferred Shares shall in all
aspects be considered as separate transfer and assignment. |
| |
3.5 |
|
Since September 31, 2003, Advance Tech’s business has been operated substantially in
accordance with all laws, rules, regulations, orders of competent regulatory authorities,
and there has not been |
| (1) |
|
any event or change in circumstances that has had, or which Advance Tech expect
to have, a materials adverse effect on Advance Tech or its business; |
| (2) |
|
any change in liabilities of Advance Tech that has had, or which Advance Tech
may expect to have, a material effect on Advance Tech or its business; |
| (3) |
|
any incidence, assumption or guarantee of any indebtedness of Advance Tech for
borrowed money of Advance Tech; |
7
| (4) |
|
any payments by Advance Tech in respect of any indebtedness of Advance Tech for
borrowed money or in satisfaction of any liabilities of Advance Tech; |
| (5) |
|
the creation, assumption or sufferance of the existence of any lien on any
assets reflected on Advance Tech’s Financial Statements; |
| (6) |
|
any change by Advance Tech in its accounting principles, methods or practices in
the manner it keeps its books and records; |
| (7) |
|
any distribution, dividend or bonus by Advance Tech to any of its respective
officers, directors, stockholders or affiliates, or any of their respective
affiliates or associates; and |
| (8) |
|
any material capital expenditure or commitment by Advance Tech or material sale,
assignment, transfer, lease or other disposition of or agreement to sell,
assign, transfer, lease or otherwise dispose of any assets or property by
Advance Tech other than in the ordinary course of business. |
| |
3.6 |
|
Advance Tech has the full corporate power and authority to carry on the business presently
being carried on by it and as proposed to be carried on by it. |
| |
3.7 |
|
Advance Tech holds all licenses, IP, software program and permits as may be requisite for
carrying on its business in the manner in which it has heretofore been carried on. |
| |
3.8 |
|
Since the last financial statements annexed hereto as Schedule II, there has been no
change in circumstances which has had or which Advance Tech may expect to have any adverse
effect on the assets, business and affairs of Advance Tech. |
| |
3.9 |
|
Schedule II annexed hereto are true and complete copies of the audited annual financial
statements of Advance Tech for the years March 2001 through to March 2003, and the
unaudited interim financial statements ending on September 30, 2003, all compiled in
accordance with the account principles generally accepted in Hong Kong. Advance Tech shall
cause Advance Tech to prepare and provide InvestNet with audited financial statements for
the last two years (March 2003 and 2002) in accordance with US GAAP as soon as practically
possible for the purpose of filing with SEC. |
Article Four
Covenants
| |
4.1 |
|
This Agreement shall enter into force and be binding on the Parties as from the date first
above written. |
| |
4.2 |
|
The Parties shall cooperate and work with each other in good faith to provide to each
other with all information necessary to enable the Parties to complete their respective
due diligence. |
8
| |
4.3 |
|
The Parties agree that InvestNet will pay to Century Square Enterprises Inc.
(“Century”) or its designate, a finder’s fee in shares of InvestNet equal
to 7% of and in addition to the shares issued to Advance Tech under this Agreement. This
is calculated to be 1, 561, 875 shares of InvestNet if all the issued shares of Advance
Tech are tendered in exchange for shares of InvestNet. Such finder fees in shares shall be
issued to Century or its designate by InvestNet upon completion of the whole transaction
contemplated herein. The actual number of shares to be paid to Century or its designate is
to be adjusted accordingly in the event that less than 100% of issued shares of Advance
Tech are tendered in exchange for shares of InvestNet. |
| |
4.4 |
|
The Parties shall cooperate in order to comply with all legal and regulatory provisions
required to maintain and continue the trading status of the common shares of InvestNet at
NASD. |
Article FiveMiscellaneous
Provisions
| |
5.1 |
|
This Agreement shall be governed by and construed in accordance with the laws of the state of Nevada.
|
| |
5.2 |
|
Any and all disputes arising out of or in connection with this Agreement, or in respect of
any defined legal relationship associated therewith or derived there from, shall be first
addressed through consultation and/or mediation. Disputes unresolved through consultation
and mediation shall be referred to and finally resolved by arbitration under the Rules of
the International Chamber of Commerce (“ICC Rules”) as those rules may be
amended and replaced from time to time, at the Hong Kong International Arbitration Centre,
Hong Kong, SAR. |
| |
5.3 |
|
The arbitration tribunal shall consist of three (3) arbitrators to be named and appointed
in accordance with the applicable rules of procedures of the ICC International Court of
Arbitration. For the avoidance of doubt, each InvestNet and Advance Tech acting jointly
shall have the right to name one (1) arbitrator and the chairman and the third arbitrator
of the tribunal shall be appointed pursuant to the applicable rules of procedure. The
final award of the arbitration tribunal shall be final and binding upon the Parties. The
losing Party shall bear and reimburse the prevailing Party costs and expenses associated
with the preparation and prosecution of the arbitration and any enforcement proceedings,
including attorney fees on solicitor-client basis, unless otherwise directed by the
arbitration tribunal or court of competent jurisdiction. |
| |
5.4 |
|
Where the losing Party fails to comply with such order and award, the prevailing Party
shall be free to apply to a court of competent jurisdiction for an order of enforcement or
such other orders or relief as may be properly granted by the court. |
| |
5.5 |
|
Nothing contained herein will limit or prohibit the rights of either Party to apply to a
court of competent jurisdiction for interim protection such as, by way of example, an
interim injunction or order enforcing its rights hereunder in a court of competent
jurisdiction, prior or subsequent to the arbitration. |
9
| |
5.6 |
|
No condoning, excusing or overlooking by a Party of any default, breach or non-observance
by the other at any time or times in respect of any covenants, provisions, or conditions
of this Agreement shall operate as a waiver of such Party’s rights under this
Agreement in respect of any continuing or subsequent default, breach or non-observance, so
as to defeat in any way the rights of such Party in respect of any such continuing or
subsequent default or breach and no waiver shall be inferred from or implied by anything
done or omitted by such Party in the absence of an express waiver in writing. |
| |
5.7 |
|
No amendment or other modification of this Agreement will be binding unless executed in
writing by the Parties hereto. The Parties shall cooperate in order to comply with all
legal and regulatory provisions required to maintain and continue the trading status of
the shares of InvestNet at NASD. |
| |
5.8 |
|
This Agreement and everything contained herein will inure to the benefit of and be binding
upon the Parties and their permitted successors and assigns. |
| |
5.9 |
|
This Agreement may be executed in counterparts and by facsimile transmission, each such
counterpart together shall constitute a single instrument. Three (3) original copies of
such counterparts executed by each Party shall be forth with delivered to all other
Parties by registered express mail. |
| |
5.10 |
|
For all purposes, this Agreement shall be deemed to be signed and executed at Vancouver,
British Columbia, Canada. |
| |
5.11 |
|
Schedules annexed hereto shall form an integral part of this Agreement. |
| |
5.12 |
|
This Agreement shall enter into force as of the date first above written. |
| |
|
|
IN WITNESS
WHEREOF the Parties have duly executed this agreement. |
|
|
| THE COMMON SEAL of InvestNet Inc., was hereto affixed in |
|
) |
|
| the presence of: | |
) | |
|
| /s/ Xxxxxxxx Xxxxxxxx | |
) | |
| Authorised Signatory | |
) | |
|
| /s/ Xxxxxxx Xxxxxx | |
) | |
| Authorised Signatory | |
) | |
|
10
|
|
| THE COMMON SEAL of |
|
) |
|
| Agrade Limited were hereto | |
) | |
| affixed in the presence of: | |
/s/ Xx Xxxx Lung Xxxxxxx
|
|
| THE COMMON SEAL of |
|
) |
|
| Advance Tech Asset Management Limited | |
) | |
| was hereto affixed in the presence of: | |
/s/ Xx Xxxx Lung Xxxxxxx
THE COMMON SEAL of Advance Tech
(Asia)) Limited
|
|
| was hereto affixed in the presence of: |
|
) |
|
|
| /s/ Xx Xxxx Lung Xxxxxxx | |
) | |
11
Schedule I
Advance Tech
Shareholders
|
|
|
| Name |
|
Number of Shares |
|
% |
|
| Agrade Limited |
|
500 |
|
80 |
.39 |
| Advance Tech Asset Management Limited | |
76 |
|
12 |
.22 |
| Bentworth Limited | |
7 |
|
1 |
.13 |
| Starlight e-Tech (Holdings) Limited | |
11 |
|
1 |
.77 |
| Xxxxx Xxxxxx Hui | |
7 |
|
1 |
.13 |
| Lin Xxxxx Xxx | |
0 |
|
0 |
.00 |
| Xxxx Xxx Ying | |
1 |
|
0 |
.16 |
| Chou Xx Xxx | |
1 |
|
0 |
.16 |
| Xxx Xxx Man | |
3 |
|
0 |
.48 |
| Ho Chung Xxx Xxxx | |
4 |
|
0 |
.64 |
| Xxxx Xxxx Xxxx | |
0 |
|
0 |
.00 |
| Xxxxx Xxxx Xxxx | |
4 |
|
0 |
.64 |
| Xxxx Xxxx Xxxx Xxxxxxx | |
2 |
|
0 |
.32 |
12
Schedule II
Financial Statements of
InvestNet
13
Schedule III
Financial Statements of
Advance Tech
COMBINED INCOME STATEMENT
Period from 1st Year ended
March, 2000 to 31st March, Year ended 31st
31st March, 2001 2002 March, 2003
HK$ HK$ HK$
Turnover 2,647,710 11,344,662 15,459,420
Cost of sales (1,477,658) (1,825,025) (1,189,543)
------------------- ---------------- -----------------
Gross profit 1,170,052 9,519,637 14,269,877
Other revenue 12,917 229 340
Selling and distribution costs (651,876) (384,820) (2,992,157)
Administrative expenses (2,088,777) (1,867,653) (3,147,847)
Other operating expenses (791,213) (285,819) (342,344)
------------------- ---------------- -----------------
(Loss)/profit from operating
activities (2,348,897) 6,981,574 7,787,869
Finance costs (15,469) (16,991) (23,684)
------------------- ---------------- -----------------
(Loss)/profit before taxation (2,364,366) 6,964,583 7,764,185
Taxation - (755,000) (1,290,000)
------------------- ---------------- -----------------
(Loss)/profit attributable to shareholders (2,364,366) 6,209,583 6,474,185
=================== ================ =================
Dividend - - -
------------------- ---------------- -----------------
14
COMBINED BALANCE SHEET
At 31st March,
2001 2002 2003
HK$ HK$ HK$
Assets
Non-current assets
Fixed assets 409,566 425,855 6,769,200
Current assets
Trade and other receivables 643,140 9,612,000 8,872,000
Prepayment and deposits 16,000 2,500 1,142,852
Bank balances 27,450 1,880 584,323
---------------- --------------- ----------------
686,590 9,616,380 10,599,175
Less: Current liabilities
Trade and other payables 493,590 856,000 87,358
Amount due to a director 1,866,152 3,275,238 42,386
Amount due to a shareholder - - 659,740
Obligations under finance leases 100,000 117,537 95,664
Provision for taxation - 755,000 847,726
---------------- --------------- ----------------
2,459,742 5,003,775 1,732,874
Net current (liabilities)/assets (1,773,152) 4,612,605 8,866,301
---------------- --------------- ----------------
Total assets less current liabilities (1,363,586) 5,038,460 15,635,501
Non-current liabilities
Obligations under finance leases - 192,463 95,333
Deferred taxation - - 1,040,000
---------------- --------------- ----------------
NET (LIABILITIES)/ASSETS (1,363,586) 4,845,997 14,500,168
CAPITAL AND RESERVES
Share capital 866 866 952
Reserves (1,364,452) 4,845,131 14,499,216
---------------- --------------- ----------------
(CAPITAL DEFICIENCY) / SHAREHOLDERS' (1,363,586) 4,845,997 14,500,168
FUNDS
================ =============== ================
15
