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EXHIBIT 10.3
THIS AGREEMENT is made this 12th day of June in the Year Two Thousand and One
BETWEEN
Delightmen Limited whose registered office is situate at Room 1702, 1715-16,
17/F., Xxxxx Xxxxx, 0 Xxxxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx, Xxx Xxx Xxx; ([name of
Xxx Xxx Yin in Chinese] holder of Hong Kong Identity Card No. X000000(0), of
Xxxx 00X, Xxxxx 00, Xxxxx 0, Xxxxxx Xxxx, Xxxxxxx; Ever Base Investment Limited
whose registered office is situate at Room 1702, 1715-16, 17/F., Xxxxx Xxxxx, 0
Xxxxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx; and Sham Chi Kit ([name of Sham Chi Kit in
Chinese]) holder of Hong Kong Identity Card No. X000000(0), of Flat B, 1/F.,
1A-B Link Road, Xxxxxxxx Heights, Happy Valley, Hong Kong (hereinafter
collectively called "the Vendors") of the one part and
Quintalinux Limited of Suites 2207-2208, 22nd floor, Metro Centre II, 21 Xxx
Xxxx Street, Kowloon, Hong Kong (hereinafter referred to as "the Purchaser") of
the other part.
WHEREAS
1. SONIK INTERIOR CONTRACTING COMPANY LIMITED [name of Sonik in Chinese] is a
Hong Kong private limited company bearing company registration no. 296497
with its registered office address situated at Room 1702, 1715-16, 17/F.,
Xxxxx Xxxxx, 0 Xxxxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx carrying on a business of
CONCEPTWEALTH INTERIOR CONTRACTING COMPANY ([name of Conceptwealth Interior
Contracting Company in Chinese]) (Business Registration No.
14031923-001-01-01-05) and has an authorized share capital of HK$25,000.00
consisting of 25,000 shares of HK$1.00 each as shown in Schedule A
(hereinafter referred to as "the Company"). The Company is now holding the
shares of Sonik Trading (China) Company Limited, Sonik Building Materials
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Company Limited, Sonik Interiors (China) Limited and Sonwa Interiors
(China) Limited.
2. Delightment Ltd. is, Ever Base Investment Ltd. and Xxx Xxx Yin is and was
the registered and beneficial owner of 5000 shares of the Company.
Delightment Ltd. is and was the registered owner of 5,000 shares of the
Company but in fact Xxx Xxx Yin is and was beneficial owner of the said
5,000 shares of the Company. Ever Base Investment Ltd. is and was the
registered owner of 15,000 shares of the Company but in fact Sham Chi Kit
is and was beneficial owner of the said 15,000 shares of the Company. Xxx
Xxx Yin is and was also the registered and beneficial owner of 5,000 shares
of the Company. The Vendors are the shareholders of the Company of the
respective shareholdings now registered under their names as specified in
Schedule A.
3. The Company is at the date of this Agreement indebted to its Creditors in
the total sum shown in the Audited Accounts attached under Annexure A.
4. The Company's business is to carry out trade and business in the interior
design and contracting industry.
5. The Vendors has after completion of the sales shares agreed to guarantee
the net income of the Company not less than HK$12M during the period from
1st October 2000 to 31st March 2003.
6. The Vendors has also agreed to guarantee the payment of the outstanding
account receivable from the debtors of the Company.
7. The Purchaser is now desirous of acquiring an aggregate of One-Hundred
percent (100%) of the total shares in the Company from the Vendors but not
including the shares of Sonik Trading (China) Company Limited, Sonik
Building Materials Company Limited, Sonik Interiors (China) Limited and
Sonwa Interiors (China) Limited with the approval of all the members of the
Company upon the terms and conditions appearing hereinafter.
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WHEREBY IT IS AGREED by and between the parties as follows:-
1. In this Agreement and the Schedule unless the context otherwise requires:
"the Accounts" means the report of the directors and the
audited Statement of Accounts of the
Company attached in Annexure A
"Completion" means the performance of their respective
obligations by the parties hereto under
Clause 5
"Completion Date" means as set out in Clause 5
"Company Liabilities" means any civil claims suits charges and taxes
liabilities imposed on the Company by
any regional or national governmental
authorities of the People's Republic of
China and Hong Kong Special
Administrative Region
"Audited Accounts" means the audited balance sheet of the Company
as at 30th September 2000 and the Profit
and Loss Account of the Company for the
period from 1st April 2000 to 30th
September 2000, copies of which are
attached under Annexure A
"Payment Mode & Dates" means please refer to Schedule C
"Account Receivable" means the outstanding account receivable of
the Company up to 30th September 2000.
"Purchaser's Office" means Xxxxxx 0000-00, Xxxxx Xxxxx, 000 Xxxx'x
Xxxx, Xxxxxx Xxxxx, Xxxxxx Xxxx,
Xxxx Xxxx
"Sale Shares" means 100 percent of the 25,000 shares i.e.
25,000 shares, please see Schedule D
1.2 Reference in this Agreement to recitals, clauses and schedules are to the
Recitals, Clauses and Schedules of this Agreement and the Schedules shall
be deemed to be incorporated into and form part of this Agreement.
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1.3 The headings to the clauses are for ease of reference only and shall not
affect the interpretation of this Agreement.
1.4 All representations warranties undertakings indemnities covenants
agreements and obligations given or entered into by more than one person
are given and entered into jointly and severally.
1.5 The expressions "the Vendors", "the Purchasers" and "the Creditors" shall
where the context permits include their respective successors and personal
representatives.
1.6 The expression "person" shall where the context permits include
corporation.
2a. Each of the Vendors shall sell as beneficial owners (and shall cause each
other to sell) those shares set opposite to their names in Schedules A in
such amount set out in Schedule D and the Purchaser relying on each of the
representations and warranties of the undertakings and indemnities given by
the Vendors herein contained shall purchase the Sale Shares as set out in
Schedule D on and with effect from the Completion Date free from all
liabilities encumbrances charges liens rights of pre-emption and with all
rights attaching thereto.
2b. In consideration of the Purchaser agreeing to purchase the sales shares
from the Vendors, the Vendors hereby agree to guarantee the net income of
the Company not less than HK$12M during the period from 1st October 2000 to
31st March 2003 after completion of the sales and purchases of the sales
shares and hereby agree to guarantee the payment of the outstanding account
receivable from the debtors of the Company. The Purchaser hereby agree to
provide an assistance for tendering for projects over a contract sum of
HK$10M during the guarantee period.
2c. In consideration of the Purchaser agreeing to purchase 100% of sales
shares, Xxx Xxx Yin and Sham Chi Kit, the existing directors of the
Company, hereby agree not to resign from the Company during the period from
the date of this agreement to
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31st March 2003 and agree to perform their best performance to serve as
directors of the Company in order to maintain the existing client.
2d. In case of Xx. Xxx Tat and Xx. Xx Xxx Xx, Perick, the existing directors
and shareholders of the Purchaser, resigns or is removed from the board of
directors of the Purchaser, the Vendors shall be entitled to purchase back
all the shares of the Company.
3. The purchase price for the Sale Shares shall be the sum of Hong Kong
Dollars Six Million Only (HK$6,000,000.00) ("the Purchase Price") and shall
be apportioned as set out in Schedule D and to be paid by the Purchaser to
the Vendors in such mode and manner as stipulated in Schedule C.
4. The Purchaser shall not be obliged to complete the purchase of any of the
Sale Shares unless the purchase of all the Sale Shares is completed
simultaneously.
5. Subject as hereinafter provided Completion shall take place within 14 days'
written notice given by the Purchaser to the Vendors (whichever is the
earlier) at the office of the Purchaser's office when all (but not part
only unless the Purchaser so agrees) of the following business shall be
duly transacted. After signing of this agreement, each of the Vendor shall
not sell, transfer, pledge or dispose of any insist and/or right in and of
the shares held by each of the Vendor.
6. Completion is conditional upon the Vendors (a) having obtained the written
resolution of the Board of Directors of the Company -
(i) authorising the sale and purchase of the Sale Shares by the Vendors
and the Purchaser;
(ii) consenting the appointment of new directors to the Board as may be
deemed necessary or requested by the Purchaser; and
(iii) undertaking to register of the Sale Shares under the names of the
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Purchaser in the Company books and records.
AND (b) satisfactorily answered the requisitions that may be raised by
Purchaser in relation to the financial position of the Company, the assets
and liabilities contained in the Company Accounts and Management Accounts
provided that -
(i) any requisitions may be made orally or in writing to the Vendors by
the Purchaser or its solicitors;
(ii) if the Purchaser shall make and insist on any requisition in respect
of the financial position or business undertakings or operation of the
Company which the Vendors shall be unable or (on the grounds of
difficulty delay or expense or on any other reasonable ground)
unwilling to remove or comply with, the Vendors shall notwithstanding
any previous negotiation, be at liberty on giving to the Purchaser's
solicitors not less than SEVEN (7) working days' written notice to
annul the sale and purchase of the Sale Shares in which case, unless
the requisition shall have been in the meantime withdrawn, the sale
and purchase of the Sale Shares shall at the expiration of the said
notice be annulled.
7. Upon completion, the Vendors shall deliver to the Purchaser the following:-
(a) duly executed sold notes and instruments of transfer in favour of the
Purchaser and/or its nominees accompanies by the share certificates in
respect of the Sale Shares;
(b) the written Board Resolution for appointment of the Directors set out
in Schedule B;
(c) the written resignations of the Directors, if any shall be duly
endorsed with a signed certificate of the director in question
pursuant to
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Section 157D(3)(b) of the Companies Ordinance;
(d) the written Board resolution of the Company pursuant to Clause 6
hereinabove;
(e) the written guarantee duly executed by the Vendors in favour of the
Purchaser for guaranteeing the payment of all outstanding account
receivable of the Company.
(f) the written guarantee duly executed by the Vendors in favour of the
Purchaser for guaranteeing the net income of the Company not less than
HK$12M during the period from 1st October 2000 to 31st March 2003.
(g) all such other documents as may be necessary for the performance of
Clause 6 (b) hereinabove and required to give a good title to the Sale
Shares and to enable Purchaser and/or its nominees to become the
registered holders.
8. Upon completion the Vendors shall procure the passing of resolutions of the
Board of Directors of the Company which:-
(a) accept the resignations referred to in Clause 7 and appoint such
persons as nominated by the Purchaser and/or its nominees as Directors
of the Company set out in Schedule D with effect from the Completion
Date;
(b) appoint such person nominated by the Purchaser as Director to the
Company, if applicable;
(c) approve the transfer and registration of both the share transfers of
the Sale Shares (subject to the same being stamped) who shall also
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resolve that new certificates of the Sale Shares made out in the name
of the Purchaser or its nominees be sealed with the Common Seal of the
Company;
(d) execute and do and cause or procure to be executed and done all such
other documents instruments acts and things as the Purchaser may
reasonably require in order to perfect the right title and interest of
the Purchaser to and in the Sale Shares;
(e) alter and/or revoke all existing bank accounts or mandate or
signatories in force for the Company in such manner as the Purchaser
shall require; and
(f) such other business as the Purchaser shall reasonably require for the
purposes of this Agreement to be duly transacted.
(g) the transfer of the shares of Sonik Trading (China) Company Limited,
Sonik Building Materials Company Limited, Sonik Interiors (China)
Limited and Sonwa Interiors (China) Limited to the Vendor or their
nominees, without consideration at the cost of the Vendors.
9. If any of the provisions of Clauses 6, 7 & 8 is not fulfilled or fully
complied with by the Vendors or waived by the Purchaser on or before the
Completion Date and/or there is a breach or non-fulfillment of the
Warranties on or before the Completion Date, the Purchaser may be notice in
writing to the Vendors rescind this Agreement, in such event the Vendor is
not entitled to bring any legal proceedings to enforce specific performance
of this Agreement or to seek any compensation from the Purchaser.
10. The Vendors hereby declare and confirm that they are fully aware of the
fact that in entering this transaction the Purchaser relies on the
information set out in the Company Accounts and Management Accounts
supplied by the Vendors AND the
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representations made by the Vendors in the course of negotiation and the
Vendors therefore jointly and severally warrant represent to and undertake
with the Purchaser:-
(a) the financial position of the Company was that disclosed to us by the
latest audited balance sheet and accounts of the Company as at the
date thereof and since that date the financial position of the Company
has not been adversely affected by losses or other changes.
(b) full disclosure has been made in that balance sheet or in
correspondence with us of:
i. all onerous commitments of the Company;
ii. all unusual or non-recurring items materially affecting the
financial position of the Company;
iii. all known and foreseeable liabilities whether present or
contingent including provisions and reserves for taxation on
profits earned up to the date of that balance sheet;
iv. all bad and doubtful debts of the Company;
v. any material litigation existing or pending against the Company;
vi. all dividends paid or proposed, exceptional payments in respect
of directors' emoluments (including pension contributions) and
any exceptional or extraordinary items;
vii. all Directors' service contracts; and
viii. share capital, authorized, issued and under option.
(c) the statements set out in the Company Accounts and Management Accounts
are true complete and accurate in all respects;
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(d) each of the Vendors have the right power and authority to sell and
transfer the Sale Shares upon the terms set out herein and the Sale
Shares will be registrable in the names of the Purchaser or such other
names as the Purchaser may require;
(e) that the representations and warranties of the Vendors contained in
this Agreement and in any certificate or other material delivered
under this Agreement are accurate and complete, do not contain any
untrue statement of a material factor, considered in the context in
which presented, omit to state a material fact necessary in order to
make this statements and information contained herein or therein not
misleading; and
(f) all representations warranties and undertakings in this Agreement
shall be deemed to be repeated as at Completion as if all references
therein to the date of this Agreement were references to the date of
Completion.
11. The Vendors hereby jointly and severally agree with and undertake to the
Purchaser as follows:-
(i) that they will fully and effectually indemnify and at all times keep
fully and effectually indemnified the Company and the Purchaser from
and against any and all taxation penalties imposed upon the Company by
regional and/or national governmental authorities resulting from or by
reference to any income profits gains transactions events matter or
things earned accrued lost received entered into or occurring prior to
Completion, whether alone or in conjunction with any other
circumstances whenever occurring and whether or not such taxation or
penalties is chargeable against or attributable to any other person
firm or company;
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(ii) to indemnify and keep indemnified the Purchaser (for themselves and as
trustees for the Company) against any loss or liability suffered by
the Purchaser or the Company as a result of or in connection with any
breach of and/or inaccuracies in any of the representations warranties
and undertakings herein given in this Agreement.
12. The Vendors warrant and undertake that they shall perform do and/or execute
all business acts things or documents as the Purchasers require for the
purpose of this Agreement notwithstanding Completion.
13. All stamp duty that is payable upon the transaction contemplated by this
Agreement, Instrument of Transfer and Sold & Bought Notes shall be paid by
the Purchaser.
14. The Purchaser's legal costs of and incidental to the preparation and
completion and performance of this Agreement shall be borne by the parties
in equal shares whilst the Vendor's solicitors own costs be borne by the
Vendors absolutely.
15. This Agreement shall so far as it remains to be performed continue in full
force and effect notwithstanding Completion except in respect of those
matters then already performed.
16. Time shall in every respect be of the essence of this Agreement.
17. No variation of this Agreement or of any document executed pursuant to this
Agreement shall be valid unless in writing and signed by or on behalf of
the parties hereto.
18. This Agreement supersedes any previous agreement between the parties in
relation to the acquisition of the Sale Shares and the parties acknowledge
that no claim shall arise in respect of any agreement so superseded by this
Agreement.
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19. Notwithstanding the Completion of the sale and purchase of the Sale Shares,
the warranties indemnities undertakings and agreements herein contained
shall continue hereafter to subsist for so long as may be necessary for the
purpose of giving effect to each and every of such warranties indemnities
undertakings and agreements in accordance with the terms hereof.
20. This Agreement shall be governed by and construed in all respects in
accordance with the laws of Hong Kong.
21. Any notice claim demand or document ("documents") to be given or served by
one party to or on the other party in connection with this Agreement shall
be sufficiently given or served if delivered to it personally or if left at
or sent by post to it at the address given at the head of this Agreement or
as changed by written notification to the other at any time. Any document
shall be deemed to be served at the time when the same is handed to or left
at the address of the party to be served and if by post within the
territory of HKSAR shall be deemed to have been received THREE (3) working
days after the date upon which posting is proved to have occurred.
IN WITNESS whereof this Agreement has been entered in this day and year first
above written.
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SCHEDULE A
SHAREHOLDERS OF THE COMPANY
NAME OF THE SHAREHOLDER NO. OF SHARES CLASS OF SHARES
----------------------- ------------- ---------------
Delightmen Ltd. 5,000 Ordinary
Ever Base Investment 15,000 Ordinary
Xxx Xxx Yin 5,000 Ordinary
Total: 25,000
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SCHEDULE B
MEMBERS OF THE BOARD
NAME OF DIRECTOR CAPACITY
---------------- --------
Chu Tat Director
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SCHEDULE C
PAYMENT MODE AND MANNER
The Purchase Price as provided in Clause 3 in the sum of HK$6,000,000.00 shall
be paid by the Purchaser to the Vendor(s) upon signing of this Agreement or
shall be paid by the Purchaser to the Vendor or such other manner to be agreed
by the them.
SCHEDULE D
NUMBER OF SHARES TO BE SOLD BY EACH VENDOR
NAME OF THE VENDOR SHAREHOLDER NO. OF SHARES TO BE SOLD PRICE
------------------------------ ------------------------ -------------
Delightmen Ltd. 5,000 $1,200,000.00
Ever Base Investment 15,000 $3,600,000.00
Xxx Xxx Yin 5,000 $1,200,000.00
------ -------------
Total: 25,000 $6,000,000.00
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WARRANTIES
1. The particulars relating to the Company set out in this Agreement and in
particular the Recitals and the Schedules are true and accurate.
2. The copy of the Memorandum and Articles of Association of the Company
provided by the Vendors is true complete update and accurate.
3. The Company has been duly incorporated and that there have been no changes
in the constitution of the company since the date of incorporation that
have not been notified to the Registrar of Companies.
4. The Company has been duly incorporated and all documents required by the
Companies Ordinance to be filed with the Registrar of Companies or other
corresponding official in respect of the Company have been prepared and
duly filed.
5. The statutory books and minutes books of the Company have been properly
written up and the Company has not received any application or request for
rectification of its register of members and compliance has been made with
all other legal requirements concerning the Company and all issues of
shares debentures or other securities thereof. Without prejudice to the
foregoing, the minutes book of shareholders' meetings respectively contain
full and accurate records of all resolutions passed by the directors and
the shareholders of the Company respectively and no resolutions have been
passed by either the directors or shareholders of the Company which are not
recorded in the relevant minutes book.
6. The Company and every officer of the Company (in his capacity as such) has
complied with all relevant legislation including (but without limitation)
legislation relating to companies and securities taxation and employment
protection.
7. All statutory obligation of the Company have been fully and properly
performed.
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8. No alteration has been made to the Memorandum and Articles of Association
of the Company which has not been disclosed to the Purchaser in this
Agreement.
9. There is no option, right to acquire, mortgage, charge, pledge, lien or
other form of security or encumbrance on over or affecting the issued or
unissued share capital of the Company and no person has the right to call
for allotment issue sale or transfer of any such share capital and there is
no agreement or commitment to give or create any of the foregoing and no
person has made any claim to be entitled to any of the foregoing.
10. The Company has not paid or agreed to pay any dividends.
11. The Shares are at Completion Date the only issued shares of the Company.
12. The financial position of the Company as at 30th September 2000 is
disclosed in the Audited Accounts.
13. The accounting and other books and records of the Company have been and
will be properly written up and accurately present and reflect in
accordance with generally accepted accounting principles and standards in
Hong Kong all the transactions entered into by the Company or to which it
has been a party and there are at the date hereof no material inaccuracies
of any kind contained or reflected in any of the said books and records,
and at the date hereof and on Completion they give and reflect a true and
fair view of the financial position of the Company and of its fixed and
current assets and liabilities, debtors and creditors.
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14. The Accounts give a true and fair view of the state of affairs of the
Company as at and the results of the Company in respect of the period it
specified; and make full provisions for all liabilities or make proper
provision for (or contain a note in accordance with good accounting
practice in Hong Kong) all deferred or contingent liabilities and whether
liquidated or unliquidated at the date thereof including liabilities in
respect of taxation.
15. Neither the Vendors nor any director or officer of the Company, nor the
Company itself are under investigation by any department or authority of
any government in any matter concerning the Company.
16. Save as disclosed in this Agreement, there are in existence no powers of
attorney given by the Company.
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ANNEXURE A
Financial Statements of the Company approved and signed by its auditors for the
year 1995-1996, 1996-1997, 1997-1998 together with management accounts signed by
its authorized directors until
Signed by Xx. Xxx Xxx Xxx, a )
director, for and on behalf of ) For and on behalf of
Delightmen Limited in the presence ) Delightmen Limited
of:- ) /s/
-----------------------
) Xxx Xxx Xxx
) Authorised Signature(s)
SIGNED by Xx. Xxx Xxx Xxx in the )
in the presence of:- ) /s/
) Xxx Xxx Xxx
)
)
)
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SIGNED by Mr. Sham Chi Kit, a ) For and behalf of
director, for Ever Base ) Ever Base Investment Limited
Investment Limited in the ) /s/
----------------------------
presence of:- ) Sham Chi Kit
)
)
SIGNED by Mr. Sham Chi Kit, in )
the presence of:- ) /s/
) Sham Chi Kit
)
)
)
SIGNED by Xx. Xxx Tat, a ) For and on behalf of
director, for and behalf of ) QUINTALINUX LIMITED
Quintalinux Limited in the ) /s/
--------------------
presence of:- ) Chu Tat
)
)
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