Exhibit 4.81
Confidential Execution
SHANGHAI WEILAN COMPUTER CO., LTD.
Yuan Jinhua
Xxxx Xxxx
and
Jing Xxxxxxxx
Xxxx Xxxxxxx
Xxxx Huawei
Xxxxx Xxxxx
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EQUITY TRANSFER AGREEMENT
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In relation to Hainan Xxxxx Xxxx Computer Co., Ltd.
June 15, 2005
EQUITY TRANSFER AGREEMENT
This equity transfer agreement (this "Agreement") is entered into on June
15, 2005 by and among the following parties in Shanghai, People's Republic of
China ("PRC"):
(1) Jing Shengmei
Address: A1705, XxxxxXxxxx Xxxxx, XxxXxxx Xxxx Xxxx, Xxxxxxxx, Xxxxxxxxx
Xxxxxxxx.
ID number: 000000000000000000
(2) Xxxx Xxxxxxx
Address: Unit 202, Xx.0 Xxxx xx XxxxXxXx Xxxxxx, XxxXxx Xxxxx Xxxx,
Xxxxxxxx, Xxxxxxxxx Xxxxxxxx.
ID number: 000000000000000000
(3) Chen Huawei
Address: ShuangZhongGong Huaqiao Hospital Dormitory, ChengDong Fengxiang
Street, Chenghai City, Guangdong Province.
ID number: 000000000000000000
(4) Xxxxx Xxxxx
Address: Xx.00 Xxxxxxx Xxxx, Xxxxxxxx Xxxx, Xxxxxxxxx Xxxxxxxx.
ID number: 342723741216003
(Each of Jing Shengmei, Xxxx Xxxxxxx, Chen Huawei and Xxxxx Xxxxx hereof is
individually to be known as "Transferor", and collectively known as
"Transferors".)
(5) Yuan Jinhua
Address: Xxxx 000, 00 Xxxx Xxxxxx 222 Lane Xx.0, XxxXx Xxxx, Xxxxxxxxx
Xxxxxxxx, Xxxxxxxx.
ID number: 330501760701302
(6) Xxxx Xxxx
Address: Xxxx 00, XxxXxx Xxxx Xx.0000, Xxxx'xx Xxxxxxxx, Xxxxxxxx.
ID number: 000000000000000000
(Each of Yuan Jinhua and Xxxx Xxxx hereof individually to be known as
"Transferee" and collectively known as "Transferees". Each of the parties above
to be known as "Party" and collectively known as "Parties".)
(7) Shanghai Weilan Computer Co., Ltd. ("Shanghai Weilan")
Address: Xx.000 XxXxx Xxxx Xxxx, XxXx Xxxx, Xxxxxxx Xxxxxxxx, Xxxxxxxx
Legal representative: Hu An'kai
WHEREAS:
1. Hainan Xxxxx Xxxx Computer Co., Ltd. is a limited liability company duly
incorporated and existing in Hainan Province, People's Republic of China
(with its registered address at 00X Xxxxx Xxxxx, Xxxxxx Xxxxxx, Xxxxxxx
District, Haikou, and legal representative Jing Shengmei, hereinafter
referred to as "Company"), with its registered capital RMB ten million
(RMB10,000,000);
2. The Transferors are the registered shareholders of the Company, Jing
Shengmei and Xxxx Xxxxxxx, and Chen Huawei and Xxxxx Xxxxx legally hold
40%, 30%, 15%
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and 15% respectively, of the Company's equity interests and together with
all rights and advantages thereon.(hereinafter referred to as "Transfer
Equity");
3. In accordance with the terms and conditions hereof, the Transferors intend
to sell and the Transferees intend to purchase the entire equity interests
and together with all rights and advantages attached thereon held by the
Transferors in the Company (hereinafter referred to as "Equity Transfer").
4. Shanghai Weilan agrees to guarantee on the obligations of the Transferees
to pay off the transfer price in accordance with the terms and conditions
of the Agreement.
THEREFOR, after equal and friendly consultation, the Parties and Shanghai Weilan
hereby agree to enter into the Agreement and to be bound by the terms and
conditions thereof.
ARTICLE 1
SELL AND PURCHASE
1.1 In accordance with the terms and conditions of this Agreement and subject
to the conditions hereof, Jing shengmei, Xxxx Xxxxxxx, Chen Huawei and
Xxxxx Xxxxx, agree to sell and Yuan Jinhua and Xxxx Xxxx agree to purchase
the 40%, 30%, 15% and 15% of the equity interests of the Company legally
held by Jing Shengmei, Xxxx Xxxxxxx, and Xxxx Huawei and Xxxxx Xxxxx,
respectively.
1.2 After the Equity Transfer contemplated in this Agreement is consummated,
the Transferors shall not hold any equity interests of the Company, and the
equity structure of the Company shall be:
Shareholder Amount of registered capital Shareholding Percentage
contributed to the Company
Yuan Jinhua RMB5,000,000 50%
Xxxx Xxxx RMB5,000,000 50%
Total: RMB10,000,000 100%
1.3 Transfer Equity shall include such equity interests and together with all
the rights and interests attached thereto and shall be free from any
mortgage, pledge, other security, option, claim and any third party's right
whatever kind and nature (hereinafter referred to as "Encumbrance").
ARTICLE 2
PRICE AND PAYMENT
2.1 The Parties agree for consideration of the Equity Transfer in accordance
with the terms and conditions of this Agreement, subject to Article 2.2,
the Transferee shall pay the equity transfer price in an aggregate amount
of RMB five point five million (RMB5,500,000) (hereinafter referred to as
"Transfer Price").
The Transferees agree to replace the Transferors to pay off the debts in an
aggregate amount of RMB eight million (RMB8,000,000) as the data indicated
in the Appendix B owing to the Company on the Registration Date (as defined
in Article 7.2, the same with the below). The Parties may universally agree
to change the above amount in writing. The Company needs to provide written
evidence to the Transferors indicating such debts have been paid off by the
Transferees within one (1) working day after the Registration Date.
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The Parties understand that the Transfer Price is the full consideration
for the entire Transfer Equity and together with all equity interests and
rights attached thereto.
Shanghai Weilan agrees to guarantee for the payment of Transfer Price by
the Transferees according to this Agreement.
2.2 The Parties agree the Transfer Price shall be paid in three installments as
the following ways:
(1) The Transferees shall within one (1) working day after the Closing
Date (as defined in Article 7.2, the same with the below) pay the
first installment via wire transfer in a amount of RMB one point five
million (RMB1,500,000) to the bank accounts designated by the
Transferors.
(2) The Transferees shall within one (1) working day after the
Registration Date (as defined in Article 7.2, the same with the below)
pay the second installment via wire transfer in a amount of RMB three
million (RMB3,000,000) to the bank accounts designated by the
Transferors.
(3) Subject to Article 2.2(4) below, the Transferees shall pay the third
installment via transfer in an amount of RMB one million
(RMB1,000,000) into the bank accounts designated by the Transferors
prior to November 30, 2005.
(4) The Transferees shall be entitled to deduct corresponding amounts of
moneys from the third installment as provided in above Article 2.2(3)
as compensation for any fine, punishment, suspension or termination of
business or any adverse results incurred by the Company and the
Transferees due to the Transferors' incorrect, untrue, incomplete, or
misleading representation and warranties or breach of the undertakings
or the terms of this Agreement, or any violation of relevant
regulations, policies, or agreements made by telecom operation
provider (including but not limited to China Mobile Co., Ltd. and
China Unicom Co., Ltd., hereinafter referred to as "Telecom
Operator"), including but not limited to:
(i) Any liability arising from any breach of warranties in according
to Article 3.15 made by the Transferors.
(ii) Any payable taxes, overdue interests, fines, other fees and any
penalty incurred by the Company's failure to pay in time any tax
to the tax authorities, withhold any individual income tax ,or
pay any stipulated social insurance and welfare, shall be paid
and fulfilled in an amount equal to the actual sum decided by
relevant documents issued by any relevant governmental
authorities, competent court or arbitration institution;
If the third installment is insufficient to make up the
indemnification payable by the Transferors, the Transferees shall be
entitled to require the Transferors make further compensation for such
deficient amounts.
For the deduction of the amounts made under Article 2.2(4), the
Transferors shall provide written basis and calculation formula
("hereinafter called as "Deduction Basis"). If the Transferors raise
no reasonable doubts to the Deduction Basis in writing within three
(3) days as of the date the Transferees provide the same to the
Transferors, the Transferors shall be deemed to have accepted the
Deduction Basis and agreed the Transferees to deduct the corresponding
prices. If there are disputes arising from the Deduction Basis, the
Parties shall resolve the dispute in accordance with Article 11.5
hereof and the Transferees shall perform its obligations to pay the
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third installments in an amount decided then within ten (10) days as
of the date of the dispute resolved.
Particularly, if after the Registration Date, the Company incurs any
government fine, penalty or other adverse results due to the faults of
the Transferees in respect of the business operation of the Company,
the Transferees shall bear any loss arising thereof and the
Transferors are not liable to the same. Such loss shall not be used as
the Deduction Basis.
(5) For the purpose of Article 2.2, The Transferors shall inform the
Transferees the bank accounts for receiving the Transfer Price in
writing, and the Transferors shall provide corresponding receipt for
each installment received within three (3) working days.
ARTICLE 3
THE REPRESENTATIONS AND WARRANTIES OF THE TRANSFERORS
The Transferors hereby severally and jointly make the follow representations and
warranties in respect of the Company and other parties as of the Registration
Date and undertake with the Transferees the representations and warranties are
correct, true, complete and not misleading, and any facts not contained in the
representations and warranties are fully disclosed in the Appendix A herein. The
Transferors hereby understand that the Transferees enter into this Agreement on
the basis of their full faith in the following representations and warranties.
The following representations and warranties include any subsidiary company,
branch office, representative office or branches (if any)
3.1 General Matters
3.1.1 The Transferors possess full and independent legal status and legal
capacity to execute, deliver and perform this Agreement and other
documents relevant to the transaction contemplated herein. The Transferors
respectively can act as an independent litigation entity.
3.1.2 The Transferors have obtained all necessary power and authority to
execute, deliver and perform this Agreement and other documents relevant
to the transaction contemplated herein, including but not limited to the
Transferors' waiver of its right of first refusal to the Transfer Equity
in writing, shareholders meeting's approval to the Equity Transfer and the
resolutions of the shareholders meeting regarding this Agreement; the
Transferors possess the full right and authority to consummate the
transactions herein.
3.1.3 The Transferors have obtained all necessary consents from any relevant
third party to execute, deliver and perform this Agreement. Other than the
approvals from the Information Industry Ministry on this Equity Transfer
on the date of execution of this Agreement, all necessary governmental
approvals and permits have been obtained for the execution, delivery and
performance of this Agreement, the Transferors confirm with their
knowledge, there exists no events that will result the Information
Industry Ministry refuses to approve this Equity Transfer.
3.1.4 The Transferors duly and legally execute and deliver this Agreement. This
Agreement and all documents from time to time to be signed by the
Transferors relevant to the transaction contemplated herein constitute
legal and binding obligations to the Transferors and are enforceable
according to the terms thereof.
3.1.5 Within the best knowledge of the Transferors, at the time of the execution
of this Agreement, the Transferors have not involved in any lawsuit,
arbitration, or other events or circumstances which will bring material
adverse effects to the consummation of the transactions herein and
performance of this Agreement.
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3.1.6 The execution and performance of this Agreement and all documents relevant
to the transactions contemplated herein does not:
(1) contravene any law, governmental regulation, governmental order,
court awards or decisions binging on the Transferors or the
Company's assets;
(2) contravene any contract, agreement, or terms of instrument documents
to which the Transferors are a party or which is binding on the
Transferors or the Company's assets;
(3) authorize other parties to terminate, suspend, modify any contract,
agreement or terms of instrument documents to which the Transferors
are a party or which is binding on the Transferors or the Company's
assets;
(4) result in any Encumbrances on the equity interests of the Company;
or
(5) contravene the Articles of Association of the Company or any other
constitutional documents.
3.2 The Ownership of the Transfer Equity
3.2.1 The Transferors are the owners of the Transfer Equity in a matter of law
and fact. The Transferors are entitled to transfer their entire equity
interests to the Transferees in accordance with terms of this Agreement
and such transfer needs no consents from any third party.
3.2.2 No Encumbrances and no any agreement, arrangement or obligations create
any Encumbrances on the Transfer Equity and any part thereof. The
Transferees shall acquire the perfect ownership with no Encumbrances
thereon after the consummation of the Equity Transfer herein.
3.2.3 Other than this Agreement, no agreement, options or other arrangements
exists on the Transfer Equity and rights or interests attached thereto.
3.3 Company
3.3.1 The Company is a company duly incorporated and validly existing under the
PRC law with full authorization, power, capacity to hold, lease, and
operate its assets, and as of the date of execution of this Agreement
engage in the on-going and contemplated business.
3.3.2 The registered capital of the Company is RMB ten million (RMB10,000,000)
and has been paid off by the Transferors respectively in according to
their ratio. Relevant government authorities have not found out the
withdrawal or transfer of the registered capital. The registered capital
has been effectively kept as RMB ten million (RMB10,000,000), which is one
of the fundamental conditions to effect the "Inter-provincial Value Added
Telecom Business License" ("VAT Telecom License") held by the Company.
3.3.3 The Company has not contravene any PRC law, or provide any loans or any
guarantee in an unfair or abnormal means other than in the normal business
operation, including but not limited to the loans to shareholders or
guarantees for shareholders' debts.
3.3.4 The Company holds all necessarily required certificates, approvals,
permits, and authorizations to engage in the on-going and contemplated
business. Such certificates, approvals, permits, and authorizations shall
remain effective and sufficient as of the Registration Date, and the
Company has completed all the update procedures and annual
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inspections for the same. Particularly, the Company holds the VAT Telecom
License and operation license for telecom service provider ("Telecom
Operator License"), and such licenses shall remain effective as of the
Registration Date.
The Transferors undertake that with their best knowledge, there are no
events which will result in any revocation of, termination of or any
failure to update and complete annual inspections for the approvals,
certificates, permits, and authorizations. The Company fully complies with
the conditions and terms of such certificates, approvals, permits and
authorizations, including but not limited to maintaining the minimum
amounts of registered capital to effect the VAT Telecom License and
effective conditions for Telecom Operation License.
3.3.5 Other than those disclosed to the Transferees, the Company has no any
other subsidiary company, branch office, representative office, or branch;
other than those disclosed to the Transferees, the Company has not
directly or indirectly control or hold any other entity or hold any equity
interests in any other entity.
3.3.6 Other than those disclosed to the Transferees, no other entity or
individual directly or indirectly hold any equity interests of the Company
or control the interest of the Company.
3.3.7 The Company has completed registration, filing, and other procedures
necessarily required in the operation of the Company, including but not
limited, the registration and filing with Ministry of Information Industry
and its local counterparts, Administration of Industry and Commerce
("AIC"), taxation bureau and other authorities, particularly including the
filing with the authorities necessarily required in the main business
place of value added telecom operation.
3.4 Accounting and Finance
3.4.1 The Company has the accounting books recorded, accounting items arranged,
evidential vouchers and books kept, invoices issued and collected in
accordance with the laws and generally accepted accounting principles of
PRC.
3.4.2 The balance sheets, profit and loss sheets and other relevant accounting
statements as of December 31, 2004 and the same as of May 31, 2005 (as
specified in Appendix B herein) and other relevant accounting statements
("Accounting Statements"):
(1) Accounting Statements are made in compliance with the applicable
laws and PRC generally accepted accounting principles;
(2) Subject to subsection (1) above, the Accounting Statements are made
in consistent with the internal accounting rules and practice of the
Company.
(3) The Accounting Statements are in all aspects accurate, complete and
have no material mistakes or errors;
(4) The Accounting Statements truly, completely and fairly shows the
assets and debts of the Company as of December 31, 2004, and May 31,
2005, and the profit or loss of the Company in the accounting period
covered by the Accounting Statements; and
(5) All the actual or contingent debts of the Company are disclosed by
the Accounting Statements.
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3.5 Information Disclosure
3.5.1 All the documents, materials and information provided by the Transferors
before and after the execution of this Agreement are true, accurate,
complete and not misleading, including but not limited to:
(1) The Accounting Statements and other accounting and finance materials
provided in accordance with Article 3.4.
(2) The name list of the employees who leaves the Company as of the
Registration Date commencing from January 1, 2005; and
(3) The Inventory of the tangible and intangible assets of the Company
as specified in Appendix C herein.
3.5.2 No actual or contingent fact having or may have adverse effects to the
Company is not disclosed by the Transferors to the Transferees.
3.6 Fully Disclosure of Debts
The information in relation to the debts of the Company disclosed by the
Transferors to the Transferees is true, accurate, complete and not
misleading. Other than those disclosed, the Company has no any other
debts, including but not limited to any payable amounts under any
contract, agreement or other legal documents.
3.7 Observance of Laws
The Company engages in the business in compliance with all applicable PRC
laws, governmental orders, and policies for the Telecom Operator and the
Company has not ever contravened any such laws, order, and policies. The
Company has been within its business scope to operate according to the
Articles of the Association and the Business License of the Company.
3.8 Litigation
There are no actual or contingent event having material adverse effects to
the Company or negative effects to the formation, validity, enforceability
of this Agreement or Equity Transfer herein, whether such events exist in
the past, or is on pending, or is contingent:
(1) The penalties and limitations made by Telecom Operator to the
Company or the Transferors;
(2) The penalties, injunctions, or orders made by governmental
authorities;
(3) Any civil, criminal, administrative litigation, arbitration or other
procedures and disputes against the Company or the Transferors.
3.9 Contract
3.9.1 The Transferors have provided all the contracts, agreements, and other
legal documents to which the Transferor is a party or which is relevant to
the business of the Company to the Transferees.
3.9.2 The Company is not a party to any contract, agreement, or other documents,
or subject to any contract, agreement, or other documents, if such
contract, agreement, other documents:
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(1) are not formed in the normal business operation;
(2) are not formed on the basis of equality principle;
(3) result in the loss or damages to the Company;
(4) cannot be performed and completed though proper input of energy
and expense
(5) limit the freedom of the business of the Company;
(6) involve the payable amounts not yet paid more than RMB one hundred
thousand (RMB100,000).
3.9.3 There is no event that the Company breaches any obligations or terms of
any contract, agreement, or documents to which the Company is a party or
which is binding on the Company.
3.10 Intellectual Property
3.10.1 The Transferors have disclosed all intellectual rights owned by the
Company or intellectual properties licensed to the Company in the
Appendix C herein, and the business of the Company has not infringe any
third party's intellectual properties.
3.11 Assets
3.11.1 The Company has full, sufficient ownership of its assets with no
Encumbrance thereon. The Company has effective, good standing, no
interruption or limitation right to use the leased assets.
3.11.2 Such assets owned or leased by the Company constitute all the assets
necessarily required for the full and effective operation of the Company
in its normal business.
3.12 Employees
Other than those disclosed to the Transferees by the Transferors:
(1) The Company hires its employees in compliance with the applicable
labor laws and signs legal and effective labor contracts with all
the employees;
(2) The Company has no any actual labor dispute or contingent labor
dispute with its current and past employees;
(3) The Company has no payable obligation not yet paid to make any
economic compensation or similar reimbursement or indemnification
fees relevant to the employment;
(4) The Company has sufficiently paid/withheld pension, medical
insurance, and any other payable social insurance or employee
welfares stipulated by relevant laws or agreements.
3.13 Affiliated Transaction
3.13.1 There is no actual or contingent debts or guarantee between/among the
Company and the Transferors, any current or resigned senior management
officer of the Company, any current or resigned directors of the Company
and any individual or organization who have direct or indirect interest
to the above person ("Affiliated Party").
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3.13.2 The Affiliated Party and the Company have no contract, agreement, or
other documents which is still currently effective to and binding on the
Company.
3.14 Non-compete
3.14.1 Other than those disclosed to the Transferees by the Transferors, there
is no event that the Transferors and its senior management officers
engage in the same, similar or competitive business with that of the
Company directly or indirectly.
3.15 Taxes
3.15.1 Other than disclosed to the Transferees by the Transferors, the Company
are in compliance with laws and requirements from the taxation
authorities to apply for, pay and withhold taxes on time and
sufficiently, including but not limited to the income taxes of
individuals or the Company, business tax, and Value-added tax, and there
is no delay or deduction of the payment of the taxation.
3.15.2 There is no adjustment of any taxation basis or the identification facts
for the fix of the price.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE TRANSFEREES
4.1 The Legal Status and Legal Capacity of the Transferees
The Transferees are able to execute, deliver and perform this Agreement
and act as litigation entity with full and independent legal status and
legal capacity. The execution, delivery and performance of this Agreement
by the Transferees does not contravene any relevant law, regulation, and
government order, and conflict with any contract, agreement to which the
Transferee is a party or which is binding on the assets of the
Transferee.
4.2 The Legality of the Transfer Price
The Transferees undertake that the source of their payments to the
Transfer Price is legal and they have the full capability to pay off the
Transfer Price to the Transferors in accordance with the terms and
conditions of this Agreement.
ARTICLE 5
ARRANGEMENT BEFORE REGISTRATION
5.1 The Transferors, as the shareholders of the Company before the
Registration Date, shall not take any acts or permit the Company to take
any acts which have or may have adverse effects to the Equity Transfer or
the Company from the execution date of this Agreement till the
Registration Date, including but not limited to waiver of any material
right or interests of the Company, or cause the Company to bear any
material liability or obligations. Unless otherwise agreed in writing in
advance by the Transferees, the Transferors shall use its best endeavors
to cause the management officers of the Company to ensure the Company
during the period commencing from the execution day of this Agreement to
the Registration Date:
(1) to operate in normal and practice way and maintain good operation;
(2) not to sign or undertake to sign any contract with a amount
exceeding RMB one hundred thousand (RMB100,000);
(3) not to sign or undertake to sign any contract beyond the scope of
normal and practice way;
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(4) not to dispose or undertake to dispose any material assets of the
Company;
(5) not to purchase or undertake to purchase any equity interests,
shares or other interests of other company, or any interests in
any other organization;
(6) not to borrow any loans or bear any other debt;
(7) unless the payments required in the normal and practice business,
not to pay (agree to pay) any other unnecessary moneys.
(8) not to announce distribution, pay or prepare for payment of any of
dividends, or other profits;
(9) take all necessary acts to maintain and protect the assets owned
or used by the Company (including but not limited to any
intellectual property);
(10) not to amend any labor contract with the Company's current
employees, including but not limited to the terms of the salary,
welfares and other interests; but in the normal process of the
business, when the changes are not material to such labor
contract, the contract can be modified with the written notice in
advance.
(11) not to amend any accounting rules or policies of the Company;
(12) not to amend the Articles of Association;
(13) not to provide guarantee for any third party;
(14) not to establish any Encumbrance on the Transfer Equity; and
(15) disclose any facts known by the Transferors as soon as practicable
that the Transferors may breach any of its representation,
warranty, and undertaking in this Agreement (whether such fact
exists before the execution date of this Agreement or happens
during the period from the execution date of this Agreement to the
Registration Date).
5.2 Provided not in breach of the Article 5.1, the Transferors as the
shareholders of the Company before the Registration Date, shall use its
best endeavors to cause the management officers of the Company to ensure
after the execution of this Agreement:
(1) The Company has full cooperation with the Transferees in respect
of the operation matters of the Company;
(2) The authorized representative of the Transferees can fully
participate the daily management and operation of the Company, and
the management officers or relevant person of the Company shall
ask their opinions in relation to the material matters affecting
the Company's business; and
(3) For the purpose of the above (2), upon the requirement of the
Transferees and their authorized representatives, the Company
shall provide the documents, materials, and persons of the Company
for them.
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ARTICLE 6
PRECONDITIONS
6.1 The Preconditions to the Obligations of the Transferors
The Transferors' satisfaction of the obligations of the Equity Transfer
herein is conditioned on the following circumstances to be satisfied or
waived in writing by the Transferors:
6.1.1 Representations, Warranties and Undertakings
The Transferees' representations, warranties and undertakings under this
Agreement as of the Registration Date are true, complete, and accurate,
as such representations, warranties and undertakings are effectively made
on the Registration Date.
6.2 The Preconditions to the Obligations of the Transferees
The Transferees' satisfaction of the obligations of the Equity Transfer
herein is conditioned on the following circumstances to be satisfied or
waived in writing by the Transferees:
6.2.1 Representations, Warranties and Undertakings
The Transferors' representations, warranties and undertakings under this
Agreement as of the Registration Date are true, complete, and accurate,
as such representations, warranties and undertakings are effectively made
on the Registration Date.
6.2.2 Due Diligence
The Transferors shall have provided their full support and assistance for
the Transferees on the reasonable requirements in the due diligence
investigation of the Company, including but not limited to, provision of
all the accounting books, records, contracts, and technology materials,
persons information, management information and other documents to the
lawyers, accountants and other representatives designated by the
Transferees. The above due diligence investigation shall include but not
limited to the investigation of the Company in relation to the operation,
law, finance, and technology and HR. The said due diligence investigation
result has satisfied the Transferees.
6.2.3 Approval and Consents
The Transferors have obtained all the necessary governmental approvals,
consents, authorizations, and consents of a third party, or the approvals
regarded as necessary to acquire by the Transferees for the Equity
Transfer herein.
6.2.4 Shareholders' Meeting
The Transferees have received the effective resolution of the
shareholders meeting made by the Transferors in accordance with the laws
and the effective Article of Association of the Company then. The
resolution indicates that the Transferors universally agree the Equity
Transfer herein and the Transferors waive their respective right of first
refusal in writing to any part of the Transfer Equity.
6.2.5 The Resign of Executive Director, General Manager, and Supervisory Board
Members
The Transferees have received the resign letters from the current
Executive Director, General Manager, and the Supervisory Board Members of
the Company effective on the Registration Date.
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6.2.6 The Resign of Legal Representative
The Transferees have received the resign letter from the current legal
Representative of the Company effective on the Registration Date.
6.2.7 No Material Adverse Effects
There is no actual or contingent matters which is regarded by the
Transferees as having material adverse effects to the Company.
6.2.8 No Material Change
Other than the disclosed matters in writing to the Transferees and obtain
of the consents of the Transferees, the business of the Company has not
occurred any changes regarded as the material alteration by the
Transferees.
6.2.9 The Completeness of the Arrangement before the Registration
The Transferees have completed the undertakings under Article 5 in a way
satisfying the Transferees.
6.2.10 Legal Opinion
The Transferees have received the legal opinion with its form as
indicated in the Appendix D issued by Fangda Law Firm on Registration
Day.
6.2.11 Due Diligence Clearance Issue
The Transferors have used their best endeavors to settle and clear the
issues found out in the due diligence investigation and the Transferees
are satisfied with the result.
ARTICLE 7
REGISTRATION WITH AIC; PAYMENT CLOSING
7.1 When the Transferees at their sole discretion decide the preconditions
under Article 6 satisfied or waived, the Transferees may notify the
Transferors in writing that the Equity Transfer can conduct
("Confirmation Notice"). As of the date of issuance of the notice, the
Equity Transfer in this Agreement shall be deemed as ascertained,
unconditional, and irrevocable, and then this Agreement and the Equity
Transfer shall be submitted to the AIC for update registration
("Registration"). But the Confirmation Notice does not release the
Transferors from the liability of its undertakings, warranties and
declarations in this Agreement. The Parities shall use their best
endeavors to submit the alteration application to the AIC for
Registration before June 22, 2005. If no alteration registration
application is submitted to AIC within twenty (20) days after the
execution of this Agreement due to intentional faults or gross negligence
of the Transferees, the Transferors are entitled to rescind this
Agreement in writing.
7.2 Upon the Receipt of the Confirmation Notice, the Transferors shall
immediately take actions to ensure the Company to apply for alteration
registration as soon as possible. Upon the receiving date of the
acceptance receipt for the alteration registration issued by AIC
("Closing Date"), the Transferors shall close the Equity Transfer. When
the Registration of the Equity Transfer are completed and the new
business license are issued by AIC, the date of issuance of the new
business license shall be known as the registration date ("Registration
Date") of the Equity Transfer.
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7.3 If the Transferors fail to apply for Registration with the AIC in time or
fail to do so upon the receiving of the Confirmation Notice, the
Transferors shall be deemed to commit a breach of this Agreement and
shall bear any liability arising thereof, including but not limited to
any direct or indirect losses, actual damages and the expected interest.
ARTICLE 8
OTHERS
8.1 The Transferors shall execute any further documents which is necessary or
maybe required for the full performance of this Agreement and the
consummation of the Equity Transfer herein and shall further take actions
which is necessary or maybe necessarily required for the full performance
of this Agreement and the consummation of the Equity Transfer herein.
8.2 Within one (1) year after the Registration Date, the Transferees shall
not engage or operate in a joint venture with other parties the value
added telecom business ("Competitive Activities") and other actions
harmful for the interests of the Company, including but not limited to:
(1) Control, hold or indirectly control company engaging in the
Competitive Activities and other organizations;
(2) Act as directors, management officers, counsels and employees in
any company engaging the Competitive Activities;
(3) Divert or solicit the clients of the Company, do or attempt to do
transactions with the clients of the Company, whether such clients
are the clients of the Company before or after the Registration
Date; or
(4) Divert or Solicit any employees then hired by the Company in any
means.
8.3 The Transferors shall severally and jointly be liable for the
representations, warranties and undertakings made in this Agreement,
including but not limited to, the events occurred before the Registration
Date or the events occurred after the Registration Date, but part or
entire of the matter shall be attributed to circumstances before the
Registration Date.
8.4 The Transferors undertake that after the Registration Date, the Company
will possess:
(1) Effective entire network short message service ("SMS") access
No.8088 of the China Monternet business;
(2) Effective entire network SMS access No.9088 of the China Monternet
business (business contract to be signed);
(3) Effective entire network XiaoLingTong SMS access No.97088 (having
passed the relevant technology test, and product test not
conducted yet, SMS No. not published yet.);
(4) All the value-added service on-going and in test for wireless
mobile phones on the Registration Date;
(5) All the tangible or intangible assets such as servers, computers
relevant to the wireless value-added service of the Company on the
Registration Date; and
(6) Other operation qualification in relation to the wireless
value-added service of the Company.
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The Parties herein confirm that the fixed assets beyond the scope of
subsection (5) above shall be handled in accordance with the Article 2 of
the Appendix C through consultation.
8.5 The Transferors shall cause the Company to take any reasonable measures
to maintain the cooperation with GuangDong Telecom Shenzhen Branch in
relation to the business with the China Game Center. The specific
cooperation ways are to be decided through the friendly consultation
between the Company and GuangDong Telecom Shenzhen Branch. Nevertheless,
the Transferees are entitled to make reasonable arrangement or adjustment
in relation to the contents and means of the cooperation according to the
business of the Company.
8.6 The Parties shall settle the revenues, fees, and costs as of June 30,
2005, arising from the business collaboration with Guangdong Telecom
Shenzhen Branch concerning the business with the China Game Center and
settle the deposit to the China Game Center Project in an amount of RMB
five hundred thousand (RMB500,000) and all payable amounts of the Company
as of June 30, 2005. The Parties agree such payable amounts shall be
settled until the Company's receipt of the accounting rules in force at
that time or the vouchers confirmed by the Parties. After the Parties
confirm the settlement results, the profit and loss concluded from such
results shall be enjoyed and borne by the Transferors, but before the
settlement of all the payable amounts, the Transferors shall not transfer
all or part of the profit and loss.
8.7 After the Registration Date, the Transferees and the Company shall
conduct an review and estimation to all the employees of the Company
before the Registration Date and shall decide the stay or leave of the
employees according to the performance of the employees and the business
situations of the Company. If the Transferees decided to let relevant
employees stay in the Company, the Company shall perform the original
labor contracts or enter into new labor contracts; if the Transferees
decide to let relevant employees leave the Company, the Company shall
terminate the labor contracts and employment relationship. The
Transferors shall use their best endeavors to assist the Transferees to
handle employees matters of the Company in accordance with Article 8.7.
The Company will pay the salary, awards, and other relevant expenses in
June for the current employees of the Company. Transferors shall bear all
the above expenses to the employees and shall be settled together in
accordance with Article 8.6.
8.8 The Parties shall negotiate to settle the contracts and agreements still
remain effective on the Registration Date to which the Company is a party
or which is binding on the Company or the assets of the Company. If
within 90 days as of Registration Date, the Transferees or the Company
need to terminate any one of the above contracts, the Transferors
undertake to use their best endeavors to assist the termination of such
contracts and the fees (include liquidation damages) incurred thereof
shall be borne by the Transferors. As to the "China Game Center" SMS
Business Cooperation Agreement entered between the Company and Guangdong
Telecom Shenzhen Branch on April 5, 2005, the relevant expenses (include
liquidation damages) and direct economic losses incurred by the Company
arising from the termination of the said agreement shall be borne by the
Transferors, except the direct economic loss arising from the Company's
serious breach of the said agreement after the Registration Date (except
the termination of the said agreement).
8.9 Jing Shengmei agrees to transfer all the domain names xxxxxxxx.xxx owned
by him to the Company and provide all relevant materials to the Company
after the Registration Date, and Jing Shengmei confirms that the Company
does not need to pay any consideration for such domain names transfer.
Within five (5) working days as of the Registration Date, Jing Shengmei
shall submit an application to relevant authorities for transfer of the
above domain names.
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ARTICLE 9
BREACH LIABILITY
9.1 This Agreement is binding and enforceable to any Party herein. If one
Party fails to fully perform its obligations under this Agreement or any
Party fails to make correct, complete or not misleading representations,
warranties and undertakings hereunder, the said Party shall be deemed to
breach this Agreement.
9.2 If the Transferors breach this Agreement, the Transferees are entitled to
take one or several remedies to protect their the rights and interests:
(1) Suspend performing their obligations hereunder, and resume to
perform when the breach events being corrected, the Transferees'
suspension of performance of the obligations do not constitute
their default or delayed performance of this Agreement.
(2) If the Transferor's breach results in that the transactions herein
cannot conduct any further, the Transferees are entitled to
unilaterally rescind this Agreement with written notice effective
as of the issuance of such notice;
(3) Require the Transferors of performing its obligations under this
Agreement;
(4) If the Transferors fails to make up the breach within fifteen (15)
working days as of the date of the breach or the remediation
period required by the Transferees, or the measures taken by the
Transferors to make up the breach do not work and the Transferees
are still continue to suffer the damages;
(5) Require the Transferors of indemnifying the Transferees against
any economic loss incurred by the Transferors' breach of this
Agreement; and/or
(6) Deduct the corresponding amounts from the third installment as
agreed in the Article 2.2.
9.3 The Transferors shall bear the several and joint liability for their
obligations and duties hereunder.
9.4 Provided that the Transferors do not breach this Agreement, if the
Transferees fail to pay the third installment to the Transferors within
the period agreed herein, then any payment failed to pay on time
according to this Agreement shall be paid together with the fines at a
5/oo for each day delayed of the amount of the payment which should have
been paid on schedule.
ARTICLE 10
EFFECTIVITY AND TERMINATION
10.1 This Agreement shall be effective as of the date this Agreement is duly
executed and delivered by all the Parties or their authorized
representatives.
10.2 The Parties agree this Agreement may be terminated or rescinded by any
event below:
(1) the Parties agree to terminate this Agreement in writing;
(2) the performance of this Agreement by the Parties is consummated;
(3) the Transferees terminate this Agreement under Article 9.2; or
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(4) other events stipulated by relevant laws, regulations, and other
provisions in this Agreement.
10.3 Notwithstanding there are other provisions in this Agreement, Article 9,
Article 10 and Article 11 hereof shall not be affected by the termination
in this Agreement.
ARTICLE 11
OTHERS
11.1 Fees and Taxes
The Parties shall respectively pay the expenses, costs and fees arising
from the negotiation of the Equity Transfer hereunder and preparation,
execution, and performance of this Agreement, including but not limited
to, the fees paid to lawyers, accountants, and counsels. Each of the
Parties shall be responsible for any taxation payable by such Party.
11.2 Notice
11.2.1 Any notice, request, requirement, or other correspondence required by
this Agreement or made in accordance with this Agreement shall be in
writing and delivered to the relevant Party in the address as below:
Jing Shengmei
Address: 13 A Building 2, Jingpeng Tower, Xinzhou Road North, Shenzhen.
Tele:000-0000-0000
Fax: 0000-0000-0000
Xxxx Xxxxxxx
Address: 00 X Xxxxxxxx 0, Xxxxxxxx Xxxxx, Xxxxxxx Xxxx North, Shenzhen.
Tele:000-0000-0000
Fax:0000-0000-0000
Chen Huawei
Address: 00 X Xxxxxxxx 0, Xxxxxxxx Xxxxx, Xxxxxxx Xxxx North, Shenzhen.
Tele:000-0000-0000
Fax:0000-0000-0000
Xxxxx Xxxxx
Address: 00 X Xxxxxxxx 0, Xxxxxxxx Xxxxx, Xxxxxxx Xxxx North, Shenzhen.
Tele:000-0000-0000
Fax:0000-0000-0000
Yuan Jinhua
Address: Floor 5th, Xxxxxxx Xxxxx, Xxxxxxx Xxxx Xxxx Xx.000, Xxxxxxxx.
Tele:000-0000-0000
Fax:000-0000-0000
Xxxx Xxxx
Address: Floor 5th, Xxxxxxx Xxxxx, Xxxxxxx Xxxx Xxxx Xx.000, Xxxxxxxx.
Tele:000-0000-0000
Fax:000-0000-0000
Shanghai Weilan
Address: Floor 5th, Xxxxxxx Xxxxx, Xxxxxxx Xxxx Xxxx Xx.000, Xxxxxxxx.
Tele:000-0000-0000
Fax:000-0000-0000
To: Jiang Xiangyuan
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11.2.2 Any notice, requirement, or other correspondence required hereunder or
pertaining hereto shall be deemed delivered and effective upon five (5)
days after deposit in the mail, if by registered mail; upon forty-eight
hours (48) after post of the mail, if by express courier service; upon
receiving of a complete fax copy transmission report by the addresser, if
sent by fax; upon sending out the mail, if by e-mail; upon delivery, if
by personal delivery.
11.3 Confidentiality
Unless with the consent of the Parties hereto or as required under
applicable law or competent court, any information about this Agreement
or any document, material, file, technology secret or trade secret of the
Company or any information documents, materials, files received from
other party shall not be disclosed to any third party. Nevertheless the
Parties hereto does not contravene the confidentiality obligation under
this Article within the following scope:
(1) to disclose with the consent of the Parties;
(2) to disclose to each Party's lawyers, accountants on a need-to-know
basis;
(3) to disclose for the purpose of the Equity Transfer hereunder with
the consents of relevant Party on a need-to know basis;
(4) The above disclosure shall not exceed the necessary scope, and the
disclosing Party shall cause the third party who accepts the above
documents, materials, and information to observe this Article; and
(5) Any information disclosed by any Party hereto shall not damage
other party's interests.
The confidential obligation in this Article 11.3 shall survive the
termination or rescission of this Agreement.
11.4 Force Majeure
11.4.1 Force majeure shall mean any unpredictable and unavoidable event or
predictable but the outcome of the event cannot be avoided or overcome,
and such events cause the failure of any Party to perform this Agreement,
including but not limited to the earthquake, typhoon, flood, fire, war
and storm and the changes of laws and policies.
11.4.2 If any Party unable to perform this Agreement due to the force majeure,
such Party shall be exempted to perform such obligations within the
impact scope. The affected Party shall immediately inform other Parties
and use its best endeavors to alleviate the impact of force majeure.
11.5 Governing Law and Dispute Settlement
11.5.1 The execution, validity and interpretations of this Agreement shall be
governed by PRC law.
11.5.2 Any disputes arising of or relevant to this Agreement shall be settled
through the friendly consultation of the Parties within fifteen (15) days
after such dispute arise, failing which any Party shall have the right to
submit the dispute to China International Economic and Trade Arbitration
Commission Shenzhen Branch in accordance with the arbitration rules in
force at the time. An arbitration award shall be final and binding on the
Parties.
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11.6 Amendment and Alteration
The Parties may amend, alter or supplement this Agreement by signing
written documents.
11.7 Severability
If any provisions of this Agreement are held to be unenforceable under
any applicable law, such provisions shall be excluded from this Agreement
and the balance of this Agreement shall not be affected and shall be
effective and enforceable in accordance with its terms. The Parties shall
use their best endeavors to enter into other agreements according to
their original purpose contained in those invalid provisions.
11.8 Assignment
This Agreement and the rights and obligations thereof shall not be
assigned to any third party by one Party without the prior written
consent of the other Parties.
11.9 Counterparts
This Agreement shall be executed in seven (7) counterparts and each Party
keep one copy. For the purpose of the Registration of the Equity Transfer
herein or the agreement by the Parties, the number of the execution
counterparts may be increased accordingly. Each counterpart shall be
deemed as an original, and all the counterparts shall constitute one and
the same instrument.
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[Execution Page]
IN WITNESS WHEREOF, This Agreement is signed on the date first above written by
the Parties hereto.
THE TRANSFERORS:
Jing Shengmei
By /s/ Jing Shengmei
-------------------------------------
Xxxx Xxxxxxx
Authorized representative: Jing Shengmei
By /s/ Jing Shengmei
-------------------------------------
Chen Huawei
Authorized representative: Jing Shengmei
By /s/ Jing Shengmei
-------------------------------------
Xxxxx Xxxxx
Authorized representative: Jing Shengmei
By /s/ Jing Shengmei
-------------------------------------
THE TRANSFEREES:
Yuan Jinhua
By /s/ Yuan Jinhua
-------------------------------------
Xxxx Xxxx
By /s/ Xxxx Xxxx
-------------------------------------
Shanghai Weilan Computer Co., Ltd.
By /s/ Shanghai Weilan Computer Co., Ltd.
----------------------------------------------------
Name:
Title:
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