Share Exchange Agreement
This Agreement as of the 1st day of September 2001.
BETWEEN: Tianjin Eastern Shipping Co., Ltd "Founding Shareholder"
AND Xxxx Xxx, Xxxxxxx Xxxx, Xxxx Xxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxx
and those persons described in schedule B ,
(collectively with the Founding Shareholder called the "The
Shareholders")
AND TEDA TECHNOLOGIES INTERNATIONAL INC. a Nevada company
hereinafter called TTI
AND TEDA TECHNOLOGIES CANADA INC.
hereinafter called TC
WHEREAS:
A. TC is in the business of providing management services, et al, to a Chinese
domestic joint venture called Teda Pioneer Technologies Co Ltd. pursuant to
an agreement dated June 1st 2001 entitled "Profit Sharing Agreement" (PSA);
and
B. The parties hereto wish to enter into a tax free exchange of their shares
to result in TTI acquiring all the issued and outstanding shares of TC in
exchange for shares in TTI as more particularly described herein:
NOW THEREFORE this Agreement witnesses that in consideration of the premises and
the respective covenants and agreements herein contained, the parties hereto
covenant and agree as follows:
1.0 DEFINITIONS and INTERPRETATIONS
1.1 In this Agreement and the recitals hereto, unless the context otherwise
requires, the following terms shall have the meanings hereinafter set
forth:
(a) "Business Day" means a day, other than a Saturday, a Sunday or a
holiday;
(b) "Closing" means the closing of the transactions contemplated herein on
the Closing Date;
(c) "Closing Date" has the meaning assigned to it in Clause 7.1;
(d) "Constating Documents" means the memorandum, the articles, the
articles of incorporation, the articles of continuance or the articles
of amalgamation pursuant to which a corporation is incorporated,
continued or amalgamated, as the case may be, together with any
amendments thereto, and the by-laws of such corporation and any
shareholders' agreement which has been executed by such corporation
and/or which governs in whole or in part such corporation's affairs;
(e) "Encumbrance" means any mortgage, charge, pledge, hypothecation,
security interest, lien, easement, right-of-way, encroachment,
covenant, conditions, right of re-entry, lease, licence, assignment,
option or claim or any other encumbrance, charge or any title defect
of whatever kind or nature, regardless of form, whether or not
registered or registerable and whether or not arising by law
(statutory or otherwise);
(f) "GAAP" means generally accepted United States accounting principles
consistently applied:
(g) "Governmental Authority" means any national, central, federal,
provincial, state, municipal, county or regional governmental or
quasi-governmental authority, domestic or foreign and includes any
ministry, department, commission, bureau, board, administrative or
other agency or regulatory body or instrumentality thereof;
(h) "Material Contract" means any contract, agreement or instrument to
which TC or any of the TC Subsidiaries is a party or from which it
derives benefit or by which it is bound and which relates, directly or
indirectly to a TC interest
(i) Material Indebtedness" means: any outstanding and unpaid indebtedness,
obligation or liability, for borrowed money, amounts unpaid for real
or personal property or services, taxes, fines, judgments, wages or
employment benefits in excess of $5,000;
(j) "Shareholders Purchaser Shares" means 15,697,000 treasury shares of
TTI to be issued in accordance with this Agreement;
(k) "TC Subsidiaries" means each body corporate of which more than fifty
(50%) percent of the outstanding shares ordinarily entitled to elect a
majority of the directors thereof are beneficially owned, directly or
indirectly by TC;
(l) "Person" means and includes an individual, sole proprietorship,
partnership, unincorporated association, unincorporated syndicate,
unincorporated organization, trust, body corporate, a trustee,
executor, administrator or other legal representative and any
Governmental Authority;
1.2 Interpretation
For the purposes of this Agreement, except as otherwise expressly provided:
(a) "this Agreement" means this Agreement, including the schedules hereto
and not any particular part, section or other portion hereof, and
includes any agreement, document or instrument entered into, made or
delivered pursuant to the terms hereof, as the same may, from time to
time, be supplemented or amended and in effect;
(b) all references in this Agreement to a designated "part", "section",
"subsection" or other subdivision or to a schedule are references to
the designated part, section, subsection or other subdivision of, or
schedule to, this Agreement;
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(c) the words "hereof", "herein", "hereto" and "hereunder" or any other
word of similar import refer to this Agreement as a whole and not to
any particular part, section, subsection or other subdivision or
schedule unless the context or subject matter otherwise requires;
(d) the division of this Agreement into parts, sections and other portions
and the insertion of headings are for convenience of reference only
and are not intended to interpret, define or limit the scope, extent
or intent of this Agreement or any provision hereof;
(e) unless otherwise provided herein, all references to currency in this
Agreement are to lawful money of the United States of America;
(f) a reference to a statute in this Agreement includes all regulations
made thereunder, all amendments to the statute or regulations in force
from time to time, and any statute or regulation that supplements or
supersedes such statues or regulations;
(g) the singular of any term includes the plural, and visa versa, and the
use of any term is generally applicable to any gender and, where
applicable, a body corporate, firm, or other entity, and the word "or"
is not exclusive and the word "including" is not limiting (whether or
not non-limiting language such as "without limitation" or "but not
limited to" or words of similar import is used with reference
thereto);
(h) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP;
(i) in the event that any date on which any action is required to be taken
hereunder by any of the parties hereto is not a Business Day, such
action shall be required to be taken on the next succeeding day which
is a Business Day;
(j) all references to "approval", "authorization" or "consent" in this
Agreement means written approval, authorization or consent.
1.3 Schedules
Attached to and forming part of this Agreement are the following Schedules:
Schedule "A" - Material Contracts
Schedule "B" - TTI Share apportionment
2.0 PURCHASE AND SALE
2.1 Relying upon the representations and warranties herein contained, and
subject to the terms and conditions hereof, at the Closing, TTI will
exchange with Shareholders all of the Shareholders' TC shares for an
aggregate of 15,697,000 TTI common treasury shares in accordance with
Schedule "B".
2.2 TTI Share Issue Price
TTI shares will be issued to the Shareholders at a deemed price of $.001
per share.
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2.3 Shareholders' Resale Restrictions
Shareholders acknowledges that TTI is a public company listed on NASD pink
sheets under the Securities Act of 1933, and will be subject to Securities
and Exchange Commission policies, rules and regulations.
3.0 POST CLOSING MATTERS
None
4.0 REPRESENTATIONS AND WARRANTIES
4.1 Representation and Warranties of Shareholders and/or TC
Shareholders and/or TC represents and warrants to and in favor of TTI as
follows and acknowledges that TTI is relying upon such representations and
warranties in consummating the transactions contemplated by this Agreement:
(a) Shareholders are directly and/or indirectly, the beneficial owner of
the entire issued and outstanding share capital of TC with good and
marketable title thereto, free and clear of any Encumbrance;
(b) If any of the Shareholders are a corporation, the corporation is duly
incorporated, organized and validly existing and current and
up-to-date with respect to all filings required under the laws of its
jurisdiction of incorporation;
(c) Shareholders have the power and authority to enter into this Agreement
and to perform its obligations hereunder;
(d) none of the execution and delivery of this Agreement, the completion
of the transactions contemplated herein or the fulfillment of, or
compliance with, the terms and provisions hereof, do or will, nor will
they upon the giving of notice or the lapse of time or both;
i) result in the breach of any term or provision of the constating
documents of TC or of Shareholders if Shareholder is a
corporation;
ii) result in the cancellation, suspension or alteration in the terms
of any Material Contract;
iii) result in the creation of any Encumbrance upon any of the assets
of TC;
iv) give to others any material interest or right, including rights
of purchase, termination, cancellation or acceleration, under any
such Material Contract; or
v) violate any provision of law or administrative regulations or any
judicial or administrative award, judgment or decree applicable
to, and (after due inquiry) known to TC, the breach of which
would have a materially adverse effect on TC's business or any
part thereof;
(e) Schedule A, constitutes all Material Contracts;
(f) there are no actions, suits, proceedings or investigations commenced,
or to the knowledge of TC (after due inquiry) contemplated or
threatened, against, or affecting TC or any part thereof at law or in
equity before any court, Governmental Authority or arbitrator of any
kind or, to the knowledge of TC (after due inquiry), are there any
existing facts or conditions which may reasonably be expected to be a
proper basis for any actions, suits, proceedings or investigations
which in either case would prevent or hinder the consummation of the
transactions contemplated by this Agreement or which would involve the
reasonable possibility of any judgment or liability that would
constitute Material Indebtedness against TC or any of the TC
Subsidiaries which could reasonably be expected to have an adverse
effect on the business.
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(g) no exemption, consent, approval, order or authorization of, or
registration or filing with, any court, Governmental Authority or any
third party is required by, or in connection with the execution and
delivery of this Agreement by TC or the consummation by Shareholders
of the transactions contemplated hereby.
(h) the execution and delivery of this Agreement and the completion of the
transactions contemplated herein have been duly authorized by the
board of directors of TC and this Agreement constitutes a valid and
binding obligation of TC and Shareholders, enforceable against each of
them in accordance with its terms;
(i) upon Closing, none of the Shareholders will beneficially own, directly
or indirectly, any right, title or interest whatsoever in and to;
i) TC, or
ii) any assets or liabilities of TC or its Subsidiaries;
4.2 Representations and Warranties of TTI
TTI represents and warrants to and in favour of TC and Shareholders as
follows and acknowledges that TC and Shareholders are relying upon such
representations and warranties in consummating the transactions
contemplated by this Agreement;
(a) TTI is duly incorporated, organized and validly existing and current
and up-to-date with respect to all filings required under the laws of
Nevada and no proceedings have been taken or authorized by TTI or, to
the best knowledge of TTI by any other person, with respect to the
bankruptcy, insolvency, liquidation, dissolution or winding up of TTI.
(b) TTI has the corporate power and authority to enter into this Agreement
to perform its obligations hereunder;
(c) none of the execution and delivery of this Agreement, the completion
of the transactions contemplated herein or the fulfillment of or
compliance with the terms and provisions hereof do or will, nor will
they upon the giving of notice or the lapse of time or both:
i) result in the breach of or violate any term or provision of the
Constating Documents of TTI; or
ii) violate any provision of law or administrative regulation or any
judicial or administrative award, judgment or decree applicable
to, and (after due inquiry) known to TTI, the breach of which
would have a materially adverse effect on TTI;
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(d) there are no actions, suits, proceedings or investigations commenced
nor, to the knowledge of TTI (after due enquiry) contemplated or
threatened, against or affecting TTI at law or in equity before or by
any court, Governmental Authority or arbitrator of any kind, nor, to
the knowledge of TTI (after due enquiry), are there any existing facts
or conditions which may reasonably be expected to be a proper basis
for any actions, suits, proceedings or investigations, which, in any
case, would prevent or hinder the consummation of the transactions
contemplated by this Agreement or which would involve the reasonable
possibility of any judgment or liability not fully covered by
insurance in excess of a reasonable deductible amount, or which could
reasonably be expected to have an adverse effect on the business,
operations, properties, assets or affairs, financial or otherwise of
TTI or TTI's ability to fulfill its obligations under this Agreement;
(e) Shareholders Purchaser Shares will, upon Closing, be validly issued as
fully paid and non-assessable shares in the capital stock of TTI;
(f) no exemption, consent, approval, order or authorization of, or
registration or filing with, any court, governmental Authority, or any
third party is required by, or with respect to, TTI in connection with
the execution and delivery of this Agreement by TTI, save and except
any required as required by the Securities and Exchange Commission,
policies, rules and regulations, or the consummation by TTI of the
transactions contemplated hereby;
(g) the execution and delivery of this Agreement and the completion of the
transactions contemplated herein have been duly authorized by the
board of directors of TTI and this Agreement constitutes a valid and
binding obligation of TTI enforceable against it in accordance with
its terms.
5.0 COVENANTS OF TC AND THE SHAREHOLDERS
5.1 TC and/or Shareholders hereby covenants and agrees with TTI as follows:
(a) until the Closing Date, TC will not perform, and will not permit any
TC Subsidiaries to perform any act or enter into any transaction or
negotiations which interferes or is inconsistent with the completion
of the transactions contemplated hereby, or would render inaccurate in
any material way any of the representations and warranties set forth
in Clause 4.1 hereof as if such representations and warranties were
made at a date subsequent to such act, transaction or negotiation.
Without limiting the generality of the foregoing, TC will not, without
the prior express written consent of TTI, and will not permit TC
Subsidiaries to:
i) amend any Material Contract;
ii) dispose of any interest, or any part thereof, to any person,
directly or indirectly, other than to TTI pursuant to this
Agreement; or
(b) TC shall, during the period prior to the Closing Date, promptly
discuss with TTI:
i) any significant developments affecting, directly or indirectly,
TC's business or any part thereof;
ii) any proposal received by TC or any TC Subsidiaries to amend an
existing Material Contract or enter into a new Material Contract;
iii) any breach or non-performance of any obligation pursuant to an
existing Material Contract or the occurrence of any event which
would, upon lapse of time or with the giving of notice,
constitute such breach or non-performance by any party thereto;
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(c) TC shall, during the period prior to the Closing Date afford to TTI
and its accountants, counsel and other representatives full access
during normal business hours to the books, contracts, commitments and
records evidencing or otherwise relating, directly or indirectly, to
TC or TC Subsidiaries to enable TTI to complete its due diligence.
(d) TC shall notify TTI immediately upon becoming aware that any of the
representations and warranties of TC and/or Shareholders contained in
Clause 4.1 hereof are no longer true and correct in any material
respect.
5.2 COVENANTS OF THE PURCHASER
TTI hereby covenants and agrees with TC and Shareholders as follows:
(a) until the Closing Date, TTI shall not perform any act or enter into
any transaction or negotiation which interferes or is inconsistent
with the completion of the transactions contemplated hereby, or, would
render inaccurate in any material way any of the representations and
warranties set forth in Clause 4.2 hereof, as if such representations
and warranties were made at a date subsequent to such act, transaction
or negotiation;
(b) TTI shall, during the period prior to the Closing Date, promptly
discuss with TC any developments in its business, assets or affairs
which could reasonably be expected to have a material impact upon TC's
or the Shareholders' ability to fulfill its obligations to TC; and
(c) TTI will notify TC and Shareholders immediately upon becoming aware
that any of the representations and warranties of TTI contained in
Clause 4.2 hereof are no longer true and correct in any material
respect.
6.0 CONDITIONS
6.1 Mutual Condition Precedent
The respective obligations of the parties hereto to complete the
transaction contemplated by this Agreement shall be subject to the
condition that there shall not be in any force, on the Closing Date, any
order or decree of a court of competent jurisdiction or any Governmental
Authority restraining, interfering with or enjoining the consummation of
the transactions contemplated by this Agreement.
6.2 Arbitration
In the event that the parties are unable to complete this agreement on the
Closing Date due to a disagreement of some term or condition or the failure
of a party to agree upon a term that is not contained herein but is none
the less a condition that is typical of the type of transaction
contemplated herein provided the condition or conditions not agreed to do
not fundamentally alter this agreement then the parties agree to solve such
disagreement through arbitration before three arbitrators and administered
by the American Arbitration Association in accordance with its Commercial
Arbitration Rules and judgment upon the award is final and binding upon the
parties hereto.
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6.3 Confidentiality
The Parties hereto agree each will keep confidential (1) all negotiations
between them, (2) the existence of all agreements and the terms thereof and
(3) all documents obtained from the other and in the event this agreement
does not close, each will return to the other all documents received from
the other and further the parties agree for a period of three years from
the termination of this agreement not to use any information gained from
the other for its own advantage in any way whatsoever unless such
information is in any event information that is in the public domain.
6.4 Tax Free Requirement
The parties recognize that it is a condition of the Shareholders that the
Share Exchange contemplated by this agreement not subject them to any
income or excise tax in the United Sates (whether Federal, State or local)
and the Shareholders shall satisfy themselves of this prior to TTI
completing its due diligence on TC.
6.5 Conditions to Obligations of TTI
The obligations of TTI to consummate the transactions contemplated hereby,
is subject to the satisfaction, on or before the Closing Date, of the
following conditions, any of which may be waived by it without prejudice to
its right to rely on any others or others of them:
(a) each of the acts and undertakings of TC to be performed on or before
the Closing Date pursuant to the terms of this Agreement shall have
been duly performed by it;
(b) TC or Shareholders will have delivered all of the documents required
to be delivered by TC or Shareholders pursuant to Part 7 of this
Agreement;
(c) the representations and warranties of TC or Shareholders contained in
Clause 4.1 hereto shall be true in all material respects immediately
prior to the Closing Date with the same effect as though made at and
as of such time; and
(d) TC and Shareholders shall not have breached any of the covenants
contained in Clause 5.1 hereof.
6.8 Conditions to Obligations of TC
The obligation of TC to consummate the transactions contemplated hereby is
subject to the satisfaction, on or before the Closing Date, of the
following conditions, any of which may be waived by TC without prejudice to
its right to rely on any other or others of them:
(a) each of the acts and undertakings of TTI to be performed on or before
the Closing Date pursuant to the terms of this Agreement shall have
been duly performed by it;
(b) TTI will have delivered all of the documents required to be delivered
by TTI pursuant to Part 7 of this Agreement;
(c) the representations and warranties of TTI contained in Clause 4.2
hereof shall be true in all material respects immediately prior to the
Closing Date with the same effect as though made at and as of such
time;
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(d) TTI agrees that the board of directors immediately following the
completion of this agreement shall be: Xxxx Xxx, Xxxxxxx Xxxx, Xxxxxx
Xxxx, and Xxxxxxx Xxxxxx; and
(d) TTI shall not have breached any of the covenants contained in Clause
4.2 hereof.
7.0 CLOSING
7.1 Subject to the terms and conditions hereof, this transaction will be
completed and closed at the Closing, to be held at 10:00 a.m. (Vancouver
time) on the Business Day which is ten (10) Business Days after the later
of the date on which TTI has informed TC or Shareholders that it has
completed and is satisfied with its due diligence of TC but in no event
shall the closing be more than 90 days from the date hereof.
7.2 Deliveries by TC and Shareholders
The Closing will be on or before Sept 15th 2001 at which time TC will
deliver the following to TTI:
(a) certified copies of the resolutions of the respective boards of
directors of TC approving this Agreement and the consummation of the
transactions contemplated herein;
(b) an instrument of assignment, in form and substance satisfactory to
TTI, acting reasonably, duly executed by TC and Shareholders providing
for the absolute and unconditional assignment and transfer to TTI of
all of TC's issued and outstanding capital.
(c) certified copies of such resolutions or consents of the board of
directors of Shareholders or any other person as may be necessary to
transfer the TC shares to TTI;
(d) undated written resignations of all directors and officers of TC;
(e) all books, records and documents relating, directly or indirectly, to
TC or to TC Subsidiaries;
(f) a certificate of a senior officer of TC or Shareholders that all of
the representations and warranties of TC and Shareholders contained in
Clause 4.1 hereof are true and correct as of the Closing Date;
7.3 Deliveries by TTI
At Closing, TTI will deliver the following to TC or Shareholders:
(a) a certified copy of the resolution of the board of directors of TTI
approving this Agreement and the consummation of the transactions
contemplated herein;
(b) one or more share certificates representing the Shareholders Purchaser
Shares registered in the name of the Shareholders in accordance with
Schedule "B";
(c) a certificate of an officer of TTI that all of the representations and
warranties of TTI contained in Clause 4.2 hereof are true and correct
as of the Closing Date;
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8.0 GENERAL
8.1 Notices
All notices which may or are required to be given pursuant to any provision
of this Agreement shall be given in writing and shall be delivered
personally or by telecopy, and in the case of TC addressed to the parties
whose addresses are hereinbefore setforth or such other address or
facsimile number of which a party may, from time to time, advise the other
parties hereto by notice in writing given in accordance with the foregoing.
Date of receipt of any such notice shall be deemed to be the date of
delivery thereof, if delivered, and on the day of telefaxing, if telefaxed,
in each such case provided such day is a Business Day and, if not, on the
first Business Day thereafter.
8.2 Binding Effect
This Agreement shall be binding upon and shall enure to the benefit of the
parties hereto and their respective successors and permitted assigns.
8.3 Waiver
Any waiver or release of any of the provisions of this Agreement, to be
effective, must be in writing executed by the party granting the same.
8.4 Time of Essence
Time is of the essence of this Agreement.
8.5 Survival of Representations and Warranties of TC and Shareholders
The representations and warranties of TC and Shareholders in this Agreement
shall survive the Closing, and shall not merge with any deed, conveyance or
other transfer instrument or other agreement giving effect hereto and shall
survive any amalgamation or reorganization or merger entered into by TC or
any other party for a period of three years following the Closing Date.
8.6 Survival of Representations and Warranties of TTI
The representations and warranties of TTI in this Agreement shall survive
the Closing, and shall not merge with any deed, conveyance or other
transfer instrument or other agreement giving effect hereto and shall
survive any amalgamation or reorganization or merger entered into by TTI
with any other party for a period of three years following the Closing
Date.
8.7 Equitable Remedies
All representations, warranties and covenants herein and opinions to be
given hereunder as to the enforceability of any covenant, agreement or
document shall be qualified as to applicable bankruptcy and other laws
affecting the enforcement of creditor's rights generally and to the effect
that a court may exercise discretion granting equitable remedies, including
the remedy of specific performance.
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8.8 Further Assurances
Each of the parties, upon the request of any other party, whether before of
after the Closing, shall do, execute, acknowledge and deliver or cause to
be done, executed, acknowledged or delivered all such further acts, deeds,
documents, assignments, transfers, conveyances and assurances as may be
reasonably necessary or desirable to effect complete consummation of the
transactions contemplated by this Agreement.
8.9 Counterparts
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
8.10 Entire Agreement
This Agreement, together with the agreements herein referred to,
constitutes the entire agreement between the parties pertaining to the
subject matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, between the parties
with respect to the subject matter hereof.
8.11 Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of Nevada and shall be treated in all respects as a State of Nevada
contract, and each of the parties does hereby irrevocably attorn to the
courts of the State of Nevada for such purposes.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the
date first above written.
Tianjin Eastern Shipping Co., Ltd
By
-------------------------
-------------------------
Xxx Xxxx
-------------------------
Xxxxxxx Xxxx
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-------------------------
Xxxxx Xxxxxxx
-------------------------
Xxxx Xxxx
-------------------------
Xxxxx Xxxxxx
Tianjin WanFang Teda Technology Development Co. Ltd.
-------------------------
BY
-------------------------
AND THE FOLLOWING PERSONS BY THEIR ATTORNEY IN FACT XXXX XXX :
Xxx Xxx, Xxxxxx Xx, Yuanying Qi, Mingfeng Hu, Xxxxxxxxxx Xxx, Xxxxxxxxxx Xx,
Xxxxxxx Xxxx, Xxxxxx Xxx, Xxxxxxxxx Xxxxx, Xxxx Xxx, Xxxxxxxx Xxxxx, Xxx Xxx,
Xxxxxxxx Xx, Xxxxxxxx Xxxx, Guangwei Fan, Xxxxxx Xxx, Hua Xxxxx, Xxxxxxx Sun,
Xxxxxxx Xx, Shihui Sun, Xxxxxxx Xxxxx, Hong Hai, Xxxxx Xxx, Ximing Sun, Xxxxxx
Xxxx, Xx Xx, Xxxxxxx Xx, Xxxxxxx Xxx, Xxxxxxx Xxxx, Xxx Xxxxx, Xxxxxxx Xxx, Xxxx
Xx, Tongwang Han, Xxxxxxxxx Xxxx, Xxxxxxx Xxxx, Xxxxxxxx Xx, Xxxxxxx Xxxx, Xx
Xxxx, Xxx Xxx Zhu
-------------------------
Xxxx Xxx as attorney in fact
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Schedule A
Material Contract
The Profit Sharing Agreement between TIANJIN TEDA PIONEER TECHNOLOGIES CO LTD.
and TC, dated June 1st 2001
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Profit Sharing Agreement
This Agreement entered into this 1st day of June, 2001
Between:
TEDA TECHNOLOGIES CANADA INC. a Canadian company incorporated in the Province of
British Columbia and having an office at #10 0000 Xxxxxxxxxx Xxxxx, Xxxxxxx, XX
X0X 0X0 ("TTC ")
AND
TIANJIN TEDA PIONEER TECHOLOGIES CO LTD , a Chinese domestic joint venture with
its principal place of business in Tianjin PRC
("PIONEER").
WHEREAS:
A. Pioneer is a domestic Chinese joint venture company whose parties are
Tianjin Xxx Xxxx Teda Co Ltd. and Yu Xxx Xxxxxx Xian Information
Development Co Ltd, (Xxxxxx Xxxx) a subsidiary of Tianjin China
Telecom;
X. Xxxxxx Xian was the former provider of value added IT services in
Tianjin municipality (Business) which business was assumed by Pioneer.
C. Pioneer believes it is in its best interest to have TTC provide
overall management for the Business and provide its capital needs
which TTC is prepared to provide in accordance with this agreement.
THIS AGREEMENT WITNESSETH that in consideration of the payments, covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
1. General Appointment
Pioneer hereby appoints TTC to be its manager to manage the affairs of the
Business for a term of 20 years unless terminated earlier as provided herein.
2. Profit Sharing
2.1 Pioneer agrees that the net profits of the Business will be allocated
(Profit Allocation). s follows:
TTC 90%
Pioneer 10%
2.2 Net profits are those profits determined in accordance with GAAP (Net
Profits) by the auditor of the Business who shall be a recognized international
audit firm approved of by Pioneer.
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2.3 The parties agree that Net Profits will be calculated semi annually and that
of the amount agreed to as Net Profits for the period, 20% thereof, or such
other amount agreed to by the parties, shall be used for working capital and
that the balance allocated to the parties as per the Profit Allocation.
3. Management
3.1 TTC will provide no fewer than two senior executives to provide on going
executive management for the Business.
4. Conversion to Equity
The parties acknowledge that it is their intention to have TTC's portion of
Profit Allocation converted to equity in Pioneer when the rules and regulations
in China permit such ownership and the parties agree that they will take steps
to have TTC's portion of Profit Allocation converted to equity in Pioneer on a
one for one basis.
5. Capital
5.1 TTC agrees to hereafter provide the capital needs of Pioneer of $500,000 US
over the next 12 months (Capital). All further capital requirements of Pioneer
will be determined by TTC as if TTC were a 90% equity owner of Pioneer.
5.2 In the event the Capital is not raised by TTC within the said 12 months,
TTC's share of the Profit Allocation shall be reduced to reflect the actual
percentage of the Capital raised.
5.3 TTC may treat that portion of the Remaining Capital it raises as registered
loans so as to enable TTC to expatriate such funds out of China should it so
elect.
6. Annual Budget
The parties agree that they will at least on an annual basis agree upon an
annual budget, prepared in accordance with XXXX and that unless otherwise agreed
the Business will be managed in accordance with the annually agreed upon budget.
7. Assignment
The parties agree that TTC may assign this agreement to any 3rd party provided
that any assignee agrees to be bound by the terms of this Agreement.
8. Termination
8.1 This Agreement shall terminate and be of no further force or effect if TTC
fails to meet any material obligation of this Agreement; or files a voluntary
petition in bankruptcy, or an involuntary petition in bankruptcy is filed
against TTC , or TTC is liquidated or its business transferred to a receiver, or
TTC makes a general assignment of all its assets on behalf of creditors.
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8.2 Upon the occurrence of an event set forth in 8.1 Pioneer shall send a
written notice to TTC stating the nature of the breach. If the breach is curable
TTC shall have thirty days from the date of the notice to cure. 9. NoticeNotices
as to disputes or termination to be given under this Agreement shall be signed
by the party giving such notice and mailed by certified or registered mail,
addressed to the party to be notified at its then current business address as
set forth at the beginning of this Agreement or as subsequently changed by
giving notice. Notice as to address changes, pricing changes, warranty changes
and other matters relating to policy and business may by given to such
addresses, by facsimile transmission, telex, telegram or first class mail.
Notices by mail shall be deemed given three days after mailing.
10. Settlement of disputes and Governing Law
10.1 In the event a dispute arises in connection with the interpretation or
implementation of this Agreement, the parties to the dispute shall attempt in
the first instance to resolve such dispute through amicable consultations. If
the dispute cannot be resolved in this manner within thirty (30) days after
first conferring, then any or all parties to the dispute may refer the dispute
to arbitration by the Beijing International Arbitration Committee ("Committee").
The number of arbitrators shall be three. The claimant(s) in the dispute shall
appoint one arbitrator within thirty (30) days of filing notice of the
arbitration, and the respondent(s) in the dispute shall appoint one arbitrator
within thirty (30) days thereafter. If the respondent fails to so appoint an
arbitrator, the Arbitration Centre shall appoint the second arbitrator. The two
arbitrators thus appointed shall choose the third arbitrator, and if they fail
to do so within thirty (30) days after the appointment of the second arbitrator,
the third arbitrator shall be appointed by the Committee. The arbitration
proceedings shall be conducted in the English language.
10.2. Any award of the arbitrators shall be final and binding on the parties.
The costs of arbitration shall be borne by the losing party, unless the
arbitrators determine that this would be inequitable. The parties agree and
recognize that any award of the arbitrators shall be recognizable and
enforceable in any court having jurisdiction over the party against whom the
award was rendered, and also wherever assets of such party are located.
10.3. The legal relations between the parties under this contract shall be
interpreted in accordance with the substantive laws of China. Any disputes
between the parties concerning their legal obligations arising under this
contract which are submitted to arbitration pursuant to this clause shall be
decided pursuant to the substantive laws of China.
16
11. Non Compete
The parties agree that during the currency of this Agreement that TTC will not
directly or indirectly in any manner whatsoever be engaged in any business
competitive to the business of Pioneer or advise or be concerned with or
interested or lend money to guaranty the debts or obligations to an competitive
business.
12. Initial Agreement
The parties agree that this Agreement is an initial agreement and that it may be
superceded by a more comprehensive agreement but until then the parties agree
this agreement will prevail.
IN WITNESS WHEREOF, the parties have hereto executed this Agreement as of the
day and year first above written.
---------------------------------------
TIANJIN TEDA PIONEER TECNOLOGIES CO LTD
---------------------------------------
TEDA TECHNOLOGIES CANADA INC.
17
Schedule B
Share allotment
TEDA TECHNOLOGIES TEDA TECHNOLOGIES
Names CANADA INC. INTERNATIONAL INC
Tianjin Eastern Shipping Co., Ltd. 6000000 6000000
Xxx Xxxx 1000000 797333
Xxxx Xxxx 1000000 797334
Xxxxxxx Xxxx 1000000 797333
Xxxxx Xxxxxx 1000000 1000000
Xxx Xxx 500000 500000
Xxxxx Xxxxxxx 500000 500000
Xxxxxx Xx 100000 100000
Yuanying Qi 300000 300000
Mingfeng Hu 50000 50000
Xxxxxxxxxx Xxx 20000 20000
Zhongliang Hu 50000 50000
Xxxxxxx Xxxx 100000 100000
Xxxxxx Xxx 20000 20000
Xxxxxxxxx Xxxxx 20000 20000
Xxxx Xxx 20000 20000
Xxxxxxxx Xxxxx 20000 20000
Xxx Xxx 10000 10000
Xxxxxxxx Xx 20000 20000
Xxxxxxxx Xxxx 20000 20000
Guangwei Fan 10000 10000
Xxxxxx Xxx 50000 50000
Xxx Xxxxx 80000 80000
Huiqing Sun 20000 20000
Xxxxxxx Xx 20000 20000
Shihui Sun 20000 20000
Xxxxxxx Xxxxx 20000 20000
Hong Hai 10000 10000
Xxxxx Xxx 10000 10000
Ximing Sun 50000 50000
Xxxxxx Xxxx 50000 50000
Xx Xx 20000 20000
Xxxxxxx Xx 20000 20000
Xxxxxxx Xxx 50000 50000
Xxxxxxx Xxxx 50000 50000
Xxx Xxxxx 100000 100000
Xxxxxxx Xxx 100000 100000
Xxxx Xx 50000 50000
Tongwang Han 50000 50000
Xxxxxxxxx Xxxx 100000 100000
Xxxxxxx Xxxx 200000 200000
Xxxxxxxx Xx 200000 200000
Xxxxxxx Xxxx 200000 200000
Tianjin WanFang Teda Technology
Development Co. Ltd. 3000000 3000000
Xx Xxxx 50000 50000
Xxx Xxx Zhu 25000 25000
---------- ----------
total issued shares 16,305,000 15,697,000
========== ==========
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