Exhibit 10.9
Dated this 1st day of December 2006
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THE PERSONS NAMED IN COLUMN 1 OF SCHEDULE 1
AND
EASTAR GROUP HOLDINGS LIMITED
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SHARE SWAP AGREEMENT IN RELATION TO
FIRST SPACE HOLDINGS LIMITED
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DIBB ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇/▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇
Tel: (▇▇▇) ▇▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇▇ ▇▇▇▇
Ref: MML.EC.2682.001
CONTENTS
Page
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1. INTERPRETATION .........................................................1
2. AGREEMENT TO SELL AND PURCHASE .........................................4
3. CONSIDERATION ..........................................................4
4. COMPLETION .............................................................5
5. WARRANTIES .............................................................6
6. FURTHER ASSURANCE AND UNDERTAKING ......................................8
7. PURCHASER'S WARRANTIES .................................................8
8. SURVIVAL OF AGREEMENT ..................................................8
9. COSTS ..................................................................8
10. SUCCESSORS AND ASSIGNS .................................................9
11. GENERAL ................................................................9
12. NOTICES ................................................................9
13. COUNTERPARTS ..........................................................10
14. GOVERNING LAW AND JURISDICTION ........................................10
SCHEDULE 1 ..................................................................12
SCHEDULE 2 ..................................................................13
SCHEDULE 3 ..................................................................14
SCHEDULE 4 ..................................................................27
SCHEDULE 5 ..................................................................29
SCHEDULE 6 ..................................................................31
SCHEDULE 7 ..................................................................33
THIS AGREEMENT is made on the 1st day of December 2006.
BETWEEN:
(1) THE PARTIES, whose names and addresses are set out in Column (1) of
Schedule 1 (collectively the "VENDORS" and each a "VENDOR");
(2) EASTAR GROUP HOLDINGS LIMITED, an exempted company incorporated under the
laws of the Cayman Islands with its registered office situate at the
offices of Codan Trust Company (Cayman) Limited, Cricket Square, ▇▇▇▇▇▇▇▇
Drive, P 0 Box 2681, Grand Cayman, KY1-111, Cayman Islands (the
"PURCHASER").
RECITALS
(A) First Space Holdings Limited (the "COMPANY") is a private company
incorporated under the laws of the British Virgin Islands, with its
registered office at P.O. Box 3321, Drake ▇▇▇▇▇▇▇▇, Road Town, Tortola,
British Virgin Islands with an authorized share capital of US$50,000.00
divided into 50,000 ordinary shares of US$1.00 each, 50,000 ordinary
shares of which have been issued and are fully paid and are registered in
the name of and beneficially owned by the Vendors-, whose short
particulars are set out in Schedule 1.
(B) The Purchaser intends to obtain a listing of its Shares in issue and to be
issued on the Main Board of the Stock Exchange pursuant to the issue of
the Prospectus.
(C) Preparatory to the listing of the Shares as aforesaid, the group of
companies comprising the Company and its Subsidiaries (as hereafter
defined) will undergo a reorganisation whereby the Company and its
Subsidiaries will become wholly-owned subsidiaries of the Purchaser (the
"REORGANISATION").
(D) Pursuant to the Reorganisation, the Vendors will sell to the Purchaser and
the Purchaser will purchase from the Vendors the entire issued share
capital of the Company subject to and upon the terms and conditions of
this Agreement.
OPERATIVE PROVISIONS
1. INTERPRETATION
1.1 In this. Agreement and the Schedules hereto the following words and
expressions shall where the context so admits bear the following
meanings:-
"ACCOUNTING DATE" 30 September 2006;
"ACCOUNTS" the audited consolidated balance sheets of the
Wuxi Seamless Oil Pipe Co., Ltd., as at the
Accounting Date and as at 31 December 2003, 2004
and 2005 and the audited consolidated profit and
loss account of the Company for the three years
ended 31 December 2005 and the nine months ended
30 September 2006 each being prepared by Deloitte
Touche Tohmatsu CPA Limited in accordance with
international financial reporting standards;
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"AGREEMENT" this Agreement;
"BOARD RESOLUTIONS" resolutions of the board of directors of the
Purchaser in the form set out in Schedule 5 or in
such other form as the parties hereto may agree;
"BUSINESS DAY" a day (not being a Saturday) on which banks
generally are open for business in Hong Kong;
"COMPANIES ORDINANCE" the Companies Ordinance (Chapter 32 of the laws of
Hong Kong);
"COMPANY'S SOLICITORS" Messrs Dibb ▇▇▇▇▇▇ ▇▇▇▇▇ of 41/F, Bank of China
Tower, ▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇;
"COMPLETION" Completion of the sale and purchase of the Sale
Shares pursuant to the terms of this Agreement as
provided in Clause 4;
"COMPLETION DATE" the date of this Agreement or such later date as
shall be agreed between the parties for
Completion;
"CONSIDERATION" the consideration payable for the Sale Shares
pursuant to the terms of this Agreement;
"EVENT" any act, omission, transaction or circumstance
occurring or subsisting at the relevant time;
"GROUP" the Company and its Subsidiaries and (where the
context so permits) each of them and "Group
Company" and "member of the Group" shall be
construed accordingly;
"HK$" OR "$" Hong Kong dollars, the lawful currency of Hong
Kong;
"HONG KONG" the Hong Kong Special Administrative Region of the
Peoples' Republic of China;
"INCORPORATION SHARES" the 1,000 nil paid Shares registered in the name
of the Vendors;
"INDEMNITY" a deed of indemnify in the agreed form to be given
by the Warrantors on a several basis proportionate
to their respective shareholdings in the Company,
to the Purchaser, the Company and the Subsidiaries
in respect of certain liabilities of tie Group;
"PRC" the People's Republic of China (other than Hong
Kong);
"PROPERTIES" the properties leased to or licensed to, and
occupied by, the Group as referred to in Appendix
IV to the
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Prospectus;
"PROSPECTUS" the 1st proof prospectus to be issued by the
Purchaser in relation to its proposed listing on
the Stock Exchange and such amendments as the
parties may reasonably agree from time to time,
the relevant extract of which is attached as
Schedule 7 of this Agreement;
"SALE SHARES" in aggregate 50,000 shares of US$1.00 each in the
capital of the Company constituting the entire
issued share capital of the Company;
"SHARES" ordinary shares of HK$0.01 each in the capital of
the Purchaser in issue from time to time;
"STOCK EXCHANGE" The Stock Exchange of Hong Kong Limited;
"SUBSIDIARIES" the companies the brief particulars of which are
set out in Schedule 6 and references to the
Subsidiaries shall be construed accordingly;
"TAXATION" shall have the meaning ascribed thereto in the
Indemnity;
"TRADE MARKS" the trade marks referred to in the paragraph
headed "Intellectual Property" of Appendix VII to
the Prospectus;
"WARRANTIES" the warranties representations and undertakings
set out or incorporated by reference in Clause 5
and Schedule 3;
"WARRANTORS" Expert Master Holdings Limited and UMW China
Ventures (L) Limited; and
"WARRANTY CLAIM" any claim for breach of any of the Warranties.
1.2 In this Agreement, the expression "indebtedness" shall mean any obligation
for the payment or repayment of money, whether as principal or as surety
and whether present or future, actual or contingent, incurred in respect
of (a) money borrowed or raised, (b) any bond, note, loan stock, debenture
or similar instrument, (c) acceptance or documentary credit facilities,
(d) foreign exchange options, (e) rental payments under leases and hire
purchase agreements and instalments under conditional sale agreements (in
all cases whether in respect of land, machinery, equipment or otherwise)
entered into primarily as a method of raising finance or of financing the
acquisition or use of the asset concerned and (f) guarantees, indemnities,
bonds, standby letters of credit or other instruments issued in connection
with the performance of contracts and or in respect of the indebtedness of
any other person.
1.3 Words and expressions defined in the Companies Ordinance shall (unless the
context clearly does not so permit) bear the same meanings where used in
this Agreement.
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1.4 The ejusdem generis rule of construction shall not apply to this Agreement
and accordingly general words shall not be given a restrictive meaning by
reason of their being preceded or followed by words indicating a
particular class or examples of acts matters or things.
1.5 Words importing the singular shall include the plural and vice versa and
words importing any gender shall include all other genders and references
to persons shall include corporations and unincorporated associations.
1.6 References in this Agreement to any agreed draft document or any document
in agreed form are references to the document described in the form of the
draft agreed between the parties and initialled by them or by the
Company's Solicitors for identification purposes.
1.7 References in this Agreement to statutory provisions shall be construed as
references to those provisions as respectively amended consolidated
extended or re-enacted from time to time and shall include the
corresponding provisions of any earlier legislation (whether repealed or
not) and any orders regulations instruments or other subordinate
legislation made from time to time under the statute concerned.
1.8 References in this Agreement to Clause(s) and the Schedule(s) are to the
clause(s) of, and the schedule(s) to, this Agreement.
1.9. References to this Agreement shall include the Schedules hereto which
shall form part hereof and shall have the same force and effect as if
expressly set out in the body of this Agreement.
1.10 The Clause headings in this Agreement are for convenience only and shall
not affect the interpretation hereof.
1.11 The obligations of the Vendors hereunder shall, save where the context
expressly requires to the contrary, be on a several basis proportionate to
their respective shareholdings in the Company.
2. AGREEMENT TO SELL AND PURCHASE
2.1 On and subject to the terms and conditions of this Agreement, each of the
Vendors shall as beneficial owners sell the relevant number of the Sale
Shares to the Purchaser and the Purchaser shall purchase the same from the
Vendors set out in Column (2) of Schedule 1 free from all liens charges
encumbrances and other equities of any description and together with the
benefit of all rights and profits attaching thereto including all rights
to dividends and other distributions declared made or payable thereon.
2.2 The Vendors hereby waive all pre-emption and similar rights over the Sale
Shares to which they or any other person may be entitled under the
Articles of Association of the Company or otherwise in relation to the
sale and purchase of the Sale Shares hereunder.
3. CONSIDERATION
3.1 In consideration of the Vendors agreeing to sell the Sale Shares to the
Purchaser, the Purchaser shall: credit as fully paid all the Incorporation
Shares, details of which are set out in column (3) of Schedule 1, upon
which 1,000 Shares will be credited as fully paid at par and the sum
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equivalent to the aggregate amount of the premium on the Incorporation
Shares will be transferred to the share premium account of the Purchaser;
3.2 procure the passing of the Board Resolutions.
4. COMPLETION
4.1 Unless otherwise agreed, Completion shall take place at the offices of
Company's Solicitors (or such other places as the parties may agree)
immediately after the signing of this Agreement.
4.2 On Completion:-
4.2.1 the Vendors shall procure that a meeting of the board of directors
of the Company shall be held at which:-
(a) the transfer of the Sale Shares to, and the registration as
the holder of the Sale Shares in the name of the Purchaser
shall be approved; and
(b) such other business shall be attended to as the Purchaser
shall reasonably require.
4.2.2 the Vendors shall deliver to the Purchaser:-
(a) duly executed instruments of transfer in respect of all the
Sale Shares in favour of the Purchaser together with the
share certificates therefor;
(b) the respective Certificates of Incorporation, Certificates of
Incorporation on Change of Name (if any), Memorandum and
Articles of Association, the Common Seals, Minute Books,
Registers of Members (duly written up to date), Share
Certificate books and all other statutory records of each
member of the Group, including all rubber stamps, cheque
books, cheque stubs and bank statements, receipt books, all
current insurance policies and title deeds and evidence of
ownership to all assets and all current contracts;
(c) such waivers, consents or other documents as the Purchaser
may reasonably require to enable the Purchaser to be
registered as holder(s) of the Sale Shares.
4.2.3 Against compliance with the provisions of Clause 4.2.1 and Clause
4.2.2, the Purchaser shall have procured the passing of the Board
Resolutions and credited as fully paid at par the Incorporation
Shares held by the Vendors.
4.3 Without prejudice to any other remedies available to the Purchaser, if any
of the provisions of Clause 4.2.1 and Clause 4.2.2 is not fully complied
with, the Purchaser shall be entitled (in addition to and without
prejudice to all other rights or remedies available to it, including
specific performance) to elect to effect Completion so far as practicable
having regard to the defaults which have occurred and treat this Agreement
as completed subject to satisfaction of a condition subsequent that the
defaults be remedied within such time as it may specify or to rescind this
Agreement.
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4.4 If the provisions of Clause 4.2.3 are not fully complied with, the Vendors
shall be entitled (in addition to and without prejudice to all other
rights or remedies available to them) to elect to rescind this Agreement
or to effect Completion so far as practicable having regard to the
defaults which have occurred and treat this Agreement as completed subject
to satisfaction of a condition subsequent that the defaults be remedied
within such time as it may specify.
5. WARRANTIES
5.1 Subject to the provisions of Schedule 4, which shall apply to all claims
for breaches of any of the Warranties, the Warrantors hereby represent and
warrant and undertake to the Purchaser (for the benefit of the Purchaser
and its successors and permitted assigns) in terms of the Warranties set
out below and those set out in Schedule 3 are true and accurate in all
material respects and not misleading in any way as at the date of this
Agreement and will continue to be so up to the time of Completion (if it
takes place after the date of this Agreement). The Warrantors acknowledge
that the Purchaser is entering into this Agreement in reliance on the
Warranties and may treat them as conditions of this Agreement. For these
purposes, the Warranties given by the Warrantors (each in respect of
itself) are:-
5.1.1 that they have full power and authority and have obtained all
necessary consents, authorization, waivers and licences to enter
into and perform the obligations to be performed by them under or
pursuant to this Agreement and any agreement to be entered into by
them as herein mentioned; and
5.1.2 that the Vendors are the absolute legal and beneficial owners of
the number of shares in the capital of the Company set out against
their respective names in Column (2) of Schedule 1 and have full
power to sell and transfer to the Purchaser full legal and
beneficial title to and in the Sale Shares and that the Sale Shares
represent the entire issued share capital of the Company, and are
and will at Completion be free from all charges, liens,
encumbrances and equities whatsoever;
and references elsewhere in this Agreement to the Warranties shall, as
regards the Warrantors, be construed accordingly.
5.2 The Warranties are given on the basis that information of which the
Purchaser or any of its officers or employees or advisers has actual or
constructive knowledge shall preclude any claim under the Warranties or
operate to reduce any amount recoverable thereunder and it shall be a
defence to any claim against the Warrantors that the Purchaser or any of
its officers or employees or advisers knew or ought to have known or had
constructive knowledge of any information relating to the circumstances
giving rise to the claims.
5.3 The Warranties shall be deemed repeated immediately before Completion with
reference to the then existing facts and circumstances.
5.4 Each of the Warranties is given separately and independently from and
(save as provided in Clause 5.2) shall not be limited by reference to any
other paragraph or anything in this Agreement (including the Schedules).
5.5 Save as necessary to give effect to the express terms of this Agreement,
the Warrantors shall not and shall procure that the Group shall not do,
deliberately and intentionally allow or procure before Completion anything
which is or might cause or constitute or result in a breach of any of the
Warranties as given on exchange hereof and/or immediately prior to
Completion.
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5.6 The Warrantors shall forthwith disclose to the Purchaser in writing any
matter or thing which may arise or become known to them after the date
hereof (whether or not prior to Completion) which is or could be a breach
of or inconsistent with or may render inaccurate or misleading any of the
Warranties as given on exchange hereof and/or immediately prior to
Completion.
5.7 In the event of any breach of the Warranties (and without restricting the
rights or ability of the Purchaser to claim damages on any bases available
to it in respect of such breach), the Warrantors shall on a several basis
proportionate to their respective shareholdings in the Company, on demand
pay to the Purchaser (or such other person at the request of the
Purchaser) a sum equal to the greater of :-
5.7.1 the amount by which the value of any asset or assets of any of the
members of the Group is or are less than or (as the case may be)
the amount by which any loss and/or liability or liabilities of (he
relevant members of the Group is or are greater than would have
been the case if there had been no breach of the Warranties; and
5.7.2 the amount by which the value of the Sale Shares is less than would
have been the case if there had been no breach of the Warranties
together with an amount equal to any expenses losses or liabilities
of the Purchaser and/or any member of the Group which it would not
have incurred or which would not have existed if there had been no
such breach.
5.8 The Purchaser may take action for any breach or non-fulfilment of the
Warranties before or after Completion save for such breach or
non-fulfilment was known to or discoverable by the Purchaser before
Completion and notwithstanding that the Purchaser shall delay or otherwise
fail to exercise its rights hereunder or generally in such regard.
5.9 The Warrantors hereby irrevocably waive any right or claim which they may
have against any member of the Group in respect of any misrepresentation
inaccuracy or omission in or from any information or advice given by any
member of the Group or any of their officers or employees to the
Warrantors to enable them to give any of the Warranties, or to assume any
of the obligations assumed or to be assumed by them under or pursuant to
this Agreement
5.10 Each of the Warrantors undertakes in relation to the Warranties that he
has made full enquiry and there is no other information of which he is
aware, the omission of which would render any of the Warranties
inaccurate, incomplete or misleading. Each of the Warrantors undertakes to
notify the Purchaser in writing of any matter or thing of which the
Warrantors becomes aware of and which is or may be a material breach of or
materially inconsistent with any of the Warranties.
5.11 Each of the Warrantors agrees and acknowledges that the Purchaser is
entering into this Agreement in reliance on the Warranties and the
accuracy of the matters disclosed herein save for any information which is
within the Purchaser's knowledge or which may otherwise come into the
possession of the Purchaser or which the Purchaser ought to have known or
had constructive knowledge on, including knowledge of the Purchaser's
representatives and advisers.
5.12 Each of the Warrantors represents and warrants to the Purchaser that all
information relating to the Group or their respective assets or affairs
which would be material to a purchaser for a value of the shares,
undertaking or assets of the Group is contained in this Agreement and the
Accounts, and will be contained in the Prospectus when it is issued in due
course.
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6. FURTHER ASSURANCE AND UNDERTAKING
6.1 The Vendors hereby agree to do or to procure the doing of any such further
acts documents and things as the Purchaser may reasonably require to vest
in the Purchaser (or as it shall direct) the legal and beneficial
ownership of the Sale Shares free from all charges, liens, encumbrances
and other adverse interests and to vest the benefit of (this Agreement in
the Purchaser.
6.2 Each of the Vendors hereby irrevocably and unconditionally appoints the
Purchaser with effect on and from Completion as its attorney with full
powers of substitutions in its name and for it and on its behalf (and to
the complete exclusion of any rights it may have in such regard) lawfully
to exercise all voting and other rights and receive all the benefits and
entitlements which may now or at any time hereafter attach to its Sale
Shares or any of the Sale Shares registered in its name (whether alone or
jointly with any other person) and to transfer and deal with such shares,
rights, benefits and entitlements and execute such documents under hand or
as a deed and do such acts and things in connection with the foregoing
(including without limitation the passing of any resolutions required to
facilitate Completion) as the Purchaser shall from time to time think fit
in all respects as if the Purchaser were the absolute legal and beneficial
owner thereof.
6.3 The power of attorney granted in this Clause is given by way of security
for the due performance by the Vendors of their obligations thereby
contemplated.
6.4 Each of the Vendors hereby undertakes to the Purchaser that it will until
the listing of the Purchaser's shares on the Stock Exchange and for a
period of 6 months after the listing or such other period as required by
the Stock Exchange, dispose of, encumber or otherwise deal with its shares
in the Purchaser in any manner such that its beneficial interest therein
would be jeopardized. For the avoidance of doubt, the undertaking given by
Expert Master Holdings Limited under this clause 6.4 shall not include
shares that are to be issued pursuant to the exchangeable notes to be
issued to the relevant investors to the subscription agreement dated 1
December 2006.
7. PURCHASER'S WARRANTIES
The Purchaser warrants to and in favour of the Vendors that it will
exercise all reasonable endeavours to procure a listing on the Stock
Exchange of the Incorporation Shares (in their fully paid form) and the
Shares to be issued by the Purchaser pursuant to the proposed listing.
8. SURVIVAL OF AGREEMENT
This Agreement (and in particular the warranties representations covenants
agreements and undertakings of the Warrantors and the Vendors hereunder)
shall, insofar as the terms thereof remain to be performed or are capable
of subsisting, remain in full force and effect after and notwithstanding
Completion.
9. COSTS
Save as expressly otherwise provided herein, each party shall pay its own
costs and expenses in connection with the preparation and carrying into
effect of this Agreement. All stamp duty (if any) payable in respect of
the transactions contemplated herein shall be equally borne by (i) the
Purchaser and (ii) the Vendors.
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10. SUCCESSORS AND ASSIGNS
This Agreement shall not be assignable by the parties hereof (save as
expressly permitted herein) but shall be binding upon and enure for the
benefit of each party's successors in title.
11. GENERAL
11.1 This Agreement supersedes all previous agreements between the parties or
any of them in relation to the sale and purchase of the Sale Shares and
the other matters referred to in this Agreement and the parties
acknowledge that no claim shall arise in respect of any agreement so
superseded.
11.2 This Agreement contains the entire agreement between the parties relating
to the sale and purchase of the Sale Shares and there are no other
representations, warranties, conditions or terms whatsoever applicable
thereto whether express or implied. In particular each of the parties
confirms that it has not been induced to enter into this agreement by any
statement or statements of fact or opinion other than such (if any) as are
contained herein.
11.3 Any variation to this Agreement shall be binding only if recorded in a
document signed by the parties.
11.4 Time shall be of the essence of this Agreement but no failure by any party
to exercise, and no delay on its part in exercising any right hereunder
will operate as a waiver thereof, nor shall any single or partial exercise
of any right under this Agreement (including a settlement with any of the
Vendors) preclude any other or further exercise of it or the exercise of
any right or prejudice or affect any right against any person under the
same liability. The right and remedies provided in this Agreement are
cumulative and not exclusive of any rights or remedies provided by law.
11.5 Save in respect of matters required to be disclosed by law or other
governmental or regulatory authorities or in connection with the proposed
listing of the share capital of the Purchaser on the Stock Exchange, none
of the parties hereto shall make any press statement or public
announcement or otherwise in connection with this Agreement without first
having received the prior written approval of the Purchaser.
12. NOTICES
12.1 Any notice claim, demand, court process, document or other communication
to be given under this Agreement (collectively "communication" in this
Clause 12) shall be in writing in the English language and may be served
or given personally or sent to the address or facsimile number (if any)
stated after the relevant party's name at the beginning of this Agreement,
or to such other address as may have been last notified in writing by such
party to the party serving the communication specifically referring to
this Agreement. All communications shall be served by the following means
and the addressee of a communication shall be deemed to have received the
same within the time stated adjacent to the relevant means of despatch:
Means of despatch Time of deemed receipt
----------------- ----------------------
Local mail or courier 24 hours
Facsimile on despatch
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Air courier/Speedpost 3 days
Airmail 5 days
12.2 A communication served in accordance with Clause 12.1 shall be deemed
sufficiently served and in proving service and/or receipt of a
communication it shall be sufficient to prove that such communication was
left at the addressee's address or that the envelope containing such
communication was properly addressed and posted or despatched to the
addressee's address or that the communication was properly transmitted by
facsimile to the addressee. In the case of facsimile transmission, such
transmission shall be deemed properly transmitted on receipt of a
satisfactory report of transmission printed out by the sending machine.
12.3 Nothing in this Clause 12 shall preclude the service of communication or
the proof of such service by any mode permitted by law.
12.4 The Purchaser hereby irrevocably appoint Messrs Dibb ▇▇▇▇▇▇ ▇▇▇▇▇ of 41/F,
Bank of ▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ as its agent to
receive and acknowledge on its behalf service of any writ, summons, order,
judgment or other notice of legal process in Hong Kong. If for any reason
the agent named above (or its successor) no longer serves as agent of the
Purchaser for this purpose, the Purchaser shall promptly appoint a
successor agent and notify all the other parties to this Agreement. The
Purchaser agrees that any such legal process shall be sufficiently served
on it if delivered to such agent for service at its address for the time
being in Hong Kong whether or not such agent gives notice thereof to the
Purchaser.
12.5 Each of the Vendors hereby irrevocably appoints Messrs Dibb ▇▇▇▇▇▇ ▇▇▇▇▇
of 41/F, Bank of ▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ as its
agent to receive and acknowledge on its behalf service of any writ,
summons, order, judgment or other notice of legal process in Hong Kong. If
for any reason the agent named above (or its successor) no longer serves
as agent of each of the Vendors for this purpose, each of the Vendors
shall promptly appoint a successor agent and notify all the other parties
to this Agreement. Each of the Vendors agrees that any such legal process
shall be sufficiently served on it if delivered to such agent for service
at its address for the time being in Hong Kong whether or not such agent
gives notice thereof to each of the Vendors.
13. COUNTERPARTS
This Agreement may be executed in any number of counterparts by the
parties hereto on separate counterparts each of which when executed shall
be binding on the party who has executed it and all of which when taken
together shall constitute one and the same document.
14. GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by and construed in accordance with the
laws of Hong Kong and the parties hereby irrevocably undertake to submit
themselves to the non-exclusive jurisdiction of the courts of Hong Kong.
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IN WITNESS whereof this Agreement has been duty executed by each of the parties
as of the day and year first before written.
SIGNED by PIAO LONG HGA ) /s/
a duty authorized representative )
EXPERT MASTER HOLDING LIMITED )
SIGNED by ▇▇▇▇▇ ▇▇▇▇▇ Bin Harun ) /s/
a duty authorized representative )
for and on behalf of )
UMW CHINA VENTURES (L) LIMITED )
SIGNED by Piao Longhua ) /s/
a duty authorized representative )
for and on behalf of )
EASTAR GROUP HOLDING LIMITED )
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SCHEDULE 1
VENDORS
(1) (2) (3)
Number of Sale Shares Number of Incorporation
Name and Address of beneficially owned by the Shares in the Purchaser
the Vendors Vendors held by the Vendors
-------------------- -------------------------- ------------------------
1. Expert Master Holdings Limited 34,700 694
PO Box 957,
Offshore Incorporation Centre,
Road Town, Tortola,
British Virgin Islands
2. UMW China Ventures (L) Limited 15,300 ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇ ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.,
▇▇▇▇▇▇▇▇
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SECHEDULE 2
FIRST SPACE HOLDING LIMITED
Incorporation date : 12 June 2006
Place of Incorporation : British Virgin Islands
Authorised share capital : US$50,000 divided into 50,000 ordinary shares of
US$1.00 each
Issued share capital : US$50,000 divided into 50,000 ordinary shares of
US$1.00 each
Shareholders :
Approximate
No. of shares percentage of
Name held shareholding
----- ------------- -------------
1. Expert Master Holdings 34,700 69.4%
Limited
2. UMW China Ventures (L) 15,300 30.6%
Limited
Directors : Piao Longhua;
Xu Xizhong;
▇▇▇▇▇ ▇▇▇▇▇ Bin Harun
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Page 13
WARRANTIES
INTERPRETATION
(1) Where any of the following paragraphs of this Schedule is qualified by the
expression "to the best of the knowledge, information and belief of the
Warrantors" or "so far as the Warrantors are aware" or any similar
expression, then (unless clearly not admitted by the context) that
paragraph shall be deemed to include an additional warranty to the effect
that the statement has been made after due and careful enquiry, including
without limitation, of the relevant professional advisers of the
Subsidiaries.
(2) Unless the context requires otherwise, the representations, warranties and
undertakings contained in this Schedule in relation to the Company shall
be deemed to be repeated mutatis mutandis in relation to each member of
the Group.
ACCOUNTS
(3) The Accounts have been prepared and audited on a proper and consistent
basis in accordance with the requirements of all relevant statutes and
with good and generally accepted accountancy principles and practice
consistently applied and are accurate in all respects and show a true and
fair view of the state of affairs of the Company and of its results and
profits for the financial period ending on the Accounting Date and :-
(A) depreciation and amortisation of the fixed assets of the Group have
been made at a rate sufficient to write down the value of such
assets to nil not later than the end of their useful working lives;
(B) slow moving stock has been written down appropriately and
unrecoverable work in progress and redundant and obsolete stock has
been wholly written off and the value attributed to the remaining
stock did not exceed the lower of cost or net realizable value at
the Accounting Date on a going concern basis;
(C) the Group's stock in trade and work in progress has been valued on a
basis in all material respects consistent with that adopted for the
purpose of the Company's audited accounts in respect of the
beginning and end of each of the three preceding accounting periods
and the nine-month period ending on the Accounting Date;
(D) the Accounts disclose and make full provision or reserve for all bad
and doubtful debts and all actual liabilities;
(E) the Accounts disclose and make proper provision or reserve for or
note all contingent liabilities, capital or burdensome commitments
and deferred taxation; and
(F) the profits and losses of the Company shown by the Accounts and for
the three (3) preceding accounting periods and the nine-month period
ending on the Accounting Date have not in any material respect been
affected by any unusual or exceptional item or by any other matter
which has rendered such profits or losses unusually high or low.
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(G) No change in accounting policies has been made in preparing the
Accounts.
COMPLIANCE WITH LEGAL REQUIREMENTS
(4) (A) Each member of the Group has duly incorporated and is validly
existing under the laws of its jurisdiction of incorporation and has
full power, authority and legal right to own its assets and carry on
its business.
(A) Each member of the Group has the right, power and authority to
execute, deliver and exercise its rights and perform its obligation
under this Agreement
(B) Each member of the Group has duly and properly complied in all
respects with any filing and registration requirements in respect of
corporate or other documents and licences imposed under all relevant
laws.
(C) The statutory books and minute books of each member of the Group has
been properly written up and each member of the Group has not
received any application or request for rectification of its
register and compliance has been made in all material respects with
all other legal requirements concerning any member of the Group and
all issues of shares, debentures or other securities thereof.
(D) A copy of the memorandum and articles of association or analogous
constitutive documents of each member of the Group, which has been
produced to the Purchaser, is accurate and complete in all respects
as at the date of this Agreement, has attached to it copies of all
resolutions and other documents required by law to be so attached,
and fully sets out all rights and restrictions attaching to each
class of the share capital of each member of the Group and the
register of members and other statutory books of each member of the
Group has been properly kept and contain a true, accurate and
complete record of the matters which should be dealt with therein
and no notice or allegation that any of the same is incorrect or
should be rectified has been received. Each member of the Group is
operating and has always operated its business in all respects in
accordance with its memorandum and articles of association at the
relevant time.
(E) Each member of the Group and the directors of the respective members
of the Group (in their capacity as such) have complied with all
relevant legislation and obtained all necessary licences and
consents to carry on business whether in the country, territory or
state in which it is incorporated or elsewhere and will at
Completion have complied with all legal requirements in relation to
any transactions to which each member of the Group has been a party
prior to Completion.
REGULATORY REQUIREMENTS
(5) (A) Each member of the Group has obtained all licences, permissions,
authorisations, consents and exceptions required for the carrying on
of its business and such licences, permissions, authorisations,
consents and exceptions are in full force and effect; and, to the
best knowledge of the Warrantors there are no circumstances which
indicate that any of such licences, permissions, authorisations,
consents or exceptions may be revoked or not renewed, in whole or in
part.
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(B) Each member of the Group has conducted its business or corporate
affairs in all material respects in accordance with their respective
memorandum and articles of association (or equivalent constitutive
documents) from time to time in force, with all applicable laws and
regulations of Hong Kong and the PRC, or the place of incorporation
of such member of the Group and there is no violation of, or dealt
with respect to, any ordinance, statute, regulation, order decree or
judgment of a court or any governmental agency of Hong Kong, the PRC
or any other jurisdiction in which any member of the Group is
established or conducts business which could reasonably have a
material adverse effect upon the assets or business of any member of
the Group.
(C) All change in shareholding in each member of the Group since their
respective incorporation has been effected in accordance with their
memorandum and articles of association (or equivalent constitutive
documents) from time to time in force and with all applicable laws
and regulations and such change has obtained all necessary consents
from third party and/or approval from all applicable authorities of
Hong Kong and the PRC or the place of incorporation of such member
of the Group.
SUPERVISORY AND REGISTRATION REQUIREMENTS
(6) Each member of the Group's books and records have been brought up-to-date
in compliance with all the requirements of all appropriate and applicable
law or statutes and in accordance with any powers or directions issued
thereunder by the relevant authorities, and all accounts, returns,
particulars, resolutions and other documents required to be delivered by
each member of the Group to the registrar of companies or any other
relevant authority have been duly delivered, filed or registered in proper
form and on due dates.
LITIGATION
(7) (A) To the best knowledge of the Warrantors, no member of the Group
is engaged in (nor is any director in relation to the affairs of any
member of the Group engaged in) any legal proceedings (including
litigation, arbitration and prosecution) and no such proceedings are
pending or threatened, nor are there any facts likely to give rise
to such proceedings known or which would on reasonable enquiry be
known to any member of the Group or their respective directors.
(B) To the best knowledge of the Warrantors, no member of the Group is
the subject of any investigation, inquiry or enforcement proceedings
or process by any governmental, administrative or regulatory body
nor are the Warrantors aware of anything which is likely to give
rise to any such investigation, inquiry, proceedings or process.
(C) No member of the Group is insolvent and no order has been made or
resolution passed for the winding up of any member of the Group and
there is no outstanding any petition for the winding up of any
member of the Group or any receivership of the whole or any part of
the undertaking and assets of any member of the Group and there are
no circumstances which would entitled any person to present such a
petition or to appoint such receiver.
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Page 16
(D) No unsatisfied judgement, order or award is outstanding against any
member of the Group and no distress or execution has been levied on,
or other process commenced against, any asset of any member of the
Group.
(E) There is no dispute with any revenue or official department in Hong
Kong, the PRC, the British Virgin Islands or any other part of the
world in relation to the affairs of any member of the Group.
(F) To the best knowledge of the Warrantors, no member of the Group or
any of its employees in the course of their employment has committed
any criminal act or material breach of contract or statutory duty or
any tortious or other unlawful act which may affect the Group or its
business.
EMPLOYEES
(8) (A) To the best knowledge of the Warrantors, no former director,
officer, employee or agent of any member of the Group has any claim
against any member of the Group for compensation for loss of office
or arising out of the termination of his office or employment.
(B) None of any member of the Group is a party to any profit sharing
scheme, share option scheme, share incentive scheme or any other
scheme under which any director, officer, employee or agent of any
members of the Group is entitled to participate in the profits of
the members of the Group or has any rights in respect of any shares
or stock of any members of the Group.
(C) So far as the Warrantors are aware, no member of the Group, nor any
of its officers, agents or employees (during the course of their
duties in relation to such member of the Group) have committed, or
omitted to do, any act or thing the commission or omission of which
is, or could be, in contravention of any material laws of Hong Kong,
the PRC, its jurisdiction of incorporation or any other jurisdiction
in which such member of the Group carries on business or has a
presence which is punishable by fine or other penalty and no notice
or communication has been received with respect to any alleged,
actual or potential violation of or failure to comply with, any of
the same.
(D) To the knowledge of the Warrantors, each member of the Group has in
relation to each of its employees and to each of its former
employees:
(i) complied with its obligations under all employment laws of
Hong Kong, the PRC and such other jurisdictions in which such
member of the Group is incorporated and has complied with all
health and safety at work and has maintained adequate and
suitable records regarding the service of the employee;
(ii) discharged fully its obligations to pay all salaries, wages,
commissions, bonuses, overtime pay, holiday pay, sick pay
accrued entitlement under incentive schemes tax and other
benefits of or connected with employment up to the date of
this Agreement;
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Page 17
(iii) no dispute has arisen within the last three years which has
remained outstanding or otherwise unresolved between any
member of the Group and a material number or category of its
employees or former employees and there are no present
circumstances which are likely to give rise to any such
dispute; and
(iv) there are no material complaints pending or threatened against
any member of the Group of whatsoever nature in relation to
any of its employees or former employees and there is no
material industrial action or dispute threatened or existing
or anticipated in respect of or concerning any employees or
former employees of any member of the Group.
(9) Each Group Company has no agreement or arrangement (binding or otherwise)
with any trade union or other organisation representing its employees.
(10) Bach Group Company is not involved in any industrial or trade disputes or
any dispute or negotiation regarding a claim of material importance with
any trade union or organisation representing the employees or a group of
employees and there are no circumstances likely to give rise to any such
dispute.
SINCE THE ACCOUNTING DATE
(11) Since the Accounting Date :-
(A) the business of each member of the Group has been carried on in the
ordinary course and so as to maintain it as a going concern and
there has been no material adverse change in the financial position
or trading prospects of any member of the Group;
(B) there has been no material reduction in the aggregate value of the
net assets of any member of the Group;
(C) no member of the Group has made or agreed to make any payment or
entered into any transaction or has assumed obligation or expenses
or incurred any liability except in the ordinary course of then
trading and for full value;
(D) none of the members of the Group has acquired or disposed of or
agreed to acquire or dispose of any business or any material asset
other than trading stock in the ordinary course of business;
(E) no distribution of capital or income has been declared made or paid
by or in respect of any share capital or assets of any member of the
Group; and
(F) no member of the Group has changed its accounting reference period.
(12) Since the Accounting Date, the respective business of each member of the
Group has not been materially and adversely affected by any event or
circumstances including without limitation, the loss of any important
customers) or source(s) of supply or any abnormal factor(s) not affecting
similar businesses to a similar extent, and the Warrantors are not aware
of any facts likely to give rise to any such effect whether before or
after Completion.
TAXATION
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(13) To the best knowledge and belief of the Warrantors, each member of the
Group has within the requisite time limits duly made all returns, given
all notices, and supplied all other information required to be supplied to
any competent relevant fiscal authority in any part of the world and all
such information returns and notices were when given or supplied and are
now accurate in all material respects and made on a proper basis and are
not, so far as the Warrantors are aware, likely to be the subject of any
dispute with any of the relevant authorities concerned.
(14) The provisions or reserves for Taxation appearing in the Accounts are
sufficient (on the basis of the rates of Taxation current at the date
hereof) to cover all Taxation for which any member of the Group was at the
Accounting Date or may after that date become or have become liable on or
in respect of or by reference to any profits gains or income (whether
deemed or actual) for any period ended on or before the Accounting Date or
in respect of any distribution or transaction made or entered into or
deemed made or entered into on or before the Accounting Date.
(15) Each member of the Group has duly deducted withheld paid and accounted for
all tax due to have been deducted withheld paid or accounted for by it
before the date of this Agreement and is not and has not at any time since
the Accounting Date been liable to pay interest on any unpaid taxation.
(16) Bach member of the Group has taken all necessary steps to obtain any
repayment of or relief from Taxation available to it.
(17) Each member of the Group made no borrowings in a foreign currency such
that on repayment a charge to tax might arise on any profit or gain
accruing in relation or by reference to any such repayment
(18) To the best knowledge and belief of the Warrantors, each member of the
Group is not under any liability to pay stamp duty and/or stamp duty
reserve tax and any documents to which any member of the Group is party
and/or which relates to or are necessary to prove the title of any member
of the Group is to their respective assets (including (without limitation)
the Properties) and/or contain material rights on the part of the members
of the Group have been properly stamped and no such documents which are
outside Hong Kong and the PRC would attract stamp duty if they were
brought into Hong Kong and the PRC.
(19) Each member of the Group has paid all tax which it has become liable to
pay and is not, and has not in the last six years ending on the date of
this Agreement been liable to pay a penalty, surcharge, fine or interest
in connection with Taxation.
INSOLVENCY
(20) (A) No receiver has been appointed of the whole or any part of the
assets or undertaking of any member of the Group.
(B) No petition has been presented, no order has been made and no
resolution has been passed for the winding-up or dissolution of any
member of the Group.
(C) None of the members of the Group has stopped payment nor is
insolvent or unable to pay its debts within the meaning of the
Companies Ordinance or similar laws and regulations in the PRC.
(D) No unsatisfied judgment is outstanding against any member of the
Group.
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Page 19
POWERS OF ATTORNEY
(21) No member of the Group has given any powers of attorney or any other
authority (express, implied or ostensible) which is still outstanding or
effective to any person to enter into any contract or commitment or do
anything on its behalf (other than any authority of directors or employees
to enter into banking and/or trading contracts and/or security documents
in the normal course of their duties).
OTHER MATERIAL CONTRACTS
(22) None of the members of the Group is a party to and has any liability
(present or future) under any long-term, unusual, non-routine, onerous or
material contract or commitment involving obligations or expenditure of an
unusual or exceptional nature or magnitude or any contract which cannot
readily be fulfilled or performed by it on time and without undue or
unusual expenditure of money or effort.
(23) Neither the Warrantors nor any member of the Group has any knowledge of
any invalidity or grounds for rescission, avoidance or repudiation of any
agreement of material importance to which any member of the Group is a
party and no member of the Group has received notice of any intention to
terminate any such agreement
(24) None of the members of the Group has outstanding any other material
indebtedness.
(25) Each member of the Group has not received any notice to repay under any
agreement relating to indebtedness which is repayable on demand; and there
has not occurred any event of default under any agreement relating to any
indebtedness (or any event which with the giving of notice and/or the
lapse of time and/or a relevant determination would constitute such an
event of default).
(26) Each member of the Group is not in default in any material respect under
any material agreement to which it is a party or by which it is bound. So
far as the Warrantors are aware (i) no party with whom any member of the
Group has entered into any material agreement or arrangement is in default
in any material respect thereunder, and (ii) there are no circumstances
likely to give rise to such a default
(27) Each member of the Group is not under any obligation, or is a party to any
contract, which cannot readily be fulfilled or performed by it on time and
without undue or unusual expenditure of money or effort.
(28) Each member of the Group is not a party to nor does it have any liability
(present or future) under any loan agreement, debenture, guarantee,
indemnity or letter of credit or leasing, hiring, hire purchase, credit
sale or conditional sale agreement nor has it entered into any contract or
commitment involving, or likely to involve, obligations or expenditure of
an unusual or exceptional nature or magnitude.
THE PROPERTIES
(29) Short particulars of the Properties are correctly set out on the valuation
certificate in Appendix IV to the Prospectus and the Properties comprise
all the land, building and premises owned,
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Page 20
leased or occupied or used by the Group at the date hereof. The tenure and
particulars of the Properties therein mentioned are complete, true and
accurate in all respects.
(30) True and complete copies of the tenancies ("Tenancies") and title
documents and other instruments, documents and agreement in respect of the
Properties required for inspection by the valuer named in Appendix IV to
the Prospectus have been supplied to them, and these agreements,
instruments and documents constitute the entire documents in respect of
the lease of the Properties.
(31) All covenants, stipulations, obligations, conditions, restrictions or
other terms imposed upon the relevant members of the Group under the
Tenancies or otherwise affecting the Properties have been duly and
promptly observed and performed and complied with and there has been no
breach by the Group's landlords of such covenants, obligations, conditions
or restrictions or other obligations to which any such landlords are bound
and there are no circumstances which would entitle or require any person
to restrict or terminate the continued possession or occupation of any of
the Properties.
(32) All rentals and other charges payable under the Tenancies have been
promptly paid as and when due and no rental has been paid in advance of
the due date for payment and any consents required for the grant of the
Tenancies have been obtained from any relevant third parties (if any).
(33) The parties to the Tenancies have observed and performed all the terms and
conditions therein and so far as the Warrantors, after making all
reasonable enquiries, there are no disputes or outstanding or expected
claims in these agreements and there are no circumstances giving rise to
such disputes or claims.
(34) No member of the Group has entered into any assignments of rental or other
monies payable under any licences, leases or tenancies in respect of the
Properties.
(35) There is no outstanding and unobserved and unperformed obligation
necessary to comply with by the Group under the Tenancies or any notice or
other requirement given by the licensors under Tenancies or by any
competent authority exercising statutory or delegated powers.
(36) There is no resolution, plan or proposal for compulsory acquisition or
expropriation of the Properties or any part thereof by government
authority, and none is pending.
(37) There is no dispute with any governmental or local authority or with the
owner or occupier of any adjoining or neighbouring property to the
Properties or howsoever otherwise.
(38) There is no person in possession or occupation of, or who has or claims a
right or interest of any kind in, the Properties adversely to any Group
Company's interest and there is attached to the Properties all rights of
way necessary for the use and enjoyment of the Properties by the relevant
Group Company.
(39) There is no material defect of any kind affecting the Properties.
(40) In relation to the Properties owned by the Group:-
(A) the relevant Group Company has valid and legal land use rights and
building ownership rights in relation to relevant Property;
(B) the land use rights to the relevant Properties are granted land use
rights;
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(C) save as disclosed in the Accounts the relevant Property is not
subject to any encumbrance;
(D) the requisition of land, the conversion of any land from allocated
to grant land use rights, and the granting of land use rights in
respect of the relevant Properties have been duly effected in
compliance with applicable laws and regulations;
(E) where applicable, the land grant premium, the relocation fee,
resettlement fee, demolition fee, expropriation fee, and any other
applicable land use fees and construction fees with respect to the
relevant Properties have been paid in full; and
(F) the relevant Group Company has obtained all necessary permits for
the construction of buildings on the relevant Properties.
(41) In relation to each Tenancy:-
(A) there are so far as the Company is aware:
(i) no disputes or outstanding or expected notices given by a
landlord affecting the Properly;
(ii) no right for a landlord or licensor to terminate the Tenancy;
(iii) no circumstances which would entitle a landlord or licensor to
exercise any power of entry upon or to take possession of the
Property or which would otherwise restrict or terminate the
continued possession or occupation thereof; and
(B) there is nothing outstanding which would enable any person or entity
to exercise any right of re-entry or take possession of the Property
or any part thereof.
INTELLECTUAL PROPERTY
(42) All intellectual property rights currently being used by or in the
business of any member of the Group:
(A) are owned by the Company or the members of the Group as the sole
legal and beneficial owner, free of any licence or encumbrance in
favour of a third party ("Company IP"); or
(B) are used by the Company or the members of the Group in accordance
with the terms of a current licence in writing from the owner of
that intellectual property rights, copies of which have been
provided to the Purchaser ("Licensed IP").
(43) All intellectual property rights currently being used by or in the
business of any member of the Group are valid and enforceable and nothing
has been done or omitted to be done by which it may cease to be valid and
enforceable.
(44) No members of the Group need to use nor has any of the members of the
Group used any intellectual property right in a manner that infringes the
intellectual property rights of any third party.
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(45) No members of the Group has granted or is under an obligation to grant a
licence, assignment, consent, undertaking, security interest or other
right in respect of any of the Company IP and Licensed IP.
(46) All renewal and maintenance fees and taxes due and in respect of each of
the pending and registered intellectual property rights currently being
used by or in the business of any member of the Group have been paid in
full.
(47) All pending applications for the registration of the Trade Marts will be
completed without undue delay and will not involve unusual expenditure or
effect on the part of the Group.
(48) Since the incorporation of the Company and any member of the Group, no
third party has:
(A) infringed or misused any Company IP, or threatened to do so; or
(B) made, threatened or bought any notice, challenge, demand, claim or
proceedings in relation to the Company IP or the Company's use of
the Licensed IP and there are no facts or matters which might give
rise to any such challenge, claim or proceedings.
(49) No members of the Group carry on business under any name other than its
own.
(50) No members of the Group have any of its records, systems, controls, data
or information recorded, stored, maintained, operated or otherwise wholly
or partly dependent on or held by any means (including any electronic,
mechanical or photographic process whether computerised or not) which
(including all means of access thereto and therefrom) are not under the
exclusive ownership and direct control of the Company.
(51) Each member of the Group has security procedures in place to prevent
unauthorised access, amendment or damage to the data of the relevant
member of the Group or the data of third parties held, recorded, stored,
maintained or operated by the Company or on behalf of the Company by any
third party, and no unauthorised access, amendment or damage to such data
has taken place since the incorporation of each member of the Group.
(52) So far as the Warrantors are aware after making all due and careful
investigation, searches and enquiries, none of the Trademark is being
used, claimed or opposed by any other person.
(53) So far as the Warrantors are aware after making all due and careful
investigation, searches and enquires, the business of each Group Company
as now carried on by any member of the Group does not, and is not likely
to, infringe any intellectual or industrial property right of any other
person (or would not do so if the same were valid) and no claims have been
made and no applications are pending of which the Warrantors are aware
which if pursued or granted may materially and adversely affect the
Company or its business.
(54) No Group Company has (otherwise than in the ordinary and normal course of
business) disclosed, or permitted to be disclosed, or undertaken or
arranged to disclose, to any person other than the Purchaser any of its
know-how, trade secrets, confidential information, price lists or lists of
customers.
(55) The intellectual property rights currently being used by or in the
business of any member of the Group are valid and enforceable will not be
adversely affected by the transactions contemplated by this Agreement.
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ASSETS
(56) Each asset included in the Accounts or acquired by any Group Company since
tie Accounting Date (other than stock disposed of in the ordinary course
of business) and each asset used by any Group Company or which is in the
reputed ownership of any Group Company is:
(A) legally and beneficially owned solely by the relevant Group Company
free from any encumbrances security, charge, pledge, lien, any third
party claims or any third party rights of whatever nature;
(B) not subject to any finance lease or hire purchase agreement or sale
on deferred, credit or conditional terms; and
(C) where capable of possession, in the possession or under the control
of the relevant Group Company.
(57) Each Group Company owns or has the right to use each asset necessary for
the effective operation of its business.
(58) All plant, machinery, vehicles and equipment owned, possessed or used by
each Group Company are in good condition and working order and have been
regularly and properly maintained. None is dangerous or unsuitable for use
in the business of each Group Company or is in need of renewal or
replacement.
(59) All assets have been regularly maintained to a good technical standard and
are in compliance with all relevant applicable safety regulations required
to be observed in relation to them.
(60) Each Group Company is not a party to any finance lease, hire purchase
agreement or credit sale agreement for the purchase of assets, goods or
land.
ENVIRONMENTAL MATTERS
(61) No use, release or discharge of a hazardous substance in the operation of
any member of the Group has exceeded an allowed quota or limit prescribed
or specified under any PRC laws and regulations, any applicable permits,
or any environmental impact appraisal reports or similar documents
relating to environmental matters.
(62) No hazardous substances have been or are disposed of, stored, kept or
present on, in or under any of the Properties, nor in water or the ground
or groundwater on or under any of the Properties.
(63) There is not and has not been any investigation, enquiry or inspection
relating to the environment or environmental matters concerning any of the
member of the Group and none is pending or threatened.
(64) Each member of the Group has conducted its business and dealt with its
assets and properties in compliance with the conditions and standards set
out in all applicable environmental impact appraisal reports or similar
assessments, studies or tests and associated documentation and
correspondence.
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INSURANCE
(65) Each insurable asset of each member of the Group has at all material times
been and is at the date of this Agreement insured to its full replacement
value against each risk normally insured against by a person operating the
types of business operated by each member of the Group.
(66) Each Group Company has at all material times been and is at the date of
this Agreement adequately insured against accident, damage, injury, third
party loss, credit risk, loss of profits and all other risks to which a
person operating the types of business operated by each member of the
Group is exposed.
(67) Each current insurance and indemnity policy in respect of which the
Company or any other Group Company has an interest is valid and
enforceable and will not be invalidated by the transaction contemplated
under this Agreement
MISCELLANEOUS
(68) All representations and warranties contained in this Schedule shall be
deemed to be repeated immediately before Completion and to relate to the
facts then existing.
(69) The Sale Shares constitute the entire issued share capital of the Company
and are in issue fully paid.
(70) The acquisition of the Sale Shares by the Purchaser and compliance with
the terms of this Agreement will not:
(A) result in any present or future indebtedness of any member of the
Group becoming due or capable of being declared due and payable
prior to its stated maturity;
(B) result in a breach of, or constitute a default under any order,
judgement or decree of any court or government agency by which any
member of the Group is bound or subject; and
(C) result in a breach of, or constitute a default under the terms,
conditions or provisions of any agreement, understanding,
arrangement or instrument (including, but not limited to, any member
of the Group's contracts).
(71) So far as the Warrantors are aware:
(A) the acquisition of the Sale Shares and compliance with the terms of
this Agreement will not cause any member of the Group to lose the
benefit of any licence, consent, permit, approval or authorisation
(public or private) or any right or privilege it presently enjoys or
relieve any person of any obligation to any member of the Group
(whether contractual or otherwise) or enable any person to determine
any such obligation or any contractual right or benefit now enjoyed
by any member of the Group or to exercise any right whether under an
agreement with any member of the Group or otherwise; and
(B) the acquisition of the Sale Shares and compliance with the terms of
this Agreement will not adversely affect the Group's relationships
with its clients, customers, suppliers and employees and the
Warrantors are not aware of any circumstances indicating that,
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nor have they been informed or are otherwise aware that, any person
who now has business dealings with any member of the Group would or
might cease to do so from and after Completion.
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SCHEDULE 4
LIMITATION OF LIABILITY OF THE WARRANTORS
(1) Liabilities of Warrantors
The liabilities of the Warrantors to the Purchaser under this Agreement
shall be on a several basis only.
(2) Combined Effects Limitation
None of the Warrantors shall be liable for any Warranty Claim which would
not have arisen but for an Event occurring after Completion.
(3) Provisions in Accounts
3.1 The amount of any Warranty Claim shall be reduced by the amount (if any)
by which:
(A) any liability of the Group included in the Accounts has been
discharged or satisfied at below the amount attributed thereto or
included in respect thereof in the Accounts; and/or
(B) any contingency or other matter provided against in the Accounts had
in the event been over-provided for.
3.2 No Warranty Claim shall be brought in respect of any breach or alleged
breach of any Warranty if and to the extent that provision is made for the
circumstances giving rise thereto in the Accounts.
(4) Duty to notify the Warrantors of potential claims
The Purchaser shall and shall procure that the Company shall as soon as is
practicable inform each of the Warrantors in writing of any Event which
comes to its notice or to the notice of the Company whereby it appears
that any of the Warrantors is or may become liable to make any payment
under any Warranty and shall not settle or compromise any such claim
without the prior written consent of all Covenantors, such consent not to
be unreasonably withheld or delayed.
(5) Warranty only actionable by the Purchaser
The Warranties shall be actionable only by the Purchaser, its assigns or
successor in title and no other person shall be entitled to make any
direct claim or take any direct action whatsoever against any of the
Warrantors under, arising out of, or in connection with any of the
Warranties.
(6) Warrantors not to be liable in certain circumstances
None of the Warrantors shall be liable under the Warranties to the extent
that any depletion, diminution or reduction in the value or amount of any
of the assets of the Group occurs as a result of or is otherwise
attributable to any legislation not in force at the date of this Agreement
or any change of law or administrative practice which takes effect
retroactively or
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occurs as a result of any increase in the rates of Taxation in force at
the date of this Agreement
(7) Right to repayment of amount recovered
The Purchaser shall reimburse to each of the Warrantors an amount equal to
any sum paid by it under any of the Warranties which is subsequently
recovered by or paid to the Purchaser or a member of the Group by any
third party.
(8) No double claims under Warranties and Indemnity
No liability shall attach to any of the Warrantors by reason of a breach
of any of the Warranties to the extent that the loss occasioned to the
Purchaser also gives rise to an equivalent claim under the Indemnity and
file Warrantors have settled such equivalent claim and no liability shall
attach to any of them by reason of a claim under the Indemnity to the
extent that an equivalent claim has been made under the Warranties and the
Warrantors have settled such equivalent claim.
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SCHEDULE 5
FORM OF BOARD MINUTES OF THE PURCHASER
EASTAR GROUP HOLDINGS LIMITED
(incorporated in the Cayman Islands with limited liability)
RESOLUTIONS IN WRITING SIGNED BY ALL THE DIRECTORS (THE "DIRECTORS") OF EASTAR
GROUP HOLDINGS LIMITED (THE "COMPANY") PURSUANT TO ARTICLE 60 OF THE ARTICLES OF
ASSOCIATION OF THE COMPANY
1. The following documents were produced for consideration by the Directors:-
(a) a share sale and purchase agreement ("Share Sale and Purchase
Agreement") to be entered into between (1) Expert Master Holdings
Limited and UMW China Ventures (L) Limited as vendors (collectively
"the Vendors"); and (2) the Company as purchaser, pursuant to which
the Vendors have agreed to transfer all their shares ("Sale Shares")
in First Space Holdings Limited to the Company, in consideration of
the Company credited as fully paid the 1,000 nil paid shares of
HK$0.01 each in the issued share capital of the Company issued nil
paid on 16 November 2006 to the relevant Vendors in the proportion
set opposite to their respect names in the third column of Schedule
1 of the Share Purchase Agreement; and
(b) instruments of transfer for the sale and purchase of the Sale Shares
to be signed by Vendors as transferors and the Company as
transferee.
2. IT WAS NOTED THAT:
(a) all the Directors had fully disclosed their interests, whether
directly or indirectly, in connection with the transaction(s) under
consideration in accordance with the articles of association of the
Company and laws applicable to the Company; and
(b) all the Directors also declared that the Share Sale and Purchase
Agreement was part of an exercise being undertaken in preparation of
the listing of the Company's shares on the main board of The Stock
Exchange of Hong Kong Limited.
3. After due and careful consideration, IT WAS RESOLVED:-
(a) THAT, the form and substance of the Share Sale and Purchase
Agreement be and the same is hereby unconditionally approved;
(b) THAT, any one Director be and is hereby authorised to sign for and
on behalf of the Company the Share Sale and Purchase Agreement and
the instruments of transfer referred to in paragraph 1 (b) above;
(c) THAT, any one Director be and is hereby authorised to sign any
further documents incidental or ancillary to or in connection with
each of the documents referred to in paragraph 1 above, and any one
Directors be and is hereby authorised to affix the common seal of
the Company in accordance with its articles of association to such
documents as they consider necessary, desirable or incidental to
transactions contemplated by the Share Sale and Purchase Agreement;
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(d) THAT, any one Director be and is hereby authorised to approve any
amendments to each of the documents referred to in this paragraph 3,
such approval being conclusively evidenced by his/her signature on
the relevant documents; and
(e) THAT, signed copies of each of the documents referred to in this
paragraph 3 be delivered to the relevant parties.
Dated the [o] day of [o] 2006.
_______________________________ ___________________________________
Piao Longhua Xu Xizhong
Director Director
_______________________________
▇▇▇▇ ▇▇▇▇▇ bin Harun
Director
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SCHEDULE 6
DETAILS OF SUBSIDIARIES
1. WUXI SEAMLESS OIL PIPES COMPANY LIMITED
Date of Incorporation : 17 November 1999
Place of Incorporation : PRC
Total Investment : US$88,300,000
Term : 20 years
Registered Share Capital : US$35,000,000
Shareholder : First Space Holdings Limited
Directors : 1. Piao Longhua;
2. Xu Xizhong;
3. ▇▇▇▇▇ ▇▇▇▇▇ Bin Harun
2. JIANGSU FANLI PIPE CO LTD
Date of Incorporation : 16 April 2004
Place of Incorporation : PRC
Registered Share Capital : US$50,000,000.00
Shareholders : Wuxi Seamless Oil Pipes Company Limited 70%
▇▇▇▇▇ ▇▇▇▇▇ 24%
▇▇▇▇▇ ▇▇▇▇▇ 4%
Gu Jianming 2%
Directors : 1. Piao Longhua;
2. Encik Zulkifly bin Zakaria;
3. ▇▇▇▇▇ ▇▇▇▇▇
3. WSP DRILL PIPE CO LTD
Date of Incorporation : 30 August 2005
Place of Incorporation : PRC
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Registered Share Capital : US$3,600,000.00
Shareholder : Wuxi Seamless Oil Pipes Company Limited 51%
Hailong International (L) Ltd. 40%
Wuxi Weld Technology Co., Ltd. 9%
Directors : 1. ▇▇▇ ▇▇▇▇ Bo;
2. Zhao Ren Cun;
3. Zhang Jun
4. WUXI SEAMLESS OIL EXTRACTION EQUIPMENT CO, LTD.
Date of Incorporation : 10 November 2004
Place of Incorporation : PRC
Registered Share Capital : US$10,000,000.00
Shareholder : Wuxi Seamless Oil Pipes Company Limited 51%
Panjin Weihua High & New Technology 49%
Energy-Saving Equipment Co., Ltd.
Directors : 1. Piao Longhua
2. Encik Zulkifly bin Zakaria;
3. Zhu ▇▇▇▇▇ ▇▇▇;
4. Liu Lan Lan
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SCHEDULE 7
1st proof of the Prospectus
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