[ execution copy 27/04/2001 ]
Dated the 27th day of April 2001
LI CHUQUAN
(as 1st Vendor)
and
CHAN XXXX XXXXX
(as 2nd Vendor)
and
PANAGRA INTERNATIONAL CORPORATION
(as Parent)
and
MINGHUA ACQUISITION CORP.
(as Purchaser)
AGREEMENT FOR SALE AND PURCHASE OF
1,000,000 Shares in
Xxxx Xxx Group International Holding (Hong Kong) Limited
I N D E X
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Clause No. Heading Page No.
--------- ------- --------
1 Interpretation 1
2 Sale and Purchase of the Sale Shares 7
3 Conditions 7
4 Consideration 9
5 Deposit 10
6 Completion 11
7 Vendor's Warranties 14
8 Purchaser's Warranties 16
9 Facsimile Execution 19
10 Further Assurance 19
11 Confidentiality and Announcements 19
12 Notices 20
13 Severability 21
14 Capacity 21
15 Entire Agreement 21
16 Amendments 21
17 Waiver 22
18 Counterparts 22
19 Assignment 22
20 Time of the Essence 22
21 Costs and Stamp Duty 22
22 Governing Law 23
23 Jurisdiction 23
Schedules
---------
Schedule 1 Particulars of the Company 25
Schedule 2 Part I - Vendor's Warranties 26
Part IA - Vendor's Schedule of Exceptions 40
Part II - Purchaser's Warranties 41
Part IIA - Purchaser's Schedule of Exceptions 46
THIS AGREEMENT is dated the 27th day of April, 2001
AMONG:
(1) LI CHUQUAN ( ) of Xxxx X, 0xx Xxxxx, Xxxxxxx Xxxxxxx, Xxx.0-00
Cleveland Street, Causeway Bay, Hong Kong (the "1st Vendor");
(2) CHAN XXXX XXXXX ( ) of 4th Floor, Tuen Mun Centre Building, Xx.00 Xxx
Xxxxx Xxxxxx, Xxxx Xxx, Xxx Xxxxxxxxxxx, Xxxx Xxxx (the "2nd Vendor");
(3) PANAGRA INTERNATIONAL CORPORATION, a New York corporation having its
business address at 515, Madison Avenue, New York, NY 10022, United
States of America (the "Parent"); and
(4) MINGHUA ACQUISITION CORP., a Delaware corporation and wholly-owned
subsidiary of Parent, having its business address a 000 Xxxxxxx Xxxxxx,
Xxx Xxxx, XX 00000, Xxxxxx Xxxxxx of America ("Purchaser").
WHEREAS:
(A) Xxxx Xxx Group International Holding (Hong Kong) Limited (the
"Company") was incorporated under the laws of Hong Kong on 4th June
1997 as a private limited liability company. Further information
concerning the Company is set out in Schedule 1.
(B) The sole asset of the Company is an 85% equity interest in the Joint
Venture Company (as defined in Section 1).
(C) The Purchaser is a wholly-owned subsidiary of the Parent.
(D) The Vendor, the Parent and the Purchaser are entering into this
Agreement for the sale and purchase of the Sale Shares subject to and
upon the terms and conditions of this Agreement.
NOW IT IS HEREBY AGREED AS FOLLOWS:
1. INTERPRETATION
1.1 In this Agreement (including the Recitals, Schedules and Exhibits),
unless the context otherwise requires, the following words and
expressions shall have the following meanings ascribed to each of them
below:
"Accounts"
the unaudited balance sheets of the Company
as at the Last Accounts Date and the
unaudited profit and loss accounts of the
Company for the period commencing from 4th
June 1997 to the Last Accounts Date;
"Adverse Consequences"
means all actions, suits, proceedings,
hearings, charges, claims, demands,
injunctions, judgments, orders, decrees,
rulings, damages, dues, penalties, fines,
costs, amounts paid in settlement,
liabilities, obligations, taxes, liens,
losses, lost value, expenses, and fees,
including court costs and reasonable legal
fees and expenses;
"Business Day"
a day (other than a Saturday) on which banks
in Hong Kong and New York are open for
business throughout their normal business
hours;
"Company"
Xxxx Xxx Group International Holding (Hong
Kong) Limited ( ( ) )
"Completion"
completion of the sale and purchase of the
Sale Shares in accordance with the terms and
conditions of this Agreement;
"Completion Date"
the date falling on the third Business Day
after all the conditions set out in Clause
3.2 have been fulfilled or waived, whichever
is the earlier;
"Consideration Share"
a share of the common stock of US$0.01 par
value per share of the Parent, forming part
of the Purchase Consideration, and reference
to "Consideration Shares" shall be construed
accordingly;
"Deposit"
the sum of US$1,000,000 which shall be paid
by the Purchaser as provided in Clause
4.2(1);
"Encumbrance"
any mortgage, charge, pledge, lien,
(otherwise than arising by statute or
operation of law), equities, hypothecation
or other encumbrance, priority or security
interest, preemptive right deferred
purchase, title retention, leasing,
sale-and-repurchase or sale-and-leaseback
arrangement whatsoever over or in any
property, assets or rights of whatsoever
nature and includes any agreement for any of
the same and reference to "Encumbrances"
shall be construed accordingly;
"Exchange Act"
Securities Exchange Act of 1934, as amended;
"Hong Kong"
the Hong Kong Special Administrative Region
of the PRC;
"Hong Kong Dollars"
or the
sign "HK$"
Hong Kong dollars;
"Intellectual Property"
means (a) all inventions (whether patentable
or unpatentable and whether or not reduced
to practice), all improvements thereto, and
all patents, patent applications, and patent
disclosures, together with all reissuances,
continuations, continuations-in-part,
revisions, extensions, and reexaminations
thereof, (b) all trademarks, service marks,
trade dress, logos, trade names, and
corporate names, together with all
translations, adaptations, derivations, and
combinations thereof and including all
goodwill associated therewith, and all
applications, registrations, and renewals in
connection therewith, (c) all copyrightable
works, all copyrights, and all applications,
registrations, and renewals in connection
therewith, (d) all mask works and all
applications, registrations, and renewals in
connection therewith, (e) all trade secrets
and confidential business information
(including ideas, research and development,
know-how, formulas, compositions,
manufacturing and production processes and
techniques, technical data, designs,
drawings, diagrams, specifications, customer
and supplier lists, catalogs, pricing and
cost information, and business and marketing
plans and proposals), (f) all computer
software (including source code, object
code, models, algorithms, data and related
documentation) (whether licensed, purchased
or internally developed), (g) all
information systems and management
procedures, (h) all other proprietary
rights, and (i) all copies and tangible
embodiments thereof (in whatever form or
medium);
"Joint Venture Company"
a Sino-foreign equity joint venture by the
name of Shenzhen Minghua Environmental
Protection Vehicles Co., Ltd. ( ) a company
existing under the laws of the PRC;
"Last Accounts Date"
December 31, 2000;
"Minghua Investment"
Shenzhen Minghua Investment Co. Ltd. ( ),
the owner of 15% of the outstanding equity
interests in the Joint Venture Company
"PRC"
The People's Republic of China, which for
the purpose of this Agreement, excludes Hong
Kong;
"Purchase Consideration"
the purchase consideration stipulated in
Clause 4.1;
"Purchaser's Schedule of
Exceptions"
the schedule containing exceptions to the
representations and warranties of the Parent
and/or the Purchaser appearing in Schedule 2
Part IIA;
"Purchaser's Warranties"
the representations and warranties set out
in Schedule 2 Part II and any other
representations, warranties and undertakings
made by or on behalf of the Purchaser in
this Agreement or which have become the
terms of this Agreement;
"Sale Shares"
1,000,000 Shares being the aggregate of the
1st Vendor's Shares and the 2nd Vendor's
Shares;
"Securities Act"
US Securities Act of 1933, as amended;
"Shares"
shares of HK$1.00 each in the share capital
of the Company and reference to "Share"
shall be construed accordingly;
"Taxation"
all forms of taxation including overseas
taxation and all forms of profits tax,
interest tax, estate duty and stamp duty and
all levies, imposts, duties, charges, fees,
deductions and withholdings whatsoever
charged or imposed by any statutory,
governmental state, provincial, local
government or municipal authority whatsoever
and the expression "Tax" shall be construed
accordingly;
"this Agreement"
this agreement for the sale and purchase of
the Sale Shares, as amended from time to
time;
"US"
United States of America;
"United States Dollars"
or the sign "US$"
United States dollars;
"Vendor"
collectively the 1st Vendor and the 2nd
Vendor;
"Vendor's Schedule of Exceptions"
the schedule containing exceptions to the
representations and warranties of the Vendor
appearing in Schedule 2 Part IA;
"1st Vendor's Shares"
900,000 Shares registered in the name of and
beneficially owned by the 1st Vendor;
"2nd Vendor's Shares"
100,000 Shares registered in the name of and
beneficially owned by the 2nd Vendor;
"Vendor's Solicitors"
Messrs. Xxxxxxx C. C. Man & Co. of Suite
1105, 11th Floor, Xxxxxxx Xxxxx, Xx.00
Xxxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx;
"Vendor's Warranties"
the representations and warranties set out
in Schedule 2 Part I and any other
representations, warranties and undertakings
made by or on behalf of the Vendor in this
Agreement or which have become the terms of
this Agreement.
1.2 The headings of this Agreement are inserted for convenience only and
shall be ignored in construing this Agreement. Unless the context
otherwise requires, references in this Agreement to the singular shall
be deemed to include references to the plural and vice versa;
references to one gender shall include all genders and references to
any person shall include an individual, firm, body corporate or
unincorporated.
1.3 References in this Agreement to Clauses, Schedules and Exhibits are
references to clauses of and schedules and exhibits to, this Agreement
and references to sub-clauses and paragraphs are unless otherwise
stated, references to sub-clauses and paragraphs of the Clause,
sub-clause or, as appropriate, the Schedule or the Exhibit in which the
reference appears.
1.4 Reference to any ordinance, regulation or other statutory provision or
Stock Exchange rules in this Agreement includes reference to such
ordinance, regulation, provision or rule as modified, consolidated or
re-enacted from time to time.
1.5 The Schedules and the Recitals shall form part of this Agreement.
2. SALE AND PURCHASE OF THE SALE SHARES
2.1 Subject to and upon the terms and conditions of this Agreement, the
Vendor shall sell and the Purchaser shall purchase the Sale Shares with
effect from Completion free from all Encumbrances together with all
rights now or hereafter attaching thereto including but not limited to
all dividends paid, declared or made in respect thereof on or after the
date of Completion.
2.2 The Purchaser shall not be obliged to purchase any of the Sale Shares
unless the purchase of all the Sale Shares is completed simultaneously.
3. CONDITIONS
3.1
(1) The Purchaser shall and shall procure that his agents shall
forthwith upon the signing of this Agreement conduct such
review of the assets, liabilities, operations and affairs both
of the Company and the Joint Venture Company as it may
reasonably consider appropriate and the Vendor shall provide
and procure the Company and/or the Joint Venture Company to
provide such assistance as the Purchaser or his agents may
reasonably require in connection with such review so as to
enable the review to be completed on or before 12:00 noon on
the date falling 30 days from the date of this Agreement or
such later date as the Vendor and the Purchaser may agree
under Clause 3.3.
(2) The Vendor shall and shall procure that his agents shall
forthwith upon the signing of this Agreement conduct such
review of the assets, liabilities, operations and affairs of
the Purchaser and the Parent as it may reasonably consider
appropriate and the Purchaser and the Parent shall provide
such assistance as the Vendor or their respective agents may
reasonably require in connection with such review so as to
enable the review to be completed on or before 12:00 noon on
the date falling 30 days from the date of this Agreement or
such later date as the Vendor and the Purchaser may agree
under Clause 3.3.
3.2 Completion is conditional upon:
(1) the Purchaser being satisfied at its sole and absolute
discretion with the results of the due diligence review to be
conducted under Clause 3.1(1);
(2) the Vendor being satisfied at their sole and absolute
discretion with the results of the due diligence review to be
conducted under Clause 3.1(2);
(3) the Vendor's Warranties (save and except the Vendor's Schedule
of Exceptions) remaining true and accurate in all respect;
(4) the Purchaser's Warranties (save and except the Purchaser's
Schedule of Exceptions) remaining true and accurate in all
respect;
(5) the Purchaser's receipt of an opinion from each of the
Vendor's Solicitors and a legal firm practicing the laws of
the PRC regarding the transactions contemplated hereby in form
and substance reasonably satisfactory to the Purchaser;
(6) no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of
any jurisdiction or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling, or
charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement or (B) cause any
of the transactions contemplated by this Agreement to be
rescinded following consummation (and no such injunction,
judgment, order, decree, ruling, or charge shall be in
effect);
(7) the parties shall have received all authorizations, consents,
and approvals of governmental authorities and third parties
that are necessary in order to complete the transactions
contemplated hereby;
(8) the Company and Minghua Investment shall have entered into a
stockholders agreement or similar agreement in form and
substance reasonably satisfactory to the parties to this
Agreement pursuant to which, among other things, Minghua
Investment will grant a perpetual irrevocable proxy to the
Company which permits the Company to vote all of the shares of
capital stock of the Joint Venture Company held by it on all
matters coming before the stockholders of the Joint Venture
Company for a vote;
(9) the Parent and the Vendor shall have entered into a
registration rights agreement in form and substance reasonably
satisfactory to the parties to this Agreement pursuant to
which the Parent shall grant to the Vendor certain rights with
respect to the registration of 28,000,000 Consideration Shares
which form part of the Purchase Consideration;
(10) Vendor shall have delivered the Vendor's Schedule of
Exceptions in a form reasonably satisfactory to the Purchaser
as contemplated by Clause 7.11 of this Agreement and the
Purchaser shall have delivered a Purchaser's Schedule of
Exceptions in a form reasonably satisfactory to the Vendor as
contemplated by Clause 8.11 of this Agreement; and
(11) Vendor shall have delivered to the Purchaser consolidated
audited financial statements for the Company prepared in
accordance with US Generally Accepted Accounting Principles
for the period from incorporation until the Last Accounts Date
and such financial statements shall be in a form suitable for
filing with the U.S. Securities and Exchange Commission as
required by Form 8-K promulgated under the Securities Act.
3.3 If any of the conditions set out in Clause 3.2 has not been satisfied
on or before 12:00 noon on the date falling 30 days from the date of
this Agreement or such later date as both the Purchaser and the Vendor
may agree, this Agreement shall cease and terminate (save and except
Clause 11 which shall continue to have full force and effect) and none
of the parties to this Agreement shall have any obligations and
liabilities hereunder against or towards one another save for any
antecedent breaches of the terms hereof.
4. CONSIDERATION
4.1 The aggregate purchase consideration for the sale and purchase of the
Sale Shares shall be:-
(1) the cash sum of US$1,000,000 (United States Dollars One
Million); and
(2) 28,000,000 Consideration Shares.
4.2 The Purchase Consideration shall be payable as follows:-
(1) the Deposit shall be paid by the Purchaser within 15 Business
Days after the execution of this Agreement as deposit and part
payment of the Purchase Consideration in the manner provided
in Clause 5.1 and the Deposit shall be governed by the terms
of Clause 5; and
(2) the balance of the Purchase Consideration being 28,000,000
Consideration Shares shall be issued by the Parent to the
Vendor on Completion in the manner provided in Clause 6.
5. DEPOSIT
5.1 The Purchaser shall, within 15 days after the signing of this
Agreement, pay the Deposit in immediately available funds by way of
wire transfer to, or by way of a cashier order/bank draft issued by a
licenced bank in Hong Kong or US in favour of the Vendor's Solicitors
who shall thereupon transfer the Deposit in the following manner:-
(1) the Vendor's Solicitors shall transfer 90% of the Deposit to
the 1st Vendor; and
(2) the Vendor's Solicitors shall transfer 10% of the Deposit to
the 2nd Vendor.
5.2 In the event that:
(1) Any of the conditions referred to in Clause 3.2 have not been
satisfied on or before 12:00 noon on the date falling 30 days
from the date of this Agreement or such later date as the
Vendor and the Purchaser may agree, the Vendor shall
immediately repay the Deposit to the Purchaser;
(2) All the conditions referred to in Clause 3.2 have been
satisfied on or before 12:00 noon on the date falling 30 days
from the date of this Agreement or such later date as the
Vendor and the Purchaser may agree, and Completion takes place
in accordance with Clause 6, the Vendor shall retain the
Deposit and treat the same as part payment of the Purchase
Consideration;
(3) All the conditions referred to in Clause 3.2 have been
satisfied on or before 12:00 noon on the date falling 30 days
from the date of this Agreement or such later date as the
Vendor and the Purchaser may agree, and Completion does not
take place in accordance with Clause 6 otherwise than as a
result of the sole default of the 1st Vendor, the sole default
of the 2nd Vendor or the joint default of the 1st Vendor and
the 2nd Vendor, the Vendor shall retain the Deposit. The
Vendor shall retain such Deposit as liquidated damages (but
not as penalty) and in full and final settlement of any
liabilities of the Purchaser towards the Vendor and whereupon
the Vendor shall not take any action to claim for damages or
to enforce specific performance or any other rights and
remedies; or
(4) All the conditions referred to in Clause 3.2 have been
satisfied on or before 12:00 noon on the date falling 30 days
from the date of this Agreement or such later date as the
Vendor and the Purchaser may agree, and Completion does not
take place in accordance with Clause 6 as a result of the sole
default of the 1st Vendor, the sole default of the 2nd Vendor
or the joint default of the 1st Vendor and the 2nd Vendor, the
Vendor shall immediately repay the Deposit to the Purchaser.
6. COMPLETION
6.1 Upon compliance with or fulfillment or waiver of all the conditions set
out in Clause 3.2, Completion shall take place at the office of the
Vendor's Solicitors at Suite 1105, 11th Floor, Xxxxxxx Xxxxx, Xx.00
Xxxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx on the Completion Date at or before
3:00 p.m. or at such other place and time as both the Vendor and the
Purchaser may jointly agree when all the acts and requirements set out
in this Clause 6 shall be complied with.
6.2 The Vendor shall deliver or procure the delivery to the Purchaser or to
its order of all the following:
(1) instruments of transfer in respect of the transfer of the Sale
Shares duly executed by the registered holder thereof in
favour of the Purchaser or its nominee(s) as the Purchaser may
direct, and such other documents as may be required to give a
good and effective transfer of title to the Sale Shares to the
Purchaser or such nominee(s) and to enable the Purchaser or
such nominee(s) to become the registered and beneficial holder
thereof free from all Encumbrances;
(2)
(i) all statutory records and minute books (which shall
be written up to date as at Completion) and other
statutory records of the Company;
(ii) the common seal and all rubber stamps, cheque books,
cheque stubs and bank statements, receipt books, all
current insurance policies, books and accounts and
title deeds and evidence of ownership to all assets
and all current contracts and all other accounting
records of the Company; and
(iii) all correspondence and other documents belonging to
the Company (including its constitutional documents)
or written authorities in favour of the Purchaser for
the collection of such documents;
(3) where directed by the Purchaser, the written resignations of
all directors and company secretary of the Company together
with a written acknowledgement under seal from each of them
respectively in such form as the Purchaser shall require that
he has no claims against the Company whether by way of
compensation, remuneration, severance payments, expenses,
damages or otherwise;
(4) copy, certified as true and complete by a director of the
Company, of resolution of the board of directors approving the
matter referred to in Clause 6.3;
(5) a cheque drawn in favour of The Government of the Hong Kong
Special Administrative Region for the sum equivalent to the
Vendor's share of stamp duty for the Sale Shares.
6.3 The Vendor shall procure a meeting of the board of directors of the
Company at which such matters shall be dealt with and resolved upon as
the Purchaser shall require for the purposes of giving effect to the
provisions of this Agreement including without limitation, (1) the
acceptance of the resignation of the directors of the Company as
provided under Clause 6.2(3) above; (2) the appointment of such persons
nominated by the Purchaser as directors and secretary of the Company
with effect from the date of Completion; and (3) the amendment of the
signatories and bank mandates for all accounts maintained by the
Company with banks and financial institutions in such manner as the
Purchaser may require.
6.4 Against compliance and fulfillment of all acts and the requirements set
out in Clauses 6.2 and 6.3, the Parent shall forthwith:
(1) deliver to the 1st Vendor or to such other person or persons
as the 1st Vendor may direct original share certificates for
25,200,000 Consideration Shares free from all Encumbrances
other than transfer restrictions in relation to the transfer
of 28,000,000 Consideration Shares (which form part of the
Purchase Consideration) or any part thereof arising under the
Securities Act ("Transfer Restrictions") with the name of the
1st Vendor or his nominee(s) as the 1st Vendor may direct
registered as the beneficial holder(s) thereof, and such other
documents as may be required to give a good and effective
transfer of title to 25,200,000 Consideration Shares to the
1st Vendor or such nominee(s) and to enable the 1st Vendor or
such nominee(s) to become the registered and beneficial holder
thereof free of all Encumbrances other than the Transfer
Restrictions;
(2) deliver to the 2nd Vendor or to such other person or persons
as the 2nd Vendor may direct original share certificates for
2,800,000 Consideration Shares free from all Encumbrances
other than the Transfer Restrictions with the name of the 2nd
Vendor or his nominee(s) as the 2nd Vendor may direct
registered as the beneficial holder(s) thereof, and such other
documents as may be required to give a good and effective
transfer of title to 2,800,000 Consideration Shares to the 2nd
Vendor or such nominee(s) and to enable the 2nd Vendor or such
nominee(s) to become the registered and beneficial holder
thereof free of all Encumbrances other than the Transfer
Restrictions; and
(3) deliver to the Vendor a copy, certified true and complete by
an authorized officer of the Parent, of resolutions of the
board of directors of the Parent approving this Agreement and
all other transactions contemplated under this Agreement.
6.5 Against compliance and fulfillment of all acts and the requirements set
out in Clauses 6.2 and 6.3, the Purchaser shall forthwith:-
(1) produce to the Vendor instrument of transfer and bought and
sold notes in respect of the Sale Shares duly executed by the
Purchaser or its nominees;
(2) deliver to the Vendor a copy, certified true and complete by
an authorized officer of the Purchaser, of resolutions of the
board of directors of the Purchaser approving this Agreement
and all other transactions contemplated under this Agreement;
and
(3) a cheque drawn in favour of The Government of the Hong Kong
Special Administrative Region for the sum equivalent to the
Purchaser's share of stamp duty for the Sale Shares.
6.6 Upon due and complete performance by the Parent of its obligations
under Clause 6.4(1) and (2), the Purchaser shall be deemed to have duly
fulfilled its payment obligation under Clause 4.1(2).
6.7 The original share certificates for 25,200,000 Consideration Shares and
the original share certificates for 2,800,000 Consideration Shares
shall contain a legend with reference being made to the Securities Act
whereby such reference shall contain wordings which are substantially
similar to the following:-
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND MAY NOT BE TRANSFERRED
UNLESS A REGISTRATION STATEMENT COVERING THE SECURITIES IS FILED AND
EFFECTIVE OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT IS AVAILABLE."
7. VENDOR'S WARRANTIES
7.1 Both the 1st Vendor and the 2nd Vendor, jointly and severally warrant
to the Purchaser that save and except in respect of all matters,
documents and/or information disclosed to the Purchaser on the Schedule
of Exceptions attached hereto as Schedule 2 Part IA ("the Vendor's
Schedule of Exceptions"), the Vendor's Warranties set out in Schedule 2
Part I are true and accurate in all material respects as at the date
hereof and will continue to be so up to and including the time of
Completion and the Vendor hereby further acknowledges that the
Purchaser in entering into this Agreement is relying on the Vendor's
Warranties. For the avoidance of doubt, the Vendor makes no warranty in
respect of all matters, documents and/or information disclosed to the
Purchaser or its agents as exceptions from the Vendor's Warranties as
set out in the Vendor's Schedule of Exceptions and the Purchaser hereby
confirm and agree that it has no right to make any claim or demand in
respect of all such matters, documents and/or information.
7.2 Each of the Vendor's Warranties is without prejudice to any other
warranty or undertaking and, except where expressly stated, no clause
contained in this Agreement governs or limits the extent or application
of any other clause.
7.3 The rights and remedies of the Purchaser in respect of any breach of
the Vendor's Warranties shall not be affected by Completion of the
purchase of the Sale Shares, by any investigation made by or on behalf
of the Purchaser into the affairs of the Company, by any failure to
exercise or delay in exercising any right or remedy or by any other
event or matter whatsoever, except a specific and duly authorized
written waiver or release.
7.4 The Vendor hereby undertakes jointly and severally to indemnify and
keep indemnified the Purchaser against any Adverse Consequences
suffered by the Purchaser as a result of or in connection with any
breach of any of the Vendor's Warranties provided that the indemnity
contained in this Clause shall be without prejudice to any other rights
and remedies of the Purchaser in relation to any such breach of the
Vendor's Warranties and all such other rights and remedies are hereby
expressly reserved to the Purchaser.
7.5 Any claim by the Purchaser in connection with the Vendor's Warranties
("a Vendor's Warranty Claim") shall not be made unless the amount of
the damages in respect of such Vendor's Warranty Claims exceeds in
aggregate the sum of US$100,000.00 at which point, the Vendor shall be
liable back to the first dollar of such claim;
7.6 The Purchaser shall not be entitled to make any Vendor's Warranty Claim
(A) to the extent that provision for the matter or liability which
would otherwise give rise to the claim in question has been
made in the Accounts or has otherwise specifically been taken
account of in the Accounts;
(B) if the claim would not have arisen but for a change in
legislation made after the date of Completion; and
(C) to the extent that the relevant matters, documents or
information have been disclosed to the Purchaser or its agent
in the Vendor's Schedule of Exceptions.
7.7 The Vendor shall both before and after the date of Completion promptly
notify the Purchaser in writing of any matter or thing of which the
Vendor becomes aware which is a breach of or inconsistent with any of
the Vendor's Warranties.
7.8 Where any of the Vendor's Warranties are qualified as being "to the
best of the information, knowledge and belief of the Vendor" or "so far
as the Vendor is aware" or by any other similar expression, such
Vendor's Warranty is deemed to have been made or given to the best of
knowledge, information and belief of the Vendor after making due and
careful enquiry.
7.9 The maximum aggregate liability of the Vendor in respect of all
Vendor's Warranty Claims shall not exceed the Purchase Consideration.
The Vendor's Warranties shall survive Completion but no Vendor's
Warranty Claims may be brought against the Vendor in respect of any
breach of Vendor's Warranties unless written notice of such Vendor's
Warranty Claim specifying the particulars of such claim has been
received by the Vendor on or before the expiration of eighteen (18)
months from the date of execution of this Agreement.
7.10 The Vendor shall not be liable for breach of any Vendor's Warranties by
reason of any act done by or omission or default of the Purchaser or
the Joint Venture Company occurring after the execution of this
Agreement.
7.11 The Purchaser acknowledges that the Vendor has not yet delivered the
Vendor's Schedule of Exceptions to the Purchaser or its agent as
contemplated by this Clause 7. The Vendor shall deliver the Vendor's
Schedule of Exceptions to the Purchaser at least 10 days prior to
Completion. The Purchaser shall have the opportunity during such 10 day
period to review and comment on the Vendor's Schedule of Exceptions and
the parties to this Agreement shall use their best efforts to resolve
any concerns or comments that the Purchaser may have with the Vendor's
Schedule of Exceptions.
8. PURCHASER'S WARRANTIES
8.1 Both the Parent and Purchaser jointly and severally warrants to the
Vendor that save and except in respect of all matters, documents and/or
information disclosed to the Vendor on the Schedule of Exceptions
attached hereto as Schedule 2 Part IIA ("the Purchaser's Schedule of
Exceptions"), the Purchaser's Warranties set out in Schedule 2 Part II
are true and accurate in all material respects as at the date hereof
and will continue to be so up to and including the time of Completion
and the Parent and the Purchaser hereby further acknowledges that the
Vendor in entering into this Agreement is relying on the Purchaser's
Warranties. For the avoidance of doubt, the Parent and the Purchaser
makes no warranty in respect of all matters, documents and/or
information disclosed to the Vendor or its agents as exceptions to the
Purchaser's Warranties as set out in the Purchaser's Schedule of
Exceptions and the Vendor hereby confirm and agree that it has no right
to make any claim or demand in respect of all such matters, documents
and/or information.
8.2 Each of the Purchaser's Warranties is without prejudice to any other
warranty or undertaking and, except where expressly stated, no clause
contained in this Agreement governs or limits the extent or application
of any other clause.
8.3 The rights and remedies of the Vendor in respect of any breach of the
Purchaser's Warranties shall not be affected by completion of the
purchase of the Sale Shares, by any investigation made by or on behalf
of the Vendor into the affairs of the Company, by any failure to
exercise or delay in exercising any right or remedy or by any other
event or matter whatsoever, except a specific and duly authorised
written waiver or release.
8.4 The Parent and the Purchaser hereby jointly and severally undertake to
indemnify and keep indemnified the Vendor against any Adverse
Consequences suffered by the Vendor as a result of or in connection
with any breach of any of the Purchaser's Warranties provided that the
indemnity contained in this Clause shall be without prejudice to any
other rights and remedies of the Vendor in relation to any such breach
of the Purchaser's Warranties and all such other rights and remedies
are hereby expressly reserved to the Vendor.
8.5 Any claim by the Vendor in connection with the Purchaser's Warranties
("a Purchaser's Warranty Claim") shall not be made unless the amount of
the damages in respect of such Purchaser's Warranty Claims exceeds in
aggregate the sum of US$100,000.00 at which point, the Vendor shall be
liable back to the first dollar of such claim;
8.6 The Vendor shall not be entitled to make any Purchaser's Warranty Claim
(A) If the claim would not have arisen but for a change in
legislation made after the date of Completion; and
(B) to the extent that the relevant matters, documents or
information have been disclosed to the Purchaser or its agent
in the Vendor's Schedule of Exceptions.
8.7 The Parent and the Purchaser shall both before and after the date of
Completion promptly notify the Vendor in writing of any matter or thing
of which the Parent and/or the Purchaser becomes aware which is a
breach of or inconsistent with any of the Purchaser's Warranties.
8.8 Where any of the Purchaser's Warranties are qualified as being "to the
best of the information, knowledge and belief of the Parent and/or the
Purchaser" or "so far as the Parent and/or the Purchaser is aware" or
by any other similar expression, such Purchaser's Warranty is deemed to
have been made or given to the best of knowledge, information and
belief of the Parent and/or the Purchaser after making due and careful
enquiry.
8.9 The maximum aggregate liability of the Parent and/or the Purchaser in
respect of all Purchaser's Warranty Claims shall not exceed the
Purchase Consideration. The Purchaser's Warranties shall survive
Completion but no Purchaser's Warranty Claims may be brought against
the Parent and/or the Purchaser in respect of any breach of Purchaser's
Warranties unless written notice of such Purchaser's Warranty Claim
specifying the particulars of such claim has been received by the
Parent and/or the Purchaser on or before the expiration of eighteen
(18) months from the date of execution of this Agreement.
8.10 The Parent and/or the Purchaser shall not be liable for breach of any
Purchaser's Warranties by reason of any act done by or omission or
default of the Vendor occurring after the execution of this Agreement.
8.11 The Vendor acknowledges that the Parent and/or the Purchaser has not
yet delivered the Purchaser's Schedule of Exceptions to the Vendor as
contemplated by this Clause 8. The Parent and/or the Purchaser shall
deliver the Purchaser's Schedule of Exceptions at least 10 days prior
to Completion. The Vendor shall have the opportunity during such 10 day
period to review and comment on the Purchaser's Schedule of Exceptions
and the parties to this Agreement shall use their best efforts to
resolve any concerns or comments that the Vendor may have with the
Purchaser's Schedule of Exceptions.
9. FACSIMILE EXECUTION
Facsimile execution and delivery of this Agreement is legal, valid
and binding for all purposes.
10. FURTHER ASSURANCE
10.1 The Vendor covenant that they shall execute and perform such further
documents and acts as the Purchaser may reasonable require effectively
to vest the beneficial and registered ownership of the Sale Shares in
the Purchaser or any of its nominee or nominees free from all
Encumbrances and with all rights now and hereafter attaching thereto
and otherwise to give effect to the Vendor's obligations under this
Agreement.
10.2 Both the Parent and the Purchaser jointly and severally covenant that
each of them shall execute and perform such further documents and acts
as the 1st Vendor or the 2nd Vendor may reasonable require effectively
to vest the beneficial and registered ownership of (1) 25,200,000
Consideration Shares in the 1st Vendor or any of his nominee or
nominees and (2) 2,800,000 Consideration Shares in the 2nd Vendor or
any of his nominee or nominees, both of which free from all
Encumbrances (other than transfer restrictions arising under the
Securities Act) and with all rights now and hereafter attaching thereto
and otherwise to give effect to the each of the Parent's and the
Purchaser's obligations under this Agreement.
11. CONFIDENTIALITY AND ANNOUNCEMENTS
11.1 The Purchaser will, and will cause its associates and advisers to,
treat in confidence all non-public information regarding the Company
contained in written documents and materials ("Confidential Material")
which they may obtain from the Company or the Joint Venture Company and
in the event that Completion is not effected and this Agreement is
rescinded or otherwise terminated, will return such Confidential
Material to the Company or the Joint Venture Company. The Purchaser may
disclose Confidential Information if, and only to the extent required
by applicable law or exchange or automatic quotation system rules.
11.2 The Vendor hereby undertakes to the Purchaser that it will not, at any
time after the date of this Agreement, divulge or communicate to any
person other than to its professional advisers, or when required by
law, or to officers or employees of the Company whose province it is to
know the same or on the instructions of the board of directors of the
Company, any confidential information concerning the business,
accounts, finance or contractual arrangements or other dealings,
transactions or affairs of the Company, the Joint Venture Company, the
Purchaser or the Parent which may be within or may come to their
knowledge and they shall use their reasonable endeavours to prevent the
publication or disclosure of any such confidential information
concerning such matters.
11.3 No public announcement or communication of any kind shall be made in
respect of the subject matter of this Agreement unless an announcement
is required pursuant to any applicable law or the requirements of any
recognised stock exchange or automatic quotation system.
12. NOTICES
12.1 Any notice consent and the like required or permitted to be given or
served under this Agreement may be given or served by facsimile or by
leaving the same with or sending the same by registered post to the
party to or on which the same is to be given or served at the address
specified opposite the name of that party or at such other address as
that party shall specify by written notice given to the other party as
provided in this Clause:-
If to the 1st Vendor:
Address: c/o Suite 1105, 11th Floor, Xxxxxxx Xxxxx, Xx.00
Xxxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx.
If to the 2nd Vendor:
Address: 4th Floor, Tuen Mun Centre Building, No.12 Xxx Xxxxx
Street, Tuen Mun, New Territories, Hong Kong.
If to the Purchaser or the Parent:
Address: 000, Xxxxxxx Xxxxxx, Xxx Xxxx X.X. 00000,
Xxxxxx Xxxxxx of America.
12.2 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
Air courier/Speedpost 3 days
Airmail 5 days
13. SEVERABILITY
If any part of this Agreement becomes invalid, illegal or unenforceable
the parties hereto shall in such an event negotiate in good faith in order to
agree the terms of a mutually satisfactory provision to be substituted for the
invalid, illegal or unenforceable provision which as nearly as possible validly
gives effect to their intentions as expressed herein.
14. CAPACITY
Each party to this Agreement hereby warrants to the other such party
that it has full capacity to enter into this Agreement and that such entry does
not in any way violate any provision of law, statute, rule, regulation,
judgement, writ, injunction, decree or order applicable to it; that this
Agreement does not conflict and will not result in the breach or termination of
any provision of, or constitute a default under any mortgage, contract or other
undertaking binding on it; and will not result in the creation of any liability,
charge or Encumbrance whatsoever upon any of its properties or other assets save
as contemplated herein.
15. ENTIRE AGREEMENT
This Agreement constitutes the entire understanding between the parties
with respect to the subject matter hereof and supersedes all prior agreements,
negotiations (whether written or otherwise) and discussions between the parties
relating thereto.
16. AMENDMENTS
Save as expressly provided herein, no amendment or variation of this
Agreement shall be effective unless in writing and signed by the 1st Vendor, the
2nd Vendor, a duly authorised representative of each of the Parent and the
Purchaser.
17. WAIVER
The failure or delay of a party hereto to exercise or enforce any
right, power, privilege or remedy whatsoever, howsoever or otherwise conferred
upon it by this Agreement shall not be deemed to be a waiver of any such right
or operate so as to bar the exercise or enforcement thereof at any time or times
thereafter, nor shall any single or partial exercise of any such right, power,
privilege or remedy preclude any other or further exercise thereof or the
exercise of any other right or remedy. No waiver shall be effective unless it is
in writing. The rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies provided by law.
18. COUNTERPARTS
This Agreement may, be signed in any number of counterparts, all of
which taken together shall constitute one and the same Agreement. Any party may
enter into this Agreement by signing any such counterpart.
19. ASSIGNMENT
This Agreement shall not be capable of being assigned by any party
without the written consent of the other parties.
20. TIME OF THE ESSENCE
Time shall be of the essence of this Agreement, both as regards the
dates and periods specifically mentioned and as to any dates and periods which
may, by agreement in writing between the parties hereto, be substituted
therefor.
21. COSTS AND STAMP DUTY
21.1 Each party shall bear its own costs and expenses (including legal fees)
incurred in connection with the preparation, negotiation, execution and
performance of this Agreement and all documents incidental or relating
to Completion.
21.2 The Vendor and the Purchaser shall each bear one-half of all applicable
stamp duties payable, arising from or as the result of the transactions
contemplated hereby.
22. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of New York in US.
23. JURISDICTION
23.1 Each of the parties to this Agreement submits to the jurisdiction of
any state or federal court sitting in the State of New York in US, in
any action or proceeding arising out of or relating to this Agreement
and agrees that all claims in respect of the action or proceeding may
be heard and determined in any such court. Each of the parties to this
Agreement waives any defense of inconvenient forum to the maintenance
of any action or proceeding so brought and waives any bond, surety, or
other security that might be required of any other party with respect
thereto.
23.2 The submission to the jurisdiction of the court referred to Clause 23.1
shall not (and shall not be construed so as to) limit the right of the
parties to this Agreement to take proceedings in any other court of
competent jurisdiction (including Hong Kong) nor shall the taking of
proceedings in any one or more jurisdictions preclude the taking of
proceedings in any other jurisdiction, whether concurrently or not.
IN WITNESS whereof the parties have executed this Agreement the day
and year first before written.
THE 1ST VENDOR
SIGNED by LI CHUQUAN (holder )
of Passport No.000000000) in the )
presence of: )
/s/ Xxxx Xxx Kgong Simom
--------------------
Xxxx Xxx Kgong Simom, Solicitor, Hong Kong
THE 2ND VENDOR
SIGNED by CHAN XXXX XXXXX )
(holder of Hong Kong Identity Card )
No.X000000(0)) in the presence of:- )
/s/ Xxxx Xxx Kgong Simom
--------------------
Xxxx Xxx Kgong Simom, Solicitor, Hong Kong
THE PARENT
SIGNED by LUI CHI XX XXXXXX )
as President of and for and on behalf )
of PANAGRA INTERNATIONAL )
CORPORATION )
in the presence of:- )
/s/ Xxxxx X. Xxxxxxxxxx
--------------------
Xxxxx X. Xxxxxxxxxx, Esq.
THE PURCHASER
SIGNED by LUI CHI XX XXXXXX )
as President of and for and on behalf of )
MINGHUA ACQUISITION CORP. )
in the presence of:- )
/s/ Xxxxx X. Xxxxxxxxxx
--------------------
Xxxxx X. Xxxxxxxxxx, Esq.
SCHEDULE 1
THE COMPANY
Part 1 - The Company
-------------------
Name : XXXX XXX GROUP INTERNATIONAL
HOLDING (HONG KONG) LIMITED
Place of Incorporation : Hong Kong
Registered Office: : Xxxxx 0000, 00xx Xxxxx, Xxxxxxx Xxxxx,
Xx.00 Xxxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx
Directors : Xx Xxxxxxx
Xxxx Xxxx Xxxxx
Authorised Share Capital : HK$1,000,000.00
Issued Share Capital : HK$1,000,000.00 divided into 1,000,000
shares of HK$1.00 each.
Shareholders : (1) Li Chuquan holding 90% of the issued
share capital of the Company; and
(2) Chan Xxxx Xxxxx holding 10% of the
issued share capital of the Company.
SCHEDULE 2
PART I
VENDOR'S WARRANTIES
REPRESENTATIONS AND WARRANTIES REGARDING THE VENDOR
1. Authorization of Transaction. Each of the 1st Vendor and the 2nd Vendor has
full power and authority to execute and deliver this Agreement and to perform
his respective obligations hereunder. This Agreement constitutes the valid and
legally binding obligation of each of the 1st Vendor and the 2nd Vendor,
enforceable in accordance with its terms and conditions. Neither the 1st Vendor
nor the 2nd Vendor need to give any notice to, make any filing with, or obtain
any authorization, consent, or approval of, any governmental authority in order
to consummate the transactions contemplated by this Agreement.
2. Noncontravention. Neither the execution and the delivery of this Agreement,
nor the consummation of the transactions contemplated hereby, will violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any governmental authority to which
either the 1st Vendor or the 2nd Vendor is subject.
3. Brokers' Fees. Neither the 1st Vendor nor the 2nd Vendor has any liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which the
Purchaser or the Parent could become liable or obligated.
4. Company Shares. The 1st Vendor owns beneficially and of record the 1st
Vendor's Shares and the 2nd Vendor owns beneficially and of record the 2nd
Vendor's Shares, free and clear of any Encumbrances, Taxes, options, warrants,
purchase rights, contracts, commitments, equities, claims, and demands. Neither
the 1st Vendor nor the 2nd Vendor is a party to any option, warrant, purchase
right, or other contract or commitment that could require the 1st Vendor, the
2nd Vendor or the Company to sell, transfer, or otherwise dispose of any capital
stock of the Company (other than this Agreement). Neither the 1st Vendor nor the
2nd Vendor is a party to any voting trust, proxy, or other agreement or
understanding with respect to the voting of any capital stock of the Company.
REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY AND THE JOINT VENTURE
COMPANY
5. Organization and Corporate Matters. The Company has been duly incorporated
and is validly existing under the laws of Hong Kong and is not in receivership
or liquidation, and that it has taken no steps to enter into liquidation and no
petition has been presented for winding up the Company. The copies of the
Memorandum and Articles of the Company which have been produced to the Purchaser
are accurate and complete in all material respects. So far as the Vendor is
aware, the Company has complied with its Memorandum and Articles of Association
in all material respects and none of the activities, agreements, commitments or
rights of the Company is ultra xxxxx or unauthorised. The Register of Members
and all other statutory books of the Company are up to date and contain true,
full and accurate records of all matters required to be dealt with therein and
all annual or other returns required to be filed with all relevant government
authorities have been properly filed within any applicable time limit. All
corporate or other documents required to be filed or registered in respect of
the Company have been duly filed as appropriate. The statutory books and minute
books of the Company has not received any application or request for
rectification of the register of members and compliance has been made with all
other legal requirements concerning the Company relating to issues of shares,
debentures or other securities thereof. So far as the Vendor is aware, the
business of the Joint Venture Company is not in contravention of any laws, rules
and regulations of the PRC.
6. Capitalization. The entire authorized capital stock of the Company consists
of 1,000,000 ordinary shares, of which the same are issued and outstanding. All
of the issued and outstanding ordinary shares have been duly authorized, are
validly issued, fully paid, and nonassessable, and are held of record
respectively by the 1st Vendor and the 2nd Vendor. There are no outstanding or
authorized options, warrants, preemptive rights, purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or commitments
that could require the Company to issue, sell, or otherwise cause to become
outstanding any of its capital stock. There are no outstanding or authorized
stock appreciation, phantom stock, profit participation, or similar rights with
respect to the Company. There are no voting trusts, proxies, or other agreements
or understandings with respect to the voting of the capital stock of the
Company. The Company has an equity interest of 85% of and in the Joint Venture
Company whereas Minghua Investment holds the remaining 15% equity interest of
and in the Joint Venture Company. There are no outstanding or authorized
options, warrants, preemptive rights, purchase rights, subscription rights,
conversion rights, exchange rights, or other contracts or commitments that could
require the Joint Venture Company to issue, sell, or otherwise cause to become
outstanding any of its capital stock. There are no outstanding or authorized
stock appreciation, phantom stock, profit participation, or similar rights with
respect to the Joint Venture Company. There are no voting trusts, proxies, or
other agreements or understandings with respect to the voting of the capital
stock of the Joint Venture Company.
7. Company and Joint Venture Company Noncontravention. Neither the execution and
the delivery of this Agreement and the documents referenced herein, nor the
consummation of the transactions contemplated hereby, will (i) violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any governmental authority to which the
Company or the Joint Venture Company is subject or any provision of the
Company's or the Joint Venture Company's constituent instruments or (ii)
conflict with, result in a breach of, constitute a default under, terminate,
modify, or cancel, or require any notice under any material agreement, permit or
other arrangement to which the Company or the Joint Venture Company is a party
or by which it is bound or to which any of its assets is subject (or result in
the imposition of any Encumbrance upon any of its assets). Neither the Company
nor the Joint Venture Company needs to give any notice to, make any filing with,
or obtain any authorization, consent, or approval of any governmental authority
in order for the parties to this Agreement to consummate the transactions
contemplated by this Agreement or continue the effectiveness of permits relating
to the business following Completion.
8. No Company or Joint Venture Company Brokers' Fees. Neither the Company nor
the Joint Venture Company has any liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement.
9. Title to Assets. The Company and the Joint Venture Company have good and
marketable title to, or a valid leasehold interest in, the properties and assets
used by it, located on its premises, or shown on the Accounts or acquired after
the date thereof.
10. Subsidiaries. Other than the Joint Venture Company, the Company does not
control, directly or indirectly, or have any direct or indirect equity
participation in any other entity. The Joint Venture Company does not control,
directly or indirectly, or have any direct or indirect equity participation in
any other entity.
11. Accounts. The Accounts have been prepared using Hong Kong generally accepted
accounting principles based upon the books and records of the Company applied on
a consistent basis throughout the periods covered thereby, present fairly the
financial condition of the Company as of such dates on a consolidated basis and
the results of operations of the Company and the Joint Venture Company for such
periods, are consistent with the books and records of the Company (which books
and records are correct and complete).
12. Events Subsequent to Last Accounts Date. Since the Last Accounts Date, there
has not been any adverse change in the business, financial condition,
operations, results of operations, or future prospects of the Company or the
Joint Venture Company. Without limiting the generality of the foregoing, since
that date:
(i) neither the Company nor the Joint Venture Company have sold,
leased, transferred, or assigned any of their respective
assets, tangible or intangible, other than for a fair
consideration in the ordinary course of business;
(ii) neither the Company nor the Joint Venture Company have entered
into any agreement, contract, lease, pricing arrangement or
license (or series of related agreements, contracts, leases,
arrangements and licenses) either involving more than
US$50,000 or outside the ordinary course of business;
(iii) no party (including the Company and the Joint Venture Company)
has accelerated, terminated, modified, or cancelled any
agreement, contract, lease, or license (or series of related
agreements, contracts, leases, and licenses) involving more
than US$50,000 to which the Company or the Joint Venture
Company is a party or by which it or its respective assets is
bound;
(iv) neither the Company nor the Joint Venture Company has imposed
or permitted any Encumbrance upon any of its assets, tangible
or intangible;
(v) neither the Company nor the Joint Venture Company has made any
capital expenditure (or series of related capital
expenditures) either involving more than US$50,000 or outside
the ordinary course of business;
(vi) neither the Company nor the Joint Venture Company has made any
capital investment in, any loan to, or any acquisition of the
securities or assets of, any other entity (or series of
related capital investments, loans, and acquisitions) either
involving more than US$50,000 or outside the ordinary course
of business;
(vii) neither the Company nor the Joint Venture Company has issued
any note, bond, or other debt security or created, incurred,
assumed, or guaranteed any indebtedness for borrowed money or
capitalized lease obligation either involving more than
US$50,000 in the aggregate or outside the ordinary course of
business;
(viii) neither the Company nor the Joint Venture Company has delayed
or postponed the payment of accounts payable and other
liabilities outside the ordinary course of business;
(ix) neither the Company nor the Joint Venture Company has
cancelled, compromised, waived, or released any right or claim
(or series of related rights and claims) either involving more
than US$50,000 or outside the ordinary course of business;
(x) there has been no change made or authorized in the constituent
instruments of the Company or the Joint Venture Company;
(xi) neither the Company nor the Joint Venture Company has issued,
sold, or otherwise disposed of any of its capital stock, or
granted any options, warrants, preemptive or other rights to
purchase or obtain (including upon conversion, exchange, or
exercise) any of its capital stock;
(xii) neither the Company nor the Joint Venture Company has
declared, set aside, or paid any dividend or made any
distribution with respect to its capital stock (whether in
cash or in kind) or redeemed, purchased, or otherwise acquired
any of its capital stock;
(xiii) neither the Company nor the Joint Venture Company has
experienced any damage, destruction, or loss (whether or not
covered by insurance) individually, in the aggregate, more
than US$50,000 to its property;
(xiv) neither the Company nor the Joint Venture Company has made any
loan to, or entered into any other transaction with, any of
its directors, officers, employees or stockholders outside the
ordinary course of business;
(xv) neither the Company nor the Joint Venture Company has entered
into any employment contract or collective bargaining
agreement, written or oral, or modified the terms of any
existing such contract or agreement;
(xvi) neither the Company nor the Joint Venture Company has granted
any increase in the base compensation of any of its directors,
officers, and employees outside the ordinary course of
business or made any other change in employment terms for any
of its directors, officers, or employees outside the ordinary
course of business;
(xvii) neither the Company nor the Joint Venture Company has adopted,
amended, modified, or terminated any bonus, profit-sharing,
incentive, severance, or other plan, contract, or commitment
for the benefit of any of its directors, officers, and
employees (or taken any such action with respect to any other
employee benefit plan);
(xviii) neither the Company nor the Joint Venture Company has made or
pledged to make any charitable or other capital contribution
outside the ordinary course of business;
(xix) no material customer, supplier, representative, distributor,
lessee, or lessor has terminated or given notice of its intent
to terminate its relationship with the Company or the Joint
Venture Company; and
(xx) there has not been any failure to act outside the ordinary
course of business involving the Company or the Joint Venture
Company; and
(xxi) neither the Company nor the Joint Venture Company has
committed to any of the foregoing.
13. Undisclosed Liabilities. Neither the Company nor the Joint Venture Company
has any material liability (whether accrued or unaccrued, contingent or not
contingent, known or unknown), except for (i) liabilities set forth in the
Accounts and (ii) labilities which have arisen after the Last Accounts Date in
the ordinary course of business (none of which results from, arises out of,
relates to, is in the nature of, or was caused by any breach of contract, breach
of warranty, tort, infringement, or violation of law).
14. Legal Compliance.
(i) The Company and the Joint Venture Company have complied with
all applicable laws (including rules, regulations, codes,
plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder) of all governmental authorities, and no
action, suit, proceeding, hearing, investigation, charge,
complaint, claim, demand, or notice has been filed or
commenced against the Company or the Joint Venture Company
alleging any failure so to comply.
(ii) The Company and the Joint Venture Company is in compliance
with the terms and conditions of the application of, all
franchises, consents, approvals, licenses, permits,
certificates and other authorizations ("Permits") from any
governmental authority that are necessary for the ownership of
its assets and the conduct of its respective business as
presently conducted in the ordinary course of business. With
respect to each such Permit: (A) neither the Company nor the
Joint Venture Company is in breach or default, and, so far as
the Vendor is aware, no event has occurred which, with notice
or lapse of time, or both, would constitute a breach or
default, or permit termination of the Permit; and (B) in
relation to Permits which have, as at the date of this
Agreement, been duly approved by the governmental authorities
or other relevant authorities, the same will continue in full
force and effect on identical terms following the consummation
of the transactions contemplated hereby.
15. Tax Matters. The Accounts contain appropriate provision for Taxation,
including deferred or provisional Taxation liable to be assessed on the Company
or the Joint Venture Company for the accounting period ended on the Last
Accounts Date or for any subsequent period (on the basis of the rates of tax and
taxation statutes in force at the Last Accounts Date) in respect of any
transaction, event or omission occurring or any income or profits or gains
earned, accrued or received by the Company on or prior to the Last Accounts Date
or for which the Company is accountable up to such date. Since the Last Accounts
Date no further liability or contingent liability for Taxation has arisen. As at
the Last Accounts Date, the Company has not received any demand for payment of
any taxes and are under no liability to pay any penalty or interest in
connection therewith.
16. Real Property. With respect to each parcel of real property owed by the
Company or the Joint Venture Company (if any):
(i) the identified owner has good and marketable title to the
parcel of real property, free and clear of any Encumbrance,
easement, covenant, or other restriction, except for
restrictions which do not impair the current use, occupancy,
or value, or the marketability of title, of the property
subject thereto;
(ii) there are no pending or, the Vendor is aware threatened
condemnation proceedings, lawsuits, or administrative actions
relating to the property or other matters affecting materially
and adversely the current use, occupancy, or value thereof;
(iii) the legal description for the parcel contained in the deed
thereof describes such parcel fully and adequately, the
buildings and improvements are located within the boundary
lines of the described parcels of land, are not in violation
of applicable setback requirements, zoning laws, and
ordinances (and none of the properties or buildings or
improvements thereon are subject to "permitted non-conforming
use" or "permitted non-conforming structure" classifications),
and do not encroach on any easement which may burden the land,
and the land does not serve any adjoining property for any
purpose inconsistent with the use of the land, and the
property is not located within any flood plain or subject to
any similar type restriction for which any permits or licenses
necessary to the use thereof have not been obtained;
(iv) all facilities have received all approvals of governmental
authorities (including licenses and permits) required in
connection with the ownership or operation thereof and have
been operated and maintained in accordance with applicable
laws, rules, and regulations;
(v) there are no leases, subleases, licenses, concessions, or
other agreements, written or oral, granting to any party or
parties the right of use or occupancy of any portion of the
parcel of real property;
(vi) there are no outstanding options or rights of first refusal to
purchase the parcel of real property, or any portion thereof
or interest therein;
(vii) there are no parties (other than the Company and the Joint
Venture Company) in possession of the parcel of real property,
other than tenants under any leases disclosed in Schedule of
Exceptions who are in possession of space to which they are
entitled;
(viii) all facilities located on the parcel of real property are
supplied with utilities and other services necessary for the
operation of such facilities, including gas, electricity,
water, telephone, sanitary sewer, and storm sewer, all of
which services are adequate in accordance with all applicable
laws, ordinances, rules, and regulations and are provided via
public roads or via permanent, irrevocable, appurtenant
easements benefitting the parcel of real property; and
(ix) each parcel of real property abuts on and has direct vehicular
access to a public road, or has access to a public road via a
permanent, irrevocable, appurtenant easement benefitting the
parcel of real property, and access to the property is
provided by paved public right-of-way with adequate curb cuts
available.
The Schedule of Exceptions lists and describes briefly all real property leased
or subleased to any of the Company or the Joint Venture Company. With respect to
each lease and sublease listed in the Schedule of Exceptions (if any):
(i) the lease or sublease is legal, valid, binding, enforceable,
and in full force and effect;
(ii) the lease or sublease will continue to be legal, valid,
binding, enforceable, and in full force and effect on
identical terms following the consummation of the transactions
contemplated hereby;
(iii) no party to the lease or sublease is in breach or default, and
no event has occurred which, with notice or lapse of time,
would constitute a breach or default or permit termination,
modification, or acceleration thereunder
(iv) no party to the lease or sublease has repudiated any provision
thereof;
(v) there are no disputes, oral agreements, or forbearance
programs in effect as to the lease or sublease;
(vi) with respect to each sublease, the representations and
warranties set forth in subsections (i) through (v) above are
true and correct with respect to the underlying lease;
(vii) none of the Company and the Joint Venture Company has
assigned, transferred, conveyed, mortgaged, deeded in trust,
or encumbered any interest in the leasehold or subleasehold;
(viii) all facilities leased or subleased thereunder have received
all approvals of governmental authorities (including licenses
and permits) required in connection with the operation thereof
and have been operated and maintained in accordance with
applicable laws, rules, and regulations;
(ix) all facilities leased or subleased thereunder are supplied
with utilities and other services necessary for the operation
of said facilities; and
(x) the owner of the facility leased or subleased has good and
marketable title to the parcel of real property, free and
clear of any Encumbrance except for restrictions which do not
impair the current use, occupancy, or value, or the
marketability of title, of the property subject thereto.
17. Intellectual Property.
(i) Save as disclosed in the Vendor's Schedule of Exceptions, the
Company and the Joint Venture Company own all right, title and
interest in and to, or all rights to use pursuant to license,
sublicense, contract or permission, all Intellectual Property
necessary for their respective businesses as now conducted
and/or as proposed to be conducted (the "Company and JV
Intellectual Property") free and clear of any Encumbrances,
licenses or other restrictions. The Schedule of Exceptions
contains a complete list of patents and pending patent
applications, trademarks (registrations, applications and
common law), service marks (registrations, applications and
common law), trade names, corporate names, domain names,
licenses and copyrights (registrations, applications and
statutory) included in the Company and JV Intellectual
Property.
(ii) Save as disclosed in Vendor's Schedule of Exceptions:
(a) there are no outstanding options, licenses, or
agreements of any kind relating to the Company and JV
Intellectual Property;
(b) the Company and the Joint Venture Company have the
right to require the applicant of any Company and JV
Intellectual Property which is tendering an
application, including, but not limited to, invention
disclosures, patent applications, trademark
applications, service xxxx applications, copyright
applications, or mask work applications, to transfer
ownership to the Company or the Joint Venture Company
of the application and of the registration once it
issues;
(c) all registered patents, trademarks, service marks,
domain names, copyrights and mask works are valid and
subsisting and in full force and effect;
(d) the consummation of the transactions contemplated
hereby will not later, impair, or result in the loss
of any rights or interests of the Company or the
Joint Venture Company in any Company and JV
Intellectual Property and all such Company and JV
Intellectual Property will be owned or available for
use by the Company or the Joint Venture Company, as
applicable, on identical terms and conditions
immediately subsequent to Completion;
(e) neither the Company nor the Joint Venture Company
has, and the continued operation of businesses of the
Company and the Joint Venture Company as now
conducted and/or as proposed to be conducted will
not, interfere with, infringe upon, violate, or
misappropriate any Intellectual Property rights of
third parties, and neither the Company nor the Joint
Venture Company has received any charge, complaint,
claim, demand or notice so alleging (including any
claim that the Company or the Joint Venture Company
must license or refrain from using any Intellectual
Property rights of any third party);
(f) no action, suit, proceeding, hearing, investigation,
charge, complaint, claim or demand has been made, is
pending, or, so far as the Vendor is aware, is
threatened which challenges the legality, validity,
enforceability, use or ownership of any Company and
JV Intellectual Property;
(g) the Company has never agreed to indemnify any person
for or against any interference, infringement,
misappropriation or other conflict with respect to
any Company and JV Intellectual Property;
(h) none of the Company and JV Intellectual Property is
subject to any outstanding order, judgment or
agreement restricting in any manner the use or
licensing thereof by the Company or the joint Venture
Company; and
(iii) so far as the Vendor is aware, no third
party has interfered with, infringed upon,
violated, or misappropriated any Company and
JV Intellectual Property;
18. Trading and General Commercial Matters.
(i) Save as described in the Vendor's Schedule of Exceptions, the
Company has never entered into, and is not, as at the date
hereof, party to :-
(a) any contracts not made in the ordinary course of
business;
(b) any contracts for the purchase of materials, supplies
or equipment;
(c) any sales agency, distribution, or purchasing
agreements;
(d) any agency or partnership arrangement; or
(e) any contract involving payment to or from the Joint
Venture Company or the Company in excess of
US$50,000.00.
(ii) As at the date hereof, the Vendor has provided to the
Purchaser full and accurate details of each bank, or other
financial institution at which the Company has accounts and
the names of all person authorised to draw thereon.
(iii) The Company is not in default under any provision of any
contract or agreement to which it is a party or by which it is
bound and no event has occurred which constitutes a default,
or which with the giving of notice or the passage of time or
otherwise, would constitute a default under such contract or
agreement or which would require the premature repayment of
any loans or other amounts due thereunder.
(iv) So far as the Vendor is aware, the books and records of the
Company accurately present and reflect in accordance with
generally accepted accounting principles and standards within
the Company's jurisdictions of incorporation and all
transactions entered into by the Company or to which it has
been a party and all documents which are subject to stamp or
similar duty have been duly stamped.
(v) So far as the Vendor is aware, the Company is not the subject
of any official investigation or inquiry and there are no
facts which are likely to give rise to any such investigation
or inquiry.
(vi) So far as the Vendor is aware, the Company has at all times
carried on its businesses in compliance with all applicable
laws and regulations and the Company has not committed any
criminal offence or any tort or any breach of the requirements
or conditions of any statute, treaty, regulation, bye-law or
other obligation relating to the Company, or the carrying on
of its businesses and without prejudice to the generality of
the foregoing, the Company has obtained all licences and
consents necessary for the carrying on of its businesses, and
all such licences and consents are valid and subsisting and as
far as the Vendor is aware, there is no reason why any of them
should be suspended, cancelled or revoked.
19. Notes and Accounts Receivable. All notes and accounts receivable of the
Company and the Joint Venture Company are reflected properly on their books and
records, are valid receivables subject to no set off or counterclaim, are
subject to adequate reserves, and had arisen in the ordinary course of business
of the Company or the Joint Venture Company, as applicable for bona fide
services rendered or products sold.
20. Insurance. The Company and the Joint Venture Company have sufficient
insurance in place as is customary for companies having business and assets
similar to the business and assets of the Company and the Joint Venture Company.
This insurance will remain in place immediately following Completion.
21. Litigation.
(i) The Company is not involved whether as plaintiff or defendant
or otherwise in any civil, criminal or arbitration proceedings
(apart from those arising in the ordinary course of business)
or in any proceedings before any tribunal and no such
proceedings are threatened or pending.
(ii) So far as the Vendor is aware, there are no facts or
circumstances which are likely to result in any such
proceedings being brought by or against the Company against
any person for whose acts or defaults the Company may be
vicariously liable.
(iii) There is no unsatisfied, court order or tribunal or arbitral
award outstanding against the Company and no distress,
execution or process has been levied on any part of their
businesses or assets.
22. Employees. So far as the Vendor is aware, no executive, key employee, or
group of employees has any plans to terminate employment with the Company or the
Joint Venture Company. There is no past, existing, threatened or pending dispute
involving the Company or the Joint Venture Company and any group or category of
its respective employees and there is no arrangement between the Company or the
Joint Venture Company and any trade union or organization representing any such
employees. No circumstances have arisen under which the Company or the Joint
Venture Company is required to pay, or is likely to be required to pay, damages
in relation to the dismissal of or to reinstate or re-engage any former
employee. There are no existing service or other agreements or contracts between
the Company or the Joint Venture Company and any officers or employees which
cannot be fairly and properly terminated by 3 calendar months' notice or less
without giving rise to any claim for damages or compensation and neither the
Company nor the Joint Venture Company has any scheme or arrangement for the
payment of bonuses to employees and the Company and the Joint Venture Company
has complied with all its obligations under all ordinances and regulations,
codes, orders, awards and agreements in connection with their employees. There
are no share option or share incentive or similar schemes for any officers or
employees of the Company or the Joint Venture Company. Neither the Company nor
the Joint Venture Company maintains any employee benefit plans.
23. Environmental, Health, and Safety Matters. The Company and the Joint Venture
Company have complied and are in compliance in all material respects with all
environmental, health, and safety requirements under applicable law. Neither the
Company nor the Joint Venture Company has received any written or oral notice,
report or other information regarding any actual or alleged violation of
environmental, health, and safety requirements, or any liabilities or potential
liabilities (whether accrued, absolute, contingent, unliquidated or otherwise),
including any investigatory, remedial or corrective obligations, relating to it
or its facilities arising under environmental, health, and safety requirements.
Neither the Company nor the Joint Venture Company has treated, stored, disposed
of, arranged for or permitted the disposal of, transported, handled, or released
any substance, including, without limitation, any hazardous substance, or owned
or operated any property or facility (and no such property or facility is
contaminated by any such substance) in a manner that has given or would give
rise to liabilities, including any liability for response costs, corrective
action costs, personal injury, property damage, natural resources damages or
attorney fees, pursuant to any environmental, health, and safety requirements.
24. Disclosure. The representations and warranties contained in this Part IA of
Schedule 2 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this Part IA of Schedule 2 not misleading.
SCHEDULE 2
PART IA
VENDOR'S SCHEDULE OF EXCEPTIONS
To be provided at a later date in accordance with Section 7.11 of the Agreement.
SCHEDULE 2
PART II
PURCHASER'S WARRANTIES
REPRESENTATIONS AND WARRANTIES REGARDING THE PARENT AND THE PURCHASER
1. Organization, Qualification, and Corporate Power. Both the Purchaser and the
Parent are corporations duly organized, validly existing, and in good standing
under the jurisdictions of their respective incorporation. Except as set forth
in the Purchaser's Schedule of Exceptions, both the Purchaser and the Parent are
duly authorized to conduct business and are in good standing under the laws each
jurisdiction where such qualification is required. The Parent and the Purchaser
each have full corporate power and authority and all licenses, permits, and
authorizations necessary to carry on the businesses in which it is engaged and
to own and use the properties owned and used by it. Other than the Purchaser,
the Parent has no subsidiaries and does not control, directly or indirectly, or
have any direct or indirect equity participation in any entity. The Parent and
the Purchaser have delivered to the Vendor correct and complete copies of the
Certificate of Incorporation and bylaws of the Purchaser and the Parent (as
amended to date). Neither the Purchaser nor the Parent is in default under or in
violation of any provision of its Certificate of Incorporation or bylaws.
2. Capitalization.
(i) The entire authorized capital stock of the Parent consists of
40,000,000 shares of Common Stock US$0.01 par value per share,
of which 11,100,000 common shares are issued and outstanding.
(ii) All of the issued and outstanding common shares have been duly
authorized, are validly issued, fully paid, and nonassessable
and have been issued in compliance with applicable laws,
including, without limitation, applicable federal and state
securities laws.
(iii) Except for the Warrant to Purchase Common Stock, dated April
2, 2004, by the Parent in favor of First Pacific Capital Ltd.
for the purchase of 500,000 shares of the Company's Common
Stock at a price per share equal to US$0.20, there are no
outstanding or authorized options, warrants, preemptive
rights, purchase rights, subscription rights, conversion
rights, exchange rights, or other rights or contracts or
commitments that could require the Parent to issue, sell, or
otherwise cause to become outstanding any of its capital
stock, nor are there any outstanding options, warrants or
other rights of any kind to acquire any additional shares of
capital stock of the Parent or securities exercisable or
exchangeable for, or convertible into, capital stock of the
Parent, nor is the Parent committed to issue any such option,
warrant, right or security.
(iv) There are no agreements relating to the voting, purchase or
sale of capital stock (a) between or among the Parent and any
of its stockholders, (b) between or among the Parent and any
third party, or (c) to the best knowledge of the Parent
between or among any of the Parent's stockholders. The Parent
is not a party to any agreement granting any stockholder of
the Parent the right to cause the Parent to register shares of
the capital stock of the Parent held by such stockholder under
the Securities Act. There are no outstanding or authorized
stock appreciation, phantom stock, profit participation, or
similar rights with respect to the Parent.
(v) All of the outstanding capital stock of the Purchaser is
registered in the name of and beneficially owned by the
Parent.
3. Noncontravention. Neither the execution and the delivery of this Agreement
and the documents referenced herein, nor the consummation of the transactions
contemplated hereby, will (i) violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge, or other restriction
of any governmental authority to which the Purchaser or the Parent is subject or
any provision of the charter or bylaws of the Purchaser or the Parent or (ii)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any material agreement, contract, permit
or other arrangement to which the Parent or the Purchaser is a party or by which
it is bound or to which any of its assets is subject (or result in the
imposition of any Encumbrance upon any of its assets). Neither the Purchaser nor
the Parent needs to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any governmental authority in order for
the parties to this Agreement to consummate the transactions contemplated by
this Agreement except for filing required under applicable federal and state
securities laws. Without limiting the generality of the foregoing, each of the
Purchaser and the Parent has obtained all necessary consents, approvals,
waivers, permits and other authorizations required by it to enter into and
perform this Agreement and to carry out the transactions contemplated hereby
(including but not limited to the allotment, issue, delivery and/or transfer of:
(i) 25,200,000 Consideration Shares pursuant to Clause 6.4(1) and (ii) 2,800,000
Consideration Shares pursuant to Clause 6.4(2)) and all such consents,
approvals, waivers, permits and other authorizations shall remain in full force
and effect and the Purchaser and the Parent have fully complied with the terms
and conditions (if any) upon which such consents, approvals, waivers, permits
and other authorizations shall have been granted.
4. Brokers' Fees. Neither the Purchaser nor the Parent has any liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement.
5. Enforceability. This Agreement constitutes a valid and binding contract on
the Purchaser and the Parent and is enforceable against each of the Purchaser
and the Parent in accordance with its terms.
6. Consideration Shares.
(i) Upon delivery of 25,200,000 Consideration Shares pursuant to
this Agreement, the 1st Vendor will acquire valid legal title
thereto, free and clear of any Encumbrance.
(ii) Upon delivery of 2,800,000 Consideration Shares pursuant to
this Agreement, the 2nd Vendor will acquire valid legal title
thereto, free and clear of any Encumbrance.
(iii) The Parent has filed all reports, registration statements,
definitive proxy statements and other documents and all
amendments thereto and supplements thereof required to be
filed by it with the U.S. Securities and Exchange Commission
since March 31, 2000 (the "SEC Reports"), all of which have
complied in all material respects with the applicable
requirements of the Securities Act and the Exchange Act and
the rules and regulations promulgated thereunder. As of the
respective dates of filing in final or definitive form (or, if
amended or superseded by a subsequent filing, then on the date
of such subsequent filing), none of the Parent's SEC Reports
contained any untrue statement of material fact or omitted to
state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances in which they were made, not misleading.
7. Financial Statements.
(i) The Parent has provided to the Vendor the audited balance
sheet and statements of income, changes in stockholders'
equity and cash flows as of and for the period commencing upon
inception and ended December 31, 2000 (the "Financial
Statements"). The Financial Statements have been prepared in
accordance with United States generally accepted accounting
principles applied on a consistent basis, fairly present the
financial condition, results of operations and cash flows of
the Parent as of the respective dates thereof and for the
periods referred to therein and are consistent with the books
and records of the Parent.
(ii) The Parent does not have any material liability (whether known
or unknown, whether accrued or unaccrued, whether contingent
or not contingent, whether known or unknown) except for
liabilities expressly specified in the Financial Statements
(none of which results from, arises out of, relates to, is in
the nature of, or was caused by any breach of contract, breach
of warranty, tort, infringement, or violation of law).
8. Absence of Certain Changes. Since December 31, 2000, there has not been any
event or condition of any character which has adversely affected, or may be
expected to adversely affect, the Parent's business or prospects, including, but
not limited to any adverse change in the condition, assets, liabilities
(existing or contingent) or business of the Parent from that shown in the
Financial Statements.
9. Legal Proceedings. Except as disclosed in the SEC Reports, as of the date of
this Agreement, there is no legal, administrative, investigatory, regulatory or
similar action, suit, claim or proceeding which is pending or, so far as the
Parent and the Purchaser are aware, threatened against the Parent or the
Purchaser which, if determined adversely to the Parent and/or the Purchaser,
could have, individually or in the aggregate, a material adverse effect on the
business, assets, or prospects of the Parent or the Purchaser which in any
manner challenges or seeks to prevent, enjoin, alter or delay the transactions
contemplated by this Agreement.
10. Legal Compliance. Each of the Parent and the Purchaser has complied in all
material respects with all applicable laws (including rules, regulations, codes,
plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder)
of all governmental authorities, and no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand, or notice has been filed or
commenced against either the Parent or the Purchaser alleging any failure so to
comply.
11. Disclosure. The representations and warranties contained in this Part IIA of
Schedule 2 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this Part IIA of Schedule 2 not misleading.
SCHEDULE 2
PART IIA
PURCHASER'S SCHEDULE OF EXCEPTIONS
To be provided at a later date in accordance with Section 8.11 of the Agreement.
