DATED 27 JULY 2009
DATED 27 JULY
2009
(1)
WINDRACE INTERNATIONAL COMPANY LIMITED
(2)
SHUIPAN LIN
(3)
WISETECH HOLDINGS LIMITED
(4)
WINDTECH HOLDINGS LIMITED
Deacons
Solicitors
& Notaries
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Fax :
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Tel :
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CONTENTS
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CLAUSE
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PAGE
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1.
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INTERPRETATION
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2
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2.
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INVESTMENT
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10
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3.
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CONDITIONS
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11
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4.
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CONSIDERATION
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12
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5.
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PRE-CLOSING
MATTERS
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14
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6.
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CLOSING,
SPA CLOSING AND POST-SPA CLOSING
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16
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7.
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WARRANTIES
AND INDEMNITIES
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16
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8.
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POST
CLOSING UNDERTAKINGS
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18
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9.
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TERMINATION
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19
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10.
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CANCELLATION
OF WARRANTS
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23
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11.
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LIMITATION
OF LIABILITIES
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23
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12.
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GUARANTEE
BY ▇▇. ▇▇▇
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25
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13.
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ANNOUNCEMENTS
AND CONFIDENTIALITY
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27
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14.
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STAMP
DUTY AND EXPENSES
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28
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15.
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GENERAL
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28
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16.
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NOTICES
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30
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17.
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GOVERNING
LAW AND JURISDICTION
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31
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SCHEDULE
1 AGREED PROPORTION
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34
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SCHEDULE
2 PART A DETAILS OF WINDRACE
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35
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SCHEDULE
2 PART B DETAILS OF SUBSIDIARIES OF
WINDRACE
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37
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SCHEDULE
3 PART A COMPLETION OBLIGATIONS UPON
CLOSING
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39
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SCHEDULE
3 PART B COMPLETION OBLIGATIONS UPON SPA
CLOSING
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41
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SCHEDULE
3 PART C COMPLETION OBLIGATIONS UPON POST-SPA
CLOSING
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42
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SCHEDULE
4 WINDRACE’S WARRANTIES
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43
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SCHEDULE
5 INVESTORS’ WARRANTIES
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78
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SCHEDULE
6 WINDRACE ACTIVITIES PENDING CLOSING
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79
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SCHEDULE
7 SPAC ACTIVITIES PENDING CLOSING
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82
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SCHEDULE
8 ESCROW AGREEMENT
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83
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SCHEDULE
9 PROPERTY
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99
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SCHEDULE
10 DEED OF INDEMNITY
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1
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EXHIBIT ACCOUNTS
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12
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AGREEMENT
DATED
27 JULY 2009
PARTIES
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(1)
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WINDRACE
INTERNATIONAL COMPANY LIMITED, a company incorporated under the
laws of the Cayman Islands with limited liability, the registered office
of which is at Cricket Square, ▇▇▇▇▇▇▇▇ Drive, ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇-▇▇▇▇, Cayman Islands (“Windrace”);
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(2)
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SHUIPAN
LIN, whose address is at ▇▇. ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
Village, Chendai Town, Jinjiang City, Fujian Province, the PRC and whose
PRC passport number is ▇▇▇▇▇▇▇▇▇ (“▇▇.
▇▇▇”);
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(3)
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WISETECH
HOLDINGS LIMITED, a company
incorporated in BVI whose registered office is at ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, BVI ("Wisetech");
and
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(4)
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WINDTECH
HOLDINGS LIMITED, a company incorporated in BVI, whose registered
office is at P.O. Box 957, Offshore Incorporations Centre, Road Town,
Tortola, BVI ("Windtech").
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(Wisetech
and Windtech collectively are referred to as the “Investors” and each of
them as the “Investor”
hereinafter.)
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RECITALS
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(A)
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Windrace
is a company incorporated under the laws of the Cayman Islands with
limited liability. It currently has an authorised share capital
of HK$390,000 divided into 3,892,000 ordinary shares of HK$0.10 each and
8,000 preferred shares of HK$0.10 each and as at the date hereof, 100,000
shares of HK$0.10 each (including 92,000 ordinary shares and 8,000
preferred shares) in the capital of Windrace have been issued and are
fully paid or credited as fully paid, details of which are set out in
Part
A of Schedule 2.
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(B)
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SPAC
is a company incorporated under the laws of Delaware and the shares of
which are listed on the NYSE Amex. Exceed is a wholly-owned subsidiary of
SPAC and a company incorporated under the laws of the BVI with limited
liability.
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(C)
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Wisetech
and Windtech are the wholly-owned subsidiaries of New Horizon Capital,
L.P. and New Horizon Capital III, L.P.,
respectively.
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1
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(D)
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Windrace,
SPAC, Exceed and the other parties entered into the SPA providing for,
amongst other things, the acquisition by Exceed of all the outstanding
ordinary shares of Windrace. Upon SPA Closing, Exceed shall
become the holding company of Windrace and SPAC shall merge with and into
Exceed with Exceed as the surviving
entity.
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(E)
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Subject
to the terms and conditions of this Agreement, the parties hereto have
agreed to provide for investment to be made by the Investors in Windrace
and Exceed.
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AGREEMENT
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1.
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INTERPRETATION
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1.1
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In
this Agreement (including the recitals), the following expressions shall
have the following meanings except where the context otherwise
requires:
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“Accounts”
the
consolidated balance sheet of Windrace as at the end of each of the three years
ended the Last Accounts Date and the consolidated profit and loss account of
Windrace for each of the three financial years ended the Last Accounts Date, and
all notes thereto prepared in accordance with IFRS, copies of which are annexed
hereto marked “Exhibit
1” and initialled by the parties hereto for the purposes of
identification;
“Affiliate”
with
respect to any person, a person that directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with such
person;
“Agreed
Proportion”
the
agreed proportion in respect of Wisetech and Windtech as set out in Schedule
1;
“Agreement”
this
Agreement including its schedules and exhibit, as may be amended or supplemented
from time to time;
“BVI”
the
British Virgin Islands;
“Business
Day”
a day
(excluding Saturdays and Sundays) on which commercial banks are generally open
for banking business in Hong Kong;
2
“Closing”
the
completion of the matters in accordance with the provisions of Clause 6.2 or the
time of such completion, as the case may be;
“Closing
Date”
the date
on which Closing takes place;
“Conditions”
the
conditions set out in Clause 3.1;
“Conditions
Deadline”
November
7, 2009 or such later date as the parties may from time to time agree in
writing;
“Consideration”
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the
amount of the aggregate purchase price payable by the Investors for the
Sale Warrants, the Windrace Shares Entitlement and the New Shares as
defined in Clause 4.1;
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“Constituent
Documents”
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with
respect to any entity, the certificate or articles of incorporation,
memorandum and articles of association, by-laws, minute books, or any
similar charter or other organizational
documents;
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“Contract”
any
written agreement, contract, commitment, instrument, undertaking or
arrangement;
“Deed
of Indemnity”
the deed
of indemnity substantially in the form attached hereto as Schedule
10;
“Deposit”
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the
sum of US$2,500,000 to be paid by the Investors to the Escrow Agent in
accordance with Clause 4.2;
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“Disclosed”
in
respect of the Windrace’s Warranties, fully and fairly disclosed in this
Agreement, the Accounts or the Windrace Disclosure Letter;
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“Encumbrance”
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a
mortgage, charge, pledge, lien, option, restriction, hypothecation, assignment,
right to acquire, pre-emption right, third-party right or interest, other
encumbrance, priority or security interest of any kind, or any other type of
preferential arrangement (including, without limitation, a title transfer or
retention arrangement) having similar effect, and any agreement or obligation to
create or grant any of the aforesaid;
3
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“Elevatech”
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Elevatech
Limited, an indirect wholly-owned subsidiary of The ▇▇▇▇▇▇▇ ▇▇▇▇▇ Group, Inc.
and the sole holder of all of the issued preferred shares of
Windrace;
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“Elevatech
Letter Agreement”
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the
letter of agreement dated May 8, 2009, between, among others, Windrace,
Elevatech and ▇▇. ▇▇▇ providing for, among others, the Redemption;
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“Escrow
Agent”
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Deacons;
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“Escrow
Agreement”
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the
escrow agreement made amongst the parties hereto and the Escrow Agent
substantially in the form attached hereto as Schedule
8 and of even date of this Agreement;
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“Exceed”
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Exceed
Company Ltd., a wholly-owned subsidiary of SPAC as at the date hereof and the
surviving entity after being merged with SPAC as contemplated under the
SPA;
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“Facilities”
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loans,
overdrafts, debentures, acceptance credits and all other indebtedness and
financial facilities of any nature outstanding or available to any Windrace
Group Company;
“Government
Entity”
any
governmental or regulatory authority, agency, court, commission or other entity,
domestic or foreign;
“Guarantee”
any
guarantee, indemnity, suretyship, letter of comfort or other assurance, security
or right of set-off or financial or other obligation given or undertaken by a
person to secure or support or incur a financial or other obligation with
respect to an obligation or liability (actual or contingent) of any other person
and whether given directly or by way of counter-indemnity to any person who has
provided such guarantee, indemnity, suretyship, letter of comfort or other
assurance, security or right of set off or financial or other obligation as
aforementioned;
“HK$”
4
the Hong
Kong Special Administrative Region of the PRC;
“International
Financial Reporting Standards” or “IFRS”
the
financial reporting standards and interpretations issued by the International
Accounting Standards Board;
“Intellectual
Property Rights”
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(a)
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patents,
trademarks, service marks, registered designs, applications for any of the
foregoing, trade and business names, unregistered trade names or marks and
service marks, copyrights, rights in designs and inventions, Proprietary
Information and all and any other intellectual property right, whether
registered or unregistered; and
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(b)
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rights
under licences, consents, orders, statutes or otherwise in relation to any
thing in paragraph (a),
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in each
case in any part of the world;
“Investors’
Warranty”
a
representation, warranty and undertaking contained in Clauses 7.4 to 7.6 or
Schedule
5 and “Investors’
Warranties” shall mean all of those representations, warranties and
undertakings;
“Last
Accounts Date”
March 31,
2009, being the date to which the Accounts were made up;
“Leased Property”
all
parcels of real property occupied by the Windrace Group under one or more leases
or licenses;
“Macau”
the Macau
Special Administrative Region of the PRC;
“Merger”
the
merger with and into Exceed by SPAC with Exceed as the surviving entity as
contemplated under the SPA;
“New
Shares”
the new
ordinary shares in Exceed which will, subject to the terms and conditions of
this Agreement, be issued and allotted in favour of the Investors and/or their
respective designated nominee(s), credited as fully paid, at the Agreed
Proportion;
5
“NYSE”
New York
Stock Exchange;
“Owned
Property”
all
parcels of real property owned by the Windrace Group;
“Post-SPA
Closing”
the
completion of the matters in accordance with the provisions of Clause 6.5 or the
time of such completion, as the case may be;
“Post-SPA
Closing Date”
the date
being six months after the SPA Closing Date, on which Post-SPA Closing takes
place;
“PRC”
the
People’s Republic of China, excluding Taiwan, Hong Kong and Macau for the
purpose of this definition;
“Property”
the Owned
Properties and the Leased Properties, as described in Schedule
9;
“Proprietary
Information”
all
information (including formulae, processes, methods, techniques, knowledge and
know-how) which is for the time being confidential to any Windrace Group Company
or not publicly known and which is used in or otherwise relates to the business,
customers, financial or other affairs and know-how of any Windrace Group Company
including information relating to:
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(a)
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the
marketing of any goods or services including, without limitation, customer
names and lists and any other details of customers, sales targets, sales
statistics, market share statistics, prices, market research reports and
surveys, and advertising or other promotional
materials;
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(b)
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future
projects, business development or planning, commercial relationships and
negotiations; or
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(c)
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the
manufacture, production, supply, storage or packaging of goods or the
provision of services, the acquisition, construction, installation or use
of raw materials, plant, machinery or equipment, quality control and
testing or the repair or service of plant, machinery, equipment
or products;
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6
“Records”
records
and information of each Windrace Group Company (including, without limitation,
all accounts, books, ledgers, minutes books, registers, financial and other
records of whatsoever kind, all Taxation and returns and filings and all other
statutory books and records);
“Redemption”
the
redemption by Windrace of the preferred shares in Windrace held by Elevatech
pursuant to the Elevatech Letter Agreement;
“Regulations”
all law,
enactment, order, decree, regulation, licence, consent, rule, constitutional
document, governmental or administrative requirement or the like, including the
rules and requirements of the SEC or any regulatory or governmental body, and the listing
requirements for the relevant exchange, to which any relevant person is subject,
in each aforesaid case whether of the BVI, United States, Hong Kong, the PRC or
elsewhere;
“RMB”
Renminbi,
the lawful currency of the PRC;
“Sale
Warrants”
up to
2,500,000 units of Warrants which will, subject to the terms and conditions of
this Agreement, on Post-SPA Closing be transferred to the Investors and/or their
respective designated nominee(s) at the Agreed Proportion;
“SEC”
the
United States Securities and Exchange Commission;
“Share”
a share
of US$0.0001 each in the capital of SPAC (or the new ordinary share in Exceed
immediately after the Merger) together with all rights attaching
thereto;
“SPA”
the sale
and purchase agreement dated May 8, 2009 entered into among Windrace, SPAC,
Exceed and the other parties thereto, as may be amended or supplemented from
time to time;
“SPA
Closing”
the
closing of the SPA as contemplated thereunder;
“SPA
Closing Date”
the date
on which the SPA Closing takes place;
7
“SPAC”
“subsidiary”
shall
have the meaning as ascribed thereto in the IFRS;
“Tax”
or “Taxation”
any and
all forms of taxation, levy, duty, charge, contribution, withholding or impost
of whatever nature (including any related fine, penalty, surcharge or interest)
imposed, collected or assessed by, or payable to, any Tax
Authority;
“Tax Authority” and “Taxation
Authority”
any
revenue, customs, fiscal governmental, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇,
provincial, local governmental or municipal authority, body or person, or any
non-revenue and non-fiscal governmental institutions responsible for collecting
Taxes on behalf of taxation authorities, whether of the BVI, United States, Hong
Kong, the PRC or elsewhere;
“US” or “United States”
the
United States of America;
“US$”
United
States dollars, the lawful currency of the United States;
“Warrant”
a warrant
currently exerciseable to purchase one share of common stock of SPAC at a price
of US$5.25 issued by SPAC in connection with the initial public offering of
SPAC’s securities;
“Windrace Disclosure
Letter”
the
disclosure letter dated the same date of this Agreement from Windrace and ▇▇.
▇▇▇ to the Investors;
“Windrace
Group”
Windrace
and its subsidiaries from time to time, and “Windrace Group Company” shall
be construed accordingly, details of the subsidiaries of Windrace as at the date
hereof are set out in Part B of
Schedule 2; and
“Windrace
Shares Entitlement”
the
entitlement to be issued and allotted such number of new ordinary shares in the
capital of Windrace on Closing which will, subject to the terms and conditions
of this Agreement, give the holder(s) of such entitlement and/or their
respective designated nominee(s) the right to be issued and allotted at SPA
Closing such number of New Shares as calculated pursuant to Clause
4.5;
8
“Windrace’s
Warranty”
a
representation, warranty and undertaking contained in Clauses 7.1 to 7.3 or
Parts A
through C of Schedule 4 and “Windrace’s Warranties” shall
mean all of those representations, warranties and undertakings.
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1.2
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In
this Agreement, except to the extent that context otherwise
requires:
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(a)
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a
Clause, a Sub-clause or a Schedule is, unless the context, otherwise
requires, a reference to a clause or a sub-clause of or a schedule to this
Agreement;
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(b)
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any
ordinance, regulation or other statutory provision or enactment is a
reference to such ordinance, regulation, statutory provision or enactment
as amended, modified, consolidated, codified, re-enacted, or extended or
applied by a court of competent jurisdiction, from time to time whether
before or after the date of this Agreement and includes subsidiary
legislation made thereunder whether before or after the date of this
Agreement;
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(c)
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a
“company” is a
reference to a body corporate (wherever
incorporated);
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(d)
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a
“person” includes
a reference to a company, unincorporated association, partnership, firm,
institution, trustee, Government Entity and to any person or party and
includes a reference to that person's or party’s legal personal
representatives and successors;
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(e)
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this
Agreement (or any specific provision hereof) or any other document shall
be construed as references to this Agreement, that provision or that other
document as amended, varied or modified from time to time;
and
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(f)
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a
“breach” of a
warranty includes that warranty being untrue, inaccurate, misleading or
there being relevant information omitted from it or not Disclosed in
respect of it.
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1.3
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Headings
in this Agreement are for ease of reference only and shall not affect the
interpretation or construction of this
Agreement.
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1.4
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The
Schedules and Exhibit form part of this
Agreement.
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1.5
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In
construing this Agreement:
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(a)
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the
rule known as the ejusdem generis rule shall not apply and accordingly
general words introduced by the word “other” shall not be given a
restrictive meaning by reason of the fact that they are preceded by words
indicating a particular class of acts, matters or
things;
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9
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(b)
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general
words shall not be given a restrictive meaning by particular examples
intended to be embraced by the general words, and where the word
“include”, “includes” or “including” appears in any statement, it shall be
deemed to be immediately followed by the words “without
limitation”;
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(c)
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words
denoting the singular include the plural and vice versa and words denoting
one gender include all genders;
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(d)
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all
references to “dollars” or “$” or any similar references or designations
contained herein mean US$; and
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(e)
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the
words “hereof”, “herein” and “hereunder” and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this
Agreement.
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1.6
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A
reference in this Agreement to Windrace’s or ▇▇. ▇▇▇’▇ knowledge,
information, belief or awareness (and similar
expressions):
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(f)
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shall
be a reference to the best of the knowledge, information, belief or
awareness of Windrace and ▇▇. ▇▇▇, each of the directors of Windrace after
making all reasonable enquiries;
and
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(g)
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is
deemed to include knowledge which each such person would have or
information, belief or awareness of such person had all reasonable
enquiries been made to senior management of Windrace, the Windrace Group
Companies and SPAC.
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1.7
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The
table of contents and heading contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
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1.8
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The
parties have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any
provisions of this Agreement.
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2.
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INVESTMENT
|
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2.1
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Subject
to the fulfilment of Conditions set out in Clause 3.1, Windrace shall as
registered and/or beneficial owners sell, and each of the Investors shall
purchase, the Sale Warrants, at the Agreed Proportion set under its name
in Schedule
1, on
and subject to the terms and conditions of this Agreement and free from
any Encumbrance and with all rights now and hereafter attaching
thereto.
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10
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2.2
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Subject
to the fulfilment of Conditions set out in Clause 3.1, Windrace shall
grant to the Investors the Windrace Shares Entitlement at the Agreed
Proportion set under their respective names in Schedule
1 on and subject to the terms and conditions of this
Agreement.
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2.3
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Subject
to Closing having taken place and upon SPA Closing, the Windrace Shares
Entitlement shall be deemed to be exercised by its holder(s)
thereof.
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2.4
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Subject
to Closing having taken place and upon SPA Closing and Post-SPA Closing
(as the case may be), ▇▇. ▇▇▇ shall procure Exceed to issue and allot to
the Investors, and the Investors shall subscribe or procure the
subscription for, such number of New Shares, calculated in accordance with
Clauses 4.5 and 4.6(b) respectively, at the Agreed Proportion set under
their respective names in Schedule
1 on and subject to the terms and conditions of this
Agreement. Windrace agrees that the New Shares will, when
issued, rank pari passu in all respects with the other Shares in issue or
to be issued by Exceed on the date of issue including the rights to all
dividends and other distributions declared, made or paid at any time after
the date of issue.
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3.
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CONDITIONS
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3.1
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Closing
is conditional on the following Conditions being satisfied, or (save as
regards paragraph (b) below) waived pursuant to Clause 3.3, on or before
the Conditions Deadline:
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(a)
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due
diligence on the Windrace Group, including without limitation, its state
of affairs, assets and liabilities, financial position and business
operation, being completed to the satisfaction of the
Investors;
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(b)
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the
Investors having obtained a legal opinion of a qualified law firm in the
place of incorporation of each Windrace Group Company and acceptable to
the Investors covering matters in respect of the due incorporation of each
Windrace Group Company, its valid existence and that no resolution or
order has been made or passed to appoint receiver, liquidator or similar
officer of, or to wind up or dissolve any Windrace Group Company and all
such other legal matters as the Investors may consider to be relevant, in
such form and substance to the Investors’
satisfaction;
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(c)
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all
legally required authorizations, consents and approvals legally required
in any and all applicable Regulations to give effect to all the
transactions contemplated hereunder (including, without limitation, the
approval for the acquisition and the transfer of the Sale Warrants, the
granting of the Windrace Shares Entitlement and the issue of the New
Shares by Exceed and such waivers as may be necessary of terms which would
otherwise constitute a default under any instrument, contract, document or
agreement to which any Windrace Group Company is a party or by which its
assets are bound, which includes the waiver contemplated under the
Elevatech Letter Agreement) having been obtained to the satisfaction of
the Investors and not revoked, and where any consent or approval is
subject to conditions, such conditions being satisfied to the opinion of
the Investors;
|
11
|
|
(d)
|
this
Agreement and the transactions contemplated hereunder having been approved
by the respective investment committees of the
Investors;
|
|
|
(e)
|
(i)
the Windrace’s Warranties contained in paragraphs 1.1, 1.2, and 2 through
4 in Part
A of Schedule 4 remaining true and accurate in all respects and not
misleading in any respect as of the Closing Date by reference to the facts
and circumstances subsisting as at the Closing Date; and (ii) the
Windrace’s Warranties (save for those warranties set out in (i) above),
remaining true and accurate in all material respects and not misleading in
any material respect as of the Closing Date by reference to the facts and
circumstances subsisting as at the Closing Date;
and
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|
|
(f)
|
the
SPA having become unconditional in all
respects.
|
|
3.2
|
Each
of the parties hereto hereby undertakes to use all reasonable efforts to
procure the fulfilment of the Condition set out in Clause 3.1(c) on or
before the Conditions Deadline.
|
|
|
3.3
|
(a)
|
Each
of Windrace and ▇▇. ▇▇▇ hereby undertakes to use all reasonable efforts to
procure the fulfilment of the Conditions set out in Clauses 3.1(a), (b),
(e) and (f) on or before the Conditions Deadline unless specifically
waived by the Investors in writing;
and
|
|
|
(b)
|
each
of Investors hereby undertakes to use all reasonable efforts to procure
the fulfilment of the Condition set out in Clause 3.1(d) on or before the
Conditions Deadline unless specifically waived by the Investors in
writing.
|
|
3.4
|
If
any of the Conditions stated in Clause 3.1 shall not be fulfilled or
waived pursuant to Clause 3.3 on or before the Conditions Deadline, this
Agreement shall be automatically terminated (other than Clauses 9, 11, 12,
13, 14.2 and 14.3 to 17, and all provisions relevant to the interpretation
and enforcement thereof) and in which event Clause 9 shall
apply.
|
|
4.
|
CONSIDERATION
|
|
4.1
|
The
aggregate consideration for the Investors’ investment as contemplated
hereunder shall be US$30,000,000 (“Consideration”).
|
|
4.2
|
The
Investors shall, within two (2) Business Days from the signing of this
Agreement, pay or cause to be paid to the Escrow Agent, subject to the
terms and conditions set out herein and in the Escrow Agreement, the
Deposit in part payment of the Consideration. The Deposit
shall be paid by transfer of fund, cashier order or cheque drawn on a
licensed bank in Hong Kong in favour of the Escrow
Agent.
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12
|
4.3
|
In
the event that the Investors have received a certificate issued by a
director of each of Windrace and SPAC confirming the satisfaction or the
waiver of all of the conditions contained clause 3.1 of the SPA (“Directors’ Certificate”)
on or before the Conditions Deadline, the Investors shall deposit or cause
to be deposited, within two (2) Business Days after receiving the
Directors’ Certificate, with the Escrow Agent, subject to the terms and
conditions set out herein and in the Escrow Agreement, a sum of
US$27,500,000 (“Second
Payment”). The Second Payment shall be settled by
transfer of fund or a cashier order or cheque drawn on a licensed bank in
Hong Kong in favour of the Escrow
Agent.
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4.4
|
At
Closing, (a) Windrace
shall grant the Windrace Shares Entitlement to the Investors and/or their
respective designated nominee(s) at the Agreed Proportion set under their
respective names in Schedule
1, and
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|
|
(b)
|
Windrace
and the Investors shall issue joint written instruction(s) to the Escrow
Agent for the release of the Second Payment to Windrace or any person as
it may direct.
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4.5
|
At
SPA Closing, the Windrace Shares Entitlement shall be deemed to be
exercised by its holder(s) thereof and ▇▇. ▇▇▇ shall procure Exceed to
issue and allot such number of New Shares being the amount of the Second
Payment divided by US$7.58 to the Investors and/or their respective
designated nominee(s) at the Agreed Proportion set under their respective
names in Schedule
1. Upon the issue and allotment of such number of New
Shares as provided herein, all rights of the Investors under the Windrace
Shares Entitlement shall be
extinguished.
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4.6
|
At
Post-SPA Closing,
|
|
|
(a)
|
Windrace
shall out of the Warrants purchased by Windrace as contemplated in Clause
5.3 (at a purchase price of not more than US1.00 for each Warrant),
transfer to the Investors and/or their respective designated nominee(s) at
the Agreed Proportion set under their respective names in Schedule
1 the
maximum number of the Sale Warrants up to 2,500,000 units at the average
price paid by Windrace for such Warrants,
and
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|
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(b)
|
▇▇.
▇▇▇ shall procure Exceed to issue and allot to the Investors and/or their
respective designated nominee(s) at the Agreed Proportion set under their
respective names in Schedule
1 such number of New Shares to be calculated as
follows:
|
13
|
A
=
|
(B
- C) / US$7.58
|
|
A
=
|
number
of New Shares to be issued and allotted by
Exceed
|
|
B
=
|
the
amount of the Deposit together with all interests accrued
thereon
|
|
C =
|
the
aggregate amount of the price payable by the Investors for the Sale
Warrants pursuant to Clause 4.6(a),
and
|
Windrace
and the Investors shall issue joint written instruction(s) to the Escrow Agent
for the release of the Deposit together with all interests accrued thereon to
Windrace or any person as it may direct.
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5.
|
PRE-CLOSING
MATTERS
|
|
5.1
|
Windrace
hereby undertakes with the Investors that if at any time before Closing,
each of Windrace or ▇▇. ▇▇▇ comes to know of any fact, circumstance or
event which:
|
|
|
(a)
|
(i)
is in any way inconsistent with such Windrace’s Warranties contained in
paragraphs 1.1, 1.2 and 2 through 4 in Part
A of Schedule
4, or suggests that any fact warranted may not be as warranted or
may be misleading in any respect or (ii) is in any way inconsistent with
any of the undertakings or Windrace’s Warranties (save for those
warranties set out in 5.1(a)(i) above), or suggests that any fact
warranted may not be as warranted or may be misleading in any material
respect; and/or
|
|
|
(b)
|
may
have occurred any material adverse effect (“Material Adverse
Effect”) on: -
|
|
|
(i)
|
the
business, assets, properties, results of operations or condition
(financial or otherwise) of any of the Windrace Group Companies or one or
more Windrace Group Companies taken as a whole or any of Exceed or SPAC;
or
|
|
|
(ii)
|
the
ability of a prudent purchaser for value of the Sale Warrants or a
subscriber for value of the Windrace Shares Entitlement and/or the New
Shares to consummate the transactions contemplated by this Agreement or
perform its obligations under this
Agreement;
|
provided,
however, that none of the following shall be deemed to constitute, and none of
the following shall be taken into account in determining whether there has been
a Material Adverse Effect: any adverse change, event, development, or effect
arising from or relating to (a) the economy in general or (b) the industry in
which the Windrace Group or any of Exceed or SPAC operates in general (in each
case under (a) and (b) not specifically relating to or disproportionately
affecting the Windrace Group or any of Exceed or SPAC); or
14
Windrace
or ▇▇. ▇▇▇ shall as soon as practicable give written notice thereof to the
Investors.
|
5.2
|
Each
of Windrace and ▇▇. ▇▇▇ hereby undertakes with the Investors that pending
Closing: -
|
|
|
(a)
|
it/he
shall, and shall procure that each Windrace Group Company
shall:
|
|
|
(i)
|
not
do (directly or indirectly) or allow to be done any act or
omission which would constitute or give rise to a breach of any of the
Windrace’s Warranties if the Windrace’s Warranties were given at any time
up to the Closing Date;
|
|
|
(ii)
|
procure
that the Investors and their respective authorised representatives and
advisers are promptly given full access to all the Records and other
documents of each Windrace Group Company and all such information,
explanations and copies with respect thereto (or thereof) and to the
business, affairs, assets, liabilities and contracts of each Windrace
Group Company as the Investors or their respective authorised
representatives or advisers may reasonably
request;
|
|
|
(iii)
|
not
dispose of any interest in any shares or equity interests in any of the
Windrace Group Company or any of them or create or grant any Encumbrance
over or in respect of any of them;
|
|
|
(iv)
|
not
pass any resolution in general meeting of any Windrace Group Company
(other than any resolution constituting ordinary business conducted at an
annual general meeting) without sending prior written notice to the
Investors;
|
|
|
(b)
|
it/he
will procure that at all times up to Closing each Windrace Group Company
will comply with the provisions of Schedule
6; and
|
|
|
(c)
|
it/he
will use all reasonable endeavours and exercise its/his rights under the
SPA to ensure that at all times up to Closing SPAC and Exceed will comply
with the provisions of Schedule
7.
|
|
5.3
|
Each
of Windrace and ▇▇. ▇▇▇ hereby undertakes with the Investors that it shall
after SPA Closing use its best endeavours to purchase up to the maximum
number of Sale Warrants at a purchase price of not more than US1.00 for
each Warrant. Such Warrants shall be purchased in the name of
and delivered to Windrace or the Investors or their respective designated
nominee(s) or such other entity(ies) as may be directed by the Investors
from time to time.
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15
|
6.
|
CLOSING, SPA CLOSING
AND POST-SPA CLOSING
|
|
6.1
|
Subject
to Clause 3.1, Closing shall take place at the offices of Deacons at
▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ or such
other place(s) as may be agreed between the parties on (a) the SPA Closing
Date but immediately prior to the SPA Closing and after (b) all the
Conditions set out in Clause 3.1 have been satisfied (or waived pursuant
to Clause 3.3, and any conditions attaching to such waiver having been
satisfied) (except the Condition set out in Clause 3.1(e) which shall be
fulfilled simultaneously upon Closing) unless the parties otherwise agree
in writing, but in any event no later than November 7,
2009.
|
|
6.2
|
At
or before Closing, Windrace and/or ▇▇. ▇▇▇ shall procure the doing of the
things and the delivery to the Investors of those documents and other
items set out in paragraph (A) of Part
A of Schedule 3, and the Investors shall procure the doing of the
things and the delivery to Windrace of those documents and other items set
out in paragraph (B) of Part
A of Schedule 3.
|
|
6.3
|
At
Closing and against full compliance by Windrace and/or ▇▇. ▇▇▇ with all
their respective obligations under paragraph (A) of Part
A of Schedule 3, Windrace and the Investors shall issue joint
written instruction to the Escrow Agent for the release of the Second
Payment to Windrace or any person as it may
direct.
|
|
6.4
|
At
SPA Closing, and against full compliance by the Investors with their
respective obligations under sub-paragraph 1.2 of paragraph (B) of Part
A of Schedule 3, each of Windrace and ▇▇. ▇▇▇ shall procure the
doing of the things and the delivery to the Investors of those documents
and other items set out in Part
B of Schedule
3.
|
|
6.5
|
At
Post-SPA Closing, and against full compliance by the Investors with their
respective obligations under sub-paragraph 1.1 of paragraph (B) of Part
C of Schedule 3, each of Windrace and ▇▇. ▇▇▇ shall procure the
doing of the things and the delivery to the Investors of those documents
and other items set out in paragraph (A) of Part
C of Schedule
3.
|
|
7.
|
WARRANTIES AND
INDEMNITIES
|
|
7.1
|
Each
of Windrace and ▇▇. ▇▇▇ hereby represents, warrants and undertakes to the
Investors, and their respective successors in title
that:
|
|
|
(i)
|
that
each statement contained in paragraphs 1.1, 1.2, 2 through 4 in Part
A of Schedule 4 is true, accurate and complete in all respects and
not misleading in any respect,
|
16
|
|
(ii)
|
each
statement contained in Parts
A and B of Schedule 4 (save for those Windrace’s Warranties set out
in (i) above) is true, accurate and complete in all material respects and
not misleading in any material respect,
and
|
|
|
(iii)
|
based
on publicly available information and assuming all representations and
warranties made by Exceed and SPAC in the SPA are true, accurate and
complete in all material respects and not misleading in any material
respect as of the date of this Agreement and on each day up to and
including the Closing Date, each statement contained in Part
C of Schedule 4 is true, accurate and complete in all material
respects and not misleading in any material
respect,
|
in the
case of each of (i), (ii) and (iii), at the date of this Agreement and on each
day up to and including the Closing Date (and in the case of paragraphs 1 to 4
in Part A of
Schedule 4, up to and including the Post-SPA Closing) with reference to
the facts and circumstances from time to time applying, provided however, that
any statement contained herein that is qualified by a materiality standard or a
material adverse effect shall not be further qualified thereby. Each
of Windrace and ▇▇. ▇▇▇ hereby acknowledges that each of the Investors is
entering into this Agreement in reliance upon each Windrace’s
Warranty. The parties to this Agreement expressly agree that the
Windrace’s Warranties are made and given subject to the matters Disclosed and
shall not be nor shall be deemed to be in breach of any of the Windrace’s
Warranties in respect of matters Disclosed, provided that such Windrace’s
Warranties when read in conjunction with the matters Disclosed satisfy the
standards set forth in the first sentence of this paragraph. The
Windrace’s Warranties are qualified by those matters Disclosed.
|
7.2
|
Each
Windrace’s Warranty is separate and independent of and without prejudice
to any other Windrace’s Warranty and, except where expressly stated
otherwise, is not limited by any provision of this Agreement or another
Windrace’s Warranty. The Windrace’s Warranties shall survive
Post-SPA Closing.
|
|
7.3
|
Each
of Windrace and ▇▇. ▇▇▇ hereby agrees to indemnify and keep indemnified on
demand the Investors and their respective successors in title from and
against all losses, costs and expenses (including legal expenses) which
the Investors actually sustain from or in consequence of any of the
Windrace’s Warranties contained in (i) paragraphs 1.1, 1.2, 2 through 4 in
Part
A of Schedule 4 not being true and accurate or fully complied with
in any respect; and (ii) Parts
A, B and C of Schedule 4 (save for those Windrace’s Warranties set
out in (i) above), not being true and accurate or complied with in all
material respects or being misleading in any material
respect. This indemnity shall be without prejudice to any other
rights and remedies of the Investors in relation to any such breach of any
such Windrace’s Warranties and all other rights and remedies are expressly
reserved to the Investors.
|
17
|
7.4
|
Each
of the Investors represents, warrants and undertakes to Windrace, ▇▇. ▇▇▇
and their respective successors in title that each statement contained in
Schedule
5 is true, accurate and complete in all respects and not misleading
in any respect at the date of this Agreement and on each day up to and
including the Closing Date with reference to the facts and circumstances
from time to time applying, provided however, that any statement
contained herein that is qualified by a materiality standard or a material
adverse effect shall not be further qualified thereby. Each of
the Investors acknowledges that each of Windrace and ▇▇. ▇▇▇ is entering
into this Agreement in reliance upon each Investors’
Warranty.
|
|
7.5
|
Each
Investors’ Warranty is separate and independent and without prejudice to
any other Investors’ Warranty and, except where expressly stated
otherwise, is not limited by any provision of this Agreement or another
Investors’ Warranty. The Investors’ Warranties shall survive
Closing.
|
|
7.6
|
Each
of the Investors agrees to indemnify and keep indemnified on demand
Windrace, ▇▇. ▇▇▇ and their respective successors in title from and
against all losses, costs and expenses (including legal expenses) which
Windrace or ▇▇. ▇▇▇ actually sustain from or in consequence of any of the
Investors’ Warranties contained in Schedule
5 not being correct or fully complied with in any
respect. This indemnity shall be without prejudice to any other
rights and remedies of Windrace or ▇▇. ▇▇▇ in relation to any such breach
of any such Investors’ Warranties and all other rights and remedies are
expressly reserved to Windrace and ▇▇.
▇▇▇.
|
|
7.7
|
▇▇.
▇▇▇ agrees to indemnify and keep indemnified on demand Windrace and its
successors in title from and against all losses, costs and expenses
(including legal expenses) which Windrace actually sustains from or
in consequence of Windrace's entering into this Agreement, including but
not limited to any indemnification amounts payable by Windrace to the
Investors under Clause 7.3 (collectively, the "Financial Losses"). The
indemnification obligation set forth in the foregoing sentence, however,
shall terminate immediately and have no further effect upon SPA Closing.
For the avoidance of doubt, ▇▇. ▇▇▇ shall have no obligation to indemnify
Windrace under this Clause 7.7 for any Financial Losses sustained by
Windrace after SPA Closing, even if such losses are attributable to
conducts or events prior to SPA
Closing.
|
|
8.
|
POST CLOSING
UNDERTAKINGS
|
|
8.1
|
Subject
to Closing having taken place, each of Windrace and ▇▇. ▇▇▇ shall execute
such further documents and perform and procure such acts and things as the
Investors may reasonably require to vest the beneficial and registered
ownership of the Sale Warrants, the Windrace Shares Entitlement and the
New Shares in the Investors and/or their respective designated nominee(s)
free from any Encumbrances and to give full effect to Windrace’s
obligations under this Agreement.
|
18
|
8.2
|
Subject
to Closing having taken place, each of Windrace and ▇▇. ▇▇▇ irrevocably
and unconditionally undertakes to the Investors that it shall execute and
procure SPAC or Exceed to execute such further documents and perform and
procure filings and registrations and such other acts and things as the
Investors may reasonably require (including all amendments to the articles
of association of Windrace or Exceed, being the surviving entity of SPAC)
(i) to confer on the Investors its rights and benefits that shall be
enjoyed by the Investors through their holdings in Windrace or Exceed
(after the SPA Closing) and (ii) to promptly secure the registration for
resale under the securities laws of the United States of all New Shares to
be issued to the Investors as contemplated
hereunder.
|
|
8.3
|
Each
of Windrace and ▇▇. ▇▇▇ hereby irrevocably and unconditionally undertakes
with the Investors that it will upon SPA Closing procure the nomination of
a representative from each of (i) the Investors collectively and (ii) SPAC
for election as directors of 福建喜得龍體育用品有限公司
(Fujian Xidelong Sports Goods Co., Ltd.) and/or 喜得龍(中國)有限公司
(Xidelong (China) Co. Ltd.), and each of such board(s) shall not have more
than five directors (“Appointments”).
|
|
8.4
|
Subject
to Closing having taken place, ▇▇. ▇▇▇ undertakes to the Investors
that he will not (and will procure Ms. Xiayu Chen (“▇▇. ▇▇▇▇”) and their
respective designated nominee(s), not to), transfer or dispose of, or
grant or create any interests or rights of any nature in respect of, any
interest in the Shares held by him (including those held on trust for ▇▇.
▇▇▇▇) and/or ▇▇. ▇▇▇▇ and/or their respective designated nominee(s), prior
to the date falling thirty-six (36) months from the SPA
Closing. The transfer restriction set forth in the immediately
preceding sentence shall not apply to the loan of, or other transfer of
dispositive power over, such Shares by ▇▇. ▇▇▇ and/or ▇▇. ▇▇▇▇ to
shareholders of Exceed who both: (i) beneficially own less than 10% of the
outstanding Shares after giving effect to such transfer; and (ii) are not
otherwise affiliated with Exceed at the time of the
transfer.
|
|
9.
|
TERMINATION
|
|
9.1
|
Subject
to fulfilment or waiver (pursuant to Clause 3.3) of the Conditions and
if:
|
|
|
(a)
|
Closing
does not take place on the date set forth in Clause 6.1 hereof as a result
of Windrace or ▇▇. ▇▇▇ failing to comply with any of their
obligations under Clause 6; or
|
|
(b)
|
at
any time prior to Closing, any of the Investors becomes aware
that:
|
|
|
(i)
|
any
of the Windrace’s Warranties is incorrect, inaccurate or misleading;
or
|
19
|
|
(ii)
|
any
obligation of Windrace or ▇▇. ▇▇▇ hereunder has not been or is (in the
reasonable opinion of the Investors) incapable of being carried
out,
|
|
|
in
the case of either (i) or (ii) in a way which (in the reasonable opinion
of the Investors) is material in the context of the proposed acquisition
of the Sale Warrants and the Windrace Shares Entitlement and the
subscription of the New Shares,
|
|
|
any
of the Investors may, at its option (but without prejudice to any other
right or remedy it may have, including without limitation any right to
subsequently claim for (x) such failure to comply, (y) breach of contract
by Windrace or ▇▇. ▇▇▇ or (z) breach of the Windrace’s Warranties) by
written notice to Windrace and ▇▇. ▇▇▇ prior to Closing, elect
to:
|
|
(aa)
|
proceed
to Closing in so far as reasonably
practicable;
|
|
|
(bb)
|
postpone
Closing to a date (which in any event shall not exceed thirty (30)
Business Days beyond the Closing Date) after the Closing Date in
accordance with Clause 6.1 hereof;
or
|
|
(cc)
|
terminate
this Agreement.
|
|
|
If
any of the Investors elects to postpone Closing in accordance with Clause
9.1(bb), the provisions of this Agreement shall apply (excluding the
option to further postpone the Closing under Section 9.1(bb)) until the
date of such Closing.
|
|
9.2
|
Subject
to fulfilment or waiver (pursuant to Clause 3.3) of the Conditions and
if:
|
|
|
(a)
|
Closing
does not take place on the date set forth in Clause 6.1 hereof as a result
of any of the Investors failing to comply with any of their
obligations under Clause 6; or
|
|
|
(b)
|
at
any time prior to Closing, any of Windrace or ▇▇. ▇▇▇ becomes aware
that:
|
|
|
(i)
|
any
of the Investors’ Warranties is incorrect, inaccurate or misleading;
or
|
|
|
(ii)
|
any
obligation of the Investors hereunder has not been or is (in the
reasonable opinion of Windrace or ▇▇. ▇▇▇) incapable of being carried
out,
|
|
|
in
the case of either (i) or (ii) in a way which (in the reasonable opinion
of Windrace or ▇▇. ▇▇▇) is material in the context of the proposed
acquisition of the Sale Warrants and the Windrace Shares Entitlement and
the subscription of the New Shares,
|
20
|
|
Windrace
or Mr. ▇▇▇ ▇▇▇, at its option (but without prejudice to any other right or
remedy it may have, including without limitation any right to subsequently
claim for (x) such failure to comply, (y) breach of contract by any of the
Investors or (z) breach of the Investors’ Warranties) by written notice to
the Investors prior to Closing, elect
to:
|
|
(aa)
|
proceed
to Closing in so far as reasonably
practicable;
|
|
|
(bb)
|
postpone
Closing to a date (which in any event shall not exceed thirty (30)
Business Days beyond the Closing Date) after the Closing Date in
accordance with Clause 6.1 hereof;
or
|
|
(cc)
|
terminate
this Agreement.
|
|
|
If
Windrace or ▇▇. ▇▇▇ elects to postpone Closing in accordance with Clause
9.2(bb), the provisions of this Agreement shall apply (excluding the
option to further postpone the Closing under Section 9.2(bb)) until the
date of such Closing.
|
|
9.3
|
If
this Agreement shall be terminated under Clauses 9.1 and 9.2 or any of the
Conditions is not fulfilled (or waived by the Investors pursuant to Clause
3.3) on or before the Conditions
Deadline:
|
|
|
(a)
|
Windrace
shall forthwith pay or cause to be paid to the Investors the Consideration
already paid by the Investors and (where this Agreement is not terminated
by Windrace due to the Investors’ breach of their respective undertakings
as provided for in Clauses 4.2, 4.3 and 6) ▇▇. ▇▇▇ shall forthwith pay to
the Investors an amount equivalent to interests accrued on the
Consideration already paid by the Investors at the rate of 10% per annum
from the date of payment by the Investors until and including the date of
refund. Without prejudice to the generality of the above,
Windrace and the Investors shall forthwith give joint instructions to the
Escrow Agent in writing to release any of the Consideration remaining in
the Escrow Account and all interests accrued thereon to the Investors (or
to such person(s) as the Investors may direct, as set out in the joint
instructions); and
|
|
|
(b)
|
save
as otherwise provided herein, all rights and obligations of the parties
shall cease immediately upon termination, except
that:
|
|
|
(i)
|
termination
shall not affect the then accrued rights and obligations of the
parties;
|
|
|
(ii)
|
termination
shall be without prejudice to the continued application of this Clause and
Clauses 11, 12, 13, 14.2 and 14.3 to 17 (and all provisions
relevant to the interpretation and enforcement thereof) which shall remain
in full force and effect; and
|
21
|
(iii)
|
other
than due to the Investors’ breach of their respective undertakings as
provided for in Clauses 4.2, 4.3 and 6 (provided that Windrace shall have
complied with its obligations contemplated under this Agreement), Windrace
and ▇▇. ▇▇▇ shall (in addition to any other remedy the Investors may have)
indemnify the Investors against all costs and expenses (including the
costs and expenses of legal, financial, accounting and other advisers)
incurred by the Investors in connection with the negotiation, preparation,
execution and termination of this Agreement and the proposed purchase of
the Sale Warrants / the proposed acquisition of the Windrace Shares
Entitlement / the proposed subscription of the New Shares (and all due
diligence and other investigations and research in connection therewith)
or the satisfaction of any of the Conditions set forth in Clause 3.1,
provided that such indemnity shall be subject to a maximum sum of
US$50,000 and shall be without prejudice to any other rights and remedies
of the Investors.
|
|
9.4
|
Subject
to Closing having taken place, if SPA Closing does not occur on or before
November 7, 2009, this Agreement shall immediately be automatically
terminated subject to the
following:
|
|
|
(a)
|
Windrace
shall forthwith pay or cause to be paid to the Investors the Consideration
already paid by the Investors and ▇▇. ▇▇▇ shall forthwith pay to the
Investors an amount equivalent to interests accrued on the Consideration
already paid by the Investors at the rate of 10% per annum from the date
of payment by the Investors until and including the date of
refund. Without prejudice to the generality of the
above, Windrace and the Investors shall forthwith give joint
instructions to the Escrow Agent in writing to release any of the
Consideration remaining in the Escrow Account and all interests accrued
thereon to the Investors (or to such person(s) as the Investors may
direct, as set out in the joint
instructions);
|
|
|
(b)
|
(i)
the Investors shall, upon Windrace’s request in writing and at the cost of
Windrace, transfer or cause to be transferred, if any, all the Sale
Warrants transferred to the Investors or their respective designated
nominee(s) as contemplated hereunder to such person as may be directed by
Windrace in writing without any liability on the part of the Investors;
and (ii) all the Windrace Shares Entitlement shall be extinguished; and
each of Windrace and ▇▇. ▇▇▇ shall indemnify and keep indemnified on
demand the Investors and their respective designated nominee(s) and
successors in title from and against all losses, costs and expenses
(including legal expenses) which the Investors and/or their respective
designated nominee(s) may incur or sustain from or in consequence of such
transfer and/or extinguishment; and
|
22
|
|
(c)
|
save
as otherwise provided herein, all rights and obligations of the parties
shall cease immediately upon termination, except
that:
|
|
|
(i)
|
termination
shall not affect the then accrued rights and obligations of the
parties;
|
|
|
(ii)
|
termination
shall be without prejudice to the continued application of this Clause and
Clauses 11, 12, 13, 14.2 and 14.3 to 17 (and all provisions
relevant to the interpretation and enforcement thereof) which shall remain
in full force and effect; and
|
|
|
(iii)
|
Windrace
and ▇▇. ▇▇▇ shall (in addition to any other remedy the Investors may have)
indemnify the Investors against all costs and expenses (including the
costs and expenses of legal, financial, accounting and other advisers)
incurred by the Investors in connection with the negotiation, preparation,
execution and termination of this Agreement and the proposed purchase of
the Sale Warrants / the proposed acquisition of the Windrace Shares
Entitlement / the proposed subscription of the New Shares (and all due
diligence and other investigations and research in connection therewith)
or the satisfaction of any of the Conditions set forth in Clause 3.1,
provided that such indemnity shall be subject to a maximum sum of
US$50,000 and shall be without prejudice to any other rights and remedies
of the Investors.
|
|
10.
|
CANCELLATION OF
WARRANTS
|
|
10.1
|
Windrace
undertakes with the Investors that any Warrants purchased by it less the
Sale Warrants shall be cancelled immediately after Post-SPA
Closing.
|
|
11.
|
LIMITATION OF
LIABILITIES
|
|
11.1
|
The
parties hereby agree that the entire liability of (i) both of Windrace and
▇▇. ▇▇▇ to the Investors; and (ii) the Investors to both of Windrace and
▇▇. ▇▇▇, under this Agreement, and/or in respect of any and all
matters/transactions contemplated under this Agreement including but not
limited to sums payable in respect of claims (whether contractual,
tortious or otherwise) (“Claims”) (exclusive of
any loss of opportunity in other investments) arising out of any one or
more of the following:-
|
|
|
(a)
|
breaches
of the express or implied terms of this
Agreement;
|
|
|
(b)
|
any
indemnity, damages or compensation in respect of the matters set out in
this Agreement;
|
23
|
|
(c)
|
all
Claims for breach of any undertakings/covenants/representations made by
the Sellers under this Agreement;
|
|
|
(d)
|
all
Claims for breach by the parties hereunder of any of their obligations or
commitment under this Agreement;
and
|
|
|
(e)
|
interest
(if any) in respect of any of the above
payments,
|
|
|
shall
be set out in Clause 11.2.
|
|
11.2
|
(a)
|
Except
as set forth in Clause 11.3, the total liability of both of Windrace and
▇▇. ▇▇▇ in contract, tort (including negligence), breach of statutory
duty, misrepresentation, restitution or otherwise shall be limited to
US$3,000,000 in aggregate.
|
|
|
(b)
|
Except
as set forth in Clause 11.3, the total
liability of the Investors in contract, tort (including negligence),
breach of statutory duty, misrepresentation, restitution or otherwise
shall be limited to US$3,000,000 in
aggregate.
|
|
11.3
|
Nothing
in this Agreement limits or excludes any party’s
liability:
|
|
|
(a)
|
for
death or personal injury resulting from negligence;
or
|
|
|
(b)
|
any
damage or liability incurred as a result of fraud or fraudulent
misrepresentation; or
|
|
|
(c)
|
any
other matter in respect of which it would be illegal for any party to
exclude or limit its liability.
|
|
11.4
|
Both
of Windrace and ▇▇. ▇▇▇ on the one hand and the Investors on the other
hand shall not be entitled to recover more than once in respect of any one
breach giving rise to a claim under this
Agreement.
|
|
11.5
|
The
rights of the Investors in respect of any Claim under this Agreement shall
be restricted in the following
manner:
|
|
|
(a)
|
no
Claim under this Agreement shall be made against Windrace or ▇▇. ▇▇▇
unless written notice thereof (specifying the nature, quantum and full
particulars) shall have been given by the Investors to Windrace or ▇▇. ▇▇▇
on or before the expiry of three (3) years after the Closing
Date;
|
|
|
(b)
|
no
Claim under this Agreement shall be made unless the amount of the claim or
the aggregate amount of the Claims is over US$100,000, and for this
purpose no Claim shall be aggregated unless its amount is over US$20,000.
|
24
|
11.6
|
The
rights of Windrace or ▇▇. ▇▇▇ or any of them in respect of any Claim under
this Agreement shall be restricted in the following
manner:
|
|
|
(a)
|
no
Claim under this Agreement shall be made against the Investors unless
written notice thereof (specifying the nature, quantum and full
particulars) shall have been given by Windrace or ▇▇. ▇▇▇ to the Investors
on or before the expiry of three (3) years after the Closing
Date;
|
|
|
(b)
|
no
Claim under this Agreement shall be made unless the amount of the claim or
the aggregate amount of the Claims is over US$100,000, and for this
purpose no Claim shall be aggregated unless its amount is over
US$20,000.
|
|
11.7
|
It
is expressly agreed and confirmed by the parties that all the obligations
and liabilities of the Investors under this Agreement and/or any matters
contemplated therein shall be on a several basis in the Agreed
Proportion.
|
|
12.
|
GUARANTEE BY ▇▇.
▇▇▇
|
|
12.1
|
In
consideration of the Investors agreeing at the request of Windrace (as
evidenced by its execution hereof) to enter into this Agreement, ▇▇. ▇▇▇
hereby unconditionally and irrevocably guarantees to the Investors the due
and punctual performance and discharge by Windrace of all obligations
(whether present or future, actual or contingent) due, owing or incurred
to the Investors by Windrace under or pursuant to this Agreement
including, without limiting the generality of the foregoing, the payment
of all moneys that may at any time be or become due and payable to the
Investors by Windrace, whether by way of costs, expenses, losses, damages
or as a consequence of any breach or non-fulfilment of any representation,
warranty or undertaking or otherwise (all of which obligations are
hereinafter called the “Windrace’s Obligations”)
to the intent that should Windrace fail duly and punctually to perform or
discharge any of Windrace’s Obligations, ▇▇. ▇▇▇ shall forthwith upon
demand perform and discharge or procure the performance and discharge of
Windrace’s Obligations.
|
|
12.2
|
In
addition and without prejudice to the guarantee contained above, ▇▇. ▇▇▇
hereby unconditionally and irrevocably agrees, as a primary obligation, to
indemnify the Investors against all costs, expenses, losses or damages
incurred by the Investors as a result of the failure by Windrace to make
any payment under this Agreement when due or as a result of any of
Windrace’s Obligations being or becoming void, voidable or unenforceable
for any reason whatsoever (whether or not known to the Investors), the
amount of such costs, expenses, losses or damages being the amount which
any of the Investors would have otherwise been entitled to recover from
Windrace together with all expenses which the any of the Investors may
reasonably and properly incur in proceeding against Windrace or ▇▇. ▇▇▇
.
|
25
|
12.3
|
This
guarantee shall be a continuing guarantee and shall remain in full force
and effect until all of Windrace’s Obligations have been duly performed
and discharged notwithstanding the insolvency or liquidation or any
incapacity or change in the constitution or status of Windrace or other
matter whatsoever. This guarantee is in addition to and
independent of, and shall not be affected in any way by any dealing with,
any other guarantee or other security now or at any time hereafter held by
the Investors.
|
|
12.4
|
So
long as any of Windrace’s Obligations remain outstanding ▇▇. ▇▇▇ shall not
exercise any right of subrogation or any other right of a surety or
enforce any security or other right or claim against Windrace or any other
person whether in respect of its liability under this guarantee or
otherwise or claim in the insolvency, liquidation or bankruptcy of
Windrace in competition with the
Investors.
|
|
12.5
|
All
payments under this guarantee shall be made in full without set-off or
counterclaim or any restriction or condition and free and clear of any
present or future taxes, duties, charges or other deductions or
withholdings of any nature. If any deduction or withholding is
required to be made from any such payment, ▇▇. ▇▇▇ shall, together with
such payment, pay to the Investors such additional amount as is necessary
to ensure that the Investors receive the full amount due
hereunder.
|
|
12.6
|
▇▇.
▇▇▇ shall be liable under this guarantee as if it were a primary obligor
and the liability of it shall not be affected or discharged
by:
|
|
|
(a)
|
the
granting of time or any other indulgence to Windrace or to any other
person;
|
|
|
(b)
|
any
amendment, variation, compounding or release of Windrace’s
Obligations;
|
|
|
(c)
|
the
invalidity or unenforceability of any of Windrace’s
Obligations;
|
|
|
(d)
|
any
waiver or exercise of, or omission to exercise, any rights against
Windrace or any other person;
|
|
|
(e)
|
any
other person being or becoming a guarantor of Windrace’s Obligations or
the Investors obtaining or exercising other security for Windrace’s
Obligations;
|
|
|
(f)
|
any
other act, matter, event or omission which but for this provision would or
might operate to discharge impair or otherwise affect Windrace’s liability
hereunder.
|
26
|
12.7
|
▇▇.
▇▇▇ hereby waives any right available to it under any applicable law which
is inconsistent with any provisions of this guarantee or which might
otherwise require the Investors to proceed against Windrace or any other
person before making a demand on ▇▇.
▇▇▇.
|
|
13.
|
ANNOUNCEMENTS AND
CONFIDENTIALITY
|
|
13.1
|
No
public announcement or communication of any kind shall be made or issued
in respect of the subject matter of this Agreement by any party hereto,
save:
|
|
|
(a)
|
with
the prior written consent of the other party hereto which may not be
unreasonably withheld or delayed;
|
|
|
(b)
|
to
the extent required by applicable Regulations, provided the party required
to make or issue an announcement or communication has, if and to the
extent practicable, first consulted (giving a reasonable amount of
information and time to) the other party and taken into account the
reasonable requirements of the other parties;
or
|
|
|
(c)
|
where
such announcement or communication is made or issued by Windrace after
Closing to a customer, client or contractor of the Windrace Group
Company informing it of the Investors’ investment
hereunder.
|
|
13.2
|
Each
party shall at all times keep confidential, treat as privileged, and not
directly or indirectly make or allow to be made any disclosure or use of
any oral or written information relating to the other party (including any
aspect of that party’s businesses or customers or the existence or subject
matter of this Agreement or any information, data, documents obtained or
to be obtained during the conduct of due diligence investigation (“Confidential
Information”), except to the
extent:
|
|
|
(a)
|
required
by applicable Regulations and then only after advising the other relevant
party or parties of that requirement and consulting (giving a reasonable
amount of information and time to) that other party or parties in respect
of the relevant matter and taking into account the reasonable requirements
of the other party;
|
|
|
(b)
|
necessary
to obtain the benefit of, or to carry out obligations under, this
Agreement, which shall include the ability to disclose Confidential
Information to any employees or advisers who need to have it for purposes
directly connected with the transactions provided for in this Agreement,
provided that the relevant disclosing party shall advise such employees or
advisers of the confidential nature of the Confidential Information and
shall use all reasonable endeavours to procure that such persons keep the
relevant Confidential Information strictly confidential and shall
indemnify the other party in respect of all costs, claims, actions,
proceedings, losses and liabilities in connection with any unauthorised
disclosure or use of the Confidential Information by such persons;
or
|
27
|
|
(c)
|
that
the information is or becomes available in the public domain without
breach by a party of its confidentiality obligations under this Clause or
at law.
|
|
14.
|
STAMP DUTY AND
EXPENSES
|
|
14.1
|
Stamp
duty, fees and commissions (if any) payable on the purchase of any
Warrants by Windrace shall be borne by it solely and those on the transfer
of the Sale Warrants by Windrace to the Investors or their respective
designated nominee(s) as contemplated hereunder shall be borne as to one
half by Windrace and as to the other half by the Investors
collectively.
|
|
14.2
|
Other
than due to the Investors’ breach of their respective undertakings as
provided for in Clauses 4.2, 4.3 and 6 (provided that Windrace shall have
complied with its obligations contemplated under this Agreement), Windrace
and ▇▇. ▇▇▇ shall upon demand forthwith reimburse the Investors against
all costs and expenses (including the costs and expenses of legal,
financial, accounting and other advisers) incurred by the Investors in
connection with the negotiation, preparation, execution and termination of
this Agreement and the proposed purchase of the Sale Warrants / the
proposed acquisition of the Windrace Shares Entitlement and the proposed
subscription of the New Shares (and all due diligence and other
investigations and research in connection therewith) or the satisfaction
of any of the Conditions set forth in Clause 3.1, provided that such
reimbursement shall be subject to a maximum sum of US$50,000 and shall be
without prejudice to any other rights and remedies of the Investors as
contemplated hereunder.
|
|
14.3
|
Save
as expressly provided herein, all expenses incurred by or on behalf of the
parties and their advisers including all fees of agents, representatives,
solicitors, accountants, actuaries and other advisers employed by any of
them, in connection with the negotiation, preparation or execution of this
Agreement, shall be borne solely by the party who incurred the
liability.
|
|
15.
|
GENERAL
|
|
15.1
|
Time
shall be of the essence in this Agreement, both as regards the dates and
periods specifically mentioned and as to any dates and periods which may,
by agreement in writing among or on behalf of the parties, be substituted
for them.
|
|
15.2
|
No
failure to exercise, or delay in exercising, any right or remedy under
this Agreement will operate as a release or waiver of such right or remedy
or any other right or remedy, nor will any single or partial exercise of
any right or remedy under this Agreement or provided by law preclude any
other or further exercise of it or the exercise of any other right or
remedy. A waiver of any breach of this Agreement or any right of remedy
under this Agreement shall not be effective, or implied, unless that
waiver is in writing and is signed by the party against whom that waiver
is claimed.
|
28
|
15.3
|
This
Agreement supersedes any previous agreement between the parties in
relation to the acquisition of the Sale Warrants and the Windrace Shares
Entitlement and the subscription of the New Shares and the parties
acknowledge that no claim shall arise in respect of any agreement so
superseded by this Agreement. This Agreement (together with the
documents referred to herein) contains the entire agreement between the
parties hereto relating to the transactions provided for herein and there
are no other warranties, conditions or terms applicable thereto whether
express or implied.
|
|
15.4
|
Any
variation to this Agreement shall be binding only if it is in writing and
signed by or on behalf of each
party.
|
|
15.5
|
If
any provision, including any phrase, sentence, clause, section or
subsection, of this Agreement is invalid, inoperative or unenforceable for
any reason, such circumstances shall not have the effect of rendering such
provisions in question invalid, inoperative or unenforceable in any other
case or circumstance, or of rendering any other provision herein contained
invalid, inoperative, or unenforceable to any extent
whatsoever.
|
|
15.6
|
The
rights and remedies provided in this Agreement are cumulative and not
exclusive of any rights or remedies provided by
law.
|
|
15.7
|
The
rights and obligations contained in this Agreement (including but not
limited to the undertakings, warranties, representations and indemnities)
remain in force after Post-SPA Closing, except to the extent that they
have been fully performed or where this Agreement provides
otherwise.
|
|
15.8
|
Subject
to the terms and conditions of this Agreement, each party shall execute
and deliver such certificates and other documents and take such actions as
may reasonably be requested by the other party in order to effect the
transactions contemplated by this
Agreement.
|
|
15.9
|
This
Agreement may be executed in several counterparts, each of which shall be
deemed an original and all of which shall together constitute one and the
same document.
|
|
15.10
|
No
party may assign or transfer or purport to assign or transfer any of its
rights or obligations under this Agreement without the written consent of
the other parties.
|
|
15.11
|
▇▇.
▇▇▇ hereby irrevocably and unconditionally authorises Windrace to act on
its behalf in all matters contemplated under Clause 17.3. All
actions taken by Windrace pursuant to Clause 17.3 shall be binding on ▇▇.
▇▇▇.
|
29
|
16.
|
NOTICES
|
|
16.1
|
Any
notice or other communication under or in connection with this Agreement
shall be in writing and shall be left at or sent by pre-paid registered
post (if posted from and to an address in Hong Kong), pre-paid registered
airmail (if posted from or to an address outside Hong Kong) or facsimile
transmission to the party due to receive the notice or communication at
its respective address or facsimile number set out below or to such other
address and/or number(s) as may have been last specified by such party by
written notice to each of the other parties
hereto.
|
|
To
Windrace:
|
||
|
Address:
|
Xidelong
Industrial Zone, Jinjiang, Fujian, the PRC
|
|
|
Attention:
|
Shuipan
Lin
|
|
|
Telephone:
|
▇▇-▇▇▇-▇▇▇▇-▇▇▇▇
|
|
|
Facsimile:
|
▇▇-▇▇▇-▇▇▇▇-▇▇▇▇
|
|
|
To
▇▇. ▇▇▇:
|
||
|
Address:
|
▇▇.
▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ Village, Chendai Town, Jinjiang City,
Fujian Province, the PRC
|
|
|
Telephone:
|
▇▇-▇▇▇-▇▇▇▇-▇▇▇▇
|
|
|
Facsimile:
|
▇▇-▇▇▇-▇▇▇▇-▇▇▇▇
|
|
|
To
the Investors:
|
c/o
New Horizon Capital
|
|
|
Address:
|
▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
100005
|
|
|
Attention:
|
▇▇▇▇▇▇▇▇
▇▇ and ▇▇▇▇▇ ▇▇▇▇
|
|
|
Telephone:
|
▇▇-▇▇-▇▇▇▇▇▇▇▇
|
|
|
Facsimile:
|
▇▇-▇▇-▇▇▇▇▇▇▇▇
|
|
|
with
a copy to
|
||
|
Deacons
|
||
|
Attn:
▇▇▇▇▇▇ ▇▇▇▇ / ▇▇▇▇▇▇ ▇▇▇
|
||
|
Ref:
156645
|
30
|
5th
Floor, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
|
||
|
▇▇
▇▇▇▇▇▇ ▇▇▇▇
|
||
|
▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇
|
||
|
Telephone:
▇▇▇▇ ▇▇▇▇
|
||
|
Facsimile:
2810 0431
|
||
|
Matter
no: 156645
|
|
16.2
|
In
the absence of evidence of earlier receipt, a notice or other
communication is deemed given:
|
|
|
(a)
|
if
delivered personally, when left at the address referred to in Clause
16.1;
|
|
|
(b)
|
if
sent by mail except air mail, two (2) days after posting;
and
|
|
|
(c)
|
if
sent by air mail, six (6) days after
posting;
|
|
|
(d)
|
if
sent by fax, on completion of its
transmission.
|
In
proving the giving of a notice by mail it shall be sufficient to prove that the
envelope containing such notice was properly addressed and posted.
|
17.
|
GOVERNING LAW AND
JURISDICTION
|
|
17.1
|
This
Agreement is governed by, and shall be construed in accordance with, the
laws of Hong Kong.
|
|
17.2
|
Each
party hereby irrevocably submits to the non-exclusive jurisdiction of the
courts of Hong Kong in respect of all matters arising in connection with
this Agreement. The submission to the jurisdiction of the courts of Hong
Kong shall not (and shall not be construed so as to) limit the right of
one party or several parties to take proceedings against the other parties
(or any of them) in any other court of competent jurisdiction, nor shall
the taking of proceedings by one party or several parties in any one or
more jurisdictions preclude such party or parties taking proceedings in
any other jurisdiction (whether concurrently or not) if and to the extent
permitted by applicable law.
|
|
17.3
|
Windrace
hereby irrevocably appoints ▇▇▇▇▇ Day of 29/F., Edinburgh Tower, the
Landmark, ▇▇ ▇▇▇▇▇’▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ as the agent to accept
service of legal process on behalf of Windrace and ▇▇.
▇▇▇. Service of legal process upon such process agent of
Windrace shall be deemed completed whether or not such legal process is
forwarded to or received by any of Windrace or ▇▇.
▇▇▇. Windrace hereby irrevocably agrees that, if the process
agent ceases to have an address in Hong Kong or ceases to act as the
process agent on behalf of Windrace or ▇▇. ▇▇▇, it shall appoint a new
process agent in Hong Kong for the same purposes and will deliver to the
other parties within fourteen (14) days a copy of a written acceptance of
appointment by the process agent. If at any time Windrace
appoints a new process agent, it shall give written notice to the other
parties of such appointment and until such time service on the process
agent last known to the other parties shall be deemed to be effective
service.
|
31
|
17.4
|
Each
of the Investors hereby irrevocably appoints Consec Services Limited of
▇/▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ as its agent to
accept service of legal process on its behalf. Service of legal
process upon the process agent of each of the Investors shall be deemed
completed whether or not such legal process is forwarded to or received by
the Investors. Each of the Investors hereby irrevocably agrees
that if its process agent ceases to have an address in Hong Kong or ceases
to act as its process agent it shall appoint a new process agent in Hong
Kong for the same purposes and will deliver to the other parties within
fourteen (14) days a copy of a written acceptance of appointment by the
process agent. If at any time any of the Investors appoints a
new process agent it shall give written notice to the other parties of
such appointment and until such time service on the process agent last
known to the other parties shall be deemed to be effective
service.
|
32
IN WITNESS whereof this
Agreement has been duly executed on the date first above written.
EXECUTED AS AN
AGREEMENT
|
SIGNED
BY LIN SHUIPAN
|
)
/s/ Lin Shuipan
|
|
|
)
|
||
|
for
and on behalf of
|
)
|
|
|
WINDRACE
INTERNATIONAL
|
)
|
|
|
COMPANY
LIMITED
|
)
|
|
|
in
the presence of :-▇▇▇ ▇▇▇ Ting
|
)/s/
▇▇▇ ▇▇▇ Ting
|
|
SIGNED
BY SHUIPAN LIN
|
)
/s/ Lin Shuipan
|
|
|
in
the presence of :-▇▇▇ ▇▇▇ Ting
|
)/s/
▇▇▇ ▇▇▇ Ting
|
|
SIGNED
BY ▇▇▇▇▇▇▇▇ ▇▇
|
)
/s/▇▇▇▇▇▇▇▇ ▇▇
|
|
|
)
|
||
|
for
and on behalf of
|
)
|
|
|
WISETECH
HOLDINGS LIMITED
|
)
|
|
|
in
the presence of :-▇▇▇ ▇▇▇ Wun
|
)
/s/▇▇▇ ▇▇▇ Wun
|
|
|
Deacons
|
||
|
Solicitor,
Hong Kong SAR
|
|
SIGNED
BY ▇▇▇▇▇▇▇▇ ▇▇
|
)
/s/▇▇▇▇▇▇▇▇ ▇▇
|
|
|
)
|
||
|
for
and on behalf of
|
)
|
|
|
WINDTECH
HOLDINGS LIMITED
|
)
|
|
|
in
the presence of :-▇▇▇ ▇▇▇ Wun
|
)
/s/▇▇▇ ▇▇▇ Wun
|
|
|
Deacons
|
||
|
Solicitor,
Hong Kong SAR
|
33
SCHEDULE
1
AGREED
PROPORTION
|
Wisetech:
|
Windtech
|
|
40%
|
60%
|
34
SCHEDULE
2
PART A
DETAILS OF
WINDRACE
|
Company
name :
|
Windrace
International Company Limited
|
||
|
Company
number:
|
207339
|
||
|
Place
of incorporation :
|
Cayman
Islands
|
||
|
Date
of incorporation :
|
March
25, 2008
|
||
|
Share
capital :
|
Authorized:
|
HK$390,000
divided into 3,892,000 ordinary shares of HK$0.10 each and 8,000 preferred
shares of HK$0.10 each
|
|
|
Issued:
|
100,000
shares of HK$0.10 each, including 92,000 ordinary shares and 8,000
preferred shares.
|
||
|
Director(s)
:
|
Mr.
▇▇▇
▇▇▇
Wanjiang
Sun
▇▇▇
▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇
|
||
|
Registered
office :
|
Cricket
Square, ▇▇▇▇▇▇▇▇ Drive, ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇-▇▇▇▇, ▇▇▇▇▇▇
Islands
|
||
35
Shareholder(s):
|
Registered
Shareholder(s)
|
Beneficial
Shareholder(s)
|
Number of share(s)
held
|
Shareholding
percentage
(%) of the
entire issued
share capital
of Windrace
|
|||||||||||
|
Ordinary
shares
|
Preferred
shares
|
|||||||||||||
|
▇▇.
▇▇▇
|
▇▇.
▇▇▇
|
37,000 | 37.000 | % | ||||||||||
|
▇▇.
▇▇▇▇
|
24,375 | 24.375 | % | |||||||||||
|
RichWise
International Investment Group Limited (“RichWise”)
|
RichWise
|
11,125 | 11.125 | % | ||||||||||
|
Tiancheng
Int’l Investment Group Limited (“Tiancheng”)
|
Tiancheng
|
9,750 | 9.750 | % | ||||||||||
|
▇▇
▇▇▇▇▇ Group Limited (“Haima”)
|
Haima
|
4,875 | 4.875 | % | ||||||||||
|
Eagle
Rise Investments Limited (“Eagle
Rise”)
|
Eagle
Rise
|
4,875 | 4.875 | % | ||||||||||
|
Elevatech
|
Elevatech
|
8,000 | 8.000 | % | ||||||||||
|
Total
|
_
|
92,000 | 8,000 | 100.000 | % | |||||||||
36
SCHEDULE
2
PART B
DETAILS OF SUBSIDIARIES OF
WINDRACE
|
Company
name :
|
福建喜得龍體育用品有限公司(Fujian
Xidelong Sports Goods Co., Ltd.)
|
喜得龍(中國)有限公司(Xidelong
(China) Co. Ltd.)
|
Hei
Dai Lung Group Company Limited
|
Windrace
Investment Holding Limited
|
||||
|
Company
number:
|
350500400009643
|
350500400009872
|
869560
|
1426312
|
||||
|
Place
of incorporation :
|
PRC
|
PRC
|
Hong
Kong
|
BVI
|
||||
|
Date
of incorporation :
|
September
26, 2001
|
April
13, 2004
|
November
5, 2003
|
August
17, 2007
|
||||
|
Authorized
share capital :
|
N/A
|
N/A
|
HK
$10,000
divided into 10,000 shares of HK$1.00 each
|
Authorized
to issue a maximum of 50,000 shares in US$
|
||||
|
Issued
share capital:
|
HK$25,000,000
|
HK$180,000,000
|
HK$10,000
|
US$100
|
||||
|
Director(s)
:
|
▇▇.
▇▇▇
▇▇.
▇▇▇▇
▇▇.
▇▇▇▇ Dongdong
|
▇▇.
▇▇▇
▇▇.
▇▇▇▇
▇▇.
▇▇▇▇ Dongdong
|
Xdlong
Investment Holding Limited
|
▇▇.
▇▇▇
|
||||
|
Registered
shareholder(s) (number of share(s) held or Percentage of shares held)
:
|
Hei
Dai Lung Group Company Limited
100%
|
Hei
Dai Lung Group Company Limited
100%
|
Xdlong
Investment Holding Limited
100%
|
Windrace
100%
|
37
|
Beneficial
shareholder(s) (number of share(s) held or Percentage of share(s) held)
:
|
Hei
Dai Lung Group Company Limited
100%
|
Hei
Dai Lung Group Company Limited
100%
|
Xdlong
Investment Holding Limited
100%
|
Windrace
100%
|
38
SCHEDULE
3
PART A
COMPLETION OBLIGATIONS UPON
CLOSING
|
A.
|
Obligations of
Windrace and ▇▇. ▇▇▇
|
|
1.
|
ACTIONS
|
The
following actions:
|
1.1
|
Holding
of a meeting, or signing written resolutions, of the board of directors of
Windrace at or in which resolutions shall be passed approving this
Agreement and all transactions contemplated hereunder
including:
|
|
|
(a)
|
the
transfer of the Sale Warrants to the Investors and/or their respective
designated nominee(s);
|
|
|
(b)
|
the
granting of the Windrace Shares Entitlement to the Investors and/or
their respective designated
nominee(s);
|
|
|
(c)
|
approving
the Appointments;
|
|
|
(d)
|
the
execution of the Escrow Agreement by Windrace;
and
|
|
|
(e)
|
the
execution of the Deed of Indemnity by Windrace and ▇▇.
▇▇▇;
|
|
1.2
|
Signing
of the joint instruction to the Escrow Agent for the release of the Second
Payment as referred to in Clause
4.4(b).
|
|
2.
|
DELIVERY
OBLIGATIONS
|
Delivery
of the following documents to the Investors: -
|
2.1
|
Certified
true copies of the minutes of the meeting or written resolutions at which
the resolutions referred to in paragraph A1.1 of this Part
A of Schedule 3 shall have been
passed.
|
|
2.2
|
All
other consents and approvals (if any) to be obtained by Windrace and ▇▇.
▇▇▇ for entering into this Agreement and the transactions contemplated
hereunder.
|
|
2.3
|
Evidence
(whether by way of a certificate of an executive officer of Windrace or
otherwise), in a form reasonably satisfactory to the Investors, of
satisfaction of the Conditions set out in Clause
3.1.
|
39
|
2.4
|
Such
other documents legally required to give good title to the Windrace Shares
Entitlement.
|
|
2.5
|
Counterparts
of the Deed of Indemnity duly executed by Windrace and ▇▇.
▇▇▇.
|
|
B.
|
Obligations of the
Investors
|
|
1.
|
ACTIONS
|
The
following actions:
|
1.1
|
Holding
of a meeting, or signing written resolutions, of the board of directors of
each of the Investors at or in which resolutions shall be passed
approving:
|
|
|
(a)
|
the
acquisition of the Sale Warrants and the Windrace Shares Entitlement and
the subscription of the New Shares in accordance with the terms of this
Agreement;
|
|
|
(b)
|
the
execution of the Escrow Agreement by the Investors;
and
|
|
|
(c)
|
the
execution of the Deed of Indemnity by the
Investors.
|
|
1.2
|
Signing
of the joint instruction to the Escrow Agent for the release of the Second
Payment as referred to in Clause
4.4(b).
|
|
2.
|
DELIVERY
OBLIGATIONS
|
Delivery
the following documents to Windrace (or as it may direct): -
|
2.1
|
A
certified true copy or extract of its board resolutions at which the
resolutions referred to in paragraph B1.1 of this Part
A of Schedule 3 shall have been
passed.
|
|
2.2
|
Counterparts
of the Deed of Indemnity duly executed by the
Investors.
|
40
SCHEDULE
3
PART B
COMPLETION OBLIGATIONS UPON
SPA CLOSING
Obligations of Windrace and
▇▇. ▇▇▇
|
1.
|
DELIVERY
OBLIGATIONS
|
Each of
Windrace and ▇▇. ▇▇▇ shall procure the delivery of the following documents to
the Investors: -
|
1.1
|
Certified
true copies of the minutes of meetings or written resolutions of the board
of Exceed approving and authorising the issue and allotment of the New
Shares as contemplated hereunder, and the registration of the Investors
and/or their respective designated nominee(s) in the register of members
of Exceed as the registered holder(s) of the New
Shares.
|
|
1.2
|
Valid
share certificate(s) for the New Shares in the names of the Investors
and/or in the name(s) of their respective designated
nominee(s).
|
|
1.3
|
All
other consents and approvals (if any) to be obtained by Exceed for the
issue and allotment of the New Shares to the Investors and/or their
respective designated nominee(s).
|
|
1.4
|
Such
other documents legally required to give good title to the New Shares and
to enable the Investors and/or their respective designated nominee(s) to
become the registered holder(s) of the New
Shares.
|
41
SCHEDULE
3
PART C
COMPLETION OBLIGATIONS UPON
POST-SPA CLOSING
|
A.
|
Obligations of
Windrace and ▇▇. ▇▇▇
|
|
1.
|
ACTIONS
|
|
1.1
|
Signing
of the joint instruction to the Escrow Agent for the release of the
Deposit together with all interests accrued thereon as referred to in
Clause 4.6.
|
|
2.
|
DELIVERY
OBLIGATIONS
|
Delivery
of the following documents to the Investors: -
|
2.1
|
Valid
certificate(s) for the Sale Warrants in the names of the Investors and/or
in the name(s) of their respective designated
nominee(s).
|
|
2.2
|
(a)
|
Duly
executed and valid instrument(s) of transfer in relation to the Sale
Warrants, such transfer to be in favour of the Investors and/or their
respective designated nominee(s) as the Investors may
direct.
|
|
|
(b)
|
The
duly executed powers of attorney or other authorities under which any of
the transfer have been executed.
|
|
2.3
|
Valid
share certificate(s) for the New Shares (if any are to be issued on
Post-SPA Closing) in the names of the Investors and/or in the name(s) of
their respective designated
nominee(s).
|
|
2.4
|
All
other consents and approvals (if any) to be obtained by Exceed for the
issue and allotment of the New Shares (if any are to be issued on Post-SPA
Closing) to the Investors and/or their respective designated
nominee(s).
|
|
2.5
|
Such
other documents legally required to give good title to the Sale Warrants
and the New Shares (if any are to be issued on Post-SPA Closing) and to
enable the Investors and/or their respective designated nominee(s) to
become the registered holder(s) of such Sale Warrants and New
Shares.
|
|
B.
|
Obligations of the
Investors
|
|
1.
|
ACTIONS
|
|
1.1
|
Signing
of the joint instruction to the Escrow Agent for the release of the
Deposit together with all interests accrued thereon as referred to in
Clause 4.6.
|
42
SCHEDULE
4
WINDRACE’S
WARRANTIES
PART A
GENERAL
|
1.
|
AUTHORITY AND
INFORMATION
|
|
|
1.1
|
Authority: Windrace
is a duly incorporated and validly existing company under the laws of the
place of incorporation and each of Windrace and ▇▇. ▇▇▇ has full right,
power and authority, and has taken all necessary action, to validly and
duly to execute and deliver, and to exercise its rights and perform their
obligations under, this Agreement and all other documents which are to be
executed by each of Windrace and ▇▇. ▇▇▇ at or before Closing, SPA Closing
and Post-SPA Closing (as the case may be), and this Agreement constitutes,
and the documents which are to be executed by each of Windrace and ▇▇. ▇▇▇
at or before Closing, SPA Closing and Post-SPA Closing (as the case may
be), when executed will constitute, legal, valid and binding agreements or
obligations of each of Windrace and ▇▇. ▇▇▇ enforceable in accordance with
their respective terms.
|
|
|
1.2
|
Power: Windrace has all
the power (under its Constituent Documents or otherwise) to permit its
entry into this Agreement and has all the power (under its Constituent
Documents or otherwise) to purchase or transfer the Sale Warrants and to
grant the Windrace Shares Entitlement in the manner set out herein and
this Agreement and its performance has been duly authorised (such
authorisation remaining in full force and effect) and executed by, and
constitutes valid and legally binding obligations of Windrace; save for
normal compliance with applicable Regulations, subject to the satisfaction
of the Condition set out in Clause 3.1, there is no authorisation,
consent, approval or notification required for the purposes of or as a
consequence of the transfer of the Sale Warrants or the granting of the
Windrace Shares Entitlement or for the execution and delivery of this
Agreement or the performance of its obligations hereunder either from
governmental, regulatory or other public bodies or authorities or courts
or from any third party pursuant to any contractual or any other
arrangement to which Windrace is a party; the transfer of the Sale
Warrants or the granting of the Windrace Shares Entitlement is not in
contravention of any regulation binding on Windrace. Upon SPA
Closing and Post-SPA Closing (as the case may be), Exceed has power to
issue and allot the New Shares free from all Encumbrances and with all
rights attaching thereto in the manner set out
herein.
|
43
|
|
1.3
|
Information
provided: All information given by Windrace, Windrace
Group Company, ▇▇. ▇▇▇, or their respective advisers, to the Investors or
the Investors’ advisers, relating to them or the businesses, activities,
affairs, or assets or liabilities of each Windrace Group Company, ▇▇. ▇▇▇,
Exceed or SPAC was, when given, and is now, true, complete and accurate in
all material respects and not misleading in any material
respect.
|
|
|
1.4
|
No information
omitted: There are no facts or circumstances, in
relation to the assets, business or financial condition of each Windrace
Group Company, ▇▇. ▇▇▇, Exceed or SPAC, which have not been fully and
fairly Disclosed in writing to the Investors or the Investors’ advisers,
and which are material for disclosure to a buyer of the Sale Warrants or a
subscriber of the Windrace Shares Entitlement and the New Shares or which,
if Disclosed, might reasonably have been expected to affect the decision
of any of the Investors to enter into this Agreement, or the terms on
which it would do so.
|
|
|
1.5
|
Information in
Schedules: The information in Schedule
2 concerning each Windrace Group Company is complete, accurate and
not misleading. The only directors of each Windrace Group
Company are the persons named in Schedule
2.
|
|
|
1.6
|
Memorandum and
articles: The copy of the Constituent Documents of each
Windrace Group Company, Exceed and SPAC given to the Investors or the
Investors’ advisers is accurate and complete in all respects and has
embodied in it a copy of every such resolution all other things required
to be embodied in it pursuant to the applicable legislation and fully sets
out the rights and restrictions attaching to each class of share capital
of each Windrace Group Company, Exceed and
SPAC.
|
|
|
1.7
|
Resolutions: Since
the Last Accounts Date, no alteration has been made to the Constituent
Documents of any Windrace Group Company, Exceed or SPAC and no resolution
of any kind of the shareholders of any Windrace Group Company, Exceed or
SPAC has been passed (other than resolutions relating to business at
annual general meetings which was not inconsistent with each of its
ordinary course of business).
|
|
2.
|
NEW SHARES
|
|
2.1
|
New
Shares: All of the New Shares will, when allotted and
issued, be properly allotted and issued by Exceed
and:
|
|
|
(a)
will be duly and validly authorised and issued and will be fully paid
up;
|
|
|
(b)
|
will
have attached to them the rights and benefits specified in the Constituent
Documents and in particular, will rank pari passu in all respects with the
Shares in issue (save as otherwise described in the Constituent Documents
as at the date of this Agreement or pursuant to any applicable
requirements under the
Regulations);
|
44
|
(c)
|
will
not be subject to any pre-emptive or other similar rights in relation to
the transfer thereof;
|
|
(d)
|
will
be free from any Encumbrances whatsoever;
and
|
|
|
(e)
|
will
be evidenced by share certificates which will be in a form which complies
with all applicable Regulations and which certificates will constitute
good evidence of title in respect of the New
Shares.
|
|
2.2
|
Sufficient unissued Shares:
At SPA Closing and Post-SPA Closing (as the case may be) there
shall be a sufficient number of unissued Shares (of the relevant class)
for the allotment and issue of the New Shares as contemplated
hereunder.
|
|
2.3
|
No options
etc: Except as required by this Agreement, the SPA and
the Elevatech Letter Agreement, there is not and has never
been:
|
|
|
(a)
|
any
agreement or arrangement in force which provides for the present or future
issue, allotment or transfer of, or grant to any person the right (whether
conditional or otherwise) to call for the issue, allotment or transfer of,
any share or loan capital of any Windrace Group Company, Exceed or SPAC
(including any option or right of pre-emption or conversion);
or
|
|
|
(b)
|
any
Encumbrance on or in relation to any issued or unissued shares of any
Windrace Group Company or Exceed or
SPAC,
|
and no
claim has been made by any person to be entitled to any such agreement,
arrangement or Encumbrance which has not been waived in its entirety or
satisfied in full.
|
3.
|
SALE
WARRANTS
|
|
3.1
|
Sale
Warrants: As at Post-SPA Closing, Windrace
will be the sole legal and/or beneficial owner of, and will have full
right, power and authority to sell and transfer, the full legal and/or
beneficial ownership of the Sale Warrants free from all Encumbrances, and
all the Sale Warrants and with all rights now and hereinafter attaching
thereto, including but not limited to the rights that upon exercise of
each Sale Warrant, the Investors will be entitled to be issued with one
common stock in SPAC (before the Merger) or one ordinary share in Exceed
(after the Merger) at an exercise price of
US$5.25.
|
|
4.
|
MERGER
|
|
4.1
|
Compliance: The Merger
will upon SPA Closing be legally, duly and properly implemented as
contemplated under the SPA. Neither the Merger
(when implemented) nor its implementation nor any of the documents signed
or executed in connection
therewith:
|
45
|
|
(a)
|
has
resulted or may result in a breach of any applicable Regulations or of the
terms or provisions of the constitutive documents and/or business
licences, where appropriate, of any Windrace Group Company or SPAC or
Exceed;
|
|
|
(b)
|
has
resulted or may result in a breach of, or constituted or will constitute a
default under, any other agreements or documents to which any Windrace
Group Company or SPAC or Exceed is a
party;
|
|
|
(c)
|
has
resulted or may result in a breach of any Regulations or approvals to
which any Windrace Group Company or ▇▇. ▇▇▇ or SPAC or Exceed was or is
subject or by or on which any Windrace Group Company or ▇▇. ▇▇▇ or SPAC or
Exceed or any of their respective businesses or assets was or is bound or
dependent; or
|
|
|
(d)
|
has
resulted in or will render any Windrace Group Company or SPAC or Exceed
liable to any, or any additional, tax, duty, charge, impost or levy
(whether by way of actual assessment, loss of allowance, deduction or
credit available for relief or otherwise) of any material
amount.
|
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4.2
|
Approvals: Prior to the
SPA Closing, all approvals, authorisations, consents, or notifications
required in connection with the Merger have been or will be obtained in
writing and have been or will be duly and validly issued or granted; and
the Merger will be effected and duly implemented in compliance with all
applicable Regulations or such approvals, authorisations, consents, or
notifications.
|
46
PART B
WINDRACE GROUP
COMPANY
|
1.
|
ACCOUNTS AND
RECORDS
|
|
1.1
|
Accounts: The
Accounts:
|
|
|
(a)
|
were
prepared in accordance with the historical cost convention and on a proper
and consistent basis; the bases and policies of accounting adopted for the
purpose of preparing the Accounts are the same as those adopted in
preparing the audited consolidation accounts of the Windrace Group in
respect of the three last preceding accounting
periods;
|
|
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(b)
|
are
complete and accurate in all material respects and give a true and fair
view of the assets, liabilities, state of affairs and financial position
of the Windrace Group at the Last Accounts Date and their profits for the
financial period ended on that
date;
|
|
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(c)
|
comply
with the requirements of the relevant
Regulations;
|
|
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(d)
|
have
been prepared in accordance with generally accepted accounting principles
and practices in the applicable jurisdiction (and in particular, in the
case of any Windrace Group Company established in the PRC, in accordance
with generally accepted accounting practice in the
PRC);
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|
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(e)
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and
the Windrace Group’s business for the periods covered by them, were not
affected by any extraordinary, exceptional or non-recurring item or by any
other circumstance rendering the profits or losses for all or any of such
periods unusually high or low, in each case which were not clearly
Disclosed;
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|
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(f)
|
fully
disclose all the material assets of the Windrace Group as at the Last
Accounts Date;
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|
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(g)
|
fully
disclose and make full provision in accordance with the relevant good
accounting practice for all bad and doubtful debts and all liabilities and
financial commitments of the Windrace Group outstanding at the Last
Accounts Date, including contingent, unquantified or disputed liabilities;
and
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47
|
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(h)
|
make
full provision or reserve, in accordance with the principles set out in
the notes included in the Accounts, for all Taxation (including any
contingent or deferred liability) liable to be assessed on the Windrace
Group, or for which it may be accountable, in respect of the period ended
on the Last Accounts Date and such provision will be sufficient to cover
all Taxation assessed or liable to be assessed on the Windrace Group or
for which the Windrace Group is, may be or may become accountable in
respect of profits, income-earnings, receipts, transfers, events and
transactions up to and including the Last Accounts
Date,
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1.2
|
Records and
documents: Each Windrace Group Company has kept duly
made up all requisite books of account (in accordance with good accounting
principles), minute books, registers and financial and other
records. All Records:
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|
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(a)
|
have
been fully, properly and accurately kept and completed in accordance with
normal business practice and good accounting principles and comply with
all applicable legal and accounting requirements and
standards;
|
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(b)
|
do
not contain any material inaccuracies or discrepancies;
and
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|
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(c)
|
give
and reflect a correct view of its trading transactions, and its financial,
contractual and trading position (and no notice or allegation that any of
them is inaccurate or should be rectified has been received or
made),
|
and the
Records and all other deeds and documents (including title deeds and documents),
belonging to or which ought to be in the possession of the Windrace Group, and
each Windrace Group Company’s seal, are in the possession of the relevant
Windrace Group Company or its agents.
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1.3
|
Statutory
books: The register of members and other statutory books
of each Windrace Group Company have been properly kept and contain
accurate and complete records of the matters with which they should deal
in accordance with applicable legal
requirements.
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1.4
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Minute
books: The minute books of directors' meetings and of
shareholders' meetings of each Windrace Group Company respectively contain
accurate records of all resolutions passed by the directors and the
shareholders respectively of that company and no resolutions have been
passed by either the directors or the shareholders of any Windrace Group
Company which are not recorded in the relevant minute
books.
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48
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2.
|
OTHER FINANCIAL
MATTERS
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|
2.1
|
No capital
transactions: Save as Disclosed, there were not at the
Last Accounts Date, and, since the Last Accounts Date, no Windrace Group
Company has made or incurred (or agreed to make or incur), any capital
commitments, capital expenditure or any acquisition of a capital asset in
excess of RMB10 million, in any single or a series of related transactions
nor has it since the Last Accounts Date disposed of, or realised, or
agreed to dispose of or realise, any capital or other assets (other than
of stock-in-trade in the ordinary course) or any part of the Windrace
Group’s business in excess of RMB10 million, in any single or a series of
related transactions, or any interest in any of the
aforesaid.
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2.2
|
Sufficient working
capital: Having regard to existing bank and other
facilities, the Windrace Group has sufficient working capital for the
purposes of continuing to carry on its business in its present form, for
the period of twelve (12) months after Closing and for the purposes of
executing, carrying out and fulfilling, in accordance with their terms,
all obligations to be performed within such twelve (12) month period
pursuant to all orders, projects and contractual obligations which are
binding upon it and remain
outstanding.
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|
2.3
|
Loans in ordinary
course: No Windrace Group Company has lent any money
which has not been repaid to it, or owns the benefit of any debt (whether
or not due for repayment), other than debts which have arisen in the
ordinary course of its business, and no Windrace Group Company has made
any loan or quasi-loan contrary to the applicable
legislation.
|
|
2.4
|
Dividends:
|
|
|
(a)
|
Since
the Last Accounts Date no dividend or other distribution has been, or is
treated as having been, or has been proposed to be, declared, made or paid
by any Windrace Group Company.
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|
|
(b)
|
All
dividends or distributions declared, made or paid by each Windrace Group
Company have been declared, made or paid in accordance with its
Constituent Documents and the applicable provisions of the applicable
laws.
|
|
3.
|
TAXATION
|
|
3.1
|
General:
|
|
|
(a)
|
All
notices, returns, computations and registrations (including, without
limitation, returns registrations) of each Windrace Group Company for the
purposes of Taxation have been made punctually on a proper basis and are
correct and current and none of them is, or is likely to be, the subject
of any dispute with any Taxation
Authority.
|
49
|
|
(b)
|
All
information supplied by or on behalf of each Windrace Group Company for
the purposes of Taxation was when supplied and remains complete and
accurate in all material respects.
|
|
|
(c)
|
All
Taxation which each Windrace Group Company is liable to pay prior to
Closing has been or will be paid prior to
Closing.
|
|
|
(d)
|
No
Windrace Group Company has paid or become liable to pay any penalty, fine,
surcharge or interest charged by virtue of any Tax law or
statute.
|
|
|
(e)
|
All
payments by each Windrace Group Company to any person which ought to have
been made after deduction or withholding of any sum for or on account of
Tax have been so made and each Windrace Group Company (if required by law
to do so) has accounted to the relevant Tax Authority for the Tax so
deducted or withheld. Proper records have been maintained in
respect of all such deductions, withholdings and payments and all
applicable Regulations have been complied
with.
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|
|
(f)
|
Full
provision or reserve has been made in the Accounts for all Taxation
assessed or liable to be assessed on each Windrace Group Company or for
which each Windrace Group Company is accountable in respect of income,
profits or gains earned, accrued or received or deemed to be earned,
accrued or received on or before the Last Accounts Date and proper
provision has been made in the Accounts for deferred Taxation in
accordance with generally accepted accounting
principals.
|
|
|
(g)
|
Each
Windrace Group Company has sufficient records relating to past events to
calculate the Taxation liability, relief or allowance which would arise on
any disposal or realisation of any asset owned at the Last Accounts Date
or acquired since the Last Accounts
Date.
|
|
3.2
|
Investigations/anti-avoidance:
|
|
|
(a)
|
No
Windrace Group Company has been subject to any audit or investigation by
any Taxation Authority and to the knowledge of Windrace and ▇▇. ▇▇▇, there
are no circumstances existing which make it likely that an audit or
investigation will be commenced.
|
|
|
(b)
|
No
Windrace Group Company, to the knowledge of Windrace and ▇▇. ▇▇▇, has
entered into or been a party to any transaction or any scheme or
arrangement of which the main purpose, or one of the main purposes, or the
sole or dominant purpose, was the unlawful avoidance of or reduction in or
the deferral or postponement of a liability to
Taxation.
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50
|
3.3
|
Concessions, clearances,
elections and appeals:
|
|
|
(a)
|
The
amount of Taxation chargeable on each Windrace Group Company during any
accounting period on or within the three (3) years before the Last
Accounts Date has not depended on any concession, agreement or other
formal or informal arrangement with any Taxation
Authority.
|
|
|
(b)
|
All
particulars supplied to any Taxation Authority in connection with an
application for any advance ruling, clearance or consent by or on behalf
of any Windrace Group Company or affecting any Windrace Group Company were
when supplied to the relevant Taxation Authority and remain complete and
accurate in all material respects; any such advance ruling, clearance or
consent has been obtained on the basis of full and accurate disclosure to
the relevant Taxation Authority of all relevant facts and considerations;
and any transaction for which an advance ruling, clearance or consent was
obtained has been carried into effect only in accordance with the terms of
the relevant advance ruling, clearance or
consent.
|
|
3.4
|
Position since the Last
Accounts Date: Since the Last Accounts
Date:
|
|
|
(a)
|
no
Windrace Group Company has changed its accounting year end or its method
of accounting or accounting practice or policy, other than such changes
required by the applicable
Regulations;
|
|
|
(b)
|
no
Windrace Group Company has declared, made or paid any dividend, bonuses or
other distribution;
|
|
|
(c)
|
no
Windrace Group Company has disposed of any asset (including stock) or
supplied any service or business facility of any kind (including a loan of
money or the letting, hiring or licensing of any property whether tangible
or intangible) in circumstances where the consideration actually received
or receivable for such disposal or supply was less than the consideration
which could be deemed to have been received by any Windrace Group Company
for Taxation purposes;
|
|
|
(d)
|
no
event has occurred which gives or may give rise to Taxation for any
Windrace Group Company in respect of deemed (as opposed to actual) income,
profits or gains or which results or may result in any Windrace Group
Company becoming liable to pay or bear a tax liability directly or
primarily chargeable against or attributable to another person, firm or
company.
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51
|
4.
|
ASSETS
|
|
4.1
|
Assets
owned: Each Windrace Group Company legally and
beneficially owned at the Last Accounts Date, and had good and marketable
title to and possession of, and (except for current assets subsequently
sold or realised in the ordinary course of business) still owns and has
good and marketable title to and possession of, all the assets included in
the relevant Accounts and to all assets acquired since the Last Accounts
Date and not subsequently sold or realised as aforesaid, save for any
sales or realizations in the ordinary course of business. No Windrace
Group Company has acquired or agreed to acquire any assets since the Last
Accounts Date, save for any purchases in the ordinary course of
business.
|
|
4.2
|
All
assets: The assets owned by the Windrace Group, together
with assets (if any) held under hire purchase, leasing or rental
agreements listed in the Accounts (which are the only assets so held),
comprise all the material assets necessary for the ordinary course of its
business as now carried on.
|
|
4.3
|
No
Encumbrance: No Windrace Group Company has created, or
granted, or agreed to create or grant, any Encumbrance in respect of any
of the assets included in the Accounts, or to be acquired or agreed to be
acquired since the Last Accounts Date, in each case otherwise than in the
ordinary course of its business, or in respect of the undertaking,
goodwill or uncalled capital of such
company.
|
|
4.4
|
Stock:
|
|
|
(a)
|
The
stock of raw materials, packaging materials and finished goods now held
are adequate in relation to the current and anticipated trading
requirements of the businesses of the Windrace Group for a period of four
(4) months from the date hereof.
|
|
|
(b)
|
The
stock-in-trade of the Windrace Group is in saleable condition and is
capable of being sold by the relevant Windrace Group Company, in the
ordinary course of its business.
|
|
4.5
|
Plant and equipment
adequate: The plant, machinery, vehicles and other
equipment owned or used by the Windrace
Group:
|
|
|
(a)
|
are,
in all material aspects, in a good and safe state of repair and condition
(subject to normal wear and tear) and satisfactory working order and have
been regularly and properly maintained to a normal technical standard, and
in accordance with safety regulations usually observed in relation to
assets of that description, and in accordance with the terms and
conditions of any applicable leasing or similar
agreement;
|
|
|
(b)
|
are
in its possession and control in all material respects, and are its
absolute property save as those which are subject to hire purchase
agreement, leasing or hiring agreement, or similar agreement or
arrangement, except for disposals made as a part of its ordinary course of
business; and
|
52
|
|
(c)
|
are
all capable and fit and (subject to normal wear and tear) for the purpose
for which they were designed or
purchased.
|
|
4.6
|
Maintenance: Maintenance
Contracts are in full force and effect in respect of all assets of capital
nature of the Windrace Group which it is normal or prudent to have
maintained by independent or specialist contractors, and in respect of all
assets which the Windrace Group is obliged to maintain or repair under any
leasing or similar agreement; provided that the absence of such contracts
will not materially adversely affect the business of the Windrace
Group.
|
|
4.7
|
Receivables: No
part of the amounts included in the Accounts, as owing by any
debtor:
|
|
|
(a)
|
is
overdue by more than twelve (12) weeks;
or
|
|
|
(b)
|
is
the subject of any arrangement made otherwise than in the ordinary of
course of business of the Windrace Group;
or
|
|
|
(c)
|
has
been realised or released on terms that any debtor pays less than the full
book value of his debt, or has been deferred, subordinated or written off,
or has proved to any extent to be irrecoverable, or is now regarded by the
relevant Windrace Group Company as irrecoverable, or subject to doubt as
to its recoverability, in whole or in part, or is subject to any
counter-claim or set-off, except to the extent of any relevant provision
or reserve relating thereto in the Accounts or for receivables in an
aggregate outstanding book value not exceeding RMB5 million as of the date
of the Accounts.
|
|
5.
|
LIABILITIES AND
INDEBTEDNESS
|
|
5.1
|
No
liabilities:
|
|
|
(a)
|
Except
as provided by the Elevatech Letter Agreement, there are no liabilities,
obligations or indebtedness of any nature (including liabilities under
guarantees, mortgages or indemnities and other contingent liabilities)
which have been assumed or incurred, or agreed to be assumed or incurred,
by any Windrace Group Company other than those liabilities, obligations
and indebtedness clearly Disclosed or incurred in the ordinary and proper
course of trading since the Last Accounts Date and which have not caused
any material adverse effect to any Windrace Group Company or its
shareholder .
|
53
|
|
(b)
|
No
Windrace Group Company is a party to or is liable (including, without
limitation, contingently) under any Guarantee guaranteeing debts or
obligations of any party not being a member of the Windrace
Group;
|
|
|
(c)
|
No
Windrace Group Company has factored any of its debts or engaged in
financing of a type which would not require to be shown or reflected in
the Accounts.
|
|
|
(d)
|
Save
for the Elevatech Letter Agreement, no Windrace Group Company has entered
into any agreements, arrangements or understandings for the creation,
entry into or doing of any of the aforesaid
things.
|
|
5.2
|
Borrowing
restrictions: The amounts borrowed by the Windrace Group
(as determined in accordance with the provisions of the relevant
instrument) do not exceed any limitation on its borrowing powers contained
in its articles of association or other constitutional documents, or in
any debenture or other deed or document binding upon
it.
|
|
5.3
|
Facilities: In
relation to all Facilities:
|
|
|
(a)
|
the
amounts borrowed by any Windrace Group Company from each of its banks or
other financial lending institution do not exceed the limits in the
relevant Facilities;
|
|
|
(b)
|
there
has been no contravention of, or non-compliance with, any provision of any
of the Facilities;
|
|
|
(c)
|
except
as Disclosed, to the knowledge of Windrace and ▇▇. ▇▇▇, there have not
been, nor are there, any circumstances whereby the continuation of any of
the Facilities might be prejudiced, or which might give rise to any
alteration in the terms and conditions of any of the
Facilities;
|
|
|
(d)
|
except
as Disclosed, none of the Facilities is dependent on the guarantee or
indemnity of, or any Encumbrance provided by, a third party other than any
Windrace Group Company; and
|
|
|
(e)
|
except
as Disclosed, none of the Facilities might be terminated or mature or be
repayable prior to its stated maturity as a result of the acquisition of
the Sale Warrants or the acquisition of the Windrace Shares Entitlement or
the subscription of the New Shares by the Investors or any other thing
contemplated in this Agreement.
|
|
5.4
|
No prepayment or
enforcement: No Windrace Group Company has, since the
Last Accounts Date:
|
|
|
(a)
|
repaid,
or, to the knowledge of Windrace and ▇▇. ▇▇▇, become liable (with or
without the giving of notice by any person) to repay, any Facility in
advance of its stated maturity;
or
|
54
|
|
(b)
|
received
notice (whether formal or informal) from any lender of money to it or
other persons, requiring repayment of any indebtedness or indicating that
any Encumbrances in respect of any of its assets may be enforced, and no
steps for the early repayment of any Facilities, or enforcement of any
such Encumbrance, have been or may (to the knowledge of Windrace and ▇▇.
▇▇▇) be taken; and, to the knowledge of Windrace and ▇▇. ▇▇▇, there are no
circumstances likely to give rise to, or would entitle any third party
(with or without the giving of notice) to give or take, any such notice or
steps.
|
|
6.
|
COMPLIANCE
|
|
6.1
|
Due incorporation: Each
Windrace Group Company has been and remains validly incorporated or
established pursuant to the laws of its country of incorporation or
establishment in all respects, and all shares in each of the Windrace
Group Company has been fully and duly paid up or credited as fully paid up
in accordance with its Constituent Documents) for the time being in force
and rank pari passu in all
respects.
|
|
6.2
|
All licences
held: Except as Disclosed, each Windrace Group Company
has the right, power and authority, and is duly qualified, to carry all
businesses which it currently carries on in all jurisdictions, has
obtained all legally required licences, consents and approvals from any
person, authority or body for the proper carrying on of its businesses and
all such licences, consents and approval are unconditional, valid and
subsisting and have been properly obtained; no Windrace Group Company is
in breach of any of the terms or conditions of any of such licences,
consents and approvals and to the knowledge of Windrace and ▇▇. ▇▇▇, there
are no factors that might in any way prejudice the continuation, or
renewal, of any of them on substantially the same terms and
conditions.
|
|
6.3
|
No breach of
laws: Except as Disclosed, no Windrace Group Company or
any of its officers, agents or employees (during the course of their
duties in relation to it), has committed, or omitted to do, any act or
thing, the commission or omission of which is, or could be, in
contravention of any applicable Regulation, giving rise to any fine,
penalty, default proceedings or other liability on its part involving
penalty sums of more than RMB500,000. To the knowledge of
Windrace and ▇▇. ▇▇▇, the Windrace Group has conducted and is conducting
its business in all respects in accordance with all applicable
Regulations, whether of the BVI, Cayman Islands, Hong Kong, the PRC or
such relevant jurisdictions to which any Windrace Group Company is
subject.
|
55
|
6.4
|
No
investigations: Except as Disclosed, to the knowledge of
Windrace and ▇▇. ▇▇▇, there is and has been no governmental or other
investigation, enquiry or disciplinary proceeding concerning any Windrace
Group Company in any jurisdiction and none is pending or
threatened. To the knowledge of Windrace and ▇▇. ▇▇▇, no fact
or circumstance exists which might give rise to any such investigation,
enquiry or proceeding.
|
|
6.5
|
No
disputes: Except as Disclosed, there is no dispute with
any revenue, or other governmental, department, agency or body in the BVI,
Cayman Islands, Hong Kong, the PRC or elsewhere, in relation to the
affairs of any Windrace Group Company, and to the knowledge of Windrace
and ▇▇. ▇▇▇, there are no facts which may give rise to any
dispute.
|
|
6.6
|
Compliance with memorandum and
articles: Except as Disclosed, each Windrace Group
Company has, at all times, carried on business and conducted its affairs
in all respects in accordance with the laws of its country of
incorporation and its Constituent Documents for the time being in
force.
|
|
6.7
|
All returns
filed: All filings, returns, particulars, resolutions
and documents (including all incorporation documents) required by any
Government Entity or the Companies Ordinance or any other legislation to
be filed with the registrar of companies, or any other authority in any
jurisdiction, in respect of any Windrace Group Company have been duly
filed and were correct in all material respects at the time of their
filing.
|
|
6.8
|
Security
valid: All Encumbrances, guarantees and indemnities in
favour of any Windrace Group Company are valid, binding and enforceable in
accordance with their terms and have (if legally required) been registered
under and otherwise comply with any other applicable
legislation.
|
|
6.9
|
Unlawful
payments: No Windrace Group Company or, to the knowledge
of Windrace and ▇▇. ▇▇▇, any person for whose acts or defaults any of the
Windrace Group Companies may be vicariously liable
has:
|
|
|
(a)
|
offered
or made an unlawful or immoral payment, contribution, gift or other
inducement to a government official or employee in any jurisdiction;
or
|
|
|
(b)
|
induced
a person (or procured another person) to enter into an agreement or
arrangement with any Windrace Group Company or any third party by means of
an unlawful or immoral payment, contribution, gift, or other
inducement;
|
|
|
(c)
|
directly
or indirectly made an unlawful contribution to a political
activity.
|
|
7.
|
BUSINESS/TRADING/PRODUCTS
|
|
7.1
|
Since the Last Accounts
Date: Since the Last Accounts
Date:
|
56
|
|
(a)
|
the
business of the Windrace Group has been continued in the ordinary and
normal course and in the same manner as
previously;
|
|
|
(b)
|
there
has been no material deterioration:
|
|
|
(i)
|
in
the turnover, or the financial or trading position, business or prospects
of the Windrace Group or material change in its assets and liabilities
(none of which have been written up or down since the Last Accounts
Date);
|
|
|
(ii)
|
in
the Windrace Group’s consolidated net asset value (on the same basis as
that used in the Accounts); or
|
|
|
(iii)
|
or
material change in the areas of business or business environment in which
any Windrace Group Company
operates;
|
|
|
(c)
|
no
major supplier or customer of any Windrace Group Company has stopped doing
business with it, or substantially reduced its supplies to or levels of
business with it, or substantially changed the terms on which it is
prepared to supply or do business with any Windrace Group Company (other
than normal price changes), except for change for which Windrace Group
Company is able to locate alternative suppliers or customers without
materially adversely affecting the Windrace Group Company business taken
as a whole; and
|
|
|
(d)
|
each
Windrace Group Company's business has not been materially adversely
affected by the termination, or a change in the terms, of an important
agreement or by an abnormal factor materially adversely affecting Windrace
Group Company’s businesses and, to the knowledge of Windrace and ▇▇. ▇▇▇,
there are no facts or circumstances which might have a material adverse
effect on Windrace Group Company's businesses taken as a
whole;
|
|
7.2
|
Relationships: To
the knowledge of Windrace and ▇▇. ▇▇▇, no circumstance exists whereby
(whether by reason of an existing agreement or arrangement or
otherwise):
|
|
(a)
|
any
significant supplier of any Windrace Group Company will or may cease, or
be entitled to cease, supplying it or will or may substantially reduce its
supplies to it or will or may substantially change the terms on which it
is prepared to do business with any Windrace Group Company that would
materially adversely affect Windrace Group Company’s business taken as a
whole (other than normal price changes) (for the purpose of this
Agreement, a significant supplier means any of the top five (5) suppliers
of the entire Windrace Group as reflected by the total purchase values for
the fiscal year ended December 31,
2008);
|
57
|
|
(b)
|
any
major customer of any Windrace Group Company will or may cease, or be
entitled to cease, to deal with it or will or may substantially reduce its
existing level of business with it or will be entitled to substantially
change the terms on which it is prepared to do business with any Windrace
Group Company (other than normal price changes) (for the purpose of this
Agreement, a major customer means any of the top five (5) customers of the
Windrace Group as reflected by the total turnover of the entire Windrace
Group for the fiscal year ended December 31,
2008);
|
|
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(c)
|
will
lead to Windrace to reasonably expect any officer or senior employee of
any Windrace Group Company will or, to the knowledge of Windrace and ▇▇.
▇▇▇, may leave his office or
employment.
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7.3
|
Warranties in respect of goods
or services: Except for a condition or warranty implied
by law or contained in its standard terms of business or otherwise given
in the usual course of business, no Windrace Group Company has given a
guarantee, condition or warranty, or made a representation, in respect of
goods or services supplied or agreed to be supplied by it, or accepted an
obligation that could give rise to a liability after the goods or services
have been supplied by it.
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7.4
|
Joint ventures and
partnerships: No Windrace Group Company is /or has,
agreed to become, a member of any joint venture, consortium, partnership
or other unincorporated association, or a party to any agreement or
arrangement for sharing commissions or other
income.
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8.
|
AGREEMENTS
|
|
8.1
|
No unusual
agreements: Except as Disclosed, no Windrace Group
Company is a party to any Contract, instrument, transaction, arrangement,
practice, liability or obligation (or offer, tender or proposal)
which:
|
|
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(a)
|
is
outside its ordinary course of
business;
|
|
|
(b)
|
is
of a long-term nature (that is, unlikely to have been fully performed, in
accordance with is terms, more than six months after the date on which it
was entered into or undertaken);
|
|
|
(c)
|
is
a swap, futures or derivatives contract of any nature or involves payment
by it of amounts determined by reference to fluctuations in an index of
retail prices or shares, or any other index, or any prices of securities,
commodities or any other things, or any other benchmark of any nature or
in the rate of exchange for any
currency;
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58
|
|
(d)
|
involves,
or is likely to involve, the purchase or supply of goods or services the
aggregate purchase or sales value of which will represent in excess of 10%
of its turnover for the preceding financial
year;
|
|
|
(e)
|
restricts
any Windrace Group Company's freedom to operate any business or use its
assets in any part of the world as it considers
appropriate;
|
|
|
(f)
|
is
prohibited, void, illegal or unenforceable, or has any consequences
(including the application of disclosure, registration or
notification requirements), under any laws or requirements of
any jurisdiction relating to competition, anti-trust, fair trading and
similar matters.
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8.2
|
Non arm's length
transactions: No Windrace Group Company is a party to,
nor have its profits or financial position during the three (3) years
prior to the date of this Agreement been affected by, any Contract,
transaction or arrangement which is not entered into in the ordinary
course of business and of an entirely arm's length
nature.
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8.3
|
No default by the Windrace
Group Companies: No Windrace Group Company is in default
under any agreement, instrument or obligation binding on it. To
the knowledge of Windrace and ▇▇. ▇▇▇, no threat or claim of default,
under any agreement, instrument or arrangement to which any Windrace Group
Company is a party has been made and there is no circumstance whereby any
such agreement, instrument or arrangement is invalid or, except as
Disclosed, may be prematurely terminated, rescinded, repudiated or
disclaimed by any other party and no notice has been received of any such
party's intention, and no such party has sought, to terminate, rescind,
repudiate or disclaim any such agreement, instrument or
arrangement.
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8.4
|
Material
Contracts: Except
as Disclosed, all material Contracts to which any Windrace Group Company
is a party are valid, binding and enforceable in accordance with their
terms under the laws of their relevant jurisdictions. No event
or circumstances have arisen or will arise before Closing which will
enable the counterparties to terminate any of the material Contracts
whether on account of a breach of the counterparties to the material
Contracts or otherwise, and the Windrace Group would not do or permit
anything to be done which may diminish, jeopardize or prejudice its right
or interest under any of the material
Contracts.
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|
8.5
|
Effect of this
Agreement: The execution of, or compliance with the
terms of, this Agreement does not and will
not:
|
|
|
(a)
|
conflict
with, or result in the breach of, or constitute a default under, any of
the terms, conditions or provisions of any agreement or instrument to
which any Windrace Group Company is a party, or any provision of the
memorandum or articles of association of any Windrace Group Company or any
Encumbrance, lease, Contract, order, judgement, award, injunction,
Regulation or other restriction or obligation of any kind or character by
which or to which any asset of any Windrace Group Company is bound or
subject;
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59
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|
(b)
|
relieve
any person from any obligation to any Windrace Group Company (whether
contractual or otherwise), or enable any person to terminate any
obligation, or any right or benefit enjoyed by any Windrace Group Company,
or, except as provided by the Elevatech Letter Agreement, to exercise any
right, whether under an agreement with, or otherwise in respect of, any
Windrace Group Company;
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|
|
(c)
|
except
as Disclosed, to the knowledge of Windrace and ▇▇. ▇▇▇, prejudicially
affect the attitude of lenders of the Windrace
Group;
|
|
|
(d)
|
result
in the creation, imposition, crystallisation or enforcement of any
Encumbrance whatsoever on any of the assets of any Windrace Group
Company;
|
|
|
(e)
|
except
as Disclosed, result in any present or future indebtedness or other
Facilities of any Windrace Group Company becoming due, or capable of being
declared due and payable, prior to its stated maturity;
or
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|
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(f)
|
to
the knowledge of Windrace and ▇▇. ▇▇▇, require any Windrace Group Company
to obtain the consent or approval of any person, body or authority
(whether as a matter of Regulation, Contract, or other requirement or
expectation whether formal or not).
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9.
|
RELATED PARTY
MATTERS
|
|
9.1
|
No related party
Contracts: Except as Disclosed, there is not now
outstanding, and there has not at any time during the three (3) years
prior to the date of this Agreement been outstanding, any Contract or
arrangement to which any Windrace Group Company is a party and in
which:
|
|
(a)
|
any
of the shareholders of Windrace;
|
|
|
(b)
|
any
other person who is a shareholder or the beneficial owner of any interest
in any Windrace Group Company; or
|
|
|
(c)
|
any
director or employee of any Windrace Group
Company.
|
|
|
is
or has been interested, whether directly or
indirectly.
|
|
9.2
|
No competing business
interest: The Founders and their respective Affiliates
do not have any rights or interests, directly or indirectly, in any
businesses other than those now carried on by any Windrace Group Company
which are or are likely to be, or become, competitive with the businesses
of the Windrace Group.
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60
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9.3
|
Related
indebtedness: There is no outstanding loan or
indebtedness of any nature owed:
|
|
|
(a)
|
by
any Windrace Group Company to any of the shareholders of Windrace or any
director or employee of any Windrace Group Company or any Affiliate of any
such person; or
|
|
|
(b)
|
by
any such person to any Windrace Group
Company.
|
|
10.
|
LITIGATION AND
INSOLVENCY
|
|
10.1
|
No
litigation: No Windrace Group Company or any person for
whose acts or defaults it may be vicariously liable is involved in any
litigation, arbitration, administrative or criminal or other proceedings
involving a claim of more than US$100,000 , there are no such
proceedings pending or threatened, either by or, to Founders’ knowledge,
against any Windrace Group Company; and there is no order or penalty
against any Windrace Group Company; and to the knowledge of Windrace and
▇▇. ▇▇▇, there is no fact or circumstance which is likely to give rise to
any such proceedings involving any Windrace Group Company, in each of the
above cases excluding ordinary debt collection proceedings by any Windrace
Group Company.
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|
10.2
|
No winding
up: No order has been made, or petition presented, or
resolution passed for the winding up of or appointment of a provisional
liquidator to any Windrace Group Company; nor has any receiver, manager or
the like been appointed in respect of any Windrace Group Company's assets
or undertakings; nor has any distress, execution or other process been
levied in respect of any Windrace Group Company or any of their assets
which remains undischarged; nor is there any unfulfilled or unsatisfied
judgment, order, decree, award or decision outstanding against any
Windrace Group Company or any person for whose acts or defaults it may be
vicariously liable.
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|
10.3
|
Insolvency: No
Windrace Group Company is insolvent or unable to pay (or has stopped
paying) its debts (or any of them) when they fall
due.
|
|
11.
|
EMPLOYEES
|
|
11.1
|
Employees; Employment
Agreements: All persons who provide services to any
Windrace Group Company are (i) employees of such Windrace Group Company or
(ii) have entered into binding Contracts or agreements with such Windrace
Group Company or other proper third party for the provisions of such
services, in each case in accordance with all applicable
Regulations
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61
|
11.2
|
No changes to employment
terms: During the period to which the Accounts relate
and since the Last Accounts Date or (where employment or holding of office
commenced after the beginning of such period) since the commencement date
of the employment or holding of
office:
|
|
|
(a)
|
no
material change has been made (or agreed to be made) in the rate of
remuneration, or the emoluments or pension benefits, of any officer,
ex-officer or senior executive of each Windrace Group Company (a “Senior Executive” being
a person in receipt of remuneration in excess of RMB250,000 per annum or
equivalent); and/or
|
|
|
(b)
|
no
change has been made in any other material terms of employment of any
Senior Executive.
|
|
11.3
|
No other
emoluments: Except as Disclosed, no Windrace Group
Company is bound or accustomed to pay any moneys or other benefits other
than in respect of remuneration, or emoluments of employment, or pension
benefits, to, or for the benefit of, any officer or employee of any
Windrace Group Company; in particular, there are no bonus, share option,
incentive or other such schemes in operation or any schemes where any
employee, officer or other person is entitled to any commission or
remuneration of any sort calculated by reference to the turnover, profits
or sales of any Windrace Group Company, or any agreements or arrangements
relating to the aforesaid.
|
|
11.4
|
Contracts terminable on
notice: All subsisting Contracts of employment, to which
any Windrace Group Company is a party, may be terminated at any time on
one month's notice or less without giving rise to any claim for damages or
compensation (other than compensation in accordance with the applicable
laws).
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|
11.5
|
No notice of
termination: Since the Last Accounts Date, no key
employees of any Windrace Group Company has given or received notice
terminating his employment or office, except as expressly contemplated in
this Agreement.
|
|
11.6
|
Employee
records: Each Windrace Group Company has maintained
up-to-date, full and accurate records regarding the employment of each of
its employees (including, without limitation, details of terms of
employment, payments of statutory entitlements, taxation, holidays,
disciplinary and health and safety matters) and termination of
employment.
|
|
11.7
|
No employee
representatives: There are no agreements or other
arrangements (whether or not legally binding) between any Windrace Group
Company and any trade union or other body representing
employees.
|
|
11.8
|
No
disputes/liabilities:
|
|
|
(a)
|
To
the knowledge of Windrace and ▇▇. ▇▇▇, no Windrace Group Company is
involved in any dispute with, or subject to any claim (whether at the
labour tribunal, in the Courts or otherwise) from, any of their current or
former employees and to the knowledge of Windrace and ▇▇. ▇▇▇, there are
no facts which might suggest that there may be any dispute or claim or
that any of the provisions of this Agreement may lead to any such dispute
or claim.
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62
|
|
(b)
|
There
is no claim involving more than US$100,000 pending or (to the knowledge of
Windrace and ▇▇. ▇▇▇) threatened, against any Windrace Group Company, by
an employee or ▇▇▇▇▇▇▇ or third party, in respect of any accident or
injury, which are not fully covered by
insurance.
|
|
|
(c)
|
Adequate
provision has been made in the Accounts for all and any compensation,
severance or other payment (whether under Regulation, relevant agreement
or otherwise) for which any Windrace Group Company is or may be liable in
respect of termination of employment, loss of office, wrongful or unfair
dismissal, redundancy or similar
matters.
|
|
11.9
|
No loans etc: No loan or
advance or financial assistance has been made by any Windrace Group
Company to any employee or officer or past or prospective employee or
officer, which is outstanding.
|
|
11.10
|
Compliance: Each
Windrace Group Company, and all its employees, consultants and other
persons for whose acts it may be vicariously liable, have at all times
complied with all applicable obligations under statute and otherwise
concerning the treatment, health and safety of the employees and officers
of the Windrace Group.
|
|
11.11
|
Payments re: employees:
To the knowledge of Windrace and ▇▇. ▇▇▇, no Windrace Group Company
has any outstanding undischarged liability to any employee or to pay to
any governmental or regulatory authority (or officially required or
sponsored fund or scheme) in any jurisdiction any contribution, taxation
or other impost arising in connection with the employment or engagement of
personnel by it.
|
|
12.
|
PENSIONS
|
|
12.1
|
No pension
arrangements: Save for compliance with applicable
Regulations, no Windrace Group Company is under any legal or moral
liability or obligation, or a party to any ex-gratia arrangement or
promise, to pay any retirement or death or disability benefit, pension,
gratuity, annuity, superannuation allowance or the like, or
life assurance, medical insurance or permanent health payments or the like
(the aforesaid together, “Benefit”), to or for any
of its past or present officers, employees or their dependant or other
person; and there are no schemes, plans arrangements or proposals in
relation to Benefits (or their Provision) or similar schemes or
arrangements in relation to, or binding on, any Windrace Group Company (or
their present or former employees) or to which any Windrace Group Company
contributes or has contributed or proposes to
contribute.
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63
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12.2
|
Payments: All
payments and contributions to, or relating to, a Benefit which is required
to be made by any of the Windrace Group Company and its employees or other
persons have been duly made. There has been no breach of the terms of any
Benefit, or of any laws or regulations applying in respect of such
Benefit, by any Windrace Group Company or by any of the trustees, managers
and administrators (if any) of such
Benefit.
|
|
13.
|
PROPERTY
|
|
13.1
|
Owned
Property: The information contained in Schedule
9 in relation to the location and ownership of each Owned Property
is held is true, accurate and complete in all
respects.
|
|
13.2
|
All
properties: The Property comprises all the real
properties owned, occupied or used by the Windrace Group in connection
with its business and are so occupied or used by right of ownership or
under lease or licence the terms of which permit such occupation or
use.
|
|
13.3
|
Title to Owned
Property: The Windrace Group has the right of
possession, occupation or usage, as the case may be, and proper legal
title to the land use rights and building ownership rights in respect of
each Owned Property (including possession of the land use rights
certificates and building ownerships certificates). Except as
Disclosed, the Windrace Group is entitled to transfer, sell, mortgage or
otherwise dispose of the Owned Property in accordance with the title
documents and regulatory requirements. To the knowledge of Windrace and
▇▇. ▇▇▇, no third party has any occupancy rights or liens affecting the
legal title of each Owned Property. The original land grant fee for any
land use certificates and building ownership certificates in relation to
each Owned Property was paid in full. Each Owned Property will, at
Closing, be free from any Encumbrance. The current use of each Owned
Property as described in Schedule
9 is in its permitted use. All consents have been obtained with
respect to all development, alterations and improvements to such Owned
Property and for the grant of the leases or licenses in relation to such
Owned Property. Compliance is being made and has at all times
been made in all material respects with all restrictions and obligations
set forth in the land use rights certificates, building ownership
certificates and all applicable Regulations with respect to each Owned
Property.
|
|
13.4
|
No Leased Property: None
of the Windrace Group Company has any interest in any Leased Property nor
has any Windrace Group Company entered into any lease or tenancy with any
party other than the Windrace
Group.
|
|
13.5
|
Compulsory purchase
notices: There are no compulsory purchase or resumption
notices, orders or resolutions affecting each of the Properties, nor are
there any circumstances likely to lead to any being
made.
|
64
|
13.6
|
Closure or enforcement
orders: Except as Disclosed, to the knowledge of
Windrace and ▇▇. ▇▇▇, there are no closure, demolition, clearance orders,
enforcement notices, stop notices or other orders affecting any Property,
nor are there any circumstances likely to lead to any being
made.
|
|
13.7
|
Good
repair: The buildings and other structures on each of
the Properties are in good and substantial repair (subject to normal wear
and tear) and fit for the purpose(s) for which they are presently
used.
|
|
13.8
|
Disputes: To
the knowledge of Windrace and ▇▇. ▇▇▇, there are no disputes with any
adjoining or neighbouring owner with respect to boundary walls and fences,
or with respect to any easement, right or means of access to any
Property.
|
|
13.9
|
Access: The
principal means of access to each Property is over roads which are public
highways and, to the knowledge of Windrace and ▇▇. ▇▇▇, no means of access
to the Property is subject to rights of determination by any other
party.
|
|
13.10
|
Main
services: Each Property enjoys the main services of
water, drainage, electricity and
gas.
|
|
13.11
|
Damage or
defects: To the knowledge of Windrace and ▇▇. ▇▇▇, no
building or structure on the Property has at any time been affected by
structural damage or electrical defects or white ants or by timber
infestation or disease.
|
|
13.12
|
Deleterious
materials: To the knowledge of Windrace and ▇▇. ▇▇▇, the
buildings or other structures on each Property do not contain in their
fabric any high alumina cement, blue asbestos, calcium chloride
accelerator, wood wool slabs used as permanent shuttering or other
deleterious material.
|
|
13.13
|
Insurance: The
Property is insured to an adequate extent against such risks normally
insured against by owners or occupiers of such
properties.
|
|
13.14
|
Reinstatement: To
the knowledge of Windrace and ▇▇. ▇▇▇, there is no obligation to reinstate
any Property by removing or dismantling any alteration made to it by the
Windrace Group or any predecessor in title to the Windrace
Group.
|
|
13.15
|
Works
required: To the knowledge of Windrace and ▇▇. ▇▇▇,
there are no known works of an extraordinary nature required to the
building of which the Property forms part or any common facilities serving
any building which would give rise to the increase of any service or
management charges to any
Property.
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65
|
14.
|
INSURANCE
|
|
14.1
|
Insurance
adequate: All the assets and undertakings of any
Windrace Group Company of an insurable nature, are, and where available,
and have at all material times been, insured in commercial reasonable
amounts against fire and all other risks normally insured against by
persons carrying on the same types of business in the same geographic
region as that carried on by the relevant Windrace Group Company. Each
Windrace Group Company is now, and has at all material times been,
adequately covered against accident, damage, injury, and all other risks
normally insured against by persons carrying on the same types of
business.
|
|
14.2
|
In
effect: All insurance policies maintained by each
Windrace Group Company as of the date hereof are in full force and effect,
and all material terms and conditions of the said policies have been
performed and observed in full. No relevant policy of insurance
is or could be void or voidable or vitiated, and nothing has been done or
omitted to be done which is likely to result in an increase in
premium. All premiums due have been duly paid in
full.
|
|
14.3
|
No
claims:
|
|
|
(a)
|
No
claim is outstanding, or may be made, under or in respect of any of the
said policies by any party thereto and no circumstances exist which will
or might give rise to such a claim or which would or might be required to
be notified to the insurers under any such
policies.
|
|
|
(b)
|
No
claim against any Windrace Group Company by any third party is outstanding
in respect of any risk covered by any of the policies or by any policy
previously held by any Windrace Group
Company.
|
|
15.
|
INTELLECTUAL PROPERTY
AND COMPUTER SYSTEMS
|
|
15.1
|
All rights
owned: All Intellectual Property Rights used or required
by the Windrace Group in connection with its business are in full force
and effect and are vested in, and beneficially owned by, the relevant
Windrace Group Company and:
|
|
|
(a)
|
(where
registration is possible) the relevant Windrace Group Company has been and
is registered as proprietor of such Intellectual Property Rights and no
other person has any interest, right or Encumbrance in or in respect of
any such Intellectual Property
Rights;
|
|
|
(b)
|
each
of those rights is valid enforceable and duly maintained, and none of them
is being used, claimed or opposed by any other
person;
|
|
|
(c)
|
to
the knowledge of Windrace and ▇▇. ▇▇▇, there has been no infringement of
such Intellectual Property Rights by any third
party;
|
66
|
|
(d)
|
renewal
fees payable in respect of such Intellectual Property Rights which are
registered have been duly paid and each other available action to maintain
and protect such Intellectual Property Rights has been duly
taken;
|
|
|
(e)
|
to
the knowledge of Windrace and ▇▇. ▇▇▇, nothing has been done or omitted to
be done by which a person is or will be able to seek cancellation,
rectification or other modification of a registration of any of such
Intellectual Property Rights;
|
|
|
(f)
|
there
is and has been no civil, criminal, arbitration, administrative or other
proceeding or dispute in any jurisdiction concerning any of such
Intellectual Property Rights; to the knowledge of Windrace and ▇▇. ▇▇▇, no
civil, criminal, arbitration, administrative or other proceeding
concerning any of such Intellectual Property Rights is pending or
threatened; to the knowledge of Windrace and ▇▇. ▇▇▇, no fact or
circumstance exists which might give rise to such proceeding or dispute;
and
|
|
|
(g)
|
no
right or license has been granted to any person by any Windrace Group
Company to use, in any manner, or to do anything which would or might
otherwise infringe, any such Intellectual Property Rights; and no act has
been done, or omission permitted, by any Windrace Group Company whereby
such Intellectual Property Rights, or any of them, have ceased or might
cease to be valid and enforceable.
|
|
15.2
|
No
infringement: To the knowledge of Windrace and ▇▇. ▇▇▇,
the business of the Windrace Group (and of any license under a licence
granted by any Windrace Group Company) as now carried on does not, and is
not likely to, infringe any Intellectual Property Right of any other
person, and all licenses to any Windrace Group Company in respect of any
such Intellectual Property Rights are in full force and effect and no
party to an agreement relating to the use by any Windrace Group Company of
Intellectual Property Rights of another person is, or has at any time
been, in breach of that agreement.
|
|
15.3
|
No breach of
licence: Nothing has been done or omitted by any
Windrace Group which would enable any license granted by such Windrace
Group Company to be terminated, or which in any way constitutes a breach
of the terms of any license.
|
|
15.4
|
No
disclosure: No Windrace 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 Investors, Exceed and SPAC any of its know-how,
trade secrets, confidential information, price lists or lists of customers
or suppliers.
|
|
15.5
|
Business
names: No Windrace Group Company uses any name for any
purpose other than its full corporate
name.
|
67
|
15.6
|
Computer
systems:
|
|
|
(a)
|
None
of the Systems, Records, data or information of or used by any Windrace
Group Company is recorded, stored, maintained, operated or otherwise
wholly or partly dependent on or held or accessible by any means
(including, without limitation, an electronic, mechanical or photographic
process computerized or not) which are not under the exclusive ownership
and direct control of the relevant Windrace Group
Company.
|
|
|
(b)
|
the
Windrace Group has security procedures in place to prevent unauthorized
access, amendment or damage to the Systems and Records and other data and
information of the Windrace Group or the data and information of third
parties held, recorded, stored, maintained or operated by the Windrace
Group or on behalf of the Windrace Group by any third party, and no
unauthorized access, amendment or damage to such Systems, Records or other
data or information has taken place as at the date of this
Agreement.
|
|
16.
|
ENVIRONMENTAL
ISSUES
|
|
16.1
|
Compliance: Each
Windrace Group Company is currently in compliance with all Environmental
Laws in all material respects and has at all times complied with all
Environmental Laws.
|
For the
purpose of this Schedule
4, “Environmental
Law” shall mean any and all applicable laws whether of the PRC or any
other relevant jurisdiction, relating to pollution, contamination or protection
of the environment or to the storage, labelling, handling, release, treatment,
processing, manufacturing, deposit, transportation or disposal of any hazardous
substance.
|
16.2
|
No breach: To the
knowledge of Windrace and ▇▇. ▇▇▇, there is no real property owned or used
by any Windrace Group Company contaminated with any hazardous substance or
any substance regulated by any Environmental Law so as to constitute a
violation of any Environmental Law.
|
|
16.3
|
No claims: To the
knowledge of Windrace and ▇▇. ▇▇▇, there have not been nor are there
pending or threatened any civil or criminal actions, notices of
violations, investigations, administrative proceedings or written
communications from any regulatory authority under any Environmental Laws
against any Windrace Group Company or any of its assets and, to the
knowledge of Windrace and ▇▇. ▇▇▇, there are no facts or circumstances
which may give rise to the
same.
|
68
|
17.
|
MISCELLANEOUS
|
|
17.1
|
Commissions: No
person is entitled to receive from any Windrace Group Company any finder's
fee, brokerage or other commission in connection with the transfer of the
Sale Warrants or the granting of the Windrace Shares Entitlement or the
issue and allotment of the New Shares to the Investors under, or otherwise
in respect of, this Agreement.
|
69
PART C
SPAC AND
EXCEED
Each of
the representations and warranties contained in this Part C is based on publicly
available information and assuming all representations and warranties made by
Exceed and SPAC in the SPA are true, accurate and complete in all material
respects and not misleading in any material respect as of the date of this
Agreement and on each day up to and including the Closing Date.
|
1.
|
PUBLIC
FILINGS
|
|
1.1
|
Financial statements:
The financial statements of SPAC included in the forms, reports and
records filed by SPAC with the SEC complied in all material respects with
applicable accounting requirements and the rules and regulations of the
SEC with respect thereto at the time of filing. Such financial
statements were prepared in accordance with US GAAP on a consistent basis
during the periods involved, except as may otherwise be specified in such
financial statements or the notes thereto, and fairly represented in all
material respects the financial position of SPAC as of and for the dates
thereof and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal, year-end
adjustments.
|
|
1.2
|
SEC Documents: SPAC has
filed all reports, schedules, forms, statements and other documents
required to be filed by SPAC with the SEC since its inception, pursuant to
Sections 13(a), 14(a) and 15(d) of the Exchange Act (the “SEC
Documents”). As of its respective filing date,
each SEC Document complied in all material respects with the
requirements of the Exchange Act and the rules and regulations of the SEC
promulgated thereunder applicable to such SEC Document, and did not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they
were made, not misleading. Except to the extent that
information contained in any SEC Document has been revised or superseded
by a later filed SEC Document, none of the SEC Documents
contains any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they
were made, not misleading. The financial statements included in
the SEC Documents comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations
applicable to SPAC with respect thereto, and have been prepared
in accordance with U.S. GAAP (except, in the case of unaudited statements,
as permitted by the rules and regulations of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated
in the notes thereto) and fairly present the financial position of SPAC as
of the dates thereof and the consolidated results of its operations and
cash flows as at the respective dates of and for the periods referred to
in such financial statements (subject, in the case of unaudited financial
statements, to normal year-end audit adjustments and the omission of notes
to the extent permitted by Regulation S-X of the
SEC).
|
70
|
2.
|
GENERAL
COMPLIANCE
|
SPAC has
not received any claim or notice that is in breach of any applicable rules,
regulations or requirements of the SEC.
|
3.
|
LISTING
STATUS
|
Before
the Merger, SPAC has listed 22,490,000 shares of the common stock of SPAC with a
par value of US$0.0001 per share on the NYSE Amex, which include 10,500,000
shares of common stock currently outstanding and 11,990,000 shares of its common
stock issuable upon exercise of outstanding rights to acquire the common stock
of SPAC pursuant to warrants to purchase an aggregate of 8,625,000 shares
of common stock of SPAC issued by SPAC as part of the units sold in SPAC’s
initial public offering of its securities, warrants to purchase an aggregate of
2,265,000 shares of the common stock of SPAC issued by SPAC in a private
placement immediately preceding the initial public offering of SPAC’s securities
and the underwriter’s purchase option to acquire 550,000 units of
SPAC. The listing status of such securities on the NYSE Amex has not
been withdrawn or cancelled, and the SEC has not indicated to SPAC that it will
object to the continued listing of such shares.
Upon SPA
Closing, Exceed will become the holding company of Windrace and SPAC shall merge
with and into Exceed with Exceed as the surviving entity. All rights
and obligation of SPAC will be resumed by Exceed.
|
4.
|
▇▇▇▇▇▇▇▇-▇▇▇▇▇ ACT OF
2002
|
Except as
Disclosed, SPAC is in material compliance with all provisions of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act”)
applicable to it as of the date hereof and as of the Closing
Date. There has been no material change in SPAC’s accounting policies
since inception except as described in the notes to SPAC’s Financial Statements.
Each required form, report and document containing financial statements that has
been filed with or submitted to the SEC since inception, was accompanied by the
certifications required to be filed or submitted by SPAC’s chief executive
officer and chief financial officer pursuant to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, and at
the time of filing or submission of each such certification, such certification
was true and accurate and materially complied with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and
the rules and regulations promulgated thereunder. Neither SPAC, nor
to the best of the knowledge of Windrace or ▇▇. ▇▇▇, any
representative of SPAC, has received or otherwise had or obtained knowledge of
any complaint, allegation, assertion or claim, whether written or oral,
regarding the accounting or auditing practices, procedures, methodologies or
methods of SPAC or their respective internal accounting controls, including any
complaint, allegation, assertion or claim that SPAC has engaged in questionable
accounting or auditing practices, except for (a) any complaint, allegation,
assertion or claim as has been resolved without any resulting change to SPAC’s
accounting or auditing practices, procedures methodologies or methods of SPAC or
its internal accounting controls, and (b) questions regarding such matters
raised and resolved in the ordinary course in connection with the preparation
and review of SPAC’s financial statements and periodic reports. To
the knowledge of Windrace and ▇▇. ▇▇▇, no attorney representing SPAC, whether or
not employed by SPAC, has reported evidence of a material violation of
securities laws, breach of fiduciary duty or similar violation by SPAC or any of
its officers, directors, employees or agents to the board of directors of SPAC
or any committee thereof or to any director or officer of SPAC. To
the knowledge of Windrace and ▇▇. ▇▇▇, no employee of SPAC has provided or is
providing information to any law enforcement agency regarding the commission or
possible commission of any crime or the violation or possible violation of any
applicable law.
71
|
5.
|
U.S.
TAXES
|
|
|
(a)
|
SPAC
has timely filed (taking into account any extensions received from the
relevant taxing authorities), or has caused to be timely filed on its
behalf, all U.S. tax returns that are or were required to be filed by it,
and all such tax returns are true, complete and accurate. To
the knowledge of Windrace and ▇▇. ▇▇▇, there are no unpaid Taxes claimed
to be due by any U.S. tax authority in charge of taxation of any
jurisdiction, nor any claim for additional taxes for any period for which
U.S. tax returns have been filed, and the officers of SPAC know of no
basis for any such claim.
|
|
|
(b)
|
SPAC
has not received any notice that any governmental authority will audit or
examine (except for any general audits or examinations routinely performed
by such governmental authorities), seek information with respect to, or
make material claims or assessments with respect to any Taxes for any
period.
|
|
|
(c)
|
SPAC’s
financial statements reflect an adequate reserve for all taxes payable by
SPAC (in addition to any reserve for deferred Taxes to reflect timing
differences between book and tax items) for all taxable periods and
portions thereof through the date of such financial statements. SPAC is
neither a party to nor is it bound by any tax indemnity, tax sharing or
similar agreement and SPAC currently has no material liability and will
not have any material liabilities for any Taxes of any other person under
any agreement or by the operation of any law. No deficiency with respect
to any taxes has been proposed, asserted or assessed against SPAC, and no
requests for waivers of the time to assess any such taxes are
pending.
|
72
|
6.
|
INVESTIGATIONS/ANTI-AVOIDANCE
|
|
|
(a)
|
SPAC
has not been subject to any audit or investigation by any U.S. Taxation
Authority and, to the knowledge of Windrace and ▇▇. ▇▇▇, there are no
circumstances existing which make it likely that an audit or investigation
will be commenced.
|
|
|
(b)
|
To
the knowledge of Windrace and ▇▇. ▇▇▇, SPAC has neither entered into nor
been a party to any transaction or any scheme or arrangement of which the
main purpose, or one of the main purposes, or the sole or dominant
purpose, was the unlawful avoidance of or reduction in or the deferral or
postponement of a liability to
taxation.
|
|
7.
|
SHARE
CAPITAL
|
Except as
Disclosed and as otherwise disclosed in the publicly available information and
records of SPAC filed with the SEC (including annual reports, statutory filings
and registrations), there is no option, right to acquire, transfer, mortgage,
charge, pledge, lien or other form of security or encumbrance on, over or
affecting any of the Sale Warrants and there is no agreement or commitment to
give or create any of the foregoing and no claim has been made by any person to
be entitled to any of the foregoing.
|
8.
|
RECORDS AND
DOCUMENTS
|
Each of
Exceed and SPAC has kept duly made up all requisite books of account (in
accordance with good accounting principles), minute books, registers and
financial and other records. All records:
|
|
(a)
|
have
been fully, properly and accurately kept and completed in accordance with
normal business practice and good accounting principles and comply with
all applicable legal and accounting requirements and
standards;
|
|
|
(b)
|
do
not contain any material inaccuracies or discrepancies;
and
|
|
|
(c)
|
give
and reflect a correct view of its trading transactions, and its financial,
contractual and trading position (and no notice or allegation that any of
them is inaccurate or should be rectified has been received or
made),
|
and the
records and all other deeds and documents (including title deeds and documents),
belonging to or which ought to be in the possession of Exceed or SPAC are in the
possession of Exceed or SPAC or their respective agents.
|
9.
|
STATUTORY
BOOKS
|
To the
knowledge of Windrace and ▇▇. ▇▇▇, the stock ledger of SPAC prepared and
maintained by SPAC’s transfer agent has been properly kept and contains an
accurate and complete record of the stockholders of record of SPAC.
73
|
10.
|
MINUTE
BOOKS
|
The
minute books of directors' meetings and of shareholders'/stockholders' meetings
of Exceed and SPAC respectively (including actions taken by written consent in
lieu of a meeting) contain full and accurate records of all resolutions passed
by the directors and the shareholders/stockholders respectively of that company
and no resolutions have been passed by either the directors or the
shareholders/stockholders of Exceed or SPAC which are not recorded in
the relevant minute books.
|
11.
|
NO BREACH OF
LAWS
|
To the
knowledge of Windrace and ▇▇. ▇▇▇, neither Exceed, SPAC nor any of its officers,
agents or employees (during the course of their duties in relation to it), has
committed, or omitted to do, any act or thing, the commission or omission of
which is, or could be, in contravention of any applicable Regulation, giving
rise to any fine, penalty, default proceedings or other liability on its
part involving penalty sums of more than US$250,000.
|
|
To
the knowledge of Windrace and ▇▇. ▇▇▇, each of Exceed and SPAC has
conducted and is conducting its business in all respects in accordance
with all applicable Regulations in each such relevant jurisdictions to
which either Exceed or SPAC is
subject.
|
|
12.
|
NO
INVESTIGATIONS
|
There is
and has been no governmental or other investigation, enquiry or disciplinary
proceeding concerning Exceed or SPAC in any jurisdiction and, to the knowledge
of Windrace and ▇▇. ▇▇▇, none is pending or threatened. To the
knowledge of Windrace and ▇▇. ▇▇▇, no fact or circumstance exists which might
give rise to any such investigation, enquiry or proceeding.
|
13.
|
NO
DISPUTES
|
There is
no dispute with any revenue, or other governmental, department, agency or body
in the U.S. or elsewhere, in relation to the affairs of Exceed or SPAC, and, to
the knowledge of Windrace and ▇▇. ▇▇▇, there are no facts which may give rise to
any dispute.
74
|
14.
|
COMPLIANCE WITH
CONSTITUENT DOCUMENTS
|
Each of
Exceed and SPAC has, at all times, carried on business and conducted its affairs
in all respects in accordance with the applicable laws of the BVI, U.S., the
State of Delaware and its Constituent Documents then in force.
|
15.
|
ALL RETURNS
FILED
|
All
filings, returns, particulars, resolutions and documents (including all
incorporation documents) required by any legislation to be filed with any U.S.
or BVI government authority, or any other authority in any jurisdiction, in
respect of either Exceed or SPAC have been duly filed and were correct in all
material respects.
|
16.
|
NO UNUSUAL
AGREEMENTS
|
Except as
Disclosed, each of Exceed and SPAC is not a party to any Contract, instrument,
transaction, arrangement, practice, liability or obligation (or offer, tender or
proposal) which:
|
|
(a)
|
is
outside of its ordinary course of
business;
|
|
|
(b)
|
is
of a long-term nature (that is, unlikely to have been fully performed, in
accordance with is terms, more than six (6) months after the date on which
it was entered into or undertaken);
|
|
|
(c)
|
is
a swap, futures or derivatives contract of any nature or involves payment
by it of amounts determined by reference to fluctuations in an index of
retail prices or shares, or any other index, or any prices of securities,
commodities or any other things, or any other benchmark of any nature or
in the rate of exchange for any
currency;
|
|
|
(d)
|
involves,
or is likely to involve, the purchase or supply of goods or services the
aggregate purchase or sales value of which will represent in excess of 10%
of its turnover for the preceding financial
year;
|
|
|
(e)
|
restricts
Exceed’s or SPAC’s freedom to operate any business or use its assets in
any part of the world as it considers
appropriate;
|
|
|
(f)
|
is
prohibited, void, illegal or unenforceable, or has any consequences
(including the application of disclosure, registration or notification
requirements), under any laws or requirements of any jurisdiction relating
to competition, anti-trust, fair trading and similar
matters.
|
75
|
17.
|
NON ARM'S LENGTH
TRANSACTIONS
|
Except as
Disclosed and as otherwise disclosed in the publicly available information and
records of SPAC filed with the SEC (including annual reports, statutory filings
and registrations), neither Exceed nor SPAC is a party to, nor have its profits
or financial position during the three (3) years prior to the date of this
Agreement been affected by, any Contract, transaction or arrangement which is
not entered into in the ordinary course of business and of an entirely arm's
length nature.
|
18.
|
NO
DEFAULT
|
Neither
Exceed nor SPAC is in default under any agreement, instrument or obligation
binding on it. To the knowledge of Windrace and ▇▇. ▇▇▇, no threat or
claim of default, under any agreement, instrument or arrangement to which Exceed
or SPAC is a party has been made and there is no circumstance whereby any such
agreement, instrument or arrangement is invalid or may be prematurely
terminated, rescinded, repudiated or disclaimed by any other party and no notice
has been received of any such party's intention, and no such party has sought,
to terminate, rescind, repudiate or disclaim any such agreement, instrument or
arrangement.
|
19.
|
EFFECT OF THIS
AGREEMENT
|
Except as
Disclosed, the execution of, or compliance with the terms of, this Agreement
does not and will not:
|
|
(a)
|
conflict
with, or result in the breach of, or constitute a default under, any of
the terms, conditions or provisions of any agreement or instrument to
which Exceed or SPAC is a party, or any provision of its Constituent
Documents or any Encumbrance, lease, Contract, order, judgment, award,
injunction, Regulation or other restriction or obligation of any kind or
character by which or to which any asset of Exceed or SPAC is bound or
subject;
|
|
|
(b)
|
relieve
any person from any obligation to either Exceed or SPAC (whether
contractual or otherwise), or enable any person to determine any
obligation, or any right or benefit enjoyed by Exceed or SPAC, or to
exercise any right, whether under an agreement with, or otherwise in
respect of, Exceed or SPAC;
|
|
|
(c)
|
result
in the creation, imposition, crystallization or enforcement of any
Encumbrance whatsoever on any of the assets of Exceed or SPAC;
or
|
76
|
|
(d)
|
result
in any present or future indebtedness or other facilities of Exceed or
SPAC becoming due, or capable of being declared due and payable, prior to
its stated maturity.
|
|
20.
|
NO RELATED PARTY
CONTRACTS
|
Except as
Disclosed, there is not now outstanding, and there has not at any time during
the three (3) years prior to the date of this Agreement been outstanding, any
contract or arrangement to which Exceed or SPAC is a party and in
which:
|
|
(a)
|
any
other Person who is a shareholder or the beneficial owner of any interest
in Exceed or SPAC; or
|
|
|
(b)
|
any
director or employee of Exceed or
SPAC;
|
is or has
been interested, whether directly or indirectly.
|
21.
|
NO
LITIGATION
|
Neither
Exceed, SPAC nor any person for whose acts or defaults it may be vicariously
liable is involved in any litigation, arbitration, administrative or criminal or
other proceedings, whether as plaintiff, defendant or otherwise; there are no
such proceedings pending or, to the knowledge of Exceed and SPAC, threatened,
either by or against Exceed or SPAC; and there is no order or penalty against
Exceed or SPAC; and, to the knowledge of Exceed or SPAC, there is no fact or
circumstance which is likely to give rise to any such proceedings involving
Exceed or SPAC.
|
22.
|
INSOLVENCY
|
|
|
No
order has been made or petition presented or resolution passed for the
dissolution of Exceed or SPAC, nor has any distress, execution or other
process been levied against Exceed or SPAC or action taken to repossess
goods in the possession of Exceed or SPAC. Exceed or SPAC has
not made or proposed any arrangement or composition with its creditors or
any class of its creditors.
|
|
23.
|
NO UNDISCLOSED
MATERIAL LIABILITIES
|
|
|
To
the knowledge of Windrace and ▇▇. ▇▇▇, Exceed or SPAC has no material
liabilities, whether absolute, accrued, contingent or otherwise, other
than those reflected in the publicly available information and records of
Exceed or SPAC.
|
77
SCHEDULE
5
INVESTORS’
WARRANTIES
2.
3.
4. 1. AUTHORITY AND
POWER
|
1.1
|
Authority: Each of the
Investors is a duly incorporated company and validly existing under the
laws of its place of incorporation; and has full power and authority to
enter into this Agreement and to perform its obligations
hereunder. Each of the Investors have been authorised to
validly and duly execute and deliver, and to exercise and perform each of
their respective rights and obligations under this
Agreement. This Agreement has been duly executed and delivered
by each of the Investors and constitutes the valid and binding obligation
of each of the Investors, enforceable against the Investors in accordance
with its terms.
|
|
1.2
|
Power: Each of the
Investors has all the power under its Constituent Documents to permit its
entry into this Agreement and this Agreement (and its performance) has
been duly authorised (such authorisation remaining in full force and
effect) and executed by, and constitutes valid and legally binding
obligations of, each of the
Investors.
|
78
SCHEDULE
6
WINDRACE ACTIVITIES PENDING
CLOSING
|
1.
|
Save
with the prior written consent of the Investors (which shall not be
unreasonably withheld), or as expressly provided in this Agreement or
actions necessary or desirable to effect the Elevatech Letter Agreement
and the SPA, Windrace will not, and ▇▇. ▇▇▇ shall procure that each
Windrace Group Company will not, pending
Closing:
|
|
|
(a)
|
issue
or agree to issue any of its share, interest or loan capital or grant or
agree to grant, redeem or amend the terms of any option over or right to
acquire any of its share or loan
capital;
|
|
|
(b)
|
save
for the Redemption, purchase or redeem any shares in its share capital or
make any repurchases or reduction of its share capital or provide
financial assistance for any such
purchase;
|
|
|
(c)
|
borrow
or otherwise raise money or incur or discharge any liabilities or
indebtedness or create any security except in the ordinary course of
business or any borrowing to refinance shareholders’
loan;
|
|
|
(d)
|
resolve
to alter the provisions of its memorandum or articles of association or
constitutive documents or adopt or pass any Regulations or resolutions
inconsistent therewith except as required by applicable
Regulations;
|
|
|
(e)
|
enter
into any onerous, unusual or material contract or arrangement with a
value, or incurring liability or potential liability, in excess of
RMB10,000,000;
|
|
|
(f)
|
terminate
any of the material agreement or arrangement with a value, or incurring
liability or potential liability, in excess of RMB10,000,000 to
which it is a party;
|
|
|
(g)
|
enter
into any material capital commitment or undertake or incur any material
contingent liability with a value in excess of
RMB10,000,000;
|
|
|
(h)
|
make
any substantial change (including, but not limited to, any change by way
of incorporation, acquisition or disposal of subsidiary(ies) or
business(es)) in the nature, extent or terms of organisation of its
business, or carry on any business other than its existing
business;
|
|
|
(i)
|
in
any material respect depart from the ordinary course of its day to day
business;
|
79
|
|
(j)
|
create
or permit to be arisen any lien, charge, pledge, mortgage, encumbrance or
other security interest on or in respect of any of its undertaking,
properties or assets (except in the ordinary course of
business);
|
|
|
(k)
|
declare,
pay or make any dividends or other capital distributions or repay or
prepay any loans or advances by its shareholder(s) or its
associates;
|
|
|
(l)
|
appoint
any directors or auditors;
|
|
|
(m)
|
acquire,
sell, transfer, lease, sub-lease, license, sub-license, assign, grant any
option over or otherwise dispose of, or purchase, take on lease or licence
or assume possession of, any interests in land, or agree to do any of the
foregoing with costs exceeding RMB10,000,000 or with a term of more than
three (3) years;
|
|
|
(n)
|
acquire
or agree to acquire or dispose or agree to dispose of any part of the
material asset or stock with a value or consideration exceeding
RMB10,000,000;
|
|
|
(o)
|
enter
into, alter or agree to alter the terms of, any borrowing, factoring or
other financing or lending arrangement, facility letter, undertaking,
guarantee, indemnity, comfort letter or commitment of any kind whatsoever
(except for any renewal or amendment of any such arrangement, letter,
undertaking, guarantee, indemnity or commitment from any other external
lender upon the expiry of previous ones in the ordinary course of business
which (a) do not involve any increase in the principal amount of the
relevant facility; (b) are at normal market rates and on normal commercial
terms or better; and (c) do not exceed RMB80,000,000, in aggregate for all
Windrace Group Companies);
|
|
|
(p)
|
make
any advances or other credits to any person or give any guarantee or
indemnity or act as surety, or otherwise accept any direct or indirect
liability, for the liabilities or obligations of any person other than a
Windrace Group Company;
|
|
|
(q)
|
alter
or agree to alter, terminate or agree to terminate or waive any right
under, any agreement to which it is a party and which has or is likely to
have a material adverse effect on the Windrace Group taken as a whole, or
enter into any unusual or abnormal material commitment except in the
ordinary course of business and for full
consideration;
|
|
|
(r)
|
commence,
compromise, settle, release, discharge or compound any civil, criminal,
arbitration or other proceedings or any liability, claim, action, demand
or dispute or waive any right in relation to any of the
foregoing;
|
80
|
|
(s)
|
terminate
or allow to lapse any insurance policy except in the ordinary course of
business or in connection with the transactions contemplated under this
Agreement, or (other than the transactions contemplated under this
Agreement) do anything to render any insurance policy void or voidable,
provided that it will not materially adversely affect Windrace Group
Company’s business taken as a
whole;
|
|
|
(t)
|
dispose
of the ownership, possession, custody or control of any corporate or other
books or records which are required under any Regulation to be kept or
which should be kept on a prudent
basis;
|
|
|
(u)
|
grant
any power of attorney or otherwise authorise any other person to do any of
the above;
|
|
|
(v)
|
enter
into any partnership or joint venture arrangement otherwise than for
normal business development;
|
|
|
(w)
|
establish
or open or close any branch or office which is material to the business of
the Windrace Group taken as a whole;
or
|
|
|
(x)
|
do
or omit to do any act or thing which would have a material adverse effect
on its trading or financial position or prospects on the Windrace Group
taken as a whole.
|
|
2.
|
▇▇.
▇▇▇ shall procure that, each Windrace Group Company, will, pending Closing
fulfil their obligations under Clauses 5.1, 5.2 and
5.3.
|
81
SCHEDULE
7
SPAC ACTIVITIES PENDING
CLOSING
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1.
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Save
with the prior written consent of the Investors (which shall not be
unreasonably withheld) or as expressly provided in this Agreement or
except as determined by SPAC to be necessary or desirable to secure the
SPAC stockholder approval as described in the SPA or as otherwise in the
opinion of SPAC to be necessary or desirable to effectuate the
transactions contemplated under this Agreement and the SPA, Windrace and
▇▇. ▇▇▇ shall procure that each of SPAC and Exceed will not, pending
Closing:
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(a)
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issue
or agree to issue any of its share, interest or loan capital or grant or
agree to grant, redeem or amend the terms of any option over or right to
acquire any of its share or loan
capital;
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(b)
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purchase
or redeem any shares in its share capital or make any repurchases or
reduction of its share capital or provide financial assistance for any
such purchase other than for the purpose of securing stockholders’
approval of the SPA as contemplated
thereunder;
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(c)
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acquire
by merging or consolidating with, or by purchasing assets of, or by any
other manner, any business or any corporation, partnership, association or
other business organization or division thereof, or acquire any equity
securities of any corporation, partnership, association or business
organization (or enter into letters of intent, memorandum of
understanding, contracts or agreements with respect to the foregoing);
and
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(d)
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engage
in discussions or negotiations or enter into letters of intent, memorandum
of understanding, contracts, agreements, arrangements or transactions of
any nature with any third party involving a payment by SPAC or Exceed with
monies in the trust account, except for disbursements permitted under the
SPA.
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82
SCHEDULE
8
ESCROW
AGREEMENT
DATED 2009
WINDRACE
INTERNATIONAL COMPANY LIMITED
and
WISETECH
HOLDINGS LIMITED
and
WINDTECH
HOLDINGS LIMITED
and
DEACONS
ESCROW
AGREEMENT
Deacons
Solicitors
& Notaries
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇ ▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇
▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇
Fax :
▇▇▇▇▇▇▇▇
Tel :
▇▇▇▇▇▇▇▇
83
ESCROW
AGREEMENT
DATED
PARTIES
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(1)
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WINDRACE
INTERNATIONAL COMPANY LIMITED, a company incorporated under the
laws of the Cayman Islands with limited liability, the registered office
of which is at Cricket Square, ▇▇▇▇▇▇▇▇ Drive, ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇-▇▇▇▇, Cayman Islands (“Windrace”);
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(2)
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WISETECH
HOLDNGS LIMITED, a company
incorporated in the BVI, whose registered office is at ▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, BVI ("Wisetech");
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(3)
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WINDTECH
HOLDINGS LIMITED, a company incorporated in the BVI, whose
registered office is at P.O. Box 957, Offshore Incorporations Centre, Road
Town, Tortola, BVI ("Windtech");
and
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(Wisetech
and Windtech collectively are referred to as the “Investors”)
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(4)
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DEACONS
of ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ (the "Escrow
Agent").
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(collectively, the “Parties” and each a “Party”).
RECITALS
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(A)
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The
Parties (other than the Escrow Agent) and Mr. Shuipan Lin have entered
into an agreement in relation to an investment in Windrace of even date
(the “Investment
Agreement”).
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(B)
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Pursuant
to clauses 4.2 and 4.3 of the Investment Agreement, the Investors will
deposit or cause to be deposited an aggregate sum of money not exceeding
US$30,000,000 (the “Escrow Moneys”) into an
escrow account in Hong Kong to be held by the Escrow
Agent. Reference to Escrow Moneys herein shall include any
interest earned thereon.
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(C)
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The
Parties have agreed that the Escrow Moneys shall be held in escrow on and
subject to the terms of this Agreement, provided, however, that nothing
herein shall amend or modify any of the binding provisions of the
Investment Agreement, and further provided that the provisions of the
Investment Agreement setting forth the conditions for the release of such
Escrow Moneys shall remain in full force and
effect.
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(D)
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The
foregoing recitals constitute the premises upon which this Agreement is
based and the reason for its execution and the said recitals are intended
to be legally binding and shall be construed as an integral part of this
Agreement.
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84
PROVISIONS
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1.1
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ESCROW
MONEYS
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|
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The
Escrow Agent shall accept any Escrow Moneys deposited with it or caused to
be deposited with it by the Investors from time to time and shall credit
the same to its client account maintained with a major licensed bank in
Hong Kong, subject to the terms of this Agreement. Such Escrow
Moneys shall be kept on such bank's overnight time deposit, subject to (a)
any written instructions given jointly by Windrace and the Investors to
hold on deposit for a different duration and (b) any payments made
hereunder. The Investors shall, promptly after depositing or having caused
to be deposited such Escrow Moneys, send a written notice by facsimile to
the Escrow Agent informing it of such deposit and the amount
thereof.
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The
Escrow Agent shall only be authorised to release all or any part of the
Escrow Moneys upon receipt of and in accordance with the joint written
instructions from Windrace and the Investors (the "Joint Instruction(s)")
from time to time, substantially in the form set out in the Appendix
attached hereto, or in accordance with Clause 9.2. The Escrow
Agent is hereby irrevocably and unconditionally authorised to act in
accordance with the Joint Instruction(s) and (upon examination of such
Joint Instruction(s) in accordance with Clause 5.1) pay the Escrow Moneys
(excluding any amount the Escrow Agent has or is entitled to set off under
Clause 9.2), or any relevant part(s) thereof, as soon as reasonably
practicable in accordance with such Joint Instruction(s). The
Escrow Agent shall comply with Joint Instruction(s) given to the Escrow
Agent and shall not be concerned with any disagreement between Windrace
and the Investors or any other parties (whether in relation to the
Investment Agreement or otherwise) after the delivery of Joint
Instruction(s) to the Escrow Agent, unless subsequent Joint Instruction(s)
directing the Escrow Agent otherwise are given to and received by the
Escrow Agent before the relevant Joint Instruction(s) have been
implemented by the Escrow Agent. The Escrow Agent does not
assume any duty or obligation of any kind in relation to, and shall not be
liable in any way for, any remittance or other risks, or in ensuring the
implementation of the Joint Instruction(s) by banks or other financial
institutions holding the Escrow Moneys, and the sole obligation of the
Escrow Agent is to give instructions to such banks or financial
institutions in accordance with the Joint
Instruction(s).
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Any
payment of all or any part(s) of the Escrow Moneys in accordance with
Clause 1.2 shall represent a full and final discharge of the obligations
of the Escrow Agent and following such release, the Escrow Agent shall
have no liability whatsoever to Windrace and the Investors or any of them
or any other party whatsoever.
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For
the avoidance of doubt, the Escrow Agent shall not be required to
interpret any provisions of the Investment
Agreement.
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2.1
|
ESCROW
AGENT’S DUTIES AND
LIABILITIES
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2.1
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The
Escrow Agent shall have only those duties, obligations and
responsibilities clearly and expressly set out in this Agreement and no
duties, obligations or responsibilities whatsoever shall be inferred or
implied against the Escrow Agent. It is understood that the Escrow Agent’s
only duties and responsibilities shall be to accept the Escrow Moneys
deposited with it in accordance with this Agreement, to hold and release
the Escrow Moneys in accordance with this
Agreement.
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85
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2.2
|
The
duties of the Escrow Agent under this Agreement are purely ministerial,
administrative and non-discretionary in nature. Neither the Escrow Agent
nor any of its partners, officers, employees, or agents shall, by reason
of any matter or thing contained in this Agreement, be deemed to be a
trustee for or have any fiduciary relationship with any of the other
Parties or any other person. Where the Escrow Agent has acted in
accordance with this Agreement it shall be deemed to have acted in
accordance with the written instructions of Windrace and the
Investors.
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2.3
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The
Escrow Agent shall not be precluded (and neither shall any partner,
officer, employee or agent of the Escrow Agent or any company or person in
any other way associated with the Escrow Agent be precluded) from entering
into or being otherwise interested in any commercial, financial or
business contacts or in any other transactions or arrangements whatsoever
with any of the other Parties or any of their affiliates or associated
companies.
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2.4
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The
Escrow Agent shall not be bound or affected in any way by any agreement or
contract between any or all of the other Parties and the Escrow Agent
shall not be deemed to have knowledge of any provision of those documents
unless the substance of such provision is explicitly set forth in this
Agreement. The Escrow Agent shall not in any way be required to determine
whether or not the terms and conditions of any other agreement or contract
between Windrace and the Investors have been complied with. Further, the
Escrow Agent shall not be affected with knowledge or notice of any fact or
circumstance not specifically set forth in this
Agreement.
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2.5
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The
Escrow Agent may rely upon and shall not be liable for acting or
refraining from acting upon any order, judgment, certification, demand,
written notice, instruction or request furnished to it under this
Agreement without being required to determine the authenticity or the
correctness of any fact stated in such document or the propriety or
validity of the service of such document. The Escrow Agent may act in
conclusive reliance upon any instrument or signature believed by it to be
genuine and may assume that any person purporting to give instructions
(including but not limited to the Joint Instruction(s)) receipt or advice,
make any statement, or execute any document in connection with the
provisions of this Agreement has been duly authorised to do so. The Escrow
Agent shall be under no duty to inquire into or investigate the validity,
accuracy or content of any such
document.
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2.6
|
The
Escrow Agent shall not be liable or accountable for any loss or damage
whatsoever to any person caused by any action taken or omitted by the
Escrow Agent except to the extent that a court of competent jurisdiction
determines that the Escrow Agent’s gross negligence or wilful misconduct
was the primary and direct cause of any such loss. This Clause shall
survive the resignation or removal of the Escrow
Agent.
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2.7
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The
Escrow Agent may execute any of its powers and perform any of its duties
under this Agreement directly or through agents or attorneys and shall not
be liable for any acts or omissions of such agents or attorneys and may
consult with counsel, accountants and other skilled persons to be selected
and retained by it. The Escrow Agent shall not be liable for anything
done, suffered or omitted by it in accordance with the advice or opinion
of any such counsel, accountants or other skilled
persons.
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86
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2.8
|
Notwithstanding
any provision in this Agreement to the contrary, in no event shall the
Escrow Agent be liable for special, indirect, punitive or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits), whether or not foreseeable, even if the Escrow Agent is aware of
or has been advised of the likelihood of such loss or damage and
regardless of whether the claim for loss or damage is made in negligence,
for breach of contract, breach of trust, breach of fiduciary obligation or
otherwise. This Clause shall survive the resignation or removal
of the Escrow Agent.
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2.9
|
The
Escrow Agent may take and instruct any delegate to take any action which
it in its sole discretion considers appropriate so as to comply with any
applicable law, regulation, request of a public or regulatory authority
which relates to the prevention of fraud, money laundering, terrorism or
other criminal activities or the provision of financial and other services
to sanctioned persons or entities. In certain circumstances, such action
may delay or prevent the processing of any instructions or the Escrow
Agent's performance of its obligations under this Agreement. Neither the
Escrow Agent nor any delegate will be liable for any loss (whether direct
or consequential and including, without limitation, loss of profit or
interest) caused in whole or in part by any actions which are taken by the
Escrow Agent or any delegate pursuant to this
Clause.
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2.10
|
Each
of Windrace and the Investors hereby unconditionally and irrevocably
covenants and undertakes on a 50:50 basis to keep the Escrow Agent and all
of its partners, officers, employees and agents (each an “indemnified party”)
indemnified in full at all times against all losses, liabilities, actions,
proceedings, claims, demands, damages, costs, expenses, taxes and
disbursements (the “Losses”) which may be
incurred, suffered or brought against such indemnified party including the
fees and disbursements under this Agreement, as a result of or in
connection with directly or indirectly their appointment or involvement
under this Agreement or the exercise of any of their powers or duties
under this Agreement or any acts taken by such indemnified party in
accordance with the terms of this Agreement or any acts taken by such
indemnified party in accordance with its usual practice. The Escrow Agent
shall not be obligated to take any action including any legal or other
proceedings hereunder which might, in its sole judgement, involve any
expense or liability of any kind unless it shall have been furnished with
a full indemnity therefor which is satisfactory to the Escrow Agent in
it’s sole opinion. The Parties acknowledge that the foregoing
indemnities shall survive the resignation or removal of the Escrow
Agent.
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2.11
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Notwithstanding
anything to the contrary in this Agreement, the Escrow Agent shall not in
any event be liable for any failure or delay in the performance of its
obligations under this Agreement if it is prevented from so performing its
obligations by any existing or future law, order or regulation of a
governmental, supranational or regulatory body, regulation of the banking
or securities industry, any existing or future act of governmental
authority, Act of God, flood, war (whether declared or undeclared),
terrorism, riot, rebellion, civil commotion, strike, lockout, other
industrial action, general failure of electricity or other supply,
aircraft collision, technical failure, accidental or mechanical or
electrical breakdown, computer failure or failure of any telecommunication
or money transmission system or any reason which is beyond the control of
the Escrow Agent.
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87
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3.1
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FEES
AND EXPENSES
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3.1
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(a)
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As
compensation for its services to be rendered under this Agreement, each of
Windrace and the Investors undertakes to pay the Escrow Agent the sum of
HK$50,000 per annum (or a pro rata portion thereof on the basis of a 360
days year) on a 50:50 basis. The fee payable to the Escrow
Agent shall be paid on a bi-annual basis on 30 June and 31 December each
year (or if that day is not a business day for licensed banks in Hong
Kong, such payment shall be made on the business day immediately preceding
that day).
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(b)
|
Each
of Windrace and the Investors also undertakes to reimburse the Escrow
Agent for all reasonable expenses, disbursements and advances (such as
bank charges for implementing any Joint Instruction(s)), if any, incurred
or made by it in connection with the carrying out of its duties under this
Agreement on a 50:50 basis. Where a claim is asserted or made
against the Investors collectively, the amount of liability of each of
Wisetech and Windtech shall be several (and not joint or joint and
several) and be on a 40:60 basis.
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(c)
|
This
Clause shall survive the resignation or removal of the Escrow
Agent.
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4.1
|
CHANGE
OF ESCROW AGENT
|
|
4.1
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The
Escrow Agent may at any time resign by giving not less than 30 days' prior
notice in writing to Windrace and the
Investors.
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4.2
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Windrace
and the Investors may at any time jointly remove the Escrow Agent by
giving not less than 30 days' prior notice in writing to the Escrow
Agent.
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4.3
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Forthwith
upon receiving a notice of resignation or giving a notice of removal,
Windrace and the Investors shall appoint a successor escrow agent to hold
the Escrow Moneys.
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4.4
|
If,
on or before the date of expiry of a notice of resignation or removal, the
Escrow Agent receives written notice (an "Appointment Notice")
from Windrace and the Investors of the name and address of a successor
escrow agent together with Joint Instruction(s) from Windrace and the
Investors, substantially in the form set out in the Appendix
attached hereto, a direction to pay the Escrow Moneys to the successor
escrow agent, the Escrow Agent shall make such payment as soon as is
reasonably practicable but (as they hereby acknowledge) at the risk of
Windrace and the Investors.
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4.5
|
Failing
receipt of an Appointment Notice on or before the date of expiry of a
notice of resignation or removal, the resignation or removal of the Escrow
Agent shall take effect and the Escrow Agent shall have no further duties
or obligations under this Agreement save that if Windrace and the
Investors shall not have appointed a successor escrow agent by the date
such resignation or removal shall become effective, the Escrow Agent
hereby agrees to continue to hold the Escrow Moneys for the same fees and
expenses set out in Clause 3.1 and payable by Windrace and the Investors
to the joint order of each of Windrace and the Investors until a successor
escrow agent is appointed on the understanding that the Escrow Agent shall
hold such moneys as bare custodian and shall have no further duties or
obligations under this Agreement. In such a case, the Escrow
Agent shall only release the Escrow Moneys, and any interest accrued
thereon, on receipt of Joint Instruction(s) from Windrace and the
Investors, substantially in the form set out in the Appendix
attached hereto.
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88
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5.1
|
INSTRUCTIONS
AND COMMUNICATIONS
|
|
5.1
|
Each
of Windrace and the Investors shall deliver to the Escrow Agent a list of
authorised signatories, as set out in Schedule
1, with respect to any notice, certificate, instrument, demand,
request, direction, instruction, waiver, receipt, consent or other
document or communication required or permitted to be furnished to the
Escrow Agent under this Agreement, and the Escrow Agent shall be entitled
to rely on such list with respect to any Party until a new list is
furnished by such Party to and acknowledged by the Escrow Agent. The
Escrow Agent shall verify the signatures on the relevant Joint
Instruction(s) against the signature specimens contained in Schedule
1 or in such new list.
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5.2
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When
the Escrow Agent acts on any information, instructions, communications,
(including, but not limited to, communications with respect to the
delivery of securities or the wire transfer of funds) sent by facsimile,
email or other form of electronic or data transmission, the Escrow Agent
shall not be responsible or liable in the event such communication is not
an authorized or authentic communication of Windrace or the Investors (as
the case may be) or is not in the form Windrace or the Investors (as the
case may be) sent or intended to send (whether due to fraud, distortion or
otherwise). Windrace and the Investors shall indemnify the
Escrow Agent against any loss, liability, claim or expense (including
legal fees and expenses) it may incur with its acting in accordance with
any such communication on a 50:50
basis.
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6.1
|
CONFLICTS
AND DISPUTES
|
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6.1
|
In
the event of any inconsistency or conflict between the provisions of this
Agreement and any other agreement or contract among Windrace and the
Investors, this Agreement shall, as among the Escrow Agent, Windrace and
the Investors, prevail.
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6.2
|
In
the event of any ambiguity or uncertainty under this Agreement or in any
notice, instruction or other communication received by the Escrow Agent
under this Agreement, the Escrow Agent may, in its sole discretion,
refrain from taking any action other than to retain possession of all
property held in escrow, unless the Escrow Agent receives written
instructions, signed by Windrace and the Investors, which eliminates such
ambiguity or uncertainty.
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6.3
|
In
the event of any dispute or conflicting claims between Windrace and the
Investors and any other person or entity with respect to any property held
in escrow, the Escrow Agent shall be entitled, in its sole discretion, to
refuse to comply with any and all claims, demands or instructions with
respect to such property held in escrow so long as such dispute or
conflict shall continue, and the Escrow Agent shall not be or become
liable in any way to Windrace and the Investors or any other person or
entity for failure or refusal to comply with such disputed or conflicting
claims, demands or instructions. The Escrow Agent shall be
entitled to refuse to act until, in its sole discretion, either (i) such
conflicting or disputed claims or demands shall have been determined by a
final order, judgment or decree of a court of competent jurisdiction,
which order, judgment or decree is not subject to appeal, or settled by
agreement between the conflicting parties as evidenced in writing that is
satisfactory to the Escrow Agent or (ii) the Escrow Agent shall have
received security or indemnity satisfactory to it sufficient to hold it
harmless from and against any and all losses which it may incur by reason
of so acting. Any court order, judgment or decree shall be accompanied by
a legal opinion by counsel for the presenting party, satisfactory to the
Escrow Agent, to the effect that said order, judgment or decree represents
a final adjudication of the rights of the Parties by a court of competent
jurisdiction, and that the time for appeal from such order, judgment or
decree has expired without an appeal having been filed with such court.
The Escrow Agent shall act on such court order and legal opinions without
further question. The Escrow Agent may, in addition, elect, in its sole
discretion, to commence an interpleader action or seek other judicial
relief or orders as it may deem, in its sole discretion, necessary. The
costs and expenses (including reasonable attorneys’ fees and expenses)
incurred in connection with such proceeding shall be paid by Windrace and
the Investors on a 50:50 basis.
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89
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7.1
|
NOTICES
|
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7.1
|
Any
notice or other communication under or in connection with this Agreement
shall be in writing and shall be left at or sent by pre-paid registered
post (if posted from and to an address in Hong Kong), pre-paid registered
airmail (if posted from or to an address outside Hong Kong) or facsimile
transmission to the Party due to receive the notice or communication at
its respective address or facsimile number set out below or to such other
address and/or number(s) as may have been last specified by such Party by
written notice to each of the other Parties
hereto.
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To
Windrace:
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|
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Address:
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Xidelong
Industrial Zone, Jinjiang, Fujian, the PRC
|
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Attention:
|
Shuipan
Lin
|
|
Telephone:
|
▇▇-▇▇▇-▇▇▇▇-▇▇▇▇
|
|
Facsimile:
|
▇▇-▇▇▇-▇▇▇▇-▇▇▇▇
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To
the Investors:
|
Wishtech
and Windtech
|
|
c/o
New Horizon Capital
|
|
|
Address:
|
▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
100005
|
|
Attention:
|
▇▇▇▇▇▇▇▇
▇▇ and ▇▇▇▇▇ ▇▇▇▇
|
|
Telephone:
|
▇▇-▇▇-▇▇▇▇▇▇▇▇
|
|
Facsimile:
|
▇▇-▇▇-▇▇▇▇▇▇▇▇
|
|
with
a copy to
|
90
|
Deacons
|
|
|
Attn:
▇▇. ▇▇▇▇▇▇ ▇▇▇▇ / ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
|
|
|
5th
Floor, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
|
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|
▇▇
▇▇▇▇▇▇ ▇▇▇▇
|
|
|
▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇
|
|
|
Telephone:
(▇▇▇) ▇▇▇▇ ▇▇▇▇
|
|
|
Facsimile:
(▇▇▇) ▇▇▇▇ ▇▇▇▇
|
|
|
Matter
number: 156645
|
|
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To
Deacons:
|
|
|
Address:
|
▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
|
|
▇▇
▇▇▇▇▇▇ ▇▇▇▇
|
|
|
▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇
|
|
|
Attention:
|
▇▇.
▇▇▇▇▇▇ ▇▇▇▇ / ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
|
|
Telephone:
|
(▇▇▇)
▇▇▇▇ ▇▇▇▇
|
|
Facsimile:
|
(▇▇▇)
▇▇▇▇ ▇▇▇▇
|
|
Matter
No:
|
156645
|
|
7.2
|
In
the absence of evidence of earlier receipt, a notice or other
communication is deemed given:
|
|
|
(a)
|
if
delivered personally, when left at the address referred to in Clause
7.1;
|
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(b)
|
if
sent by mail except air mail, two (2) days after posting;
and
|
1.1
|
|
(c)
|
if
sent by air mail, six (6) days after
posting;
|
|
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(d)
|
if
sent by fax, on completion of its
transmission.
|
In
proving the giving of a notice by mail it shall be sufficient to prove that the
envelope containing such notice was properly addressed and posted.
|
8.1
|
WARRANTY
|
|
8.1
|
Each
of Windrace and the Investors represents, warrants and undertakes to each
other and to the Escrow Agent that it has full right, power and authority,
and has taken all necessary action, to validly and duly execute and
deliver, and to exercise their rights and perform their obligations under
this Agreement and all other documents (including all written instruction
to be given by them to the Escrow Agent) relating to this Agreement, and
this Agreement constitutes, and the documents which are to be executed by
it when executed will constitute, legal, valid and binding agreements or
obligations enforceable against it in accordance with their respective
terms.
|
|
9.1
|
SET
OFF
|
|
9.1
|
The
Investors shall be reimbursed for all fees and expenses incurred (“Investors Fees”) as
contemplated and in accordance with the terms and conditions of the
Investment Agreement, subject to a maximum sum of
US$50,000.
|
91
|
9.2
|
Upon
receipt by the Escrow Agent of a written instruction from the Investors,
the Escrow Agent shall be entitled to (a) deduct from the Escrow Moneys
any sum representing the Investors Fee as stipulated in such written
instruction; and (b) pay to the Investors or any person(s) as they may in
such written instruction direct such Investors Fee, up to a maximum sum of
US$50,000.
|
|
10.1
|
COUNTERPARTS
|
|
10.1
|
This
Agreement may be executed in one or more counterparts each of which shall
be binding on each Party by whom or on whose behalf it is so executed, but
which together shall constitute a single instrument. For the
avoidance of doubt, this Agreement shall not be binding on any Party
hereto unless and until it shall have been executed by or on behalf of all
persons expressed to be Party
hereto.
|
|
11.1
|
GENERAL
|
|
11.1
|
The
terms and provisions of this Agreement constitute the entire agreement
among the Parties in respect of the subject matter of this Agreement, and
neither (i) Windrace and the Investors on the one hand nor (ii) the Escrow
Agent on the other hand has relied on any representations or agreements of
the other, except as specifically set forth in this
Agreement.
|
|
11.2
|
This
Agreement or any provisions of this Agreement may be amended, modified,
waived or terminated only by written agreement duly signed by the Parties
thereto.
|
|
11.3
|
This
Agreement shall inure to the benefit of, and be binding upon, the Parties
and their respective heirs, devisees, executors, administrators, personal
representatives, successors, trustees, receivers and permitted assignees.
This Agreement is for the sole and exclusive benefit of the Parties, and
nothing in this Agreement, express or implied, is intended to confer or
shall be construed as conferring upon any other person any rights,
remedies or any other type or types of
benefits.
|
|
11.4
|
The
rights and remedies conferred upon the Parties shall be cumulative, and
the exercise or waiver of any such right or remedy shall not preclude or
inhibit the exercise of any additional rights or remedies. The waiver of
any right or remedy under this Agreement shall not preclude the subsequent
exercise of such right or remedy.
|
|
11.5
|
If
one or more of the provisions of this Agreement shall for any reason be
held to be invalid, illegal or unenforceable in any respect under
applicable law, such invalidity, illegality or unenforceability shall not
affect any other provisions of this Agreement, and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never
been contained in this Agreement, and the remaining provisions of this
Agreement shall be given full force and
effect.
|
|
12.1
|
GOVERNING
LAW AND JURISDICTION
|
|
12.1
|
This
Agreement shall be governed by and construed in accordance with the laws
of Hong Kong and the Parties hereby irrevocably submit to the exclusive
jurisdiction of the Hong Kong courts in respect of all disputes of any
kind in connection with the terms of this
Agreement.
|
92
|
12.2
|
Windrace
hereby irrevocably appoints ▇▇▇▇▇ Day of ▇▇/▇, ▇▇▇▇▇▇▇▇▇ Tower, the
Landmark, ▇▇ ▇▇▇▇▇’▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ as the agent to accept
service of legal process on its behalf. Service of legal
process upon such process agent of Windrace shall be deemed completed
whether or not such legal process is forwarded to or received by
Windrace. Windrace hereby irrevocably agrees that, if the
process agent ceases to have an address in Hong Kong or ceases to act as
the process agent on behalf of Windrace, it shall appoint a new process
agent in Hong Kong for the same purposes and will deliver to the other
Parties within fourteen (14) days a copy of a written acceptance of
appointment by the process agent. If at any time Windrace
appoints a new process agent, it shall give written notice to the other
Parties of such appointment and until such time service on the process
agent last known to the other Parties shall be deemed to be effective
service.
|
|
12.3
|
Each
of the Investors hereby irrevocably appoints Consec Services Limited of
▇/▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ as the agent to
accept service of legal process on its behalf. Service of legal
process upon the process agent of the Investors shall be deemed completed
whether or not such legal process is forwarded to or received by any of
the Investors. Each of the Investors hereby irrevocably agrees
that if its process agent ceases to have an address in Hong Kong or ceases
to act as its process agent it shall appoint a new process agent in Hong
Kong for the same purposes and will deliver to the other Parties within
fourteen (14) days a copy of a written acceptance of appointment by the
process agent. If at any time any of the Investor appoints a
new process agent it shall give written notice to the other Parties of
such appointment and until such time service on the process agent last
known to the other Parties shall be deemed to be effective
service.
|
93
IN WITNESS whereof the hands
of the Parties the date and year first before written.
|
SIGNED by
|
)
|
|
duly
authorized for and on behalf of
|
)
|
|
WINDRACE
INTERNATIONAL COMPANY
|
)
|
|
LIMITED
|
)
|
|
in
the presence of:
|
)
|
|
Witness’
signature:
|
|
|
Witness’
name:
|
|
|
Witness’
occupation:
|
|
|
Witness’
address:
|
|
SIGNED by
|
)
|
|
duly
authorized for and on behalf of
|
)
|
|
WISETECH
HOLDINGS LIMITED
|
)
|
|
in
the presence of:
|
)
|
|
Witness’
signature:
|
|
|
Witness’
name:
|
|
|
Witness’
occupation:
|
|
|
Witness’
address:
|
|
SIGNED by
|
)
|
|
duly
authorized for and on behalf of
|
)
|
|
WINDTECH
HOLDINGS LIMITED
|
)
|
|
in
the presence of:
|
)
|
|
Witness’
signature:
|
|
|
Witness’
name:
|
|
|
Witness’
occupation:
|
|
|
Witness’
address:
|
94
|
SIGNED by
|
)
|
|
duly
authorized for and on behalf of
|
)
|
|
DEACONS
|
)
|
|
in
the presence of:
|
)
|
|
Witness’
signature:
|
|
|
Witness’
name:
|
|
|
Witness’
occupation:
|
|
|
Witness’
address:
|
95
APPENDIX
FORM OF JOINT WRITTEN
INSTRUCTION(S)
Date:
|
To:
|
Deacons
|
|
|
▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
|
|
|
▇▇
▇▇▇▇▇▇ ▇▇▇▇
|
|
|
▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇
|
Attention: ▇▇
▇▇▇▇▇▇ ▇▇▇▇/▇▇ ▇▇▇▇▇▇ ▇▇▇
Dear
Sirs
Escrow
Agreement dated [●]
among
the undersigned and Deacons (the “Escrow Agreement")
Matter no.
156645
Terms
used in this notice shall have the same meaning as defined in the Escrow
Agreement.
We hereby
instruct you, pursuant to clause [*] of the Escrow Agreement, to release
[amount] of the Escrow Moneys by direct transfer as follows:
Bank:
Account
number:
Accountholder
name:
|
SIGNED by
|
)
|
|
)
|
|
|
for
and on behalf of
|
)
|
|
WINDRACE
INTERNATIONAL COMPANY
|
)
|
|
LIMITED
|
)
|
|
in
the presence of:
|
)
|
|
Witness’
signature:
|
|
|
Witness’
name:
|
|
|
Witness’
occupation:
|
|
|
Witness’
address:
|
96
|
SIGNED by
|
)
|
|
duly
authorized for and on behalf of
|
)
|
|
WISETECH
HOLDINGS LIMITED
|
)
|
|
in
the presence of:
|
)
|
|
Witness’
signature:
|
|
|
Witness’
name:
|
|
|
Witness’
occupation:
|
|
|
Witness’
address:
|
|
SIGNED by
|
)
|
|
duly
authorized for and on behalf of
|
)
|
|
WINDTECH
HOLDINGS LIMITED
|
)
|
|
in
the presence of:
|
)
|
|
Witness’
signature:
|
|
|
Witness’
name:
|
|
|
Witness’
occupation:
|
|
|
Witness’
address:
|
97
SCHEDULE
1
LIST
OF AUTHORISED SIGNATORIES
Windrace: (any one of the
following representatives to sign)
|
Name: Shuipan
Lin
Title:
Director of Windrace
|
Specimen
Signature: ________________
|
|
Name:
▇▇▇ ▇▇▇ Ting
Title: Chief
Financial Officer of Windrace
|
Specimen
Signature: ________________
|
Wisetech Holdings Limited:
(any one of the following representatives to sign)
|
Name: ▇▇▇▇▇▇▇▇
▇▇
|
Specimen
Signature: ________________
|
|
Name: ▇▇▇
▇▇▇ ▇▇▇▇
|
Specimen
Signature:
________________
|
Windtech Holdings Limited:
(any one of the following representatives to sign)
|
Name: ▇▇▇▇▇▇▇▇
▇▇
|
Specimen
Signature: ________________
|
|
Name: ▇▇▇
▇▇▇ ▇▇▇▇
|
Specimen
Signature: ________________
|
98
SCHEDULE
9
PROPERTY
Part
A - Owned Property
|
1.
|
Land
|
|
Owner
|
國有土地使用證
證書編號 (State-owned
Land
Use Rights
Certificate
number)
|
Site
|
Use
|
Date
of
Expiry
of
the
Use
Right |
Use
right
Area
(Square
meter)
|
|||||||||
|
喜得龍(中國)有限公司(Xidelong
(China) Co. Ltd.)
|
晋國用（2007）第00785号
(▇▇▇
▇▇▇ Yong (2007) No.00785)
|
中國福建省晋江市陳埭鎮南霞美村
(Nanxiamei
Village, Chendai Town, Jinjiang City, Fujian Province, the
PRC)
|
Industrial
|
2056-12-25 |
9,475.00
|
|||||||||
|
喜得龍(中國)有限公司(Xidelong
(China) Co. Ltd.)
|
晋國用（2007）第00786號
(▇▇▇
▇▇▇ ▇▇▇▇ (2007) No. 00786)
|
中國福建省晋江市陳埭鎮南霞美村
(Nanxiamei
Village, Chendai Town, Jinjiang City, Fujian Province, the
PRC)
|
Industrial
|
2056-12-25 |
9,196.00
|
|||||||||
|
喜得龍(中國)有限公司(Xidelong
(China) Co. Ltd.)
|
晋國用（2007）第00787號
(▇▇▇
▇▇▇ Yong (2007) No. 00787)
|
中國福建省晋江市陳埭鎮南霞美村
(Nanxiamei
Village, Chendai Town, Jinjiang City, Fujian Province, the
PRC)
|
Industrial
|
2056-12-25 |
20,113.00
|
|||||||||
|
福建喜得龍體育用品有限公司
(Fujian Xidelong Sports Goods Co., Ltd.)
|
晋國用（2005）第01753號 (▇▇▇ ▇▇▇
▇▇▇▇ (2005) No. 01753)
|
中國福建省晋江市陳埭鎮南霞美村
(Nanxiamei
Village, Chendai Town, Jinjiang City, Fujian Province, the
PRC)
|
Industrial
|
2055-07-06 |
15,277.00
|
|||||||||
99
|
2.
|
Buildings
|
|
Owner
|
房屋所有權證證書編號
(Building
Ownership
Certificate
number)
|
Site
|
Construction
Area
(Square
meter)
|
|||||
|
喜得龍(中國)有限公司(Xidelong
(China) Co. Ltd.)
|
晋房權證陳埭字第06-200574號(▇▇▇ ▇▇▇▇
Quan ▇▇▇▇▇ ▇▇▇▇ Dai Zi No. 06-200574)
|
中國福建省晋江市陳埭鎮南霞美村
(Nanxiamei
Village, Chendai Town, Jinjiang City, Fujian Province, the
PRC)
|
10,735.96 | |||||
|
喜得龍(中國)有限公司(Xidelong
(China) Co. Ltd.)
|
晋房權證陳埭字第06-200576號 (▇▇▇ ▇▇▇▇
Quan ▇▇▇▇▇ ▇▇▇▇ Dai Zi No. 06-200576)
|
中國福建省晋江市陳埭鎮南霞美村
(Nanxiamei
Village, Chendai Town, Jinjiang City, Fujian Province, the
PRC)
|
66,102.31 | |||||
|
喜得龍(中國)有限公司(Xidelong
(China) Co. Ltd.)
|
晋房權證陳埭字第06-200578號 (▇▇▇ ▇▇▇▇
Quan ▇▇▇▇▇ ▇▇▇▇ Dai Zi No. 06-200578)
|
中國福建省晋江市陳埭鎮南霞美村
(Nanxiamei
Village, Chendai Town, Jinjiang City, Fujian Province, the
PRC)
|
22,186.39 | |||||
Part
B - Leased Property
Nil
100
SCHEDULE
10
DEED OF
INDEMNITY
1
|
Dated
the day
of 2009
SHUIPAN
LIN
and
WISETECH
HOLDINGS LIMITED
and
WINDTECH
HOLDINGS LIMITED
____________________________
DEED
OF INDEMNITY
in
respect of
TAXATION
____________________________
Deacons
Solicitors
& Notaries
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇
▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇
Fax
: ▇▇▇▇▇▇▇▇
Tel
: ▇▇▇▇▇▇▇▇
|
2
THIS DEED OF INDEMNITY is
made day
of ,
2009
BY:
|
(1)
|
SHUIPAN
LIN, whose address is at ▇▇. ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ Village, Chendai Town, Jinjiang City, Fujian Province,
the PRC and whose PRC passport number is ▇▇▇▇▇▇▇▇▇ (the “Covenantor”);
|
In favour
of:
|
(2)
|
WISETECH
HOLDNGS LIMITED, a company
incorporated in the BVI, whose registered office is at P.O. Box 957,
Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands
("Wisetech");
and
|
|
(3)
|
WINDTECH
HOLDINGS LIMITED, a company incorporated in the BVI, whose
registered office is at P.O. Box 957, Offshore Incorporations Centre, Road
Town, Tortola, British Virgin Islands ("Windtech").
|
|
|
(Wisetech
and Windtech collectively are referred to as the “Covenantees”)
|
Whereas
:-
|
(A)
|
This
Deed is made pursuant to an investment agreement
dated 2009
(the “Principal
Agreement”) entered into between, among others, the Covenantor and
the Covenantees providing for, amongst other thing, the investment in
Windrace.
|
|
(B)
|
The
Covenantor has agreed to give certain indemnities in favour of the
Covenantees upon the terms and subject to the conditions set out in this
Deed.
|
NOW THIS
DEED WITNESSES AND IT IS HEREBY AGREED as
follows:-
|
1.
|
INTERPRETATION
|
|
1.1
|
In
this Deed, terms capitalised in this Deed but not otherwise defined have
the meaning given to them in the Principal Agreement and the following
expressions shall have the following meanings except where the context
otherwise requires:-
|
|
|
"Exceed" means (i) Exceed
and SPAC (before the Merger); and (ii) Exceed (after the Merger), being
the merged entity after the Merger;
|
|
|
"Relief" means any
relief, allowance, concession, preferential tax treatment, right to
repayment, set-off or deduction in computing profits or other assessable
sum against which a Taxation is assessed, and any credit granted by or
available pursuant to any legislation or otherwise relating to all forms
of Taxation;
|
3
|
|
"Taxation" or “Tax”
means:-
|
(a) any
liability to any form of taxation and duty whenever created or imposed whether
of the United States, Hong Kong, the BVI, the PRC or of any other part of the
world and, without prejudice to the generality of the foregoing, including
profits tax, provisional profits tax, business tax on gross income, enterprise
income tax, income tax, value added tax, interest tax, salaries tax, individual
income tax (employer as the statutory tax withholding agent) and social security
contribution, property tax, land appreciation tax, lease registration tax, urban
real estate tax, deed tax, estate duty, capital gains tax, death duty, capital
duty, stamp duty, payroll tax, withholding tax, rates, import, customs and
excise duties, local surtaxes, local surcharges (including but not limited to
river administration fee) and generally any tax, duty, impost, levy or rate or
any amount payable to any Taxation Authority;
(b) such
amount or amounts as is or are referred to in Clause 1.2
;
(c) all
costs, interests, penalties, fines, charges, liabilities and expenses incidental
or relating to any liability to Taxation which is the subject of the Deed, to
the extent that the same are payable or suffered by Exceed or a Windrace Group
Company; and
|
|
“Taxation Authority”
means any revenue, customs, fiscal governmental, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇, provincial, local governmental or municipal authority,
body or person, or any non-revenue and non-fiscal governmental
institutions responsible for collecting Taxes on behalf of taxation
authorities, whether of the United States, Hong Kong, the BVI, the PRC or
elsewhere;
|
|
|
"Taxation Claim(s)" means
any claim, counterclaim, assessment, notice, demand or other documents
issued or action taken by or on behalf of any Taxation Authority whereby
Exceed or a Windrace Group Company is liable or is sought to be made
liable for any payment of any Taxation or is denied or sought to be denied
any Relief.
|
|
1.2
|
In
the event of deprivation of any Relief or of a right to repayment of any
form of Taxation available to Exceed or a Windrace Group Company, there
shall be treated as an amount of Taxation for which a liability has
arisen, the amount of such Relief or repayment; or if the amount of
Taxation being reduced is smaller than the actual amount of Relief, the
amount by which the liability equal to any such Taxation of Exceed or any
particular Windrace Group Company would have been reduced by such Relief
if there had been no such deprivation, applying the relevant rates of
Taxation in force in the period or periods in respect of which such Relief
would have applied or (where the rate has at the relevant time not been
fixed) the last known rate and assuming that Exceed or such Windrace Group
Company had sufficient profits, turnover or other assessable income or
expenditure against which such Relief might be set off or
given.
|
4
|
1.3
|
In
this Deed:
|
(a)
the
masculine gender shall include the feminine gender and neuter and the singular
number shall include the plural and vice versa;
(b)
references
to persons shall include individuals, bodies corporate (wherever incorporated),
unincorporated associations, partnerships and all forms of governmental body or
authority; and
(c)
the
headings are inserted for convenience only and shall not affect the
interpretation of this Deed.
|
1.4
|
The
recitals form part of this Deed and shall be construed and shall have the
same force and effect as if expressly set out in the body of this
Deed.
|
|
2.
|
TAXATION
INDEMNITY
|
|
2.1
|
Without
prejudice to any of the foregoing provisions of this Deed and subject as
hereinafter provided, the Covenantor agrees, and undertakes, to indemnify
and at all times keep each of the Covenantees fully indemnified on demand
from and against:
|
(a)
the
amount of any and all Taxation falling on any of Exceed and the Windrace Group
Companies resulting from or by reference to any income, profits, gains,
transactions, events, matters or things earned, accrued, received, entered into
or occurring up to the date hereof, whether alone or in conjunction with any
other circumstances whenever occurring and whether or not such Taxation is
chargeable against or attributable to any other person, firm or company
including any and all Taxation resulting from the receipt by any of Exceed or
the Windrace Group Companies of any amounts paid by the Covenantor under this
Deed;
(b)
all
actions, claims, losses, damages, costs (including all legal costs), expenses or
other liabilities which any of Exceed or the Windrace Group Companies may made,
suffer or incur in respect of or arising from or on the basis of or in
connection with any Taxation which is covered by the indemnities given under
Clause 2.1(a), including without limitation to the generality of the
foregoing:
(i)
the
investigation, assessment or the contesting of any Taxation
Claim;
(ii)
the
settlement of any claim under this Deed;
(iii)
any legal
proceedings in which any of Exceed or the Windrace Group Companies claims under
or in respect of this Deed and in which judgment is given for any of Exceed or
the Windrace Group Companies; or
5
(iv)
the
enforcement of any such settlement or judgment referred to in (ii) and (iii)
above.
|
2.2
|
Notwithstanding
Clause 2.1 of this Deed, the Covenantor shall be under no liability under
this Deed in respect of Taxation:
|
(a)
to the
extent that it is payable by Exceed or any Windrace Group Company chargeable in
consequence of any event occurring or income, profits or gains earned, accrued
or received or alleged to have been earned, accrued or received in after the
date hereof and which is not interest or penalty, surcharge or fine in
connection with Taxation in relation to an event which took place on or prior to
the date hereof;
(b)
to the
extent that provision has been made for such Taxation in the
Accounts;
(c)
to
the extent that it would not have arisen but for any act or omission by Exceed
or any of the Windrace Group Companies voluntarily effected after the date
hereof (other than pursuant to a legally binding commitment created on or before
the date hereof) without the prior written consent or agreement of the
Covenantor, otherwise than in the ordinary course of business of Exceed or the
relevant Windrace Group Company; and
(d)
to the
extent that such Taxation or Taxation Claim arises or is incurred as a result of
the imposition of Taxation as a consequence of any retrospective change in the
law or the interpretation or practice thereof by the relevant Taxation Authority
or any other relevant authority in the relevant jurisdiction coming into force
after the date hereof or to the extent such Taxation Claim arises or is
increased by an increase in rates of Taxation after the date hereof with
retrospective effect.
2.3
The
maximum aggregate liability of the Covenantor under this Deed and for breach of
the Principal Agreement shall be US$3,000,000 in aggregate, together with any
reasonable costs and expenses properly incurred by the Covenantees in seeking
compensation and damages from the Covenantor pursuant to this Deed and the
Principal Agreement.
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3.
|
NO DOUBLE
CLAIM
|
|
3.1
|
No
claim under this Deed shall be made by more than one of the Covenantees in
respect of the same Taxation.
|
|
3.2
|
Each
of the Covenantees shall not be entitled to recover more than once in
respect of any one matter giving rise to a claim whether under this Deed
or the Principal Agreement or both.
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6
|
4.
|
TAXATION CLAIM
|
|
4.1
|
In
the event of any Taxation Claim arising, the Covenantees shall by way of
covenant but not as a condition precedent to the liability of the
Covenantor hereunder:
|
(a)
give or
procure that such notice together with the relevant information will as soon as
reasonably practicable be given to the Covenantor in the manner provided in
Clause 10; and
(b)
at the
written request of the Covenantor, take such action or procure that such action
be taken as the Covenantor may reasonably request to cause the Taxation or
Taxation Claim to be withdrawn, or to dispute, resist, appeal against,
compromise or defend the Taxation Claim and any determination in respect thereof
but subject to it being indemnified and secured to its reasonable satisfaction
by the Covenantor from and against any or all losses, liabilities (including
additional Taxation), penalties, interests, costs, damages and expenses which
may be thereby incurred.
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4.2
|
Without
the prior approval of the Covenantees, the Covenantor shall not make any
settlement of any Taxation Claim nor agree to any matter in the course of
disputing any Taxation Claim likely to affect the future taxation
liability of Exceed or any of the Windrace Group
Companies.
|
|
4.3
|
Without
the prior approval of the Covenantor, a Covenantee shall not make any
settlement of any Taxation Claim nor agree to any matter in the course of
disputing any Taxation Claim likely to affect the amount payable by the
Covenantor under this Deed.
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|
5.
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PAYMENTS
|
|
5.1
|
If
after the Covenantor has made any payment pursuant to Clause 2, any of
Exceed or the Windrace Group Companies shall receive a refund of all or
part of the relevant Taxation, Exceed or such Windrace Group Company shall
repay or procure the repayment by Exceed or such other Windrace Group
Company, as the case may be, to the Covenantor a sum corresponding to the
amount of such refund less:-
|
(a)
any and
all reasonable expenses, costs and charges payable or properly incurred by
Exceed or the Windrace Group Company in recovering such refund;
and
(b)
the
amount of any additional Taxation which may be suffered by any of Exceed or the
Windrace Group Companies in consequence of such refund.
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5.2
|
Any
payments due by the Covenantor pursuant to the foregoing provisions of
this Deed shall be increased to include such interest and penalty on
unpaid Taxation as Exceed or the Windrace Group Companies or any of them
shall have been required to pay pursuant to the applicable
Regulations.
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7
|
5.3
|
In
respect of any payments payable by or due from the Covenantor to any of
Exceed or the Windrace Group Companies under this Deed, the Covenantor may
make such payment to the Covenantees instead of to Exceed or such Windrace
Group Companies, and payments so made by the Covenantees shall constitute
a good and absolute release and discharge of such payment obligations of
the Covenantor.
|
|
5.4
|
All
payments made by or due from the Covenantor under this Deed shall be made
gross, free and clear of any rights of counterclaim or set-off (save with
the agreement of any Covenantor and any Convenantee) and without any
deductions or withholdings of any
nature.
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|
5.5
|
No
payment shall be treated as made by the Covenantor under this Deed until
and to the extent that cleared funds are available in respect of it to
Exceed or the Windrace Group
Company.
|
|
5.6
|
For
the avoidance of doubt, the Covenantor shall remain liable in accordance
with the terms of this Deed notwithstanding that any Taxation giving rise
to a liability to make a payment under Clause 2 of this Deed is or has
been discharged or suffered by Exceed or the relevant Windrace Group
Company, whether before or after the date hereof and whether by payment or
by loss or utilisation of any relief or right to repayment of
Taxation.
|
|
6.
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BINDING
EFFECT
|
The indemnities, agreements and
undertakings herein contained shall bind the successors of the Covenantor and
shall enure for the benefit of each party's successors and permitted
assigns.
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7.
|
FURTHER
UNDERTAKING
|
The Covenantor undertakes with the
Covenantees that it will on demand do all such acts and things and execute all
such deeds and documents as may be necessary to carry into effect or to give
legal effect to the provisions of this Deed and the indemnities hereby
contemplated.
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8.
|
ASSIGNMENT
|
|
|
None
of the Covenantees may assign the whole or any part of the benefit of this
Deed without the prior written consent of the Covenantor such consent not
to be unreasonably withheld.
|
|
9.
|
SEVERABILITY
|
Any
provision of this Deed prohibited by or which is unlawful or unenforceable under
any applicable law shall, to the extent required by such law, be severed from
this Deed and rendered ineffective so far as is possible without modifying the
remaining provisions of this Deed.
8
|
10.
|
NOTICES
|
Any
notice required to be given under this Deed shall be in writing and shall be
delivered personally or sent by facsimile or by registered or recorded delivery
post, postage prepaid to the respective party at the address set out herein or
such other address as may have been last notified in writing by or on behalf of
such party to the other parties hereto with specific reference to this
Deed. Any notice, demand or other communications so addressed to the
relevant party shall be deemed to be served at the time when the same is handed
to or left at the address of the party to be served and if served by facsimile
shall be deemed received on the date of despatch and if served by prepared
registered post shall be deemed received on the third Business Days after
despatch.
|
To
the Covenantor:
|
|
|
Name:
|
Shuipan
Lin
|
|
Address:
|
▇▇.
▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ Village, Chendai Town, Jinjiang City,
Fujian Province, the PRC
|
|
Telephone:
|
▇▇-▇▇▇-▇▇▇▇-▇▇▇▇
|
|
Facsimile:
|
▇▇-▇▇▇-▇▇▇▇-▇▇▇▇
|
|
To
the Covenantees:
|
|
|
Name:
|
Wisetech
and Windtech
|
|
c/o
New Horizon Capital
|
|
|
Address:
|
▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
100005
|
|
Attention:
|
▇▇▇▇▇▇▇▇
▇▇ and ▇▇▇▇▇ ▇▇▇▇
|
|
Telephone:
|
▇▇-▇▇-▇▇▇▇▇▇▇▇
|
|
Facsimile:
|
▇▇-▇▇-▇▇▇▇▇▇▇▇
|
|
with
a copy to
|
|
|
Deacons
|
|
|
▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
|
|
|
▇▇
▇▇▇▇▇▇ ▇▇▇▇
|
|
|
▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇
|
|
|
Telephone:
▇▇▇▇ ▇▇▇▇
|
|
|
Facsimile:
2810 0431
|
|
|
Attn:
▇▇▇▇▇▇ ▇▇▇▇ / ▇▇▇▇▇▇ ▇▇▇
|
|
|
Matter
number: 156645
|
9
|
11.
|
GENERAL
PROVISION
|
|
11.1
|
This
Deed constitutes the entire agreement between the parties in relation to
the subject of this Deed and supersedes any previous agreement between or
representation by any party to any other in relation to the subject
matter.
|
|
11.2
|
No
variation of any of the terms of this Deed will be effective unless it is
made or confirmed in writing and signed by or on behalf of each of the
parties.
|
|
11.3
|
No
relaxation, forbearance, indulgence or delay of any party in exercising
any right under this Deed shall affect the ability of that party
subsequently to exercise such right or to pursue any remedy, nor shall
such failure or delay constitute a waiver of any other
right.
|
|
12.
|
COUNTERPARTS
|
This Deed
may be executed in any number of counterparts and by the different parties
hereto on separate counterparts, each of which when so executed and delivered
shall be an original, but all of which shall together constitute one and the
same instrument.
|
13.
|
LAW AND
JURISDICTION
|
|
13.1
|
This
Deed shall be governed by and construed in accordance with the laws of
Hong Kong and the parties hereto hereby irrevocably submit to the
non-exclusive jurisdiction of the Hong Kong
courts.
|
|
13.2
|
Each
party hereby irrevocably submits to the non-exclusive jurisdiction of the
courts of Hong Kong in respect of all matters arising in connection with
this Agreement. The submission to the jurisdiction of the courts of Hong
Kong shall not (and shall not be construed so as to) limit the right of
the Covenantees to take proceedings against the Covenantor (or any of
them) in any other court of competent jurisdiction, nor shall the taking
of proceedings by the Covenantees in any one or more jurisdictions
preclude the Covenantees taking proceedings in any other jurisdiction
(whether concurrently or not) if and to the extent permitted by applicable
law.
|
|
13.3
|
The
Covenantor hereby irrevocably appoints ▇▇▇▇▇ Day of 29/F., Edinburgh
Tower, the Landmark, ▇▇ ▇▇▇▇▇’▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ as
its agent to accept service of legal process on its
behalf. Service of legal process upon the process agent of the
Covenantor shall be deemed completed whether or not such legal process is
forwarded to or received by the Covenantor. The Covenantor hereby
irrevocably agrees that if its process agent ceases to have an address in
Hong Kong or ceases to act as its process agent it shall appoint a new
process agent in Hong Kong for the same purposes and will deliver to the
other parties within fourteen (14) days a copy of a written acceptance of
appointment by the process agent. If at any time the Covenantor
appoints a new process agent it shall give written notice to the other
parties of such appointment and until such time service on the process
agent last known to the other parties shall be deemed to be effective
service.
|
10
|
13.4
|
Each
of the Covenantees hereby irrevocably appoints Consec Services
Limited of
▇/▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ as its
agent to accept service of legal process on its behalf. Service
of legal process upon the process agent of the Covenantees shall be deemed
completed whether or not such legal process is forwarded to or received by
any of the Covenantees. Each of the Covenantees hereby irrevocably agrees
that if its process agent ceases to have an address in Hong Kong or ceases
to act as its process agent it shall appoint a new process agent in Hong
Kong for the same purposes and will deliver to the other parties within
fourteen (14) days a copy of a written acceptance of appointment by the
process agent. If at any time any of the Covenantees appoints a
new process agent it shall give written notice to the other parties of
such appointment and until such time service on the process agent last
known to the other parties shall be deemed to be effective
service.
|
AS WITNESS whereof
this Deed has been duly executed on the day and year first above
written.
|
SIGNED, SEALED and DELIVERED by
|
)
|
|
SHUIPAN
LIN
|
)
|
|
in
the presence of:-
|
)
|
|
SEALED
with the SEAL of
|
)
|
|
WISETECH
HOLDINGS LIMITED
|
)
|
|
)
|
|
|
and
SIGNED by
|
)
|
|
)
|
|
|
in
the presence of:-
|
)
|
|
)
|
|
|
WINDTECH
HOLDNGS LIMITED
|
)
|
|
)
|
|
|
and
SIGNED by
|
)
|
|
)
|
|
|
in
the presence of :-
|
)
|
11
EXHIBIT
ACCOUNTS
12