THIS AGREEMENT is dated the 24th day of May 2005
AMONG:
(1) ▇▇▇▇ ▇▇▇▇ FAI of ▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.▇▇ Taikoo Shing
Road, Hong Kong (the "Vendor");
(2) KEY CHANCE INTERNATIONAL LIMITED, a company incorporated in the British
Virgin Island and having its registered office at P.O. Box 957, Offshore
Incorporation Centre, Road Town, Tortola, British Virgin Island (the
"Purchaser"); and
(3) THE ART BOUTIQUE, INC., a company incorporated in the United States of
America and having its correspondence address at Rooms ▇▇▇▇-▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇ Seng Building, ▇▇.▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ (the "Parent
Company").
WHEREAS:
(A) Micronesian Resort Inc. (the "Company") was incorporated under the laws of
the British Virgin Islands as a private limited liability company. Further
information concerning the Company is set out in Schedule 1.
(B) As at the date hereof, the Company is the lessee of the Property subject to
and under the terms as contained in and under the Lease Agreement.
(C) The Purchaser is a wholly-owned subsidiary company of the Parent Company,
which is listed on the Over-The-Counter Bulletin Board operated by the
National Association of Securities Dealers in the US under stock code
"ARTB".
(D) The Vendor, the Parent Company and the Purchaser are entering into this
Agreement for the sale and purchase of the Sale Shares subject to and upon
the terms and conditions of this Agreement.
NOW IT IS HEREBY AGREED as follows:
1. INTERPRETATION
1.1 In this Agreement (including the Recitals, Schedules and Exhibits),
unless the context otherwise requires, the following words and
expressions shall have the following meanings ascribed to each of
them below:
"Accounts" means the audited
balance sheets of the
Company as at the Last
Accounts Date and the
audited profit and loss
accounts of the Company
for the period
commencing from 22nd
February 2005 to the
Last Accounts Date;
"Business Day" means a day (other
than a Saturday) on
which banks in the state
of Colorado in the US
are open for business
throughout their normal
business hours;
"Company" means Micronesian Resort
Inc., a company
incorporated under the
laws of the British
Virgin Islands;
"Completion" means completion of
the sale and purchase
of the Sale Shares in
accordance with the
terms and conditions of
this Agreement;
"Completion Date" means the date
falling on the third
Business Day after all
the conditions set out
in Clause 3.2 have been
fulfilled or waived,
whichever is the
earlier;
"Consideration Share" means a share of
the common stock of the
Parent Company, forming
part of the Purchase
Consideration Shares,
and reference to
"Consideration Shares"
shall be construed
accordingly;
"Encumbrance" means any mortgage,
charge, pledge, lien,
(otherwise than arising
by statute or operation
of law), equities,
hypothecation or other
encumbrance, priority
or security interest,
preemptive right
deferred purchase, title
retention,leasing, sale-
and-repurchase or sale-
and-leaseback
arrangement whatsoever
over or in any property,
assets or rights of
whatsoever nature and
includes any agreement
for any of the same
and reference to
"Encumbrances" shall be
construed accordingly;
"Family Trust" means the "Roman
Tmetuchl Family Trust",
a trust created by the
Head Lessee by way of a
Declaration of Trust
dated 28th May 1999;
"Head Lease Agreement" means a lease agreement
dated 1st May 1987
entered into between
the Government of the
State of Airai in
the Republic of Palau,
by and through the
representatives of the
Land Authority named
under the said lease
agreement as lessor of
the one part and the
Head Lessee as lessee
of the other part for
the lease of the
Property by the Land
Authority to the Head
Lessee;
"Head Lessee" means ▇▇.▇▇▇▇▇ Tmetuchl,
the lessee under the
Head Lease Agreement;
"Land Authority" means the Airai State
Land Authority in the
State of Airai in the
Republic of Palau;
"Last Accounts Date" means 30th April 2005;
"Lease Agreement" means the
lease agreement dated
25th April 2005 entered
into between the Trustee
and the Company pursuant
to which the Trustee has
leased unto the Company
the Property subject to
and under the terms and
conditions of the said
lease agreement;
"Property" means the pieces or
parcels of ground or
land situated in a
location being adjacent
to the Koror Babelthuap
Bridge, southwest of
Ngerebeselch in Airai
State in the Republic of
Palau, the location of
which is identified in a
plan annexed to the
Lease Agreement as
Schedule B;
"Purchase Consideration Shares" has the meaning ascribed
thereto in Clause 4.1;
"Purchaser's Solicitors" means Messrs. ▇▇▇▇▇▇▇
C.C. Man & Co., the
firm of solicitors
acting for both the
Purchaser and the
Parent Company in this
Agreement;
"Sale Shares" means 80 Shares
registered in the name
of and beneficially
owned by the Vendor
representing 80% of the
total issued share
capital of the Company;
"Securities Act" means US Securities Act
of 1933, as amended;
"Shares" means shares of US$1.00
each in the share
capital of the Company
and reference to
"Share" shall be
construed accordingly;
"Taxation" means all forms of
taxation including
overseas taxation and
all forms of profits
tax, interest tax,
estate duty and stamp
duty and all levies,
imposts, duties,
charges, fees,
deductions and
withholdings whatsoever
charged or imposed by
any statutory,
governmental state,
provincial, local
government or municipal
authority whatsoever
and the expression
"Tax" shall be construed
accordingly;
"this Agreement" means this share
exchange agreement in
respect of the Sale
Shares, as amended from
time to time;
"Transfer Restrictions" means
transfer restrictions in
relation to the transfer
of Purchase
Consideration Shares or
any part thereof arising
under the Securities
Act;
"Trustee" means Madam Perpetua
Tmetuchl who has been
appointed as the sole
trustee of and under the
Family Trust since 1st
July 1999;
"US" means United States of
America;
"United States Dollars" or the means United States
dollars;
sign "US$"
"Vendor's Schedule of Exceptions"
means the schedule
containing exceptions to
the representations and
warranties of the Vendor
appearing in Schedule 2
Part IA; and
"Vendor's Warranties" means the
representations and
warranties set out in
Schedule 2 Part I and
any other
representations,
warranties and
undertakings made by or
on behalf of the Vendor
in this Agreement.
1.2 The headings of this Agreement are inserted for convenience only and
shall be ignored in construing this Agreement. Unless the context
otherwise requires, references in this Agreement to the singular
shall be deemed to include references to the plural and vice versa;
references to one gender shall include all genders and references to
any person shall include an individual, firm, body corporate or
unincorporated.
1.3 References in this Agreement to Clauses, Schedules and Exhibits are
references to clauses of and schedules and exhibits to, this
Agreement and references to sub-clauses and paragraphs are unless
otherwise stated, references to sub-clauses and paragraphs of the
Clause, sub-clause or, as appropriate, the Schedule or the Exhibit in
which the reference appears.
1.4 Reference to any ordinance, regulation or other statutory provision
or stock exchange rules in this Agreement includes reference to such
ordinance, regulation, provision or rule as modified, consolidated or
re-enacted from time to time.
1.5 The Schedules and the Recitals shall form part of this Agreement.
2. SALE AND PURCHASE OF THE SALE SHARES
2.1 Subject to and upon the terms and conditions of this Agreement, the
Vendor shall sell and the Purchaser shall purchase the Sale Shares
with effect from Completion free from all Encumbrances together with
all rights now or hereafter attaching thereto including but not
limited to all dividends paid, declared or made in respect thereof on
or after the Completion Date.
3. CONDITIONS
3.1 The Purchaser shall and shall procure that his agents shall forthwith
upon the signing of this Agreement conduct such review of the assets,
liabilities, operations and affairs of the Company as it may
reasonably consider appropriate and the Vendor shall provide and
procure the Company to provide such assistance as the Purchaser or
his agents may reasonably require in connection with such review so
as to enable the review to be completed on or before 12:00 noon on
the date falling 30 days from the date of this Agreement or such
later date as the Vendor and the Purchaser may agree under Clause
3.3.
3.2 Completion is conditional upon:
(1) the Purchaser being satisfied at its sole and absolute discretion
with the results of the due diligence review to be conducted
under Clause 3.1;
(2) the Vendor's Warranties (save and except the Vendor's Schedule of
Exceptions) remaining true and accurate in all respect;
(3) the Vendor's Schedule of Exceptions having been delivered by the
Vendor in a form reasonably satisfactory to the Purchaser as
contemplated by Clause 6.10;
(4) the Accounts having been delivered by the Vendor to the
Purchaser;
(5) the Vendor having delivered to the Purchaser a consolidated
audited financial statements for the Company prepared in
accordance with US Generally Accepted Accounting Principles for
the period from the date of its incorporation until the Last
Accounts Date and such financial statements shall be in a form
suitable for filing with the U.S. Securities and Exchange
Commission as required by Form 8-K promulgated under the
Securities Act;
(6) the parties to this Agreement having received all authorizations,
consents, and approvals of governmental authorities and third
parties that are necessary in order to complete the transactions
contemplated hereby;
(7) the Parent Company and the Vendor having entered into a
registration rights agreement in form and substance reasonably
satisfactory to the parties to this Agreement pursuant to which
the Parent Company shall grant to the Vendor certain rights with
respect to the registration of the Purchase Consideration Shares;
and
(8) there being sufficient authorized capital stock of the Parent
Company for the purpose of conducting the issue of the Purchase
Consideration Shares on Completion.
3.3 If any of the conditions set out in Clause 3.2 has not been satisfied
on or before 12:00 noon on the date falling 30 days from the date of
this Agreement or such later date as the Purchaser and the Vendor may
jointly agree, this Agreement shall cease and terminate (save and
except Clause 10 which shall continue to have full force and effect)
and none of the parties to this Agreement shall have any obligations
and liabilities hereunder against or towards one another save for any
antecedent breaches of the terms hereof. Subject to the immediately
preceding sentence in this Clause 3.3, none of the parties hereto
shall take any action against any of the other parties hereto to
claim for damages or to enforce specific performance or any other
rights, remedies or relief following the cessation and termination of
this Agreement in accordance with this Clause 3.3.
4. CONSIDERATION
4.1 The aggregate consideration of the sale and purchase of the Sale
Shares shall be US$25.00 together with other valuable considerations,
which shall be satisfied by the issue of 25,000,000 Consideration
Shares ("Purchase Consideration Shares").
4.2 The Purchase Consideration Shares shall be issued by the Parent
Company to the Vendor on Completion in the manner as provided in
Clause 5.
5. COMPLETION
5.1 Upon compliance with or fulfillment or waiver of all the conditions
set out in Clause 3.2, completion of the sale and purchase of the
Sale Shares shall take place at the office of the Purchaser on
Completion Date at or before 3:00 p.m. or at such other place and
time as both the Vendor and the Purchaser may jointly agree when all
the acts and requirements set out in this Clause 5 shall be complied
with.
5.2 The Vendor shall deliver or procure the delivery to the Purchaser or
to its order of all the following:
(1) instruments of transfer in respect of the transfer of the Sale Shares
duly executed by the registered holder thereof in favour of the
Purchaser or its nominee(s) as the Purchaser may direct, and such
other documents as may be required to give a good and effective
transfer of title to the Sale Shares to the Purchaser or such
nominee(s) and to enable the Purchaser or such nominee(s) to become
the registered and beneficial holder thereof free from all
Encumbrances;
(2) (i) all statutory records and minute books (which shall be written up
to date as at Completion) and other statutory records of the Company;
(ii) the common seal and all rubber stamps, cheque books, cheque stubs
and bank statements, receipt books, all current insurance
policies, books and accounts and title deeds and evidence of
ownership to all assets and all current contracts and all other
accounting records of the Company; and
(iii)all correspondence and other documents belonging to the Company
(including its constitutional documents) or written authorities
in favour of the Purchaser for the collection of such documents;
(3) where directed by the Purchaser, the written resignation of any or all
director(s) and company secretary of the Company together with a
written acknowledgement under seal from each of them respectively in
such form as the Purchaser shall require that he has no claims against
the Company whether by way of compensation, remuneration, severance
payments, expenses, damages or otherwise;
(4) copy, certified as true and complete by a director of the Company, of
resolution of the board of directors of the Company approving the
matters referred to in Clause 5.3; and
(5) if requested by the Purchaser, the original share certificate for the
Sale Shares registered in the name of the Vendor.
5.3 The Vendor shall procure a meeting of the board of directors of the
Company at which such matters shall be dealt with and resolved upon
as the Purchaser shall require for the purposes of giving effect to
the provisions of this Agreement including without limitation, (1)
the acceptance of the resignation of the director(s) of the Company
as provided under Clause 5.2(3) above; (2) the appointment of such
person(s) nominated by the Purchaser as director(s) and secretary of
the Company with effect from Completion Date; and (3) the amendment
of the signatories and bank mandates for all accounts maintained by
the Company with banks and financial institutions in such manner as
the Purchaser may require.
5.4 Against compliance and fulfillment of all acts and the requirements
set out in Clauses 5.2 and 5.3, the Parent Company shall and the
Purchaser shall procure that the Parent Company shall forthwith:
(1) deliver to the Vendor or its nominee(s) as the Vendor may direct
the original share certificate for Purchase Consideration Shares
free from all Encumbrances other than the Transfer Restrictions
with the name of the Vendor or such nominee(s) registered as the
beneficial holder(s) thereof, and such other documents as may be
required to give a good and effective transfer of title to
Purchase Consideration Shares to the Vendor or such nominee(s)
and to enable the Vendor or such nominee(s) to become the
registered and beneficial holder thereof free of all Encumbrances
other than the Transfer Restrictions;
(2) procure a meeting of the board of directors of the Parent Company
at which such matters shall be dealt with and resolved upon as
the Vendor shall require for the purposes of giving effect to the
provisions of this Agreement including without limitation, if
requested by the Vendor, (i) the appointment of such persons as
may be nominated by the Vendor as directors and/or officers of
the Parent Company with effect from Completion Date; and (ii) the
amendment of the signatories and bank mandates for all accounts
maintained by the Parent Company with banks and financial
institutions in such manner as the Vendor may require;
(3) deliver to the Vendor a copy, certified true and complete by an
authorized officer of the Parent Company, of resolutions of the
board of directors of the Parent Company approving this Agreement
and all other transactions contemplated under this Agreement.
5.5 Against compliance and fulfillment of all acts and the requirements set out
in Clauses 5.2 and 5.3, the Purchaser shall forthwith:
(1) pay a sum of US$25.00 to the Vendor as part of the purchase
consideration for the purchase of the Sale Shares;
(2) produce to the Vendor instrument of transfer in respect of the
Sale Shares duly executed by the Purchaser or its nominee(s); and
(3) deliver to the Vendor a copy, certified true and complete by an
authorized officer of the Purchaser, of resolutions of the board
of directors of the Purchaser approving this Agreement and all
other transactions contemplated under this Agreement.
5.6 Upon due and complete performance by the Parent Company and the
Purchaser of their obligations under Clause 5.4(1) and Clause 5.5(1)
respectively, the Purchaser shall be deemed to have duly fulfilled
their payment obligations under Clause 4.
5.7 The parties hereto acknowledge that the original share certificate as
referred to in Clause 5.4(1) shall contain one or more legends with
reference being made to the Securities Act (as well as any other
legends required by the laws of any applicable jurisdiction) whereby
such reference shall contain wordings which are substantially similar
to the ones appearing on such original share certificate.
6. VENDOR'S WARRANTIES
6.1 The Vendor warrants to the Purchaser that the Vendor's Warranties set
out in Schedule 2 Part I are true and accurate in all material
respects as at the date hereof and will continue to be so up to and
including the time of Completion and the Vendor hereby further
acknowledges that the Purchaser in entering into this Agreement is
relying on the Vendor's Warranties. For the avoidance of doubt, the
Vendor makes no warranty in respect of all matters, documents and/or
information disclosed to the Purchaser or its agents as exceptions
from the Vendor's Warranties as set out in the Vendor's Schedule of
Exceptions and the Purchaser hereby confirms and agrees that it has
no right to make any claim or demand in respect of all such matters,
documents and/or information.
6.2 Each of the Vendor's Warranties is without prejudice to any other
warranty or undertaking and, except where expressly stated, no clause
contained in this Agreement governs or limits the extent or
application of any other clause.
6.3 The rights and remedies of the Purchaser in respect of any breach of
the Vendor's Warranties shall not be affected by completion of the
sale and purchase of the Sale Shares, by any investigation made by or
on behalf of the Purchaser into the affairs of the Company, by any
failure to exercise or delay in exercising any right or remedy or by
any other event or matter whatsoever, except a specific and duly
authorized written waiver or release.
6.4 The Vendor hereby undertakes to indemnify and keep indemnified the
Purchaser against any losses, liabilities, damages, costs and
expenses suffered by the Purchaser as a result of or in connection
with any breach of any of the Vendor's Warranties provided that the
indemnity contained in this Clause 6.4 shall be without prejudice to
any other rights and remedies of the Purchaser in relation to any
such breach of the Vendor's Warranties and all such other rights and
remedies are hereby expressly reserved to the Purchaser.
6.5 (1) Any claim by the Purchaser in connection with the Vendor's Warranties
("Vendor's Warranty Claim") shall not be made unless the amount of the
liabilities in respect of such Vendor's Warranty Claim exceed in aggregate
the sum of US$100,000 but if the liabilities exceed that sum the Vendor
shall (subject to other provisions hereof) be liable for the whole of such
liability and not merely the excess.
(2) No liability shall be attached to the Vendor in respect of any single
Vendor's Warranty Claim unless the amount of such Vendor's Warranty
Claim shall exceed US$10,000.
6.6 The Purchaser shall not be entitled to make any Vendor's Warranty Claim
(1) to the extent that provision for the matter or liability which would
otherwise give rise to the claim in question has been made in the
Accounts or has otherwise specifically been taken account of in the
Accounts;
(2) if the claim would not have arisen but for a change in legislation
made after the Completion Date; and
(3) to the extent that the relevant matters, documents or information have
been disclosed to the Purchaser or its agent in the Vendor's Schedule
of Exceptions.
6.7 Where any of the Vendor's Warranties are qualified as being "to the
best of the information, knowledge and belief of the Vendor" or "so
far as the Vendor is aware" or by any other similar expression, such
Vendor's Warranty is deemed to have been made or given to the best of
knowledge, information and belief of the Vendor after making due and
careful enquiry.
6.8 The maximum aggregate liability of the Vendor in respect of all
Vendor's Warranty Claims shall not exceed the purchase consideration
as set out in Clause 4.1. The Vendor's Warranties shall survive
Completion but no Vendor's Warranty Claims may be brought against the
Vendor in respect of any breach of Vendor's Warranties unless written
notice of such Vendor's Warranty Claim specifying the particulars of
such claim has been received by the Vendor on or before the
expiration of eighteen (18) months from the Completion Date.
6.9 The Vendor shall not be liable for breach of any Vendor's Warranties
by reason of any act done by or omission or default of the Purchaser
or the Parent Company occurring after the execution of this
Agreement.
6.10 The Purchaser acknowledges that as at the date of this Agreement the
Vendor has not yet delivered the Vendor's Schedule of Exceptions to
the Purchaser or its agent as contemplated by this Clause 6. The
Vendor shall deliver the Vendor's Schedule of Exceptions to the
Purchaser at least 10 days prior to Completion. The Purchaser shall
have the opportunity during such 10 day period to review and comment
on the Vendor's Schedule of Exceptions and the parties to this
Agreement shall use their best efforts to resolve any concerns or
comments that the Purchaser may have with the Vendor's Schedule of
Exceptions.
7. PURCHASER'S WARRANTIES
7.1 The Purchaser represents and warrants to the Vendor that:-
(1) Both the Purchaser and the Parent Company are corporations duly
organized, validly existing, and in good standing under the
jurisdictions of their respective incorporation. Both the
Purchaser and the Parent Company are duly authorized to conduct
business and are in good standing under the laws each
jurisdiction where such qualification is required. The Parent
Company and the Purchaser each have full corporate power and
authority and all licenses, permits, and authorizations
necessary to carry on the businesses in which it is engaged and
to own and use the properties owned and used by it. Other than
the Purchaser, the Parent Company has no subsidiaries and does
not control, directly or indirectly, or have any direct or
indirect equity participation in any entity.
(2) The entire authorized capital stock of the Parent Company
consists of 50,000,000 shares of common stock, of which
12,471,900 common shares are issued and outstanding as at the
date of this Agreement. According to a Form 8-K filed with the
Securities and Exchange Commission on 18th May 2005, the Parent
Company has engaged Top Harmony Holdings Limited to act as the
Parent Company's placement agent who has agreed to seek to
complete, on a best effect basis, a subscription or subscriptions
by investors of up to 10,000,000 new shares of the Parent
Company's common stock in aggregate.
(3) All of the issued and outstanding common shares of the Parent
have been duly authorized, are validly issued, fully paid, and
nonassessable and have been issued in compliance with applicable
laws, including, without limitation, applicable federal and state
securities laws.
(4) Except as disclosed in the reports, statements and other
documents filed by the Parent Company with the US Securities and
Exchange Commission, as of the date of this Agreement, so far as
the Parent Company is aware of, there is no legal,
administrative, investigatory, regulatory or similar action,
suit, claim or proceeding which is pending or, so far as the
Parent Company and the Purchaser are aware, threatened against
the Parent Company or the Purchaser which, if determined
adversely to the Parent Company and/or the Purchaser, could have,
individually or in the aggregate, a material adverse effect on
the business, assets, or prospects of the Parent Company or the
Purchaser which in any manner challenges or seeks to prevent,
enjoin, alter or delay the transactions contemplated by this
Agreement.
8. GUARANTEE BY PARENT COMPANY
8.1 In consideration of the Vendor entering into this Agreement, the Parent
Company hereby unconditionally and irrevocably undertakes to the Vendor
to procure the due and punctual performance by the Purchaser of all the
obligations expressed to be imposed on or assumed by it under this
Agreement and undertakes to indemnify and keep effectively indemnified
the Vendor (if necessary by the payment of cash on first demand) against
all liabilities, losses, damages, costs and expenses stipulated under
this Agreement or otherwise which the Vendor may suffer or incur in
connection with any default or delay on the part of the Purchaser in the
performance of any such obligations. For the avoidance of doubt, the
Parent Company shall only be liable up to the same extent and to the
maximum amount by or under which the Purchaser will be liable under this
Agreement and that the Parent Company's liability under this Agreement
shall not exceed such extent or amount.
8.2 As a separate and independent stipulation it is agreed by the Parent
Company that any obligations and undertakings under this Clause 8 which
may not be enforceable or becomes unenforceable against the Parent
Company on the footing of a guarantee, whether by reason of any legal
limitation, disability or incapacity on or of the Purchaser or any other
fact or circumstances or other event and whether or not known to the
Vendor shall nevertheless be enforceable against the Parent Company as
sole or principal obligor in respect thereof.
8.3 Subject to Clause 8.5, the Parent Company shall not be discharged or
released from its obligation under this Clause 8 by any arrangement made
between the other parties or by any alteration in the obligations on the
part of either the Purchaser or the Parent Company under this Agreement
or by any time or other indulgence granted by the Vendor.
8.4 The obligations and liabilities of the Parent Company under this
Agreement are of continuing nature and shall not be discharged or
affected by the dissolution, amalgamation, reconstruction or
reorganization of or the change in constitution or control of any of the
parties to this Agreement.
8.5 Without prejudice to the other provisions of this Agreement, the
obligations and undertakings expressed to be assumed by or imposed on
the Parent Company under this Agreement shall remain in force so long as
the Purchaser shall have any liability or obligation to the Vendor under
this Agreement and until all such liabilities and obligations have been
discharged in full.
8.6 The Parent Company hereby waives any right to require a proceeding first
against the Purchaser or any other person.
9. FURTHER ASSURANCE
9.1 The Vendor shall execute, do and perform or procure to be executed,
done and performed by other necessary parties all such further acts,
agreements, assignments, assurances, deeds and documents as the
Purchaser may require effectively to vest the registered and
beneficial ownership of the Sale Shares in the Purchaser free from
all Encumbrances and with all rights now and hereafter attaching
thereto.
9.2 Both the Parent Company and the Purchaser jointly and severally
covenant that each of them shall execute and perform such further
documents and acts as the Vendor may reasonably require effectively
to vest the beneficial and registered ownership of the Purchase
Consideration Shares in the Vendor or its nominee(s), all of which
free from all Encumbrances (other than the Transfer Restrictions) and
with all rights now and hereafter attaching thereto.
10. CONFIDENTIALITY AND ANNOUNCEMENTS
10.1 The Purchaser will, and will cause its associates and advisers to,
treat in confidence all non-public information regarding the Company
contained in written documents and materials ("Confidential
Material") which they may obtain from the Company and in the event
that Completion is not effected and this Agreement is rescinded or
otherwise terminated, will return such Confidential Material to the
Company. The Purchaser may disclose Confidential Information if, and
only to the extent required by applicable law or exchange or
automatic quotation system rules.
10.2 No public announcement or communication of any kind shall be made in
respect of the subject matter of this Agreement unless an
announcement is required pursuant to any applicable law or the
requirements of any recognised stock exchange or automatic quotation
system.
11. NOTICES
11.1 Each notice, demand or other communication given or made under this
Agreement shall be in writing and delivered or sent to the relevant
party at its address or fax number set out below (or such other address
or fax number as the addressee has by five (5) days' prior written
notice specified to the other parties):
To the Vendor : ▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.▇▇ Taikoo Shing
Road, Hong Kong Fax Number :
To the Purchaser : Rooms ▇▇▇▇-▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ Seng Building, ▇▇.▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ Fax Number : (▇▇▇) ▇▇▇▇-▇▇▇▇ Attention : ▇▇.
▇▇▇▇▇▇ ▇▇▇ (Reference No.: ST- 55138-08-05)
To the ParentRooms ▇▇▇▇-▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ Seng Building, Company : ▇▇.▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ Fax Number : (▇▇▇) ▇▇▇▇-▇▇▇▇ Attention :
▇▇. ▇▇▇▇▇▇ ▇▇▇ (Reference No.: ST- 55138-08-05)
11.2 Any notice, demand or other communication so addressed to the relevant
party shall be deemed to have been delivered (1) if given or made by
letter, when actually delivered to the relevant address; and (2) if
given or made by fax, when despatched with a report of the sender
confirming successful transmission.
12. SEVERABILITY
12.1 If any part of this Agreement becomes invalid, illegal or
unenforceable the parties hereto shall in such an event negotiate in
good faith in order to agree the terms of a mutually satisfactory
provision to be substituted for the invalid, illegal or unenforceable
provision which as nearly as possible validly gives effect to their
intentions as expressed herein.
12.2 If any provision of this Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect:
(1) the validity or enforceability in that jurisdiction of any other
provision of this Agreement; or
(2) the validity or enforceability in other jurisdictions of that or
any other provision of this Agreement.
13. CAPACITY
13.1 Each party to this Agreement hereby warrants to the other such party
that it has full capacity to enter into this Agreement and that such
entry does not in any way violate any provision of law, statute, rule,
regulation, judgement, writ, injunction, decree or order applicable to
it; that this Agreement does not conflict and will not result in the
breach or termination of any provision of, or constitute a default under
any mortgage, contract or other undertaking binding on it; and will not
result in the creation of any liability, charge or Encumbrance
whatsoever upon any of its properties or other assets save as
contemplated herein.
14. ENTIRE AGREEMENT
14.1 This Agreement constitutes the entire understanding between the parties
with respect to the subject matter hereof and supersedes all prior
agreements, negotiations (whether written or otherwise) and discussions
between the parties relating thereto.
15. AMENDMENTS
15.1 Save as expressly provided herein, no amendment or variation of this
Agreement shall be effective unless in writing and signed by the Vendor,
a duly authorised representative of each of the Parent Company and the
Purchaser.
16. WAIVER
16.1 The failure or delay of a party hereto to exercise or enforce any right,
power, privilege or remedy whatsoever, howsoever or otherwise conferred
upon it by this Agreement shall not be deemed to be a waiver of any such
right or operate so as to bar the exercise or enforcement thereof at any
time or times thereafter, nor shall any single or partial exercise of
any such right, power, privilege or remedy preclude any other or further
exercise thereof or the exercise of any other right or remedy. No waiver
shall be effective unless it is in writing. The rights and remedies
herein provided are cumulative and are not exclusive of any rights or
remedies provided by law.
17. LEGAL REPRESENTATION
17.1 The parties hereto acknowledge and agree that the Purchaser's Solicitors
only act for the Purchaser and the Parent Company in this Agreement. The
Vendor hereby acknowledges that the Purchaser's Solicitors have duly
advised the Vendor that the Purchaser's Solicitors are the solicitors
acting only for the Purchaser and the Parent Company in this Agreement,
although the Purchaser's Solicitors may witness the execution of this
Agreement by the Vendor. The Vendor further acknowledges and confirms
that prior to the signing of this Agreement by him, he has been duly
advised to seek independent legal advice and representation in
connection with this Agreement and to the transactions contemplated by
this Agreement.
18. COUNTERPARTS
18.1 This Agreement may be signed in any number of counterparts, all of which
taken together shall constitute one and the same Agreement. Any party
may enter into this Agreement by signing any such counterpart.
19. FACSIMILE EXECUTION
19.1 Facsimile execution and delivery of this Agreement is legal, valid and
binding for all purposes.
20. ASSIGNMENT
20.1 This Agreement shall not be capable of being assigned by any party without
the written consent of the other parties.
21. TIME OF THE ESSENCE
21.1 Time shall be of the essence of this Agreement, both as regards the
dates and periods specifically mentioned and as to any dates and periods
which may, by agreement in writing between the parties hereto, be
substituted therefor.
22. COSTS AND STAMP DUTY
22.1 Each party shall bear its own costs and expenses (including legal fees)
incurred in connection with the preparation, negotiation, execution and
performance of this Agreement and all documents incidental or relating
to Completion.
23. GOVERNING LAW
23.1 This Agreement shall be governed by and construed in accordance with the
laws of the State of Colorado in the US. Venue and jurisdiction for any
legal actions hereunder shall be District Court in and for Jefferson
County, Colorado.
IN WITNESS whereof the parties have executed this Agreement the day
and year first before written.
THE VENDOR
SIGNED by ▇▇▇▇ ▇▇▇▇ Fai )
(holder of Hong Kong Identity Card )
No.▇▇▇▇▇▇▇(▇)) in the presence of:- )
THE PURCHASER
SIGNED by )
)
for and on behalf of Key Chance )
International Limited in the presence )
of:- )
THE PARENT COMPANY
SEALED with the Common Seal of )
the Parent Company and SIGNED by )
)
for and on behalf of The Art Boutique, )
Inc. in the presence of:- )
SCHEDULE 1
THE COMPANY
Name : Micronesian Resort Inc.
Place of Incorporation : British Virgin Islands
Registered Office: : ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇
Incorporation Centre, Road Town,
Tortola, British Virgin Island
Director : ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ Fai
Authorised Share Capital : US$50,000.00
Issued Share Capital : US$100.00 divided into 100 shares
of US$1.00 each.
Shareholder : (1) ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
holding 10 shares of
US$1.00 representing 10%
of the issued share
capital of the
Company; and
(2) ▇▇. ▇▇▇▇ ▇▇▇▇ ▇▇▇ holding 90
shares of US$1.00
representing 90% of the
issued share capital of the
Company.
SCHEDULE 2
PART I
VENDOR'S WARRANTIES
REPRESENTATIONS AND WARRANTIES REGARDING THE VENDOR
1. Authorization of Transaction. The Vendor has full power and authority to
execute and deliver this Agreement and to perform its respective
obligations hereunder. This Agreement constitutes the valid and legally
binding obligation of each of the Vendor, enforceable in accordance with
its terms and conditions.
2. Noncontravention. Neither the execution and the delivery of this Agreement,
nor the consummation of the transactions contemplated hereby, will violate
any constitution, statute, regulation, rule, injunction, judgment, order,
decree, ruling, charge, or other restriction of any governmental authority
to which the Vendor is subject.
3. Brokers' Fees. The Vendor has no liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Purchaser or the
Parent Company could become liable or obligated.
4. Company Shares. The Vendor owns beneficially and of record the Sale Shares,
free and clear of any Encumbrances, Taxation, options, warrants, purchase
rights, contracts, commitments, equities, claims, and demands. The Sale
Shares represent [80]% of the issued share capital of the Company.
REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY
5. Organization and Corporate Matters. The Company has been duly incorporated
and is validly existing under the laws of the British Virgin Islands and is
not in receivership or liquidation, and that it has taken no steps to enter
into liquidation and no petition has been presented for winding up the
Company. The copies of the Memorandum and Articles of Association of the
Company which have been produced to the Purchaser are accurate and complete
in all material respects. So far as the Vendor is aware, the Company has
complied with its Memorandum and Articles of Association in all material
respects and none of the activities, agreements, commitments or rights of
the Company is ultra ▇▇▇▇▇ or unauthorised. The statutory books and minute
books of the Company has not received any application or request for
rectification of the register of members. So far as the Vendor is aware,
the business of the Company is not in contravention of any laws, rules and
regulations of the British Virgin Islands.
6. Capitalization. The total issued share capital of the Company consists of
100 ordinary shares. Such issued ordinary shares of the Company have been
duly authorized, are validly issued, fully paid and are held of record by
the Vendor. There are no outstanding or authorized options, warrants,
preemptive rights, purchase rights, subscription rights, conversion rights,
exchange rights, or other contracts or commitments that could require the
Company to issue shares in its authorized share capital. There are no
voting trusts, proxies, or other agreements or understandings with respect
to the voting rights in the Company.
7. Noncontravention. So far as the Vendor is aware, neither the execution and
the delivery of this Agreement and the documents referenced herein, nor the
consummation of the transactions contemplated hereby, will (i) violate any
constitution, statute, regulation, rule, injunction, judgment, order,
decree, ruling, charge, or other restriction of any governmental authority
to which the Company is subject or any provision of the Company's
constituent instruments or (ii) conflict with, result in a breach of,
constitute a default under, terminate, modify, or cancel, or require any
notice under any material agreement, permit or other arrangement to which
the Company is a party or by which it is bound or to which any of its
assets is subject (or result in the imposition of any Encumbrance upon any
of its assets). The Company will not need to give any notice to, make any
filing with, or obtain any authorization, consent, or approval of any
governmental authority in order for the parties to this Agreement to
consummate the transactions contemplated by this Agreement or continue the
effectiveness of permits relating to the business following Completion.
8. No Brokers' Fees. The Company has no liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
9. Title to Assets. The Company has good and marketable title to, or a valid
leasehold interest in, the properties and assets used by it (including the
Property), located on its premises, or shown on the Accounts or acquired
after the date thereof.
10. Subsidiaries. The Company does not control, directly or indirectly, or have
any direct or indirect equity participation in any other entity.
11. Accounts. The Accounts have been prepared using generally accepted
accounting principles of the Hong Kong Special Administrative Region based
upon the books and records of the Company applied on a consistent basis
throughout the periods covered thereby, present fairly the financial
condition of the Company as of such dates on a consolidated basis and the
results of operations of the Company for such periods, are consistent with
the books and records of the Company (which books and records are correct
and complete).
12. Events Subsequent to Last Accounts Date. Since the Last Accounts Date,
there has not been any adverse change in the business, financial condition,
operations, results of operations, or future prospects of the Company.
Without limiting the generality of the foregoing, since that date:
(i) the Company has not sold, leased, transferred, or assigned any of
its assets, tangible or intangible, other than for a fair
consideration in the ordinary course of business;
(ii) the Company has not entered into any agreement, contract, lease,
pricing arrangement or license (or series of related agreements,
contracts, leases, arrangements and licenses) either involving
more than US$50,000 or outside the ordinary course of business;
(iii) no party (including the Company) has accelerated, terminated,
modified, or cancelled any agreement, contract, lease, or license
(or series of related agreements, contracts, leases, and licenses)
involving more than US$50,000 to which the Company is a party or
by which it or its respective assets is bound;
(iv) the Company has not imposed or permitted any Encumbrance upon any
of its assets, tangible or intangible;
(v) the Company has not made any capital expenditure (or series of
related capital expenditures) either involving more than
US$50,000 or outside the ordinary course of business;
(vi) the Company has not made any capital investment in, any loan to,
or any acquisition of the securities or assets of, any other
entity (or series of related capital investments, loans, and
acquisitions) either involving more than US$50,000 or outside the
ordinary course of business;
(vii)the Company has not issued any note, bond, or other debt
security or created, incurred, assumed, or guaranteed any
indebtedness for borrowed money or capitalized lease obligation
either involving more than US$50,000 in the aggregate or outside
the ordinary course of business;
(viii) the Company has not delayed or postponed the payment of
accounts payable and other liabilities outside the ordinary
course of business;
(ix) the Company has not cancelled, compromised, waived, or released
any right or claim (or series of related rights and claims)
either involving more than US$50,000 or outside the ordinary
course of business;
(x) there has been no change made or authorized in the constituent
instruments of the Company;
(xi) the Company has not issued, sold, or otherwise disposed of any of
its capital stock, or granted any options, warrants, preemptive
or other rights to purchase or obtain (including upon conversion,
exchange, or exercise) any of its capital stock;
(xii)the Company has not declared, set aside, or paid any dividend or
made any distribution with respect to its capital stock (whether
in cash or in kind) or redeemed, purchased, or otherwise acquired
any of its capital stock;
(xiii) the Company has not experienced any damage, destruction, or
loss (whether or not covered by insurance) individually, in the
aggregate, more than US$50,000 to its property;
(xiv)the Company has not made any loan to, or entered into any other
transaction with, any of its directors, officers, employees or
stockholders outside the ordinary course of business;
(xv) the Company has not entered into any employment contract or
collective bargaining agreement, written or oral, or modified the
terms of any existing such contract or agreement;
(xvi)the Company has not granted any increase in the base
compensation of any of its directors, officers, and employees
outside the ordinary course of business or made any other change
in employment terms for any of its directors, officers, or
employees outside the ordinary course of business;
(xvii) the Company has not adopted, amended, modified, or terminated any
bonus, profit-sharing, incentive, severance, or other plan,
contract, or commitment for the benefit of any of its directors,
officers, and employees (or taken any such action with respect to
any other employee benefit plan);
(xviii) the Company has not made or pledged to make any charitable or other
capital contribution outside the ordinary course of business; and
(xix)no material customer, supplier, representative, distributor, lessee,
or lessor has terminated or given notice of its intent to terminate
its relationship with the Company.
13. Undisclosed Liabilities. The Company has no any material liability (whether
accrued or unaccrued, contingent or not contingent, known or unknown), except
for (i) liabilities set forth in the Accounts and (ii) labilities which have
arisen after the Last Accounts Date in the ordinary course of business (none of
which results from, arises out of, relates to, is in the nature of, or was
caused by any breach of contract, breach of warranty, tort, infringement, or
violation of law).
14. Legal Compliance.
(i) So far as the Vendor is aware, the Company has complied with all
applicable laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and charges
thereunder) of all governmental authorities, and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim, demand,
or notice has been filed or commenced against the Company alleging any
failure so to comply.
(ii) So far as the Vendor is aware, the Company is in compliance with the
terms and conditions of the application of, all franchises, consents,
approvals, licenses, permits, certificates and other authorizations
("Permits" or each "Permit") from any governmental authority that are
necessary for the ownership of its assets and the conduct of its
respective business as presently conducted in the ordinary course of
business. With respect to each such Permit: (A) so far as the Vendor
is aware, the Company is not in material breach or default, and no
event has occurred which, with notice or lapse of time, or both, would
constitute a material breach or default, or permit termination of the
Permit; and (B) in relation to Permits which have, as at the date of
this Agreement, been duly approved by the governmental authorities or
other relevant authorities, the same will continue in full force and
effect on identical terms following the consummation of the
transactions contemplated hereby.
15. Tax Matters. The Accounts contain appropriate provision for Taxation,
including deferred or provisional Taxation liable to be assessed on the Company
for the accounting period ended on the Last Accounts Date or for any subsequent
period (on the basis of the rates of tax and taxation statutes in force at the
Last Accounts Date) in respect of any transaction, event or omission occurring
or any income or profits or gains earned, accrued or received by the Company on
or prior to the Last Accounts Date or for which the Company is accountable up to
such date. Since the Last Accounts Date no further liability or contingent
liability for Taxation has arisen. As at the Last Accounts Date, the Company has
not received any demand for payment of any taxes and are under no liability to
pay any penalty or interest in connection therewith.
16. The Property.
(i) As at the date of this Agreement, all the estate, interest, right
and title in, under, over or in respect of all the land and
premises comprised within the Property are wholly owned by the
Land Authority as registered and beneficial owner thereof.
(ii) The Land Authority possesses good title to the Property free and
clear of all claims, charges, mortgages, liens, Encumbrances,
leases (with the exception of the Head Lease Agreement only),
options, covenants, restrictions, conditions or other agreements
affecting the same.
(iii) The title to the Property is properly constituted by and can be
deduced from documents of title which are in possession and under
the control of the Land Authority. So far as the Vendor is aware,
there are no entries in any public register in the Land Authority
against the Property which are adverse to the title of the Land
Authority to the Property.
(iv) So far as the Vendor is aware, there are no covenants,
restrictions, burdens, stipulations, conditions, terms or
outgoings affecting the Property which are of an unusual or
onerous nature or which affect the use or intended use of the
Property and there are no other matters which adversely affect the
value of the Property or cast any doubt on the right or title to
thereto.
(v) So far as the Vendor is aware, the Head Lease Agreement and the
Lease Agreement are valid, subsisting and binding on the parties
thereunder and all covenants, restrictions, stipulations,
conditions and other terms under each of the Head Lease Agreement
and the Lease Agreement have been observed and performed. There is
no breach in whatever manner of any of the terms and conditions of
either the Head Lease Agreement on the part of the Land Authority
or the Head Lessee or the Lease Agreement on the part of the
Trustee or the Company.
(vi) There are no circumstances which would entitle or require the
governmental or other authorities of the Republic of Palau or
other person to exercise any powers of entry and taking possession
or which would otherwise restrict or terminate the continued
possession or occupation of the Property or which would prevent
the use or intended use of the Property.
(vii) The present permitted use of the Property include the development
or construction of hotels and residential properties thereon and
that such permitted use of the Property is not subject to onerous
or unusual conditions giving rise to abnormal expenditure.
(viii) So far as the Vendor is aware, no building or construction work
carried out in relation to the Property which would require any
consent under or by virtue of any laws and regulations imposed by
the Land Authority or the Government of the Republic of Palau or
any other relevant legislation has been so carried out without
such consent having been properly obtained and any conditions or
restrictions imposed thereon have been fully observed and
performed.
(ix) So far as the Vendor is aware, the Property or the occupation or
possession thereof is not affected by any order or notice of or
proceedings involving any governmental or local authority or other
body or any agreement with any of the same.
(x) The building works which have been carried out at the Property
complies with all statutes, regulations, bye-laws and other
relevant legislation in the Republic of Palau.
(xi) All licences under any applicable legislation or regulations which
apply to the Property have been obtained and are in full force and
effect.
(xii) The Land Authority has not parted with possession of or agreed to
part with possession of the whole or any part of the Property in
any manner whatsoever nor will it do so before Completion.
(xiii) There is no restriction or prohibition, whether imposed under the
Head Lease Agreement or any laws and regulations of the Republic
of Palau, on the sub-leasing of the Property or any part thereof
by the Head Lessee pursuant to and under the Head Lease Agreement
and that no prior consent or approval in whatever manner has to be
given by the Land Authority or any other regulatory authorities of
the Republic of Palau for either sub-leasing of the Property or
any part thereof pursuant to and arising from the Head Lease
Agreement or entering into the Lease Agreement.
(xiv) Neither the Land Authority, the Head Lessee, the Family Trust, the
Trustee nor the Company has terminated or given any notice to
terminate or agreed in whatever manner to terminate the lease
under the Head Lease Agreement or the sub-lease under Lease
Agreement.
(xv) Neither the Land Authority, the Head Lessee, the Family Trust, the
Trustee nor the Company has varied or modified any of the terms
and conditions under the Head Lease Agreement or the Lease
Agreement.
(xvi) Other than the obligations on the part of the Head Lessee towards
the Land Authority as provided under the Head Lease Agreement,
there are no obligations of whatever nature on the part of the
Head Lessee, the Family Trust, the Trustee or the Company towards
the Land Authority and/or any other governmental or regulatory
authorities of the Republic of Palau, whether expressed or
implied, for any matters arising from or in connection with the
Head Lease Agreement or the Lease Agreement.
(xvii) Other than the obligations on the part of the Company towards the
Trustee as provided under the Lease Agreement, there are no
obligations of whatever nature on the part of the Company towards
the Trustee, the Family Trust or any other person, whether
expressed or implied, for any matters arising from or in
connection with the Head Lease Agreement or the Lease Agreement.
(xviii) The total area of the Property is of at least 1,000,000 square feet.
17. The Family Trust.
----------------
(i) The Family Trust has been legally and validly created by the Head
Lessee by virtue of a Declaration of Trust dated 28th February 1999
("Declaration of Trust").
(ii) So far as the Vendor is aware, the Declaration of Trust is a valid,
subsisting and enforceable document prepared by the Head Lessee.
(iii) The Trustee is the sole trustee under the Family Trust and that the
appointment of the Trustee as sole trustee of the Family Trust has not
been terminated and the term of office of the Trustee as sole trustee
of the Family Trust has not expired.
(iv) The Family Trust has full power, authority and legal capacity to
sub-lease the Property to the Company under the Head Lease Agreement.
(v) The Trustee has full power, authority and legal capacity under the
Family Trust to act for or represent the Family Trust to negotiate and
enter into the Lease Agreement with the Company and observe and
perform all her obligations thereunder.
(vi) The Trustee has full power, authority and legal capacity to appoint
the Mr. Mlib Tmetuchl ("Attorney") as her attorney pursuant to and
under the power of attorney entitled "Limited Power of Attorney" dated
18th February 2005 as referred to in the Lease Agreement, which
constitutes a valid, subsisting and enforceable document to legally
enable or authorize the Attorney to sign for and on behalf of the
Trustee under the Lease Agreement.
(vii) Neither the execution of the Lease Agreement by either the Trustee
or the Attorney nor the performance by the Trustee of any of her
obligations or the exercise of any of her rights hereunder will
conflict with or result in a breach or non-compliance of any law,
regulation, judgment, order, authorization, agreement or obligation
applicable to her, the Attorney or the Family Trust.
18. Trademarks and trade secrets. The business of each of the Company as now
carried on, does not, and is not likely to, infringe any intellectual
property right of any other person.
19. Trading and General Commercial Matters.
(i) Save as described in the Vendor's Schedule of Exceptions, the Company
has never entered into, and is not, as at the date hereof, party to :-
(a) any contracts not made in the ordinary course of business;
(b) any sales agency, distribution, or purchasing agreements;
(c) any agency or partnership arrangement; or
(d) any contract involving payment to or from the Company in excess of
US$50,000.00.
(ii) The Company is not in material default under any provision of any
contract or agreement to which it is a party or by which it is
bound and no event has occurred which constitutes a default, or
which with the giving of notice or the passage of time or
otherwise, would constitute a default under such contract or
agreement or which would require the premature repayment of any
loans or other amounts due thereunder.
(iii)So far as the Vendor is aware, the books and records of the Company
accurately present and reflect in accordance with generally accepted
accounting principles and standards within their respective
jurisdictions of incorporation and all transactions entered into by
the Company or to which any of them has been a party and all documents
which are subject to stamp or similar duty have been duly stamped.
(iv) So far as the Vendor is aware, the Company is not the subject of any
official investigation or inquiry and there are no facts which are
likely to give rise to any such investigation or inquiry.
(v) So far as the Vendor is aware, the Company has at all times carried on
its businesses in compliance with all applicable laws and regulations
and the Company has not committed any criminal offence or any tort or
any breach of the requirements or conditions of any statute, treaty,
regulation, bye-law or other obligation relating to the Company, or
the carrying on of its businesses and without prejudice to the
generality of the foregoing, the Company has obtained all licences and
consents necessary for the carrying on of its businesses, and all such
licences and consents are valid and subsisting and as far as the
Vendor is aware, there is no reason why any of them should be
suspended, cancelled or revoked.
(vi) There are in force no power of attorneys given by the Company. No
person in the capacity of an agent is entitled or authorized to bind
or commit the Company to any obligation.
20. Notes and Accounts Receivable. All notes and accounts receivable of the
Company are reflected properly on their books and records, are valid
receivables subject to no set off or counterclaim, are subject to adequate
reserves, and had arisen in the ordinary course of business of the Company,
as applicable for bona fide services rendered or products sold.
21. Insurance. The Company has sufficient insurance (if any) in place as is
customary for companies having business and assets similar to the business
and assets of the Company. This insurance will remain in place immediately
following Completion.
22. Litigation.
(i) So far as the Vendor is aware, the Company is not involved whether as
plaintiff or defendant or otherwise in any civil, criminal or
arbitration proceedings (apart from those arising in the ordinary
course of business) or in any proceedings before any tribunal and no
such proceedings are threatened or pending.
(ii) There is no unsatisfied, court order or tribunal or arbitral award
outstanding against the Company and no distress, execution or process
has been levied on any part of their businesses or assets.
23. Employees. There are no executive, officer or employee employed by the
Company except the Vendor.
24. Disclosure. The representations and warranties contained in this Part I of
Schedule 2 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this Part I of Schedule 2 not misleading.
25. General. All information contained in this Agreement and all other
information concerning the Company and/or any part or parts of its business
operations assets and liabilities (actual or contingent) supplied in the course
of the negotiations leading to this Agreement to the Purchaser or the
Purchaser's Solicitors or other professional advisers was when given true,
complete and accurate in all respects and there is no fact or matter which has
not been disclosed which renders any such information or documents untrue,
inaccurate or misleading at the date of this Agreement or which if disclosed
might reasonable be expected to influence adversely the Purchaser's decision to
purchase the Sale Shares on the terms of this Agreement.
SCHEDULE 2
PART IA
VENDOR'S SCHEDULE OF EXCEPTIONS
To be provided at a later date in accordance with Section 6.10 of the Agreement.