SHARE PURCHASE AGREEMENT Effective as of June 30, 2010 Between China INSOnline Corp. (the “Seller”) and Hong Kong Jing Nuo International Limited (the “Buyer”)
Effective
as of June 30, 2010
Between
(the
“Seller”)
and
Hong
Kong Jing Nuo International Limited
(the
“Buyer”)
STOCK
PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT
(the “Agreement”) is
effective as of June 30, 2010 (the “Effective Date”), by
and between Hong Kong Jing Nuo International Limited, a Hong Kong limited
company (the “Buyer”), and China
INSOnline Corp., a Delaware corporation (the “Seller”).
PRELIMINARY
STATEMENT
Seller
owns 100% ownership interest of Rise and Grow Limited, a Hong Kong limited
company (“R&G”), which
R&G owns 100% ownership interest of New Fortune Associate (Beijing)
Information Technology Co., Ltd. (formerly known as Zhi ▇▇▇ ▇▇ ▇▇▇▇ (Beijing)
Technology Co. Ltd. and hereinafter, “NFA”), a limited
liability company organized under the laws of the People’s Republic of China
(the “PRC”),
which NFA has 100% control, through a series of contractual agreements, over
Beijing ZYTX Technology Co., Ltd (“ZYTX”), a Variable
Interest Entity (“VIE”) and a limited
liability company organized under the laws of PRC.
On June
23, 2010, Beijing San Teng Da Fei Technology Development Co., Ltd. (“STDF”), a VIE and a
limited liability company organized under the laws of the PRC, acquired 100%
ownership of ▇▇▇▇▇ ▇▇▇ Insurance Agency Company Limited (“GHIA”), a limited
liability company organized under the laws of the PRC, which STDF is 100%
controlled by Run Ze ▇▇▇▇ ▇▇▇▇▇ (Beijing) Technology Co. Ltd. (“RZYC”), a limited
liability company organized under the laws of the PRC, through a series of
contractual agreements, which RZYC is 100% owned by Ever Trend Investment
Limited (“ETI”), a Hong Kong
limited company.
On June
29, 2010, ZYTX transferred and sold, for consideration received, certain
Software, Copyrights and Intellectual Property to STDF pursuant to that certain
Software Copyright Transfer Agreement (“Software Copyright Transfer
Agreement”) dated as of June 29, 2010 by and between ZYTX, as transferor
and STDF, as transferee.
On June
29, 2010, ZYTX transferred and sold, for consideration received, certain account
receivables to STDF pursuant to that certain Tri-party Creditor’s Right Transfer
Agreement (“Tri-party
Creditor’s Right Transfer Agreement”) dated as of June 29, 2010 by and
among ZYTX, as transferor, STDF, as transferee, and Beijing Yingtong Jixun
Sci-Tech Development Co., Ltd. (“YTJX”), a limited
liability company organized under the laws of the PRC, pursuant to which
agreement YTJX expressly agreed upon such credit right transfer.
Seller
desires to sell to the Buyer, and the Buyer desires to purchase from the Seller,
all issued and outstanding ownership and equity shares of R&G on the terms
and subject to the conditions set forth herein.
Accordingly,
in consideration of the mutual agreements hereinafter set forth, the Buyer and
the Seller agree as follows:
ARTICLE
1
DEFINITIONS AND
INTERPRETATION
Section
1.1 In this Agreement, the following
terms have the meanings specified or referred to in this Section and shall be
equally applicable to both the singular and plural forms.
“Balance Sheet” has
the meaning specified in Section
4.4.
“Balance Sheet Date”
means June 30, 2010.
“Buyer” means Hong
Kong Jing Nuo International Limited, as set forth in the preamble to this
Agreement.
“Claim Notice” has the
meaning specified in Section
7.3.
“Closing” means the
closing of the transfer of the Shares from the Seller to the Buyer.
“Closing Date” has the
meaning specified in Section
3.1.
“Company” means,
collectively, Rise and Grow Limited, New Fortune Associate (Beijing) Information
Technology Co., Ltd. and Beijing ZYTX Technology Co., Ltd.
“Copyrights” means
PRC, Hong Kong and foreign copyrights, copyrightable works, and mask work,
whether registered or unregistered, and pending applications to register the
same.
“Court Order” means
any judgment, order, award or decree of any foreign, federal, state, local or
other court or tribunal and any award in any arbitration
proceeding.
“Effective Date” has
the meaning set forth in the preamble of this Agreement.
“Encumbrance” means
any lien (statutory or other), claim, charge, security interest, mortgage, deed
of trust, pledge, hypothecation, assignment, conditional sale or other title
retention agreement, preference, priority or other security agreement or
preferential arrangement of any kind or nature, and any easement, encroachment,
covenant, restriction, right of way, defect in title or other encumbrance of any
kind.
“ETI” means Ever Trend
Investment Limited, a Hong Kong limited company.
“Expenses” means any
and all expenses incurred in connection with investigating, defending or
asserting any claim, action, suit or proceeding incident to any matter
indemnified against hereunder (including court filing fees, court costs,
arbitration fees or costs, witness fees, and reasonable fees and disbursements
of legal counsel, investigators, expert witnesses, consultants, accountants and
other professionals).
“GHIA” means ▇▇▇▇▇ ▇▇▇
Insurance Agency Company Limited, a limited liability company organized under
the laws of the People’s Republic of China.
“Governmental Body”
means any political subdivision or department thereof, any other governmental or
regulatory body, commission, central bank, board, bureau, organ or
instrumentality or any court, in each case whether federal, state, local or
foreign.
“HK$” means the legal
currency of Hong Kong.
“Intellectual
Property” means Copyrights, Patent Rights, Trademarks and Trade Secrets
and all agreements, contracts, licenses, sublicenses, assignments and
indemnities which relate or pertain to any of the foregoing.
“Losses” means any and
all losses, costs, obligations, liabilities, settlement payments, awards,
judgments, fines, penalties, damages, expenses, deficiencies or other
charges.
“NFA” means New
Fortune Associate (Beijing) Information Technology Co., Ltd., a limited
liability company organized under the laws of the People’s Republic of
China.
“Patent Rights” means
PRC, Hong Kong and foreign patents, patent applications, continuations,
continuations-in-part, divisions, reissues, patent disclosures, inventions
(whether or not patentable or reduced to practice) and improvements
thereto.
“Permitted
Encumbrances” means: (i) liens for taxes and other governmental charges
and assessments arising in the ordinary course of business which are not yet due
and payable, (ii) liens of landlords and liens of carriers, warehousemen,
mechanics and materialmen and other like liens arising in the ordinary course of
business for sums not yet due and payable, (iii) other liens or imperfections on
property which are not material in amount, do not interfere with, and are not
violated by, the consummation of the transactions contemplated by this
Agreement, and do not impair the marketability of, or materially detract from
the value of or materially impair the existing use of, the property affected by
such lien or imperfection, and (iv) liabilities of the Company, including, but
not limited to the tax liabilities of any of the Company.
“Person” means any
individual, corporation, partnership, joint venture, limited liability company,
association, joint-stock company, trust, unincorporated organization or
Governmental Body.
“Purchase Price” has
the meaning specified in Section
2.2.
“R&G” means Rise
and Grow Limited, a company organized under the laws of Hong Kong.
“Requirements of Laws”
means any foreign, federal, state and local laws, statutes, regulations, rules,
codes or ordinances enacted, adopted, issued or promulgated by any Governmental
Body (including those pertaining to electrical, building, zoning, subdivision,
land use, environmental and occupational safety and health requirements) or
common law.
“RMB” means the legal
currency of the People’s Republic of China.
“RZYC” means Run Ze
▇▇▇▇ ▇▇▇▇▇ (Beijing) Technology Co. Ltd., a limited liability company organized
under the laws of the People’s Republic of China.
“Sale of GHIA” means
the sales of all registered capitals, issued and outstanding ownership shares
and all assets and liabilities of GHIA by R&G and ZYTX to ETI and STDF on
June 23, 2010.
“Seller” has the
meaning specified in the first paragraph of this Agreement.
“Shares” means all
issued and outstanding ownership shares of R&G.
“Software” means
computer software programs and software systems, including all databases,
compilations, tool sets, compilers, higher level or “proprietary” languages,
related documentation and materials, whether in source code, object code or
human readable form.
“Software Copyright Transfer
Agreement” means that certain Software Copyright Transfer Agreement dated
as of June 29, 2010 by and between ZYTX, as transferor and STDF, as
transferee.
“STDF” means Beijing
San Teng Da Fei Technology Development Co., Ltd., a VIE and a limited liability
company organized under the laws of the People’s Republic of China.
“Subsidiaries” means
any corporation, partnership, limited liability company, joint venture or other
entity in which the Company (a) owns, or at any relevant time owned, directly or
indirectly, fifty percent (50%) or more of the outstanding voting securities or
equity interests or (b) is a general partner.
“Tax” means any
present or future tax, levy, impost, duty, charge, fee, deduction or withholding
of any nature and whatever called, by whomsoever, on whomsoever and wherever
imposed, levied, collected, withheld or assessed, including interest, penalties,
additions to tax and any similar liabilities with respect thereto.
“Trademarks” means
China and foreign trademarks, service marks, logos, trade dress and trade names
(including all assumed or fictitious names under which the Company is conducting
business or has within the previous five years conducted business), whether
registered or unregistered, and pending applications to register the
foregoing.
“Trade Secrets” means
confidential ideas, trade secrets, know-how, concepts, methods, processes,
formulae, reports, data, customer lists, mailing lists, business plans, or other
proprietary information.
“Tri-party Creditor’s Right
Transfer Agreement” means that certain Tri-party Creditor’s Right
Transfer Agreement dated as of June 29, 2010 by and among ZYTX, as transferor,
STDF, as transferee, and YTJX.
“US$” means the legal
currency of the United States of America.
“VIE” means Variable
Interest Entity.
“YTJX” means Beijing
Yingtong Jixun Sci-Tech Development Co., Ltd. a limited liability company
organized under the laws of the PRC.
“ZYTX” means Beijing
ZYTX Technology Co. Ltd., a VIE and a company organized under the laws of the
People’s Republic of China.
Section
1.2 Interpretation. As
used in this Agreement, the word “including” means without limitation, the word
“or” is not exclusive and the words “herein”, “hereof”, “hereby”, “hereto” and
“hereunder” refer to this Agreement as a whole. Unless the context
otherwise requires, references herein: (i) to Articles, Sections, Exhibits and
Schedules mean the Articles and Sections of and the Exhibits and Schedules
attached to this Agreement; (ii) to an agreement, instrument or other document
means such agreement, instrument or other document as amended, supplemented and
modified from time to time to the extent permitted by the provisions thereof and
by this Agreement; and (iii) to a statute means such statute as amended from
time to time and includes any successor legislation thereto. The
Schedules and Exhibits referred to herein shall be construed with and as an
integral part of this Agreement to the same extent as if they were set forth
verbatim herein. Titles to Articles and headings of Sections are
inserted for convenience of reference only and shall not be deemed a part of or
to affect meaning or interpretation of this Agreement. References
herein to the knowledge of a party or matters or information known to a party
mean the actual knowledge or conscious awareness of the Chief Executive Officer,
Chief Financial Officer, Chairman of the Board or Manager of such
party.
ARTICLE
2
PURCHASE AND SALE OF SHARES;
PURCHASE PRICE
Section
2.1 Purchase and Sale of
Shares. Upon the terms and subject to the conditions of this
Agreement, on the Closing Date, Seller shall sell, transfer, assign, convey and
deliver to the Buyer, and Buyer shall purchase from the Seller, the Shares, free
and clear of all Encumbrances (except for Permitted Encumbrances).
Section
2.2 Purchase
Price. The purchase price for the Shares and certain assets
shall be US $100,000 in cash (the “Purchase
Price”).
ARTICLE
3
CLOSING
Section
3.1 Closing
Date. The Closing shall take place at 9:00 A.M., local time on
the day when the conditions set forth in Article 8 have
been satisfied or such later date as may be agreed upon by the Buyer and the
Seller. The time and date on which the Closing is actually held are
sometimes referred to herein as the “Closing
Date”.
Section
3.2 Payment of Purchase
Price. Subject to fulfillment or waiver of the conditions set forth in
Section 6.1, at
the Closing, Buyer shall pay the Purchase Price by wire transfer of immediately
available funds to the account specified by the Seller.
Section
3.3 Buyer’s Additional
Deliveries. Subject to fulfillment or waiver of the conditions
set forth in Section
6.1, at the Closing, Buyer shall deliver to the Seller all the
following:
(a)
Copy of Buyer’s Certificate of Incorporation certified as of a recent date by
the appropriate office in Hong Kong;
(b)
Certificate of good standing of the Buyer (or the equivalent) issued as of a
recent date by the appropriate office in Hong Kong;
(c)
(i) The resolutions of the Board of Directors of the Buyer (or the equivalent)
authorizing the execution and performance of this Agreement and the transactions
contemplated hereby; and (ii) incumbency and signatures of the officers of the
Buyer executing this Agreement.
Section
3.4 Seller’s
Deliveries. Subject to fulfillment or waiver of the conditions
set forth in Section
6.2, at Closing, Seller shall deliver to the Buyer all the
following:
(a)
Copy of the Certificate of Incorporation (or the equivalent) of the Seller,
R&G, NFA and ZYTX certified as of a recent date by the appropriate office of
Hong Kong or the People’s Republic of China and a copy of the bylaws (or the
equivalent) of R&G, NFA and ZYTX dated as of a recent date.
(b)
Certificate of good standing of R&G, NFA and ZYTX (or the equivalent) issued
as of a recent date by the appropriate office in Hong Kong or the People’s
Republic of China; and
(c)
(i) The resolutions of the Board of Directors of the Seller (or the equivalent)
authorizing the execution and performance of this Agreement and the transactions
contemplated hereby; and (ii) incumbency and signatures of the officers of the
Seller executing this Agreement.
ARTICLE
4
REPRESENTATIONS AND
WARRANTIES OF SELLERS
As an
inducement to the Buyer to enter into this Agreement and to consummate the
transactions contemplated hereby, the Seller hereby represents and warrants to
the Buyer and agrees as follows:
Section
4.1 Title to the Shares;
Authority of the Seller.
(a)
As of the Closing Date, the Seller has good and valid title to the respective
Shares of R&G, NFA and ZYTX, and none of the Shares are subject to any
outstanding option, warrant, call, or similar right of any other Person to
acquire the same, and none of the Shares are subject to any restriction on
transfer thereof except for restrictions under applicable laws. Upon
consummation of the transactions contemplated hereby in accordance with the
terms hereof, the Seller will convey good and valid title to the Buyer of all of
the Shares.
(b)
The Seller has full power and authority to execute, deliver and perform this
Agreement. This Agreement has been duly executed and delivered by the
Seller and is the legal, valid and binding obligation of the Seller enforceable
in accordance with its terms.
(c)
Neither the execution and delivery of this or the consummation of any of the
transactions contemplated hereby nor compliance with or fulfillment of the
terms, conditions and provisions hereof will:
(i)
conflict with, result in a breach of the terms, conditions or provisions of, or
constitute a default, an event of default or an event creating rights of
acceleration, termination or cancellation or a loss of rights under, or result
in the creation or imposition of any Encumbrance upon any of the assets or
properties of the Seller or the Company, under (1) the charter or Bylaws of the
Company, (2) any note, instrument, agreement, mortgage, lease, license,
franchise, permit or other authorization, right, restriction or obligation to
which the Seller or the Company is a party or any of the respective assets or
properties of the Seller or the Company is subject or by which the Seller or the
Company is bound, (3) any Court Order to which the Seller or the Company is a
party or any of the respective assets or properties of the Seller or the Company
is subject or by which the Seller or the Company is bound, or (4) any
Requirements of Laws affecting the Seller or the Company or their respective
assets or properties; or
(ii)
require the approval, consent, authorization or act of, or the making by the
Seller or the Company of any declaration, filing or registration with, any
Person.
Section
4.2 Organization and Capital
Structure of the Company.
(a)
Each of the Company is a company duly organized, validly existing and in good
standing under the laws of the People’s Republic of China or Hong
Kong. The Company has full power and authority to own or lease and to
operate and use its properties and assets and to carry on its business as now
conducted.
(b)
The registered capital of R&G is HK$10,000, NFA, US$150,000, and ZYTX,
RMB¥1,000,000. Except for this Agreement, there are no agreements,
arrangements, options, warrants, calls, rights or commitments of any character
relating to the issuance, sale, purchase or redemption of any shares of capital
stock of the Company. No holder of Company Common Stock has any
preemptive, stock purchase or other rights to acquire Company Common
Stock. All of the outstanding shares of the Company Common Stock are
validly issued, fully paid and nonassessable and were not issued in violation of
any preemptive or similar rights. The Seller owns 100% ownership interest of
R&G, which R&G owns 100% ownership interest of NFA, which NFA has
100% interest and control over ZYTX as a VIE.
(c)
True and complete copies of the Certificate of Incorporation (or the equivalent)
and all amendments thereto, of the Charter, as amended to date, and of the stock
ledger of the Company have been delivered to the Buyer.
Section
4.3 Subsidiaries and
Investments. The Seller owns 100% ownership interest of R&G, which
R&G owns 100% ownership interest of NFA, which NFA, a VIE, has 100% interest
and control over ZYTX. As part of Seller’s internal corporate restructuring,
prior to the closing of this Agreement on June 23, 2010, R&G and ZYTX sold
all issued and outstanding ownership shares and assets and liabilities of GHIA
to ETI and STDF (the “Sale of GHIA”), which
ETI is 100% owned by the Seller and STDF, a VIE, is 100% controlled by ETI
through its wholly owned subsidiary, RZYC. The Buyer expressly acknowledges that
GHIA is no longer the subsidiary of the Company as of the Closing Date and the
time of the closing of this Agreement. The Buyer also expressly acknowledges
that only the Shares and the assets and liabilities as indicated by the Balance
Sheet will be sold to the Buyer.
Section
4.4 Financial
Statements. Schedule 4.4 contains
(i) the unaudited balance sheet of the Company as of June 30, 2010, (such
balance sheet being herein called the “Balance Sheet”) and
the related statements of income and cash flows as well as the list of assets to
be sold and the liabilities, including, but not limited to the tax liabilities
to be assumed by the Buyer as indicated in Exhibit I to the Balance Sheet. All
such statements were (or shall have been) prepared in conformity with GAAP and
fairly present the financial position (on a consolidated and, where applicable,
consolidating basis) of the entities described in such financial statements as
at the respective dates thereof and the results of operations and cash flows (on
a consolidated and, where applicable, consolidating basis) of the entities
described therein for each of the periods then ended, subject, in the case of
any such unaudited financial statements, to changes resulting from audit and
normal year-end adjustments.
Section
4.5 Operations Since Balance
Sheet Date.
(a)
Since the Balance Sheet Date, there has been:
(i)
no material adverse change in the assets, business, operations, liabilities,
profits, prospects or condition (financial or otherwise) of the Company, and no
fact or condition exists or is contemplated or threatened which might reasonably
be expected to cause such a change in the future except for the Sale of GHIA and
certain software copyrights and account receivables transfer pursuant to the
Software Copyright Transfer Agreement and the Tri-party Creditor’s Right
Transfer Agreement; and
(ii)
no damage, destruction, loss or claim, whether or not covered by insurance, or
condemnation or other taking adversely affecting any of the assets, business,
operations, condition or prospects of the Company.
Section
4.6 No
Finder. Neither the Seller, the Company nor any Person acting
on their behalf have paid or become obligated to pay any fee or commission to
any broker, finder or intermediary for or on account of the transactions
contemplated by this Agreement.
Section
4.7 Disclosure. None
of the representations or warranties of the Seller contained herein, none of the
information contained in the Schedules referred to in this Article, and none of
the other information or documents furnished to Buyer or any of its
representatives by the Seller or the Company or their representatives pursuant
to the terms of this Agreement, is false or misleading in any material respect
or omits to state a fact herein or therein necessary to make the statements
herein or therein not misleading in any material respect. There is no
fact which adversely affects or in the future is likely to adversely affect the
Company or its business in any material respect which has not been set forth or
referred to in this Agreement or the Schedules hereto.
ARTICLE
5
REPRESENTATIONS AND
WARRANTIES OF BUYER
As an
inducement to the Seller to enter into this Agreement and to consummate the
transactions contemplated hereby, the Buyer hereby represents and warrants to
the Seller and agrees as follows:
Section
5.1 Organization of the
Buyer. The Buyer is a company duly organized, validly existing
and in good standing under the laws of Hong Kong and has full corporate power
and authority to own or lease and to operate and use its properties and assets
and to carry on its business as now conducted.
Section
5.2 Authority of the
Buyer. The Buyer has full power and authority to execute, deliver and
perform this Agreement. The execution, delivery and performance of
this Agreement by the Buyer have been duly authorized and approved by the
Buyer’s board of directors and do not require any further authorization or
consent of the Buyer or its stockholders. This Agreement has been
duly authorized, executed and delivered by the Buyer and is the legal, valid and
binding agreement of the Buyer enforceable in accordance with its
terms.
Section
5.3 No Conflicts. Neither
the execution and delivery of this Agreement or the consummation of any of the
transactions contemplated hereby nor compliance with or fulfillment of the
terms, conditions and provisions hereof will:
(a)
conflict with, result in a breach of the terms, conditions or provisions of, or
constitute a default, an event of default or an event creating rights of
acceleration, termination or cancellation or a loss of rights under (1) the
Certificates of Incorporation or Charters of the Buyer, (2) any material note,
instrument, agreement, mortgage, lease, license, franchise, permit or other
authorization, right, restriction or obligation to which the Buyer is a party or
any of their properties are subject or by which they are bound, (3) any Court
Order to which the Buyer is a party or by which it is bound or (4) any
Requirements of Laws affecting the Buyer; or
(b)
require the approval, consent, authorization or act of, or the making by the
Buyer of any declaration, filing or registration with, any Person.
ARTICLE
5-A
COVENANTS OF
BUYER
As an inducement to the Seller to enter
into this Agreement and to consummate the transactions contemplated hereby, the
Buyer expressly represents to the Seller that the Buyer will pay and satisfy in
a timely fashion all Tax in connection with all tax liabilities of any of the
Company incurred on and before June 30, 2010.
ARTICLE
6
CONDITIONS PRECEDENT TO
OBLIGATIONS OF PARTIES
Section
6.1 Conditions to Buyer’s
Obligations. The obligations of the Buyer to purchase the
Shares pursuant to this Agreement shall, at the option of the Buyer, be subject
to the satisfaction, on or prior to the Closing Date, of the following
conditions:
Each of the representations and
warranties of the Seller contained or referred to herein shall be true and
correct on the Closing Date as though made on the Closing Date, except for
changes therein specifically permitted by this Agreement or resulting from any
transaction expressly consented to in writing by the Buyer and there shall have
been delivered to Buyer a certificate to such effect, dated the Closing Date,
signed on behalf of the Seller, in addition to the other deliveries specified in
Section
3.4.
Section
6.2 Conditions to Seller’s
Obligations. The obligations of the Seller to sell the Shares
and all issued and outstanding ownership shares of the Company pursuant to this
Agreement shall, at the option of the Seller, be subject to the satisfaction, on
or prior to the Closing Date, of the following conditions:
Each of
the representations and warranties of the Buyer contained or referred to in this
Agreement shall be true and correct on the Closing Date as though made on the
Closing Date, except for changes therein specifically permitted by this
Agreement or resulting from any transaction expressly consented to in writing by
the Buyer or any transaction contemplated by this Agreement; and there shall
have been delivered to the Seller a certificate to such effect, dated the
Closing Date and signed on behalf of the Buyer by an authorized officer of the
Buyer, in addition to the other deliveries specified in Section
3.3.
ARTICLE
7
INDEMNIFICATION
Section
7.1 Indemnification by the
Seller.
(a)
The Seller agrees to indemnify and hold harmless the Buyer from and against any
and all Losses and Expense incurred by the Buyer up to the Purchase Price in
connection with or arising from:
(i)
any breach by the Seller of any of its covenants in this Agreement;
(ii)
any failure of the Seller to perform any of its obligations in this Agreement;
or
(iii)
any breach of any warranty or the inaccuracy of any representation of the Seller
contained or referred to in this Agreement or any certificate delivered by or on
behalf of the Seller pursuant hereto;
provided
that, without limitation of Seller’s indemnification obligations under clause
(i) or (ii) of this subsection (a) the Seller shall be required to indemnify and
hold harmless under clause (iii) of this subsection with respect to Loss and
Expense incurred by the Buyer as a result of inaccuracies only to the extent
that the aggregate amount of such Loss and Expense exceeds
RMB100,000.
(b)
The indemnification provided for in this Section shall terminate two (2) years
after the Closing Date (and no claims shall be made by any the Buyer under this
Section thereafter), except that the indemnification by the Seller shall
continue as to:
(i)
the representations and warranties of Sellers set forth in Sections 4.1 and
4.2;
(ii)
any Loss or Expense of which Buyer has notified the Seller in accordance with
the requirements of Section 7.3 on or
prior to the date such indemnification would otherwise terminate in accordance
with this Section, as to which the obligation of the Seller shall continue until
the liability of the Seller shall have been determined pursuant to this Article
and the Seller shall have reimbursed the Buyer for the full amount of such Loss
and Expense in accordance with this Article.
Section
7.2 Indemnification by the
Buyer.
(a)
Buyer agrees to indemnify and hold harmless the Seller from and against any and
all Loss and Expense incurred by the Seller in the event that the Governmental
Body initiates any actions against the Seller for any Tax owed by any of the
Company for any tax liabilities of any of the Company incurred on and before
June 30, 2010.
(b)
Buyer agrees to indemnify and hold harmless the Seller from and against any and
all Loss and Expense incurred by the Seller up to the Purchase Price (except for
the event as described in Section 7.2 (a) of this Agreement) in connection with
or arising from:
(i)
any breach by the Buyer of any of its covenants or agreements in this
Agreement;
(ii)
any failure by the Buyer to perform any of its obligations in this Agreement;
or
(iii)
any breach of any warranty or the inaccuracy of any representation of Buyer
contained or referred to in this Agreement or in any certificate delivered by or
on behalf of Buyer pursuant hereto;
provided
that, without limitation of Buyer’s indemnification obligations under clauses
(i) and (ii) of this subsection (a) Buyer shall be required to indemnify and
hold harmless under clause (iii) of this subsection with respect to Loss and
Expense incurred by the Seller only to the extent that the aggregate amount of
such Loss and Expense exceeds RMB100,000 .
(c)
The indemnification provided for in this Section shall terminate two (2) years
after the Closing Date (and no claims shall be made by the Seller under this
Section thereafter), except that the indemnification by the Buyer shall continue
as to:
(i)
the representations and warranties of the Buyer set forth in Sections 5.1 and
Article 5-A;
and
(ii)
any Loss or Expense of which the Seller has notified the Buyer in accordance
with the requirements of Section 7.3 on or
prior to the date such indemnification would otherwise terminate in accordance
with this Section, as to which the obligation of the Buyer shall continue until
the liability of the Buyer shall have been determined pursuant to this Article,
and the Buyer shall have reimbursed the Seller for the full amount of such Loss
and Expense in accordance with this Article.
Section
7.3 Notice of
Claims.
(a)
Any party seeking indemnification hereunder shall give to the party obligated to
provide indemnification to such Indemnified Party (the “Indemnitor”) a notice
(a “Claim
Notice”) describing in reasonable detail the facts giving rise to any
claim for indemnification hereunder and shall include in such Claim Notice (if
then known) the amount or the method of computation of the amount of such claim,
and a reference to the provision of this Agreement or any other agreement,
document or instrument executed hereunder or in connection herewith upon which
such claim is based; provided, that (i) a Claim Notice in respect of any action
at law or suit in equity by or against a third Person as to which
indemnification will be sought shall be given promptly after the action or suit
is commenced; and (ii) failure to give such notice shall not relieve the
Indemnitor of its obligations hereunder except to the extent it shall have been
prejudiced by such failure.
(b)
After the giving of any Claim Notice pursuant hereto, the amount of
indemnification to which an Indemnified Party shall be entitled under this
Article shall be determined: (i) by the written agreement between the
Indemnified Party and the Indemnitor; (ii) by a final judgment or decree of any
court of competent jurisdiction; or (iii) by any other means to which the
Indemnified Party and the Indemnitor shall agree. The judgment or
decree of a court shall be deemed final when the time for appeal, if any, shall
have expired and no appeal shall have been taken or when all appeals taken shall
have been finally determined. The Indemnified Party shall have the
burden of proof in establishing the amount of Loss and Expense suffered by
it.
Section
7.4 Third Person
Claims.
(a)
Subject to Section
7.4(b), the Indemnified Party shall have the right to conduct and
control, through counsel of its choosing, the defense, compromise or settlement
of any third Person claim, action or suit against such Indemnified Party as to
which indemnification will be sought by any Indemnified Party from any
Indemnitor hereunder, and in any such case the Indemnitor shall cooperate in
connection therewith and shall furnish such records, information and testimony
and attend such conferences, discovery proceedings, hearings, trials and appeals
as may be reasonably requested by the Indemnified Party in connection therewith;
provided, that (i) the Indemnitor may participate, through counsel chosen by it
and at its own expense, in the defense of any such claim, action or suit as to
which the Indemnified Party has so elected to conduct and control the defense
thereof; and (ii) the Indemnified Party shall not, without the written consent
of the Indemnitor (which written consent shall not be unreasonably withheld),
pay, compromise or settle any such claim, action or suit, except that no such
consent shall be required if, following a written request from the Indemnified
Party, the Indemnitor shall fail, within fourteen (14) calendar days after the
making of such request, to acknowledge and agree in writing that, if such claim,
action or suit shall be adversely determined, such Indemnitor has an obligation
to provide indemnification hereunder to such Indemnified
Party. Notwithstanding the foregoing, the Indemnified Party shall
have the right to pay, settle or compromise any such claim, action or suit
without such consent, provided that in such event the Indemnified Party shall
waive any right to indemnity therefor hereunder unless such consent is
unreasonably withheld.
(b)
If any third Person claim, action or suit against any Indemnified Party is
solely for money damages or, where Sellers is the Indemnitor, will have no
continuing effect in any material respect on the Company or its business, assets
or operations, then the Indemnitor shall have the right to conduct and control,
through counsel of its choosing, the defense, compromise or settlement of any
such third Person claim, action or suit against such Indemnified Party as to
which indemnification will be sought by any Indemnified Party from any
Indemnitor hereunder if the Indemnitor has acknowledged and agreed in writing
that, if the same is adversely determined, the Indemnitor has an obligation to
provide indemnification to the Indemnified Party in respect thereof, and in any
such case the Indemnified Party shall cooperate in connection therewith and
shall furnish such records, information and testimony and attend such
conferences, discovery proceedings, hearings, trials and appeals as may be
reasonably requested by the Indemnitor in connection therewith; provided that
the Indemnified Party may participate, through counsel chosen by it and at its
own expense, in the defense of any such claim, action or suit as to which the
Indemnitor has so elected to conduct and control the defense
thereof. Notwithstanding the foregoing, the Indemnified Party shall
have the right to pay, settle or compromise any such claim, action or suit,
provided that in such event the Indemnified Party shall waive any right to
indemnity therefor hereunder unless the Indemnified Party shall have sought the
consent of the Indemnitor to such payment, settlement or compromise and such
consent was unreasonably withheld, in which event no claim for indemnity
therefor hereunder shall be waived.
ARTICLE
8
GENERAL
PROVISIONS
Section
8.1 Survival of
Obligations. All representations, warranties, covenants,
agreements and obligations contained in this Agreement shall survive the
consummation of the transactions contemplated by this Agreement; provided, however, that, except
as otherwise provided in Article 7, the
representations and warranties contained in Articles 4 and 5 shall terminate on
the two (2) year anniversary of the Closing Date. Except as otherwise
provided herein, no claim shall be made for the breach of any representation or
warranty contained in Articles 7 or under
any certificate delivered with respect thereto under this Agreement after the
date on which such representations and warranties terminate as set forth in
this.
Section
8.2 Notices. All
notices or other communications required or permitted hereunder shall be in
writing and shall be deemed given or delivered (i) when delivered personally,
(ii) if transmitted by Fax when confirmation of transmission is received, or
(iii) if sent by registered or certified mail, return receipt requested, or by
private courier when received; and shall be addressed as follows:
(a) If
to the Buyer, to:
▇▇▇▇ ▇,
▇▇/▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ Villas
Tin Shui
Wai, New Territories
Hong
Kong
Attention:
Mr. Pok ▇▇▇ ▇▇
(b) If
to the Seller, at:
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▇▇▇▇/▇▇▇▇
▇▇, ▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
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▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
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▇▇.
▇▇▇▇▇▇ ▇▇
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or to
such other address as such party may indicate by a notice delivered to the other
party hereto.
Section
8.3 Successors and
Assigns.
(a)
Either party may assign any of its rights hereunder, but no such assignment
shall relieve it of its obligations hereunder.
(b)
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their successors and permitted assigns. The successors and
permitted assigns hereunder shall include without limitation, in the case of the
Buyer, any permitted assignee as well as the successors in interest to such
permitted assignee (whether by merger, liquidation (including successive mergers
or liquidations) or otherwise). Nothing in this Agreement, expressed
or implied, is intended or shall be construed to confer upon any Person other
than the parties and successors and assigns permitted by this Section any right,
remedy or claim under or by reason of this Agreement.
Section
8.4 Entire Agreement;
Amendments. This Agreement and the Exhibits and Schedules
referred to herein and the documents delivered pursuant hereto contain the
entire understanding of the parties hereto with regard to the subject matter
contained herein or therein, and supersede all prior agreements, understandings
or letters of intent between or among any of the parties hereto. This
Agreement shall not be amended, modified or supplemented except by a written
instrument signed by an authorized representative of each of the parties
hereto.
Section
8.5 Waivers. Any
term or provision of this Agreement may be waived, or the time for its
performance may be extended, by the party or parties entitled to the benefit
thereof. Any such waiver shall be validly and sufficiently given for
the purposes of this Agreement if, as to any party, it is in writing signed by
an authorized representative of such party. The failure of any party
hereto to enforce at any time any provision of this Agreement shall not be
construed to be a waiver of such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right of any party
thereafter to enforce each and every such provision. No waiver of any
breach of this Agreement shall be held to constitute a waiver of any other or
subsequent breach.
Section
8.6 Partial
Invalidity. Wherever possible, each provision hereof shall be
interpreted in such manner as to be effective and valid under applicable law,
but in case any one or more of the provisions contained herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
provision shall be ineffective to the extent, but only to the extent, of such
invalidity, illegality or unenforceability without invalidating the remainder of
such provision or provisions or any other provisions hereof, unless such a
construction would be unreasonable.
Section
8.7 Execution in
Counterparts. This Agreement may be executed in two (2) or
more counterparts, each of which shall be considered an original instrument, but
all of which shall be considered one and the same agreement, and shall become
binding when one or more counterparts have been signed by each of the parties
hereto and delivered to the Seller and the Buyer.
Section
8.8 Legal Counsel. Each
Party represents that it has been given the opportunity of seeking legal
counsels.
Section
8.9 Governing
Law. This Agreement shall be governed by and construed in
accordance with the internal laws (as opposed to the conflicts of law
provisions) of Hong Kong.
IN WITNESS WHEREOF, the
parties hereto have caused this Stock Purchase Agreement to be executed the day
and year first above written.
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BUYER:
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Hong
Kong Jing Nuo International Limited
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By:
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/s/ Pok ▇▇▇ ▇▇ | |
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Name:
Pok ▇▇▇ ▇▇
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Title:
Director
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(Witness)
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/s/ ▇▇▇▇▇▇▇
▇▇▇▇
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Name:
▇▇▇▇▇▇▇ ▇▇▇▇
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/s/ ▇▇▇▇▇▇▇
▇▇▇▇
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Name: ▇▇▇▇▇▇▇
▇▇▇▇
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