Dated the 13th day of June 2007
EXHIBIT
2.1
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Dated
the 13th
day of June 2007
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Hartcourt
Capital, Inc.
Shanghai
Jiumeng Information Technology Co., Ltd
and
LI
ZHENGZHENG
AGREEMENT
FOR SALE AND PURCHASE OF
51%
INTEREST IN THE REGISTERED CAPTIAL OF
SHANGHAI
HUAQING CORPORATION DEVELOPMENT CO., LTD
THIS
AGREEMENT is entered into on the 13th
day of June 2007 in
Shanghai.
BETWEEN:
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(1)
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Hartcourt
Capital, Inc., &
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Shanghai
Jiumeng Information Technology Co., Ltd (together the
“Vendors”); and
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(2)
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Li
Zhengzheng, (the
“Purchaser”).
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WHEREAS:
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1.
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HARTCOURT
CAPITAL, INC. (hereinafter “Hartcourt”) is a company
incorporated in the British Virgin Islands and validly
existing;
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Shanghai
Jiumeng Information Technology Co., Ltd (hereinafter “Shanghai
Jiumeng”) is a limited liability company duly incorporated in
Shanghai China with business license no. of 3101062014453 and validly
existing as of the date of this Agreement.
Li Zhengzheng, is Chinese Citizen with PRC identity
card
no. of 310108511123403.
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2.
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Shanghai
Huaqing Corporation Development Co., Ltd (hereinafter
“ShanghaiHuaqing”) is a limited
liability company duly incorporated in Shanghai China and validly
existing. As at the date of this Agreement, Shanghai Huaqing has
a
registered capital of RMB 20,000,000, among which 7.35% equity interest
was held by Li Zhengzheng, 7.35% by ▇▇▇ ▇▇▇▇▇▇▇▇, 7.35% by ▇▇▇▇▇
▇▇▇,
7.35% by ▇▇▇▇ ▇▇, 3% by Dai Peimin, 3% by ▇▇▇ ▇▇▇▇▇▇▇, 51% by Shanghai
Jiumeng and the remaining 13.6% by Shanghai Chengqing Electronic
Development Co., Ltd (hereinafter “Shanghai
Chengqing”).
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3.
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In
respect that the complex Chinese investment regulations of foreign
investment in China retail and distribution industry, Hartcourt therefore
uses Shanghai Jiumeng as the registered owner of a 51% equity interest
in
Shanghai Huaqing on behalf of Hartcourt. As at the date of this Agreement,
Shanghai Jiumeng owns 51% equity interest in Shanghai
Huaqing.
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4.
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The
Vendors have agreed to sell and the Purchaser has agreed to purchase
the
51% equity interest in Shanghai Huaqing which was legally owned by
Shanghai Jiumeng on behalf of Hartcourt. (the “Sale
Interests”)
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5.
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All
the other shareholders of Shanghai Huaqing, incl. ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇,
▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ and Shanghai Chengqing, have unanimously
agreed the sale and purchase of the Sale Interests and abnegate their
preemption over the Sale Interests.
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THEREFORE,
IT IS HEREBY AGREED BY THE VENDORS AND THE PURCHASER AS
FOLLOWS:
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1.
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VENDORS’
REPRESENTATION AND
WARRANTS
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1.1
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Hartcourt
shall be the actual beneficial owner of the 51% Sale Interests in
Shanghai
Huaqing, but due to the complicated Chinese investment regulations
of
foreign investment in China retail and distribution industry, Hartcourt
therefore uses Shanghai Jiumeng to be the registered owner of the
51% Sale
Interests in Shanghai Huaqing on behalf of
itself.
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1.2
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Shanghai
Jiumeng agrees that its 51% Sale Interests in Shanghai Huaqing is
in fact
beneficially owned by Hartcourt.
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2
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1.3
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The
action taken by either Hartcourt or Shanghai Jiumeng, or both, shall
be
regarded as the co-action of Hartcourt and Shanghai Jiumeng. Hartcourt
and
Shanghai Jiumeng shall not deny the force effect of the action of
either
party.
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1.4
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Hartcourt
and Shanghai Jiumeng assure that no third-party interest has been
put
against the 51% Sale Interests in Shanghai Huaqing such as pledge,
lien,
or sequestration by juridical authority, etc. which will affect the
fact
of the true, integrity, credibility of the Sale
Interests.
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1.5
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Hartcourt
and Shanghai Jiumeng have the full capability to conduct the sale
of the
Sale Interests in Shanghai Huaqing which was owned by Shanghai Jiumeng
on
behalf of Hartcourt. The shareholders of Hartcourt and Shanghai Jiumeng
have unanimously agreed and resolved the resolution on the sale and
purchase of the Sale Interests in Shanghai
Huaqing.
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2.
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PURCHASER’S
REPRESENTATION AND
WARRANTS
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The
Purchaser fully understands the fact that the 51% Sale Interests in Shanghai
Huaqing was owned by Shanghai Jiumeng on behalf of Hartcourt. The Purchaser
has
acknowledged that Hartcourt had fully paid the Consideration of the 51% Sale
Interests at acquisition to Shanghai Huaqing.
The
Purchaser has the full capability to execute the Agreement and purchase the
51%
Sale Interests in Shanghai Huaqing which was owned by Shanghai Jiumeng on behalf
of Hartcourt.
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3
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EXECUTION
DATE
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The
Vendors and the Purchaser have affirmed that the execution date of the Agreement
is the date of duly signing this Agreement by both parties. In the event of
different signing date by each party, the latest signing date
applies.
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4
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CONSIDERATION
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The
Consideration for the sale and purchase of the 51% Sale Interests
in
Shanghai Huaqing shall be RMB 4,000,000 cash
net.
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4.2
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The Purchaser agrees to purchase the 51% Sale Interests in Shanghai Huaqing at the Consideration of RMB 4,000,000 cash net. |
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4.3
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As
an additional condition on the Consideration, both the Vendors and
the
Purchaser agree that Dai Peimin, one of the shareholders of Shanghai
Huaqing, shall endorse the 997,550 shares of Hartcourt common stock
under
the share certificate no. 8521 to the entity or individual designated
by
Hartcourt free of charge.
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5
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RIGHTS AND OBLIGATIONS OF SHAREHOLDERS |
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5.1
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All
the rights and obligations of shareholders attached to the 51% Sale
Interests in Shanghai Huaqing shall be transferred to the Purchaser
since
the execution date of this
Agreement.
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5.2
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All
the rights and liabilities of Shanghai Huaqing shall be assumed by
Shanghai Huaqing after the Purchaser executes this Agreement since
the
execution date.
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5.3
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All
the assets of Shanghai Huaqing will be taken by Shanghai Huaqing
after the
Purchaser executes this Agreement since the execution
date.
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6
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PAYMENT
OF CONSIDERATION
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| Per the requirements of Hartcourt and confirmed by Shanghai Jiumeng, the Purchaser will credit the Consideration to the Vendors satisfied as details hereunder: |
3
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6.1
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First
installment: Within 3 days upon signing the Agreement, the Purchaser
shall
entrust Shanghai Huaqing to credit RMB 1,000,000 cash to Hartcourt
or
Shanghai Jiumeng.
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6.2
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Second
installment: Within 2 months upon finishing the registration of ownership
change and obtaining new business license of Shanghai Huaqing, the
Purchaser shall entrust Shanghai Huaqing to credit RMB 1,000,000
cash to
Hartcourt or Shanghai Jiumeng.
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6.3
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Last
installment: By the end of January 2008, and upon the item 6.2 is
full
satisfied, the Purchaser shall entrust Shanghai Huaqing to credit
RMB
2,000,000 cash to Hartcourt or Shanghai
Jiumeng.
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6.4
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The
Purchaser shall request Dai Peimin, one of the shareholders of Shanghai
Huaqing, to endorse 997,550 shares of Hartcourt common stock under
the
share certificate no. 8521 to the entity or individual designated
by
Hartcourt. Hartcourt affirms that the aforesaid share certificate
has been
returned to Hartcourt before executing this
Agreement.
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6.5
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Unless
otherwise defines, the Purchaser will not need to pay Hartcourt or
Shanghai Jiumeng any other fees, shares or other securities whatsoever
except the abovementioned 997,550 shares of Hartcourt common stock
for the
purchase of the Sale Interests.
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7
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REGISTRATION
OF OWNERSHIP CHANGE OF SHANGHAI
HUAQING
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Upon
executing this Agreement, the Purchaser shall be fully responsible for applying
for the ownership change of Shanghai Huaqing with local Industrial &
Commercial Administration Bureau, incl. the amendment of Article of Association,
the Board and other related registration formality; if needed, Hartcourt and
Shanghai Jiumeng shall work with Shanghai Huaqing for the registration; All
the
fees occurred in the registration shall be borne by the Purchaser and Shanghai
Huaqing in this regard.
The
Vendors and the Purchaser agree that whether the aforesaid registration
formality is completed will not affect the effectiveness and enforcement of
this
Agreement.
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8
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TRANSFER
OF EQUITY INTEREST IN SHANGHAI TIANQIAN INFORMATION TECHNOLOGY CO.,
LTD
(HEREINAFTER “SHANGHAI
TIANQIAN”)
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8.1
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Upon
executing the Agreement, Hartcourt and Shanghai Jiumeng shall cooperate
with Shanghai Tianqian to request Yan Hong, one of the shareholders
of
Shanghai Tianqian, to sell his 51% equity interest in Shanghai Tianqian
to
the Purchaser with no Consideration, while the Purchaser agrees to
purchase the 51% equity interest in Shanghai Tianqian from Yan Hong
with
no Consideration.
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8.2
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Hartcourt,
Shanghai Jiumeng together with Yan Hong affirm that the sale and
purchase
of the 51% equity interest in Shanghai Tianqian is unconditional
and with
no Consideration.
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8.3
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Hartcourt
and Shanghai Jiumeng affirm, in the meanwhile assure that Yan Hong
will
cooperate to apply for the registration of ownership change of Shanghai
Tianqian in relation to the sale and purchase of 51% equity interest
in
Shanghai Tianqian at local Industrial and Commercial Administration
Bureau.
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9
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BREACH
OF AGREEMENT
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9.1
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In
the event that the Purchaser fails to fulfill his obligations and
delay
the payment of Consideration to the account designated by Hartcourt,
1‰
of the due amount per day penalty shall be imposed till the
payoff
date. Afterwards, the Agreement shall continuously be
executed.
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9.2
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In
the event that the Vendors breach or fail to fulfill their obligations
specified under Clauses 7 and 8, the payment of Consideration will
be
postponed accordingly.
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9.3
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Except
covenanted in this Agreement, any party when fails to fulfill its
obligations specified in this Agreement which causes the economic
loss to
the other party, shall assume the liabilities of breach and indemnify
the
other party against all the
losses.
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4
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10
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EFFECTIVENESS
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10.1
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Before
execution of this Agreement, any contract, agreement, or other written
or
oral agreements between Hartcourt or Shanghai Jiumeng and Shanghai
Huaqing, other shareholders or one of the shareholders of Shanghai
Huaqing
except for Hartcourt and Shanghai Jiumeng, or any affiliates of Shanghai
Huaqing, including but not limit to Shanghai Huaqing Economic Development
Co., Ltd, Shanghai Chengqing, Shanghai Tianqian, etc.; or any oral
or
written commitment made to Hartcourt or Shanghai Jiumeng will terminate
and be of no effect.
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10.2
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This
Agreement will be effective immediately upon duly signed by the Vendors
and the Purchaser.
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10.3
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Any
amendments or revision to this Agreement will be of no effect unless
it is
in writing and duly signed by the Vendors and the Purchaser with
clearly
specifying the amendments, deletion, or addition in relation to certain
Clauses of this Agreement.
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10.4
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All
the documents for the registration of ownership change in relation
to the
sale and purchase of the Sale Interests, including but not limit
to the
sale and purchase agreement, amendments of Article of Association,
board
resolution, etc., except otherwise specified in this Agreement about
the
effectiveness, in the event that the context conflicts with this
Agreement, the covenant in this Agreement
overrules.
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10.5
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The
sale and purchase of the Sale Interests is subject to the shareholders’
approval of The Hartcourt Companies, Inc. if required by applicable
law.
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11
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DISPUTE
SETTLEMENT
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Any
dispute, controversy or claim arising out of or relating to this
Agreement, shall be settled by negotiation and discussion between
both
parties in good faith. In the event that the dispute, controversy
or claim
cannot be solved through negotiation and discussion, it shall be
submitted
and settled by the jurisdiction of People’s Court in which Shanghai
Huaqing locates.
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12
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MICELLANEOUS
This
Agreement will be in four original copies, one copy
each with Hartcourt, Shanghai Jiumeng, Li Zhengzheng and Shanghai
Huaqing.
Each copy shall be deemed as equally
authentic.
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5
IN
WITNESS whereof this Agreement has been duly executed by all parties
hereto the day and year first above written.
SIGNED
by
For
and
on behalf of
HARTCOURT
CAPITAL, INC.
SIGNED
by
For
and
on behalf of
SHANGHAI
JIUMENG INFORMATION TECHNOLOGY CO., LTD.
SIGNED
by
LI
ZHENGZHENG