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EXHIBIT 2.9
DATED 01 FEB 2000
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(1) CHOI, LEUNG CHI
(2) PANG, MAN PO
(3) HO, KA CHUNG
(4) CHAN, KOON MAN SIMON
AS VENDORS
AND
(5) ACG INTERNATIONAL INC.
AS PURCHASER
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AGREEMENT FOR THE
SALE AND PURCHASE
OF SHARES IN
HELIX WEB SERVICES LIMITED
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[BAKER & MCKENZIE LETTERHEAD]
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CONTENTS
Number Clause Headings Page
- ------ --------------- ----
1. Definitions and Interpretation......................................................................1
2. Sale of Sale Shares.................................................................................5
3. Consideration.......................................................................................6
4. Conditions..........................................................................................6
5. Completion..........................................................................................7
6. Completion Accounts................................................................................10
7. Adjustment of Consideration and Payment of Retained Consideration..................................12
8. Post-Completion Obligations........................................................................12
9. Warranties.........................................................................................16
10. Retirement Scheme..................................................................................17
11. Restriction on Announcements.......................................................................17
12. Confidentiality of Information Received by the Vendors.............................................17
13. Costs..............................................................................................18
14. General............................................................................................18
15. Notices............................................................................................19
16. Governing Law and Submission to Jurisdiction.......................................................19
Schedules
SCHEDULE 1 The Vendors...................................................................................20
SCHEDULE 2 Details of the Company........................................................................*
SCHEDULE 3 The Properties................................................................................*
SCHEDULE 4 Deed of Indemnity.............................................................................*
SCHEDULE 5 Warranties....................................................................................*
SCHEDULE 6 Resignation Letter............................................................................*
SCHEDULE 7 Intellectual Property.........................................................................*
SCHEDULE 8 Software......................................................................................*
SCHEDULE 9 Disclosure Letter.............................................................................*
Execution...................................................................................................54
* Schedule omitted -- will be provided supplementally to the Commission upon
request.
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DATE: 01 FEB 2000
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PARTIES:
(1) The persons whose names are set out in Column 1 of Schedule 1 (the
"VENDORS").
(2) ACG INTERNATIONAL INC., a company incorporated in the British Virgin
Islands whose registered office is at First Floor, Columbus Centre
Building, Road Town, Tortola, British Virgin Islands and which is a
subsidiary of Asia Online, Ltd. (the "PURCHASER").
RECITALS:
(A) The Vendors are the registered holders and beneficial owners of all of
the issued shares in the capital of Helix Web Services Limited ("THE
COMPANY"). Particulars of the Company are set out in Schedule 2.
(B) The Vendors wish to sell and the Purchaser wishes to purchase the said
shares on the terms and conditions set out in this Agreement.
TERMS AGREED:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement where the context so admits the following words and
expressions shall have the following meanings:
"ACCOUNTING DATE" 31 August 1999;
"ACCOUNTS" the unaudited financial statements of the
Company for the accounting period which
ended on the Accounting Date (each such
financial statement comprising a balance
sheet, profit and loss account), copies of
which are annexed to the Disclosure Letter;
"ADVERSE CONSEQUENCES" shall have the meaning specified in Clause
9.4.2;
"ASIA ONLINE SHARES" shall mean the Series C Common Stock of Asia
Online, Ltd.;
"AUDITED ACCOUNTS" the audited financial statements of the
Company for the accounting period which
ended on 31 December 1998 (each such
financial statement comprising a balance
sheet, profit and loss account, notes and
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directors' and auditors' report), copies of
which are annexed to the Disclosure Letter;
"AUDITORS" L.Y. Lau & Co. of Room 701, Hollywood Plaza,
610 Nathan Road, Kowloon, Hong Kong;
"BOARD" the board of directors of the Company for
the time being;
"COMPANY" Helix Web Services Limited details of which
are set out in Schedule 2;
"COMPANY" any company or body corporate wherever
incorporated;
"COMPANIES ORDINANCE" the Companies Ordinance (Chapter 32 of the
Laws of Hong Kong);
"COMPLETION" completion of the sale and purchase of the
Sale Shares as specified in Clause 5;
"COMPLETION ACCOUNTS" the audited balance sheet of the Company
made up as at the close of business on the
Completion Date and the audited profit and
loss account of the Company for the period
from the Accounting Date to the Completion
Date, to be prepared and agreed or
determined in accordance with the provisions
of Clause 6;
"COMPLETION DATE" the date hereof (or such later date as the
Parties may agree in writing);
"CONDITIONS" the conditions specified in Clause 4.1;
"CONSIDERATION" the total consideration for the Sale Shares
being the cash consideration and share
component specified in Clause 3 but subject
to adjustment (if any) under Clause 7.1;
"CONTINUING DIRECTOR" Mr. Choi, Leung Chi, being one of the
Directors;
"DEED OF INDEMNITY" the Deed in the form set out in Schedule 5;
"DIRECTORS" the persons listed as directors of the
Company in Schedule 2;
"DISCLOSURE LETTER" the letter of today's date from the Vendors
to
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the Purchaser in the approved terms which
shall be attached hereto as Schedule 9 and
incorporated herein;
"HONG KONG" the Hong Kong Special Administrative Region
of the People's Republic of China;
"INITIAL CONSIDERATION" the amount of HK$3,600,000;
"INTELLECTUAL PROPERTY" Includes patents, knowhow, trade secrets and
other confidential information, registered
designs, copyrights, Internet domain names
of any level, design rights, rights in
circuit layouts, topography rights, trade
marks, service marks, business names,
registrations of, applications to register
and rights to apply for registration of any
of the aforesaid items, rights in the nature
of any of the aforesaid items in any
country, rights in the nature of unfair
competition rights and rights to sue for
passing off;
"LEASES" all the leases, sub-leases, tenancy
agreements, sub-tenancy agreements, licences
or other documents (including any options
for extension relating thereto) granted or
agreed to be granted to the Company or
pursuant to which the Company holds or
occupies any property, details of which are
set out in Schedule 4;
"LEASED PROPERTIES" the properties short particulars of which
are set out in Schedule 3;
"MANAGEMENT ACCOUNTS" the unaudited balance sheet of the Company
as at 31 October 1999 and the unaudited
profit and loss account of the Company for
the period commencing from the day
immediately following the Accounting Date
and ending on 31 October 1999, copies of
which are annexed to the Disclosure Letter;
"NET ASSETS" the net assets of the Company at Completion
as shown by the Completion Accounts;
"NET ASSETS STATEMENT" shall have the meaning specified in Clause
6.3;
"OCCUPATIONAL RETIREMENT
SCHEME" an occupational retirement scheme within the
meaning given to that term in Section 2 of
the
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Occupational Retirement Schemes Ordinance
(Chapter 426 of the Laws of Hong Kong);
"PARTIES" the named parties to this Agreement and
their respective successors and assigns;
"PROPERTIES" the Leased Properties;
"PURCHASER'S ACCOUNTANTS" PricewaterhouseCoopers of 21st Floor,
Prince's Building, Central, Hong Kong;
"PURCHASER'S SOLICITORS" Baker & of 14th Floor Hutchison House, 10
Harcourt Road, Central, Hong Kong;
"RETAINED CONSIDERATION" the amount of HK$900,000 in cash;
"SALE SHARES" the 10,000 ordinary shares of HK$1.00 each
in the issued share capital of the Company
to be bought and sold pursuant to Clause 2;
"TAX" all forms of taxation, estate duties,
deductions, withholdings, duties, imposts,
levies, fees, charges, social security
contributions and rates imposed, levied,
collected, withheld or assessed by any
local, municipal, regional, urban,
governmental, state, federal or other body
in Hong Kong or elsewhere and any interest,
additional taxation, penalty, surcharge or
fine in connection therewith;
"VENDORS'LAWYERS" Bryan Cave LLP of 2106, Lippo Tower, Lippo
Centre, 89 Queensway, Central, Hong Kong;
"WARRANTIES" the representations, warranties and
undertakings contained or referred to in
Clause 9 and Schedule 5; and
"HK$" Hong Kong dollars.
1.2 Save where the context otherwise requires words and phrases the
definitions of which are contained or referred to in the Companies
Ordinance shall be construed as having the meaning thereby attributed
to them.
1.3 Any references, express or implied, to statutes or statutory provisions
shall be construed as references to those statutes or provisions as
respectively amended or re-enacted or as their application is modified
from time to time by other provisions (whether before or after the date
hereof) and shall include any statutes or provisions of
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which they are re-enactments (whether with or without modification) and
any orders, regulations, instruments or other subordinate legislation
under the relevant statute or statutory provision. References to
Sections of consolidating legislation shall, wherever necessary or
appropriate in the context, be construed as including references to the
Sections of the previous legislation from which the consolidating
legislation has been prepared.
1.4 References in this Agreement to Clauses and Schedules are to clauses in
and schedules to this Agreement (unless the context otherwise
requires). The Recitals and Schedules to this Agreement shall be deemed
to form part of this Agreement.
1.5 Headings are inserted for convenience only and shall not affect the
construction of this Agreement.
1.6 The expression "THE VENDORS" includes their respective personal
representatives and the expression "THE PURCHASER" includes its
successors and assigns.
1.7 References to "PERSONS" shall include bodies corporate, unincorporated
associations and partnerships (whether or not having separate legal
personality).
1.8 References to writing shall include any methods of producing or
reproducing words in a legible and non-transitory form.
1.9 The masculine gender shall include the feminine and neuter and the
singular number shall include the plural and vice versa.
1.10 All warranties, representations, indemnities, covenants, agreements and
obligations given or entered into by more than one person are given or
entered into jointly and severally.
1.11 A document expressed to be "IN THE APPROVED TERMS" means a document the
terms of which have been approved by or on behalf of the Parties and a
copy of which has been signed for the purposes of identification by or
on behalf of those Parties.
1.12 In construing this Agreement:
1.12.1 the rule known as the ejusdem generis rule shall not apply
and, accordingly, general words introduced by the word
"other" shall not be given a restrictive meaning by reason
of the fact that they are preceded by words indicating a
particular class of acts, matters or things; and
1.12.2 general words shall not be given a restrictive meaning by
reason of the fact that they are followed by particular
examples intended to be embraced by the general words.
2. SALE OF SALE SHARES
2.1 Subject to the terms of this Agreement, each of the Vendors shall sell
as beneficial owner (and shall cause each other so to sell) and the
Purchaser shall purchase, free
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from all liens, charges and encumbrances and together with all rights
now or hereafter attaching to them, including all rights to any
dividend or other distribution declared, made or paid after the date of
this Agreement, the number of Sale Shares set opposite his name in
column 2 of Schedule 1.
2.2 Each of the Vendors hereby waives and agrees to procure the waiver of
any restrictions on transfer (including pre-emption rights) which may
exist in relation to the Sale Shares, whether under the articles of
association of the Company or otherwise.
2.3 The Purchaser shall not be obliged to complete the purchase of any of
the Sale Shares unless the purchase of all of the Sale Shares is
completed simultaneously.
3. CONSIDERATION
3.1 The total consideration payable for the Sale Shares shall be
HK$4,500,000 (Four Million Five Hundred Thousand Hong Kong Dollars) in
cash and in Asia Online Shares, as set forth in this Agreement (subject
to adjustment of the Retained Consideration in accordance with Clause
7).
3.2 The cash component of the Initial Consideration shall be payable on
Completion to each of the Vendors in accordance with Clause 5.3.1 in
the following amounts:
Choi, Leung Chi HK$675,360
Pang, Man Po HK$787,680
Ho, Ka Chung HK$675,360
Chan, Koon Man Simon HK$787,680
3.3 Prior to the earlier of either (i) six months from the Completion Date
or (ii) the date of the initial public offering of the shares of Asia
Online, Ltd. on the NASDAQ Stock Exchange, the share component of the
Initial Consideration shall be delivered to each of the Vendors as
follows:
Choi, Leung Chi 3,600 Asia Online Shares
Pang, Man Po 1,800 Asia Online Shares
Ho, Ka Chung 3,600 Asia Online Shares
Chan, Koon Man Simon 1,800 Asia Online Shares
3.4 The Retained Consideration shall be payable in accordance with Clause
7.1.
4. CONDITIONS
4.1 The sale and purchase of the Sale Shares is conditional upon:
4.1.1 the Purchaser notifying the Vendor's Lawyers in writing that
it is satisfied in reliance on the Warranties and upon
inspection and investigation as to:-
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4.1.1.1 the financial, contractual, taxation and trading
positions of the Company;
4.1.1.2 the title of the Company to its assets; and
4.1.1.3 the results of its searches and the replies to its
enquiries in regard to the Properties;
4.1.2 all necessary consents being granted by third parties
(including governmental or official authorities) and no
statute, regulation or decision which would prohibit, restrict
or materially delay the sale and purchase of the Sale Shares
or the operation of the Company after Completion having been
proposed, enacted or taken by any governmental or official
authority;
4.1.3 all necessary consents being granted by any landlord or other
reversioner to any Lease where the sale and purchase of the
Sale Shares would breach or be deemed to breach such Lease;
4.1.4 Mr. Choi, Leung Chi duly executing an employment agreement
with Asia Online (Hong Kong) Limited in the approved terms;
and
4.1.5 Mr. Ho, Ka Chung duly executing an employment agreement with
the Asia Online (Hong Kong) Limited in the approved terms.
4.2 The Purchaser may waive all or any of such conditions at any time by
notice in writing to the Vendors' Lawyers.
4.3 The Vendors shall use their best endeavours to procure the fulfilment
of the Conditions on or before the Completion Date.
4.4 In the event that any of the Conditions shall not have been fulfilled
(or waived pursuant to Clause 4.2) prior to the Completion Date then
the Purchaser shall not be bound to proceed with the purchase of the
Sale Shares and this Agreement shall cease to be of any effect except
Clauses 1, 11, 12, 13, 14.1 to 14.5, 15 and 16 which shall remain in
force and save in respect of claims arising out of any antecedent
breach of this Agreement.
4.5 In the event that the Purchaser shall give notice in writing of
satisfaction of, or shall waive, the conditions contained in Clause
4.1.1, Clause 4.1.2, Clause 4.1.3 and Clause 4.1.4 such notice or
waiver shall not imply that the Purchaser is not relying on the
Warranties but rather only that it is prepared, in reliance upon the
Warranties and such comfort, if any, as it has taken from its
investigations, to proceed with the transaction.
5. COMPLETION
5.1 Subject to the provisions of Clause 4, Completion shall take place on
the Completion Date at the offices of the Purchaser's Solicitors when
all (but not some only) of the events described in this Clause 5 shall
occur.
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5.2 At Completion, the Vendors shall:
5.2.1 deliver to the Purchaser:
5.2.1.1 duly executed transfers and sold notes in respect of
all of the Sale Shares in favour of the Purchaser or
its nominees together with the relative share
certificates together with a cheque for HK$5,625 in
respect of the Vendors' 50% share of stamp duty drawn
in favour of the Government of the Hong Kong Special
Administrative Region and the Vendors undertake to
pay forthwith half of any additional stamp duty which
may be imposed in respect of such transfers of the
Sale Shares;
5.2.1.2 such waivers or consents as the Purchaser may require
to enable the Purchaser or its nominees to be
registered as holders of any of the Sale Shares;
5.2.1.3 the Deed of Indemnity duly executed by the Vendors
and the Company;
5.2.1.4 a letter of resignation of the Auditors as the
auditors of the Company, in the approved terms, such
resignation to contain a statement in accordance with
Section 140A of the Companies Ordinance that there
are no circumstances connected with their resignation
which they consider should be brought to the
attention of the members or creditors of the Company;
5.2.1.5 the title deeds, Leases and all other relevant deeds,
documents and correspondence relating to the
Properties;
5.2.1.6 all the statutory and other books and records
(including financial records) duly written up to date
of the Company and its certificate of incorporation,
current business registration certificate, common
seal and any other papers and documents of the
Company;
5.2.1.7 written confirmation in the approved terms that none
of the Vendors or Directors is aware of any matter or
thing which is a breach of or inconsistent with any
of the Warranties;
5.2.1.8 an unconditional letter of release from the Company's
bankers, in the approved terms, evidencing the
release and discharge of all guarantees, debentures
and charges granted by the Company, if any;
5.2.1.9 certified copies of any powers of attorney under
which any of the documents referred to in this Clause
5.2 is executed or evidence satisfactory to the
Purchaser of the authority of any person signing on
behalf of any of the Vendors;
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5.2.1.10 letters of resignation in the approved terms from
each of the Directors (other than the Continuing
Director) and the secretary of the Company, such
resignations to take effect from close of the meeting
of the Board referred to in Clause 5.2.4;
5.2.1.11 a duly executed release under seal, in the approved
terms, releasing the Company from any liability
whatsoever (whether actual or contingent) which may
be owing to the Vendors by the Company at Completion;
5.2.1.12 irrevocable powers of attorney (in such form as the
Purchaser may require) executed under seal by each of
the holders of the Sale Shares in favour of the
Purchaser or such person(s) as may be nominated by
the Purchaser to enable the Purchaser or its nominees
(pending registration of the said transfers) to act
generally in respect of the Sale Shares and to
execute all voting and other rights attaching to the
Sale Shares and to appoint proxies for that purpose;
5.2.1.13 evidence satisfactory to the Purchaser that all
guarantees given by the Company in favour of third
parties in respect of the performance of the
obligations of the Vendors or any other person have
been released;
5.2.1.14 evidence satisfactory to the Purchaser that all loans
or other indebtedness due or owing to the Company by
any of the Vendors or Directors or other officers of
the Company have been repaid in full; and
5.2.1.15 the duly executed copy of the employment agreement of
the Continuing Director and Ho, Ka Chung with Asia
Online (Hong Kong) Limited in the approved terms.
5.2.2 pay all monies (if any) then owing by them to the Company,
whether due for payment or not;
5.2.3 cause the Directors to hold a meeting of the Board at which
the Directors shall pass resolutions in the approved terms
(inter alia) to:-
5.2.3.1 approve the registration of the Purchaser or its
nominees as members of the Company subject only to
the production of duly stamped and completed
transfers in respect of the Sale Shares;
5.2.3.2 approve and authorise the execution by the Company of
the Deed of Indemnity;
5.2.3.3 appoint the Purchaser's Accountants as auditors of
the Company;
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5.2.3.4 cause such persons as the Purchaser may nominate to
be validly appointed as directors of the Company and
upon such appointment forthwith cause the Directors,
other than the Continuing Director, and the secretary
of the Company to resign from their respective
offices and as employees, each delivering to the
Purchaser a letter under seal in the form set out in
Schedule 6 acknowledging that the person so retiring
has no claim outstanding for compensation or
otherwise; and
5.2.3.5 procure revocation of all authorities to the bankers
of the Company relating to bank accounts and procure
the giving of authority to such persons as the
Purchaser may nominate to operate the same.
5.3 At Completion, the Purchaser shall:
5.3.1 pay to each of the Vendors their respective cash component of
the Initial Consideration as set out in Clause 3.2 by
telegraphic bank transfer to the bank account nominated by
each Vendor in writing not less than two business days prior
to the Completion Date or by bank cheque; and
5.3.2 deliver to the Vendors a counterpart Deed of Indemnity duly
executed by the Purchaser.
5.4 Without prejudice to any other remedies available to the Purchaser, if
in any respect the provisions of Clause 5 are not complied with by any
of the Vendors on the Completion Date the Purchaser may:
5.4.1 defer Completion to a date not more than 28 days after the
Completion Date (and so that the provisions of this Clause 5.4
shall apply to Completion as so deferred); or
5.4.2 proceed to Completion so far as practicable (without prejudice
to its rights under this Agreement).
6. COMPLETION ACCOUNTS
6.1 Immediately after Completion the Purchaser's Accountants (or their
representatives) and the Auditors (or their representatives) shall, if
the Purchaser elects, participate in a physical stocktake conducted by
the Company at the Properties.
6.2 The Purchaser and the Vendors shall use all reasonable endeavours to
procure that draft accounts for the Company in respect of the period
from the Accounting Date to the Completion Date shall be prepared by
the Company as soon as reasonably practicable after such stocktake and
such accounts:
6.2.1 shall be prepared on the same accounting bases and in
accordance with the same accounting and valuation principles
and practices as the Accounts; and
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6.2.2 shall in all respects comply with current legislation and
standard accounting principles and practice.
6.3 Following the preparation of such draft accounts, the Company shall
submit them to the Auditors who shall conduct an audit applying the
same bases and principles referred to in Clause 6.2 and produce the
Completion Accounts and a draft statement as to the amount of the Net
Assets (the "NET ASSET STATEMENT") confirming that in their opinion the
Completion Accounts have been prepared in accordance with the
provisions of this Clause 6. The Auditors shall agree in advance with
the Purchaser's Accountants what audit procedures should be employed in
conducting the audit and shall carry out the audit on that basis
6.4 The Auditors shall, as soon as reasonably practicable, submit the draft
Completion Accounts and draft Net Asset Statement to the Purchaser's
Accountants for their review to determine if there are any material
adjustments required to the draft Completion Accounts and the draft Net
Asset Statement. The Vendors shall procure that the Auditors' working
papers and the Company's books and accounts are made available to the
Purchaser's Accountants, if required by them in carrying out their
review.
6.5 If the Purchaser's Accountants and the Auditors are able to agree the
form and content of the Completion Accounts and the Net Asset Statement
within 30 days of the date on which the drafts were submitted to the
Purchaser's Accountants (or within such other period as the Vendors and
the Purchaser may agree in writing), the accounts as so agreed shall be
the Completion Accounts and the Auditors shall issue a Net Asset
Statement which shall be final and binding on the Parties but such
statement shall be without prejudice to the Purchaser's right to claim
under the Warranties, the Deed of Indemnity or otherwise in respect of
any matter. In carrying out their functions under this Agreement, the
Auditors and the Purchaser's Accountants shall be deemed to be acting
as experts and not as arbitrators.
6.6 If the Purchaser's Accountants and the Auditors shall not be able to
agree the form and content of the Completion Accounts and the Net Asset
Statement within 30 days of the date on which the draft accounts were
first submitted to the Purchaser's Accountants (or within such other
period as the Vendors and the Purchaser may agree in writing) the
matter may be referred by the Vendors or the Purchaser to an
independent firm of chartered accountants selected by agreement between
the Vendors and the Purchaser or, failing agreement, nominated by the
President for the time being of the Hong Kong Society of Accountants on
the application of any of the Vendors or the Purchaser and:
6.6.1 such independent firm of chartered accountants shall be
requested to settle any matter in dispute, applying the
same bases and principles as are referred to in Clause 6.2
and (unless both the Vendors and the Purchaser shall
otherwise direct in writing) determine the form and
content of the Completion Accounts and the Net Asset
Statement; and
6.6.2 the decision of such firm of chartered accountants as to
the matter in dispute and their determination (if any) as
to the form and content of the Completion Accounts and the
Net Asset Statement shall, in the absence of
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manifest error, be final and binding on the Parties and
such chartered accountants shall be deemed to act as
experts and not as arbitrators.
6.7 The costs of the Auditors in respect of the preparation and
determination of the Completion Accounts shall be borne by the Vendors
and the costs of the Purchaser's Accountants shall be borne by the
Purchaser. The costs of the independent chartered accountant, if any,
shall be borne by the Vendors and the Purchaser equally.
7. ADJUSTMENT OF CONSIDERATION AND PAYMENT OF RETAINED CONSIDERATION
7.1 Within seventy-five (75) days of the determination of the amount of the
Net Assets in accordance with Clause 6:
7.1.1 if the Net Assets is less than HK$0, the Purchaser will pay to
the Vendors the Retained Consideration, less the amount that
the Net Assets is less than HK$0; or
7.1.2 if the Net Assets exceeds HK$0, the Purchaser shall pay to the
Vendors' Lawyers (whose receipt shall be an absolute discharge
thereof) the Retained Consideration, plus an amount equal to
such excess and the Purchaser shall not be concerned to see to
the distribution of the monies so paid.
8. POST-COMPLETION OBLIGATIONS
8.1 Each of the Vendors undertakes with the Purchaser (for itself
and as trustee for the Company) that, except with the consent
in writing of the Purchaser and subject to the provisions of
Clause 8.3:
8.1.1 for the period of twenty-four (24) months after Completion he
will not within any country or place in which the Company has
carried on business during the year preceding Completion
either on his own account or in conjunction with or on behalf
of any person, firm or company carry on or be engaged,
concerned or interested, directly or indirectly, whether as
shareholder, director, employee, partner, agent or otherwise
in carrying on the business of Web hosting (other than as a
holder of not more than 5 per cent (5%) of the issued shares
or debentures of any company listed on a recognised stock
exchange). Notwithstanding the foregoing, any of the Vendors
may be employed by a company which engages in the business of
web hosting, provided such Vendor does not directly
participate in, supervise, manage or control the web hosting
business of such company;
8.1.2 for the period of twenty-four (24) months after Completion he
will not either on his own account or in conjunction with or
on behalf of any other person, firm or company solicit or
entice away or attempt to solicit or entice away from the
Company the custom of any person, firm, company or
organisation who shall at any time within the year preceding
the date hereof have been a customer, identified prospective
customer, representative, agent, or correspondent of the
Company or in the habit of
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dealing with the Company or enter into any contract for sale
and purchase of Web hosting services or accept any Web hosting
business from any such person, firm, company or organisation;
8.1.3 for the period of twenty-four (24) months after Completion he
will not either on his own account or in conjunction with or
on behalf of any other person, firm or company employ,
solicit, entice away or attempt to employ, solicit or entice
away from the Company any person who at the date hereof is or
at the date of or within the year preceding such employment,
solicitation, enticement or attempt shall have been an
officer, manager, consultant or employee of the Company
whether or not such person would commit a breach of contract
by reason of leaving such employment;
8.1.4 he will not at any time hereafter make use of or disclose or
divulge to any person (other than to officers, employees, or
professional advisers of the Company whose province it is to
know the same) any information (other than any information
properly available to the public or disclosed or divulged
pursuant to an order of a court of competent jurisdiction)
relating to the Company, the identity of its customers and
suppliers, its products, finance, contractual arrangements,
business or methods of business and shall use his best
endeavours to prevent the publication or disclosure of any
such information, except in his capacity as a continuing
director and employee of the Company, as may be appropriate;
8.1.5 if, in connection with the business or affairs of the Company,
he shall have obtained trade secrets or other confidential
information belonging to any third party under an agreement
purporting to bind the Company which contained restrictions on
disclosure he will not without the previous written consent of
the board of directors of the Purchaser at any time infringe
or take any action which would or might result in an
infringement of such restrictions;
8.1.6 he will not at any time hereafter in relation to any trade,
business or company use a name or trade mark including the
word or symbol Helix or its Chinese equivalent or any word or
symbol confusingly similar thereto in such a way as to be
capable of or likely to be confused with the name or any trade
mark of the Company and shall use his best endeavours to
procure that no such name or trade mark shall be used by any
person, firm or company with which he is connected.
8.2 Each Vendor shall procure that all companies and businesses directly or
indirectly owned or controlled by him shall be bound by and observe the
provisions of Clause 8.1 to Clause 8.4 as if they were parties
covenanting with the Purchaser in the same terms.
8.3 While the restrictions contained in Clause 8.1 to Clause 8.4 are
considered by the parties to be reasonable in all the circumstances, it
is recognised that restrictions of the nature in question may fail for
technical reasons and accordingly it is hereby agreed and declared that
if any of such restrictions shall be adjudged to be void as
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going beyond what is reasonable in all the circumstances for the
protection of the interests of the Purchaser but would be valid if part
of the wording thereof were deleted or the periods thereof reduced or
the range of activities or area dealt with thereby reduced in scope the
said restriction shall apply with such modifications as may be
necessary to make it valid and effective.
8.4 The restrictions contained in sub-Clauses 8.1 and 8.2 above shall be
without prejudice to performance by and shall not limit the
restrictions on Choi, Leung Chi under the terms of his employment
agreement entered into pursuant to this Agreement.
8.5 The Purchaser agrees to provide the Company with HK$800,000 in cash as
working capital, in accordance with the Company's reasonable expansion
needs, but in no event later than 31 March 2000.
8.6 In relation to the Leasing Programme for Dell computers dated 6 October
1999 entered into between the Company and Dell Computer Asia Ltd. with
financing provided by Newcourt Credit Hong Kong Limited (the "Lessor"),
the Vendors shall indemnify the Company and the Purchaser against any
and all losses, expenses, costs or damage suffered or incurred by the
Company that are directly caused by any failure to obtain the Lessor's
consent to the sale and purchase of the Sale Shares by the Vendors to
the Purchaser.
8.7 The Vendors shall indemnify the Company and the Purchaser against any
and all losses, expenses, costs or damage suffered or incurred by the
Company that are directly caused by any unauthorised or infringing use
of any computer programs or software by the Company.
8.8 The Vendors shall indemnify the Company and the Purchaser against any
and all losses, expenses, costs or damage suffered or incurred by the
Company that are directly caused by any Tax liabilities arising from
the employment or termination of any and all employees of the Company.
8.9 In relation to the tenancy agreement dated 1 December 1998 entered into
between the Company and Ms. Hsu Chi Liang and Yip Lina (the "First
Landlord"), the Vendors shall indemnify the Company and the Purchaser
against any and all losses, expenses, costs or damage suffered or
incurred by the Company that are directly caused by the Company's use
and occupation of the Company's current office premises at Room 903
Ricky Centre, 36 Chong Yip Street, Kwun Tong, Kowloon, Hong Kong for
other than industrial use, including, but not limited to, any fines
imposed by the Hong Kong government or any claims made by the First
Landlord.
8.10 In relation to the tenancy agreement dated 21 December 1999 entered
into between the Company and City Top Trading Limited (the "Second
Landlord"), the Vendors shall indemnify the Company and the Purchaser
against any and all losses, expenses, costs or damage suffered or
incurred by the Company that are directly caused by the Company's use
and occupation of the premises at Room 809 Ricky Centre, 36 Chong Yip
Street, Kwun Tong, Kowloon, Hong Kong for other than industrial use,
including, but not limited to, any fines imposed by the Hong Kong
government or any claims made by the Second Landlord.
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9. WARRANTIES
9.1 Each of the Vendors jointly and severally represents, warrants and
undertakes to and with the Purchaser that each of the statements set
out in Schedule 7 is now true and accurate.
9.2 The Warranties (other than Warranties 1, 2, 3, 4, 5.1 and 15 in respect
of which no qualification is accepted) are given subject to matters
fully, fairly and specifically disclosed in the Disclosure Letter but
no other information relating to the Company of which the Purchaser has
knowledge (actual or constructive) and no investigation by or on behalf
of the Purchaser shall prejudice any claim made by the Purchaser under
the Warranties or operate to reduce any amount recoverable, and
liability in respect thereof shall not be confined to breaches
discovered before Completion. No letter, document or other
communication shall be deemed to constitute a disclosure for the
purposes of this Agreement unless the same is accepted as such by the
Purchaser and is expressly referred to in the Disclosure Letter.
9.3 The Vendors acknowledge that the Purchaser has entered into this
Agreement in reliance upon the Warranties and has been induced by them
to enter into this Agreement.
9.4 Without restricting the rights of the Purchaser or otherwise affecting
the ability of the Purchaser to claim damages on any other basis
available to it, in the event that any of the Warranties is broken or
(as the case may be) proves to be untrue or misleading, the Vendors
shall, on demand, pay to the Purchaser or, at the Purchaser's
direction, the Company subject to Clauses 9.11 to 9.14:
9.4.1 the amount necessary to put the Company into the position
which would have existed if the Warranties had not been broken
or (as the case may be) had been true and not misleading; and
9.4.2 all costs and expenses incurred by the Purchaser and the
Company in connection with or as a result of such breach and
any costs (including legal costs on a solicitor and own client
basis), expenses or other liabilities which any of them may
incur either before or after the commencement of any action in
connection with (i) any legal proceedings in which the
Purchaser claims that any of the Warranties has been broken or
is untrue or misleading and in which judgment is given for the
Purchaser or (ii) the enforcement of any settlement of, or
judgment in respect of, such claim (the amounts, costs and
expenses described in Clause 9.4.1 and this Clause 9.4.2,
collectively are referred to herein as "Adverse
Consequences").
9.5 Each of the Warranties shall be separate and independent and, save as
expressly provided to the contrary, shall not be limited by reference
to or inference from any other Warranty or any other term of this
Agreement, nor by anything in the Disclosure Letter which is not
expressly referenced to the Warranty concerned.
9.6 Where any statement in the Warranties or any confirmation or
certificate given by any of the Vendors hereunder or pursuant hereto is
qualified by the expression "so far as
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the Vendors are aware" or "to the best of the Vendors' knowledge and
belief" or any similar expression, that statement shall be deemed to
include an additional statement that it has been made after due and
careful enquiry.
9.7 Each of the Vendors hereby agrees with the Purchaser (for itself and as
trustee for the Company) to waive any rights which he may have in
respect of any misrepresentation or inaccuracy in, or omission from,
any information or advice supplied or given by the Company or its
officers, employees or advisers in connection with the giving of the
Warranties and the preparation of the Disclosure Letter.
9.8 The Vendors shall give to the Purchaser and its solicitors and
accountants both before and after Completion all such information and
documentation relating to the Company as the Purchaser shall reasonably
require to enable it to satisfy itself as to the accuracy and due
observance of the Warranties.
9.9 The benefit of the Warranties may be assigned in whole or in part and
without restriction by the person for the time being entitled thereto.
9.10 If any sum payable by the Vendors under this Clause 9 shall be subject
to Tax (whether by way of deduction or withholding or direct assessment
of the person entitled thereto) such payment shall be increased by such
an amount as shall ensure that after deduction, withholding or payment
of such Tax the recipient shall have received a net amount equal to the
payment otherwise required hereby to be made.
9.11 The Purchaser shall notify the Vendors in writing within a reasonable
period of time after becoming aware of, and shall provide to the
Vendors at such time all material information and documentation in its
possession reasonably necessary to support and verify, any Adverse
Consequences that the Purchaser shall have determined have given rise
to, or could reasonably be expected to give rise to, a claim under this
Clause 9.
9.12 If any third party shall notify the Purchaser of any matter which may
give rise to a claim under this Clause 9, then the Purchaser shall
promptly notify the Vendors thereof in writing. The Vendors shall have
the right to defend the Company and/or Purchaser against the third
party claim with counsel of its choice satisfactory to the Purchaser,
provided the Vendors conduct the defense of such third party claim
actively and diligently.
9.13 The Vendors shall not have any liability for indemnification under this
Clause 9 for breaches of the Warranties until the aggregate amount of
all Adverse Consequences in connection with or as a result of such
breach exceeds HK$50,000.
9.14 The liabilities of the Vendors under the Warranties shall:
(a) cease after a period of two (2) years commencing on the
Completion Date hereof except in respect of matters which have
been the subject of a written claim made before such date by
the Purchaser or the Purchaser's Solicitors to any of the
Vendors or the Vendors' Lawyers; and
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(b) in relation to the year 2000 or Malfunction (as defined in
paragraph 9 of Schedule 5 herein) Warranties in paragraphs
5.19, 8.5 and 9.8 of Schedule 5 herein, be limited to a
maximum aggregate amount of HK$4,500,000;
PROVIDED ALWAYS that if in any case the relevant claim or claims has
arisen by reason of:
9.14.1 fraud or wilful concealment or dishonesty or deliberate
non disclosure on the part of any of the Vendors or on
the part of any officer or representatives of the
Company prior to the date of this Agreement; or
9.14.2 the Company not having good title to any asset
(including any shares or stock of any company) of which
it is now warranted to be the owner; or
9.14.3 any of the Vendors or any signatory on their respective
behalfs being claimed not to have had legal authority or
capacity to enter into the Agreement or any agreement
ancillary thereto;
then in any such case none of the limitations whether as to amount or
time set forth in this Clause 9.14 shall apply.
10. RETIREMENT SCHEME
The Vendors represent and warrant that there is no Occupational
Retirement Scheme operated in respect of the Directors and employees of
the Company.
11. RESTRICTION ON ANNOUNCEMENTS
Each of the Parties undertakes that it will not (save as required by
law or by any securities exchange or any supervisory or regulatory body
to whose rules any of the Parties is subject) make any announcement in
connection with this Agreement unless the other Parties shall have
given their respective consents to such announcement (which consents
may not be unreasonably withheld or delayed and may be given either
generally or in a specific case or cases and may be subject to
conditions).
12. CONFIDENTIALITY OF INFORMATION RECEIVED BY THE VENDORS
12.1 The Vendors undertake with the Purchaser that they shall treat as
strictly confidential all information received or obtained by them or
their employees, agents or advisers as a result of entering into or
performing this Agreement including information relating to the
provisions of this Agreement, the negotiations leading up to this
Agreement, the subject matter of this Agreement or the business or
affairs of the Purchaser or any member of the Purchaser's Group and
subject to the provisions of Clause 12.2 that they will not at any time
hereafter make use of or disclose or divulge to any person any such
information and shall use their best endeavours to prevent the
publication or disclosure of any such information.
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12.2 The restrictions contained in Clause 12.1 shall not apply so as to
prevent the Vendors from making any disclosure required by law or by
any securities exchange or supervisory or regulatory or governmental
body pursuant to rules to which the relevant Vendor is subject or from
making any disclosure to any professional adviser for the purposes of
obtaining advice (provided always that the provisions of this Clause 12
shall apply to and the Vendors shall procure that they apply to and are
observed in relation to, the use or disclosure by such professional
adviser of the information provided to him) nor shall the restrictions
apply in respect of any information which comes into the public domain
otherwise than by a breach of this Clause 12 by any Vendor.
13. COSTS
13.1 Each party to this Agreement shall pay its own costs of and incidental
to this Agreement and the sale and purchase hereby agreed to be made.
13.2 The Vendors confirm that no expense of whatever nature relating to the
sale of the Sale Shares to the Purchaser has been or is to be borne by
the Company.
14. GENERAL
14.1 This Agreement shall be binding upon and enure for the benefit of the
estates, personal representatives or successors of the Parties.
14.2 This Agreement (together with any documents referred to herein or
executed contemporaneously by the Parties in connection herewith)
constitutes the whole agreement between the Parties and supersedes any
previous agreements or arrangements between them relating to the
subject matter hereof; it is expressly declared that no variations
hereof shall be effective unless made in writing signed by duly
authorised representatives of the Parties.
14.3 All of the provisions of this Agreement shall remain in full force and
effect notwithstanding Completion (except insofar as they set out
obligations which have been fully performed at Completion).
14.4 If any provision or part of a provision of this Agreement shall be, or
be found by any authority or court of competent jurisdiction to be,
invalid or unenforceable, such invalidity or unenforceability shall not
affect the other provisions or parts of such provisions of this
Agreement, all of which shall remain in full force and effect.
14.5 If any liability of one or more but not all of the Vendors shall be or
become illegal, invalid or unenforceable in any respect, such
circumstance shall not affect or impair the liabilities of the other
Vendors under this Agreement.
14.6 Any right of rescission conferred upon the Purchaser hereby shall be in
addition to and without prejudice to all other rights and remedies
available to it (and, without prejudice to the generality of the
foregoing, shall not extinguish any right to damages to which the
Purchaser may be entitled in respect of the breach of this Agreement)
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and no exercise or failure to exercise such a right of rescission shall
constitute a waiver by the Purchaser of any such other right or remedy.
14.7 The Purchaser may release or compromise the liability of any of the
Vendors hereunder or grant to any Vendor time or other indulgence
without affecting the liability of any other Vendor hereunder.
14.8 Subject to Clause 9.14, no failure of the Purchaser to exercise, and no
delay or forbearance in exercising, any right or remedy in respect of
any provision of this Agreement shall operate as a waiver of such right
or remedy.
14.9 Upon and after Completion the Vendors shall do and execute or procure
to be done and executed all such further acts, deeds, documents and
things as may be necessary to give effect to the terms of this
Agreement and to place control of the Company in the hands of the
Purchaser and pending the doing of such acts, deeds, documents and
things the Vendors shall as from Completion hold the legal estate in
the Sale Shares in trust for the Purchaser.
14.10 This Agreement may be executed in one or more counterparts, and by the
Parties on separate counterparts, but shall not be effective until each
party has executed at least one counterpart and each such counterpart
shall constitute an original of this Agreement but all the counterparts
shall together constitute one and the same instrument.
15. NOTICES
Any notice required to be given by any party hereto to any other shall
be deemed validly served by hand delivery or by prepaid registered
letter sent through the post (airmail if to an overseas address) or by
facsimile transmission to its address given herein or such other
address as may from time to time be notified for this purpose and any
notice served by hand shall be deemed to have been served on delivery,
any notice served by facsimile transmission shall be deemed to have
been served when sent and any notice served by prepaid registered
letter shall be deemed to have been served 48 hours 72 hours in the
case of a letter sent by airmail to an address in another country after
the time at which it was posted and in proving service it shall be
sufficient (in the case of service by hand and prepaid registered
letter) to prove that the notice was properly addressed and delivered
or posted, as the case may be, and in the case of service by facsimile
transmission to prove that the transmission was confirmed as sent by
the originating machine.
16. GOVERNING LAW AND SUBMISSION TO JURISDICTION
This Agreement shall be governed by and construed in accordance with
the laws of Hong Kong and the parties hereto irrevocably submit to the
non-exclusive jurisdiction of the Hong Kong courts for the purpose of
enforcing any claim arising hereunder.
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SCHEDULE 1
THE VENDORS
(1) (2)
NAME AND ADDRESS OF THE VENDORS NUMBER OF SALE SHARES
CHOI, LEUNG CHI 2,500
(Hong Kong Identity Card No. G808031(2))
2906 Pak Yuen House
Chuk Yuen Estate
Kowloon
Hong Kong
PANG, MAN PO 2,500
(Hong Kong Identity Card No. G660249(4))
9680 Mcburney Drive,
Richmond, B.C.,
Canada V6Y 3C6
HO, KA CHUNG 2,500
(Hong Kong Identity Card No. K144105(1))
Room 1234, Yiu Wo House
Yiu On Estate
Ma On Shan
New Territories
Hong Kong
CHAN, KOON MAN SIMON 2,500
(Hong Kong Identity Card No. K176734(8))
Room 1806, Wang Hin House
Wang Tau Hom
Kowloon
Hong Kong
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IN WITNESS WHEREOF the parties hereto have signed this document on the date
appearing at the head hereof.
SIGNED, SEALED AND DELIVERED )
by CHOI, LEUNG CHI )
in the presence of: )
) /s/ CHOI, LEUNG CHI
SIGNED, SEALED AND DELIVERED )
by HO, KA CHUNG, )
the duly appointed attorney of )
PANG, MAN PO )
in the presence of: )
) /s/ HO, KA CHUNG
SIGNED, SEALED AND DELIVERED )
by HO, KA CHUNG )
in the presence of: )
) /s/ HO, KA CHUNG
SIGNED, SEALED AND DELIVERED )
by CHAN, KOON MAN SIMON )
in the presence of: )
) /s/ CHAN, KOON MAN SIMON
SIGNED BY Kevin Randolph )
for and on behalf of )
ACG INTERNATIONAL INC. )
in the presence of: ) /s/ KEVIN H. RANDOLPH
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