1
EXHIBIT 2.10
[BAKER & MCKENZIE LETTERHEAD]
DATED 17 JANUARY 2000
(1) WONG CHING MAN
(2) CHAN KAI LEUNG
(3) LAW PUI YIN, IRENE
AS VENDORS
AND
(4) ACG INTERNATIONAL INC.
AS PURCHASER
----------
AGREEMENT FOR THE
SALE AND PURCHASE
OF SHARES IN
MACRO SYSTEMS LIMITED
----------
2
CONTENTS
Number Clause Headings Page
- ------ --------------- ----
1. Definitions and Interpretation......................................................................2
2. Sale of Sale Shares.................................................................................6
3. Consideration.......................................................................................6
4. Conditions..........................................................................................7
5. Completion..........................................................................................8
6. Completion Accounts................................................................................11
7. Adjustment of Consideration and Payment of Retained Consideration..................................12
8. Post-Completion Obligations........................................................................13
9. Warranties.........................................................................................15
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...................................................................................
SCHEDULE 2 Details of the Company.........................................................................*
SCHEDULE 3 The Properties.................................................................................*
SCHEDULE 4 Deed of Indemnity..............................................................................*
SCHEDULE 5 Warranties.....................................................................................*
SCHEDULE 6 Resignation Letter.............................................................................*
SCHEDULE 7 Software.......................................................................................*
Execution...................................................................................................
* Schedule omitted -- will be provided supplementally to the Commission upon
request.
3
DATE: 17 JANUARY 2000
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 (the
"PURCHASER").
RECITALS:
(A) The Vendors are the registered holders and beneficial owners of all
of the issued shares in the capital of Macro Systems 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 March 1999;
"ACCOUNTS" the audited 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, notes and
directors' and auditors' report) and the profit and
loss account and balance sheet of the Company as at
and for the period ending on the Accounting Date
copies of which are annexed to the Disclosure Letter;
"ASIA ONLINE SHARES" shall mean the Series C Common Stock of Asia Online,
Ltd.;
"AUDITORS" Hung Sui Kwan, Certified Public Accountant of Room 17E
Skyline Tower, 18 Tong Mi Road, Mongkok, Kowloon, Hong
Kong;
"BOARD" the board of directors of the Company for the time
being;
2
4
"COMPANY" Macro Systems 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" Chan Kai Leung;
"DEED OF INDEMNITY" the Deed in the form set out in Schedule 4;
"DIRECTORS" the persons listed as directors of the Company in
Schedule 2;
"DISCLOSURE LETTER" the letter of today's date from the Vendors to the
Purchaser in the approved terms;
"HONG KONG" the Hong Kong Special Administrative Region of the
People's Republic of China;
"INITIAL CONSIDERATION" the amount of HK$ 4,800,000;
"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
3
5
layouts, 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 3;
"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 August
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 August
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;
"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 & McKenzie of 14th Floor Hutchison House, 10
Harcourt Road, Central, Hong Kong;
"RETAINED CONSIDERATION" the amount of HK$1,200,000;
"SALE SHARES" the 50,000 ordinary shares of HK$1.00 each in the issued
share capital of the Company to be bought and sold pursuant to
Clause 2;
"TAX" all forms of taxation, estate duties,
4
6
deductions, withholdings, duties, imposts, levies, fees,
charges, social security contributions and rates imposed,
levied, collected, withheld or assessed by any local,
municipal, regional, urban, governmental, state,
federal or other body in Hong Kong or elsewhere and
any interest, additional taxation, penalty, surcharge
or fine in connection therewith;
"VENDORS' SOLICITORS" Ho & Tam, Solicitors, Unit 3703, 37/F, Tower 1, Lippo
Centre, 89 Queensway, Hong Kong;
"WARRANTIES" the representations, warranties and undertakings
contained or referred to in Clause 9 and Schedule 5;
and
"HK$" 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 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.
5
7
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 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$6,000,000 (Six Million Hong Kong Dollars) (subject to adjustment
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:
6
8
Chan Kai Leung HK$1,084,320
Law Pui Yin, Irene HK$722,880
Wong Ching Man HK$2,400,000
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
following Vendors as follows:
Chan Kai Leung 5,700 Asia Online Shares
Law Pui Yin, Irene 3,800 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 Solicitors in writing
that it is satisfied in reliance on the Warranties and upon
inspection and investigation as to :-
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; and
4.1.4 Chan Kai Leung duly executing an employment agreement with
Asia Online (Hong Kong) Ltd. 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' Solicitors.
4.3 The Vendors shall use their best endeavours to procure the fulfilment
of the Conditions on or before the Completion Date.
7
9
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.
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$7,500 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
reasonably 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
8
10
financial records) duly written up to date of
the Company and its certificates 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;
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;
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 5.2.3;
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 reasonably 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 reasonably 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 (if any) have been released;
9
11
5.2.1.14 evidence reasonably 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 with Asia
Online (Hong Kong) Ltd. 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;
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
9 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.
10
12
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, except that the
Company's accounting policy for revenue recognition shall
be that revenue will be recognised by the Company when the
relevant equipment and software are delivered to the
customer and the relevant services are rendered to the
customer and not when the customer is invoiced for such
equipment and services; and
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.
11
13
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 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 negative HK$32,728, the
Purchaser shall pay to the Vendors the Retained
Consideration, less the amount that the Net Assets is less
than negative HK$32,728; or
7.1.2 if the amount of the Net Assets exceeds negative HK$32,728,
the Purchaser shall pay to the Vendors' Solicitors (whose
receipt shall be an absolute
12
14
discharge thereof), 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 or
any other business carried on by the Company(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);
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 dealing
with the Company or enter into any contract for sale and
purchase or accept 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 for the period of twenty-four (24) months after Completion
he will not make use of or disclose or divulge to any
person (other than to officers or employees 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;
13
15
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
words or symbol "Macro" or "Macro Systems" 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 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 the Continuing Director under the terms of agreements
entered into pursuant to this Agreement.
8.5 The Purchaser agrees to provide the Company with HK$2,000,000 as
working capital.
8.6 In relation to the Microsoft Certified Solution Provider Agreement
dated 7 April 1999 entered into between the Company and Microsoft
Hong Kong Ltd. on behalf of Microsoft Corporation ("Microsoft"), the
Vendors shall indemnify the Company and the Purchaser against any and
all losses, expenses, costs or damage suffered or incurred by the
Company if Microsoft's consent to the sale and purchase of the Sale
Shares by the Vendors to the Purchaser is not obtained.
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 in relation to any unauthorised use of any computer programs
or software by the Company.
8.8 In relation to the tenancy agreement dated 20 July 1998 entered into
between Konsun
14
16
International Limited ("KIL") and the Company, the Vendors shall
indemnify the Company and the Purchaser against any and all losses,
expenses, costs or damage suffered or incurred by the Company if
KIL's consent to the sale and purchase of the Sale Shares by the
Vendors to the Purchaser is not obtained.
8.9 The Vendors shall indemnify the Company and the Purchaser against any
and all losses, expenses, costs or damage suffered or incurred by the
Company in relation to any warranty claims by the Company's customers
which are not adequately covered by the original manufacturers' and
licensors' warranties for the relevant equipment, software and
computer systems.
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 5 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:
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
15
17
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.
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 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 of 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 liabilities of the Vendors under the Warranties and under the
indemnities contained in Clauses 8.6 to 8.9 shall cease after a
period of two (2) years commencing on the 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' Solicitors PROVIDED ALWAYS that
if in any case the relevant claim or claims has arisen by reason of:
9.11.1 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
9.11.2 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
16
18
9.11.3 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 the limitations as to time set forth in this
Clause 9.11 shall not apply.
10. RETIREMENT SCHEME
The Vendors warrant that there is no 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 of
companies 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.
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 Vendors.
17
19
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 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)
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 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.
18
20
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 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.
19
21
SCHEDULE 1
THE VENDORS
(1) (2)
NAME AND ADDRESS OF THE VENDORS NUMBER OF SALE SHARES
WONG CHING MAN Twenty-five Thousand (25,000)
(Hong Kong Identity Card No. D545275(A))
Flat G, 11th Floor, Block 4
Fullview Garden
Siu Sai
Hong Kong
CHAN KAI LEUNG Fifteen Thousand (15,000)
(Hong Kong Identity Card No. G647435(6))
Flat J, 4th Floor, Man Wo Garden
No. 38 Yuet Wah Street
Kwun Tong
Kowloon
Hong Kong
LAW PUI YIN, IRENE Ten Thousand (10,000)
(Hong Kong Identity Card No. C629716(A))
Flat J, 4th Floor, Man Wo Garden
No. 38 Yuet Wah Street
Kwun Tong
Kowloon
Hong Kong
20
22
IN WITNESS WHEREOF the parties hereto have signed this document on the date
appearing at the head hereof.
SIGNED, SEALED AND DELIVERED )
by WONG CHING MAN. )
in the presence of: )
/s/ HO PAK MING ) /s/ Wong Ching Man
Ho Pak Ming
Solicitor, HKSAR
Ho & Tam
SIGNED, SEALED AND DELIVERED )
by CHAN KAI LEUNG. )
in the presence of: )
/s/ HO PAK MING ) /s/ Chan Kai Leung
Ho Pak Ming
Solicitor, HKSAR
Ho & Tam
SIGNED, SEALED AND DELIVERED )
by LAW PUI YIN, IRENE )
in the presence of: )
/s/ HO PAK MING ) /s/ Law Pui Yin
Ho Pak Ming
Solicitor, HKSAR
Ho & Tam
SIGNED BY /s/ KEVIN H. RANDOLPH )
-------------------------- )
for and on behalf of )
ACG INTERNATIONAL INC. )
in the presence of: ) /s/ Kevin H. Randolph
/s/ [ILLEGIBLE]
21