STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of October 21, 2004 (this "Agreement"),
between KOK, SIN KEUNG (the "Seller") and MINGHUA GROUP INTERNATIONAL HOLDINGS
LIMITED, a corporation organized under the laws of the State of New York (the
"Purchaser").
BACKGROUND
The Seller and Top Team Holdings Limited, a British Virgin Islands
corporation and indirect wholly-owned subsidiary of the Purchaser ("Top Team"),
formed Ming Hua Environmental Protection Science and Technology Limited, a Hong
Kong corporation ("Ming Hua EPST"). Top Team is the owner of 57% of the equity
of Ming Hua EPST and the Seller is the owner of the remaining 43% of the equity
(the "Equity") of Ming Hua EPST.
Ming Hua EPST is the sole owner of each of Good View Bus Manufacturing
(Holdings) Company Limited ("Good View") and Eagle Bus Development Limited
("Eagle"), both corporations organized under the laws of the People's Republic
of China. Good View and Eagle collectively own approximately 90% of Guangzhou
City View Bus Installation Co. Ltd. (the "Manufacturing Company") with Guangzhou
Public Automobile Company No. 2 owning the remaining 10%.
The Manufacturing Company is the owner and operator of a manufacturing
facility that the Purchaser intends to utilize to manufacture its hybrid busses.
The Purchaser desires to purchase the Seller's Equity and thereby become the
sole beneficial owner of Ming Hua EPST and thereby increase its percentage
beneficial ownership in the Manufacturing Company. The Seller desires to sell
the Seller's Equity to the Purchaser for the consideration described herein.
Upon acquisition of the Equity, the Purchaser desires that the Equity be
registered in the name of Euromax International Investments Limited.(Euromax)
NOW, THEREFORE, in consideration of the premises and of the mutual
promises set forth herein, the Purchaser and the Seller hereby agree as follows:
1. Sale of Equity; Purchase Price. Subject to the terms and
conditions set forth herein, the Purchaser hereby agrees to purchase the Equity
from the Seller, and the Seller agrees to sell the Equity to the Purchaser, for
the following consideration (collectively, the "Purchase Price"):
(a) Within seven (7) days of executing this Agreement, the
Purchaser shall pay to the Seller RMB 1,000,000; and
(b) Within thirty (30) days following the date that the Equity
is registered in the name of the Purchaser (or its designee, Euromax), the
Purchaser shall pay to the Seller RMB 13,000,000.
2. Closing.
(a) The closing (the "Closing") shall take place on the date
of the execution of this Agreement at such time or place as the parties may
agree upon.
(b) At the Closing, the Seller shall deliver to the Purchaser
a certificate or certificates representing the Equity or such other evidence of
the transfer of the Equity into the name of the Purchaser (or its designee,
Euromax) as may be suitable under applicable law and such other documents as may
be necessary to effect the transfer of the Equity to the Purchaser (or its
designee, Euromax) free and clear of all liens, claims, charges, security
interests, and encumbrances of any kind.
3. Representations and Warranties of Seller. The Seller represents
and warrants that:
(a) The Seller owns the Equity, of record and beneficially,
free and clear of all liens, claims, charges, security interests, and
encumbrances of any kind whatsoever. The Seller has sole control over the Equity
or sole discretionary authority over any account in which the Equity is held.
The Equity constitutes 43% of the issued and outstanding equity of Ming Hua EPST
and neither Ming Hua EPST nor the Seller is subject to any agreement,
constituent instrument, document, other instrument or other arrangement pursuant
to which any third party has the right to acquire or otherwise purchase or take
over all or any part of the Equity. Ming Hua EPST is the record and beneficial
owner of all of the issued and outstanding equity of each of Good View and
Eagle. Good View and Eagle collectively own 90.1% of the issued and outstanding
equity of the Manufacturing Company, in each case, free and clear of all liens,
claims, charges, security interests, and encumbrances of any kind whatsoever and
neither Ming Hua EPST, nor Good View nor Eagle is subject to any agreement,
constituent instrument, document, other instrument or other arrangement pursuant
to which any third party has the right to acquire or otherwise purchase or take
over all or any part of Ming Hua EPST's equity interest in Good View or Eagle or
their respective equity interests in the Manufacturing Company. By virtue of the
acquisition of the Equity pursuant hereto, the Purchaser will be able to control
and otherwise direct the affairs and business of Ming Hua EPST, Good View, Eagle
and the Manufacturing Company.
(b) The Seller has full right, power and authority to execute,
deliver and perform this Agreement and to carry out the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by the Seller and constitutes a valid, binding obligation of the
Seller, enforceable against the Seller in accordance with its terms (except as
such enforceability may be limited by laws affecting creditor's rights
generally).
4. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants that the Purchaser has full right, power and authority
to execute, deliver and perform this Agreement and to carry out the transactions
contemplated hereby. This Agreement has been duly and validly executed by the
Purchaser, constitutes a valid obligation of the Purchaser, is legally binding
on the Purchaser and is enforceable against it in accordance with its terms
(except as such enforceability may be limited by laws affecting creditors'
rights generally).
5. Survival; Indemnification. (a) The Seller and the Purchaser
covenant that their respective representations and warranties contained herein
shall be true in all respects as of the Closing date of the sale of the Equity
pursuant to this Agreement. All representations and warranties and other
agreements made by the Seller and the Purchaser in this Agreement or pursuant
hereto shall survive the Closing.
(b) The Seller shall indemnify the Purchaser and its
successors and assigns, and its directors, officers, employees, agents,
stockholders and counsel (collectively, the "Minghua Indemnitees"), pay on
demand and protect, defend, save and hold each Minghua Indemnitee harmless from
and against any and all liabilities (whether known or unknown, whether asserted
or unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due), damages,
losses, settlements, claims, actions, suits, penalties, fines, costs or expenses
(including, without limitation, reasonable attorneys' and accountants' fees)
(any of the foregoing, a "Claim") incurred by or asserted by a third party
against any Minghua Indemnitee of whatever kind or nature arising from or
occurring as a result of a breach of this Agreement by the Seller or a breach of
any representation or warranty made by the Seller in this Agreement. The
Purchaser shall promptly notify the Seller of any Claim, upon becoming aware
thereof, and permit the Seller at the Seller's sole cost to defend such Claim or
suit and shall cooperate in the defense thereof. Neither Purchaser nor any
Seller shall enter into, or permit, any settlement of any such suit without the
express written consent of the other party. The Purchaser may, at its option and
expense, have its own counsel participate in any proceeding that is under the
direction of any Seller and will cooperate with the Seller and its insurers in
the disposition of any such matter.
6. Additional Action. Each party shall, upon the request of the
other, from time to time, execute and deliver promptly to such other party all
instruments and documents of further assurances or otherwise and will do any and
all such acts and things as may be reasonably required to carry out the
obligations of such party hereunder and to consummate the transactions
contemplated hereby.
7. Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
assigns.
8. Governing Law. This Agreement shall in all respects be governed
by the laws of the People's Republic of China.
9. Entire Agreement. This Agreement constitutes the entire
arrangement between the parties with respect to the Equity and cannot be
changed, modified, discharged or terminated except by a writing signed by the
party against whom enforcement of any change, modification, discharge or
termination is sought. THIS ENGLISH VERSION OF THE AGREEMENT IS THE FINAL AND
AUTHORITATIVE VERSION OF THE UNDERSTANDING BETWEEN THE PARTIES REGARDING THE
SUBJECT MATTER HEREOF AND IT SUPERSEDES ANY OTHER VERSIONS OF SUCH
UNDERSTANDING, INCLUDING, WITHOUT LIMITATION, ANY VERSIONS WRITTEN IN CHINESE.
10. Waiver. No waiver shall be deemed to be made by any party of any
of its rights hereunder unless the same shall be in writing, and each waiver, if
any, shall be a waiver only with respect to the specific instance involved and
shall in no way impair the rights of the waiving party or the obligations of the
other party in any other respect at any other time.
11. Assignment. The Purchaser may at any time assign its rights and
obligations under this Agreement to persons or entities affiliated with the
Purchaser. The Seller shall be required to honor any such assignment only after
receiving notice thereof from the Purchaser.
12. Notices. Any notice, demand or other communication to be given
hereunder by either party to the other shall be in writing and shall be mailed
by certified mail, return receipt requested, or delivered against receipt to the
party to whom it is to be given to the address of such party set forth on the
signature page hereto (or to such other address as the party shall have
furnished in accordance with the provisions of this Section 12). Any notice or
other communication given by certified mail shall be deemed given at the time of
certification thereof, except for a notice changing a party's address which
shall be deemed given at the time of receipt thereof.
13. Captions. The captions used in this Agreement are for
convenience only and shall not be deemed as, or construed as, a part of this
Agreement.
14. Counterparts; Facsimile Execution. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original,
and all of which shall constitute one and the same instrument. Facsimile
execution and delivery of this Agreement is legal, valid and binding for all
purposes.
15. Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible to the fullest extent permitted by
applicable law in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the extent possible.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
SELLER:
KOK, SIN KEUNG
/s/ Sin Keung Kok
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Address:
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PURCHASER:
MINGHUA GROUP INTERNATIONAL
HOLDINGS LIMITED
By: /s/ Chang-De-Li
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Name:
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Address:
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