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Title: |
Equity Transfer Agreement |
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Entities: |
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Date: |
2008 |
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Size: |
41KB total |
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Price: |
$37 |
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ID: |
#3284843 |
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[SHANGHAI PU DONG LAW OFFICE; TENTH DRAFT AS OF 20TH OCTOBER 2007]
EQUITY TRANSFER AGREEMENT
BY AND BETWEEN
LI WENYONG AND HOU BIN
(As the Transferors)
AND
Home Inns & Hotels Management (Shanghai) Inc.
(As the Transferee)
With Respect to the Transfer of 100% Equities of
Chuwen Investment (Shanghai) Holdings Co., Ltd.
Dated: 21st October 2007
Page 1 of 24
This Equity Transfer Agreement (hereinafter referred to as ?The Agreement?) is made and entered in Shanghai, People?s Republic of China (?PRC?) on the 21st day of October in 2007 by and between the parties referred to below.
WHEREAS,
| (A) | LI Wenyong, a natural person of Chinese nationality, holding a Chinese ID Card numbered 310106620622121 and residing in No. 29, Lane 333, Wukang Road, Shanghai, People?s Republic of China; HOU Bin, a natural person of Chinese nationality, holding a Chinese ID Card numbered 310107196003165012 and residing in Room 301, No. 18, Lane 1028, Changshou Road, Putou District, Shanghai, PRC (collectively referred to as ?the First Party?); and |
| (B) | Home Inns & Hotels Management (Shanghai) Inc., a corporation duly organized and existing under the laws of the People?s Republic of China, with its legal address at No. 462, Shangzhong Road, Shanghai, PRC (hereinafter referred to as ?the Second Party?). |
WHEREAS, Chuwen Investment (Shanghai) Holdings Co., Ltd. 
referred to in this Agreement is a limited liability company (LLC) duly incorporated and exists under the laws of the People?s Republic of China, with its registered address at No. 923, Zhong Shan South No. 2 Road, Shanghai, PRC (hereinafter referred to as ?the Company?). (The First Party and the Second Party are collectively referred to as the ?Parties? and each is individually referred to as a ?Party?).
Page 2 of 24
| 1. | GENERAL PROVISIONS |
| 1.1 | PREAMBLE |
| (a) | The Company shall currently take the form of a limited liability company (a domestic joint venture). The registered capital of the Company is ONE HUNDRED MILLION RENMINBI (RMB100,000,000.00), of which NINETY MILLION RENMINBI (RMB90,000,000.00) has been contributed by LI Wenyong in the form of cash (representing ninety percent (90%) of the total registered capital) and TEN MILLION RENMINBI (RMB10,000,000.00) has been contributed by HOU Bin in the form of cash (representing ten percent (10%) of the total registered capital). The capital contributions of the Parties referred to above have been made in full and attested by the Certified Public Accountant (CPA). |
| (b) | The Company is currently holding twenty percent (20%) of the equities of Shanghai Top Star Hotel Management Co., Ltd. (hereinafter referred to as ?Top Star?), one hundred percent (100%) of the equities of Nanning Top Star Hotel Management Co., Ltd. (hereinafter referred to as ?Nanning Top Star?), ninety-five percent (95%) of Chengdu Top Star Hotel ? Mareka Hotel Management Limited Liability Company (hereinafter referred to as ?Chengdu Top Star?), and ninety percent (90%) of the equities of Wen Lai Investment Management (Shanghai) Co., Ltd. (hereinafter referred to as ?Shanghai Wen Lai?). In addition, the Company is planning to invest in the establishment of Guoding Top Star Hotel (Shanghai) Co., Ltd. (hereinafter referred to as ?Shanghai Guoding Top Star?). (Except for Shanghai Wen Lai, the other four (4) companies are collectively referred to as the ?Subsidiaries?). |
| (c) | As of October 10, 2007, Top Star has a total of twenty (20) branches. Except for its Shenzhen branch, the other nineteen (19) branches are currently operating nineteen (19) ?Top Star Hotels?. As of (Month) (Day), 2007, two of the branch stores (respectively located at Yan An Road (West) of Shanghai and the People?s Square of Changzhou) have not yet obtained the business licenses (the twenty branches and the two branch stores are collectively referred to as ?Branch Offices?). |
Page 3 of 24
| (d) | The First Party agrees to sell to the Second Party the equities (hereinafter referred to as ?Equities?) corresponding to one hundred percent (100%) of the total registered capital of the Company held by the First Party in accordance with the terms and conditions set out in the Agreement. Additionally, the Second Party has agreed to purchase the Equities. |
| (e) | As of August 31, 2007, the Company has not yet repaid Shanghai Chang Bai Real Estate Development Co., Ltd.   the debts in the amount of TWO HUNDRED AND TWENTY MILLION AND SIX HUNDRED THOUSAND RENMINBI (RMB220,600,000.00) (hereinafter referred to as ?Loans?). |
| 1.2 | TITLE |
The title of this Agreement is provided herein for reference only and does not affect the interpretation of this Agreement.
| 2. | EQUITY TRANSFER |
| 2.1 | EQUITY TRANSFER |
Pursuant to the terms and conditions of this Agreement, the Second Party shall purchase the Equities from the First Party as of the Transaction Date (as defined hereunder). The transfer of Equities to the Second Party by the First Party herein is hereinafter referred to as ?Equity Transfer?.
Page 4 of 24
| 2.2 | OWNERSHIP |
Upon obtaining the new business license with the Second Party recorded as the investor of the Company, the Second Party shall own one hundred percent (100%) of the Equities of the Company.
| 3. | PURCHASE PRICE AND PAYMENT |
| 3.1 | EQUITY PURCHASE PRICE |
The total purchase price for the transfer of equities from the First Party to the Second Party is ONE MILLION RENMINBI (RMB1,000,000.00) (hereinafter referred to as the ?Purchase Price?). The Second Party shall pay the First Party the Purchase Price through telegraphic transfer.
The Parties shall agree and arrive at the Purchase Price in consideration of the consensus on and agreements for the net asset valuation of the Company.
The Second Party agrees that, upon the recall of all the Company?s debt claims from Tuofeng Advertising (Shanghai) Co., Ltd. 
by the Company, the Company upon the acquisition of the Company by the Second Party shall continue to repay the Company?s Loans to Shanghai Chang Bai Real Estate Development Co., Ltd. 
.
| 3.2 | PAYMENT |
The Second Party shall, in accordance with the time schedule and the method(s) referred to below, pay the First Party the Purchase Price:
The Second Party shall, after the completion of Equity Transfer in the Company on the first working day, pay the First Party ONE MILLION RENMINBI (RMB1,000,000.00);
Page 5 of 24
The First Party?s receiving bank account is subject to the First Party?s written notification to the Second Party.
The First Party shall, upon each payment by the Second Party, issue a receipt to the Second Party to confirm the receipt of the payment.
| 3.3 | LOAN REPAYMENT |
The Second Party guarantees that, upon the completion of the transaction, the Company shall repay its Loans to Shanghai Chang Bai Real Estate Development Co., Ltd. 
in accordance with the conditions and procedures set out below:
| (a) | On the first working day upon the completion of the Equity Transfer (subject to the new business license), the Company shall repay the Loans in the amount of THIRTY-FOUR MILLION RENMINBI (RMB34,000,000.00) to Shanghai Chang Bai Real Estate Development Co., Ltd.  ; |
| (b) | Upon the completion of the Company?s Equity Transfer, and upon the recall of all the Company?s debt claims from Tuofeng Advertising (Shanghai) Co., Ltd.  by the Company and Top Star, the Company shall, not later than November 30, 2007, repay the remaining Loans to Shanghai Chang Bai Real Estate Development Co., Ltd.  . (If the two preceding conditions have not been satisfied by November 30, 2007, the remaining Loans shall be repaid until the two aforesaid conditions are satisfied.) |
| 3.4 | FEES |
All the taxes and fees imposed on equity transfer within the PRC by the relevant Chinese government authorities shall be
Page 6 of 24
borne by the paying party of the said taxes and fees pursuant to the laws and regulations officially promulgated by the PRC. Nonetheless, any taxes and fees not stipulated in the laws and regulations shall be equally borne by both parties hereto. If one party has already paid taxes or fees which shall be payable by the other party pursuant to the laws, the other party which shall pay the said taxes or fees as set forth in the applicable laws and regulations shall, upon receipt of a written notice from the party who has already paid the taxes or fees on behalf of the other party, forthwith repay the party who has already paid the taxes or fees the amount accordingly.
Pursuant to the current ?Individual Income Tax Law?, the Second Party is responsible for withholding and collecting individual income taxes for the First Party resulting from Equity Transfer. Accordingly, both parties hereto agree that the amount of individual income taxes withheld and collected by the Second Party for the First Party shall be deducted from the Purchase Price to be paid by the Second Party to the First Party.
| 4. | CONDITIONS PRECEDENT |
| 4.1 | Prior to the completion of the transaction, the First Party shall ensure that the matters referred to below have been completed: |
| (a) | All the directors and legal representative(s) originally holding the relevant posts in the Company on behalf of the First Party have resigned, and have been replaced by persons designated by the Second Party, unless the Second Party agrees that the relevant personnel originally taking up the posts may continue to hold such posts. |
| (b) | The Company has issued a written confirmation to confirm that no significant adverse changes have occurred to the Company and to any of its Subsidiaries as from the signing date to the transaction completion date. |
Page 7 of 24
| (c) | The First Party, on that day upon the completion of the transaction and prior to the transaction, has not violated its representations, warranties or covenants under this Agreement. |
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