Equity Sales Contract

Contract Categories: Business Operations - Sales Agreements
EX-10.1 2 dex101.htm EQUITY SALES CONTRACT TO SELL 34.143% INTEREST Equity Sales Contract to sell 34.143% interest

Exhibit 10.1

 

Equity Sales Contract

 

This contract (“Contract”) is entered by and between:

 

Assignor:    Cortelco China Corporation

Address:

   

14000 Tracy Court, Los Altos Hills, CA 94022

Legal Representative:

   

David S. Lee

Type of Business:

   

USA Company

Registered Capital:

   

USD 1,000,000

Equity Sales Agent:

   

Shanghai Yuanliu Property Exchange Agency

Phone:

   

5885-2146

Assignee:    Shanghai Fortune Investment & Development Co. Ltd

Address:

   

1666 Sichuan North Road, #2103, Shanghai 200080, China

Legal Representative:

   

Yuan Xin

Type of Business:

   

Limited Company

Registered Capital:

   

RMB 100,000,000

Telephone:

   

6364-3835

Equity Sales Agent:

   

Shanghai Zhangjiang Hige-Tech Property Exchange Agency

Phone:

   

5080-0577

 

WITNESSETH:

 

WHEREAS, Cortelco Shanghai Information Technology Co. Ltd. (“Cortelco Shanghai”) was established in 1993 with registered capital of USD 2,100.000, of which USD 963,000 was invested by Shanghai Fortune Telecommunication Technology Development Co. Ltd., and USD 1,137,000 was invested by Cortelco China Corporation (“Cortelco China”);

 

WHEREAS, the appraised Assets of Cortelco Shanghai at July 31, 2005 was RMB 76,114,423.59, appraised Liabilities of Cortelco Shanghai at July 31, 2005 was RMB 55,413,912.16, and the appraised Net Assets of Cortelco Shanghai at July 31, 2005 was RMB 20,700,511.43;

 

WHEREAS, each person sign below has been legally authorized by each party;

 

NOW, THEREFORE, the parties agree as follows:

 

1. Object

 

Cortelco China shall sell its 34.143% interests in Cortelco Shanghai to Fortune Investment & Development Co. Ltd. (“Fortune”).

 

2. Pricing

 

Cortelco China shall transfer its 34.143% interests in Cortelco Shanghai to Fortune at RMB 7,067,776.00.

 

3. After Cortelco Shanghai interests are appraised by an Appraisal firm, the share transfer shall be filed at Shanghai Equity Exchange. The interests shall be transferred in accordance with the terms and conditions provided in this contract.

 

4. Employee Arrangement – Not applicable to this transaction.

 

5. Since Cortelco Shanghai will stay in business after the share is transferred, Cortelco Shanghai will succeed to all the rights and obligations it has as a company.

 

6. Disposition of Assets – Not applicable to this transaction.

7. Payment Terms:

 

Fortune shall turn in application at State Administration Foreign Exchange, Shanghai Branch, to purchase US dollars to pay Cortelco China in full within 10 days upon the new business license is approved by Local Business Bureau.

 

8. Both parties shall file at Shanghai Equity Exchange in order to get the certificate no later than January 31, 2006.

 

As agreed by both parties, the effective date of the transaction was 7/31/2005. Any profit or loss of Cortelco Shanghai between 8/1/2005 to the closing date shall be transferred to Fortune.

 

9. Cortelco China and Fortune shall assist Cortelco Shanghai to obtain all certificates or approvals from government related to the share transfer within 6 months.

 

10. All taxes or costs related to the share transfer shall be paid in accordance with applicable Chinese Law and regulations.

 

11. Breach Liabilities

 

If Cortelco China did not transfer its interests in Cortelco Shanghai as agreed in #8, or if Fortune did not pay Cortelco China as agreed in #7, the breaching party shall pay the other party 0.3% of the total purchase price every three days after exceeding the time limit. The total penalty amount shall not higher than 1% of the total purchase price.

 

12. Settlement of Disputes

 

The formation of this contract, its validity, interpretation, execution and settlement of the disputes shall be governed by the related laws of the People’s Republic of China. Any dispute arising in connection with the contract shall be resolved by both parties through friendly consultation. If the dispute can not be resolved by friendly consultations, either party may submit such dispute to Shanghai Arbitration Center. Each party may submit a dispute to Shanghai Arbitration Center directly without consultation with the other party.

 

13. Amendment, Alteration and Discharge of the Contract

 

Any amendment or discharge of the contract shall come into force if:

 

  13.1 It is agreed by both parties through friendly consultation, and such action will not impair any interests of the country, the society and public;

 

  13.2 It is due to force majeure;

 

  13.3 One party fails to perform as agreed in this contract, but it’s approved by the other party afterward;

 

  13.4 It is due to any other conditions agreed by both parties.

 

If both parties agree to discharge the contract, Cortelco China shall refund all payments from Fortune.

 

If there is any amendment or discharge of the contract, both parties and the consultant firm shall sign an amendment or a discharge agreement and file at Shanghai Equity Exchange.

 

14. Consents of both parties:

 

  14.1 Cortelco China promises that the interests in Cortelco Shanghai it intends to sell is real and complete, without concealing the following situations:

 

  14.1.1 The interests it intends to sell is sequestered by any legal authorities;

 

  14.1.2 The interests it intends to sell is in pledge;

 

  14.1.3 The interests it intends to sell is not obscured;

 

  14.1.4 The interests is intends to sell is not involved in any lawsuits;

 

  14.1.5 Other situations that will impact the interests to be real and complete.

 

  14.2 Fortune promises that the company has absolute capacity for civil rights and actions without any fraudulent conducts.

 

  14.3 No party shall disclosure any information regarding to the Contract unless it is approved by other parties in written.

15 Other - Not applicable to this transaction.

 

The Contract has nine original copies. All copies have equal binding force.

 

Assignor:
Cortelco China Corporation
/s/    DAVID S. LEE        
David S. Lee
Date: December 22, 2005
Assignee:
Shanghai Fortune Investment & Development Co. Ltd.
/s/    ZHOU SONGXIN        
Zhou Songxin
Date: December 22, 2005