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x
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ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Nevada
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20-1211204
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(State or other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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17800 Castleton St., Suite 300
City of Industry, CA
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91748
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(Address of Principal Executive Offices)
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(Zip Code)
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Common Stock
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(Title of Class)
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Large accelerated filer
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¨
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Accelerated filer
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x
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Non-accelerated filer
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¨
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Smaller reporting
company
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¨
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1.
|
Super Hydro-Oxy:
An oral liquid designed to revitalize and detoxify the human body.
|
2.
|
Super Silica:
An oral liquid designed to support bones, arteries, connective tissue, healthy hair, skin and nails.
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3.
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Colloidal Silver:
An oral liquid designed to combat bacterial, fungal and viral infections.
|
4.
|
Rooibos Tea:
A popular South African tea believed to promote anti-aging and immune system health.
|
5.
|
Zeolite Plus:
An oral liquid designed to detoxify the body, support immune system strength and normalize pH in the body.
|
6.
|
2006 Celprotect I:
Ingestible tablets designed to eliminate toxins and viruses (e.g., cold sores) and promote energy.
|
7.
|
2007 Celprotect II:
An oral liquid designed to stimulate cellular metabolism, neutralize toxins, assist in avoiding food poisoning, balance cell life and boost energy.
|
8.
|
2006 – 2007 Celprotect I:
A kit containing 2006 Celprotect I and 2006 - 2007 Celprotect II.
|
9.
|
Vinegar Tablet
:
A pill containing Pectin and Acetic Acid which relieves acid reflux and helps decrease the risk of heart diseases. Vinegar is high in Potassium and Potassium foods are known to play a role in lowering high blood pressure
.
|
10.
|
Essential 90+:
An oral spray designed to promote overall health.
|
11.
|
Super Re-Vitalizer:
An oral spray designed to promote overall health.
|
12.
|
MSM
(
Methylsulfonymethane):
An oral spray designed to rebuild connective tissue and joints.
|
13.
|
Re-Live Again:
An oral spray designed to increase the release of Human Growth Hormone within the body to increase energy and endurance.
|
14.
|
Slim’n Easy:
An oral spray designed to promote and sustain weight loss.
|
15.
|
Perform Plus:
An oral spray designed to promote endurance, performance and increased libido.
|
16.
|
Cordyceps Sinensis:
An oral spray that supports the body’s vital antioxidant enzymes that have anti-aging effects.
|
17.
|
Colostrum:
An oral spray designed to promote anti-aging, weight loss and immune system support.
|
18.
|
Spray-EEZE:
An oral spray designed to alleviate colds and sore throats.
|
19.
|
Memory Plus:
An oral spray designed to overcome the natural processes associated with aging and enhance healthy cognitive ability.
|
20.
|
Vision Plus:
An oral spray designed to nourish the eyes.
|
21.
|
Slumber Plus:
An oral spray designed to aid sleep.
|
22.
|
Super Cal:
An oral spray designed to promote bone health.
|
23.
|
Deer Antler Velvet Plus:
An oral spray designed to promote white blood cell count and to help the body handle stress and promote recovery from the effects of injury and fatigue.
|
24.
|
GlucoBalance:
An oral spray designed to maintain proper levels of blood sugar for good health.
|
25.
|
Liver Support:
An oral spray designed to cleanse the liver and rebuild damaged tissue.
|
26.
|
CardioSupport:
An oral spray designed to promote heart health.
|
27.
|
ReishiPlus:
An oral spray designed to help lower blood pressure and decrease elevated cholesterol and triglyceride levels and support the immune system.
|
1
.
|
Fountain of Youth:
A daily skin care regimen including a synergistic blend of 10 oriental herbs for the purpose of skin brightening, cleaning, and anti-wrinkle effects.
|
2
.
|
Rooibos Tea Cream:
A skin cream containing Alpha-Hydroxy acids, antioxidant, Vitamin B, Vitamin C and Vitamin E, Zinc, Potassium, Calcium, Copper and DHEA.
|
3
.
|
Gold Cream:
A topical cream containing colloidal gold for the purpose of relieving pain associated with arthritis, stiff and swollen joints, sprains, strains, muscle spasms, bursitis and tendonitis.
|
4.
|
Bust Cream:
An herbal cream containing natural ingredients for the purpose of stimulating the development of the breast tissue and tightening and firming of the breast.
|
5
.
|
Progesterone Cream:
A non-pharmaceutical cream containing natural ingredients for menopausal and postmenopausal women.
|
6
.
|
Face Lifting Masque:
A 20 minute masque for the purpose of reducing the visible signs of aging while lifting, tightening, and refining the pores of the skin.
|
7
.
|
Daily Eye Treatment:
A soothing and hydrating eye cream for the purpose of reducing puffiness, fine lines and the effects of stress and fatigue.
|
8
.
|
Pressed Mineral Powder:
A multi-functional face power containing zinc, Vitamins A and E and green tea extract.
|
9
.
|
Nia Face and Body Powder:
A jar containing face and body powder and a powder puff.
|
10.
|
Nia Lip Magic:
A lip gloss. Colors include Celebration Red with Pink shimmer and Plum Raisin with Peach shimmer.
|
11
.
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Nia Eye Color:
A palette of four color-coordinated eye shadows: Pearl grey, Soft pink, Cranberry and Charcoal.
|
12
.
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Nia Concealer:
A light colored concealer for the purpose of providing coverage for any skin imperfection as in darkness around the eyes, blemishes and to even out skin tones.
|
13
.
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Nia 3 Plus 1 Lash & Line:
Mascara and eyeliner package containing two items in each tube: dark brown mascara and navy blue mascara in one tube and black mascara and black eyeliner in the other tube.
|
14
.
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Instant Whitening Cream:
A cream for the purpose of brightening overall complexion, lightening age spots, liver spots and sun damaged skin.
|
15
.
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Designed lip color:
A long lasting moisturizing lipstick.
|
16.
|
Sunscreen UV:
Enhanced SPF 50 power that provides protection against harmful UVA and UVB rays.
|
17.
|
Facial Hair Removal:
An organic facial hair removal that also moisturizes with an organic Aloe Vera base.
|
18.
|
Body Hair Removal
:
Organic Aloe Vera formula with Sunflower Seed Oil removes unwanted body hair quickly and pain free.
|
19
.
|
The Collection:
A makeup kit containing Face Primer, Silk Whipped Foundation, Wet/Dry Powder, Eye Shadow, Black Eye Pencil, Pressed Shimmer Powder, Shimmer Blush, Long Lasting Lipstick, Lip Gloss Palate, Cream Lipstick, and Coordinating Lip Pencils.
|
20
.
|
Perfume set:
A floral fragrance perfume.
|
21
.
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Travel Kits:
An Anti-Aging Skin Care Travel Kit containing products designed for balancing skin tone, increasing hydration, diminishing lines and wrinkles and restoring resiliency.
|
|
·
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political and economic instability in foreign countries, including heightened terrorism and other security concerns, which could subject imported or exported goods to additional or more frequent inspections, leading to delays in deliveries or impoundment of goods, or to an increase in transportation costs of raw materials or finished product;
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·
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the imposition of regulations and quotas relating to exports and imports, including quotas imposed by bilateral agreements between the United States from where we source our products and foreign countries, including China;
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·
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the imposition of duties, taxes and other charges on exports and imports;
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·
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significant fluctuation of the value of the U.S. dollar against the Hong Kong Dollar, Chinese Yuan and other foreign currencies;
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·
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restrictions on the transfer of funds to or from foreign countries; and
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·
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violations by foreign contractors of labor and wage standards and resulting adverse publicity.
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•
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Quarterly variations in our operating results;
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•
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Operating results that vary from the expectations of investors;
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•
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Changes in expectations as to our future financial performance, including financial estimates by investors;
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•
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Reaction to our periodic filings, or presentations by executives at investor and industry conferences;
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•
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Changes in our capital structure;
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•
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Changes in market valuations of other internet or online service companies;
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•
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Announcements of innovations or new services by us or our competitors;
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•
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Announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments;
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•
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Lack of success in the expansion of our business operations;
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•
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Announcements by third parties of significant claims or proceedings against us or adverse developments in pending proceedings;
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•
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Additions or departures of key personnel;
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•
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Asset impairment;
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•
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Temporary or permanent inability to offer products or services;
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•
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Rumors or public speculation about any of the above factors; and
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•
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Market and volume fluctuations in the stock markets in general.
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·
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The Company’s accounting for its interest in Excalibur and its acquisition of a 92% equity interest in Digital Development Partners. The Company has restated its prior financial statements to address these issues, as described in Note 2 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
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·
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The Company’s disclosure on the effectiveness of its disclosure controls and procedures. Information on the Company’s disclosure controls and procedures and internal control over financial reporting is included in Item 9A of this Annual Report on Form 10-K.
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Three Months Ended
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Low Bid
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High Bid
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||||||
June 30, 2009
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$ | 2.05 | $ | 5.50 | ||||
September 30, 2009
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$ | 3.01 | $ | 5.68 | ||||
December 31, 2009
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$ | 2.18 | $ | 5.11 | ||||
March 31, 2010
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$ | 1.80 | $ | 3.03 | ||||
June 30, 2010
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$ | 1.90 | $ | 4.00 | ||||
September 30, 2010
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$ | 2.20 | $ | 2.85 | ||||
December 31, 2010
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$ | 0.40 | $ | 2.36 | ||||
March 31, 2011
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$ | 0.58 | $ | 1.27 |
ITEM 6.
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SELECTED FINANCIAL DATA
|
Years ended March 31,
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||||||||||||||||||||
Statements of Operations
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2011
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2010
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2009
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2008
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2007
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|||||||||||||||
(Restated)
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(Restated)
|
|||||||||||||||||||
Net revenue
|
$ | 13,013,480 | $ | 21,073,166 | $ | 18,515,208 | $ | 40,359,662 | $ | 19,844,776 | ||||||||||
Operating expenses:
|
||||||||||||||||||||
General and administrative
|
23,927,032 | 26,380,783 | 9,702,045 | 3,693,369 | 1,690,293 | |||||||||||||||
Other income
|
841,124 | 384,658 | 235,128 | 326,194 | 11,566 | |||||||||||||||
Interest income
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1,022,556 | 517,039 | 1,261,708 | 275,538 | 22,819 | |||||||||||||||
Net income (loss)
|
(19,756,880 | ) | (14,178,943 | ) | 810,763 | 20,795,695 | 10,063,293 | |||||||||||||
Net income (loss) attributable to Company
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$ | ( 15,409,176 | ) | $ | ( 8,386,643 | ) | $ | 2,541,795 | $ | 20,795,695 | $ | 10,063,293 | ||||||||
Net income (loss) per common share:
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||||||||||||||||||||
Basic and diluted
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$ | (0.20 | ) | $ | (0.11 | ) | $ | 0.04 | $ | 0.37 | $ | 0.17 | ||||||||
Weighted average common shares outstanding:
|
||||||||||||||||||||
Basic and diluted
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75,983,203 | 75,983,205 | 66,637,448 | 55,350,545 | 59,821,414 |
Balance Sheets
|
March 31,
|
|||||||||||||||||||
2011
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2010
|
2009
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2008
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2007
|
||||||||||||||||
(Restated)
|
(Restated)
|
|||||||||||||||||||
Current assets
|
$ | 47,047,371 | $ | 43,186,040 | $ | 47,026,462 | $ | 19,414,774 | $ | 2,722,521 | ||||||||||
Total assets
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56,492,067 | 65,739,747 | 79,930,632 | 57,427,420 | 2,826,369 | |||||||||||||||
Current liabilities
|
21,988,783 | 11,242,672 | 15,684,199 | 55,687,992 | 3,195,557 | |||||||||||||||
Contingent liabilities
|
2,703,409 | 2,904,957 | — | — | — | |||||||||||||||
Total liabilities
|
24,692,192 | 14,147,629 | 15,684,199 | 55,687,992 | 3,195,557 | |||||||||||||||
Working capital
|
25,058,588 | 31,943,368 | 31,342,263 | (36,273,218 | ) | (473,036 | ) | |||||||||||||
Stockholders' equity (deficit)
|
31,799,875 | 51,592,118 | 64,246,433 | 1,739,428 | (369,188 | ) |
6/30/2010
|
9/30/2010
|
12/31/2010
|
3/31/2011
|
|||||||||||||
Net revenue
|
$ | 3,765,872 | $ | 4,711,418 | $ | 4,241,906 | $ | 294,284 | ||||||||
Gross profit
|
2,413,898 | 2,166,726 | 1,490,175 | (2,672,571 | ) | |||||||||||
Income tax (expense) benefit
|
— | (2,400 | ) | (143,539 | ) | 76,739 | ||||||||||
Net income (loss)
|
173,797 | (4,875,804 | ) | (3,400,260 | ) | (11,654,613 | ) | |||||||||
Non-controlling interest
|
474,453 | 2,792,696 | 876,257 | 204,298 | ||||||||||||
Net income (loss) attributable to Company
|
648,250 | (2,083,108 | ) | (2,524,003 | ) | (11,450,315 | ) | |||||||||
Net income (loss) per common share, basic and diluted
|
0.01 | (0.03 | ) | (0.03 | ) | (0.15 | ) |
6/30/2009
|
9/30/2009
|
12/31/2009
|
3/31/2010
|
|||||||||||||
(Restated)
|
(Restated)
|
(Restated)
|
(Restated)
|
|||||||||||||
Net revenue
|
$ | 5,046,677 | $ | 6,183,310 | $ | 4,507,110 | $ | 5,336,069 | ||||||||
Gross profit
|
2,990,559 | 3,662,664 | 2,199,553 | 2,968,911 | ||||||||||||
Income tax (expense) benefit
|
- | - | - | (4,505 | ) | |||||||||||
Net income (loss)
|
548,128 | 1,321,576 | 37,492 | (16,086,139 | ) | |||||||||||
Non-controlling interest
|
574,173 | 546,195 | 485,564 | 4,186,368 | ||||||||||||
Net income (loss) attributable to Company
|
1,122,301 | 1,867,771 | 523,056 | (11,899,771 | ) | |||||||||||
Net income (loss) per common share, basic and diluted
|
0.01 | 0.02 | 0.01 | (0.15 | ) |
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Increase (I) or
|
||||
Item
|
Decrease (D)
|
Reason
|
||
Sales revenue, net
|
D
|
Sales are recorded net of commissions we pay the Affiliates who are responsible for the sales, and the commission is paid to Affiliates upon receipt of sales orders which is even before revenue can be recognized. In March 2011, $15 million of sales orders and payments were received. Out of the $15 million, only $3.5 million was recognized as revenue in accordance with our revenue recognition policy, but full commission expenses of $10 million related to these orders have been credited to the Affiliates’ accounts and were recorded as a reduction of revenue in this year, which resulted in a decrease in net revenue. Undelivered orders at year end, which is recorded as Unearned Revenue, will be recognized as revenue once they are delivered.
|
||
Shipping charges
|
D
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Decrease in sales and we do not collect shipping fees for the sales made through our reverse auction program since products sold under this program are shipped directly by the manufacturer of the product.
|
Increase (I) or
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||||
Item
|
Decrease (D)
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Reason
|
||
Sales revenue, net
|
I
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Sales are recorded net of the commissions we pay the Affiliates who are responsible for the sales. We lowered the commission payout to our Affiliates by approximately 15% during the fiscal year ended March 31, 2010. The reduction in commissions increased our sales revenue.
|
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Shipping charges
|
D
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We do not collect shipping fees for the sales made through our reverse auction program since products sold under this program are shipped directly by the manufacturer of the product.
|
||
Gross Profit as a % of total revenue
|
I
|
Gross profit, as a % of total revenue, was 56% during fiscal 2010 compared with 55% during the year ended March 31, 2009. The increase in our gross percentage was the result of increased sales revenue. Sales revenue increased due primarily to a reduction in the amount of commissions we paid our Affiliates, and not as a result of increased product sales. If sales revenue increased primarily as a result of product sales, there would have been a corresponding increase in cost of goods sold as well as shipping costs.
|
||
Depreciation
|
I
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Depreciation expenses increased compared with the year ended March 31, 2009, primarily related to the vessel OceanLaLa, which was acquired by Excalibur in October 2008.
|
||
Interest income
|
D
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Decline in interest rates.
|
||
Impairment loss of equipment
|
I
|
The net book value of OceanLaLa exceeded its market value after it was damaged.
|
||
Foreign exchange loss
|
I
|
Changes in foreign exchange rates.
|
||
Other income, net
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|
D
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Other income represents fees received for educational training classes conducted by the Company. During the year ended March 31, 2010 group leaders conducted more of the classes and we did not receive any fees for the classes conducted by the group leaders.
|
Year Ended March 31,
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
Net cash provided by (used in) operating activities
|
$ | 4,547,136 | $ | 4,912,068 | $ | (11,024,088 | ) | |||||
Net cash (used in) investing activities
|
(7,180,044 | ) | (13,904,536 | ) | (18,158,923 | ) | ||||||
Net cash provided by (used in) financing activities
|
- | (193,992 | ) | 52,848,489 | ||||||||
Effect of exchange rate changes on cash
|
3,604 | 31,404 | (241,533 | ) | ||||||||
Net increase (decrease) in cash
|
$ | (2,629,304 | ) | $ | (9,155,056 | ) | $ | 23,423,945 |
Increase (I) or
|
||||
Category
|
Decrease (D)
|
Reason
|
||
Cash and cash equivalents
|
D
|
We used some of our excess cash to invest in securities available for sale during the year ended March 31, 2011. We also reclassified $8,949,324 as securities available for sale that were reported as cash and cash equivalents at March 31, 2010.
|
||
Securities available for sale
|
I
|
We used some of our excess cash to invest in securities available for sale during the year ended March 31, 2011.
|
||
Inventories
|
D
|
Increase in product sales orders by year end.
|
||
Property and equipment
|
D
|
On August 8, 2010, OceanLaLa, the ship owned by Excalibur, was damaged when sailing in the Taiwan Strait. As a result of the damage, we estimated that the net book value of the ship exceeded its market value, and as a result, an impairment loss of $5.4 million has been provided.
|
Held-to-maturity securities
|
D
|
We sold all our corporate notes in November 2010 as the issuers of some securities experienced significant deteriorations in their creditworthiness.
|
||
Loans to related parties
|
D
|
We recorded an impairment loss of $1,567,000 during the period, as we determined that the related party to whom we made the loan would not be able to repay the loan.
|
||
Accounts payable
|
I
|
Marketing expenses accrued during the year have not been fully paid to the public relation company by year end.
|
||
Unearned revenue
|
I
|
Temporary delay in deliveries of product to Affiliates resulted in higher unearned revenues.
|
||
Non-controlling interest
|
|
D
|
|
This item represents the interests in Excalibur and Digital Development Partners, Inc. owned by others.
|
Total
|
2012
|
2013
|
2014
|
2015
|
Thereafter
|
|||||||||||||||||||
Lease payments
|
$ | 690,500 | $ | 484,248 | $ | 206,252 | - | - | - |
Page(s)
|
|
Reports of Independent Registered Public Accounting Firm
|
F-1
|
Reports of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting
|
F-2
|
Consolidated Financial Statements
|
|
Consolidated Balance Sheets
|
F-4
|
Consolidated Statements of Operations
|
F-5
|
Consolidated Statement of Changes in Stockholders’ Equity
|
F-6
|
Consolidated Statements of Cash Flows
|
F-7
|
Notes to Consolidated Financial Statements
|
F-8
|
|
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To The Board of Directors and Stockholders of
EFT Holdings, Inc.
City of Industry, California
We have audited the accompanying consolidated balance sheets of EFT Holdings, Inc. (the Company) and subsidiaries as of March 31, 2011 and 2010, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for each of the three years in the period ended March 31, 2011. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of EFT Holdings, Inc. and subsidiaries as of March 31, 2011 and 2010, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2011, in conformity with accounting principles generally accepted in the United States of America.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), EFT Holdings, Inc.’s internal controls over financial reporting as of March 31, 2011, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August 17, 2011 expressed an adverse opinion thereon.
As described in Note 2, the Company determined it was necessary to restate the 2010 and 2009 consolidated financial statements.
/s/ Child, Van Wagoner and Bradshaw, PLLC
Salt Lake City, Utah
August 17, 2011
|
|
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON
INTERNAL CONTOL OVER FINANCIAL REPORTING
To the Board of Directors and Stockholders of
EFT Holdings, Inc.
City of Industry, California
We have audited the EFT Holdings Inc. and subsidiaries’ (the Company) internal control over financial reporting as of March 31, 2011, based on criteria established in
Internal Control – Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”). EFT Holdings, Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of the internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statement for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.
A material weakness is a control deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. We have identified the following material weaknesses of the company’s internal control over financial reporting. These material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the March 31, 2011 financial statements, and this report does not affect our report dated August 17, 2011 on those financial statements.
The items listed below are material weaknesses in the Company’s internal controls. The final item consists of several significant deficiencies that have been aggregated to a material weakness that allowed the security breach that was not caught in a timely manner and resulted in a significant loss to the Company.
|
·
|
The Company initiated material investments without the proper approval of the Board of Directors.
|
·
|
The Company has one individual, a consultant, with the ability and knowledge to create changes, and move them into the information system’s production environment.
|
·
|
The Company has one individual, a consultant, with full control over the development, test and production of its information systems production environment.
|
·
|
The Company’s information systems developer records changes in a manual log. The Company’s information system does not have proper tools in place to track changes made in its system.
|
·
|
Web-based application security controls are not adequate to prevent a breach in the Company’s information system.
|
·
|
There is a lack of the information system resources needed to properly execute controls, including logical and physical access controls.
|
March 31, 2011
|
March 31, 2010
|
|||||||
(Restated)
|
||||||||
ASSETS
|
||||||||
Current assets
|
|
|
||||||
Cash and cash equivalents
|
$ | 26,805,205 | $ | 29,434,509 | ||||
Securities available for sale
|
16,773,970 | 9,740,712 | ||||||
Inventories
|
2,488,068 | 2,971,713 | ||||||
Prepaid expenses
|
554,570 | 942,192 | ||||||
Other receivables
|
425,558 | 96,914 | ||||||
Total current assets
|
47,047,371 | 43,186,040 | ||||||
Restricted cash
|
193,992 | 193,992 | ||||||
Property and equipment, net
|
8,722,774 | 15,370,975 | ||||||
Held-to-maturity securities
|
- | 4,763,165 | ||||||
Loans to related parties
|
- | 1,567,000 | ||||||
Security deposit
|
527,930 | 658,575 | ||||||
Total assets
|
$ | 56,492,067 | $ | 65,739,747 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities
|
||||||||
Accounts payable
|
$ | 1,962,119 | $ | 1,424,459 | ||||
Commission payable
|
8,346,853 | 6,380,408 | ||||||
Other liabilities
|
304,029 | 720,698 | ||||||
Unearned revenues
|
11,327,787 | 2,673,680 | ||||||
Due to related parties
|
47,995 | 43,427 | ||||||
Total current liabilities
|
21,988,783 | 11,242,672 | ||||||
Contingent liabilities
|
2,703,409 | 2,904,957 | ||||||
Total liabilities
|
24,692,192 | 14,147,629 | ||||||
Stockholders' equity
|
||||||||
EFT Holdings, Inc. stockholders' equity:
|
||||||||
Preferred stock, $.001 par value, 25,000,000 shares authorized, none issued and outstanding
|
- | - | ||||||
Common stock, $0.00001 par value, 4,975,000,000 shares authorized, 75,983,201 shares issued and outstanding at March 31, 2011 and 75,983,205 shares issued and outstanding at March 31, 2010
|
760 | 760 | ||||||
Additional paid in capital
|
52,854,891 | 52,854,891 | ||||||
Retained deficit
|
(19,358,694 | ) | (3,949,518 | ) | ||||
Accumulated other comprehensive income (loss)
|
462,790 | 126,469 | ||||||
Total EFT Holdings, Inc. stockholders' equity
|
33,959,747 | 49,032,602 | ||||||
Non-controlling interests
|
(2,159,872 | ) | 2,559,516 | |||||
Total stockholders' equity
|
31,799,875 | 51,592,118 | ||||||
Total liabilities and stockholders' equity
|
$ | 56,492,067 | $ | 65,739,747 |
Year Ended
|
||||||||||||
March 31, 2011
|
March 31, 2010
|
March 31, 2009
|
||||||||||
|
(Restated)
|
(Restated)
|
||||||||||
Sales revenues, net
|
$ | 9,277,352 | $ | 16,776,314 | $ | 12,846,809 | ||||||
Shipping charges
|
3,579,905 | 4,006,080 | 5,657,625 | |||||||||
Transportation income - Excalibur
|
156,223 | 290,772 | 10,774 | |||||||||
13,013,480 | 21,073,166 | 18,515,208 | ||||||||||
Cost of goods sold
|
6,161,273 | 4,869,900 | 5,780,447 | |||||||||
Shipping costs
|
1,873,867 | 1,224,231 | 2,204,502 | |||||||||
Operating costs - Excalibur
|
1,580,112 | 3,157,348 | 250,179 | |||||||||
9,615,252 | 9,251,479 | 8,235,128 | ||||||||||
Gross profit
|
3,398,228 | 11,821,687 | 10,280,080 | |||||||||
Operating expenses:
|
||||||||||||
Selling, general and administrative expenses
|
8,702,936 | 6,960,102 | 6,979,326 | |||||||||
Depreciation
|
1,255,415 | 2,284,127 | 409,582 | |||||||||
Impairment of investment
|
5,000,000 | - | - | |||||||||
Impairment of goodwill
|
- | 8,935,848 | - | |||||||||
Impairment of loan receivable
|
1,567,000 | - | - | |||||||||
Impairment of transportation equipment
|
5,400,000 | 6,141,261 | - | |||||||||
Royalty expenses
|
2,001,681 | 2,059,445 | 2,313,137 | |||||||||
Total operating expenses
|
23,927,032 | 26,380,783 | 9,702,045 | |||||||||
Net operating income (loss)
|
(20,528,804 | ) | (14,559,096 | ) | 578,035 | |||||||
Other income (expense)
|
||||||||||||
Interest income
|
1,022,556 | 517,039 | 1,261,708 | |||||||||
Gain on disposal of held-to-maturity securities
|
243,855 | - | - | |||||||||
Gain on disposal of available for sale securities
|
119,919 | - | - | |||||||||
Dividend income
|
41,119 | 13,437 | - | |||||||||
Foreign exchange gain (loss)
|
(3,675 | ) | (248,645 | ) | (1,661,245 | ) | ||||||
Other losses
|
(640,193 | ) | - | - | ||||||||
Other income (expense)
|
57,543 | 102,827 | 634,665 | |||||||||
Total other income (expense)
|
841,124 | 384,658 | 235,128 | |||||||||
Net income (loss) before income taxes and non-controlling interest
|
(19,687,680 | ) | (14,174,438 | ) | 813,163 | |||||||
Income taxes expense
|
( 69,200 | ) | (4,505 | ) | ( 2,400 | ) | ||||||
Net income (loss)
|
(19,756,880 | ) | (14,178,943 | ) | 810,763 | |||||||
Non-controlling interests
|
4,347,704 | 5,792,300 | 1,731,032 | |||||||||
Net income (loss) attributable to EFT Holdings Inc.
|
$ | (15,409,176 | ) | $ | (8,386,643 | ) | $ | 2,541,795 | ||||
Net income per common share
|
||||||||||||
Basic and diluted
|
$ | (0.20 | ) | $ | ( 0.11 | ) | $ | 0.04 | ||||
Weighted average common shares outstanding
|
||||||||||||
Basic and diluted
|
75,983,203 | 75,983,205 | 66,637,448 |
Accumulated
|
||||||||||||||||||||||||||||
Additional
|
Retained
|
Other
|
Total
|
|||||||||||||||||||||||||
Common Stock
|
Paid-In
|
Earnings
|
Comprehensive
|
Non-Controlling
|
Stockholders'
|
|||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
(Deficits)
|
Income (Loss)
|
Interests
|
Equity
|
||||||||||||||||||||||
BALANCE, APRIL 1, 2008
|
61,022,414 | $ | 610 | $ | 6,552 | $ | 1,895,330 | $ | (163,064 | ) | $ | - | $ | 1,739,428 | ||||||||||||||
Shares issued to former shareholders
|
66,667 | 1 | (1 | ) | - | - | - | - | ||||||||||||||||||||
Issuance of common stock to employee
|
4,084 | - | 16,731 | - | - | - | 16,731 | |||||||||||||||||||||
Issuance of common stock in private placement offering
|
14,890,040 | 149 | 43,919,414 | - | - | - | 43,919,563 | |||||||||||||||||||||
Issuance of warrants in private placement offering
|
- | - | 8,912,195 | - | - | - | 8,912,195 | |||||||||||||||||||||
Acquisition of subsidiary with non-controlling interest
|
- | - | - | - | - | 10,757,296 | 10,757,296 | |||||||||||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||
Net income
|
- | - | - | 2,541,795 | - | (1,731,032 | ) | 810,763 | ||||||||||||||||||||
Foreign currency translation adjustment
|
- | - | - | - | (772,332 | ) | (809,992 | ) | (1,582,324 | ) | ||||||||||||||||||
Unrealized loss on securities available for sale
|
- | - | - | - | (327,219 | ) | - | (327,219 | ) | |||||||||||||||||||
Total comprehensive income
|
- | - | - | - | - | - | 1,098,780 | |||||||||||||||||||||
BALANCE, MARCH 31, 2009 - restated
|
75,983,205 | $ | 760 | $ | 52,854,891 | $ | 4,437,125 | $ | (1,262,615 | ) | $ | 8,216,272 | $ | 64,246,433 | ||||||||||||||
Acquisition of subsidiary with non-controlling interest
|
- | - | - | - | - | 381 | 381 | |||||||||||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||
Net loss
|
- | - | - | (8,386,643 | ) | - | (5,792,300 | ) | (14,178,943 | ) | ||||||||||||||||||
Unrealized gain on securities available for sale
|
- | - | - | - | 245,623 | - | 245,623 | |||||||||||||||||||||
Foreign currency translation adjustment
|
- | - | - | - | 1,143,461 | 135,163 | 1,278,624 | |||||||||||||||||||||
Total comprehensive income
|
- | - | - | - | - | - | (12,654,696 | ) | ||||||||||||||||||||
BALANCE, MARCH 31, 2010 - restated
|
75,983,205 | $ | 760 | $ | 52,854,891 | $ | (3,949,518 | ) | $ | 126,469 | $ | 2,559,516 | $ | 51,592,118 | ||||||||||||||
Retirement of common stock
|
(4 | ) | - | - | - | - | - | - | ||||||||||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||
Net loss
|
- | - | (15,409,176 | ) | - | (4,347,704 | ) | (19,756,880 | ) | |||||||||||||||||||
Unrealized gain on securities available for sale
|
- | - | - | - | 206,198 | - | 206,198 | |||||||||||||||||||||
Foreign currency translation adjustment
|
- | - | - | - | 130,123 | (371,684 | ) | (241,561 | ) | |||||||||||||||||||
Total comprehensive income
|
- | - | - | - | - | - | (19,792,243 | ) | ||||||||||||||||||||
BALANCE, MARCH 31, 2011
|
75,983,201 | $ | 760 | $ | 52,854,891 | $ | (19,358,694 | ) | $ | 462,790 | $ | (2,159,872 | ) | $ | 31,799,875 |
Year Ended
|
||||||||||||
March 31, 2011
|
March 31, 2010
|
March 31, 2009
|
||||||||||
(Restated)
|
(Restated)
|
|||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income (loss)
|
$ | (19,756,880 | ) | $ | (14,178,943 | ) | $ | 810,763 | ||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
||||||||||||
Depreciation and amortization
|
1,255,415 | 2,284,127 | 409,582 | |||||||||
Bond premium amortization
|
9,625 | - | - | |||||||||
Stock based compensation
|
- | - | 16,731 | |||||||||
Gain from securities available for sale
|
(119,919 | ) | - | - | ||||||||
Gain from held-to-maturity securities
|
(243,855 | ) | - | - | ||||||||
Impairment of investment
|
5,000,000 | - | - | |||||||||
Impairment of goodwill
|
- | 8,935,848 | - | |||||||||
Impairment of loan receivable
|
1,567,000 | - | - | |||||||||
Impairment of transportation equipment
|
5,400,000 | 6,141,261 | - | |||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Inventories
|
483,646 | 937,231 | (1,289,511 | ) | ||||||||
Prepaid expenses and other receivables
|
228,801 | 2,407,919 | (257,840 | ) | ||||||||
Accounts payable
|
520,964 | (2,399,492 | ) | (1,258,563 | ) | |||||||
Commission payable
|
1,966,445 | 402,439 | (5,648,236 | ) | ||||||||
Other liabilities
|
(418,213 | ) | (300,787 | ) | (1,547,424 | ) | ||||||
Unearned revenues
|
8,654,107 | 682,465 | (1,954,590 | ) | ||||||||
Income tax payable
|
- | - | (305,000 | ) | ||||||||
Net cash provided by (used in) operating activities
|
4,547,136 | 4,912,068 | (11,024,088 | ) | ||||||||
Cash flows from investing activities:
|
||||||||||||
Assets acquired in acquisition of Digital Development
|
- | 381 | - | |||||||||
Investments
|
(5,000,000 | ) | - | (15,985,269 | ) | |||||||
Additions to fixed assets
|
(470,297 | ) | (1,353,248 | ) | (276,654 | ) | ||||||
Notes receivable - related party
|
- | 1,197,839 | (1,897,000 | ) | ||||||||
Advancement to related party
|
(33,000 | ) | - | - | ||||||||
Refund by related party
|
33,000 | - | - | |||||||||
Purchase of corporate notes
|
- | (4,800,184 | ) | - | ||||||||
Proceeds from redemption of corporate notes
|
500,000 | - | - | |||||||||
Proceeds from corporate notes
|
4,497,395 | - | - | |||||||||
Purchase of securities available for sale
|
(10,915,397 | ) | (8,949,324 | ) | - | |||||||
Proceeds from securities available for sale
|
4,208,255 | - |
-
|
|||||||||
Net cash (used in) investing activities
|
(7,180,044 | ) | (13,904,536 | ) | (18,158,923 | ) | ||||||
Cash flows from financing activities:
|
||||||||||||
Restricted cash
|
- | (193,992 | ) | - | ||||||||
Proceeds from issuance of common stock and warrants
|
- | - | 52,848,489 | |||||||||
Net cash provided by (used in) financing activities
|
- | (193,992 | ) | 52,848,489 | ||||||||
Effect of exchange rate changes on cash
|
3,604 | 31,404 | (241,533 | ) | ||||||||
Net increase (decrease) in cash
|
(2,629,304 | ) | (9,155,056 | ) | 23,423,945 | |||||||
Cash, beginning of period
|
29,434,509 | 38,589,565 | 15,165,620 | |||||||||
Cash, end of period
|
$ | 26,805,205 | $ | 29,434,509 | $ | 38,589,565 | ||||||
Supplemental disclosures of cash flow information:
|
||||||||||||
Income taxes paid in cash
|
$ | 145,939 | $ | 4,505 | $ | 2,400 |
1.
|
Excalibur:
|
|
1.1
|
For the three months ended December 31, 2008, Excalibur recorded a deferred tax benefit for its net operating loss. Because the realization of the benefit of this net operating loss was not more likely than not, no benefit should have been recognized.
|
|
1.2
|
The Company consolidates Excalibur based on quarterly data for the prior fiscal quarter. For the three months ended March 31, 2009 (Excalibur information for the fiscal quarter ended December 31, 2008) and June 30, 2009 (Excalibur information for the fiscal quarter ended March 31, 2009), the Company did not use the correct periods and partially duplicated Excalibur’s results of operations.
|
|
During the three months ended December 31, 2008, Excalibur previously recorded a prepaid asset of approximately $14.8 million for deposits on two ships purportedly made by certain shareholders of Excalibur. Neither the deposits nor the ships are owned or controlled by Excalibur, and the existence of these deposits is the subject of litigation as described in Note 17. When Excalibur was consolidated beginning on January 15, 2010, this purported prepayment was treated as a stock subscription receivable and excluded from Excalibur’s assets to be consolidated. However, an exchange loss previously recorded by Excalibur related to these deposits was not adjusted.
|
|
1.4
|
The Company did not consistently adjust Excalibur’s financial statements to reflect the elimination of inter-company interest income and expense.
|
|
1.5
|
Because of Excalibur’s continuing losses, the Company previously considered that the amount by which the carrying value of its investment in Excalibur exceeded the Company’s share of Excalibur’s net assets should be written off. The amount to be written off has been adjusted as a result of the above adjustments.
|
Year Ended
|
Three Months Ended
|
Year Ended
|
||||||||||||||||||||||
March 31, 2009
|
June 30, 2009
|
September 30, 2009
|
December 31, 2009
|
March 31, 2010
|
March 31, 2010
|
|||||||||||||||||||
Net income (loss) attributable to EFT Holdings Inc
|
||||||||||||||||||||||||
Adjustments for -
|
||||||||||||||||||||||||
Deferred tax benefit reversed
|
$ | (214,141 | ) | - | - | - | - | - | ||||||||||||||||
Duplication of reporting periods
|
269,355 | 490,920 | - | - | (490,920 | ) | - | |||||||||||||||||
Exchange losses related to prepayment
|
437,322 | - | - | - | - | - | ||||||||||||||||||
Omission of depreciation expenses
|
(176,029 | ) | - | - | - | - | - | |||||||||||||||||
Impairment of goodwill
|
- | 1,080,969 | - | - | (1,838,120 | ) | (757,151 | ) | ||||||||||||||||
Inter-company interest
|
98,391 | - | - | - | 333,554 | 333,554 | ||||||||||||||||||
Exchange rate differences
|
(1,765 | ) | (41,663 | ) | (5,946 | ) | 1,577 | (71,098 | ) | (117,130 | ) | |||||||||||||
413,133 | 1,530,226 | (5,946 | ) | 1,577 | (2,066,584 | ) | (540,727 | ) | ||||||||||||||||
Net income (loss) - as previously reported
|
2,128,662 | (407,924 | ) | 1,873,715 | 521,479 | (9,833,186 | ) | (7,845,916 | ) | |||||||||||||||
Net income (loss) – as restated
|
$ | 2,541,795 | $ | 1,122,302 | $ | 1,867,769 | $ | 523,056 | $ | (11,899,770 | ) | $ | (8,386,643 | ) |
2.
|
Digital Development Partners:
|
March 31, 2010
|
March 31, 2009
|
|||||||||||||||
As Previously
Reported
|
As Restated
|
As Previously
Reported
|
As Restated
|
|||||||||||||
Current assets
|
|
|
||||||||||||||
Cash and cash equivalents
|
$ | 29,434,509 | $ | 29,434,509 | $ | 38,181,837 | $ | 38,589,565 | ||||||||
Securities available for sale
|
9,740,712 | 9,740,712 | 508,746 | 508,746 | ||||||||||||
Inventories
|
2,971,713 | 2,971,713 | 3,908,629 | 3,908,940 | ||||||||||||
Prepaid expenses
|
942,192 | 942,192 | 2,551,298 | 2,923,023 | ||||||||||||
Other receivables
|
96,914 | 96,914 | 33,504 | 1,096,188 | ||||||||||||
Short-term notes receivable – Excalibur
|
- | - | 4,064,717 | - | ||||||||||||
Total current assets
|
43,186,040 | 43,186,040 | 49,248,731 | 47,026,462 | ||||||||||||
Restricted cash
|
193,992 | 193,992 | - | - | ||||||||||||
Property and equipment, net
|
15,370,975 | 15,370,975 | 360,156 | 22,020,413 | ||||||||||||
Investments in bonds
|
4,763,165 | 4,763,165 | - | - | ||||||||||||
Equity method investment – Excalibur
|
- | - | 17,129,314 | - | ||||||||||||
Loans to related parties
|
1,567,000 | 1,567,000 | 1,897,000 | 1,897,000 | ||||||||||||
Security deposit
|
658,575 | 658,575 | 31,121 | 50,909 | ||||||||||||
Goodwill
|
5,000 | - | - | 8,935,848 | ||||||||||||
22,558,707 | 22,553,707 | 19,417,591 | 32,904,170 | |||||||||||||
Total assets
|
$ | 65,744,747 | $ | 65,739,747 | $ | 68,666,322 | $ | 79,930,632 | ||||||||
Current liabilities:
|
||||||||||||||||
Accounts payable
|
2,346,835 | 1,424,459 | 3,610,195 | 6,424,740 | ||||||||||||
Commission payable
|
6,380,408 | 6,380,408 | 5,977,969 | 5,977,969 | ||||||||||||
Other liabilities
|
720,698 | 720,698 | 697,583 | 1,247,851 | ||||||||||||
Unearned revenues
|
2,673,680 | 2,673,680 | 1,991,215 | 1,991,215 | ||||||||||||
Due to related parties
|
43,427 | 43,427 | - | 42,424 | ||||||||||||
Total current liabilities
|
12,165,048 | 11,242,672 | 12,276,962 | 15,684,199 | ||||||||||||
Contingent liabilities
|
2,904,957 | 2,904,957 | - | - | ||||||||||||
Total liabilities
|
15,070,005 | 14,147,629 | 12,276,962 | 15,684,199 | ||||||||||||
Stockholders’ equity:
|
||||||||||||||||
EFT Holdings Inc. stockholders’ equity
|
||||||||||||||||
Common stock
|
760 | 760 | 760 | 760 | ||||||||||||
Additional paid-in capital
|
52,854,891 | 52,854,891 | 52,854,891 | 52,854,891 | ||||||||||||
Retained earnings (deficit)
|
(3,821,924 | ) | (3,949,518 | ) | 4,023,992 | 4,437,125 | ||||||||||
Accumulated other comprehensive income (loss)
|
(469,326 | ) | 126,469 | (490,283 | ) | (1,262,615 | ) | |||||||||
Total EFT Holdings Inc. stockholders’ equity
|
48,564,401 | 49,032,602 | 56,389,360 | 56,030,161 | ||||||||||||
Non-controlling interests
|
2,110,341 | 2,559,516 | - | 8,216,272 | ||||||||||||
Total stockholders’ equity
|
50,674,742 | 51,592,118 | 56,389,360 | 64,246,433 | ||||||||||||
Total liabilities and stockholders’ equity
|
$ | 65,744,747 | $ | 65,739,747 | $ | 68,666,322 | $ | 79,930,632 |
Year Ended March 31, 2010
|
Year Ended March 31, 2009
|
|||||||||||||||
As Previously
Reported
|
As Restated
|
As Previously
Reported
|
As Restated
|
|||||||||||||
Sales revenue, net
|
$ | 16,776,314 | $ | 16,776,314 | $ | 12,846,809 | $ | 12,846,809 | ||||||||
Shipping charge
|
4,006,080 | 4,006,080 | 5,657,625 | 5,657,625 | ||||||||||||
Transportation income - Excalibur
|
- | 290,772 | - | 10,774 | ||||||||||||
20,782,394 | 21,073,166 | 18,504,434 | 18,515,208 | |||||||||||||
Cost of goods sold
|
4,869,900 | 4,869,900 | 5,780,447 | 5,780,447 | ||||||||||||
Shipping cost
|
1,224,231 | 1,224,231 | 2,204,502 | 2,204,502 | ||||||||||||
Operating costs - Excalibur
|
- | 3,157,348 | - | 250,179 | ||||||||||||
6,094,131 | 9,251,479 | 7,984,949 | 8,235,128 | |||||||||||||
Gross profit
|
14,688,263 | 11,821,687 | 10,519,485 | 10,280,080 | ||||||||||||
Operating expenses:
|
||||||||||||||||
Selling, general and administrative expenses
|
7,093,907 | 6,960,102 | 6,564,511 | 6,979,326 | ||||||||||||
Depreciation
|
77,110 | 2,284,127 | 51,514 | 409,582 | ||||||||||||
Impairment of transportation equipment
|
- | 6,141,261 | - | - | ||||||||||||
Impairment of goodwill
|
- | 8,935,848 | - | - | ||||||||||||
Royalty expenses
|
2,059,445 | 2,059,445 | 2,313,137 | 2,313,137 | ||||||||||||
Total operating income (loss)
|
9,230,462 | 26,380,783 | 8,929,162 | 9,702,045 | ||||||||||||
Net operating income (loss)
|
5,457,801 | (14,559,096 | ) | 1,590,323 | 578,035 | |||||||||||
Other income (expense)
|
||||||||||||||||
Interest income
|
546,471 | 517,039 | 1,246,433 | 1,261,708 | ||||||||||||
Investment income
|
13,437 | 13,437 | - | - | ||||||||||||
Loss from equity method investment
|
(5,744,421 | ) | - | (2,063,686 | ) | - | ||||||||||
Equity method investment write-off
|
(8,178,697 | ) | - | - | - | |||||||||||
Foreign exchange gain (loss)
|
(133,437 | ) | (248,645 | ) | 723,357 | (1,661,245 | ) | |||||||||
Other income (expense)
|
88,780 | 102,827 | 634,635 | 634,665 | ||||||||||||
Total other income (expense)
|
(13,407,867 | ) | 384,658 | 540,739 | 235,128 | |||||||||||
Net income (loss) before income taxes and non-controlling interest
|
(7,950,066 | ) | (14,174,438 | ) | 2,131,062 | 813,163 | ||||||||||
Income taxes expense
|
(4,505 | ) | (4,505 | ) | (2,400 | ) | (2,400 | ) | ||||||||
Extraordinary gain
|
100,531 | - | - | - | ||||||||||||
Net income (loss)
|
(7,854,040 | ) | (14,178,943 | ) | 2,128,662 | 810,763 | ||||||||||
Non-controlling interest
|
8,124 | 5,792,300 | - | 1,731,032 | ||||||||||||
Net income (loss) attributable to EFT Holdings Inc.
|
$ | (7,845,916 | ) | $ | (8,386,643 | ) | $ | 2,128,662 | $ | 2,541,795 | ||||||
Net income (loss) per common share:
|
||||||||||||||||
Basic and diluted
|
$ | (0.10 | ) | $ | (0.11 | ) | $ | 0.03 | $ | 0.04 | ||||||
Weighted average common shares outstanding
|
75,983,205 | 75,983,205 | 66,637,448 | 66,637,448 |
Three Months Ended
|
Three Months Ended
|
Three Months Ended
|
||||||||||||||||||||||
June 30, 2009
|
September 30, 2009
|
December 31, 2009
|
||||||||||||||||||||||
As Previously
Reported
|
As Restated
|
As Previously
Reported
|
As Restated
|
As Previously
Reported
|
As Restated
|
|||||||||||||||||||
Sales revenue, net
|
$ | 3,989,316 | $ | 3,989,316 | $ | 5,125,444 | $ | 5,125,444 | $ | 3,362,196 | $ | 3,362,196 | ||||||||||||
Shipping charge
|
1,054,080 | 1,054,080 | 995,490 | 995,490 | 965,520 | 965,520 | ||||||||||||||||||
Transportation income - Excalibur
|
- | 3,281 | - | 62,376 | - | 179,394 | ||||||||||||||||||
5,043,396 | 5,046,677 | 6,120,934 | 6,183,310 | 4,327,716 | 4,507,110 | |||||||||||||||||||
Cost of goods sold
|
960,448 | 960,448 | 1,365,484 | 1,365,483 | 1,048,913 | 1,048,913 | ||||||||||||||||||
Shipping cost
|
301,900 | 301,900 | 286,468 | 286,468 | 334,879 | 334,879 | ||||||||||||||||||
Operating costs - Excalibur
|
- | 793,770 | - | 868,695 | - | 923,765 | ||||||||||||||||||
1,262,348 | 2,056,118 | 1,651,952 | 2,520,646 | 1,383,792 | 2,307,557 | |||||||||||||||||||
Gross profit
|
3,781,048 | 2,990,559 | 4,468,982 | 3,662,664 | 2,943,924 | 2,199,553 | ||||||||||||||||||
Selling, general and administrative expenses
|
2,306,319 | 2,524,505 | 2,253,548 | 2,501,530 | 2,398,664 | 2,601,802 | ||||||||||||||||||
Net operating income (loss)
|
1,474,729 | 466,054 | 2,215,434 | 1,161,134 | 545,260 | (402,249 | ) | |||||||||||||||||
Other income (expense)
|
||||||||||||||||||||||||
Interest income
|
164,932 | 165,054 | 134,462 | 134,663 | 426,577 | 426,601 | ||||||||||||||||||
Investment loss – 48.81% Excalibur
|
(1,080,969 | ) | - | - | - | - | - | |||||||||||||||||
Loss from equity method investment
|
(996,734 | ) | - | (514,854 | ) | - | (464,566 | ) | - | |||||||||||||||
Foreign exchange gain (loss)
|
886 | (112,212 | ) | (5,038 | ) | (17,951 | ) | 751 | (351 | ) | ||||||||||||||
Other income (expense)
|
29,232 | 29,232 | 43,711 | 43,730 | 13,457 | 13,491 | ||||||||||||||||||
Total other income (expense)
|
(1,882,653 | ) | 82,074 | (341,719 | ) | 160,442 | (23,781 | ) | 439,741 | |||||||||||||||
Net income (loss) before income taxes
|
(407,924 | ) | 548,128 | 1,873,715 | 1,321,576 | 521,479 | 37,492 | |||||||||||||||||
Income taxes expense
|
- | - | - | - | - | - | ||||||||||||||||||
Net income (loss) before non-controlling interest
|
(407,924 | ) | 548,128 | 1,873,715 | 1,321,576 | 521,479 | 37,492 | |||||||||||||||||
Non-controlling interest | - | 574,173 | - | 546,195 | - | 485,564 | ||||||||||||||||||
Net income (loss) attributable to EFT Holdings Inc.
|
$ | (407,924 | ) | $ | 1,122,301 | $ | 1,873,715 | $ | 1,867,771 | $ | 521,479 | $ | 523,056 | |||||||||||
Net income (loss) per common share:
|
||||||||||||||||||||||||
Basic and diluted
|
$ | (0.01 | ) | $ | 0.01 | $ | 0.02 | $ | 0.02 | $ | 0.01 | $ | 0.01 | |||||||||||
Weighted average common shares outstanding
|
75,983,205 | 75,983,205 | 75,983,205 | 75,983,205 | 75,983,205 | 75,983,205 |
Machinery and equipment
|
3-8 years
|
Computers and office equipment
|
3-5 years
|
Automobiles
|
5 years
|
Leasehold improvements
|
5 years
|
Transportation equipment
|
12 years
|
Products sold for
|
|
0-2 months
|
2% of cost
|
3-4 months
|
1.5% of cost
|
5-6 months
|
1% of cost
|
Year Ended March 31,
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
Weighted average warrants outstanding
|
14,890,040 | 14,890,040 | 14,890,040 | |||||||||
Total
|
14,890,040 | 14,890,040 | 14,890,040 | |||||||||
Historical Numerator:
|
||||||||||||
Net income (loss) attributable to EFT Holdings, Inc
|
$ | (15,409,176 | ) | $ | (8,386,643 | ) | $ | 2,541,795 | ||||
Denominator:
|
||||||||||||
Weighted-average shares used for basic and diluted net income per share
|
75,983,203 | 75,983,205 | 66,637,448 | |||||||||
Basic and diluted net income (loss) per share
|
$ | (0.20 | ) | $ | (0.11 | ) | $ | 0.04 |
Pronouncement
|
Issued
|
Title
|
||
ASU No. 2010-26
|
October 2010
|
Financial Services—Insurance (Topic 944): Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts (a consensus of the Financial Accounting Standards Board (“FASB”) Emerging Issues Task Force)
|
||
ASU No. 2010-27
|
December 2010
|
Other Expenses (Topic 720): Fees Paid to the Federal Government by Pharmaceutical Manufacturers (a consensus of the FASB Emerging Issues Task Force)
|
||
ASU No. 2010-28
|
December 2010
|
Intangibles—Goodwill and Other (Topic 350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts (a consensus of the FASB Emerging Issues Task Force)
|
||
ASU No. 2010-29
|
December 2010
|
Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations (a consensus of the FASB Emerging Issues Task Force)
|
||
ASU No. 2011-01
|
|
January 2011
|
|
Receivables (Topic 310): Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20
|
ASU No. 2011-02
|
|
April 2011
|
|
Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring
|
ASU No. 2011-03
|
|
April 2011
|
|
Transfers and Servicing (Topic 860): Reconsideration of Effective Control for Repurchase Agreements
|
ASU No. 2011-04
|
|
May 2011
|
|
Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (“IFRS”)
|
ASU No. 2011-05
|
|
June 2011
|
|
Comprehensive Income (Topic 220): Presentation of Comprehensive Income
|
Level 1
—
|
Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
Level 2 —
|
Other inputs that are directly or indirectly observable in the marketplace.
|
Level 3 —
|
Unobservable inputs which are supported by little or no market activity.
|
March 31, 2011
|
||||||||||||||||
Level 1
|
||||||||||||||||
Quoted Prices
|
Level 2
|
|||||||||||||||
in Active
|
Significant
|
Level 3
|
||||||||||||||
Markets for
|
Other
|
Significant
|
||||||||||||||
Identical
|
Observable
|
Unobservable
|
||||||||||||||
Assets
|
Inputs
|
Inputs
|
Total
|
|||||||||||||
Securities available
for sale
|
||||||||||||||||
- Corporate notes
|
$ | 16,773,970 | $ | - | $ | - | $ | 16,773,970 | ||||||||
Total assets measured at fair value
|
$ | 16,773,970 | $ | - | $ | - | $ | 16,773,970 |
March 31, 2010
|
||||||||||||||||
Level 1
|
||||||||||||||||
Quoted Prices
|
Level 2
|
|||||||||||||||
in Active
|
Significant
|
Level 3
|
||||||||||||||
Markets for
|
Other
|
Significant
|
||||||||||||||
Identical
|
Observable
|
Unobservable
|
||||||||||||||
Assets
|
Inputs
|
Inputs
|
Total
|
|||||||||||||
Securities available for sale
|
$ | 9,740,712 | $ | - | $ | - | $ | 9,740,712 | ||||||||
Total assets measured at fair value
|
$ | 9,740,712 | $ | - | $ | - | $ | 9,740,712 |
March 31,
|
March 31,
|
|||||||
2011
|
2010
|
|||||||
Construction in progress
|
$ | 980,656 | $ | 804,410 | ||||
Transportation equipment
|
11,611,785 | 17,065,379 | ||||||
Leasehold improvements
|
507,831 | 418,582 | ||||||
Automobiles
|
239,097 | 154,724 | ||||||
Computer equipment
|
162,198 | 144,696 | ||||||
Furniture & fixtures
|
93,939 | 68,461 | ||||||
Machinery and equipment
|
118,145 | 49,903 | ||||||
13,713,651 | 18,706,155 | |||||||
Less: Accumulated depreciation
|
(4,990,877 | ) | (3,335,180 | ) | ||||
$ | 8,722,774 | $ | 15,370,975 |
Corporate notes:
|
Net Carrying
Value
|
Sales Proceeds
|
Gross realized
gain
|
|||||||||
Long-term held-to-maturity securities:
|
||||||||||||
Due after one year through five years
|
$ | 1,478,480 | $ | 1,573,015 | $ | 94,535 | ||||||
Due after five years through ten years
|
1,068,875 | 1,151,275 | 82,400 | |||||||||
Due after ten years
|
1,706,185 | 1,773,105 | 66,920 | |||||||||
Total
|
$ | 4,253,540 | $ | 4,497,395 | $ | 243,855 |
Corporate notes:
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
Short-term held-to-maturity securities:
|
||||||||||||||||
Due in one year or less
|
$ | 507,885 | $ | 4,505 | $ | - | $ | 512,390 | ||||||||
Total
|
$ | 507,885 | $ | 4,505 | $ | - | $ | 512,390 | ||||||||
Long-term held-to-maturity securities:
|
||||||||||||||||
Due after one year through five years
|
$ | 1,482,874 | $ | 27,491 | $ | - | $ | 1,510,365 | ||||||||
Due after five years through ten years
|
1,065,519 | - | (15,924 | ) | 1,049,595 | |||||||||||
Due after ten years
|
1,706,887 | 13,771 | - | 1,720,658 | ||||||||||||
Total
|
$ | 4,255,280 | $ | 41,262 | $ | (15,924 | ) | $ | 4,280,618 |
Excalibur International Marine Corporation
|
||||||||||||||||
December 31, 2010
|
December 31, 2009
|
|||||||||||||||
NTD*
|
USD
|
NTD
|
USD
|
|||||||||||||
Total assets
|
275,825,320 | 8,059,124 | 480,601,504 | 14,907,918 | ||||||||||||
Total liabilities
|
357,481,305 | 12,247,563 | 319,434,380 | 9,908,629 | ||||||||||||
Net assets
|
(81,655,985 | ) | (4,188,439 | ) | 161,167,124 | 4,999,289 | ||||||||||
48.81% ownership
|
(39,856,286 | ) | (2,044,377 | ) | 78,665,673 | 2,440,153 |
March 31 , 2011
|
March 31, 2010
|
|||||||
Payroll liabilities
|
35,834 | 645,900 | ||||||
Warranty liabilities
|
88,784 | 43,346 | ||||||
Accrued expenses
|
88,353 | - | ||||||
Others
|
91,058 | 31,452 | ||||||
$ | 304,029 | $ | 720,698 |
March 31, 2011
|
March 31, 2010
|
|||||||
Warranty liability as at beginning of period, current
|
$ | 43,346 | $ | 51,684 | ||||
Cost accrued/(reversal) of costs
|
59,312 | (8,338 | ) | |||||
Service obligations honored
|
(13,874 | ) | - | |||||
Warranty liability as at end of period, current
|
$ | 88,784 | $ | 43,346 |
March 31, 2011
|
March 31, 2010
|
|||||||
Amount due to related parties:
|
$ | 47,995 | $ | 43,427 |
Year Ended March 31,
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
Current:
|
||||||||||||
Domestic
|
$ | 2,400 | $ | 2,506 | $ | 2,400 | ||||||
Foreign
|
- | 1,999 | - | |||||||||
Provision for prior years
|
66,800 | - | - | |||||||||
Deferred
|
- | - | - | |||||||||
Income tax expenses
|
$ | 69,200 | $ | 4,505 | $ | 2,400 |
Year Ended March 31,
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
Income tax at U.S. statutory rate
|
$ | (5,701,395 | ) | $ | (3,103,058 | ) | $ | 940,464 | ||||
State tax
|
2,400 | 2,506 | 2,400 | |||||||||
Indefinitely invested earnings / incurred losses of foreign subsidiaries
|
5,695,474 | 3, 101,717 | (949,847 | ) | ||||||||
Nondeductible expenses
|
5,921 | 3,340 | 9,383 | |||||||||
Provision for prior years
|
66,800 | - | - | |||||||||
Income tax expenses
|
$ | 69,200 | $ | 4,505 | $ | 2,400 |
Year Ending March 31,
|
||||
2012
|
360,000 | |||
2013
|
90,000 |
Year Ending March 31,
|
||||
2012
|
10,800 | |||
2013
|
8,100 |
|
a)
|
A third party will be engaged to perform application vulnerability scanning to identify vulnerabilities, and also to perform application and network level penetration testing to attempt to exploit the identified vulnerabilities within the FMA application, and our corporate network. Resulting vulnerabilities will be addressed and corrected; and
|
|
b)
|
Additional controls and procedures will be implemented within the program change and code development process, to allow for proper segregation of duties and prevention of a single resource from controlling the entire process.
|
|
·
|
We hired a chief financial officer with previous experience as the chief financial officer of a publicly traded company listed in the United Kingdom. The new chief financial officer is a fellow member of Certified General Accountants (Canada) and Association of Chartered Certified Accountants.
|
|
·
|
We hired additional experienced staff accountants to enhance our ability to segregate responsibilities and provide additional oversight in the various accounting functions.
|
|
·
|
We implemented new internal controls to properly evaluate revenue recognition criteria.
|
|
·
|
We implemented new internal controls to sufficiently mitigate cut-off errors in revenue.
|
|
·
|
We implemented new internal controls related to the proper oversight of work performed by our controller.
|
|
·
|
We implemented new internal controls over the period-end financial reporting process.
|
|
·
|
We implemented new internal controls to deter or mitigate management override.
|
|
·
|
We implemented new internal controls to correctly and accurately record business combinations.
|
|
·
|
We also implemented controls over our controlled subsidiary, Excalibur International Marine Corporation.
|
Name
|
Age
|
Title
|
||
Jack Jie Qin
|
51
|
President, Chief Executive Officer, and a Director
|
||
Jeffery Cheung
|
51
|
Principal Financial and Accounting Officer
|
||
Jerry B. Lewin
|
56
|
Director
|
||
Visman Chow
|
56
|
Director
|
||
Norman Ko
|
47
|
Director
|
||
Pyng Soon
|
|
51
|
|
General Counsel of the Company
|
Name and Principal
Position
|
Fiscal Year
Ended
March 31,
|
Salary (1)
|
Stock
Awards (2)
|
Option
Awards
(2)
|
Total
|
|||||||||||||
2011
|
$ | 235,583 | — | — | $ | 235,583 | ||||||||||||
Jack Jie Qin (3)
|
2010
|
$ | 205,000 | — | — | $ | 205,000 | |||||||||||
(Principal Executive Officer)
|
2009
|
$ | 86,750 | — | — | $ | 86,750 | |||||||||||
2011
|
$ | 141,350 | — | — | $ | 141,350 | ||||||||||||
George Curry (4))
|
2010
|
$ | 132,000 | — | — | $ | 132,000 | |||||||||||
(Chief Marketing Officer)
|
2009
|
$ | 120,000 | — | — | $ | 120,000 | |||||||||||
2011
|
$ | 115,500 | — | — | $ | 115,500 | ||||||||||||
Sharon Tang (5)
|
2010
|
$ | 103,950 | — | — | $ | 103,950 | |||||||||||
(Principal Financial Officer)
|
2009
|
$ | 126,000 | — | — | $ | 126,000 | |||||||||||
Angy Chin (6)
|
2011
|
— | — | — | — | |||||||||||||
(Principal Financial Officer)
|
2010
|
$ | 116,125 | — | — | $ | 116,125 | |||||||||||
Pyng Soon(7)
|
2011
|
$ | 138,682 | — | — | $ | 138,682 | |||||||||||
(General counsel)
|
2010
|
$ | 126,075 | — | — | $ | 126,075 | |||||||||||
Jeffery Cheung (8)
|
2011
|
$ | 4,969 | — | — | $ | 4,969 | |||||||||||
(Principal Financial and Accounting Officer)
|
(1)
|
The dollar value of base salary (cash and non-cash) earned and any bonus (cash and non-cash) earned.
|
(2)
|
To date, we have not adopted a stock option plan, a stock bonus plan or any other type of incentive plan. We have not issued any options to our executive officers, directors or employees or paid them other payments.
|
(3)
|
Jack Jie Qin was also our Chief Financial Officer from May 2010 to March 2011.
|
(4)
|
George Curry resigned as our Chief Marketing officer and a director of us on March 31, 2011 and still remains an employee of us.
|
(5)
|
Sharon Tang was our principal financial officer between June 2008 and February 2010.
|
(6)
|
Angy Chin was our principal financial officer between February 15, 2010 and May 18, 2010.
|
(7)
|
Pyng Soon was appointed as the general counsel of our company in January 2009.
|
(
8
)
|
Jeffery Cheung was appointed as our principal financial and accounting officer on March 21, 2011.
|
Name
|
Fees Earned or
Paid in Cash
|
Stock Awards
|
Option Awards
|
Total
|
||||||||||||
Jerry B Lewin
|
$ | 24,000 | — | — | $ | 24,000 | ||||||||||
Visman Chow
|
$ | 24,000 | — | — | $ | 24,000 | ||||||||||
Norman Ko
|
$ | 48,000 | — | — | $ | 48,000 |
The Board of Directors
|
|
Jack Jie Qin
|
|
Jerry B. Lewin
|
|
Visman Chow
|
|
Norman Ko
|
Name
|
Number of Shares
Beneficially Owned
|
Percent of Shares
Outstanding
|
||||||
Jack Jie Qin
|
1,000 | * | ||||||
Jeffery Cheung
|
— | — | ||||||
Jerry B. Lewin
|
— | — | ||||||
Visman Chow
|
— | — | ||||||
Norman Ko
|
— | — | ||||||
Pyng Soon
|
— | — | ||||||
Dragon Win Management, Ltd. (1)
|
50,099,000 | 65.93 | % | |||||
Officers and directors as a group (6 persons)
|
1,000 | * |
2011
|
2010
|
|||||||
Audit Fees
|
$ | 162,000 | $ | 125,000 | ||||
Audit-Related Fees
|
17,448 | 14,302 | ||||||
Tax Fees
|
13,500 | 7,000 | ||||||
All Other Fees
|
14,918 | 7,530 |
(a)
|
The following documents are filed as part of this report:
|
(1)
|
Consolidated Financial Statements:
|
|
·
|
Reports of Independent Registered Public Accounting Firm
|
|
·
|
Consolidated Balance Sheets
|
|
·
|
Consolidated Statements of Operations
|
|
·
|
Consolidated Statements of Changes in Stockholders’ Equity
|
|
·
|
Consolidated Statements of Cash Flows
|
|
·
|
Notes to the Consolidated Financial Statements
|
(2)
|
Consolidated Financial Statement Schedule:
|
(3)
|
Exhibits:
|
Exhibit No.:
|
Description:
|
3.1(1)
|
Articles of Incorporation of GRG, Inc. (now EFT Holdings, Inc.).
|
3.1.1(1)
|
Articles of Merger filed December 28, 2004 between HumWare Media Corporation, World Wide Golf Web, Inc. and GRG, Inc.
|
3.1.2(1)
|
Certificate of Amendment, effective November 7, 2007, to the Articles of Incorporation of HumWare Media Corporation
|
3.1.3
|
Articles of Merger filed December 13, 2010 between QCSC, Inc. and EFT Biotech Holdings, Inc.
|
3.2(3)
|
By-laws
|
4.1(1)
|
Form of Common Stock Certificate
|
4.2(1)
|
Form of Warrant to purchase one share of Common Stock for a purchase price of $3.80 per share until the second anniversary date of the date of issuance
|
10.1(3)
|
Share Exchange Agreement, dated as of the 1st day of November, 2007, by and among EFT Holdings, Inc. (formerly HumWare Media Corporation), a Nevada corporation; certain EFT Shareholders and EFT BioTech Corporation, a Nevada corporation
|
10.2(2)
|
Subscription Agreement for Units in connection with the Registrant’s Regulation S Private Placement
|
10.3(3)
+
|
Employment Agreement, dated May 10, 2008, between EFT BioTech Holdings, Inc. and Sharon Tang
|
10.4(5)
|
$500,000 Loan Agreement (the “Agreement”), dated November 24, 2008, between the EFT Biotech Holdings, Inc. (as the Lender), EFT Investment Co., LTD., and Excalibur International Marine Corporation (as the Borrower).
|
10.5(5)
|
First Extension of $500,000 Loan, dated December 25, 2008
|
10.6(5)
|
Second Extension of $500,000 Loan, dated May 25, 2009
|
10.7(6)
|
$2,000,000 Loan Agreement (the “Agreement”) and promissory note, dated September 23, 2008, between the EFT Biotech Holdings, Inc. (as the Lender), EFT Investment Co., LTD., and Excalibur International Marine Corporation (as the Borrower).
|
10.8(5)
|
First Extension of $2,000,000 Loan, dated November 25, 2008
|
10.9(5)
|
Second Extension of $2,000,000 Loan, dated May 25, 2009
|
10.10(6)
|
$600,000 Loan Agreement, dated May 13, 2009, between the EFT Biotech Holdings, Inc. (as the Lender), EFT Investment Co., LTD., and Excalibur International Marine Corporation (as the Borrower).
|
10.11(6)
|
Addendum to $600,000 Loan Agreement, dated May 13, 2009, between the EFT Biotech Holdings, Inc. (as the Lender), EFT Investment Co., LTD., and Excalibur International Marine Corporation (as the Borrower).
|
10.12 (7)
|
$330,000 Loan Agreement, dated July 14, 2008, between EFT BioTech Holdings, Inc. (Lender) and Yeuh-Chi Liu (Borrower)
|
10.13 (7)
|
Addendum to $330,000 Loan Agreement, dated July 15, 2008, between BioTech Holdings, Inc. and Yeuh-Chi Liu
|
10.14 (7)
|
$1,567,000 Loan Agreement, dated July 25, 2008, between BioTech Holdings, Inc. (Lender) and Yeuh-Chi Liu (Borrower)
|
10.15(8)
|
Subscription agreement with Excalibur International Marine Corporation
|
10.16(8)
|
Extension of $2,000,000 loan with Excalibur International Marine Corporation
|
10.17(8)
|
Extension of $600,000 loan with Excalibur International Marine Corporation
|
10.18(8)
|
Extension of $500,000 loan with Excalibur International Marine Corporation
|
10.19
|
Consultancy Agreement, dated March 31, 2010, between EFT International Limited and JFL Capital Limited
|
10.20
|
Employment Agreement, dated January 1, 2009, between EFT Biotech Holdings Inc. and Jack Jie Qin
|
10.21
|
Employment Letter, dated December 20, 2010, between EFT (HK) Limited and Chueng, Chung Man Cyril
|
10.22
|
Employment Agreement, dated January 1, 2009, between EFT Biotech Holdings Inc. and Pyng Soon
|
10.23
|
English Translation of Form of Pre-sale Building Unit Purchase and Sale Agreement, A5 Building, Taipei Enterprise Headquarters Park
|
10.24
|
English Translation of Agreement Regarding the "Pre-sale Building Unit Purchase and Sale Agreement, A5 Building, Taipei Enterprise Headquarters Park," dated May 31, 2011, among Jack Jie Qin, Meifu Development Co., Ltd. and EFT Investment Co., Ltd.
|
10.25
|
English Translation of Agreement Regarding the "Pre-sale Building Unit Purchase and Sale Agreement, A5 Building, Taipei Enterprise Headquarters Park," dated May 31, 2011, among Jack Jie Qin, Transglobe Life Insurance Inc. and EFT Investment Co., Ltd.
|
10.26
|
English Translation of Amendment Agreement to the "Pre-sale Building Unit Purchase and Sale Agreement, A5 Building, Taipei Enterprise Headquarters Park," dated July 1, 2011, among Jack Jie Qin, Meifu Development Co., Ltd. and EFT Investment Co., Ltd.
|
10.27
|
English Translation of Agreement to Amend the "Pre-sale Building Unit Purchase and Sale Agreement, A5 Building, Taipei Enterprise Headquarters Park," dated July 7, 2011, among Jack Jie Qin, Transglobe Life Insurance Inc. and EFT Investment Co., Ltd.
|
14.1(3)
|
Code of Ethics
|
21.1
|
List of Subsidiaries
|
31
|
Rule 13a-14(a) Certifications
|
32
|
Section 1350 Certifications
|
(1)
|
Filed as an exhibit to Form 10 (File No.: 001-34222) filed with the SEC on December 10, 2008 and incorporated by reference herein.
|
(2)
|
Filed as an exhibit to Form 10-Q for the quarter ended December 31, 2008 (File No.: 001-34222) filed with the SEC on February 13, 2009 and incorporated by reference herein.
|
(3)
|
Filed as an Exhibit to Amendment No. 1 to Form 10 (File No.: 001-34222) filed with the SEC on April 13, 2009 and incorporated by reference herein.
|
(4)
|
Filed as an Exhibit to Amendment No. 2 to Form 10 (File No.: 001-34222) filed with the SEC on April 21, 2009 and incorporated by reference herein.
|
(5)
|
Filed as an Exhibit to Form 10-K (File No.: 001-34222) filed with the SEC on July 17, 2009 and incorporated by reference herein.
|
(6)
|
Filed as an Exhibit to Amendment No. 4 to Form 10 (File No.: 001-34222) filed with the SEC on September 3, 2009 and incorporated by reference herein.
|
(7)
|
Filed as an Exhibit to Amendment No. 5 to Form 10 (File No.: 001-34222) filed with the SEC on October 19, 2009 and incorporated by reference herein.
|
(8)
|
Filed as an Exhibit to Amendment No. 9 to Form 10 (File No.: 001-34222) filed with the SEC on April 16, 2010.
|
EFT HOLDINGS, INC.
|
||
By:
|
/s/ Jack Jie Qin
|
|
Jack Jie Qin, Principal Executive Officer
|
||
Date: August 23, 2011
|
Signature
|
Title
|
Date
|
||
/s/ Jack Jie Qin
|
Director and Principal
|
August 23, 2011
|
||
Jack Jie Qin
|
Executive Officer
|
|||
/s/ Jeffery Cheung
|
Director and Principal
|
August 23, 2011
|
||
Jeffery Cheung
|
Financial and Accounting Officer
|
|||
|
||||
/s/ Jerry B. Lewin
|
|
August 23, 2011
|
||
Jerry B. Lewin
|
Director
|
|||
|
||||
/s/ Visman Chow
|
|
|||
Visman Chow
|
Director
|
August 23, 2011
|
||
/s/ Norman Ko
|
|
|||
Norman Ko
|
Director
|
August 23, 2011
|
Exhibit No.:
|
Description:
|
3.1(1)
|
Articles of Incorporation of GRG, Inc. (now EFT Holdings, Inc.).
|
3.1.1(1)
|
Articles of Merger filed December 28, 2004 between HumWare Media Corporation, World Wide Golf Web, Inc. and GRG, Inc.
|
3.1.2(1)
|
Certificate of Amendment, effective November 7, 2007, to the Articles of Incorporation of HumWare Media Corporation
|
3.1.3
|
Articles of Merger filed December 13, 2010 between QCSC, Inc. and EFT Biotech Holdings, Inc.
|
3.2(3)
|
By-laws
|
4.1(1)
|
Form of Common Stock Certificate
|
4.2(1)
|
Form of Warrant to purchase one share of Common Stock for a purchase price of $3.80 per share until the second anniversary date of the date of issuance
|
10.1(3)
|
Share Exchange Agreement, dated as of the 1st day of November, 2007, by and among EFT Holdings, Inc. (formerly HumWare Media Corporation), a Nevada corporation; certain EFT Shareholders and EFT BioTech Corporation, a Nevada corporation
|
10.2(2)
|
Subscription Agreement for Units in connection with the Registrant’s Regulation S Private Placement
|
10.3(3)
+
|
Employment Agreement, dated May 10, 2008, between EFT BioTech Holdings, Inc. and Sharon Tang
|
10.4(5)
|
$500,000 Loan Agreement (the “Agreement”), dated November 24, 2008 , between the EFT Biotech Holdings, Inc. (as the Lender), EFT Investment Co., LTD., and Excalibur International Marine Corporation (as the Borrower).
|
10.5(5)
|
First Extension of $500,000 Loan, dated December 25, 2008
|
10.6(5)
|
Second Extension of $500,000 Loan, dated May 25, 2009
|
10.7(6)
|
$2,000,000 Loan Agreement (the “Agreement”) and promissory note, dated September 23, 2008, between the EFT Biotech Holdings, Inc. (as the Lender), EFT Investment Co., LTD., and Excalibur International Marine Corporation (as the Borrower).
|
10.8(5)
|
First Extension of $2,000,000 Loan, dated November 25, 2008
|
10.9(5)
|
Second Extension of $2,000,000 Loan, dated May 25, 2009
|
10.10(6)
|
$600,000 Loan Agreement, dated May 13, 2009, between the EFT Biotech Holdings, Inc. (as the Lender), EFT Investment Co., LTD., and Excalibur International Marine Corporation (as the Borrower).
|
10.11(6)
|
Addendum to $600,000 Loan Agreement, dated May 13, 2009, between the EFT Biotech Holdings, Inc. (as the Lender), EFT Investment Co., LTD., and Excalibur International Marine Corporation (as the Borrower).
|
10.12 (7)
|
$330,000 Loan Agreement, dated July 14, 2008, between EFT BioTech Holdings, Inc. (Lender) and Yeuh-Chi Liu (Borrower)
|
10.13 (7)
|
Addendum to $330,000 Loan Agreement, dated July 15, 2008, between BioTech Holdings, Inc. and Yeuh-Chi Liu
|
10.14 (7)
|
$1,567,000 Loan Agreement, dated July 25, 2008, between BioTech Holdings, Inc. (Lender) and Yeuh-Chi Liu (Borrower)
|
10.15(8)
|
Subscription agreement with Excalibur International Marine Corporation
|
10.16(8)
|
Extension of $2,000,000 loan with Excalibur International Marine Corporation
|
10.17(8)
|
Extension of $600,000 loan with Excalibur International Marine Corporation
|
10.18(8)
|
Extension of $500,000 loan with Excalibur International Marine Corporation
|
10.19
|
Consultancy Agreement, dated March 31, 2010, between EFT International Limited and JFL Capital Limited
|
10.20
|
Employment Agreement, dated January 1, 2009, between EFT Biotech Holdings Inc. and Jack Jie Qin
|
10.21
|
Employment Letter, dated December 20, 2010, between EFT (HK) Limited and Chueng, Chung Man Cyril
|
10.22
|
Employment Agreement, dated January 1, 2009, between EFT Biotech Holdings Inc. and Pyng Soon
|
10.23
|
English Translation of Form of Pre-sale Building Unit Purchase and Sale Agreement, A5 Building, Taipei Enterprise Headquarters Park
|
10.24
|
English Translation of Agreement Regarding the "Pre-sale Building Unit Purchase and Sale Agreement, A5 Building, Taipei Enterprise Headquarters Park," dated May 31, 2011, among Jack Jie Qin, Meifu Development Co., Ltd. and EFT Investment Co., Ltd.
|
10.25
|
English Translation of Agreement Regarding the "Pre-sale Building Unit Purchase and Sale Agreement, A5 Building, Taipei Enterprise Headquarters Park," dated May 31, 2011, among Jack Jie Qin, Transglobe Life Insurance Inc. and EFT Investment Co., Ltd.
|
10.26
|
English Translation of Amendment Agreement to the "Pre-sale Building Unit Purchase and Sale Agreement, A5 Building, Taipei Enterprise Headquarters Park," dated July 1, 2011, among Jack Jie Qin, Meifu Development Co., Ltd. and EFT Investment Co., Ltd.
|
10.27
|
English Translation of Amendment Agreement to the "Pre-sale Building Unit Purchase and Sale Agreement, A5 Building, Taipei Enterprise Headquarters Park," dated July 1, 2011, among Jack Jie Qin, Transglobe Life Insurance Inc. and EFT Investment Co., Ltd.
|
14.1(3)
|
Code of Ethics
|
21.1
|
List of Subsidiaries
|
31
|
Rule 13a-14(a) Certifications
|
32
|
Section 1350 Certifications
|
(1)
|
Filed as an exhibit to Form 10 (File No.: 001-34222) filed with the SEC on December 10, 2008 and incorporated by reference herein.
|
(2)
|
Filed as an exhibit to Form 10-Q for the quarter ended December 31, 2008 (File No.: 001-34222) filed with the SEC on February 13, 2009 and incorporated by reference herein.
|
(3)
|
Filed as an Exhibit to Amendment No. 1 to Form 10 (File No.: 001-34222) filed with the SEC on April 13, 2009 and incorporated by reference herein.
|
(4)
|
Filed as an Exhibit to Amendment No. 2 to Form 10 (File No.: 001-34222) filed with the SEC on April 21, 2009 and incorporated by reference herein.
|
(5)
|
Filed as an Exhibit to Form 10-K (File No.: 001-34222) filed with the SEC on July 17, 2009 and incorporated by reference herein.
|
(6)
|
Filed as an Exhibit to Amendment No. 4 to Form 10 (File No.: 001-34222) filed with the SEC on September 3, 2009 and incorporated by reference herein.
|
(7)
|
Filed as an Exhibit to Amendment No. 5 to Form 10 (File No.: 001-34222) filed with the SEC on October 19, 2009 and incorporated by reference herein.
|
(8)
|
Filed as an Exhibit to Amendment No. 9 to Form 10 (File No.: 001-34222) filed with the SEC on April 16, 2010.
|
1)
|
Name and jurisdiction of organization of each constituent entity (NRS 92A.200):
|
EFT Biotech Holdings, Inc.
|
||
Name of
surviving
entity
|
||
Nevada
|
Corporation
|
|
Jurisdiction
|
Entity type *
|
2)
|
Forwarding address where copies of process may be sent by the Secretary of State of Nevada (if a foreign entity is the survivor in the merger - NRS 92A.190)
|
3)
|
(choose one):
|
4)
|
Owner's approval (NRS 92A.200) (options a, b or c must be used, as applicable, for each entity):
|
5)
|
Amendments, if any, to the articles or certificate of the surviving entity. Provide article numbers, if available. (NRS 92A.200)*:
|
6)
|
Location of Plan of Merger (check a or b):
|
|
7)
|
Effective date (optional) ** :
|
January 1, 2011
|
(1)
|
EFT INTERNATIONAL LIMITED
a company incorporated under the laws of the British Virgin Islands (the
"Appointor");
and
|
(2)
|
JFL CAPITAL LIMITED
a company incorporated under the laws of the British Virgin Islands (the
"Company").
|
1.
|
DUTIES & TERM OF APPOINTMENT
|
2.
|
REMUNERATION
|
2.1
|
From 1
st
April 2010 until 31
st
March 2011, the Appointor shall pay the Company an annual fee of U.S. $315,000 divided into 12 equal monthly instalments of U.S. $26,250 each payable in arrears on the last day of each calendar month and if such day is not a business day, the business day preceding such day.
|
2.2
|
As from 1
st
April 2011, the annual fee shall be increased at the rate of U.S. $15,000 each year, being 5% over the Base Fee, that is U.S.$300,000.
|
3.
|
TERMINATION
|
3.1
|
This Agreement shall terminate on the occurrence of any of the following events:
|
|
(a)
|
a party hereto committing a material breach of its obligations under this Agreement and, in the cases of a breach capable or remedy, failing to remedy the same with fourteen days of being specifically required in writing so to do by the other party;
|
|
(b)
|
any distress, execution, sequestration or other process being levied or enforced upon or sued out against any material property of a party hereto which is not discharged within fourteen days;
|
|
(c)
|
the inability of a party hereto to pay its debts in the normal course of business;
|
|
(d)
|
a party hereto ceasing or threatening to cease wholly or substantially to carry on its business, otherwise than for the purpose of a reconstruction or amalgamation without insolvency previously approved by the other party (such approval not to be unreasonably withheld);
|
|
(e)
|
any encumbrancer taking possession of or a receiver or trustee being appointed over the whole or any material part of the undertaking, property or assets of a party hereto; or
|
|
(f)
|
the making of an order or the passing of a resolution for the winding up of a party hereto, otherwise than for the purpose of a reconstruction or amalgamation without insolvency previously approved by the other party (such approval not to be unreasonably withheld).
|
3.2
|
Any termination of the Agreement hereunder shall be without prejudice to any monies or rights accrued to the parties hereto prior to such termination.
|
4.
|
ENTIRE AGREEMENT
|
5.
|
CONFIDENTIALITY
|
5.1
|
Other than such disclosure as may be required by law or any competent authority, neither of the parties hereto shall make any announcement or release or disclose any information concerning this Agreement or the transactions herein referred to or disclose the identity of the other party (save disclosure to their respective professional advisers under a duty of confidentiality) without the written consent of the other party.
|
6.
|
ASSIGNMENT
|
7.
|
COSTS AND EXPENSES
|
8.
|
GOVERNING LAW
|
SIGNED by
|
)
|
|
a director, for and on behalf
|
)
|
|
/s/
|
||
of the Appointor in the
|
)
|
|
presence of:
|
)
|
|
SIGNED by
|
)
|
|
a director, for and on behalf
|
)
|
|
/s/ Wendy Qin
|
||
of the Company in the
|
)
|
|
presence of:
|
)
|
1.
|
Employment. EFT hereby agrees to employ Employee and Employee hereby agrees to work for EFT as its
Chairman, Chief Executive Officer
. Employee's principal office shall be in City of Industry, California. So long as Employee is employed by EFT, Employee shall devote Employee's skill, energy and substantially most of his business-related efforts to the faithful discharge of Employee's duties as an employee of EFT. In providing services hereunder, Employee shall comply with and follow all directives, policies, standards and regulations from time to time established by the Board of Directors of EFT, which are applicable to EFT.
|
2.
|
Term of Employment. Employee's employment by EFT pursuant to this Agreement shall continue in effect for a term of seven (7) years from the date of this Agreement (the "Initial Period"), which shall be automatically extended, without any action on the part of Employee or EFT, for additional, successive one-year periods (each such one-year period, an "Additional Period" and all of such one-year periods collectively, the "Additional Periods") commencing on the second anniversary date of this Agreement and on each anniversary date thereafter, unless either party gives notice of non-renewal of this Agreement, as provided in Section 10(e) of this Agreement, or otherwise terminates this Agreement, in accordance with the other provisions of Section 10 hereof.
|
3.
|
Representations and Warranties. Employee represents and warrants that Employee is under no contractual that will limit in any way Employee's activities on behalf of EFT or its Affiliates or will prohibit or limit the disclosure or use by Employee of any information that directly or indirectly relates to the businesses of EFT or its Affiliates, or the services to be rendered by Employee under this Agreement.
|
4.
|
Compensation. Subject to the provisions of Section 10 of this Agreement, Employee will be entitled to the compensation and benefits set forth in this Section 4.
|
(a)
|
During the Initial Period, EFT shall pay Employee an Annual Base Salary, payable semimonthly, in equal installments, at a rate equal to $200,000 per year for the first calendar year or portion thereof occurring during the term of this Agreement. In each subsequent calendar year, or portion thereof, occurring during the term of this Agreement, EFT shall pay to Employee an Annual Base Salary determined by the Compensation Increase Scale as reviewed and approved by the EFT Board of Directors Compensation Committee and approved by the Board of Directors of EFT following its annual salary and performance review. Employee's Annual Base Salary for each succeeding calendar year (or portion thereof) occurring during the term of this Agreement will be reviewed at least annually in the fourth quarter of each calendar year of Employee's employment hereunder, commencing in the fourth quarter of calendar year 2009. In the event this Agreement is terminated or expires during any calendar year, the amount of such Annual Base Salary owed by EFT to Employee, if any, will be determined pursuant to Section 10 of this Agreement.
|
(b)
|
Employee shall be eligible to receive an annual base salary adjustment in each subsequent calendar year or portion thereof as a cost of living increase at ten percent (10%) per annum.
|
(c)
|
Employee shall be eligible to receive an annual bonus pursuant to the Executive Bonus Scale in effect, for executive employees of EFT. The Executive Bonus Scale rewards executives based upon profit improvements of EFT. The scale rewards the executives in direct proportion to increases in gross profits.
|
(d)
|
All payments of salary and other compensation to Employee shall be made after deduction of any taxes required to be withheld with respect thereto under applicable federal, state and local laws.
|
5.
|
Fringe Benefits; Expenses.
|
(a)
|
During the term of employment of Employee hereunder, Employee shall participate in all employee benefit plans sponsored by EFT for its executive employees, which may include, but will not be limited to, stock bonus, stock purchase, stock performance incentive and stock option plans, sick leave and disability leave, health insurance, dental insurance and pension and/or profit sharing plans; provided, however, that except as provided below, the existence, nature, amount and limitations of such plans shall be determined from time to time by the Board of Directors of EFT.
|
(b)
|
EFT will reimburse Employee for all reasonable business expenses incurred by Employee in the scope of Employee's employment; provided, however, that Employee must file expense reports with respect to such expenses in accordance with EFT's policies as are in effect from time to time, and any expenses requiring the approval of any officer or the Board of Directors of EFT pursuant to any policies of EFT then in effect shall have been so approved.
|
(c)
|
During the term of employment of Employee hereunder, Employee shall be entitled to a minimum of two (2) weeks paid vacation during each calendar year and to paid holidays and other paid leave set forth in EFT's policies in effect from time to time. Any vacation not used during a calendar year may not be used during any subsequent period.
|
(d)
|
During the term of employment of Employee hereunder, EFT will pay all license fees, occupation taxes and reasonable educational costs and expenses necessary to maintain Employee's good standing under any professional licenses required in connection with Employee's employment by EFT.
|
(e)
|
During the term of this Agreement, EFT shall use its reasonable efforts to provide to Employee (i) life insurance payable to Employee's designated beneficiary or beneficiaries in an amount at least three times Employee's Annual Base Salary and (ii) disability insurance on behalf of Employee which, as a goal, shall provide for salary continuation in the event of permanent disability in an amount equal to the lesser of (I) 60% of Employee's Annual Base Salary, or (II) $10,000 per month.
|
(f)
|
EFT is currently investigating a car program for executives which either furnishes an appropriate automobile commensurate with the position occupied or an allowance which shall allow the employee to lease/purchase a vehicle reflective of his/her position. An automobile policy will be introduced before the end of fiscal year 2009.
|
6.
|
Indemnification and Insurance. EFT shall indemnify Employee with respect to matters relating to Employee's services as an officer and/or director of EFT or any of its Affiliates, occurring during the course and scope of Employee's employment with EFT, to the extent and pursuant to the procedures set forth in EFT's By-laws, and in accordance with the terms and procedures of any other indemnification which is generally applicable to executive officers of EFT that may be provided by the Board of EFT from time to time. The foregoing indemnity is contractual and will survive any adverse amendment to or repeal of the By-laws. EFT will also cover Employee under a policy of officers' and directors' liability insurance providing coverage that is comparable to that provided now or hereafter to any other executive officer or director of EFT. The provisions of this Section 6 will survive the termination of this Agreement for any reason.
|
7.
|
Change in Control. If a Change of Control occurs and if during the Protected Period, Employee's employment is terminated or not renewed pursuant to Section 10, whether by EFT or by Employee, then EFT shall promptly pay or otherwise provide to Employee the benefits set forth below:
|
(a)
|
An amount equal to two times the sum of (i) Employee's Annual Base Salary then in effect and (ii) the amount of Employee's target bonus established by the Compensation Committee of EFT at the beginning of the calendar year in which such termination occurs, which shall not be less than 10% of the Annual Base Salary for such year, payable in a single lump sum by certified or bank cashier's check within 30 days of such termination; and
|
(b)
|
An amount equal to the product of (i) the maximum monthly premium payment that may be charged to continue coverage for Employee and Employee's dependents under EFT's health insurance plan under COBRA, and under all life insurance and disability policies provided by EFT for Employee, multiplied by (ii) 24. Such amount shall be payable semi-monthly in accordance with EFT's policies then in effect over a period of twenty-four (24) calendar months beginning in the first calendar month following the effective date of such termination. Any unpaid amounts under this clause (b) will cease if Employee obtains substantially similar coverage under new employment.
|
8.
|
Gross-Up of Parachute Payments.
|
(a)
|
To provide Employee with adequate protection in connection with Employee's ongoing employment with EFT, this Agreement or other incentive plans of EFT provide Employee with various benefits in the event of termination of Employee's employment with EFT during the Protected Period following a Change of Control. If Employee's employment is terminated or not renewed pursuant to Section 10 during a Protected Period following a Change of Control, or otherwise in connection with a "change of control" of EFT, within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), a portion of those benefits could be characterized as "excess parachute payments" within the meaning of Section 280G of the Code. The parties hereto acknowledge that the protections set forth in this Section 8 are important, and it is agreed that Employee should not have to bear the full burden of the excise tax that might be levied under Section 4999 of the Code or any similar provision of federal, state of local law, in the event that any portion of the benefits payable to Employee pursuant to this Agreement or the other incentive plans of EFT are treated as an excess parachute payment. The parties, therefore, have agreed as set forth in this Section 8.
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(b)
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Anything in this Agreement to the contrary notwithstanding, if it shall be determined that any payment or distribution (including income recognized by Employee upon the early vesting of restricted property or upon the exercise of options whose exercise date has been accelerated) by EFT or any other Person to or for the benefit of Employee (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 8) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the Code or any similar provision of any federal, state or local law or any interest or penalties are incurred by Employee with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then EFT shall pay an additional payment, not to exceed $250,000 in the aggregate (a "Gross-Up Payment"), in an amount such that after payment by Employee of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed on the Gross-Up Payment, Employee retains an amount of the Gross-Up Payment equal to fifty percent (50%) of the Excise Tax imposed on the Payments. Employee will bear the cost of the remaining 50% until the aggregate Gross-Up Payments from EFT have reached $250,000, and will thereafter bear all additional taxes, interest or penalties.
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(c)
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In the event of any dispute as to the applicability or amount of any Gross-Up Payment, all determinations required to be made under this Section 8, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the independent public accounting firm regularly employed by EFT (the "Accounting Firm") which shall provide detailed supporting calculations both to EFT and to Employee within 15 business days after the receipt of notice from Employee that there has been a Payment, or such earlier time as is requested by EFT. All fees and expenses of the Accounting Firm will be borne by EFT. If the Accounting Firm determines that no Excise Tax is payable by Employee, it shall furnish Employee with a written statement that failure to report the Excise Tax on Employee's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding on EFT and Employee unless and until a final determination is received from the Internal Revenue Service indicating a contrary result. As a result of uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments may not have been made by EFT that should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. If Employee thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by EFT to or for the benefit of Employee, consistent with the maximum limitation stated in Section 8(b) above. In the event it is determined by the Accounting Firm that the Gross Payments previously made by EFT exceeded the limitations stated in Section 8(b) above, upon written notice from EFT, accompanied by a copy of the Accounting Firm's calculation of same, the amount of such overpayment shall be promptly paid by Employee to EFT.
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9.
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Options and Other Stock-Related Plans. The terms and conditions of any option, stock bonus, restricted stock, stock award or other stock-related plan or program with respect to capital stock of EFT, which may be granted to Employee, or in which Employee may participate, shall be governed by the applicable EFT plan, if any, and/or separate agreement(s) between EFT and Employee with respect thereto.
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10.
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Termination or Non-Renewal of Employment
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(a)
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Termination by Either Party; General Provisions. Either EFT or Employee may terminate this Agreement and Employee's employment hereunder at any time during the term of this Agreement by delivery of written notice by the terminating party to the other party at least sixty (60) days prior to the effective date of such termination as set forth in such notice; provided that notice under this Section 10(a) shall only be effective to terminate this Agreement in situations not governed by Section 10(e) of his Agreement. Within thirty (30) days after such termination is effective, in addition to any other payments or benefits provided in this Section 10, EFT shall pay to Employee an amount equal to the sum of (i) Employee's unpaid Annual Base Salary prorated through the date of termination of this Agreement at the rate in effect at the time of such termination, (ii) vacation pay earned pursuant to the policies of EFT then in effect but not taken to the date of such termination, and (iii) all other amounts previously deferred by Employee or earned by Employee as reflected in the books and records of EFT but not paid as of such date under the Company's incentive or deferred compensation plans or programs.
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(b)
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Termination for Cause; Resignation without Good Reason. If EFT terminates Employee's employment for Cause, or Employee terminates his employment without Good Reason, the payments due to Employee shall be limited to the amounts described in Section 10(a) of this Agreement.
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(c)
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Termination without Cause; Termination for Good Reason. If EFT terminates Employee's employment without Cause (except as provided in Section 10(d) below), or if Employee terminates Employee's employment for Good Reason, EFT shall promptly pay or otherwise provide to Employee the following amounts in addition to those set forth in Section 10(a) of this Agreement:
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(i)
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An amount equal to two times the sum of (A) Employee's Annual Base Salary then in effect and (B) the amount of Employee's target bonus established by the Compensation Committee of EFT at the beginning of the calendar year in which such termination occurs, which shall not be less than 10% of the Annual Base Salary for such year, payable in a single lump sum by certified or bank cashier's check within 30 days of such termination; and
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(ii)
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An amount equal to the product of (A) the maximum monthly premium payment that may be charged to continue coverage for Employee and Employee's dependents under EFT's health insurance plan under COBRA, and under all life insurance and disability policies provided by EFT for Employee multiplied by (B) 24. Such amount shall be payable semi-monthly in accordance with EFT's policies then in effect over a period of twenty-four (24) calendar months beginning in the first calendar month following the effective date of such termination. Any unpaid amounts under this clause (ii) will cease if Employee obtains substantially similar coverage under new employment.
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(d)
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Termination on Disability. If at any time during the term of Employee's employment hereunder, Employee is unable to perform the essential functions of Employee's job with or without reasonable accommodation, EFT shall continue payment of Employee's compensation as provided in Section 4 of this Agreement during the first twelve (12) month period of such disability to the extent not covered by EFT's disability insurance policies (EFT may offset against its obligations in this sentence the amounts actually received by Employee under such policies). If Employee should die during the term of Employee's employment hereunder, Employee's employment and EFT's obligations hereunder for compensation payments shall terminate as of the end of the month in which Employee's death occurs.
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(e)
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Non-Renewal of Employment; General Provisions. Either EFT or Employee may elect not to renew Employee's employment hereunder at the end of the Initial Period, or at the end of any Additional Period thereafter, by delivery of written notice by the electing party to the other party at least sixty (60) days prior to the effective date of such termination, as set forth in such notice. Within thirty (30) days after the expiration of the employment term (in addition to any other amounts provided in Section 10(f) below in the case of a non-renewal by EFT), EFT shall pay to Employee an amount equal to the sum of (i) Employee's unpaid Annual Base Salary prorated through the date of termination of this Agreement at the rate then in effect at the time of such non-renewal, (ii) vacation pay earned pursuant to the policies of EFT then in effect but not taken to the date of such termination, and (iii) all other amounts previously deferred by Employee or earned by Employee as reflected on the books and records of EFT but not paid as of such date under all Company incentive or deferred compensation plans or programs. In the event of a nonrenewal by Employee, the amounts due Employee shall be limited to the amounts specified in clause (i) and (ii) of the preceding sentence.
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(f)
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Non-Renewal by EFT at End of Initial Period or Additional Period. If EFT elects not to continue this Agreement and renew Employee's employment as of the end of the Initial Period or an Additional Period, and provided in EFT's reasonable good faith determination, Employee continues to perform Employee's duties and responsibilities through the end of such Initial Period or Additional Period, as the case may be, then the Company shall promptly pay or otherwise provide to Employee the following amounts in addition to those set forth in Section 10(a):
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(i)
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An amount equal to the sum of (A) Employee's Annual Base Salary then in effect and (B) the amount of Employee's target bonus established by the Compensation Committee of EFT at the beginning of the calendar year in which such non-renewal occurs, which shall not be less than 10% of the Annual Base Salary for such year, payable in a single lump sum by certified or bank cashier's check within 30 days of such non-renewal; and
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(ii)
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An amount equal to the product of (A) the maximum monthly premium payment that may be charged to continue coverage for Employee and Employee's dependents under EFT's health insurance plan under COBRA, and under all life insurance and disability policies provided by EFT for Employee multiplied by (B) 12. Such amount shall be payable semimonthly in accordance with EFT's policies then in effect over a period of twelve (12) calendar months beginning in the first calendar month following the effective date of such non-renewal. Any unpaid amounts under this clause (ii) will cease if Employee obtains substantially similar coverage under new employment.
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(g)
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Waiver of Claims. In the event this Agreement expires as a result of non-renewal by EFT, or is terminated by EFT without Cause or because Employee is unable to perform the essential functions of his or her job, with or without reasonable accommodation, in accordance with Section 10(d) hereof, or is terminated by Employee with Good Reason, Employee agrees to accept, in full settlement of any and all claims, losses, damages and other demands that Employee may have arising out of such termination or non-renewal, as liquidated damages and not as a penalty, the payments, benefits and vesting of rights set forth in this Agreement. Employee waives any and all rights Employee may have to bring any cause of action or proceeding contesting any such termination or non-renewal. Under no circumstances shall Employee be entitled to any compensation or confirmation of any benefits under this Agreement for any period of time following Employee's date of termination if Employee's termination is for Cause, or Employee's election to not renew this Agreement at the end of the Initial Period or any Additional Period, or Employee's election to terminate his or her employment without Good Reason.
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(h)
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Lock-ups, etc. During the one (1) year period after Employee receives the lump sum payments as provided in Section 10(c) or (f) above, Employee shall sign any lock-up letters, standstill agreements, or other similar documentation specifically required by an underwriter from such Employee in connection with a public offering of securities by EFT or take other actions reasonably related thereto as requested by the Board of Directors of EFT; provided, however, that equivalent agreements are being required of EFT management and the period of any such lock-up or standstill agreements shall not exceed the shorter of (i) 180 days or (ii) the balance of the one (1) year period. In the event Employee fails to sign any such letters, agreements or similar documentation or take any such action, EFT may seek and obtain specific performance of such covenant, including, without limitation, any injunction requiring execution thereof or the taking of any such actions, and Employee hereby appoints the then president of EFT in office from time to time to sign any such documents on Employee's behalf so long as such documents are prepared on the same basis as other shareholders generally or as all EFT management shareholders.
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11.
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No Mitigation Obligation. All amounts paid to Employee under this Agreement following Employee's termination of employment and this Agreement are acknowledged by EFT and Employee to be reasonable and to be liquidated damages, and Employee will not be required to reduce the amount of such payments by seeking other employment or otherwise, nor will any profits, income, earnings or other benefits from any source whatsoever (including from other employment) create any mitigation, offset, reduction or any other obligation on the part of Employee under this Agreement.
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12.
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Covenant Not to Compete.
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(a)
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During Employee's employment with EFT or any of its Affiliates, and thereafter during the Restricted Period, in order to help, among other things, ensure the security of EFT's Confidential Information, regardless of the reason for the termination of Employee's employment and this Agreement, Employee will not engage in or carry on, directly or indirectly, either for himself or as a member of a partnership or as a shareholder, investor, owner, officer or director of a company or other entity, or as an employee, agent, associate or consultant of any person, partnership, corporation or other entity, any business in any State of the United States or in any other part of the world that directly competes with any services or products produced, sold, conducted, developed, or in the process of development by EFT or its Affiliates on the date of termination of Employee's employment.
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(b)
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Notwithstanding the foregoing, Employee shall not be deemed to be in violation of Section 12(a) based solely on the ownership of less than one percent of any class of securities of a publicly-held company whose gross assets exceed $100,000,000.
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(c)
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Employee acknowledges that (i) during the term of this Agreement, Employee will be provided training by EFT or its Affiliates and access to certain Confidential Information related to the business and operations of EFT and its Affiliates and (ii) the limitations set forth herein on Employee's rights to compete with EFT and its Affiliates are reasonable and necessary for the protection of EFT and its Affiliates. In this regard, Employee specifically agrees that the limitations as to period of time and geographic area, as well as all other restrictions on Employee's activities specified herein, are reasonable and necessary for the protection of EFT and its Affiliates.
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(d)
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In the event that there shall be any violation of the covenant not to compete set forth in this Section 12, then the time limitation thereof shall be extended for a period of time equal to the period of time during which such violation continues; and in the event EFT is required to seek relief from such violation in any court, board of arbitration or other tribunal, then the covenant shall be extended for a period of time equal to the pendency of such proceedings, including all appeals.
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(e)
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Employee agrees that the remedy at law for any breach by Employee of this Section 12 will be inadequate and that EFT shall also be entitled to injunctive relief.
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13.
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Confidential Information. During the term of Employee's employment hereunder, and for five (5) years after Employee's termination of employment, Employee shall not use or disclose, without the prior written consent of EFT, Confidential Information relating to EFT or any of its Affiliates and upon termination of Employee's employment will return to EFT all written materials in Employee's possession embodying such Confidential Information. Employee will promptly disclose to EFT all Confidential Information, as well as any business opportunity related to EFT which comes to Employee's attention during the term of Employee's employment with EFT. Employee will not take advantage of or divert any such business opportunity for the benefit of Employee or any other Person without the prior written consent of EFT. Employee agrees that the remedy at law for any breach by Employee of this Section 13 will be inadequate and that EFT shall also be entitled to injunctive relief.
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14.
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Intellectual Property.
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(a)
|
To the extent they relate to, or result from, directly or indirectly, the actual or anticipated operations of EFT or any of its Affiliates, or the activities of Employee in the course and scope of his employment, Employee hereby agrees that all patents, trademarks, copyrights, trade secrets, and other intellectual property rights, all inventions, whether or not patentable, and any product, drawing, design, recording, writing, literary work or other author's work, in any other tangible form developed in whole or in part by Employee during the term of this Agreement, or otherwise developed, purchased or acquired by EFT or any of its Affiliates ("Intellectual Property"), shall be the exclusive property of EFT or such Affiliate, as the case may be.
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(b)
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Employee will hold all Intellectual Property in trust for EFT and will deliver all Intellectual Property in Employee's possession or control to EFT upon request and, in any event, at the end of Employee's employment with EFT.
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(c)
|
Employee shall assign and does hereby assign to EFT all property rights that Employee may now or hereafter have in the Intellectual Property. Employee shall take such action, including, but not limited to, the execution, acknowledgment, delivery and assistance in preparation of documents, and the giving of testimony, as may be requested by EFT to evidence, transfer, vest or confirm EFT's right, title and interest in the Intellectual Property.
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(d)
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Employee will not contest the validity of any invention, any copyright, any trademark or any mask work registration owned by or vesting in EFT or any of its Affiliates under this Agreement.
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15.
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Definitions. As used in this Agreement, the terms defined in Exhibit A have the meaning assigned to such terms in such exhibit.
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16.
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Notices. All notices, requests, demands and other communications required by or permitted under this Agreement shall be in writing and shall be sufficiently delivered if delivered by hand, by courier service, or sent by registered or certified mail, postage prepaid, to the parties at their respective addresses listed below:
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(a)
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If to Employee: Jack Jie
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(b)
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If to EFT:
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17.
|
Set-off Rights. EFT's obligations to make the payments and provide the benefits required by this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set off, counterclaim, recoupment, defense or other claim, right or action that EFT may have against Employee or others, unless such amount is a determinable liability of Employee to EFT.
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18.
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Assignment This Agreement is personal to Employee, and Employee shall not assign any of Employee's rights or delegate any of Employee's duties hereunder without the prior written consent of EFT. Neither Employee nor Employee's spouse will have the right to commute, encumber, or otherwise dispose of any payments under this Agreement. EFT shall have the right to assign this Agreement to a successor in interest in connection with a merger, sale of substantially all assets, or the like; provided however, that an assignment of this Agreement to an entity with operations, products or services outside of the industries in which EFT or its Affiliates is then active shall not be deemed to expand the scope of Employee's covenant not to compete with such operations, products or services without Employee's written consent. As used in this Agreement, the term "Company" means EFT as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, written agreement, or otherwise.
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19.
|
Survival. The provisions of this Agreement shall survive the termination of Employee's employment hereunder in accordance with their terms.
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20.
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Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of California without regard to the choice-of-law principles thereof.
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21.
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Binding Upon Successors. This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective heirs, legal representatives, successors and permitted assigns.
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22.
|
Entire Agreement This Agreement constitutes the entire agreement between EFT and Employee with respect to the terms of employment of Employee by EFT and supersedes all prior agreements and understandings, whether written or oral, between them concerning such terms of employment.
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23.
|
Amendments and Waivers. This Agreement may be amended, modified or supplemented, and any obligation hereunder may be waived, only by a written instrument executed by the parties hereto. The waiver by either party of a breach of any provision of this Agreement shall not operate as a waiver of any subsequent breach. No failure on the part of any party to exercise, and no delay in exercising, any right or remedy hereunder shall operate as a waiver hereof, nor shall any single or partial exercise of any such right or remedy by such party preclude any other or further exercise thereof or the exercise of any other right or remedy.
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24.
|
Cumulative Rights And Remedies. All rights and remedies hereunder are cumulative and are in addition to all other rights and remedies provided by law, agreement or otherwise. Employee's obligations to EFT and EFT's rights and remedies hereunder are in addition to all other obligations of Employee and rights and remedies of EFT created pursuant to any other agreement.
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25.
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Construction. Each party to this Agreement has had the opportunity to review this Agreement with legal counsel. This Agreement shall not be construed or interpreted against any party on the basis that such party drafted or authored a particular provision, parts of or the entirety of this Agreement.
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26.
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Severability. In the event that any provision or provisions of this Agreement is held to be invalid, illegal or unenforceable by any court of law or otherwise, the remaining provisions of this Agreement shall nevertheless continue to be valid, legal and enforceable as though the invalid or Unenforceable parts had not been included therein. In addition, in such event the parties hereto shall negotiate in good faith to modify this Agreement so as to affect the original intent of the parties as closely as possible with respect to those provisions that were held to be invalid, illegal or unenforceable.
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27.
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Attorneys' Fees and Costs. If any action at law or in equity is brought to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees, costs and necessary disbursements in addition to any other relief to which it may be entitled.
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28.
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EFT Performance Guarantee. EFT shall perform each and every obligation to be performed hereunder.
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COMPANY:
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EMPLOYEE:
|
||
EFT BIOTECH HOLDINGS, INC.
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Mr. Jack Jie Qin
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||
By: |
/s/ George
W Curry
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/s/
Mr. Jack Jie Qin
|
|
Name: George W Curry
|
|||
On behalf of the Board of Directors
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|||
Title: Corporate Secretary
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EFT BIOTECH HOLDINGS, INC.
|
||
By:
|
./s/ Sharon Tang
|
|
Name: Sharon Tang
|
||
Title: CFO
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EFT BIOTECH HOLDINGS, INC.
|
||
By:
|
/s/ Pyng Soon
|
|
Name: Pyng Soon
|
||
Title: Attorney at Law
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(i)
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the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a "Designated Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended, (the "Exchange Act")) of 30% or more of either (1) the then outstanding shares of Common Stock of EFT (the "Outstanding EFT Common Stock") or (2) the combined voting power of the then outstanding voting securities of EFT entitled to vote generally in the election of directors (the "Outstanding EFT Voting Securities"); provided, however, that the following acquisitions shall not constitute a Change of Control: (a) any acquisition of Common Stock of EFT or voting securities of EFT by any employee benefit plan(s) (or related trust(s)) sponsored or maintained by EFT or any other corporation controlled by EFT and approved by the Incumbent Board, (b) any acquisition by any corporation pursuant to a reorganization, merger or consolidation, if, immediately following such reorganization, merger or consolidation, the conditions described in clauses (1), (2) and (3) of paragraph (iii) below of this definition are satisfied; or
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(ii)
|
individuals who, as of the date hereof, constitute the entire Board of Directors of EFT (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board of Directors of EFT (the "Board"); provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by EFT shareholders, was approved by a vote of at least a majority of the directors then comprising The Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either (1) an actual or threatened election contest (as such terms are used in Rule 14a-l 1 of the Regulation 14A promulgated under the Exchange Act), or an actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board or (2) a plan or agreement to replace a majority of the members of the Board then comprising the Incumbent Board; or
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(iii)
|
approval by the shareholders of EFT of a reorganization, merger or consolidation, in each case unless, immediately following such reorganization, merger or consolidation, (1) more than 50% (or such greater percentage as may be approved by the Incumbent Board) of the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation (including, without limitation, a corporation which as a result of such transaction owns EFT through one or more subsidiaries) and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding EFT Common Stock and Outstanding EFT Voting Securities immediately prior to such reorganization, merger or consolidation in substantially the same proportions as their ownership immediately prior to such reorganization, merger or consolidation, of the Outstanding EFT Common Stock or outstanding EFT Voting Securities, as the case may be, (2) no Designated Person (excluding EFT, any employee benefit plan(s) (or related trust(s)) of EFT and/or its subsidiaries or any Person beneficially owning, immediately prior to such reorganization, merger or consolidation, directly or indirectly, 30% (or such lesser percentage as may be approved by the Incumbent Board) or more of the Outstanding EFT Common Stock or Outstanding EFT Voting Securities, as the case may be) beneficially owns, directly or indirectly, 30% (or such lesser percentage as may be approved by the Incumbent Board) or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors, and (3) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement providing for such reorganization, merger or consolidation; or
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(iv)
|
approval by the shareholders of EFT of (1) a complete liquidation or dissolution of EFT or (2) the sale or other disposition of all or substantially all of the assets of EFT, other than to a corporation, with respect to which immediately following such sale or other disposition, (A) more than 50% (or such greater percentage as may be approved by the Incumbent Board) of the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were beneficial owners, respectively, of the Outstanding EFT Common Stock and Outstanding EFT Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the Outstanding EFT Common Stock and Outstanding EFT Voting Securities, as the case may be, (B) no Designated Person (excluding EFT and any employee benefit plan (or related trust) of EFT and/or its subsidiaries or such corporation and any Person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, 30% (or such lesser percentage as may be approved by the Incumbent Board) or more of the Outstanding EFT Common Stock or Outstanding EFT Voting Securities, as the case may be) beneficially owns, directly or indirectly, 30% (or such lesser percentage as may be approved by the Incumbent Board) or more of, respectively, the then outstanding shares of common stock of such corporation or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors, and (C) at least a majority of the members of the board of directors of such corporation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition of assets of EFT.
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(a)
|
Employee is assigned duties, taken as a whole, that are materially inconsistent with, or materially diminished from, Employee's positions, duties, responsibilities and status with EFT immediately prior to such action, or Employee's status, reporting responsibilities, titles or offices are materially diminished from those in effect immediately prior to such action, or Employee's duties and responsibilities are materially increased without a corresponding reasonable increase in Employee's compensation (provided that in the case of such a change within a Protected Period, such increase must be satisfactory to Employee in Employee's sole reasonable judgment), except in each case in connection with the termination of Employee's employment by EFT for Cause or on account of disability, or as a result of Employee's death, or by Employee for other than Good Reason; provided, however, that Good Reason shall not be triggered under this subsection (a) by an immaterial action not taken in bad faith or by an action that is remedied by EFT promptly after receipt of written notice from Employee; or
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(b)
|
Employee's Annual Base Salary is reduced (i) within a Protected Period, from that in effect immediately prior to the commencement of a Protected Period or as the same may be increased from time to time thereafter, or (ii) other than within a Protected Period, from that which was in effect prior to such action unless such reduction is part of a general reduction in compensation within the officer ranks due to economic or company-wide considerations; or
|
(c)
|
EFT (i) within a Protected Period, fails to continue in effect any benefit or compensation plan, including, but not limited to, the annual bonus plan, qualified retirement plan, executive life insurance plan and/or health and accident plan, in which Employee is participating immediately prior to the commencement of the Protected Period, or plans providing, in the sole reasonable judgment of Employee, Employee with substantially similar benefits, or EFT takes any action that would adversely affect Employee's participation in or reduce Employee's benefits under any of such plans (excluding any such action by EFT that is required by law), or (ii) other than within a Protected Period, takes any action to materially reduce or eliminate Employee's participation in EFT's benefit or compensation plans unless such reduction or elimination is part of a general reduction in benefits within the officer ranks due to economic or company-wide considerations; or
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(d)
|
EFT requires Employee at any time to relocate more than 50 miles from where Employee's principal office was located immediately prior to such event; or
|
(e)
|
The amendment, modification or repeal of any provision of the Certificate of Incorporation or Bylaws of EFT that was in effect immediately prior to the commencement of a Protected Period, if such amendment, modification or repeal would materially adversely affect Employee's rights to indemnification by EFT; or
|
(g)
|
EFT shall violate or breach any obligation of EFT (regardless whether such obligation be set forth in the Bylaws of EFT and/or in this Agreement or any other separate agreement entered into between EFT and Employee) to indemnify Employee against any claim, loss, expense or liability sustained or incurred by Employee by reason, in whole or in part, of the fact that Employee is or was an officer or director of EFT; or
|
(h)
|
EFT shall violate or breach any other material obligation of EFT owing to Employee relating to Employee's employment with EFT, provided that in the event of a violation or breach that is reasonably subject to being cured by EFT, Good Reason shall only occur if EFT shall fail or refuse to commence a cure within 15 days after written notice thereof is given by Employee to EFT or shall thereafter fail to diligently prosecute such cure to completion; or
|
(i)
|
EFT shall fail to keep in force, for the benefit of Employee, directors' and officers' insurance policy with coverage amounts and scope at least equal to the coverage amounts in effect on the date hereof; or
|
(j)
|
EFT shall fail to obtain from a successor (including a successor to a material portion of the business or assets of EFT) a satisfactory assumption in writing of EFT's obligations under this Agreement; or
|
(k)
|
EFT shall fail to provide Employee with office space, related facilities and support personnel (including, but not limited to, administrative and secretarial assistance) that are both commensurate with Employee's position and Employee's responsibilities to and position with EFT and not materially dissimilar to the office space, related facilities and support personnel provided to other executive officers of EFT; or
|
(1)
|
EFT notifies Employee of EFT's intention not to observe or perform one or more of the material obligations of EFT under this Agreement.
|
(i)
|
one year after the termination of Employee's employment if Employee is not entitled to benefits under Section 7 or 10(c); or;
|
(ii)
|
two years after the termination of Employee's employment, if Employee receives all of the benefits under Section 7 or 10(c) (after giving effect to any permissible setoff).
|
1.
|
Position
|
2.
|
Employment Date
|
3.
|
Working Hours
|
4.
|
Salary and Performance — Related Bonus Salary
|
5.
|
Annual Leave
|
6.
|
Medical Benefits
|
7.
|
Mandatory Provident Fund
|
8.
|
Termination
|
9.
|
Code of Conduct
|
10.
|
Conflict of Interest
|
11.
|
Other Covenants
|
12.
|
Additional Terms:
|
13.
|
Governing Law
|
Accepted and Confirmed
|
Accepted and Confirmed
|
EFT (HK) Limited
|
Mr CHEUNG, Chung Man Cyril
|
For and on behalf of EFT (HK) LIMITED
|
/s/ Wendy Qin
|
/s/ Mr CHEUNG, Chung Man Cyril
|
Wendy Qin
|
Mr CHEUNG, Chung Man Cyril
|
Capacity: Director
|
HK ID Number: G218561(9)
|
Date: December 20, 2010
|
Date: December 20, 2010
|
1.
|
Employment. EFT hereby agrees to employ Employee and Employee hereby agrees to
work for EFT as its
Vice President - General Counsel
. Employee's principal office shall be in
City of Industry, California. So long as Employee is employed by EFT, Employee shall devote
Employee's skill, energy and substantially most of his business-related efforts to the faithful
discharge of Employee's duties as an employee of EFT. In providing services hereunder,
Employee shall comply with and follow all directives, policies, standards and regulations from
time to time established by the Board of Directors of EFT, which are applicable to EFT.
|
2.
|
Term of Employment. Employee's employment by EFT pursuant to this Agreement shall continue in effect for a term of three (3) years from the date of this Agreement (the "Initial Period"), which shall be automatically extended, without any action on the part of Employee or EFT, for additional, successive one-year periods (each such one-year period, an "Additional Period" and all of such one-year periods collectively, the "Additional Periods") commencing on the second anniversary date of this Agreement and on each anniversary date thereafter, unless either party gives notice of non-renewal of this Agreement, as provided in Section 10(e) of this Agreement, or otherwise terminates this Agreement, in accordance with the other provisions of Section 10 hereof.
|
3.
|
Representations and Warranties. Employee represents and warrants that Employee is under no contractual that will limit in any way Employee's activities on behalf of EFT or its Affiliates or will prohibit or limit the disclosure or use by Employee of any information that directly or indirectly relates to the businesses of EFT or its Affiliates, or the services to be rendered by Employee under this Agreement.
|
4.
|
Compensation. Subject to the provisions of Section 10 of this Agreement, Employee will be entitled to the compensation and benefits set forth in this Section 4.
|
(a)
|
During the Initial Period, EFT shall pay Employee an Annual Base Salary, payable semimonthly, in equal installments, at a rate equal to $123,000 per year for the first calendar year or portion thereof occurring during the term of this Agreement. In each subsequent calendar year, or portion thereof; occurring during the term of this Agreement, EFT shall pay to Employee an Annual Base Salary determined by the Compensation Increase Scale as reviewed and approved by the EFT Board of Directors Compensation Committee and approved by the Board of Directors of EFT following its annual salary and performance review. Employee's Annual Base Salary for each succeeding calendar year (or portion thereof) occurring during the term of this Agreement will be reviewed at least annually in the fourth quarter of each calendar year of Employee's employment hereunder, commencing in the fourth quarter of calendar year 2009. In the event this Agreement is terminated or expires during any calendar year, the amount of such Annual Base Salary owed by EFT to Employee, if any, will be determined pursuant to Section 10 of this Agreement
|
(b)
|
Employee shall be eligible to receive an annual base salary adjustment in each subsequent calendar year or portion thereof as a cost of living increase at ten percent (10%) per annum.
|
(c)
|
Employee shall be eligible to receive an annual bonus pursuant to the Executive Bonus Scale in effect, for executive employees of EFT. The Executive Bonus Scale rewards executivesbased upon profit improvements of EFT. The scale rewards the executives in direct proportion to increases in gross profits.
|
(d)
|
All payments of salary and other compensation to Employee shall be made after deduction of any taxes required to be withheld with respect thereto under applicable federal, state and locallaws.
|
5.
|
Fringe Benefits; Expenses.
|
(a)
|
During the term of employment of Employee hereunder, Employee shall participate in all employee benefit plans sponsored by EFT for its executive employees, which may include, but will not be limited to, stock bonus, stock purchase, stock performance incentive and stock option plans, sick leave and disability leave, health insurance, dental insurance and pension and/or profit sharing plans; provided, however, that except as provided below, the existence, nature, amount and limitations of such plans shall be determined from time to time by the Board of Directors of EFT.
|
(b)
|
EFT will reimburse Employee for all reasonable business expenses incurred by Employee in me scope of Employee's employment; provided, however, that Employee must file expense reports with respect to such expenses in accordance with EFT's policies as are in effect from time to time, and any expenses requiring the approval of any officer or the Board of Directors of EFT pursuant to any policies of EFT then in effect shall have been so approved.
|
(c)
|
During the term of employment of Employee hereunder, Employee shall be entitled to a minimum of three (3) weeks paid vacation during each calendar year and to paid holidays and other paid leave set forth in EFT's policies in effect from time to time. Any vacation not used during a calendar year may not be used during any subsequent period.
|
(d)
|
During the term of employment of Employee hereunder, EFT will pay all license fees, occupation taxes and reasonable educational costs and expenses necessary to maintain Employee's good standing under any professional licenses required in connection with Employee's employment by EFT.
|
(e)
|
During the term of this Agreement, EFT shall use its reasonable efforts to provide to Employee (I) life insurance payable to Employee's designated beneficiary or beneficiaries in an amount at least three times Employee's Annual Base Salary and (H) disability insurance on behalf of Employee which, as a goal, shall provide for salary continuation in the event of permanent disability in an amount equal to the lesser of (I) 60% of Employee's Annual Base Salary, or (II) $10,250 per month.
|
(f)
|
EFT is currently investigating a car program for executives which either furnishes an appropriate automobile commensurate with the position occupied or an allowance which shall allow the employee to lease/purchase a vehicle reflective of his/her position. An automobile policy will be introduced before the end of fiscal year 2009.
|
6.
|
Indemnification and Insurance. EFT shall indemnify Employee with respect to matters relating to Employee's services as an officer and/or director of EFT or any of its Affiliates, occurring during the course and scope of Employee's employment with EFT, to the extent and pursuant to the procedures set forth in EFT's By-laws, and in accordance with the terms and procedures of any other indemnification which is generally applicable to executive officers of EFT that may be provided by the Board of EFT from time to time. The foregoing indemnity is contractual and will survive any adverse amendment to or repeal of the By-laws. EFT will also cover Employee under a policy of officers' and directors' liability insurance providing coverage that is comparable to that provided now or hereafter to any other executive officer or director of EFT. The provisions of this Section 6 will survive the termination of this Agreement for any reason.
|
7.
|
Change in Control. If a Change of Control occurs and if during the Protected Period, Employee's employment is terminated or not renewed pursuant to Section 10, whether by EFT or by Employee, then EFT shall promptly pay or otherwise provide to Employee the benefits set forth below:
|
(a)
|
An amount equal to two times the sum of (I) Employee's Annual Base Salary then in effect and (II) the amount of Employee's target bonus established by the Compensation Committee of EFT at the beginning of the calendar year in which such termination occurs, which shall not be less than 10% of the Annual Base Salary for such year, payable in a single lump sum by certified or bank cashier's check within 30 days of such termination; and
|
(b)
|
An amount equal to the product of (i) the maximum monthly premium payment that may be charged to continue coverage for Employee and Employee's dependents under EFT's health insurance plan under COBRA, and under all life insurance and disability policies provided by EFT for Employee, multiplied by (ii) 24. Such amount shall be payable semi-monthly in accordance with EFT's policies then in effect over a period of twenty-four (24) calendar months beginning in the first calendar month following the effective date of such termination. Any unpaid amounts under this clause (b) will cease if Employee obtains substantially similar coverage under new employment.
|
8.
|
Gross-Up of Parachute Payments.
|
(a)
|
To provide Employee with adequate protection in connection with Employee's ongoing employment with EFT, this Agreement or other incentive plans of EFT provide Employee with various benefits in the event of termination of Employee's employment with EFT during the Protected Period following a Change of Control. If Employee's employment is terminated or not renewed pursuant to Section 10 during a Protected Period following a Change of Control, or otherwise in connection with a "change of control" of EFT, within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), a portion of those benefits could be characterized as "excess parachute payments" within the meaning of Section 280G of the Code. The parties hereto acknowledge that the protections set forth in this Section 8 are important, and it is agreed that Employee should not have to bear the full burden of the excise tax that might be levied under Section 4999 of the Code or any similar provision of federal, state of local law, in the event that any portion of the benefits payable to Employee pursuant to this Agreement or the other incentive plans of EFT are treated as an excess parachute payment. The parties, therefore, have agreed as set forth in this Section 8.
|
(b)
|
Anything in this Agreement to the contrary notwithstanding, if it shall be determined that any payment or distribution (including income recognized by Employee upon the early vesting of restricted property or upon the exercise of options whose exercise date has been accelerated) by EFT or any other Person to or for the benefit of Employee (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 8) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the Code or any similar provision of any federal, state or local law or any interest or penalties are incurred by Employee with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then EFT shall pay an additional payment, not to exceed $250,000 in the aggregate (a "Gross-Up Payment"), in an amount such that after payment by Employee of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed on the Gross-Up Payment, Employee retains an amount of the Gross-Up Payment equal to fifty percent (50%) of the Excise Tax imposed on the Payments. Employee will bear the cost of the remaining 50% until the aggregate Gross-Up Payments from EFT have reached $250,000, and will thereafter bear all additional taxes, interest or penalties.
|
(c)
|
In the event of any dispute as to the applicability or amount of any Gross-Up Payment, all determinations required to be made under this Section 8, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the independent public accounting firm regularly employed by EFT (the "Accounting Firm") which shall provide detailed supporting calculations both to EFT and to Employee within 15 business days after the receipt of notice from
|
9.
|
Options and Other Stock-Related Plans The terms and conditions of any option, stock bonus, restricted stock, stock award or other stock-related plan or program with respect to capital stock of EFT, which may be granted to Employee, or in which Employee may participate, shall be governed by the applicable EFT plan, if any, and/or separate agreement(s) between EFT and Employee with respect thereto.
|
10.
|
Termination or Non-Renewal of Employment.
|
(a)
|
Termination by Either Party; General Provisions. Either EFT or Employee may terminate this Agreement and Employee's employment hereunder at any time during the term of this Agreement by delivery of written notice by the terminating party to the other party at least sixty (60) days prior to the effective date of such termination as set forth in such notice; provided that notice under this Section 10(a) shall only be effective to terminate this Agreement in situations not governed by Section 10(e) of his Agreement Within thirty (30) days after such termination is effective, in addition to any other payments or benefits provided in this Section 10, EFT shall pay to Employee an amount equal to the sum of (i) Employee's unpaid Annual Base Salary prorated through the date of termination of this Agreement at the rate in effect at the time of such termination, (ii) vacation pay earned pursuant to the policies of EFT then in effect but not taken to the date of such termination, and (iii) all other amounts previously deferred by Employee or earned by Employee as reflected in the books and records of EFT but not paid as of such date under the Company's incentive or deferred compensation plans or programs.
|
(b)
|
Termination for Cause; Resignation without Good Reason. If EFT terminates Employee's employment for Cause, or Employee terminates his employment without Good Reason, the payments due to Employee shall be limited to the amounts described in Section 10(a) of this Agreement
|
(c)
|
Termination without Cause; Termination for Good Reason. If EFT terminates Employee's employment without Cause (except as provided in Section 10(d) below), or if Employee terminates Employee's employment for Good Reason, EFT shall promptly pay or otherwise provide to Employee the following amounts in addition to those set forth in Section 10(a) of this Agreement:
|
(i)
|
An amount equal to two times the sum of (A) Employee's Annual Base Salary then in effect and (B) the amount of Employee's target bonus established by the Compensation Committee of EFT at the beginning of the calendar year in which such termination occurs, which shall not be less than 10% of the Annual Base Salary for such year, payable in a single lump sum by certified or bank cashier's check within 30 days of such termination; and
|
(ii)
|
An amount equal to the product of (A) the maximum monthly premium payment that may be charged to continue coverage for Employee and Employee's dependents under EFT's health insurance plan under COBRA, and under all life insurance and disability policies provided by EFT for Employee multiplied by (B) 24. Such amount shall be payable semi-monthly in accordance with EFT's policies then in effect over a period of twenty-four (24) calendar months beginning in the first calendar month following the effective date of such termination. Any unpaid amounts under this clause (ii) will cease if Employee obtains substantially similar coverage under new employment.
|
(d)
|
Termination on Disability. If at any time during the term of Employee's employment hereunder, Employee is unable to perform the essential functions of Employee's job with or without reasonable accommodation, EFT shall continue payment of Employee's compensation as provided in Section 4 of this Agreement during the first twelve (12) month period of such disability to the extent not covered by EFT's disability insurance policies (EFT may offset against its obligations in this sentence the amounts actually received by Employee under such policies). If Employee should die during the term of Employee's employment hereunder, Employee's employment and EFT's obligations hereunder for compensation payments shall terminate as of the end of the month in which Employee's death occurs.
|
(e)
|
Non-Renewal of Employment; General Provisions. Either EFT or Employee may elect not to renew Employee's employment hereunder at the end of the Initial Period, or at the end of any Additional Period thereafter, by delivery of written notice by the electing party to the other party at least sixty (60) days prior to the effective date of such termination, as set forth in such notice. Within thirty (30) days after the expiration of the employment term (in addition to any other amounts provided in Section 10(f) below in the case of a non-renewal by EFT), EFT shall pay to Employee an amount equal to the sum of (i) Employee's unpaid Annual Base Salary prorated through the date of termination of this Agreement at the rate then in effect at the time of such non-renewal, (ii) vacation pay earned pursuant to the policies of EFT then in effect but not taken to the date of such termination, and (iii) all other amounts previously deferred by Employee or earned by Employee as reflected on the books and records of EFT but not paid as of such date under all Company incentive or deferred compensation plans or programs. In the event of a nonrenewal by Employee, the amounts due Employee shall be limited to the amounts specified in clause (i) and (ii) of the preceding sentence.
|
(f)
|
Non-Renewal by EFT at End of Initial Period or Additional Period. If EFT elects not to continue this Agreement and renew Employee's employment as of the end of the Initial Period or an Additional Period, and provided in EFT's reasonable good faith determination, Employee continues to perform Employee's duties and responsibilities through the end of such Initial Period or Additional Period, as the case may be, then the Company shall promptly pay or otherwise provide to Employee the following amounts in addition to those set forth in Section 10(a):
|
(i)
|
An amount equal to the sum of (A) Employee's Annual Base Salary then in effect and (B) the amount of Employee's target bonus established by the Compensation Committee of EFT at the beginning of the calendar year in which such non-renewal occurs, which shall not be less than 10% of the Annual Base Salary for such year, payable in a single lump sum by certified or bank cashier's check within 30 days of such non-renewal; and
|
(ii)
|
An amount equal to the product of (A) the maximum monthly premium payment that may be charged to continue coverage for Employee and Employee's dependents under EFT's health insurance plan under COBRA, and under all life insurance and disability policies provided by EFT for Employee multiplied by (B) 12. Such amount shall be payable semimonthly in accordance with EFT's policies then in effect over a period of twelve (12) calendar months beginning in the first calendar month following the effective date of such non-renewal. Any unpaid amounts under this clause (ii) will cease if Employee obtains substantially similar coverage under new employment.
|
(g)
|
Waiver of Claims. In the event this Agreement expires as a result of non-renewal by EFT, or is terminated by EFT without Cause or because Employee is unable to perform the essential functions of his or her job, with or without reasonable accommodation, in accordance with Section 10(d) hereof, or is terminated by Employee with Good Reason, Employee agrees to accept, in full settlement of any and all claims, losses, damages and other demands that Employee may have arising out of such termination or non-renewal, as liquidated damages and not as a penalty, the payments, benefits and vesting of rights set forth in this Agreement. Employee waives any and all rights Employee may have to bring any cause of action or proceeding contesting any such termination or non-renewal. Under no circumstances shall Employee be entitled to any compensation or confirmation of any benefits under this Agreement for any period of time following Employee's date of termination if Employee's termination is for Cause, or Employee's election to not renew this Agreement at the end of the Initial Period or any Additional Period, or Employee's election to terminate his or her employment without Good Reason.
|
(h)
|
Lock-ups, etc. During the one (1) year period after Employee receives the lump sum payments as provided in Section 10(c) or (f) above, Employee shall sign any lock-up letters, standstill agreements, or other similar documentation specifically required by an underwriter from such Employee in connection with a public offering of securities by EFT or take other actions reasonably related thereto as requested by the Board of Directors of EFT; provided, however, that equivalent agreements are being required of EFT management and the period of any such lock-up or standstill agreements shall not exceed the shorter of (i) 180 days or (ii) the balance of the one (1) year period. In the event Employee fails to sign any such letters, agreements or similar documentation or take any such action, EFT may seek and obtain specific performance of such covenant, including, without limitation, any injunction requiring execution thereof or the taking of any such actions, and Employee hereby appoints the then president of EFT in office from time to time to sign any such documents on Employee's behalf so long as such documents are prepared on the same basis as other shareholders generally or as all EFT management shareholders.
|
11.
|
No Mitigation Obligation. All amounts paid to Employee under this Agreement following Employee's termination of employment and mis Agreement are acknowledged by EFT and Employee to be reasonable and to be liquidated damages, and Employee will not be required to reduce the amount of such payments by seeking other employment or otherwise, nor will any profits, income, earnings or other benefits from any source whatsoever (including from other employment) create any mitigation, offset, reduction or any other obligation on the part of Employee under this Agreement
|
12.
|
Covenant Not to Compete.
|
(a)
|
During Employee's employment with EFT or any of its Affiliates, and thereafter during the Restricted Period, in order to help, among other things, ensure the security of EFT's Confidential Information, regardless of the reason for the termination of Employee's employment and this Agreement, Employee will not engage in or carry on, directly or indirectly, either for himself or as a member of a partnership or as a shareholder, investor, owner, officer or director of a company or other entity, or as an employee, agent, associate or consultant of any person, partnership, corporation or other entity, any business in any State of the United States or in any other part of the world that directly competes with any services or products produced, sold, conducted, developed, or in the process of development by EFT or its Affiliates on the date of termination of Employee's employment.
|
(b)
|
Notwithstanding the foregoing, Employee shall not be deemed to be in violation of Section 12(a) based solely on the ownership of less than one percent of any class of securities of a publicly-held company whose gross assets exceed $100,000,000.
|
(c)
|
Employee acknowledges that (i) during the term of this Agreement, Employee will be provided training by EFT or its Affiliates and access to certain Confidential Information related to the business and operations of EFT and its Affiliates and (ii) the limitations set forth herein on Employee's rights to compete with EFT and its Affiliates are reasonable and necessary for the protection of EFT and its Affiliates. In this regard, Employee specifically agrees that the limitations as to period of time and geographic area, as well as all other restrictions on Employee's activities specified herein, are reasonable and necessary for the protection of EFT and its Affiliates.
|
(d)
|
In the event that there shall be any violation of the covenant not to compete set forth in this Section 12, then the time limitation thereof shall be extended for a period of time equal to the period of time during which such violation continues; and in the event EFT is required to seek relief from such violation in any court, board of arbitration or other tribunal, then the covenant shall be extended for a period of time equal to the pendency of such proceedings, including all appeals.
|
(e)
|
Employee agrees that the remedy at law for any breach by Employee of this Section 12 will be inadequate and that EFT shall also be entitled to injunctive relief.
|
13.
|
Confidential Information. During the term of Employee's employment hereunder, and for five (5) years after Employee's termination of employment, Employee shall not use or disclose, without the prior written consent of EFT, Confidential Information relating to EFT or any of its Affiliates and upon termination of Employee's employment will return to EFT all written materials in Employee's possession embodying such Confidential Information. Employee will promptly disclose to EFT all Confidential Information, as well as any business opportunity related to EFT which comes to Employee's attention during the term of Employee's employment with EFT. Employee will not take advantage of or divert any such business opportunity for the benefit of Employee or any other Person without the prior written consent of EFT. Employee agrees that the remedy at law for any breach by Employee of this Section 13 will be inadequate and that EFT shall also be entitled to injunctive relief.
|
14.
|
Intellectual Property.
|
(a)
|
To the extent they relate to, or result from, directly or indirectly, the actual or anticipated operations of EFT or any of its Affiliates, or the activities of Employee in the course and scope of his employment, Employee hereby agrees that all patents, trademarks, copyrights, trade secrets, and other intellectual property rights, all inventions, whether or not patentable, and any product, drawing, design, recording, writing, literary work or other author's work, in any other tangible form developed in whole or in part by Employee during the term of this Agreement, or otherwise developed, purchased or acquired by EFT or any of its Affiliates ("Intellectual Property"), shall be the exclusive property of EFT or such Affiliate, as the case may be.
|
(b)
|
Employee will hold all Intellectual Property in trust for EFT and will deliver all
Intellectual Property in Employee's possession or control to EFT upon request and, in any event, at the end of Employee's employment with EFT.
|
(c)
|
Employee shall assign and does hereby assign to EFT all property rights that Employee may now or hereafter have in the Intellectual Property. Employee shall take such action, including, but not limited to, the execution, acknowledgment, delivery and assistance in preparation of documents, and the giving of testimony, as may be requested by EFT to evidence, transfer, vest or confirm EFT's right, title and interest in the Intellectual Property.
|
(d)
|
Employee will not contest the validity of any invention, any copyright, any trademark or any mask work registration owned by or vesting in EFT or any of its Affiliates under this Agreement.
|
15.
|
Definitions. As used in this Agreement, the terms defined in Exhibit A have the meaning assigned to such terms in such exhibit.
|
16.
|
Notices. All notices, requests, demands and other communications required by or permitted under this Agreement shall be in writing and shall be sufficiently delivered if delivered by hand, by courier service, or sent by registered or certified mail, postage prepaid, to the parties at their respective addresses listed below:
|
(a)
|
If to Employee: Pyng Soon
|
(b)
|
If to EFT:
|
17.
|
Set-off Rights. EFT's obligations to make the payments and provide the benefits required by this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set off, counterclaim, recoupment, defense or other claim, right or action that EFT may have against Employee or others, unless such amount is a determinable liability of Employee to EFT.
|
18.
|
Assignment. This Agreement is personal to Employee, and Employee shall not assign any of Employee's rights or delegate any of Employee's duties hereunder without the prior written consent of EFT. Neither Employee nor Employee's spouse will have the right to commute, encumber, or otherwise dispose of any payments under this Agreement. EFT shall have the right to assign this Agreement to a successor in interest in connection with a merger, sale of substantially all assets, or the like; provided however, that an assignment of this Agreement to an entity with operations, products or services outside of the industries in which EFT or its Affiliates is then active shall not be deemed to expand the scope of Employee's covenant not to compete with such operations, products or services without Employee's written consent. As used in this Agreement, the term "Company" means EFT as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, written agreement, or otherwise.
|
19.
|
Survival. The provisions of this Agreement shall survive the termination of Employee's employment hereunder in accordance with their terms.
|
20.
|
Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of California without regard to the choice-of-law principles thereof.
|
21.
|
Binding Upon Successors. This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective heirs, legal representatives, successors and permitted assigns.
|
22.
|
Entire Agreement. This Agreement constitutes the entire agreement between EFT and Employee with respect to the terms of employment of Employee by EFT and supersedes all prior agreements and understandings, whether written or oral, between them concerning such terms of employment.
|
23.
|
Amendments and Waivers. This Agreement may be amended, modified or supplemented, and any obligation hereunder may be waived, only by a written instrument executed by the parties hereto. The waiver by either party of a breach of any provision of this Agreement shall not operate as a waiver of any subsequent breach. No failure on the part of any party to exercise, and no delay in exercising, any right or remedy hereunder shall operate as a waiver hereofj nor shall any single or partial exercise of any such right or remedy by such party preclude any other or further exercise thereof or the exercise of any other right or remedy.
|
24.
|
Cumulative Rights And Remedies. All rights and remedies hereunder are cumulative and are in addition to all other rights and remedies provided by law, agreement or otherwise. Employee's obligations to EFT and EFT's rights and remedies hereunder are in addition to all other obligations of Employee and rights and remedies of EFT created pursuant to any other agreement
|
25.
|
Construction. Each party to this Agreement has had the opportunity to review this Agreement with legal counsel. This Agreement shall not be construed or interpreted against any party on the basis that such party drafted or authored a particular provision, parts of or the entirety of this Agreement.
|
26.
|
Severability. In the event that any provision or provisions of this Agreement is held to be invalid, illegal or unenforceable by any court of law or otherwise, the remaining provisions of this Agreement shall nevertheless continue to be valid, legal and enforceable as though the invalid or Unenforceable parts had not been included therein. In addition, in such event the parties hereto shall negotiate in good faith to modify this Agreement so as to affect the original intent of the parties as closely as possible with respect to those provisions that were held to be invalid, illegal or unenforceable.
|
27.
|
Attorneys' Fees and Costs. If any action at law or in equity is brought to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees, costs and necessary disbursements in addition to any other relief to which it may be entitled.
|
28.
|
EFT Performance Guarantee. EFT shall perform each and every obligation to be performed hereunder.
|
COMPANY:
|
|||
EFT BIOTECH HOLDINGS, INC.
|
|||
By:
|
/s/ Jack Qin
|
||
Name: Jack Qin
|
|||
Title: Chairman and CEO
|
|||
Employee:
|
|||
By:
|
/s/ Pyng Soon
|
||
Name: Pyng Soon
|
EFT BIOTECH HOLDINGS, INC.
|
||
By:
|
/s/
George W Curry
|
|
Name: George W Curry
|
||
Title: Corporate Secretary
|
(i)
|
the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a "Designated Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended, (the "Exchange Act")) of 30% or more of either (1) the then outstanding shares of Common Stock of EFT (the "Outstanding EFT Common Stock") or (2) the combined voting power of the then outstanding voting securities of EFT entitled to vote generally in the election of directors (the "Outstanding EFT Voting Securities"); provided, however, that the following acquisitions shall not constitute a Change of Control: (a) any acquisition of Common Stock of EFT or voting securities of EFT by any employee benefit plan(s) (or related trust(s)) sponsored or maintained by EFT or any other corporation controlled by EFT and approved by the Incumbent Board, (b) any acquisition by any corporation pursuant to a reorganization, merger or consolidation, if, immediately following such reorganization, merger or consolidation, the conditions described in clauses (1), (2) and (3) of paragraph (iii) below of this definition are satisfied; or
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(ii)
|
individuals who, as of the date hereof, constitute the entire Board of Directors of EFT (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board of Directors of EFT (the "Board"); provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by EFT shareholders, was approved by a vote of at least a majority of the directors then comprising The Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either (1) an actual or threatened election contest (as such terms are used in Rule 14a-11 of the Regulation 14A promulgated under the Exchange Act), or an actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board or (2) a plan or agreement to replace a majority of the members of the Board then comprising the Incumbent Board; or
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(iii)
|
approval by the shareholders of EFT of a reorganization, merger or consolidation, in each case unless, immediately following such reorganization, merger or consolidation, (1) more than 50% (or such greater percentage as may be approved by the Incumbent Board) of the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation (including, without limitation, a corporation which as a result of such transaction owns EFT through one or more subsidiaries) and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding EFT Common Stock and Outstanding EFT Voting Securities immediately prior to such reorganization, merger or consolidation in substantially the same proportions as their ownership immediately prior to such reorganization, merger or consolidation, of the Outstanding EFT Common Stock or outstanding EFT Voting Securities, as the case may be, (2) no Designated Person (excluding EFT, any employee benefit plan(s) (or related trust(s)) of EFT and/or its subsidiaries or any Person beneficially owning, immediately prior to such reorganization, merger or consolidation, directly or indirectly, 30% (or such lesser percentage as may be approved by the Incumbent Board) or more of the Outstanding EFT Common Stock or Outstanding EFT Voting Securities, as the case may be) beneficially owns, directly or indirectly, 30% (or such lesser percentage as may be approved by the Incumbent Board) or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors, and (3) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement providing for such reorganization, merger or consolidation; or
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(iv)
|
approval by the shareholders of EFT of (1) a complete liquidation or dissolution of EFT or (2) the sale or other disposition of all or substantially all of the assets of EFT, other than to a corporation, with respect to which immediately following such sale or other disposition, (A) more than 50% (or such greater percentage as may be approved by the Incumbent Board) of the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were beneficial owners, respectively, of the Outstanding EFT Common Stock and Outstanding EFT Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the Outstanding EFT Common Stock and Outstanding EFT Voting Securities, as the case may be, (B) no Designated Person (excluding EFT and any employee benefit plan (or related trust) of EFT and/or its subsidiaries or such corporation and any Person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, 30% (or such lesser percentage as may be approved by the Incumbent Board) or more of the Outstanding EFT Common Stock or Outstanding EFT Voting Securities, as the case may be) beneficially owns, directly or indirectly, 30% (or such lesser percentage as may be approved by the Incumbent Board) or more of, respectively, the then outstanding shares of common stock of such corporation or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors, and (C) at least a majority of the members of the board of directors of such corporation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition of assets of EFT.
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(a)
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Employee is assigned duties, taken as a whole, that are materially inconsistent with, or materially diminished from, Employee's positions, duties, responsibilities and status with EFT immediately prior to such action, or Employee's status, reporting responsibilities, titles or offices are materially diminished from those in effect immediately prior to such action, or Employee's duties and responsibilities are materially increased without a corresponding reasonable increase in Employee's compensation (provided that in the case of such a change within a Protected Period, such increase must be satisfactory to Employee in Employee's sole reasonable judgment), except in each case in connection with die termination of Employee's employment by EFT for Cause or on account of disability, or as a result of Employee's death, or by Employee for other than Good Reason; provided, however, that Good Reason shall not be triggered under this subsection (a) by an immaterial action not taken in bad faith or by an action that is remedied by EFT promptly after receipt of written notice from Employee; or
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(b)
|
Employee's Annual Base Salary is reduced (i) within a Protected Period, from that in effect immediately prior to the commencement of a Protected Period or as the same may be increased from time to time thereafter, or (ii) other than within a Protected Period, from that which was in effect prior to such action unless such reduction is part of a general reduction in compensation within the officer ranks due to economic or company-wide considerations; or
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(c)
|
EFT (i) within a Protected Period, fails to continue in effect any benefit or compensation plan, including, but not limited to, the annual bonus plan, qualified retirement plan, executive life insurance plan and/or health and accident plan, in which Employee is participating immediately prior to the commencement of the Protected Period, or plans providing, in the sole reasonable judgment of Employee, Employee with substantially similar benefits, or EFT takes any action that would adversely affect Employee's participation in or reduce Employee's benefits under any of such plans (excluding any such action by EFT that is required by law), or (ii) other than within a Protected Period, takes any action to materially reduce or eliminate Employee's participation in EFTs benefit or compensation plans unless such reduction or elimination is part of a general reduction in benefits within the officer ranks due to economic or company-wide considerations; or
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(d)
|
EFT requires Employee at any time to relocate more than 50 miles from where Employee's principal office was located immediately prior to such event; or
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(e)
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The amendment, modification or repeal of any provision of the Certificate of Incorporation or Bylaws of EFT that was in effect immediately prior to the commencement of a Protected Period, if such amendment, modification or repeal would materially adversely affect Employee's rights to indemnification by EFT; or
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(g)
|
EFT shall violate or breach any obligation of EFT (regardless whether such obligation be set forth in the Bylaws of EFT and/or in this Agreement or any other separate agreement entered into between EFT and Employee) to indemnify Employee against any claim, loss, expense or liability sustained or incurred by Employee by reason, in whole or in part, of the fact that Employee is or was an officer or director of EFT; or
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(h)
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EFT shall violate or breach any other material obligation of EFT owing to Employee relating to Employee's employment with EFT, provided that in the event of a violation or breach that is reasonably subject to being cured by EFT, Good Reason shall only occur if EFT shall fail or refuse to commence a cure within 15 days after written notice thereof is given by Employee to EFT or shall thereafter fail to diligently prosecute such cure to completion; or
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(i)
|
EFT shall fail to keep in force, for the benefit of Employee, directors' and officers' insurance policy with coverage amounts and scope at least equal to the coverage amounts in effect on the date hereof; or
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(j)
|
EFT shall fail to obtain from a successor (including a successor to a material portion of the business or assets of EFT) a satisfactory assumption in writing of EFT's obligations under this Agreement; or
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(k)
|
EFT shall fail to provide Employee with office space, related facilities and support personnel (including, but not limited to, administrative and secretarial assistance) that are both commensurate with Employee's position and Employee's responsibilities to and position with EFT and not materially dissimilar to the office space, related facilities and support personnel provided to other executive officers of EFT; or
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(1)
|
EFT notifies Employee of EFT's intention not to observe or perform one or more of the material obligations of EFT under this Agreement.
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(i)
|
one year after the termination of Employee's employment if Employee is not entitled to benefits under Section 7 or 10(c); or;
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(ii)
|
two years after the termination of Employee's employment, if Employee receives all of the benefits under Section 7 or 10(c) (after giving effect to any permissible setoff).
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(1)
|
Buyer is purchasing __ building unit(s). Buyer's land share area is calculated as the ratio of the area of the principal structure of each building unit relative to the total area of the principal structures of all building units in the A5 Building, as each is set out in the construction survey map approved and issued by the land administration authority (deducting the parking space land shares). In the event of subdivision, consolidation, or cadastral map re-survey, registration of title will be made according to the subsequent new land lot numbers and new land areas.
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(2)
|
Buyer is purchasing __ parking spaces. The land share for each parking space is one ten-thousandth of the total area of the Land subsequent to consolidation.
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(1)
|
The area of the principal structure, calculated at __ square meters ( __ ping).
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(2)
|
The area of appurtenant structures, calculated at __ square meters ( __ ping).
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(3)
|
An area of the commonly owned portion of the A5 Building, calculated at __ square meters ( __ ping), and an area of the commonly owned portion of the Enterprise Headquarters Park, calculated at __ square meters ( __ ping), for a total of __ square meters ( __ ping).
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1.
|
The "commonly owned portions" of the A5 Building, with the exception of the automobile parking spaces of the second and third underground levels, which are separately calculated, refers to the foyers, hallways, stairwells, elevators, elevator machine rooms, electrical control rooms, machine rooms, building management rooms, incoming power line rooms, pump rooms, electrical power distribution rooms, water tanks, water reservoirs, air-raid shelters, extensions from the roof, spaces for management and maintenance uses, motorcycle parking spaces, loading and unloading spaces, parts of vehicle lanes, and other items defined as commonly owned in accordance with laws and regulations. The total commonly owned area of the A5 Building is 13875.28 square meters (4197.27 ping). A share of the minor commonly owned area of each floor is distributed in accordance with the ratio of the area occupied by the principal structure of each building unit to the total area occupied by all of the principal structures on that floor, while a share of the major commonly owned area of the building as a whole is distributed in accordance with the ratio of the area occupied by the principal structure of each building unit to the total area occupied by all of the principal structures of the building as a whole.
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2.
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The "commonly owned area of the Enterprise Headquarters Park," with the exception of the parking spaces of the first and second underground levels, which are calculated separately, refers to hallways, stairwells, elevators, elevator machine rooms, electrical control rooms, machine rooms, building management rooms, incoming power line rooms, pump rooms, electrical power distribution rooms, water tanks, water reservoirs, air-raid shelters, extensions from the roof, spaces for management and maintenance uses, motorcycle parking spaces, loading and unloading spaces, parts of vehicle lanes, and other items defined as commonly owned in accordance with laws and regulations. The total area of the commonly owned portion of the Enterprise Headquarters Park is calculated at 2620.09 square meters (792.58 ping), a share of which shall be distributed to each building unit in the ratio of the area of the principal structure of the building unit to the total area of all such principal structures in the Enterprise Headquarters Park.
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1.
|
The applicable area of a building unit is the area stated in the completed registration of the unit with the land administration authority. When, for a part of the building unit area that originally could have been duly registered, changes in law or regulation subsequent to the signing of this Agreement make it impossible to carry out initial registration of building unit title, the building unit's area shall be calculated in accordance with Article 56, paragraph 3 of the Act Governing the Management of Residential and Commercial Buildings.
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2.
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If there is a discrepancy in the registered total area of a principal structure or building unit, Buyer and Seller will mutually settle between them the amount of the shortfall or the overage in the area, and Buyer and Seller agree that such mutual settlement for a discrepancy in area will be made by respective calculations of the prices of the principal structure, appurtenant structures, and commonly owned portions (including land price, for which refer to Article 5), and settled with a single interest-free payment at the time of handover. Except when there is a shortfall in excess of three percent in the registered area of the principal structure, or when otherwise stipulated between Buyer and Seller, neither Buyer nor Seller may seek rescission of this Agreement due to a discrepancy in building unit area.
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3.
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Settlement of any discrepancies in parking spaces shall be calculated based on their number and sale price.
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1.
|
The total purchase and sale price under this Agreement is
Column E
,
calculated based on the areas of the building units and the number of parking spaces, and includes the land price, provided that the ratio of land price to building unit price will be calculated by Seller at the ratio approved by the relevant competent authority at the time of Seller's initial building registration for the A5 Building. With respect thereto:
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(1)
|
The price of the presale building units under this Agreement is __.
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(2)
|
The sale price of the __ parking spaces for these presale building units is __ per parking space, for a total sale price of __.
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2.
|
If, at the time of actual registration, a discrepancy occurs in the number of pings of the presale building units of this Agreement (with respect to the floors and individual building units stipulated per this Agreement) relative to the number of pings stipulated under Article 2 of this Agreement, Buyer and Seller agree that settlement of the discrepancy in building unit area shall be made by respective calculations of the unit prices for the principal structure, appurtenant structures, and commonly owned portions (exclusive of parking space prices and areas) and settled with a single interest-free payment at the time of handover. If, due to changes in law or regulation subsequent to the signing of this Agreement, it becomes impossible to carry out property rights registration for a part of the building unit area that originally could have been duly registered, Buyer and Seller shall determine the area according to the area given in the use permit floor plan. Buyer shall have absolutely no recourse against such a determination, and may not use such a determination as cause for any claim or demand against Seller. Buyer agrees that the discrepant part of the area falls within the scope of the purchase and sale, and that Buyer and Seller shall mutually seek supplementation.
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5.
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With the exception of the commonly owned portions of the A5 Building, the commonly owned portions of the Enterprise Headquarters Park, portions stipulated as commonly-used, and other facilities on the Land which by law and regulation must be provided for public use, the owners of the A5 Building may not on their own initiative make use of any other structure on the Land.
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1.
|
All construction shall be undertaken in accordance with the standards of the approved engineering drawings and descriptions and the schedule of construction materials and equipment in Attachment 5 of this Agreement. With the consent of Buyer, construction materials or equipment may be changed to others of the same grade or substitutions made with products other than those of the brands listed in Attachment 5. These restrictions shall not apply when Seller can verify that for reasons not attributable to Seller the original construction materials or equipment could not be supplied, and that the value, efficacy, and quality of the substituted constructions materials or equipment are not less than those of the originally stipulated construction materials and equipment or Seller compensates Buyer for the difference in price.
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2.
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Seller warrants that construction of these Pre-Sale Building Units does not include any materials such as radioactive steel bars, asbestos, unprocessed sea sand, or any other similar substances that would be damaging to the structural safety of the building or harmful to human health or safety.
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3.
|
Any use of asbestos as referenced in the preceding paragraph may not violate the standards prescribed by the competent authority or the purpose of use for which it was approved; nevertheless, in the event of any injury to the life, physical well-being, or health of Buyer, Seller shall bear all related legal liability.
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4.
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Buyer and Seller agree that violation of any of the conditions of the preceding three paragraphs shall be dealt with in accordance with the provisions for penalty for breach of agreement.
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1.
|
Building construction for the Pre-Sale Building Units shall commence prior to 17 May 2011. Completion of the principal structure, appurtenant structures, and other necessary facilities specified in the use permit shall be completed, and the use permit obtained, by 1380 calendar days after the approved construction start date. Given any of the following circumstances, however, the periods above may be extended accordingly:
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(1)
|
When due to natural disaster or other force majeure cause, Seller is unable to engage in construction, an extension may be granted for the length of the construction halt period.
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(2)
|
When due to changes in governmental laws or regulations or the occurrence of any other cause not attributable to Seller, an extension may be granted for the length of the period of the effect resulting from the change.
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2.
|
If, after the relevant deadline of the preceding paragraph, Seller has not commenced construction or obtained the use permit, Seller shall pay default interest to Buyer at the simple interest rate of five ten-thousandths of the price of the real estate already paid, per each day past the deadline. If, three months after the relevant deadline, Seller has still not commenced construction or obtained the use permit, Seller will be deemed in breach of agreement, and Buyer and Seller agree to handle the breach in accordance with the provisions for penalty for breach of agreement.
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1.
|
When Seller has completed all of the facilities of the principal structure and appurtenant structures of the building units of this Agreement, has obtained the use permit, has connected running water and electricity, and has completed all facilities set out in the Agreement and the advertising illustrations, Seller shall notify Buyer to undertake inspection and acceptance procedures.
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2.
|
Buyer and Seller agree that
Column F-a
percent of the total price of this purchase and sale Agreement will be the final installment payable at handover. When Buyer and Seller undertake inspection and acceptance, Seller shall provide an inspection and acceptance checklist, and if the building units are found to have defect, the defect shall be noted on the checklist, and Seller shall complete the corrective repair and maintenance within a specified period. Buyer is entitled to reserve
Column F-a
percent of the total price of the real estate from the cash payment portion as the final installment payable at handover, and when corrective repair and maintenance of any defect found upon initial inspection is completed shall immediately carry out handover and pay the final installment payable at handover. Any defect discovered after handover shall be handled in accordance with the warranty provisions of Article 16 of this Agreement.
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3.
|
If Seller breaches paragraph 2, resulting in an increase in taxes or dues or an administrative fine (or overdue charge), Seller shall be solely responsible for the full amount thereof; if there is damage to Buyer's rights or interests, Seller shall be liable for damages.
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(1)
|
In accordance with the payment method stipulated by the Agreement, with the exception of the stipulated final installment payable at handover, Buyer shall pay in full all of the payments due before the registration of the real estate title transfer, plus default interest for any late payment.
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(2)
|
Buyer shall submit the documents in connection with carrying out the registration of title transfer registration and the loan documents, pay any fees in connection with the loan, pay in full all taxes and dues, prepare in advance any documents required for withdrawals of funds or for authorizations of payments, and issue a promissory note to seller naming Seller as the Payee and on the face of the promissory note specify that it is non-endorsable and non-transferable and state the amount and scope of the creditor's rights that it secures.
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(3)
|
If any expenses under subparagraphs (1) and (2) herein are paid by negotiable instrument, all such negotiable instruments shall be honored and cashed in full before registration.
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5.
|
The matters to be carried out under paragraphs 1 and 2 herein shall be carried out by a professional land registration agent designated by Seller. If as required for any of the various procedures it is necessary for Buyer to affix seals, produce documents, or pay various taxes or dues, Buyer shall do so within 7 days counting from the date of receipt of notice from Seller or the professional land registration agent handling the matter. If Buyer exceeds this deadline, Buyer shall pay default interest to Seller calculated at the simple interest rate of two ten-thousandths of the real estate price already paid per each day of delay. Additionally, if any delay or failure to cooperate by Buyer results in an increase in taxes or dues or an administrative fine (or overdue charge), Buyer shall be solely responsible for the full amount thereof; if there is damage to Seller's rights or interests, Buyer shall be liable for damages.
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1.
|
Within 6 months from obtaining the use permit, Seller shall give Buyer notice for the handover of the building units. At the time of the handover, the parties shall perform each of the following obligations:
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(1)
|
Seller shall pay in full to Buyer any default interest payable due to late completion of construction.
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(2)
|
Before the handover, Seller shall complete repairs and maintenance of any defect as stipulated herein or complete any business still unfinished.
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(3)
|
Buyer shall pay in full any sums payable and still unpaid (including the Final Installment Payable at Handover) and complete any and all procedures for the handover.
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(4)
|
If Seller fails to give Buyer notice for handover of the building units within 6 months from obtaining the use permit, Seller shall pay default interest to Buyer at the simple interest rate of five ten-thousandths of the price of the real estate already paid, per each day past the deadline.
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2.
|
After Buyer has properly completed the procedures for the handover of the building units, Seller shall deliver to Buyer the certificates of title for the land and building, the use and maintenance handbook, draft building rules, photocopy of the use permit, receipts for tax expenses paid by Seller, and keys.
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3.
|
Within 5 days counting from the date it receives the notice for handover of the building units, Buyer shall cooperate to carry out the procedures for the handover, and Seller shall not bear any custodial responsibility, unless arising through a cause attributable to Seller.
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4.
|
Buyer agrees that from the 30th day after and counting from the handover date of which it is notified, regardless of whether Buyer has moved into the building units, Buyer shall be responsible for the utilities fees for the building units.
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1.
|
Seller shall serve as administrator of the commonly owned portions of the Pre-Sale Building Units, and shall hand them over after forming a management committee or appointing a manager in charge. The parties agree that from the date of handover of the building units, Buyer shall pay a monthly management fee for the commonly owned portions.
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2.
|
Within 7 days after forming the management committee or appointing the manager in charge, Seller, accompanied by the management committee or the appointed manager in charge, shall conduct on-site inspection and testing of the utilities, mechanical facilities, fire safety facilities, and all conduits, ducts, plumbing, and wiring, and confirm that they are functioning normally, after which it shall hand over the common use areas, common-use-by-stipulation areas, and their appurtenant facilities and equipment; the facilities and equipment use and maintenance handbook and vendor data, photocopy of the use permit, drawings and documentation in connection with the completion of construction, and the drawings and documentation in connection with the utilities, mechanical facilities, fire safety, and conduits, ducts, plumbing, and wiring, and related materials. Seller shall bear the responsibility for the aforesaid inspection and testing, and the inspection and testing method shall be mutually discussed and agreed upon by Seller and the management committee or manager in charge. Seller furthermore shall notify the competent governmental authority to send personnel to be present and to witness to whether the handover has been completed.
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1.
|
From the date that the building units under this Agreement are handed over to Buyer, or, in the event of a cause attributable to Buyer, from the date that Seller gives notice for handover of the building units, Seller shall be liable for warranty for 15 years for structural portions (e.g.: beams and columns, stairwells, retaining walls, miscellaneous works...etc.) and shall be liable for warranty for 1 year for fixed building material and equipment portions (e.g.: doors and windows, paint, floor tiles...etc.), unless Seller can prove that there is a factor attributable to Buyer or to force majeure.
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2.
|
After a period under the preceding paragraph has lapsed, Buyer may continue to assert rights under the Civil Code and other laws.
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1.
|
In the event that Buyer has paid in full all the installment payments due and wishes to transfer this Agreement to another person before the completion of the title transfer registration for the real estate under this Agreement, Buyer must first obtain Seller's written agreement, and Seller may decline with just cause.
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2.
|
In the event of transfer of this Agreement under the preceding paragraph, Seller may collect from Buyer a processing fee of one-thousandth of the price of the real estate under this Agreement, unless the transfer is to the spouse, a lineal relative by blood, or a company in which Buyer holds 100 percent of the shares, in any of which cases no processing fee shall be collected.
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1.
|
The apportionment of land tax shall be based on the date for handover of the building units as specified in the handover notice given by Seller. Seller shall be responsible for land tax before that date and Buyer shall be responsible for land tax after that date. If the tax period thereof has already commenced but the tax has not yet been assessed, the amount of the tax for which Seller shall be liable shall be calculated in proportion to the share held by Seller and the number of days out of that fiscal year for which Seller held it, based on the basic tax amount of the tax imposed on that Land as stated on the land tax statement for the preceding fiscal year, and the amount of Seller's liability shall be deducted from the final installment of the purchase amount payable by Buyer to Seller. Buyer shall then be solely responsible for paying the land tax when it is assessed.
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2.
|
The apportionment of building tax shall be based on the date for handover of the building units as specified in the handover notice given by Seller. Seller shall be responsible for building tax before that date and Buyer shall be responsible for Building tax after that date, and the amounts for which they respectively are responsible shall be calculated in proportion to the statutory tax rate and the respective months out of the tax year.
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1.
|
The land value increment tax shall be declared on [the date of the contract for registration of the land title transfer], and shall be calculated at the government-assessed current value for the fiscal year of the declaration. If it is declared more than 30 days from that date, Seller shall be responsible for the land value increment tax calculated at the government-assessed current value applicable to the period of the date of the declaration, provided that if Buyer fails to fails to properly prepare the documentation for the declaration as required under Article 30 herein, Buyer shall be responsible for any additional land value increment tax that may result.
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2.
|
Buyer shall bear the administrative fees for the title transfer registration, the stamp tax, the deed tax, agent service charge, loan insurance premium, and any other additional taxes. However, if the builder is Seller, Seller shall bear the administrative fees and agent service charges for the initial registration of title to the building.
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3.
|
For any taxes and dues payable by Buyer, Buyer shall pay such amounts in full before carrying out the title transfer registration, and then at the time of the handover settle up in full any remaining accounts, at which time any excess shall be refunded and any shortfall be paid up
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1.
|
Seller warrants the title to be free and clear, and that there is no circumstance such as sale of the same property to several purchasers, unauthorized possession of the land of another person, a contractor exercising a statutory mortgage right under Article 513 of the Civil Code, or creation of any other interest or encumbrance thereupon. In the event any of the aforesaid circumstances exists, Seller shall be liable for eliminating, expunging, and canceling it before the handover date of the Pre-Sale Building Units, unless the terms are favorable to Buyer in the context of this Contract, in which case the terms favorable to Buyer shall be followed.
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2.
|
Liability for warranty against defect of the subject matter of this Agreement shall in every instance be handled in conformance with the Civil Code and other applicable laws and regulations.
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1.
|
If Seller breaches any provision regarding the Principal Construction Materials and Their Brands and Specifications, or the Deadlines for Commencement of Construction and Obtaining the Use Permit, herein, Buyer may rescind this Agreement.
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2.
|
If Seller breaches any provision regarding Seller's Liability for Warranty Against Defect herein, Buyer may give Seller written notice to make corrections within a deadline set by Buyer. If Seller fails to make corrections or is unable to make corrections, Buyer may duly claim for a reduction in price or rescission of the Agreement.
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3.
|
When Buyer rescinds the Agreement under paragraph 1 or 2, Seller shall refund to Buyer the amount of the real estate price already paid by Buyer, along with default interest if any is due, and furthermore shall at the same time pay a compensatory penalty of 15 percent of the total real estate price, provided that if that compensatory amount exceeds the amount of the price already paid, it shall be limited to the amount of the price already paid.
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4.
|
If Buyer breaches any provision relating to the terms and method of payment herein, Seller may confiscate an amount calculated as 15 percent of the total real estate price. However, if the amount to be confiscated exceeds the amount of the price already paid, it shall be limited to the amount of the price already paid, and the parties may rescind this Agreement.
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5.
|
If at the time of signing of this Agreement, Buyer has not yet paid the Signature Payment, and fails to pay it in full by
Column G
July 2011, Buyer shall additionally pay default interest calculated at the simple interest rate of two ten-thousandths per day of the portion overdue and unpaid, which interest it shall pay to Seller at the same time as it pays up the amount overdue. If there is any aforesaid failure to pay the Signature Payment in full, Seller also may proceed directly to notify the Buyer of rescission of this Agreement with no requirement to first provide notification of payment due, in which event default interest shall be calculated on the amount of the Signature Payment stipulated in this Agreement, and Seller may claim from Buyer payment of any default interest payable before rescission of this Agreement.
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6.
|
With the exception of the claims available under paragraphs 3 to 5 of this Article, neither Buyer nor Seller may otherwise make any claim for other damages.
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1.
|
The Attachments to this Agreement are deemed an integral part hereof.
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2.
|
This Agreement shall take effect from the date it is signed. It is made in duplicate originals with one to be kept by each of the parties.
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Buyer
:
|
EFT Investment Co. Ltd.
Responsible person of the company: Sun Jianping
Uniform serial number of the company: 28971239
Address of the company: 5F, No. 356, Neihu Rd., Sec. 1, Neihu District, Taipei
|
Seller
:
|
Column A
Statutory representative:
Uniform serial number of the company:
Address of the company:
Telephone:
|
Floor
|
Use
|
Principal
Structure
(m²)
|
Appurtenant
Structures
(m²)
|
Minor
commonly
owned area of
the floor (m²)
|
Share of
major
commonly
owned area
of the
building
(m²)
|
Share of
major
commonly
owned area
of the entire
site (m²)
|
Share of
area
specified
on the
certificate
of title (m²)
|
Share of
area
specified
on the
certificate
of title
(ping)
|
Land
share
(/)
|
Land
share
area (m²)
|
Land
share
area
(ping)
|
|||||||||||
1F
|
Financial and insurance enterprises
|
1,294.72
|
-
|
331.31
|
397.61
|
31.84
|
2,055.48
|
621.78
|
0.0109
|
404.24
|
122.28
|
|||||||||||
2F
|
Strategic industries
|
1,095.47
|
59.53
|
184.38
|
336.42
|
26.94
|
1,702.74
|
515.08
|
0.0092
|
342.03
|
103.46
|
|||||||||||
3F-1
|
Strategic industries
|
927.51
|
69.28
|
331.45
|
284.84
|
22.81
|
1,615.89
|
488.81
|
0.0078
|
289.59
|
87.60
|
|||||||||||
3F-2
|
Strategic industries
|
721.97
|
65.69
|
242.43
|
221.72
|
17.76
|
1,269.57
|
384.04
|
0.0061
|
225.42
|
68.19
|
|||||||||||
4F-1
|
Strategic industries
|
927.51
|
69.28
|
331.45
|
284.84
|
22.81
|
1,615.89
|
488.81
|
0.0078
|
289.59
|
87.60
|
|||||||||||
4F-2
|
Strategic industries
|
721.97
|
65.69
|
242.43
|
221.72
|
17.76
|
1,269.57
|
384.04
|
0.0061
|
225.42
|
68.19
|
|||||||||||
5F-1
|
Strategic industries
|
927.51
|
69.28
|
311.45
|
284.84
|
22.81
|
1,615.89
|
488.81
|
0.0078
|
289.59
|
87.60
|
|||||||||||
5F-2
|
Strategic industries
|
721.97
|
65.69
|
242.43
|
221.72
|
17.76
|
1,269.57
|
384.04
|
0.0061
|
225.42
|
68.19
|
|||||||||||
6F-1
|
Strategic industries
|
927.51
|
69.28
|
311.45
|
284.84
|
22.81
|
1,615.89
|
488.81
|
0.0078
|
289.59
|
87.60
|
|||||||||||
6F-2
|
Strategic industries
|
721.97
|
65.69
|
242.43
|
221.72
|
17.76
|
1,269.57
|
384.04
|
0.0061
|
225.42
|
68.19
|
|||||||||||
7F-1
|
Strategic industries
|
927.51
|
69.28
|
311.45
|
284.84
|
22.81
|
1,615.89
|
488.81
|
0.0078
|
289.59
|
87.60
|
|||||||||||
7F-2
|
Strategic industries
|
721.97
|
65.69
|
242.43
|
221.72
|
17.76
|
1,269.57
|
384.04
|
0.0061
|
225.42
|
68.19
|
|||||||||||
8F-1
|
Strategic industries
|
927.51
|
69.28
|
311.45
|
284.84
|
22.81
|
1,615.89
|
488.81
|
0.0078
|
289.59
|
87.60
|
|||||||||||
8F-2
|
Strategic industries
|
721.97
|
65.69
|
242.43
|
221.72
|
17.76
|
1,269.57
|
384.04
|
0.0061
|
225.42
|
68.19
|
|||||||||||
9F-1
|
Strategic industries
|
927.51
|
69.28
|
311.45
|
284.84
|
22.81
|
1,615.89
|
488.81
|
0.0078
|
289.59
|
87.60
|
|||||||||||
9F-2
|
Strategic industries
|
721.97
|
65.69
|
242.43
|
221.72
|
17.76
|
1,269.57
|
384.04
|
0.0061
|
225.42
|
68.19
|
|||||||||||
10F-1
|
Strategic industries
|
927.51
|
69.28
|
331.45
|
284.84
|
22.81
|
1,615.89
|
488.81
|
0.0078
|
289.59
|
87.60
|
|||||||||||
10F-2
|
Strategic industries
|
721.97
|
65.69
|
242.43
|
221.72
|
17.76
|
1,269.57
|
384.04
|
0.0061
|
225.42
|
68.19
|
|||||||||||
11F-1
|
Strategic industries
|
927.51
|
69.28
|
331.45
|
284.84
|
22.81
|
1,615.89
|
488.81
|
0.0078
|
289.59
|
87.60
|
|||||||||||
11F-2
|
Strategic industries
|
721.97
|
65.69
|
242.43
|
221.72
|
17.76
|
1,269.57
|
384.04
|
0.0061
|
225.42
|
68.19
|
|||||||||||
12F-1
|
Strategic industries
|
927.51
|
69.28
|
331.45
|
284.84
|
22.81
|
1,615.89
|
488.81
|
0.0078
|
289.59
|
87.60
|
|||||||||||
12F-2
|
Strategic industries
|
721.97
|
65.69
|
242.43
|
221.72
|
17.76
|
1,269.57
|
384.04
|
0.0061
|
225.42
|
68.19
|
|||||||||||
13F-1
|
Strategic industries
|
1,675.02
|
134.97
|
528.39
|
514.40
|
41.20
|
2,893.98
|
875.43
|
0.0141
|
522.98
|
158.20
|
|||||||||||
14F-1
|
Strategic industries
|
1,153.27
|
89.89
|
624.19
|
354.17
|
28.36
|
2,249.89
|
680.59
|
0.0097
|
360.08
|
108.92
|
|||||||||||
Subtotal
|
21,713.28
|
1,634.09
|
7,207.07
|
6,668.21
|
534.02
|
37,756.67
|
11421.38
|
0.1825
|
6,779.43
|
2,050.78
|
||||||||||||
B1F
|
Public Space
|
|||||||||||||||||||||
Number of motorcycle parking spaces
|
397
|
|||||||||||||||||||||
Number of loading and unloading spaces
|
4
|
Number of parking spaces available for sale
|
144
|
A5 Building Parking Spaces
|
0.0144
|
534.99
|
161.83
|
|||||||||||||||
B2F
|
Number of statutory parking spaces
|
62
|
Number of additional discretionary parking spaces
|
8
|
Building unit + parking spaces
|
0.1969
|
7,314.41
m²
|
2,212.61 ping
|
||||||||||||||
B3F
|
Number of statutory parking spaces
|
74
|
1.
|
Building structure
|
|
■
|
The buildings in the Enterprise Headquarters Park are of steel construction (SC) and reinforced concrete construction. They comply with the provisions of the Directions for Detecting Radioactive Contamination by the Steel Industry and are free of radioactive contamination.
|
2.
|
Exterior design of buildings
|
|
■
|
The exterior design of the buildings employs a glass and metal curtain wall system. The glass panels are double glazed and may be treated with Low-E coating if necessary.
|
3.
|
Landscape of the garden
|
|
■
|
The garden is designed by landscaping experts and fitted with outdoor lighting equipment that can be automatically turned on and off at preset times to save electricity.
|
4.
|
First floor
|
|
■
|
The floor and walls of the entrance hall of each building are fitted with imported top-flight granite, marble, polished porcelain tiles, crystallized glass, and flameproof carpet, and the ceiling is designed to harmonize with the lighting and air conditioning systems.
|
5.
|
Elevator cars
|
|
■
|
The floor is covered with flameproof carpet, and the ceiling is fitted with a clip-in ceiling system to harmonize with the lighting and air conditioning designs.
|
6.
|
Emergency exit stairways
|
|
■
|
The floor is covered with non-slip porcelain tiles and heat-resistant non-slip PVC tiles, and fire doors are installed in accordance with applicable laws and regulations.
|
7.
|
Flooring
|
|
Overall floor finishing is applied to the indoor floor, and space for raised flooring is reserved for the offices in Area A.
|
|
■
|
The floor of the washrooms and break rooms are covered with polished porcelain tiles of brands such as Champion, KPT, and STG.
|
8.
|
Indoor walls
|
|
■
|
Dry compartment walls are erected indoors.
|
|
■
|
The walls of the washrooms and break rooms are fitted with polished porcelain tiles of brands such as Champion, KPT, and STG.
|
9.
|
Ceilings
|
|
■
|
Mineral fiber lay-in ceiling system is used for the indoor ceiling, and the ceiling include no lighting.
|
|
■
|
A light steel joist ceiling system is used for the washroom ceiling, and the ceiling is covered with cement paint; a light steel joist ceiling system is also used for the break room ceiling; both ceilings have lighting installed.
|
|
■
|
The ceiling of the balcony is designed to harmonize with the overall architectural style and has lighting installed.
|
10.
|
Balconies
|
|
■
|
The balcony floor is covered with porcelain tiles.
|
|
■
|
The work balcony is fitted with faucets.
|
11.
|
Front door and windows of each unit
|
|
■
|
Front door: fire-resistant metal door.
|
|
■
|
Break room door: high-quality pressed plywood door leaf; an open circulation plan is adopted for the washroom.
|
12.
|
Washroom equipment
|
|
■
|
Washrooms are fitted with mirrors and equipment of famous brands such as TOTO, HCG, VB, or other brands of the same grade; the equipment includes toilets, wash basins, mop cleaning basins, and copperware.
|
13.
|
Break room equipment
|
|
■
|
Break rooms are fitted with made-in-Taiwan kitchen countertops with integrated wall cupboards and sinks.
|
14.
|
Elevator equipment
|
|
■
|
Microcomputer controlled elevators of brands such as Mitsubishi, GFC, Schindler, Fujitec, and KONE:
|
15.
|
Electric power system
|
|
■
|
The A Buildings and commonly owned portions are equipped with high voltage power supply and fitted with individual utility submeters. Each unit of the B, C, and D Buildings is equipped with 380/220V three-phase four-wire power supply and has a separate electricity meter.
|
|
■
|
Mains of the A Buildings are equipped with aluminum busways.
|
|
■
|
Pull boxes without electrical sockets are fitted indoors.
|
|
■
|
The lighting in the public area uses 220V single phase power supply.
|
|
■
|
Automatic emergency power generators are also fitted to supply power during power outage to public safety and other important facilities including elevators, public emergency lighting, security and surveillance equipment, pumps of sewage and drainage systems, and automatic fire sprinkler system.
|
|
■
|
Emergency power generators use brand new diesel generating sets and are equipped with black smoke purifiers and mufflers; the equipment conforms to applicable laws and regulations.
|
|
■
|
PVC pipes with the Chinese National Standard Quality Certification Mark are used for all electric conduits, and electrical wires are products of Pacific Electric Wire & Cable Co., Ltd. or Walsin Lihwa Corp. The electric power systems of the high-rise buildings are installed in accordance with the requirements of government laws and regulations.
|
16.
|
Lightning arresters on the rooftop
|
|
Lightning arresters conform to applicable laws and regulations.
|
17.
|
Water supply system
|
|
■
|
A and C Buildings are fitted with a water supply system consisting of automatic frequency converter and constant pressure equipment; each unit of B and D Buildings has a separate water meter, and water for the second floor is supplied by pressurizing the water in the tanks.
|
|
■
|
The water tanks in the basement are of reinforced concrete material and installed with water level sensors to ensure continuous water supply.
|
|
■
|
Press fit stainless steel pipes are used for water supply pipes, stainless steel pipes are used for ascending pipes, and orange-colored PVC pipes approved by the Sewerage Systems Office are used for sewage and drainage pipes. The water supply systems of the high-rise buildings are installed in accordance with the requirements of government laws and regulations.
|
18.
|
Sewage and drainage system
|
|
■
|
Separate piping is implemented for the drainage system; drain pipes are separately installed for storm water, sewage, and waste water.
|
|
■
|
Sewage pipes are connected with the sanitary sewers in accordance with applicable regulations.
|
|
■
|
Separate piping is installed for the balcony drainage of each unit and the storm drainage on the rooftop. The water is collected in the raft foundation in the basement for use by the watering system of the pool on the first floor to reduce water wastage.
|
19.
|
Air conditioning system
|
|
Each building is fitted with VRV air conditioning main units of brands such as Mitsubishi, Hitachi, and Daikin, but indoor blowers are not included. The A Buildings are additionally fitted with air-to-air heat exchangers.
|
|
■
|
The indoor air conditioners and relevant piping and wiring are purchased and handled by the customer based on its needs.
|
20.
|
Fire safety system
|
|
■
|
Automatic smoke extraction system: the smoke extraction systems at the elevator on each floor shall be designed pursuant to the standards set out in laws and regulations.
|
|
■
|
Fire hydrant system: the fire hydrant cabinets at the stairwells on each floor and the fire alarm panel shall be designed pursuant to laws and regulations.
|
|
■
|
Automatic fire alarm system: A fire detector is installed in each building unit on each floor. It can automatically detect a fire, or otherwise be used manually to report a fire to the alarm receiver at the central control room; it can also connect with the Management Center during an emergency.
|
|
■
|
Escape facilities: Lights indicating emergency exits, and emergency lights are installed at each stairwell on each floor to provide lighting for emergency escape during a blackout, and dry-chemical fire extinguishers are installed for emergency use during a fire.
|
|
■
|
Foam fire extinguisher system: Automatic foam fire extinguisher facilities are installed in the underground parking lots.
|
|
■
|
Emergency public announcement equipment: It is installed on each floor pursuant to laws and regulations, and is used for necessary public announcement when a fire or any irregular circumstance takes place.
|
|
■
|
Obstruction marker lights for flight safety shall be installed on the roofs.
|
|
■
|
Automatic sprinkler equipment shall be installed pursuant to laws and regulations.
|
|
■
|
Connecting water delivery pumps and the relay water tanks shall be installed on buildings taller than 60 meters pursuant to laws and regulations.
|
21.
|
Underground parking lots and ventilation
|
|
■
|
IP cameras and automatic traffic control systems are installed in the underground parking lots.
|
|
■
|
Positive pressure ventilation is adopted for the underground parking lots, and the ventilation and exhaust equipment is automatically activated.
|
|
■
|
Epoxy flooring is used for parking lots, and each parking space comes with a wheel stopper, and each pillar is installed with anti-collision strips.
|
22.
|
Central closed-circuit monitor system and building automation equipment
|
|
■
|
Monitor Center and public area:
|
|
(1)
|
Establish a Central Monitor Center
|
|
(2)
|
Every public area is installed with monitor cameras, and the entire area is covered by the monitor cameras installed by the Central Closed-circuit Monitor Center.
|
|
■
|
Intercom system at each building: Each building is installed with intercom devices, which can be used to communicate with the Management Center.
|
|
■
|
Building automatic management system:
|
|
(1)
|
Central security system and security surveillance system are both connected to the Management Center for on-line monitoring, and can automatically give warning signals and store files.
|
|
(2)
|
Cameras are installed at the foyer on the first floor of the A Buildings, basement, car entrance and exit on the first floor, underground parking lots, entrances and exits and staircases, and any other appropriate locations.
|
|
(3)
|
Electro-mechanical equipment, such as power, telecommunication, water supply, drainage of sewage and wastewater, and fire safety equipment, is connected to the monitor system, which can immediately give off warning signals if there is any irregular operation.
|
|
(4)
|
Public water tanks are installed with a monitor system, which will send warning signals to the Management Center if the water tanks are opened.
|
23.
|
Telephone and television equipment
|
|
■
|
Digital TV antenna multicoupler is installed on the roof.
|
|
■
|
Each building unit is installed with one TV outlet, to be used for receiving signals for wireless digital TV; cable TV outlets are also provided. Matters related to the installation and reception of cable TV are handled by the management committee, and the fees are borne by the customers.
|
|
■
|
Each building unit is installed with intermediate distribution frames for telephone.
|
24.
|
Special covenants
|
|
■
|
The planning and design of the Park Area are conducted pursuant to the approved diagrams related to the urban design review and the building permit.
|
|
■
|
The construction materials and equipment as listed above may be changed to others of the same or better grade by the Company in any of the following circumstances:
|
|
(1)
|
Because new construction materials are continually being introduced to replace old ones due to technical advances, newer or better products may be used if available in order to maintain the high quality of the buildings.
|
|
(2)
|
If the specifications or quality of the products provided by the suppliers are not consistent with the original design, affecting construction quality.
|
|
(3)
|
When market supply is not properly adjusted to demand, or the use of certain construction material is prohibited by law or regulation, or the import of such construction material is discontinued.
|
|
(4)
|
When a supplier monopolizes the market, and deliberately increases the price.
|
|
(5)
|
When the production of construction materials listed in this schedule is discontinued, only construction materials of a higher grade may be used.
|
|
■
|
Both parties agree that the Company retains the right to modify the appearance of the buildings (including lighting design), garden landscapes, the design of all public facilities, and construction materials or equipment in order to maintain the overall exquisite style of the buildings.
|
|
■
|
Both parties agree and understand that any interior installation and repair at each building unit in the buildings, and the construction materials used shall comply with laws and regulations applicable to interior installations and repair, fire safety, and public safety provided by government agencies in order to maintain the quality and public safety of the buildings.
|
|
Attachment 6. Draft Building Rules Attached to the Application for the Construction Permit
|
Column A
|
Column B
|
Column C
|
Column D
|
Column E
|
Column F
|
Column G
|
|||||||
1
|
Transglobe Life Insurance Inc.
|
the 1st to the 6th floors, one unit on the 7th floor, and the 65 parking spaces at basement appurtenant to the above units
|
the 1st floor
a. No. of Units: 1
b. No. of Parking Spaces: 5
(Basement 2/F No. 30,50 & Basement 3/F No. 1,2,3)
|
2,055.48 square meters (621.78 ping)
a. main area 1,294.72 square meters (391.65 ping)
b. minor area 0 square meters (0 ping)
c. others 760.76 square meters (230.13 ping)
|
NT$375,000,000
a. prepaid NT$366,000,000
b. main NT$599,700/ping
c. minor NT$587,700/ping
d. others NT$569,700/ping
e. car- parking NT$9,000,000
|
a. 1.38;
b. 2.07;
c. 27.58;
d. 67.59.
|
18 | ||||||
2
|
Transglobe Life Insurance Inc.
|
the 1st to the 6th floors, one unit on the 7th floor, and the 65 parking spaces at basement appurtenant to the above units
|
the 2nd floor
a. No. of Units: 1
b. No. of Parking Spaces: 6
(Basement 2/F No. 51,52,53 & Basement 3/F No. 4,11,55)
|
1,702.74 square meters (515.08 ping)
a. main area 1,095.47 square meters (331.38 ping)
b. minor area 59.93 square meters (18.01 ping)
c. others 547.74 square meters (165.69 ping)
|
NT$268,800,000
a. prepaid NT$258,000,000
b. main NT$509,400/ping
c. minor NT$499,200/ping
d. others NT$483,900/ping
e. car- parking NT$10,800,000
|
a. 1.38;
b. 2.07;
c. 27.58;
d. 67.59.
|
18 | ||||||
3
|
Transglobe Life Insurance Inc.
|
the 1st to the 6th floors, one unit on the 7th floor, and the 65 parking spaces at basement appurtenant to the above units
|
the 3rd floor
a. No. of Units: 2
b. No. of Parking Spaces: 12
(Basement 2/F No. 19-24 & Basement 3/F No. 18-23)
|
2,885.46 square meters (872.86 ping)
a. main area 1,649.48 square meters (498.97 ping)
b. minor area 134.97 square meters (40.83 ping)
c. others 1,101.01 square meters (333.06 ping)
|
NT$471,600,000
a. prepaid NT$450,000,000
b. main NT$526,100/ping
c. minor NT$515,600/ping
d. others NT$499,800/ping
e. car- parking NT$21,600,000
|
a. 1.38;
b. 2.07;
c. 27.58;
d. 67.59.
|
18 | ||||||
4
|
Transglobe Life Insurance Inc.
|
the 1st to the 6th floors, one unit on the 7th floor, and the 65 parking spaces at basement appurtenant to the above units
|
the 4th floor
a. No. of Units: 2
b. No. of Parking Spaces: 12
(Basement 2/F No. 5-10 & Basement 3/F No. 5-10)
|
2,885.46 square meters (872.86 ping)
a. main area 1,649.48 square meters (498.97 ping)
b. minor area 134.97 square meters (40.83 ping)
c. others 1,101.01 square meters (333.06 ping)
|
NT$484,600,000
a. prepaid NT$463,000,000
b. main NT$541,300/ping
c. minor NT$530,500/ping
d. others NT$514,200/ping
e. car- parking NT$21,600,000
|
a. 1.38;
b. 2.07;
c. 27.58;
d. 67.59.
|
18 | ||||||
5
|
Transglobe Life Insurance Inc.
|
the 1st to the 6th floors, one unit on the 7th floor, and the 65 parking spaces at basement appurtenant to the above units
|
the 5th floor
a. No. of Units: 2
b. No. of Parking Spaces: 12
(Basement 2/F No. 13-18 & Basement 3/F No. 12-17)
|
2,885.46 square meters (872.86 ping)
a. main area 1,649.48 square meters (498.97 ping)
b. minor area 134.97 square meters (40.83 ping)
c. others 1,101.01 square meters (333.06 ping)
|
NT$497,600,000
a. prepaid NT$476,000,000
b. main NT$556,500/ping
c. minor NT$545,400/ping
d. others NT$528,700/ping
e. car- parking NT$21,600,000
|
a. 1.38;
b. 2.07;
c. 27.58;
d. 67.59.
|
18 | ||||||
6
|
Transglobe Life Insurance Inc.
|
the 1st to the 6th floors, one unit on the 7th floor, and the 65 parking spaces at basement appurtenant to the above units
|
the 6th floor
a. No. of Units: 2
b. No. of Parking Spaces: 12 (Basement 2/F No. 1-4,11-12 & Basement 3/F No. 52-54,65-67
|
2,885.46 square meters (872.86 ping)
a. main area 1,649.48 square meters (498.97 ping)
b. minor area 134.97 square meters (40.83 ping)
c. others 1,101.01 square meters (333.06 ping)
|
NT$510,600,000
a. prepaid NT$489,000,000
b. main NT$571,700/ping
c. minor NT$560,300/ping
d. others NT$543,100/ping
e. car- parking NT$21,600,000
|
a. 1.38;
b. 2.07;
c. 27.58;
d. 67.59.
|
18 | ||||||
7
|
Transglobe Life Insurance Inc.
|
the 1st to the 6th floors, one unit on the 7th floor, and the 65 parking spaces at basement appurtenant to the above units
|
the 7th floor (7/F-1)
a. No. of Units: 1
b. No. of Parking Spaces: 6
(Basement 2/F No. 38-40 & Basement 3/F No. 56,57,64)
|
1,615.89 square meters (488.81 ping)
a. main area 927.51 square meters (280.57 ping)
b. minor area 69.28 square meters (20.96 ping)
c. others 619.10 square meters (187.28 ping)
|
NT$291,800,000
a. prepaid NT$281,000,000
b. main NT$586,600/ping
c. minor NT$574,900/ping
d. others NT$557,300/ping
e. car- parking NT$10,800,000
|
a. 1.38;
b. 2.07;
c. 27.58;
d. 67.59.
|
18 |
8
|
Meifu Development Co., Ltd.
|
the 8th to the 14th floors, one unit on the 7th floor, and the 79 parking spaces at basement appurtenant to the above units
|
the 7th floor (7/F-2)
a. No. of Units: 1
b. No. of Parking Spaces: 6
(Basement 2/F No. 41-43 & Basement 3/F No. 58-60)
|
1,269.57 square meters (384.05 ping)
a. main area 721.97 square meters (218.40 ping)
b. minor area 65.69 square meters (19.87 ping)
c. others 481.91 square meters (145.78 ping)
|
NT$229,800,000
a. prepaid NT$219,000,000
b. main NT$581,900/ping
c. minor NT$570,300/ping
d. others NT$552,800/ping
e. car- parking NT$10,800,000
|
a. 1.43;
b. 10.48;
c. 19.04;
d. 67.62.
e. 1.43
|
23 | ||||||
9
|
Meifu Development Co., Ltd.
|
the 8th to the 14th floors, one unit on the 7th floor, and the 79 parking spaces at basement appurtenant to the above units
|
the 8th floor
a. No. of Units: 2
b. No. of Parking Spaces: 12
(Basement 2/F No. 44-49 & Basement 3/F No. 42-47)
|
2,885.46 square meters (872.86 ping)
a. main area 1,649.48 square meters (498.97 ping)
b. minor area 134.97 square meters (40.83 ping)
c. others 1,101.01 square meters (333.06 ping)
|
NT$536,600,000
a. prepaid NT$515,000,000
b. main NT$602,100/ping
c. minor NT$590,100/ping
d. others NT$572,000/ping
e. car- parking NT$21,600,000
|
a. 1.43;
b. 10.48;
c. 19.04;
d. 67.62.
|
23 | ||||||
10
|
Meifu Development Co., Ltd.
|
the 8th to the 14th floors, one unit on the 7th floor, and the 79 parking spaces at basement appurtenant to the above units
|
the 9th floor
a. No. of Units: 2
b. No. of Parking Spaces: 12
(Basement 2/F No. 54-59 & Basement 3/F No. 37-41,48)
|
2,885.46 square meters (872.86 ping)
a. main area 1,649.48 square meters (498.97 ping)
b. minor area 134.97 square meters (40.83 ping)
c. others 1,101.01 square meters (333.06 ping)
|
NT$553,600,000
a. prepaid NT$532,000,000
b. main NT$621,900/ping
c. minor NT$609,500/ping
d. others NT$590,800/ping
e. car- parking NT$21,600,000
|
a. 1.43;
b. 10.48;
c. 19.04;
d. 67.62.
|
23 | ||||||
11
|
Meifu Development Co., Ltd.
|
the 8th to the 14th floors, one unit on the 7th floor, and the 79 parking spaces at basement appurtenant to the above units
|
the 10th floor
a. No. of Units: 2
b. No. of Parking Spaces: 12
(Basement 2/F No. 25-30 & Basement 3/F No. 49-51,61-63)
|
2,885.46 square meters (872.86 ping)
a. main area 1,649.48 square meters (498.97 ping)
b. minor area 134.97 square meters (40.83 ping)
c. others 1,101.01 square meters (333.06 ping)
|
NT$571,600,000
a. prepaid NT$555,000,000
b. main NT$643,000/ping
c. minor NT$630,100/ping
d. others NT$610,900/ping
e. car- parking NT$21,600,000
|
a. 1.43;
b. 10.48;
c. 19.04;
d. 67.62.
|
23 | ||||||
12
|
Meifu Development Co., Ltd.
|
the 8th to the 14th floors, one unit on the 7th floor, and the 79 parking spaces at basement appurtenant to the above units
|
the 11th floor
a. No. of Units: 2
b. No. of Parking Spaces: 12
(Basement 2/F No. 62-66,68 & Basement 3/F No. 68-73)
|
2,885.46 square meters (872.86 ping)
a. main area 1,649.48 square meters (498.97 ping)
b. minor area 134.97 square meters (40.83 ping)
c. others 1,101.01 square meters (333.06 ping)
|
NT$588,600,000
a. prepaid NT$567,000,000
b. main NT$662,900/ping
c. minor NT$649,600/ping
d. others NT$629,800/ping
e. car- parking NT$21,600,000
|
a. 1.43;
b. 10.48;
c. 19.04;
d. 67.62.
|
23 | ||||||
13
|
Meifu Development Co., Ltd.
|
the 8th to the 14th floors, one unit on the 7th floor, and the 79 parking spaces at basement appurtenant to the above units
|
the 12th floor
a. No. of Units: 2
b. No. of Parking Spaces: 12 (Basement 2/F No. 60,61,67,69,70,71 & Basement 3/F No. 24-29)
|
2,885.46 square meters (872.86 ping)
a. main area 1,649.48 square meters (498.97 ping)
b. minor area 134.97 square meters (40.83 ping)
c. others 1,101.01 square meters (333.06 ping)
|
NT$606,600,000
a. prepaid NT$585,000,000
b. main NT$683,900/ping
c. minor NT$670,200/ping
d. others NT$649,700/ping
e. car- parking NT$21,600,000
|
a. 1.43;
b. 10.48;
c. 19.04;
d. 67.62.
|
23 | ||||||
14
|
Meifu Development Co., Ltd.
|
the 8th to the 14th floors, one unit on the 7th floor, and the 79 parking spaces at basement appurtenant to the above units
|
the 13th and 14th floor
a. No. of Units: 1
b. No. of Parking Spaces: 13
(Basement 2/F No. 32-37 & Basement 3/F No. 30-36)
|
5,143.86 square meters (1,556.02 ping)
a. main area 2,828.29 square meters (855.5541 ping)
b. minor area 224.86 square meters (68.0217 ping)
c. others 2,090.71 square meters (632.4428 ping)
|
NT$1,113,200,000
a. prepaid NT$1,089,800,000
b. main NT$715,500/ping
c. minor NT$701,200/ping
d. others NT$679,700/ping
e. car- parking NT$23,400,000
|
a. 1.43;
b. 10.48;
c. 19.04;
d. 67.62.
|
23 |
Jack Jie Qin
|
("Jack Jie Qin")
|
Meifu Development Co., Ltd.
|
("Meifu")
|
EFT Investment Co. Ltd.
|
("EFT")
|
1.
|
After the signing of this Agreement, if EFT pays NT$60 million to Meifu by 8 June 2011, Meifu agrees not to assert any rights against Jack Jie Qin under Article 24, paragraph 5, of the Pre-Sale Agreements prior to 24 June 2011. If EFT does not pay NT$60 million to Meifu by 8 June 2011, articles 3 and 4 of this Agreement shall lose their force and effect, and Meifu may, under Article 24, paragraph 5 of the Pre-Sale Agreements, claim for payment of default interest or penalty from Jack Jie Qin or rescind the Pre-Sale Agreements, or claim other rights under the law.
|
2.
|
Jack Jie Qin and Meifu agree to adjust the amounts to be paid as the Signature Payment and the Construction Start Payment respectively under the Pre-Sale Agreements, i.e. that the adjusted Signature Payment under the Pre-Sale Agreements shall be a combined total of NT$440 million and the adjusted Construction Start Payment under the Pre-Sale Agreements shall be a combined total of NT$60 million.
|
3.
|
By 24 June 2011, Jack Jie Qin will transfer the Pre-Sale Agreements to EFT's 100 percent owned subsidiary (the "New Buyer"), and Meifu will not charge any service charge for the transfer. If by 24 June 2011 Jack Jie Qin and the New Buyer complete the procedures with Meifu for replacement of the agreements and pay in full the Signature Payment under the Pre-Sale Agreements, totaling NT$440 million, then on the next business day after receiving the Signature Payment, Meifu shall refund to EFT the sum specified in Article 1 of this Agreement.
|
4.
|
If by the deadline stipulated in Article 3 of this Agreement, Jack Jie Qin and the New Buyer have not completed the procedures for replacement of the agreements and paid in full the Signature Payment under the Pre-Sale Agreements of NT$440 million in total, Meifu agrees to refund to EFT without interest the sum specified in Article 1 of this Agreement, and may under Article 24, paragraph 5 of the Pre-Sale Agreements, claim for payment of default interest or penalty from Jack Jie Qin or rescind the Pre-Sale Agreements, or claim other rights under the law.
|
5.
|
Jack Jie Qin and EFT agree that, after the signing of this Agreement and before Jack Jie Qin and the New Buyer have completed the procedures with Meifu for replacement of the Agreements, Meifu may sell the Property for Purchase to a third party, in which event Jack Jie Qin and EFT may not assert any rights against Meifu under the Pre-Sale Agreements or this Agreement. Once Meifu has notified Jack Jie Qin and EFT of such a sale, the force and effect of this Agreement and the Pre-Sale Agreements will thereupon be terminated. If EFT has already paid the NT$60 million under Article 1 of this Agreement, Meifu shall refund that sum to EFT without interest.
|
6.
|
This Agreement shall take effect from the date it is signed. It is made in triplicate originals with one to be kept by each of the three parties.
|
This Agreement is made by and between:
|
Jack Jie Qin
|
/s/ Jack Jie Qin
|
Jack Jie Qin
|
("Jack Jie Qin")
|
Transglobe Life Insurance Inc.
|
("TransGlobe")
|
EFT Investment Co. Ltd.
|
("EFT")
|
1.
|
After the signing of this Agreement, if EFT pays NT$40 million to TransGlobe by 8 June 2011, TransGlobe agrees not to assert any rights against Jack Jie Qin under Article 24, paragraph 5, of the Pre-Sale Agreements prior to 24 June 2011. If EFT does not pay NT$40 million to TransGlobe by 8 June 2011, articles 3 and 4 of this Agreement shall lose their force and effect, and TransGlobe may, under Article 24, paragraph 5 of the Pre-Sale Agreements, claim for payment of default interest or penalty from Jack Jie Qin or rescind the Pre-Sale Agreements, or claim other rights under the law.
|
2.
|
Jack Jie Qin and TransGlobe agree to adjust the amounts to be paid as the Signature Payment and the Construction Start Payment respectively under the Pre-Sale Agreements, i.e. that the adjusted Signature Payment under the Pre-Sale Agreements shall be a combined total of NT$60 million and the adjusted Construction Start Payment under the Pre-Sale Agreements shall be a combined total of NT$40 million.
|
3.
|
By 24 June 2011, Jack Jie Qin will transfer the Pre-Sale Agreements to EFT's 100 percent owned subsidiary (the "New Buyer"), and TransGlobe will not charge any service charge for the transfer. If by 24 June 2011 Jack Jie Qin and the New Buyer complete the procedures with TransGlobe for replacement of the agreements and pay in full the Signature Payment under the Pre-Sale Agreements, totaling NT$60 million, then on the next business day after receiving the Signature Payment, TransGlobe shall refund to EFT the sum specified in Article 1 of this Agreement.
|
4.
|
If by the deadline stipulated in Article 3 of this Agreement, Jack Jie Qin and the New Buyer have not completed the procedures for replacement of the agreements and paid in full the Signature Payment under the Pre-Sale Agreements of NT$60 million in total, TransGlobe agrees to refund to EFT without interest the sum specified in Article 1 of this Agreement, and may under Article 24, paragraph 5 of the Pre-Sale Agreements, claim for payment of default interest or penalty from Jack Jie Qin or rescind the Pre-Sale Agreements, or claim other rights under the law.
|
5.
|
Jack Jie Qin and EFT agree that, after the signing of this Agreement and before Jack Jie Qin and the New Buyer have completed the procedures with TransGlobe for replacement of the Agreements, TransGlobe may sell the Property for Purchase to a third party, in which event Jack Jie Qin and EFT may not assert any rights against TransGlobe under the Pre-Sale Agreements or this Agreement. Once TransGlobe has notified Jack Jie Qin and EFT of such a sale, the force and effect of this Agreement and the Pre-Sale Agreements will thereupon be terminated. If EFT has already paid the NT$40 million under Article 1 of this Agreement, TransGlobe shall refund that sum to EFT without interest.
|
6.
|
This Agreement shall take effect from the date it is signed. It is made in triplicate originals with one to be kept by each of the three parties.
|
This Agreement is made by and between:
|
Jack Jie Qin
|
/s/ Jack Jie Qin
|
Jack Jie Qin
|
("Jack Jie Qin")
|
Meifu Development Co., Ltd.
|
("Meifu")
|
EFT Investment Co. Ltd.
|
("EFT")
|
1.
|
When Meifu has signed new pre-sale agreements with EFT in connection with the Purchased Property (the "New Agreements"), and EFT has performed the payment obligations set out in Article 2 hereinbelow, all the parties hereto agree that the Pre-Sale Agreements and the Tripartite Agreement shall thereupon lose their force and effect. All of the terms and conditions of purchase and sale under the New Agreements between Meifu and EFT shall be the same as those set out in the Pre-Sale Agreements.
|
2.
|
When EFT signs the New Agreements, it shall pay to Meifu a Signature Payment and Construction Start Payment of, in combined total, NT$500 million. If and after EFT has performed all of the stipulations set out herein, Meifu agrees not to invoke the provisions of Article 24, paragraph 5, of the Pre-Sale Agreements regarding claiming payment of default interest or penalty from Jack Jie Qin or rescission of the agreement, nor to claim any other rights under the law.
|
3.
|
Meifu and EFT agree, regarding the Signature Payment and Construction Start Payment that EFT is required to pay under the New Agreements, that NT$60 million from the sum paid by EFT under Article 1 of the Tripartite Party Agreement shall be directly applied as a portion of the Signature Payment and Construction Start Payment that EFT is required to pay to Meifu under the New Agreements. That is, at the time of signing of this Agreement, EFT shall simultaneously pay NT$350 million toward the difference, and on 6 July 2011 shall pay the remaining difference of NT$90 million.
|
4.
|
If any matter is not fully covered by this Agreement, it shall be resolved fairly in accordance with the laws and regulations of the Republic of China and the principle of good faith. In the event of any dispute giving rise to litigation under or in connection with this Agreement, the three parties agree that the Taiwan Taipei District Court shall be the court with jurisdiction in the first instance.
|
5.
|
This Agreement shall take effect from the date it is signed. It is made in triplicate originals with one to be kept by each of the three parties.
|
This Agreement is made by and among:
|
Jack Jie Qin
|
/s/ Jack Jie Qin
US Passport no.:
Contact address: 929, Radecki, Ct., City of Industry, CA 91748 USA
Taiwan contact address: 5F, No. 356, Neihu Road, Section 1, Taipei
Contact telephone: (02) 8751-0577
|
Jack Jie Qin
|
("Jack Jie Qin")
|
Transglobe Life Insurance Inc.
|
("TransGlobe")
|
EFT Investment Co. Ltd.
|
("EFT")
|
1.
|
When TransGlobe has signed new pre-sale agreements with EFT in connection with the Purchased Property (the "New Agreements"), and EFT has performed the payment obligations set out in Article 2 herein below, all the parties hereto agree that the Pre-Sale Agreements and the Three Party Agreement shall thereupon lose their force and effect. All of the terms and conditions of purchase and sale except the terms of Signature Payment and Construction Start Payment under the New Agreements between TransGlobe and EFT shall be the same as those set out in the Pre-Sale Agreements.
|
2.
|
When EFT signs the New Agreements, it shall pay to TransGlobe a Signature Payment and Construction Start Payment of, in combined total, NT$100 million. If and after EFT has performed all of the stipulations set out herein, TransGlobe agrees not to invoke the provisions of Article 24, paragraph 5, of the Pre-Sale Agreements regarding claiming payment of default interest or penalty from Jack Jie Qin or rescission of the agreement, nor to claim any other rights under the law.
|
3.
|
TransGlobe and EFT agree, regarding the Signature Payment and Construction Start Payment that EFT is required to pay under the New Agreements, that NT$40 million from the sum paid by EFT under Article 1 of the Three Party Agreement shall be directly applied as a portion of the Signature Payment and Construction Start Payment that EFT is required to pay to TransGlobe under the New Agreements. That is, at the time of signing of this Agreement, EFT shall simultaneously pay NT$60 million toward the difference.
|
4.
|
If any matter is not fully covered by this Agreement, it shall be resolved fairly in accordance with the laws and regulations of the Republic of China and the principle of good faith. In the event of any dispute giving rise to litigation under or in connection with this Agreement, the three parties agree that the Taiwan Taipei District Court shall be the court with jurisdiction in the first instance.
|
5.
|
This Agreement shall take effect from the date it is signed. It is made in triplicate originals with one to be kept by each of the three parties.
|
This Agreement is made by and among:
|
Name of Company
|
Jurisdiction of Incorporation
|
Percentage of
Attributable Equity
Interests
|
||||||
Subsidiaries
|
||||||||
1.
|
EFT Investment Co., Ltd
|
a Taiwan company
|
100 | % | ||||
2.
|
EFT Biotech,Inc.
|
a Nevada company
|
100 | % | ||||
3.
|
EFT Limited
|
a British Virgin Islands company
|
100 | % | ||||
4.
|
EFT International Limited
|
a British Virgin Islands Company
|
100 | % | ||||
5.
|
EFT (HK) Limited
|
a HK company
|
100 | % | ||||
6.
|
EFT Investment Company Limited
|
a HK company
|
100 | % | ||||
7.
|
EFT DigiTech Ltd
|
a British Virgin Islands company
|
100 | % | ||||
8.
|
Top Capital International Limited
|
a British Virgin Islands company
|
100 | % | ||||
9.
|
EFT Inc.
|
a California company
|
100 | % | ||||
10.
|
Goldevent Limited
|
a British Virgin Islands company
|
100 | % | ||||
11.
|
Aerio Limited
|
a British Virgin Islands company
|
100 | % | ||||
12.
|
Heilongjiang Tian Quan Manor Soda Water Drinking Co., Ltd.
|
a PRC company
|
100 | % | ||||
13.
|
Digital Development Partners Inc.
|
a U.S. company
|
91.74 | % | ||||
Controlled Subsidiary
|
||||||||
14.
|
Excalibur International Marine Corporation
|
a Taiwan company
|
August 23, 2011
|
/s/ Jack Jie Qin
|
Jack Jie Qin
|
|
Principal Executive Officer
|
August 23, 2011
|
/s/ Jeffery Cheung
|
Jeffery Cheung
|
|
Principal Financial and Accounting Officer
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects the financial condition and results of operations of the Company.
|
August 23, 2011
|
/s/ Jack Jie Qin
|
Jack Jie Qin, Principal Executive Officer
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects the financial condition and results of operations of the Company.
|
August 23, 2011
|
/s/ Jeffery Cheung
|
Jeffery Cheung, Principal Financial and Accounting Officer
|