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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________
Commission File Number: 0-12825
JENSON INTERNATIONAL, INC.
(Exact name of Registrant as Specified in its Charter)
Nevada 84-0916272
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Room 1008-9, Shun Tak Centre, West Tower, 168-200 Connaught Road, Central,
Hong Kong
(Address of principal executive offices)
Issuer's telephone number, including area code: (852) 2548-0781
Securities registered pursuant to Section 12(b) of the Act: None.
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 Par Value
(Title of Class)
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [ ] Yes [X] No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-B is not contained herein, and will not be contained,
to the best of registrant's knowledge in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-K. [ ] Yes [ X] No
Transitional Small Business Disclosure Format. [ ] Yes [ X] No
Issuer's Revenues for its most recent Fiscal Year, December 31, 1998
were $2,576,240.
The Company is not aware of any reported trading of its common stock,
or of any reported bid and asked quotations, during at least the last past sixty
(60) days.
The number of shares outstanding of the issuer's classes of Common
Stock, as of April 30, 1999: 2,763,843 shares of Common Stock, $.001 par value.
Documents Incorporated by Reference: None
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TABLE OF CONTENTS
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ITEM 1. BUSINESS............................................................................................2
Background...................................................................................................2
Business Operations..........................................................................................3
Employees....................................................................................................5
Certain Recent Developments..................................................................................5
ITEM 2. PROPERTIES..........................................................................................6
ITEM 3. LEGAL PROCEEDINGS...................................................................................7
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.................................................8
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS' MATTERS.............................8
Market Information...........................................................................................8
Holders......................................................................................................8
Dividends....................................................................................................8
Sale of Company's Securities in 1999.........................................................................8
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS...............9
Forward-Looking Statements...................................................................................9
Years Ended December 31, 1998 and December 31, 1997.........................................................10
Years Ended December 31, 1997 and 1996......................................................................11
Consolidated Financial Resources - December 31, 1998........................................................12
ITEM 7. FINANCIAL STATEMENTS...............................................................................13
Foreign Currency Exchange and Inflation.....................................................................13
Year 2000 Issue.............................................................................................14
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE...............15
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.................................................15
ITEM 10. EXECUTIVE COMPENSATION.............................................................................17
Board of Directors..........................................................................................17
Stock Option................................................................................................17
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.....................................18
Changes in Control..........................................................................................19
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.....................................................19
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K...................................................................20
SIGNATURES..............................................................................................25
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PART I
ITEM 1. BUSINESS
BACKGROUND
Jenson International, Inc., (formerly known as Best Medical Treatment
Group, Inc., Gaensel Gold Mines, Inc. and World Technologies & Trading Company)
(the "Company"), was incorporated under the original name Chatham Energy
Corporation on September 13, 1981, under the laws of the State of Nevada. The
Company subsequently changed its name to World Technologies & Trading Company on
May 15, 1983, to Gaensel Gold Mines, Inc. on August 2, 1984, and to Jenson
International, Inc. on June 3, 1998.
The Company had no operations from 1984 until early 1997. On March 31,
1997, the Company acquired all of the capital stock of Lifeline Medical
Information Systems, Inc. ("Lifeline"). In connection with this transaction, the
Company issued an aggregate of 800,000 shares of common stock, $.001 par value
per share ("Common Stock").
On March 12, 1998, the Company entered into a Share Exchange Agreement
(the "Exchange Agreement") with C.M. Cheng (the "Shareholder"). Pursuant to the
Exchange Agreement, the Company acquired from the Shareholder all of the
outstanding shares of Wonderwide Consultants Limited (BVI) ("Wonderwide") in
exchange for the issuance to the Shareholder of 2,230,000 shares of Common
Stock of which 334,500 shares of the shareholder are under escrowed. The closing
date of the transaction was March 16, 1998.
Section 2.04 of the Exchange Agreement provided that in the event that
Wonderwide's consolidated net income, as audited under United States generally
accepted accounting principles ("U.S. GAAP"), was less than $2.5 million for the
year ended December 31, 1997, then the Shareholder would cancel that number of
shares of Common Stock necessary to increase the Company's earnings per share of
Common Stock to that level that would have existed had Wonderwide's 1997
earnings met the minimum level stated above (before adjustment for any splits or
new issuances post closing). Wonderwide's consolidated net income, as audited
under U.S. GAAP for the fiscal year ended December 31, 1997, was $793,736. In
accordance with Section 2.04 of the Exchange Agreement, an aggregate of
1,886,022 shares of Common Stock issued pursuant to the Exchange Agreement were
automatically cancelled effective as of May 18, 1999 (which is the date of
completion of the independent audit of Wonderwide's financial statements for the
fiscal year ended December 31, 1997).
Subsequent to the closing date of the Exchange Agreement, the
Shareholder agreed to transfer to Wonderwide all of the issued and outstanding
capital stock of Jenson International Travel Services Limited ("Jenson Travel")
in exchange for the issuance to the Shareholder by the Company of 1,275,673
shares of Common Stock. The Shareholder also has agreed to contribute to the
Company the sum of RMB36,535,000, representing the approximate net income of the
group tour business now conducted by Jenson Travel for the years ended December
31, 1995, 1996, 1997 and 1998. In addition, the Shareholder has provided certain
operating advances to the Company from time to time, in the aggregate amount of
RMB70,000,000. With respect to
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such advances, the Company and the Shareholder have agreed that (i)
RMB36,535,000 shall be applied to offset in full the obligation of the
Shareholder to contribute to the Company an amount equal to the approximate net
income of the group tour business now conducted by Jenson Travel for the years
ended December 31, 1995, 1996, 1997 and 1998, and (ii) in exchange for the
remaining amount of such advances of RMB33,465,000, the Company shall issue to
the Shareholder an aggregate of 501,484 shares of Common Stock. The foregoing
transactions are described in an Investment Agreement dated as of May 18, 1999,
entered into by and between the Company and the Shareholder.
BUSINESS OPERATIONS
Jenson International, Inc., (formerly known as Best Medical Treatment
Group, Inc., Gaensel Gold Mines, Inc. and World Technologies & Trading Company)
(the "Company"), was incorporated under the original name Chatham Energy
Corporation on September 13, 1981, under the laws of the State of Nevada. The
Company subsequently changed its name to World Technologies & Trading Company on
May 15, 1983, and to Gaensel Gold Mines, Inc. on August 2, 1984, and to Jenson
International, Inc. on June 3, 1998.
The Company had no operations from 1984 until early 1997. On March 31,
1997, the Company acquired all of the capital stock of Lifeline Medical
Information Systems, Inc. ("Lifeline"). In connection with this transaction, the
Company issued an aggregate of 800,000 shares of common stock, $.001 par value
per share ("Common Stock").
On March 12, 1998, the Company entered into a Share Exchange Agreement
(the "Exchange Agreement") with C.M. Cheng (the "Shareholder"). Pursuant to the
Exchange Agreement, the Company acquired from the Shareholder all of the
outstanding shares of Wonderwide Consultants Limited (BVI) ("Wonderwide") in
exchange for the issuance to the Shareholder at 2,230,000 shares of Common
Stock. The closing date of the transaction was March 16, 1998.
WONDERWIDE AND ITS SUBSIDIARIES.
Wonderwide, is the holding company for four subsidiaries: (i) King Yuen
Investment & Development Limited ("King Yuen"); (ii) Qin Dynasty Hotel (Xian)
Ltd. ("Qin Dynasty"); (iii) Malee Consultants Limited ("Malee"); and (iv) Jenson
International Travel Services Limited ("Jenson Travel"). Jenson Travel did not
become a subsidiary of the Company until after December 31, 1998.
King Yuen was incorporated during 1985 to establish a Sino-foreign
co-operative joint venture agreement (the "CJV Agreement") signed with an
unrelated party in the PRC to establish Qin Dynasty. The investment in Qin
Dynasty by King Yuen was primarily financed by an interest free advance from
C.M. Cheng, who was the principal shareholder of King Yuen at the time of such
advance.
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Qin Dynasty is a sino-foreign co-operative joint venture enterprise
registered in the PRC on November 20, 1986, and principally engaged in the
ownership and operation of the Qin Dynasty Hotel in Xian ("Qin Dynasty Hotel").
Malee is principally engaged in the business of providing consulting
services.
Jenson Travel is principally engaged in the business of providing
travel services.
The Company and its subsidiaries are principally engaged in two
business segments: (i) the operation of a hotel in the People's Republic of
China ("PRC"); and (ii) the provision of consulting services to certain parties
in the PRC.
HOTEL OPERATIONS.
The Qin Dynasty Hotel is an international four-star hotel located at
the west boundary of the ancient city wall in Xian, China. Xian is the ancient
capital of 11 Chinese dynasties, a major tourist destination and the starting
point of the ancient silk road to the West. The Qin Dynasty Hotel has 170 rooms
and suites, three restaurants (Cantonese, Chinese and Western), a business
center, a karoake, a discotheque, a beauty salon, a health club and a lounge.
Qin Dynasty has a joint venture term of 30 years, ending on November 20, 2016.
During 1998 the Company spent over RMB17 million to refurbish the hotel rooms
and the dining outlets and to install a health center which provides massage and
hot spa services for the hotel guests. The occupancy rate of the Qin Dynasty
Hotel was 56.75% in 1997 and 71.06% in 1998.
CONSULTING SERVICES AND TRAVEL SERVICES.
On December 28, 1994, King Yuen entered into a consulting agreement
(the "Consulting Agreement"). Under the Consulting Agreement, King Yuen agreed
to provide certain consulting services to an entity to establish a temple theme
park in the PRC. The other party, or entity, to the Consulting Agreement was
formerly an affiliate of C.M. Cheng and is now beneficially owned and controlled
by Mr. Lee Seow Pheng and Mr. Zhang Rui Lin.
Following a reorganization of C.M. Cheng's private businesses in 1996,
the consulting services under the Consulting Agreement were carried out by Malee
instead of King Yuen. On May 13, 1999, King Yuen, the entity and Malee signed an
agreement to formalize the transfer of the consulting business to Malee and to
provide for similar services to be carried out by Malee for the period from 1997
to 1999 ("Temple Agreement").
On December 8, 1995, King Yuen entered into an arrangement with
Guangzhou Universal Ocean Biological Science Corporation (the "Guangzhou
Agreement") to provide consulting services to establish an ocean park in Xian.
Since 1996, the consulting services under the Guangzhou Agreement have been
provided by Malee instead of King Yuen. On June 2, 1998, an agreement was
entered into to formalize this arrangement for the period from 1997 to 2000
("Ocean Park Agreement").
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Jenson Travel provides group travel and tour services for visitors from
other countries who travel to the PRC.
EMPLOYEES
As of March 1999, the Company and its subsidiaries employ a total of
367 persons, 310 of which are full-time employees, and all of which reside in
the PRC.
As required by the PRC government regulations, the Company is required
to provide certain staff welfare and benefits for all of its permanent employees
who are located in the PRC. The aggregate rate of these statutory provisions
during the years ended December 31, 1996, 1997 and 1998 was approximately 83%,
68% and 72%, respectively, of the base salary of the permanent employees. The
total expense of staff welfare and benefits of the Company for the years ended
December 31, 1996, 1997 and 1998 was RMB2,023,504, RMB1,583,908 and
RMB1,817,600, respectively. These amounts include amounts for a defined
contribution retirement plan, a staff housing fund and inflation allowances.
The monthly contribution to the defined contribution retirement plan,
labor and medical insurance fund, staff housing fund and inflation allowances
for the year ended December 31, 1996, was 18%, 40%, and 24% respectively, of
base salary and RMB20 per employee in the PRC. The monthly contribution to the
defined contribution retirement plan, labor and medical insurance fund, staff
housing fund and inflation allowances for the year ended December 31, 1997 was
20.5%, 17%, and 30%, respectively, of base salary and RMB20 per employee in the
PRC. The monthly contribution to the defined contribution retirement plan, labor
and medical insurance fund, staff housing fund and inflation allowances for the
year ended December 31, 1998 was 27.5%, 14%, and 30% of the base salary and
RMB20 per employee in the PRC.
Except for the Qin Dynasty Hotel, the Company does not have any
retirement plans. Pursuant to PRC government regulations, Qin Dynasty has a
defined contribution retirement plan for all its permanent employees. The
monthly contributions of Qin Dynasty for permanent employees to the defined
contribution retirement plan were 18%, 20.5% and 27.5% of the base salary of the
permanent employees for the years ended December 31, 1996, 1997 and 1998,
respectively. The pension expense to the Company during the years ended December
31, 1996, 1997 and 1998 were RMB413,939, RMB506,355 and RMB566,464,
respectively.
The Company's administrative services are provided by King Pacific
International Holdings Limited ("King Pacific") for a monthly fee of HK$30,000
(US$3,846). King Pacific is listed on the Hong Kong Stock Exchange and Mr. C.M.
Cheng is a principal shareholder of King Pacific.
CERTAIN RECENT DEVELOPMENTS
On January 1, 1999, the Company entered into a sale and purchase
agreement with C.M. Cheng and Ching Kwok Leung to acquire, for consideration of
HK$200,000 (equivalent to approximately US$26,000), the entire issued share
capital of Jenson Travel in which C.M.
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Cheng and Ching Kwok Leung had beneficial ownership interests. The Company
acquired Jenson Travel in order to capitalize on the group tour business.
Pursuant to those certain agency agreements entered into on February 1,
1999, and effective on January 1, 1999, with four entities in which Mr. Cheng
has beneficial ownership interests, Yellowhead Inn, King Sun Trading Limited,
Jenda Enterprises Company Limited and Beijing City Hotel Company Limited
(collectively, "Agents), the Agents have appointed Jenson Travel to handle its
customers for the Hong Kong, Macau and Xian stages of arranged trips. On
February 1, 1999, effective January 1, 1999, Jenson Travel also entered into a
contract with an unrelated party, Foreign Enterprise Service Corporation
("FESCO"), whereby FESCO was appointed as a sub-contractor for the operation of
the Xian stages of the trips and at the same time, FESCO also entered into a
contract with Qin Dynasty to appoint Qin Dynasty as the sub-contractor for the
operation of the Xian stages of the trips. Jenson Travel will provide customers
with sight-seeing services and accommodation arrangement services in Hong Kong
and Macau, whereas Qin Dynasty will provide these services in Xian.
On February 1, 1999, effective January 1, 1999, the Company entered
into a consulting contract with C.M. Cheng for consulting services provided for
the Temple Agreement and the Ocean Park Agreement. The annual consulting fee
payable to C.M. Cheng is 2% of the consulting service fee income recognized by
the Company pursuant to the Temple Agreement and the Ocean Park Agreement.
On May 7, 1999, effective January 1, 1999, the Company entered into a
management agreement for a period of two years whereby a company in which C.M.
Cheng has a beneficial ownership interest, will provide office space and
administrative and accounting services. The management fee is a monthly payment
of HK$30,000.
The Company's administrative services are provided by King Pacific
International Holdings Limited ("King Pacific") for a monthly fee of HK$30,000
(US$3,846). King Pacific is listed on the Hong Kong Stock Exchange and Mr. C.M.
Cheng is a principal shareholder of King Pacific.
ITEM 2. PROPERTIES
Qin Dynasty Hotel is the Company's major property which is located in
the hub of Xian city and is close to the Yuxiang Mun exit of the ancient city
wall. The immediate area surrounding the Qin Dynasty Hotel property is a mixture
of medium to low-rise buildings containing retail facilities and residential
apartments.
The Qin Dynasty Hotel is a four-star hotel located at the west boundary
of the ancient city wall in Xian China. Xian is the ancient capital of 11
Chinese dynasties, a major tourist destination and the starting point of the
ancient silk road to the West. The Qin Dynasty Hotel has 170 rooms and suites,
three restaurants (Cantonese, Western, and Chinese), a business center, a
karoake, a discotheque, a beauty salon, a health club and a lounge. Qin Dynasty
has a joint venture term of 30 years, ending on November 20, 2016. During 1998
the Company spent
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over RMB17 million to refurbish the hotel rooms and the dining outlets and to
install a health center which provides massage and hot spa services for the
hotel guests.
The occupancy rate for the Qin Dynasty Hotel was 56.75% in 1997 and
71.06% in 1998.
The Company leases the land on which the Qin Dynasty Hotel is located
("Dynasty Hotel Lease"). The Dynasty Hotel Lease expires in 2001. However, the
Company has obtained legal advice that the term of the Dynasty Hotel Lease can
be extended to the year 2016. The Company is presently applying for an extension
of the Dynasty Hotel Lease until the year 2016, although no assurances can be
given that such an extension will be granted.
ITEM 3. LEGAL PROCEEDINGS
In August 1988, Qin Dynasty signed a loan agreement (the "Loan
Agreement") with a company in the PRC (the "Plaintiff") to provide a loan in the
amount of US$ 2,000,000 to Qin Dynasty. Under the Loan Agreement, the loan
accrued interest at the 6-month LIBOR rate plus 0.8% per annum and was repayable
24 months after the first draw down date in four equal half-yearly installments
of US$500,000. The loan was secured by a RMB10,000,000 deposit (approximately
equivalent to the loan amount on the draw down date) provided by C.M. Cheng on
behalf of Qin Dynasty to the Plaintiff and accrued interest at a fixed annual
interest rate of 7.2%. The Plaintiff was required to refund the deposit to C.M.
Cheng in four equal half-yearly installments of RMB2,500,000 on the maturity
dates of the four half-yearly principal installments of US$500,000 on March 3,
1991, September 3, 1991, March 3, 1992 and September 3, 1992, respectively.
However, Qin Dynasty did not repay any portion of the loan and the Plaintiff did
not request settlement during the period because the Company contends there was
a verbal agreement (the "Verbal Agreement") between the parties whereby the
parties agreed that the quarterly principal payment of US$500,000 would be set
off against RMB2,500,000 of the deposit in case of default in repayment.
The Plaintiff made its first demand for the settlement under the Loan
Agreement in March 1994. Qin Dynasty refused to pay in view of the existence of
the Verbal Agreement.
The Plaintiff then filed a lawsuit against Qin Dynasty and in May 1996,
PRC court determined that the first three installments of the loan repayment
with an aggregate value of US $1.5 million should be set-off against RMB7.5
million of C.M. Cheng's deposit and that Qin Dynasty should repay the fourth
loan installment of US$500,000 to the Plaintiff in return for a refund of the
remaining RMB2,500,000 deposit to Cheng Chao Ming. All related interest expenses
and penalty interest for the delay of repayment in respect of the US$500,000
loan principal and RMB2,500,000 deposit to be computed and settled in accordance
with the Loan Agreement. The related liabilities arising from the loan to Qin
Dynasty have been accrued in accordance with the court's determination as of
December 31, 1998. The Plaintiff has filed an appeal. The Company's directors
believe that the ultimate resolution of this matter will not have any material
impact on the Company's financial position.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the Company's security holders
during the fourth quarter of the fiscal year ended December 31, 1998.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDERS' MATTERS
MARKET INFORMATION
The Common Stock of Jenson International, Inc. is traded on the OTC
Electronic Bulletin Board under the symbol JENS. During 1998, however, there was
extremely limited trading activity. The reported high and low per share sales
prices of the Common Stock from June 12, 1998 through December 31, 1998 were
$16.00 and 7/64, respectively.
HOLDERS
As of December 31, 1998, there were approximately 500 shareholders of
record of the Company's Common Stock.
DIVIDENDS
The Company has never paid dividends and has no present intention of
paying dividends in the foreseeable future. It is the policy of the Board of
Directors to retain all earnings to provide for the future growth of the Company
by investing such earnings in product development, acquisition or expansion.
Consequently, it does not expect to pay dividends within the foreseeable future.
SALES OF COMPANY'S SECURITIES IN 1999
Pursuant to a Share Exchange Agreement dated as of March 12, 1998 (the
"Agreement") by and between the Company and C.M. Cheng (the "Shareholder"), the
Company acquired from the Shareholder all of the outstanding shares of
Wonderwide Consultants Limited (BVI) ("Wonderwide") in exchange for the issuance
to the Shareholder of 2,230,000 shares of Common Stock of the Registrant. The
closing date of the transaction was March 16, 1998.
Section 2.04 of the Agreement provides that in the event that
Wonderwide's consolidated net income, as audited under U.S. GAAP is less than
$2.5 million for the year ended December 31, 1997, then the Shareholder will
cancel that number of shares of Common Stock necessary to increase Company
earnings per share of Common Stock to that level that would have existed had
Wonderwide's 1997 earnings met the minimum level stated above (before adjustment
for any splits or new issuances post closing). Wonderwide's consolidated net
income, as audited
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under U.S. generally accepted accounting principles for the fiscal year ended
December 31, 1997, was $793,736. In accordance with Section 2.04 of the
Agreement, an aggregate of 1,886,022 shares of Common Stock issued to the
Shareholder on the closing date of the Agreement were automatically cancelled
effective as of May 18, 1999 (which is the date of completion of the audit of
Wonderwide's financial statements for the fiscal year ended December 31, 1997).
Subsequent to the closing date of the Agreement, the Shareholder agreed
to transfer to Wonderwide all of the issued and outstanding capital stock of
Jenson Travel in exchange for the issuance to the Shareholder by the Company of
1,275,673 shares of Common Stock. The Shareholder also has agreed to contribute
to the Company the sum of RMB36,535,000, representing the approximate net income
of the group tour business now conducted by Jenson Travel for the years ended
December 31, 1995, 1996, 1997 and 1998. In addition, the Shareholder has
provided certain operating advances to the Company from time to time, in the
aggregate amount of RMB70,000,000. With respect to such advances, the Company
and the Shareholder have agreed that (i) RMB36,535,000 shall be applied to
offset in full the obligation of the Shareholder to contribute to the Company an
amount equal to the approximate net income of the group tour business now
conducted by Jenson Travel for the years ended December 31, 1995, 1996, 1997 and
1998, and (ii) in exchange for the remaining amount of such advances of
RMB33,465,000, the Company shall issue to the Shareholder an aggregate of
501,484 shares of Common Stock. The foregoing transactions are described in an
Investment Agreement dated as of May 18, 1999 entered into by and between the
Company and the Shareholder.
After giving effect to (i) the cancellation of 1,886,022 shares of
Common Stock pursuant to Section 2.04 of the Agreement, (ii) the issuance of
1,275,673 shares of Common Stock to the Shareholder in exchange for the
contribution by the Shareholder to Wonderwide of 100% of the capital stock of
Jenson Travel, and (iii) the issuance of 501,484 shares of Common Stock to
shareholder in exchange for certain operating advances previously made to the
Company by the Shareholder, a total of 2,654,978 shares of Common Stock are
issued and outstanding, of which 2,121,135 shares are held by the Shareholder.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
financial statements and notes thereto set forth elsewhere herein and the
"Forward-Looking Statements" explanation included herein. Amounts are in RMB,
unless indicated otherwise. The exchange rate was US$1.00 to RMB8.30 as of
December 31, 1996, RMB8.30 as of December 31, 1997 and RMB8.30 as of December
31, 1998.
FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-KSB contains certain statements which are
forward-looking statements within the meaning of the Safe Harbor Provisions of
Section 27A of the Securities Act and Section 21E of the Exchange Act. These
statements relate to future events or the future financial performance of the
Company. In some cases, you can identify forward-looking statement by
terminology such a "May," "Will," "Should," "Expects," "Plans," "Anticipates,"
"Believes," "Estimates," "Predicts," "Potential, or "Continue" or the negative
of
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such terms and other comparable terminology. These only reflect management's
expectations and estimates on the date of this report. Actual events or results
may differ materially from these expectations. In evaluating those statements,
you should specifically consider various factors, including the risk included in
the reports filed by the Company with the SEC. These factors may cause actual
results to differ materially from any forward-looking statements. The Company is
not undertaking any obligation to update any forward-looking statements
contained in this report.
YEARS ENDED DECEMBER 31, 1998 AND DECEMBER 31, 1997
SALES.
For the year ended December 31, 1998, net sales were RMB21,382,794, of
which RMB15,251,762 (71.3%) was from the hotel operation and RMB6,131,032
(28.7%) was from the consulting services.
For the year ended December 31, 1997, net sales were RMB28,015,004, of
which RMB12,786,027 (45.6%) was from the hotel operation and RMB15,228,977
(54.4%) was from the consulting services.
Net sales decreased by RMB6,632,210 (23.7%) in 1998 as compared to
1997. This decrease in sales was mainly due to the drop in the consulting
services income during 1998.
OPERATING EXPENSES.
Operating expenses increased by RMB5,457,969 or 28.8% in 1998 as
compared to 1997 was mainly contributed by the significant increase in the legal
and professional fees and management fee by RMB2,790,246 and RMB385,200,
respectively. The legal and professional fees incurred in 1998 mainly
represented audit fees, legal counsel fees and professional expenses incurred
for the reverse acquisition of Best Medical Treatment Group, Inc. during 1998.
The management fee in 1998 represented the professional services acquired in
relation to the Company's registered office, accounting and administrative
function during 1998.
INTEREST INCOME AND INTEREST EXPENSES.
For the year ended December 31, 1998, interest expense was RMB2,042,860
as compared to RMB1,977,368 in fiscal 1997. No material interest income were
noted in fiscal 1997 and 1998.
INCOME TAXES.
For the year ended December 31, 1998, one of the Company's BVI
subsidiaries operating in the PRC was subject to PRC income tax and RMB205,000
tax provision was made during 1998.
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For the year ended December 31, 1997, one of the Company's BVI
subsidiaries operating in the PRC was subject to PRC income tax and RMB513,000
tax provision was made during 1997.
Save as disclosed above, no other companies within the Group has
assessable income during fiscal 1997 and 1998.
NET (LOSS)/INCOME BEFORE INCOME TAXES.
Net loss for the year ended December 31, 1998 was RMB5,259,656 as
compared to net income before income tax of RMB6,588,015 in 1997. This
significant decrease in net income was mainly due to a significant decrease in
consulting services income recognized and a significant increase in the
operating expenses during 1998.
YEARS ENDED DECEMBER 31, 1997 AND 1996
SALES.
For the year ended December 31, 1997, net sales were RMB28,015,004, of
which RMB12,786,027 (45.6%) was from the hotel operation and RMB15,228,977
(54.4%) was from the consulting services.
For the year ended December 31, 1996, net sales were RMB15,012,370, of
which the whole amount was exclusively generated from the hotel operation since
the consulting agreements on hand commenced from January 1, 1997. So, no
consulting service revenue was generated in fiscal 1996.
In 1997, revenue from the hotel operation decreased by RMB1,708,258 or
11.8% from RMB14,494,285 to RMB12,786,027 and such decrease mainly resulted from
the keen competition of the industry in Xian.
OPERATING EXPENSES.
For the year ended December 31, 1997, operating expenses were
RMB18,936,621 or 67.6% of net sales, consisting of direct operating expenses of
RMB6,074,442 or 21.7% of net sales and other operating expenses of RMB12,862,179
or 45.9% of net sales.
For the year ended December 31, 1996, operating expenses were
RMB20,634,189 or 137.4% of net sales, consisting of direct operating expenses of
RMB6,662,081 or 44.4% of net sales and other operating expenses of RMB13,972,108
or 93.0% of net sales.
Operating expenses decreased by RMB1,697,568 or 8.3% in 1997 as
compared to 1996 was mainly due to the decrease in the hotel's overall occupancy
rate in 1997. So, the direct operating expenses and other operating expenses
decreased accordingly.
11
<PAGE> 14
INTEREST INCOME AND INTEREST EXPENSES.
For the year ended December 31, 1997, interest expense was RMB1,977,368
as compared to RMB1,837,040 in fiscal 1996. No material interest income were
noted in fiscal 1996 and 1997.
INCOME TAXES.
For the year ended December 31, 1997, one of the Company's BVI
subsidiaries operating in the PRC was subject to PRC income tax and RMB513,000
tax provision was made during 1997.
Except as disclosed above, no other subsidiaries within the Company had
assessable income during fiscal 1996 and 1997.
NET (LOSS)/INCOME BEFORE INCOME TAXES.
Net income for the year ended December 31, 1997 was RMB6,588,015 as
compared to net loss of RMB7,458,859 in 1996. This significant increase in net
income in 1997 was mainly due to a significant increase in consulting services
income recognized during 1997 as the consulting services agreements commenced
from January 1, 1997.
CONSOLIDATED FINANCIAL RESOURCES - DECEMBER 31, 1998
LIQUIDITY AND CAPITAL RESOURCES.
For the year ended December 31, 1998, the Company's operations provided
cash resources of RMB17,338,278. The major components of the cash provided from
operations in 1998 were the decrease of RMB13,072,236 in accounts receivable,
the increase of RMB5,140,072. RMB17,929,451 were used in investing activities
for the purchases of property, plant and equipment. The Company's cash balance
increased by RMB8,876 to RMB825,433 at December 31, 1998, as compared to
RMB816,557 at December 31, 1997. The Company's net working capital deficit
increased by RMB18,668,130 to RMB57,323,390 at December 31, 1998, as compared to
RMB38,655,260 at December 31, 1997. As a result, the Company's current ratio
decreased to 0.07 to 1 at December 31, 1998, as compared to 0.31 to 1 at
December 31, 1997.
For the year ended December 31, 1998, the net cash used in the
Company's investing activities amounted to RMB17,925,451 which was mainly used
in the renewal and renovation of the hotel's guest rooms, dining facilities and
health centre.
For the year ended December 31, 1998, the net cash provided by
financing activities amounted to RMB596,049 and represented the renewal of the
short-term bank borrowing. The short-term bank borrowing will mature in December
1999.
The Company is currently operating at a loss and has net working
capital deficit. The Company's ability to continue as a going concern is
dependent on the continued financial
12
<PAGE> 15
support of its principal shareholder, who has provided a letter of financial
support to the Company.
The management is currently seeking alternative ways to improve the
liquidity of the Company. On May 18, 1999, the principal shareholder signed an
investment agreement with the Company to forego repayment on the advances made
by him of RMB70,000,000 in exchange for 501,484 shares of Common Stock of the
Company.
On December 31, 1998, the Company has outstanding capital commitments
in respect of renovations to the hotel in Xian of approximately RMB1,421,000.
FOREIGN CURRENCY EXCHANGE AND INFLATION
The PRC government imposes control over its foreign currency reserves
in part through direct regulation of the conversion of Renminbi into foreign
exchange and through restrictions on foreign trade. The conversion of Renminbi
into United States Dollars and other foreign currencies is based on the rate set
by the PBOC, which is set based on the previous day's PRC interbank foreign
exchange market rate and with reference to current exchange rates on the world
financial markets.
Foreign investment enterprises may generally remit out of the PRC
profits or dividends derived from a source within the PRC, subject to the
availability of foreign currency. Except for such profits or dividends,
remittance out of the PRC by foreign investors of any other amount (including
proceeds from a disposition of an investment in the PRC) is subject to the
approval of the State Administration of Foreign Exchange and the availability of
foreign currency (at the central government of provincial level). In addition,
if there is a deterioration in the PRC's balance of payments or for other
reasons, the PRC may impose restrictions on foreign currency remittances abroad.
No assurance can be given that the Company's PRC subsidiaries will be able or
permitted to remit out of the PRC amounts due to the Company.
In the most recent decade, the Chinese economy has experienced rapid
economic growth as well as relatively high rates of inflation, which in turn
resulted in the periodic adoption by the Chinese government of various
corrective measures designed to regulate growth and contain inflation. Since
1993, the Chinese government has implemented an economic program designed
to control inflation, which has resulted in the tightening of working capital to
Chinese business enterprises. The recent Asian financial crisis has resulted in
a general reduction in domestic production and sales, and a general tightening
of credit. The success of the Company depends in substantial part upon the
continued growth and development of the Chinese economy.
Foreign operations are subject to certain risks inherent in conducting
business abroad, including price and currency exchange controls, influctations
in the relative value of currencies. The Company conducts virtually all of its
business in China and, accordingly, the sale of its products is settled
primarily in RMB. As a result, devaluation of the RMB against the USD would
adversely affect the Company's financial performance when measured in USD.
Although prior to 1994, the RMB experienced significant devaluation against the
USD, the RMB has remained fairly stable since then. In addition, the RMB is not
freely convertible into foreign currencies, and the ability to convert the RMB
is subject to the availability of currencies. Effective December 1, 1998, the
foreign exchange transactions involving the RMB must take place through
authorized banks or financial institutions in China at the prevailing exchange
rates quoted by the People's Bank of China.
The continuing Asian financial crisis has inhibited the growth and
general level of activity of the Chinese economy, thus reducing consumer demand
in China, which has had a negative impact on the Company's results of
operations, financial condition and cash flows. In addition, as a result of the
Asian financial crisis, China has tightened its foreign exchange controls.
Although the central government of China has repeatedly indicated that it does
not intend to devalue its currency in the near future, devaluation still remains
a possibility. Should the central government of China decide to devalue its
currency, the Company does not believe that such an action would have a
detrimental effect on the Company's operations, since the Company conducts
virtually all of its business in China, and the sale of its products and the
purchase of raw materials and services is settled in RMB.
YEAR 2000 ISSUE
The Year 2000 Issue results in the fact that certain computer programs
have been written using two digits rather than four digits to designate the
applicable year. Computer programs that have sensitive software may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result in
a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
send invoices, or engage in similar normal business activities. Based on a
recent internal assessment, the Company does not believe that the cost to modify
its existing software and/or convert to new software will be significant.
Due to the number of distributors and suppliers that the Company
conducts business with on a continuing basis, and their varying levels of
sophistication with respect to utilization of computer systems, the Company is
currently unable to determine if such parties have fully addressed the Year 2000
Issue as it relates to their respective operating systems. However, the Company
does not believe that a Year 2000 system failure by any of such parties will, in
the aggregate, have a material adverse effect on the Company's consolidated
results of operations, financial position or cash flow.
ITEM 7. FINANCIAL STATEMENTS
The consolidated financial statements and related financial information
required to be filed are set forth below beginning on page F-1.
13
<PAGE> 16
JENSON INTERNATIONAL INC.
(FORMERLY KNOWN AS BEST MEDICAL TREATMENT GROUP INC.)
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 1998 AND 1997, AND RELATED
CONSOLIDATED STATEMENTS OF OPERATIONS, SHAREHOLDERS' EQUITY, AND CASH FLOWS FOR
EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1998 AND INDEPENDENT
AUDITORS' REPORT
<TABLE>
<CAPTION>
CONTENTS Page
----
<S> <C>
INDEPENDENT AUDITORS' REPORT........................................... F-1
CONSOLIDATED BALANCE SHEETS............................................ F-2
CONSOLIDATED STATEMENTS OF OPERATIONS.................................. F-3
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY........................ F-4
CONSOLIDATED STATEMENTS OF CASH FLOWS.................................. F-5
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS......................... F-6
</TABLE>
<PAGE> 17
INDEPENDENT AUDITORS' REPORT
TO THE SHAREHOLDERS AND DIRECTORS OF JENSON INTERNATIONAL INC.
(FORMERLY KNOWN AS BEST MEDICAL TREATMENT GROUP INC.)
We have audited the accompanying consolidated balance sheets of Jenson
International Inc. and subsidiaries as of December 31, 1998 and 1997,
and the related consolidated statements of operations, shareholders'
equity and cash flows for each of the three years in the period ended
December 31, 1998. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the 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, such financial statements present fairly, in all
material respects, the financial position of Jenson International Inc.
and subsidiaries as of December 31, 1998 and 1997, and the results of
their operations and their cash flows for each of the three years in
the period ended December 31, 1998 in conformity with accounting
principles generally accepted in the United States of America.
Our audits also comprehended the translation of Renminbi amounts into
United States dollar ("US$") amounts and, in our opinion, such
translation has been made in conformity with the basis stated in note
3. Such US$ amounts are presented solely for the convenience of readers
in the United States of America.
We draw your attention to note 14 which state that the Company is
exposed to certain risks through its operations in the People's
Republic of China.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in note 2,
the deficiency in the Company's working capital raises substantial
doubt as to its ability to continue as a going concern. Management's
plans concerning these matters are also discussed in note 2. The
financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
DELOITTE TOUCHE TOHMATSU
Hong Kong
May 27, 1999
F-1
<PAGE> 18
JENSON INTERNATIONAL INC.
(FORMERLY KNOWN AS BEST MEDICAL TREATMENT GROUP INC.)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
As of December 31,
-----------------------------------------------
1997 1998 1998
---- ---- ----
RMB RMB US$
(note 3)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ........................................... 816,557 825,433 99,450
Accounts receivable, net of allowance for
doubtful accounts of RMB639,470 and
RMB807,681 for 1997 and 1998,
respectively (note 4) ............................................. 15,430,374 2,189,927 263,847
Inventories ......................................................... 779,198 767,702 92,494
Prepayments, deposits and other receivables ......................... 410,570 795,282 95,817
----------- ----------- -----------
Total current assets .................................................. 17,436,699 4,578,344 551,608
Property, plant and equipment, net of
accumulated depreciation and amortization
of RMB46,974,826 and RMB50,959,580 for
1997 and 1998, respectively (note 5) ................................ 34,134,339 47,717,113 5,749,050
----------- ----------- -----------
Total assets .......................................................... 51,571,038 52,295,457 6,300,658
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term bank borrowings (note 6) ................................. 24,964,050 25,560,099 3,079,530
Accounts payable .................................................... 3,369,771 2,556,854 308,055
Accrued hotel advisory fee .......................................... 3,345,359 3,269,047 393,861
Interest payable .................................................... 2,600,106 3,185,756 383,826
Statutory provision for staff welfare and benefits
(note 7) .......................................................... 9,376,307 10,614,268 1,278,827
Accrued expenses .................................................... 5,737,834 10,877,906 1,310,591
Other creditors ..................................................... 1,431,002 4,123,047 496,753
Amount due to the principal shareholder (note 8a) ................... 4,754,530 996,757 120,091
Income tax payable .................................................. 513,000 718,000 86,506
----------- ----------- -----------
Total current liabilities ............................................. 56,091,959 61,901,734 7,458,040
----------- ----------- -----------
Advances from the principal shareholder (note 8b) ..................... 70,000,000 70,000,000 8,433,735
----------- ----------- -----------
Commitments and contingencies (note 16)
Shareholders' equity:
Common stock par value US$0.001; authorized 50,000,000 shares; issued
2,623,843 and 2,763,843 at December 31, 1997 and 1998,
respectively ...................................................... 21,771 22,933 2,763
Additional paid-in capital .......................................... (180,110) (6,972) (840)
Accumulated deficit ................................................. (74,362,582) (79,622,238) (9,593,040)
----------- ----------- -----------
Total deficiency of shareholders' equity .............................. (74,520,921) (79,606,277) (9,591,117)
----------- ----------- -----------
Total liabilities and shareholders' equity ............................ 51,571,038 52,295,457 6,300,658
=========== =========== ===========
</TABLE>
See accompanying notes to the consolidated financial statements
F-2
<PAGE> 19
JENSON INTERNATIONAL INC.
(FORMERLY KNOWN AS BEST MEDICAL TREATMENT GROUP INC.)
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year ended December 31,
--------------------------------------------------------------------
1996 1997 1998 1998
---- ---- ---- ----
RMB RMB RMB US$
(note 3)
<S> <C> <C> <C> <C>
Revenues:
Hotel operations:
Rooms ........................................... 7,044,523 6,720,133 9,696,085 1,168,203
Food and beverage ............................... 6,604,973 5,570,167 5,340,345 643,415
Other operating departments ..................... 1,593,320 1,164,540 1,015,128 122,305
Sales tax ....................................... (748,531) (668,813) (799,796) (96,361)
----------- ----------- ----------- -----------
14,494,285 12,786,027 15,251,762 1,837,562
Consultancy services .............................. -- 15,480,000 6,200,000 746,988
Other ............................................. 518,085 135,977 86,032 10,365
Sales tax for consultancy services ................ -- (387,000) (155,000) (18,675)
----------- ----------- ----------- -----------
Total revenue ....................................... 15,012,370 28,015,004 21,382,794 2,576,240
----------- ----------- ----------- -----------
Operating expenses:
Hotel operations by department:
Rooms ........................................... 1,770,583 1,782,072 1,748,464 210,658
Food and beverage ............................... 4,490,224 3,899,733 3,518,934 423,968
Other operating departments ..................... 401,274 392,637 332,940 40,113
Consultancy services:
Consultancy fee paid to the principal shareholder -- -- 124,000 14,940
Other operating expenses:
Administrative and general ...................... 2,808,907 2,309,773 3,607,902 434,687
Consultancy fee paid to the consultant (note 10) -- -- 174,300 21,000
Depreciation and amortization ................... 4,131,413 4,016,213 4,280,814 515,761
Electricity, gas and water ...................... 2,727,601 2,365,605 2,786,170 335,683
Legal and professional fees ..................... 163,727 60,508 2,850,754 343,464
Management fee (note 8c) ........................ -- -- 385,200 46,410
Provision for staff welfare and benefits ........ 1,074,382 809,845 867,495 104,517
Repairs and maintenance ......................... 522,211 725,741 809,646 97,548
Salaries and allowances ......................... 2,543,867 2,574,494 2,907,971 350,358
----------- ----------- ----------- -----------
Total operating expenses ............................ 20,634,189 18,936,621 24,394,590 2,939,107
----------- ----------- ----------- -----------
Net operating (loss) income ......................... (5,621,819) 9,078,383 (3,011,796) (362,867)
Interest expense .................................... (1,837,040) (1,977,368) (2,042,860) (246,128)
----------- ----------- ----------- -----------
(Loss) income before income taxes ................... (7,458,859) 7,101,015 (5,054,656) (608,995)
Income taxes (note 9) ............................... -- (513,000) (205,000) (24,699)
----------- ----------- ----------- -----------
Net (loss) income for the year ...................... (7,458,859) 6,588,015 (5,259,656) (633,694)
=========== =========== =========== ===========
(Loss) earnings per share
Basic ............................................. (10.11) 8.93 (5.99) (0.72)
=========== =========== =========== ===========
Weighted average number of shares of
common stock outstanding
Basic ........................................... 737,821 737,821 877,821 877,821
=========== =========== ========== ===========
</TABLE>
See accompanying notes to the consolidated financial statements
F-3
<PAGE> 20
JENSON INTERNATIONAL INC.
(FORMERLY KNOWN AS BEST MEDICAL TREATMENT GROUP INC.)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common stock
----------------------------------- Total
Additional deficiency of
paid-in Accumulated shareholders'
Shares Amount Amount capital deficit equity
------ ------ ------ ------- ------- ------
US$ RMB RMB RMB RMB
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1996.............. 1,018,843 1,018 8,449 (66,209) (73,491,738) (73,549,498)
Recapitalization in connection with the
disposal of subsidiary................ (625,000) (625) (5,187) 4,357 - (830)
Recapitalization in connection with the
Company's acquisition of Wonderwide... 2,230,000 2,230 18,509 (18,501) - 8
Net loss................................ - - - - (7,458,859) (7,458,859)
--------- -------- -------- ---------- ---------- ----------
Balance at December 31, 1996............ 2,623,843 2,623 21,771 (80,353) (80,950,597) (81,009,179)
Expenses incurred by the Company prior to
the acquisition of Wonderwide......... - - - (99,757) - (99,757)
Net income.............................. - - - - 6,588,015 6,588,015
--------- -------- -------- ---------- ---------- ----------
Balance at December 31, 1997............ 2,623,843 2,623 21,771 (180,110) (74,362,582) (74,520,921)
Issue to effect a consulting agreement.. 140,000 140 1,162 173,138 - 174,300
Net loss................................ - - - - (5,259,656) (5,259,656)
--------- -------- -------- ---------- ---------- ----------
Balance at December 31, 1998............ 2,763,843 2,763 22,933 (6,972) (79,622,238) (79,606,277)
========= ========= ========= ========== ============= ==========
Translated to US$
Balance at December 31, 1998............
(note 3).............................. 2,763,843 US$2,763 US$2,763 (US$840) (US$9,593,040) (US$9,591,117)
========= ========= ========= ========== ============= =============
</TABLE>
See accompanying notes to the consolidated financial statements
F-4
<PAGE> 21
JENSON INTERNATIONAL INC.
(FORMERLY KNOWN AS BEST MEDICAL TREATMENT GROUP INC.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------------------------------
1996 1997 1998 1998
---- ---- ---- ----
RMB RMB RMB US$
(note 3)
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net (loss) income .................................... (7,458,859) 6,588,015 (5,259,656) (633,694)
Adjustments to reconcile net (loss) income to
net cash provided by (used in) operating activities:
Depreciation and amortization .................... 4,131,413 4,016,213 4,280,814 515,761
Consulting fees .................................. -- -- 174,300 21,000
Provision (write-back) for doubtful accounts ..... 129,764 (54,421) 168,211 20,266
(Gain) loss on disposal of property, plant and
equipment ...................................... (148,878) 8,660 61,863 7,453
Changes in working capital components:
Accounts receivable ............................ 21,926 (13,809,121) 13,072,236 1,574,968
Inventories .................................... 118,025 153,309 11,496 1,385
Prepayments, deposits and other receivables .... 354,003 (99,253) (384,712) (46,351)
Accounts payable ............................... 1,389 154,149 (812,917) (97,942)
Accrued hotel advisory fee ..................... 101,709 219,964 (76,312) (9,194)
Interest payable ............................... 53,818 99,384 585,650 70,560
Statutory provision for staff welfare and
benefits ..................................... 1,839,860 1,159,078 1,237,961 149,152
Accrued expenses ............................... 631,150 349,915 5,140,072 619,286
Other creditors ................................ 512,066 131,191 2,692,045 324,343
Amount due to the principal shareholder ........ 259,627 (1,413,966) (3,757,773) (452,743)
Income tax payable ............................. -- 513,000 205,000 24,699
----------- ----------- ----------- -----------
Net cash provided by (used in) operating activities .... 547,013 (1,983,883) 17,338,278 2,088,949
----------- ----------- ----------- -----------
Cash flows from investing activities:
Purchase of property, plant and equipment ............ (572,214) (616,426) (17,929,451) (2,160,175)
Proceeds from the disposal of property, plant and
equipment .......................................... 746,000 160,000 4,000 482
----------- ----------- ----------- -----------
Net cash provided by (used in) investing activities .... 173,786 (456,426) (17,925,451) (2,159,693)
----------- ----------- ----------- -----------
Cash flows from financing activities:
New bank borrowings .................................. -- 10,000,000 596,049 71,813
Repayment of bank borrowings ......................... (69,062) (8,317,019) -- --
----------- ----------- ----------- -----------
Net cash (used in) provided by financing activities .... (69,062) 1,682,981 596,049 71,813
----------- ----------- ----------- -----------
Net increase (decrease) in cash and cash equivalents ... 651,737 (757,328) 8,876 1,069
Cash and cash equivalents
Beginning of the year ................................ 922,148 1,573,885 816,557 98,380
----------- ----------- ----------- -----------
End of the year ...................................... 1,573,885 816,557 825,433 99,449
=========== =========== =========== ===========
Supplemental disclosures of cash flow information:
Interest paid ........................................ 1,783,222 1,877,984 1,457,210 175,567
=========== =========== =========== ===========
</TABLE>
See accompanying notes to the consolidated financial statements
F-5
<PAGE> 22
JENSON INTERNATIONAL INC.
(FORMERLY KNOWN AS BEST MEDICAL TREATMENT GROUP INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
Jenson International Inc. (formerly known as Best Medical Treatment
Group Inc., Gaensel Gold Mines, Inc., World Technologies & Trading
Company, Chatham Energy Corporation) (the "Company") was incorporated
in the State of Nevada, the United States of America on September 13,
1981. The Company had no operations from 1984 until March 16, 1998 when
the Company undertook a scheme (the "Scheme") pursuant to a Share
Exchange Agreement ("Agreement") in which 2,230,000 shares of common
stock of the Company were issued in exchange for the outstanding 1
ordinary share of Wonderwide Consultants Limited ("Wonderwide"), a
British Virgin Islands corporation. On the same date, part of the
outstanding common stock of the Company of 625,000 shares was cancelled
pursuant to the Agreement in connection with the disposal of a former
subsidiary.
The exchange of shares has been accounted for as reverse acquisition
and the Company, as the continuing legal entity, is assumed to be the
acquiree. The accompanying financial statements include the
consolidated results of operations and financial position of Wonderwide
and its subsidiaries for all periods presented.
The Company and its subsidiaries are principally engaged in the
operation of a hotel in the People's Republic of China ("PRC") and the
provision of consulting services to certain parties in the PRC.
The accompanying consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the
United States of America ("US GAAP") and are presented in Renminbi as
the operations of the Company are predominantly denominated in
Renminbi. This basis of accounting differs from that used in the
preparation of the statutory financial statements of the relevant PRC
subsidiary which are prepared in accordance with the accounting
principles and relevant financial regulations established by the
Ministry of Finance of the PRC.
2. GOING CONCERN
These consolidated financial statements have been prepared on the going
concern basis of accounting which assumes the Company will realize it
assets and discharge its liabilities in the normal course of business.
The Company is currently operating at a loss and has net liabilities.
Should the Company be unable to continue as a going concern it may be
required to realize its assets and settle its liabilities at amounts
substantially different from the current carry values.
The Company's ability to continue as a going concern is dependent on
the continued financial support of its principal shareholder, who has
provided a letter of financial support to the Company.
F-6
<PAGE> 23
JENSON INTERNATIONAL INC.
(FORMERLY KNOWN AS BEST MEDICAL TREATMENT GROUP INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
3. SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION - The consolidated financial statements
include the assets, liabilities, revenues and expenses of all
subsidiaries. All material intra-group transactions and balances have
been eliminated.
REVENUE RECOGNITION - Revenues represent the invoiced value for
services provided, net of discounts. Revenues are recognized when
services are rendered to customers.
INVENTORIES - Inventories consist primarily of food and beverage
products as well as consumable supplies and are stated at the lower of
cost or market value. Cost is calculated using the first-in, first-out
method.
PROPERTY, PLANT AND EQUIPMENT - Property, plant and equipment is stated
at cost less accumulated depreciation and amortization. Expenditure for
normal repairs and maintenance that do not significantly extend the
life of the property, plant and equipment is expensed as incurred.
Depreciation and amortization are provided using the straight-line
method based on the estimated useful lives of the assets as follows:
Buildings....................................... 25 years
Furniture and fixtures.......................... 5 years
Plant, machinery and equipment.................. 5 to 10 years
Motor vehicles.................................. 5 years
IMPAIRMENT OF LONG-LIVED ASSETS - The Company regularly reviews its
long-lived assets for impairment whenever events or changes in the
circumstances indicate that the carrying amount of an asset may not be
recoverable based upon undiscounted cash flows expected to be produced
by such assets over their expected useful lives.
INCOME TAXES - Certain items are treated differently for financial
reporting purposes than for income tax purposes. Pursuant to the
provision of Statement of Financial Accounting Standards No.109,
"Accounting for Income Taxes", deferred tax is provided, under the
liability method, for the resulting temporary differences between the
financial reporting and tax bases of assets and liabilities, using the
tax rates expected to be in effect when the related temporary
differences reverse. A valuation allowance is provided to reduce the
amount of deferred tax assets if it is considered more likely than not
that some part on, or all of, the deferred tax asset will not be
realized.
(LOSS) EARNINGS PER SHARE - (Loss) earnings per share are based on net
(loss) income for the period and the weighted average number of common
stock outstanding during each period. The weighted average number of
common stock outstanding for the periods presented are calculated after
taking the effect of the cancellation of 1,886,022 shares issued to
Cheng Chao Ming as disclosed in note 19(e).
CASH AND CASH EQUIVALENTS - Cash and cash equivalents include cash on
hand, cash accounts, interest-bearing savings accounts, and short-term
bank deposits with original maturities of three months or less.
FOREIGN CURRENCY TRANSLATION - The financial records and the statutory
financial statements of the Company's PRC subsidiary are maintained in
Renminbi. In preparing the financial statements, all foreign currency
transactions are translated into Renminbi using the applicable rates of
exchange, quoted by the People's Bank of China ("PBOC") for the
respective periods. Monetary assets and liabilities denominated in
foreign currencies have been translated into Renminbi using the rate of
exchange quoted by PBOC prevailing at the balance sheet date. The
resulting exchange gains or losses have been credited or charged to the
consolidated statements of operations in the period in which they
occur.
F-7
<PAGE> 24
JENSON INTERNATIONAL INC.
(FORMERLY KNOWN AS BEST MEDICAL TREATMENT GROUP INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
3. SIGNIFICANT ACCOUNTING POLICIES - continued
FOREIGN CURRENCY TRANSLATION - continued
The Company's share capital is denominated in United States dollars
("US$") and for reporting purposes, the US$ share capital amounts have
been translated into Renminbi ("RMB") at the applicable rates
prevailing on the balance sheet dates.
Translation of amounts from RMB into US$ is for the convenience of the
reader only and has been made at the swap center rate of US$1.00 =
RMB8.3 as quoted by PBOC on December 31, 1998. No representation is
made that the Renminbi amounts could have been, or could be, converted
into United States dollars at that rate or at any other rate.
USE OF ESTIMATES - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
EFFECTS OF RECENT ACCOUNTING STANDARDS - In 1998, the Company adopted
Statement of Financial Accounting Standards (SFAS) No.130, "Reporting
Comprehensive Income", SFAS No.131, "Disclosures about Segments of an
Enterprise and Related Information" and SFAS No.132, "Employers'
Disclosures about Pensions and Other Postretirement Benefits".
SFAS No.130 requires that an enterprise to report, by major components
and a single total the change in its net assets during the period from
non-owner sources. Since the Company did not have any items of other
comprehensive income during the years presented, the net income (loss)
reported in the consolidated statements of income is equivalent to the
total comprehensive income.
SFAS No.131, which superseded SFAS No.14, "Financial Reporting for
Segments of a Business Enterprise", establishes standards for the way
that public enterprises report information about operating segments in
financial statements issued to the pubic. It also establishes standards
for disclosures regarding products and services, geographic areas and
major customers. The adoption of SFAS No.131 did not require any
changes to the Company's existing financial statement disclosures.
SFAS No.132 amends the disclosure requirements for pensions and other
postretirement benefits. The adoption of SFAS No.132 had no significant
impact on the Company's current financial statements disclosures.
NEW ACCOUNTING STANDARD NOT YET ADOPTED - The Financial Accounting
Standards Board has issued a new standard SFAS No.133, "Accounting for
Derivative Instruments and Hedging Activities". Management has not yet
completed the analysis of the impact this would have on the financial
statements of the Company.
F-8
<PAGE> 25
JENSON INTERNATIONAL INC.
(FORMERLY KNOWN AS BEST MEDICAL TREATMENT GROUP INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
4. ACCOUNTS RECEIVABLE
Accounts receivable consisted of the following:
<TABLE>
<CAPTION>
As of December 31,
------------------
1997 1998
---- ----
RMB RMB
<S> <C> <C>
Accounts receivable - trade ................. 2,174,844 1,734,608
- consulting fees ....... 13,895,000 1,263,000
Less: Allowance for doubtful accounts ....... (639,470) (807,681)
---------- ---------
15,430,374 2,189,927
========== =========
</TABLE>
Accounts receivable in respect of consulting fees are related to two
service contracts signed between the Company and two unrelated parties
on May 13, 1998 and June 2, 1998 to formally document previous
consultancy service arrangements provided to the unrelated parties for
the establishment of a temple and an amusement park in the PRC,
referred to as the Temple Contract and the Ocean Park Contract,
respectively.
Changes to the allowance for doubtful accounts were as follows:
<TABLE>
<CAPTION>
As of December 31,
--------------------------------
1996 1997 1998
---- ---- ----
RMB RMB RMB
<S> <C> <C> <C>
Balance as of beginning of year ....... 564,127 693,891 639,470
Provided (written back) during the year 129,764 (54,421) 168,211
------- ------- -------
Balance as of end of year ............. 693,891 639,470 807,681
======= ======= =======
</TABLE>
F-9
<PAGE> 26
JENSON INTERNATIONAL INC.
(FORMERLY KNOWN AS BEST MEDICAL TREATMENT GROUP INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
5. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consisted of the following:
<TABLE>
<CAPTION>
As of December 31,
--------------------------
1997 1998
---- ----
RMB RMB
<S> <C> <C>
At cost:
Buildings ..................................... 30,018,407 30,048,490
Furniture and fixtures ........................ 7,194,469 24,125,260
Plant, machinery and equipment ................ 41,872,227 42,483,672
Motor vehicles ................................ 2,024,062 2,019,271
---------- ----------
Total ....................................... 81,109,165 98,676,693
Less: Accumulated depreciation and amortization (46,974,826) (50,959,580)
---------- ----------
34,134,339 47,717,113
========== ==========
</TABLE>
The Company has an annual operating lease commitment of RMB120,000 in
respect of the land on which the buildings are located until 2001. The
Company has obtained legal advice that the term can be extended to 2016
as the joint venture term of the Company had already been extended to
that date and is in the process of applying for the extension. Details
of the operating lease commitments are described in note 16.
6. SHORT-TERM BANK BORROWINGS
<TABLE>
<CAPTION>
As of December 31,
------------------------
1997 1998
---- ----
RMB RMB
Short-term bank borrowings comprise:
<S> <C> <C>
Secured bank borrowings ............ 17,658,445 18,254,494
Unsecured bank borrowings .......... 7,305,605 7,305,605
---------- ----------
24,964,050 25,560,099
========== ==========
</TABLE>
Interest rates of the short-term bank borrowings are generally based on
London Interbank Offered Rates ("LIBOR") and the floating interest
rates on foreign currencies of the Bank of China. At December 31, 1998,
the interest rates of the short-term bank borrowings ranged from 6.50%
to 12.00%.
The bank borrowings are repayable on demand and there are no
significant covenants or financial restrictions relating to the
Company's short-term debt. The bank borrowings will mature in December
1999. The net book value of the property, plant and equipment pledged
to banks in respect of the borrowings as of December 31, 1998 amounted
to RMB20,635,595.
F-10
<PAGE> 27
JENSON INTERNATIONAL INC.
(FORMERLY KNOWN AS BEST MEDICAL TREATMENT GROUP INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. STATUTORY PROVISION FOR STAFF WELFARE AND BENEFITS
As stipulated by PRC government regulations, the Company is required to
make provisions for various categories of staff welfare and benefits
for all its permanent employees in the PRC. The aggregate rate of these
statutory provisions during the years ended December 31, 1996, 1997 and
1998 was approximately 83%, 68% and 72%, respectively, of the basic
salary of the permanent employees. The total expense of staff welfare
and benefits of the Company for the years ended December 31, 1996, 1997
and 1998 was RMB2,023,504, RMB1,583,908 and RMB1,817,600, respectively.
The statutory provision for staff welfare and benefits includes amounts
for a defined contribution retirement plan (see note 12), staff housing
fund and inflation allowances.
The monthly contribution of the defined contribution retirement plan,
labor and medical insurance fund, staff housing fund and inflation
allowances for the year ended December 31, 1996, was calculated at 18%,
40%, 24%, respectively, of the basic salary and RMB20 per employee and
for the year ended December 31, 1997, was calculated at 20.5%, 17%,
30%, respectively, of the basic salary and RMB20 per employee in the
PRC. The monthly contributions for these provisions for the year ended
December 31, 1998 were calculated at 27.5%, 14%, 30% of the basic
salary and RMB 20 per person, respectively, of the PRC permanent
employees.
8. RELATED PARTY TRANSACTIONS
(a) Amount due to the principal shareholder
The amount due to the principal shareholder represents
advances from Cheng Chao Ming to the Company. The amount is
interest free and has no fixed repayment terms.
(b) Advances from the principal shareholder
The advances from the principal shareholder are interest free
and will not be repayable within twelve months. On May 18,
1999, Cheng Chao Ming agreed to forego repayment on the
advances made by him of RMB70,000,000 in exchange for 501,484
shares of common stock of the Company.
(c) Management fee paid to a related party
The amount is in respect of the provision of office space and
administrative and accounting services and is payable to a
company in which Cheng Chao Ming has a beneficial ownership
interest.
F-11
<PAGE> 28
JENSON INTERNATIONAL INC.
(FORMERLY KNOWN AS BEST MEDICAL TREATMENT GROUP INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
9. INCOME TAXES
The components of (loss) income before income taxes are as follows:
<TABLE>
<CAPTION>
Year ended December 31,
------------------------------------------
1996 1997 1998
---- ---- ----
RMB RMB RMB
<S> <C> <C> <C>
PRC .......................... (7,458,859) (7,991,985) (7,170,556)
British Virgin Islands ("BVI") -- 15,093,000 2,115,900
---------- ---------- ----------
(7,458,859) 7,101,015 (5,054,656)
========== ========= ==========
</TABLE>
The Company had no taxable income in 1996. The provision for income
taxes of the Company for the years ended December 31, 1997 and 1998 was
RMB513,000 and RMB205,000, respectively.
United States of America
The Company is subject to taxes in the United States of America but had
no taxable income for the years ended December 31, 1996, 1997 and 1998.
Hong Kong (HK)
The Company's subsidiary incorporated in HK is subject to the HK
Profits Tax at the applicable tax rate (currently 16.0%) on its
assessable profits computed in accordance with the Inland Revenue
Ordinance in HK. The HK subsidiary has no assessable profits for the
years ended December 31, 1996, 1997 and 1998.
Under current HK laws, dividends and capital gains arising from the HK
subsidiary's investments are not subject to Hong Kong Profits Tax, and
no withholding tax is imposed on payments of dividends by the HK
subsidiary to the Company.
British Virgin Islands (BVI)
The Company's subsidiaries incorporated in the BVI are not taxed in the
BVI. Under current BVI laws, dividends and capital gains arising from
the BVI subsidiaries' investments are not subject to income taxes, and
no withholding tax is imposed on payments of dividends by the BVI
subsidiaries to the Company
PRC
The Company's subsidiary registered in the PRC other than HK are
subject to China income taxes at the applicable tax rate (currently
33%) on taxable income as reported in their statutory financial
statements in accordance with the relevant income tax laws applicable
to foreign enterprises. The subsidiary in the PRC had no taxable income
for the years ended December 31, 1996, 1997 and 1998.
One of the Company's BVI subsidiaries operating in the PRC was subject
to PRC income tax which amounted to RMB513,000 in 1997 and RMB205,000
in 1998.
F-12
<PAGE> 29
JENSON INTERNATIONAL INC.
(FORMERLY KNOWN AS BEST MEDICAL TREATMENT GROUP INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
9. INCOME TAXES - continued
A reconciliation between the credit (provision) for income taxes
computed by applying the statutory tax rates in the PRC for 1996, 1997
and 1998 to (loss) income before income taxes and the income tax
provision is as follows:
<TABLE>
<CAPTION>
Year ended December 31,
-------------------------------------------
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
PRC statutory rate ........................................................ 33% 33% 33%
---------- ---------- ----------
RMB RMB RMB
Credit (provision) for income taxes at statutory
rate on (loss) income before income taxes for
the year ................................................................ 2,461,423 (2,343,335) 1,668,027
Income not subject to income taxes ........................................ -- 4,467,690 493,247
Loss for which tax benefit is not available ............................... (2,461,423) (2,637,355) (2,366,274)
---------- ---------- ----------
Income tax provision ...................................................... -- (513,000) (205,000)
========== ========== ==========
</TABLE>
Operating losses of sino-cooperative joint ventures in the PRC can be
carried forward for a period of five years to offset future taxable
income.
Deferred income taxes reflect the net tax effect of temporary
differences between the amounts of assets and liabilities for income
tax purposes compared with the respective amounts for financial
statement purposes. At December 31, 1997 and 1998 deferred income taxes
comprised the following:
<TABLE>
<CAPTION>
At December 31,
---------------------------
1997 1998
---- ----
RMB RMB
<S> <C> <C>
Deferred tax assets (liabilities):
Excess of tax over financial reporting depreciation (700,092) (1,143,918)
Net operating loss carryforwards .................. 13,197,651 14,394,479
Allowance for doubtful accounts ................... 208,043 242,007
Allowance for obsolete inventories ................ 70,681 64,364
----------- -----------
12,776,283 13,556,932
Valuation allowance ............................... (12,776,283) (13,556,932)
----------- -----------
-- --
=========== ===========
</TABLE>
F-13
<PAGE> 30
JENSON INTERNATIONAL INC.
(FORMERLY KNOWN AS BEST MEDICAL TREATMENT GROUP INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
10. CAPITAL STOCK
In accordance with a consultancy service agreement signed on January 2,
1998, the Company issued 140,000 shares of its common stock to an
unaffiliated party (the "Consultant") for its services provided from
January 2, 1998 to March 16, 1998. The consultancy fee of US$21,000 was
determined based on the fair value of the common stock issued as of the
date of these shares being granted to the Consultant and was expensed
in 1998.
On March 16, 1998, the Company issued 2,230,000 shares of common stock
in exchange for the outstanding 1 ordinary share of Wonderwide. On the
same date, the outstanding shares of common stock of the Company of
625,000 shares were cancelled pursuant to the Agreement in connection
with the disposal of a former subsidiary.
11. FOREIGN CURRENCY EXCHANGE
The PRC government imposes control over its foreign currency reserves
in part through direct regulation of the conversion of Renminbi into
foreign exchange and through restrictions on foreign trade. The
conversion of Renminbi into US dollars and other foreign currencies is
based on the rate set by the PBOC, which is set based on the previous
day's PRC interbank foreign exchange market rate and with reference to
current exchange rates on the world financial markets. The approximate
exchange rate at December 31, 1998 was US$1 = RMB8.30.
Foreign investment enterprises may generally remit out of the PRC
profits or dividends derived from a source within the PRC, subject to
the availability of foreign currency. Except for such profits or
dividends, remittance out of the PRC by foreign investors of any other
amount (including proceeds from a disposition of an investment in the
PRC) is subject to the approval of State Administration of Foreign
Exchange and to the availability of foreign currency (at the central
government or provincial level). In addition, if there is a
deterioration in the PRC's balance of payments or for other reasons,
the PRC may impose restrictions on foreign currency remittances abroad.
No assurance can be given that the Company's PRC subsidiary will be
able or permitted to remit out of the PRC amounts due to the Company.
12. RETIREMENT PLAN
Except for Qin Dynasty Hotel (Xian) Ltd. ("Qin Dynasty"), a subsidiary
operating a hotel in the PRC, the Company did not have any retirement
plans in operation.
As stipulated by the PRC government regulations, Qin Dynasty has a
defined contribution retirement plan for all its permanent employees.
The monthly contributions of Qin Dynasty for permanent employees to the
defined contribution retirement plan were calculated at 18%, 20.5% and
27.5% of the basic salary of the permanent employees for the years
ended December 31, 1996, 1997 and 1998, respectively. The pension
expense of the Company during the years ended December 31, 1996, 1997
and 1998 amounted to RMB413,939, RMB506,355 and RMB566,464,
respectively.
F-14
<PAGE> 31
JENSON INTERNATIONAL INC.
(FORMERLY KNOWN AS BEST MEDICAL TREATMENT GROUP INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
13. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of SFAS No. 107
"Disclosure about Fair Value of Financial Instruments". The estimated
fair value amounts have been determined by the Company, using available
market information and appropriate valuation methodologies. However,
considerable judgment is necessarily required in interpreting market
data to develop estimates of fair value. Accordingly, these estimates
are not necessarily indicative of the amounts that the Company could
realize in a current market exchange.
The carrying amounts of cash and cash equivalents, short-term bank
borrowings, amount due to the principal shareholder, accounts
receivable and accounts payable are reasonable estimates of their fair
value due to the short maturity of the instruments.
14. CONCENTRATION OF RISKS
The Company's operating assets and primary source of income and cash
flows are its interest in the PRC subsidiary and services provided by
the BVI subsidiary in the PRC and in various countries. The PRC economy
has, for many years, been a centrally-planned economy, operating on the
basis of annual, five-year and ten-year state plans adopted by central
PRC governmental authorities which set out national production and
development targets. The PRC government has been pursuing economic
reforms since it first adopted its "open-door" policy in 1978. There is
no assurance that the PRC government will continue to pursue economic
reforms or that there will not be any significant change in its
economic or other policies, particularly in the event of any change in
the political leadership of, or the political, economic or social
conditions in, the PRC. There is also no assurance that the Company
will not be adversely affected by any such change in governmental
policies or any unfavorable change in the political, economic or social
conditions, the laws or regulations or the rate or method of taxation
in the PRC.
As many of the economic reforms which have been or are being
implemented by the PRC government are unprecedented or experimental,
they may be subject to adjustment or refinement which may have adverse
effects on the Company. Further, through state plans and other economic
and fiscal measures, it remains possible for the PRC government to
exert significant influence on the PRC economy.
The Company has obtained foreign currency bank loans for working
capital purposes. For the risks relating to foreign currency, please
refer to note 11.
The Company's financial instruments that are exposed to concentrations
of credit risk consist primarily of cash and accounts receivable from
customers. Cash is maintained with major banks in the PRC. The
Company's business activities are with customers in the PRC and in
various countries. The Company periodically performs credit analyses
and monitors the financial condition of its clients in order to
minimize credit risk.
F-15
<PAGE> 32
JENSON INTERNATIONAL INC.
(FORMERLY KNOWN AS BEST MEDICAL TREATMENT GROUP INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
15. SEGMENT INFORMATION
The Company has two reportable segments which are hotel operations and
consultancy services. The hotel operation includes a hotel and related
services provided in Xian, the PRC. The consultancy services are
provided to two unrelated parties in respect of the establishment of a
temple and an amusement park in the PRC.
The Company accounts for intersegment sales and transfers as if the
sales or transfers were to third parties, that is, at current market
prices.
The Company's reportable segments are strategic business units that
offer different services. They are managed separately, other than the
group tour coordination and consultancy services which are managed by
the same management, because each business requires different marketing
strategies due to the different location of customers.
The following is a summary of information regarding the Company's
operations by principal activities for the years ended December 31,
1997 and 1998:
<TABLE>
<CAPTION>
1997 1998
------------------------------------- ------------------------------------------
Hotel Consultancy Hotel Consultancy
operation services Total operation services Total
RMB RMB RMB RMB RMB RMB
<S> <C> <C> <C> <C> <C> <C>
Revenue from external
customers ................ 12,922,004 15,093,000 28,015,004 15,337,394 6,045,000 21,382,794
---------- ---------- ---------- ---------- --------- ----------
Total revenue for reportable
segments ................. 28,015,004 21,382,794
========== ==========
Segment (loss) profit ...... (7,991,985) 15,093,000 7,101,015 (7,170,656) 2,116,000 (5,054,656)
---------- ----------
Income before income taxes . 36,091,038 7,101,015 (5,054,656)
========= ==========
Segment assets ............. 35,984,030 15,480,000 51,571,038 51,032,457 1,263,000 52,295,457
Corporate assets ........... -- --
---------- ----------
Consolidated total ......... 51,571,038 52,295,457
========== ==========
Supplemental information
Interest expenses ........ 1,977,368 -- 1,977,368 2,042,860 -- 2,042,860
Depreciation and
amortization ........... 4,016,213 -- 4,016,213 4,280,814 -- 4,280,814
Expenditures for segment
assets ................. 616,426 -- 616,426 753,779 -- 753,779
========== ==========
</TABLE>
In 1996, the Company did not provide consultancy services and was only
engaged in the hotel operation. Cheng Chao Ming, substantially the sole
individual involved in providing the consultancy services, did not
allocate any of his compensation for consulting services since the
amount would not have been material.
The Company operated in the PRC for the three years ended December 31,
1998 and all long-lived assets of the Company were located in the PRC
at December 31, 1996, 1997 and 1998.
Revenue from two customers of the Company's consultancy services
represents RMB15,480,000 and RMB6,200,000 of the Company's consolidated
revenue in 1997 and 1998, respectively.
F-16
<PAGE> 33
JENSON INTERNATIONAL INC.
(FORMERLY KNOWN AS BEST MEDICAL TREATMENT GROUP INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
16. COMMITMENTS AND CONTINGENCIES
The Company had capital commitments in respect of renovation of the
hotel in Xian amounting to approximately RMB1,421,000 (1997: nil).
The Company leases land in the PRC on which the Company's hotel is
located. The annual rental payment of RMB120,000 is fixed until 2001.
The Company has an annual commitment of RMB600,000 until 2016 payable
to the PRC joint venture partners in accordance with a supplemental
agreement of the sino-foreign co-operative joint venture agreement.
Total rental expense charged to operations during the years ended
December 31, 1996, 1997 and 1998 was RMB738,000, RMB743,615 and
RMB720,000, respectively.
At December 31, 1998, the minimum future rental commitments under
non-cancelable leases payable over the remaining terms of the leases
are:
<TABLE>
<CAPTION>
Payable to
the PRC
Land Venturer
---- --------
RMB RMB
<S> <C> <C> <C>
1999......................... 120,000 600,000
2000......................... 120,000 600,000
2001......................... 120,000 600,000
2002......................... - 600,000
2003......................... - 600,000
2004 through 2016............ - 7,800,000
------- ----------
360,000 10,800,000
======= ==========
</TABLE>
F-17
<PAGE> 34
JENSON INTERNATIONAL INC.
(FORMERLY KNOWN AS BEST MEDICAL TREATMENT GROUP INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
17. LITIGATION
In August 1988, Qin Dynasty signed a loan agreement (the "Loan
Agreement") with a finance company in the PRC (the "Plaintiff") to
raise a loan of US$2 million. According to the Loan Agreement, the loan
bore interest at the 6-month LIBOR rate plus 0.8% per annum and was
repayable 24 months after the first draw down date in 4 equal half
yearly installments of US$500,000. The loan is secured by a RMB10
million deposit (approximately equivalent to the loan amount on the
draw down date) provided by Cheng Chao Ming to the Plaintiff and earned
interest from the Plaintiff at a fixed annual interest rate of 7.2%.
The Plaintiff was required to refund the deposit to Cheng Chao Ming in
4 equal half yearly installments of RMB2,500,000 on the maturity dates
of the 4 half yearly principal installments of US$500,000 on March 3,
1991, September 3, 1991, March 3, 1992 and September 3, 1992,
respectively. However, Qin Dynasty did not repay any portion of the
loan and the Plaintiff did not request settlement during the period
because the Company contends there was a verbal agreement (the "Verbal
Agreement") between the parties that the quarterly principal repayment
of US$500,000 should be treated as being set-off against RMB2,500,000
of the deposit in case of default in repayment.
The Plaintiff made its first demand for the settlement of the US$2
million loan in March 1994 which Qin Dynasty refused to pay in view of
the existence of the Verbal Agreement.
The Plaintiff then brought a legal action against Qin Dynasty and in
May 1996 a PRC court determined that the first three installments of
the loan repayment with an aggregate value of US$1.5 million should be
set-off against RMB7.5 million of Cheng Chao Ming's deposit, and that
Qin Dynasty should repay the fourth loan installment of US$500,000 to
the Plaintiff in return for a refund of the remaining RMB2,500,000
deposit to Cheng Chao Ming. All related interest income, expenses and
penalty interest for the delay of repayment in respect of the
US$500,000 loan principal and RMB2,500,000 deposit are to be computed
and settled in accordance with the loan agreement. The related
liabilities arising from the loan by Qin Dynasty have been accrued in
accordance with the court's determination as of December 31, 1998.
The Plaintiff has lodged an appeal. The Company's directors believe
that the ultimate resolution of this matter will not have any material
impact on the Company's financial position.
F-18
<PAGE> 35
JENSON INTERNATIONAL INC.
(FORMERLY KNOWN AS BEST MEDICAL TREATMENT GROUP INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
18. STOCK OPTION AND BENEFIT PLANS
1993 EMPLOYEE STOCK COMPENSATION PLAN - The Company has adopted an
Employee Stock Compensation Plan for employees, officers, directors of
the Company and advisors to the Company (the "ESC Plan"). The Company
has reserved a maximum of 1,000,000 Common Shares to be issued upon the
grant of awards under the ESC Plan. Employees will recognize taxable
income upon the grant of Common Stock equal to the fair market value of
the Common Stock on the date of the grant and the Company will
recognize a compensating deduction at such time. The ESC Plan will be
administered by the Board of Directors.
1993 INCENTIVE STOCK OPTION PLAN - The Company has adopted an Incentive
Stock Option Plan for key employees (the "ISO Plan"). The Company has
reserved a maximum of 500,000 Common Shares to be issued upon the
exercise of options granted under the ISO Plan. The ISO Plan is
intended to qualify as an "Incentive stock option: plan under Section
422 of the Internal Revenue Code of 1986, as amended. Accordingly,
options will be granted under the ISO Plan at exercise prices at least
equal to the fair market value per share of the Common stock on the
respective dates of grant and will be subject to the limitations
provided by the Code. However, options may be granted to employees who
own more than 10% of the outstanding shares of the Company of all
classes or any parent or subsidiary thereof (a "Significant
Shareholder") only at an option price which on the date granted is at
least 110% of the fair market value of the Common Stock. With respect
to options granted pursuant to Section 422, employees will not
recognize taxable income upon either the grant or exercise of such
options. The Company will not be entitled to any compensating deduction
with respect to such options unless disqualifying dispositions, as
defined by such law, are made. The ISO Plan will be administered by the
Board of Directors or a committee of directors. No options have been
granted under the ISO Plan, and none may be granted unless and until it
has been approved by the shareholders.
1993 NON-STATUTORY STOCK OPTION PLAN - The Company had adopted a
Non-Statutory Stock Option Plan for officers, key employees, potential
key employees, non-employee directors and advisors (the "NSO Plan").
The Company has reserved a maximum of 5,000,000 Common Shares to be
issued upon the exercise of options granted under the NSO Plan. The NSO
Plan will not qualify as an "incentive stock option" plan under Section
422A of the Internal Revenue Code of 1986, as amended. Options will be
granted under the NSO Plan at exercise prices to be determined by the
Board of Directors or other NSO Plan administrator. With respect to
options granted pursuant to the NSO Plan, optionees will not recognize
taxable income upon the grant of options, but will realize income (or
capital loss) at the time the options are exercised to purchase Common
stock. The amount of income will be equal to the difference between the
exercise price and the fair market value of the Common Stock on the
date of exercise. The Company will be entitled to it compensating
deduction in an amount equal to the taxable income realized by an
optionee as a result of exercising the option. The NSO Plan will be
administered by the Board of Directors or a committee of directors. No
options have been granted under the NSO Plan.
F-19
<PAGE> 36
JENSON INTERNATIONAL INC.
(FORMERLY KNOWN AS BEST MEDICAL TREATMENT GROUP INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
19. SUBSEQUENT EVENTS
(a) On January 1, 1999, the Company entered into a sale and
purchase agreement to acquire, for a contribution of
HK$200,000 (equivalent to approximately US$26,000), the entire
issued share capital of Jenson International Travel Services
Limited ("Jenson Travel") in which Cheng Chao Ming had
beneficial ownership interests.
(b) As stipulated in the agency agreements entered into on
February 1, 1999, effective January 1, 1999, with four related
party entities, (collectively referred to as the "Agents") in
which Cheng Chao Ming has beneficial ownership interests, the
Agents have appointed Jenson Travel to handle their customers
within the Hong Kong, Macau and Xian stages of arranged trips.
On February 1, 1999, effective January 1, 1999, Jenson Travel
also entered into a contract with an unrelated party, which
was appointed as a sub-contractor for the operation of the
Xian stages of the trips and at the same time, this unrelated
party also entered into a contract with Qin Dynasty to appoint
Qin Dynasty as the sub-contractor for the operation of the
Xian stages of the trips. Jenson Travel will provide customers
with sight-seeing services and accommodation arrangement
services in Hong Kong and Macau whereas Qin Dynasty will
provide these services in Xian.
(c) On February 1, 1999, effective January 1, 1999, the Company
entered into a consulting contract with Cheng Chao Ming for
consulting services provided for the Temple Contract and the
Ocean Park Contract. The annual consulting fee payable to
Cheng Chao Ming is fixed at 2% of the consulting service fee
income recognized by the Group as stipulated in the two
consulting contracts.
(d) On May 7, 1999, effective January 1, 1999, the Company entered
into a management agreement for a period of two years whereby
a related company in which Cheng Chao Ming has a beneficial
ownership interest will provide office space and
administrative and accounting services. The management fee has
been agreed at a monthly payment of HK$30,000. The agreement
is cancellable provided that each of the parties gives to the
other three month's prior written notice.
(e) On May 18, 1999, 1,886,022 shares out of the 2,230,000 shares
issued to Cheng Chao Ming were cancelled in accordance with a
share exchange agreement as the consolidated net income of its
subsidiary, Wonderwide Consultants Limited, for the year ended
December 31, 1997 was less than US$2.5 million.
(f) On May 18, 1999, Cheng Chao Ming agreed to forego repayment on
the advances made by him of RMB70,000,000 in exchange for
501,484 shares of common stock of the Company.
(g) On May 18, 1999, the Company acquired the group tour business
from Cheng Chao Ming for a consideration of HK$80,000,000
(equivalent to US$10,256,410) through the issuance of
1,275,673 shares to him.
F-20
<PAGE> 37
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
Effective March 26, 1998, the Company dismissed Pritchett, Siler &
Hardy P.C. as the Company's independent accountants, and engaged Deloitte Touche
Tohmatsu as the Company's new independent accountants. Prior to the engagement
of Deloitte Touche Tohmatsu, the Company did not consult with that firm
regarding the application of accounting principles to a specified transaction,
either completed or proposed, or the type of audit opinion that might be
rendered on the Company's financial statements. The decision to change
accountants was approved by the Company's Board of Directors.
None of the reports by Pritchett, Siler & Hardy P.C. on such financial
statements contained an adverse opinion or a disclaimer of opinion, or were
qualified or modified as to uncertainty, audit scope or accounting principles.
During the fiscal years ended December 31, 1998, October 31, 1997, and
October 31, 1996, there were no disagreements with Pritchett, Siler & Hardy P.C.
on any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure, which disagreements, if not resolved
to the satisfaction of Pritchett, Siler & Hardy P.C. would have caused
Pritchett, Siler & Hardy P.C. to make reference to the subject matter of the
disagreements in connection with the firm's reports on the Company's financial
statements.
PART III.
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following tables and text sets forth the names and ages of all
directors and executive officers of the Company as of May 18, 1999, and their
positions and offices with the Company. The Board of directors of the Company is
comprised of only one class. All of the directors will serve until the next
annual meeting of shareholders and until their successors are elected and
qualified, or until the earlier of death, retirement, resignation or removal.
Executive officers serve at the discretion of the Board of Directors, and are
appointed to serve until the first Board of Directors meeting following the
annual meeting of the shareholders. There are no family relationships among
directors and executive officers. Also provided is a brief description of the
business experience of each director and executive officer during the past five
years and a indication of directorship held by each director in other companies
subject to the reporting requirements under the Federal securities laws.
DIRECTORS
<TABLE>
<CAPTION>
Date Elected
Name Age as Director
- ---- --- -----------
<S> <C> <C>
C.M. (Jenson) Cheng 52 March 16, 1998
Pingbo (Paul) Xiong 39 March 16, 1998
John Backhouse 58 March 16, 1998
</TABLE>
15
<PAGE> 38
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
Date Elected
Name Age Position(s) as Officer
- ---- --- ----------- ----------
<S> <C> <C> <C>
C.M. (Jenson) Cheng 52 Chairman March 16, 1998
Pingbo (Paul) Xiong 39 Secretary March 16, 1998
C.M. (Jimmy) Chow 30 Chief Financial Officer January 1, 1999
</TABLE>
The following biographical information is supplied with respect to each
officer and director.
C.M. (Jenson) Cheng, 52, was elected to his positions with the
Registrant on March 16, 1998. Mr. Cheng graduated from Beijing University and
has over 25 year of experience in building and operating hotels, international
trade and infrastructure investment. Hotel projects in which Mr. Cheng has
beneficiary interests include: Yellowhead Inn in Canada; City Hotel Xian in
PRC; and City Hotel Beijing in PRC. Mr. Cheng is also the substantial
shareholder and managing director of King Pacific International Holdings
Limited, a company listed on the Hong Kong Stock Exchange Limited, which is
mainly involved in building, construction, restaurant operation and
infrastructure investment.
Pingbo (Paul) Xiong, 39, was elected to his positions with the
Registrant on March 16, 1998. Mr. Xiong graduated from the University of British
Columbia ("UBC") with a Masters Degree in Science. He previously worked for UBC
and MacMillan Bloedel Research in Canada as Research Engineer and Research
Scientist, respectively. Mr. Xiong is also an executive director of King Pacific
International Holdings Limited.
John Backhouse, 58, was elected director of the Company on March 16,
1998. Mr. Backhouse graduated from Oklahoma State University with a Bachelor
Degree Library Studies and is currently employed by College of New Caledonia in
Canada. Mr. Backhouse was the Mayor of Prince George City, B.C., Canada from
1986 to 1996.
C.M. (Jimmy) Chow, 30, was elected Chief Financial Officer of the
Company on January 1, 1999. From May 1992 until December 1998, Mr. Chow worked
for Deloitte Touche Tohmatsu. Mr. Chow served as an audit manager for Deloitte
Touche Tohmatsu. Mr. Chow earned a business degree from Queensland University of
Technology, Australia.
SECTION 16 (A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE:
The Company failed to file one (1) Form 3 filing for C.M. (Jenson)
Cheng regarding the closing of that certain share exchange transaction as
represented in that Share Exchange Agreement (the "Exchange Agreement") with
C.M. Cheng (the "Shareholder"), dated March 12, 1998, and as discussed in Item 1
of this 10-KSB.
16
<PAGE> 39
ITEM 10. EXECUTIVE COMPENSATION
The only Company Officer to receive any compensation during 1998 was
C.M. (Jenson) Cheng, Chief Executive Officer. Mr. Cheng received 2% of the
revenue of $US 6.4 million (or US$124,000) as a result of a consulting contract
with a subsidiary of the Company.
Further, The Company's administrative services are provided by King
Pacific for HK$30,000 monthly (US$3,846). King Pacific is listed on the Hong
Kong Stock Exchange and Mr. Cheng is a substantial shareholder and managing
director.
The Company's other Officers did not receive any compensation during
1996, 1997 and 1998. The Company does not have any immediate plans to provide
compensation to the Company's Officers in 1999 (other than pursuant to the
consulting contract referenced above).
BOARD OF DIRECTORS
Directors currently receive no compensation for their duties and no
compensation was received by the Directors during 1996, 1997 and 1998.
STOCK OPTION
1993 EMPLOYEE STOCK COMPENSATION PLAN
The Company has adopted an Employee Stock Compensation Plan for
employees, officers, directors of the Company and advisors to the Company (the
"ESC Plan"). The Company has reserved a maximum of 1,000,000 Common Shares to be
issued upon the grant of awards under the ESC Plan. Employees will recognize
taxable income upon the grant of Common Stock equal to the fair market value of
the Common Stock on the date of the grant and the Company will recognize a
compensating deduction at such time. The ESC Plan will be administered by the
Board of Directors.
1993 INCENTIVE STOCK OPTION PLAN.
In 1993, the Company adopted an Incentive Stock Option Plan for key
employees (the "ISO Plan"). The Company reserved a maximum of 500,000 share of
Common Stock to be issued upon the exercise of options granted under the ISO
Plan. The ISO Plan is intended to qualify as an "Incentive Stock Option Plan"
under Section 422 of the Internal Revenue Code of 1986, as amended. The ISO Plan
will be administered by the Board of Directors or a committee of directors. No
options have been granted under the ISO Plan.
1993 NON-STATUTORY STOCK OPTION PLAN.
In 1993, the Company had adopted a Non-Statutory Stock Option Plan for
Officers, key employees, potential key employees, non-employee directors and
advisors (the "NSO Plan"). the Company reserved a maximum of 500,000 shares of
Common Stock to be issued upon the exercise of options granted under the NSO
Plan. The NSO Plan will not qualify as an "incentive stock option" plan and
under Section 422A of the Internal Revenue Code of 1986, as amended. Options
will be granted under the NSO Plan at exercise prices to be determined by the
Board of Directors or other NSO Plan administrator. The NSO Plan will be
administered by the Board of Directors or a committee of directors. No options
have been granted under the NSO Plan.
17
<PAGE> 40
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As used in this section, the term beneficial ownership with respect to
a security is defined by Rule 13d-3 under the Securities Exchange Act of 1934,
as amended, as consisting of sole or shared voting power (including the power to
vote or direct the vote) and/or sole or shared investment power (including the
power to dispose of or direct the disposition of) with respect to the security
through any contract arrangement, understanding, relationship or otherwise,
subject to community property laws where applicable.
As of April 30, 1999, the Company had a total of 2,763,843 shares of
Common Stock issued and outstanding.
The following table sets forth as of April 30, 1999: the names and
addresses of each beneficial owner of more than five percent (5%) of the
Company's Common Stock known to the Company, the number of shares of Common
Stock beneficially owned by each such person, and the percent of the Company's
Common Stock so owned, the number of shares of Common Stock of the Company
beneficially owned, and the percentage of the Company's Common Stock so owned,
by each director, and by all directors and officers of the Company as a group.
Each such person has sole voting and investment power with respect to the shares
of Common Stock except as otherwise indicated. Beneficial ownership consists of
a direct interest in the shares of Common Stock, except as otherwise indicated.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OUTSTANDING OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP COMMON STOCK
---------------- -------------------- ------------
<S> <C> <C>
C.M. (Jenson) Cheng 2,230,000 Shares 81%
c/o Jenson International, Inc.
Room 1008-9, Shun Tak Centre, West Tower
168-200 Connaught Road, Central
Hong Kong
Pingbo (Paul) Xiong -- --
John Backhouse -- --
</TABLE>
18
<PAGE> 41
<TABLE>
<S> <C> <C>
C.M. (Jimmy) Chow
All Directors and Officers 2,230,000 Shares 81%
</TABLE>
CHANGES IN CONTROL
The Company is unaware of any contract or other arrangement, the
operation of which may at a subsequent date result in a change in control of the
Company.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On February 1, 1999, effective January 1, 1999, the Company entered
into a consulting contract with C.M. Cheng for consulting services provided for
the Temple Agreement and the Ocean Park Agreement. The annual consulting fee
payable to C.M. Cheng is 2% of the consulting service fee income recognized by
the Company pursuant to the Temple Agreement and the Ocean Park Agreement.
On May 7, 1999, effective January 1, 1999, the Company entered into a
management agreement for a period of two years whereby a related company in
which C.M. Cheng has a beneficial ownership interest, will provide office space
and administrative and accounting services. The management fee is a monthly
payment of HK$30,000.
On January 1, 1999, the Company entered into a sale and purchase
agreement with C.M. Cheng and Ching Kwok Leung to acquire, for consideration of
HK $200,000 (equivalent to approximately US$ 26,000), the entire issued share
capital of Jenson Travel, in which C.M. Cheng and Ching Kwok Leung had
beneficial ownership interests.
Pursuant to those certain agency agreements entered into on February 1,
1999, and effective on January 1, 1999, with four entities in which C.M. Cheng
has beneficial ownership interests, Yellowhead Inn, King Sun Trading Limited,
Jenda Enterprises Company Limited and Beijing City Hotel Company Limited
(collectively, "Agents"), the Agents have appointed Jenson Travel to handle its
customers for the Hong Kong, Macau and Xian stages of arranged trips. On
February 1, 1999, effective January 1, 1999, Jenson Travel also entered into a
contract with an unrelated party, Foreign Enterprise Service Corporation
("FESCO"), whereby FESCO was appointed as a sub-contractor for the operation of
the Xian stages of the trips and at the same
19
<PAGE> 42
time, FESCO also entered into a contract with Qin Dynasty to appoint Qin Dynasty
as the sub-contractor for the operation of the Xian stages of the trips. Jenson
Travel will provide customers with sight-seeing services and accommodation
arrangement services in Hong Kong and Macau, whereas Qin Dynasty will provide
these services in Xian.
As of December 31, 1997 an amount of RMB4,754,530 was due to C.M.
(Jenson) Cheng representing advances from Mr. Cheng to the Company. The amount
is interest free and has no fixed repayment terms. As of December 31, 1998
RMB4,123,047 (US$120,091) represented in an advance from Mr. C.M. (Jenson) Cheng
as an advance to the Company. The amount is interest free and has not fixed
repayment terms.
As of December 31, 1997 advances from the principal shareholder, Mr.
Cheng, amounted to RMB70,000,000 (US$8,433,735). The amount is unchanged as of
December 31, 1998. The advances from the principal shareholder, Mr. Cheng, are
interest free and will not be repayable within 12 months. On May 18, 1999 Mr.
Cheng agreed to forego repayment on the advances made by him of RMB70,000,000 in
exchange for 501,484 shares of the Company Common Stock.
A management fee of RMB385,200 (US$46,410) was paid to a company in
which Mr. C.M. (Jenson) Cheng has a beneficial interest. The amount is in
respect of the provision of office space and administrative accounting services.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(A)
<TABLE>
<CAPTION>
Exhibit No. Description Method of Filing
----------- ----------- ----------------
<S> <C> <C>
2.1 Agreement and Plan of Incorporated by reference to the
Reorganization, dated March 31, Current Report on Form 8-K, dated
1997 between the Company and March 31, 1997.
Shareholder.
3.1 Articles of Incorporation of
Chatham Energy Corporation Incorporated by reference to
registration statement on Form S-18
of Chatham Energy Corporation, File
No. 2-75288-NY
3.2 Articles of Amendment of Chatham Incorporated by reference to Exhibit
Energy Corporation (changing the 3.2 to Form 10-KSB for fiscal year
name to World Technologies and ended October 31, 1991
Trading Company)
</TABLE>
20
<PAGE> 43
<TABLE>
<CAPTION>
Exhibit No. Description Method of Filing
----------- ----------- ----------------
<S> <C> <C>
2.1 Agreement and Plan of Incorporated by reference to the
Reorganization, dated March 31, Current Report on Form 8-K, dated
1997 March 31, 1997.
3.1 Articles of Incorporation of
Chatham Energy Corporation Incorporated by reference to
registration statement on Form S-18
of Chatham Energy Corporation, File
No. 2-75288-NY
3.2 Articles of Amendment of Chatham Incorporated by reference to Exhibit
Energy Corporation (changing the 3.2 to Form 10-KSB for fiscal year
name to World Technologies and ended October 31, 1991
Trading Company)
3.3 Articles of Amendment of World Incorporated by reference to Exhibit
Technologies and Trading Company 3.3 to Form 10-KSB for fiscal year
(changing name to Gaensel Gold ended October 31, 1991.
Mines, Inc.)
3.4 By-laws of the Company adopted Incorporated by reference to Exhibit
August 31, 1993 3.4 to Form 10-KSB for fiscal year
ended October 31, 1991.
4.1 Specimen, Common Stock certificate Incorporated by reference to
of the Company Exhibit of the Company 4.1 to Form
10-KSB for fiscal year ended
October 31, 1991.
4.2 Board Resolutions describing the Incorporated by reference to the
Advisor Compensation Plan Company's Registration Statement on
Form F S-8, File No. 333-45035.
10.1 1993 Employee Stock Compensation Incorporated by reference to Exhibit
Plan of the Company 10.1 to Form F 10-KSB for fiscal year
ended October 31, 1991.
10.2 1993 Incentive Stock Option Plan of Incorporated by reference to Exhibit
the Company 10.2 to Form F 10-KSB for fiscal year
ended October 31, 1991.
10.3 1993 Non-Statutory Stock Option Incorporated by reference to Exhibit
Plan of the Company 10.3 to Form F 10-KSB for fiscal year
ended October 31, 1991.
10.4 Contract between Hin Sun Holding Filed herewith
Nan Hai Development Company and
King Yuen Investment & Development
Ltd., dated November 28, 1994
10.5 Contract among Hing Sun Group Filed herewith
Hainan Development Co., King Yuen
Investment & Development Ltd. and
Malee Consultants, dated May 13,
1998
10.6 Contract between Guangzhou Ocean Filed herewith
Life Limited and King Yuen
Investment & Development Ltd.,
dated June 2, 1998
10.7 Contract between Yellowhead Inn and Filed herewith
Jenson International Travel
Services Limited, effective
January 1, 1999
10.8 Contract among Malee Consultants Filed herewith
Limited, Lite Charter (China)
Limited, King Yuen Investment &
Development Limited and another
party, effective January 1, 1999
10.9 Contract among Cheng Chao Ming, Filed herewith
Ching Kwok Leung, Jenson
International Travel Services
Limited and Wonderwide Consultants
Limited, dated January 1, 1999
10.10 Contract between King Sun Trading Filed herewith
(PTE) Limited and Jenson
International Travel Services
Limited, dated February 1, 1999
</TABLE>
21
<PAGE> 44
<TABLE>
<CAPTION>
Exhibit No. Description Method of Filing
----------- ----------- ----------------
<S> <C> <C>
10.11 Contract between Jenda Enterprise Filed herewith
Company Limited and Jenson
International Travel Services
Limited, dated February 1, 1999
10.12 Contract between Jenson International Filed herewith
Travel Services Limited and Foreign
Enterprise Service Corporation,
dated, February 1, 1999
10.13 Contract between Lite Charter (China) Filed herewith
Limited and Cheng Chao Ming, dated
February 1, 1999
10.14 Contract between Beijing City Hotel Filed herewith
Company Limited and Jenson
International Travel Services
Limited, dated February 1, 1999
10.15 Contract between Foreign Enterprise Filed herewith
Service Corporation and Qin Dynasty
Hotel (Xian) Limited, dated
February 1, 1999
10.16 Contract between Beijing City Hotel Filed herewith
Company Limited and Qin Dynasty
Hotel (Xian) Limited, dated
February 1, 1999
10.17 Contract among Guangzhou Universal Filed herewith
Ocean Biological Corporation, Malee
Consultants Limited and Lite Charter
(China) Limited, dated February 1,
1999
10.18 Contract between Wonderwide Filed herewith
Consultants Limited and King Pacific
International Holdings Limited,
dated May 7, 1999
10.19 Investment Agreement between the Incorporated by
Company and Mr. C.M. Cheng, dated reference to the
May 18, 1999 Company's Current
Report on Form 8-K/A
(Amendment No. 1)
dated March 16, 1998
16.1 Letter from Cordovano & Co. Incorporated by reference to the
Company's Current Report on Form 8-K,
dated January 20, 1998.
21 Subsidiaries of the Registrant Filed herewith
27 Financial Data Statements
</TABLE>
(B) A Form 8-K/A, Amendment No. 1, was filed on May 21, 1999
amending the Current Report on Form 8-K, previously filed by the Registrant on
March 27, 1998. The following is a list of the items reported and financial
statements filed in the Form 8-K/A:
Item 1. Change in Control of Registrant.
Item 2. Acquisition or Disposition of Assets.
Item 7. Financial Statements and Exhibits.
22
<PAGE> 45
The following financial statements relating to the transaction
contemplated by the Share Exchange Agreement dated March 12, 1998 by and between
the Company and the Shareholder were filed therewith:
WONDERWIDE CONSULTANTS LIMITED AND SUBSIDIARIES
Independent Auditors Report
Audited consolidated balance sheets
as of December 31, 1997 and 1996
Audited Consolidated Statements of
Operations, Shareholder's Equity and
Cash Flows for each of the three
years in the period ended December
31, 1997
Notes to Financial Statements
23
<PAGE> 46
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
JENSON INTERNATIONAL, INC.
May 27, 1999 By: /s/ C.M. Cheng
-------------------------------------
C.M. Cheng,
Chairman (Chief Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report on Form 10-KSB has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ C.M. Cheng Director and Chairman May 27, 1999
- -------------------------------------
/s/ Pingbo Xiong Director and Secretary May 27, 1999
- -------------------------------------
Director May __, 1999
- -------------------------------------
</TABLE>
24
<PAGE> 47
Exhibit Index
<TABLE>
<CAPTION>
Exhibit No. Description Method of Filing
----------- ----------- ----------------
<S> <C> <C>
2.1 Agreement and Plan of Incorporated by reference to the
Reorganization, dated March 31, Current Report on Form 8-K, dated
1997 March 31, 1997.
3.1 Articles of Incorporation of
Chatham Energy Corporation Incorporated by reference to
registration statement on Form S-18
of Chatham Energy Corporation, File
No. 2-75288-NY
3.2 Articles of Amendment of Chatham Incorporated by reference to Exhibit
Energy Corporation (changing the 3.2 to Form 10-KSB for fiscal year
name to World Technologies and ended October 31, 1991
Trading Company)
3.3 Articles of Amendment of World Incorporated by reference to Exhibit
Technologies and Trading Company 3.3 to Form 10-KSB for fiscal year
(changing name to Gaensel Gold ended October 31, 1991.
Mines, Inc.)
3.4 By-laws of the Company adopted Incorporated by reference to Exhibit
August 31, 1993 3.4 to Form 10-KSB for fiscal year
ended October 31, 1991.
4.1 Specimen, Common Stock certificate Incorporated by reference to
of the Company Exhibit of the Company 4.1 to Form
10-KSB for fiscal year ended
October 31, 1991.
4.2 Board Resolutions describing the Incorporated by reference to the
Advisor Compensation Plan Company's Registration Statement on
Form F S-8, File No. 333-45035.
10.1 1993 Employee Stock Compensation Incorporated by reference to Exhibit
Plan of the Company 10.1 to Form F 10-KSB for fiscal year
ended October 31, 1991.
10.2 1993 Incentive Stock Option Plan of Incorporated by reference to Exhibit
the Company 10.2 to Form F 10-KSB for fiscal year
ended October 31, 1991.
10.3 1993 Non-Statutory Stock Option Incorporated by reference to Exhibit
Plan of the Company 10.3 to Form F 10-KSB for fiscal year
ended October 31, 1991.
10.4 Contract between Hin Sun Holding Filed herewith
Nan Hai Development Company and
King Yuen Investment & Development
Ltd., dated November 28, 1994
10.5 Contract among Hing Sun Group Filed herewith
Hainan Development Co., King Yuen
Investment & Development Ltd. and
Malee Consultants, dated May 13,
1998
10.6 Contract between Guangzhou Ocean Filed herewith
Life Limited and King Yuen
Investment & Development Ltd.,
dated June 2, 1998
10.7 Contract between Yellowhead Inn and Filed herewith
Jenson International Travel
Services Limited, effective
January 1, 1999
10.8 Contract among Malee Consultants Filed herewith
Limited, Lite Charter (China)
Limited, King Yuen Investment &
Development Limited and another
party, effective January 1, 1999
10.9 Contract among Cheng Chao Ming, Filed herewith
Ching Kwok Leung, Jenson
International Travel Services
Limited and Wonderwide Consultants
Limited, dated January 1, 1999
10.10 Contract between King Sun Trading Filed herewith
(PTE) Limited and Jenson
International Travel Services
Limited, dated February 1, 1999
10.11 Contract between Jenda Enterprise Filed herewith
Company Limited and Jenson
International Travel Services
Limited, dated February 1, 1999
10.12 Contract between Jenson International Filed herewith
Travel Services Limited and Foreign
Enterprise Service Corporation,
dated, February 1, 1999
10.13 Contract between Lite Charter (China) Filed herewith
Limited and Cheng Chao Ming, dated
February 1, 1999
10.14 Contract between Beijing City Hotel Filed herewith
Company Limited and Jenson
International Travel Services
Limited, dated February 1, 1999
10.15 Contract between Foreign Enterprise Filed herewith
Service Corporation and Qin Dynasty
Hotel (Xian) Limited, dated
February 1, 1999
10.16 Contract between Beijing City Hotel Filed herewith
Company Limited and Qin Dynasty
Hotel (Xian) Limited, dated
February 1, 1999
10.17 Contract among Guangzhou Universal Filed herewith
Ocean Biological Corporation, Malee
Consultants Limited and Lite Charter
(China) Limited, dated February 1,
1999
10.18 Contract between Wonderwide Filed herewith
Consultants Limited and King Pacific
International Holdings Limited,
dated May 7, 1999
10.19 Investment Agreement between the Incorporated by
Company and Mr. C.M. Cheng, dated reference to the
May 18, 1999 Company's Current
Report on Form 8-K/A
(Amendment No. 1)
dated March 16, 1998
16.1 Letter from Cordovano & Co. Incorporated by reference to the
Company's Current Report on Form 8-K,
dated January 20, 1998.
21 Subsidiaries of the Registrant Filed herewith
27 Financial Data Statements
</TABLE>
<PAGE> 1
Exhibit 10.4
ITEMS RELATED TO "THE CULTURAL CITY OF CHINESE BUDDHISM
FAMEN TEMPLE SHANNXI"
PARTY A: Hin Sun Holding Nan Hai Development Company
REGISTERED ADDRESS: No. 110 Hai Sau Road, Hainan Province of China
Hai Hsu City
Sun Star Hotel
PARTY B: King Yuen Investment & Development Ltd.
REGISTERED ADDRESS: Room 1008-9 Shun Tak Centre West
No. 168-200 Connaught Road Centre
In order to develop the culture of Chinese Buddism, Famen Temple History culture
and Buddhist culture resource, Both Parties A and B sign the agreement of "The
Cultural City of Chinese Buddhism Famen Temple Shannxi."
1. Content of consultancy service
With its experience in investment in China and construction, extensive
social internal and overseas network, strong social influence and sound
financial and technical base, it has provided the consultancy service
of the investment and construction of "The Cultural City of Chinese
Buddhism Famen Temple Shannxi" to Party A. The services include the
overall planning of "The Cultural City of Chinese Buddhism Famen Temple
Shannxi," suggestion given to construction, assessment of the
feasibility of this project, arrangement of the seminar concerning
about the progress of the project in Xian Chun Duo Hotel and to
promote, raise share capital and donate to the "The Cultural City of
Chinese Buddhism Famen Temple Shannxi."
2. The description of consultancy service planning
i. 1995
- assist Party A to plan, organize the international academic
seminar of "The Cultural City of Chinese Buddhism Famen"
- prepare academic report for Party A to participate The 4th
Chinese Religious Association
- complete other works which are authorised by Party A
ii. 1996
- arrange the annual meeting of Chinese Religious Association
- arrange international Buddhist to examine the environment of
Famen Temple
<PAGE> 2
- encourage to develop Famen Temple cultural resource's discount
policy
- edit "Agreement on construction of the Cultural City of
Chinese Buddhism Famen Temple"
- edit "The feasibility report of The Cultural City of Chinese
Buddhism Famen Temple Shannxi"
- complete others which are authorized by Party A
iii. 1997
- organise the handover of Hong Kong
- organise the monks to prepare the solemn ceremonies for the
disaster in Hong Kong and Taiwan
- organise the solemn ceremonies in South East Asia
- complete others which are authorised by Party A
iv. 1998
- recommend outsiders to establish and register the joint
venture
- prepare to establish the fund for "The Cultural City of
Chinese Buddhism Famen Temple Shannxi"
- establish the relationship with the Buddhism in Hong Kong,
Macau and Taiwan
- search, plan and design the item of "Chinese Buddhism City"
- recommend the Investment fund to invest
- complete the works authorized by Party A
v. 1999
- promote, raising share capital and donate for "Chinese
Buddhism City"
- complete other work of Party A
A. Period of the consultancy service
Since January 1995, Party B provide consultancy service fee to Party A
for the investment of "The Cultural City of Chinese Buddhism Famen
Temple Shannxi."
<PAGE> 3
Party B will provide the service for 5 years to Party A. Both parties A
and C will sign the extension of the agreement 3 months before the
termination of this agreement. If Party A terminate the agreement due
to the dissatisfaction of the services provided by Party C, Party A
should notify Party B three months before.
C. Consultancy Service Fee
Party A pay the consultancy fee as follow:
1. RMB Two million and four hundred thousand in 1995
2. RMB Two million and four hundred thousand in 1996
3. RMB Four million and two hundred thousand in 1997
4. RMB Four million and two hundred thousand in 1998
5. RMB Four million and two hundred thousand in 1999
D. Payment of consultancy service fee and Payment time
Party A should pay consultancy service fee to Party B twice a year,
namely 31st June and 31st December.
E. Breach the contract
The responsibility of Party A to breach the agreement.
If Party A doesn't pay the consultancy fee in accordance with Clause 5
to Party B, Party A should pay 3% on consultancy service fee to Party B
after one month overdue.
The responsibility of Party B to breach the agreement.
If Party B doesn't execute the term of agreement, Party B should refund
the consultancy service fee and at the same time Party B should also
pay 3% of consultancy service fee to Party A.
F. Agreement on argument
In case of the argument arised, Party A and B should agree with each
other. If the argument doesn't solve, the argument should pass to China
International Economic Trade Committee to solve.
G. Other
If Party B recruit international well-known consultancy company to
complete the service, it should notify Party A and recognize by Party
A.
This contract will have 4 copies, each of the above parties receive 2
copies.
<PAGE> 4
Party A:
Party B: King Yuen Investment & Development Ltd.
November 28, 1994
<PAGE> 1
Exhibit 10.5
CONSULTING CONTRACT OF THE CULTURAL CITY OF CHINESE BUDDHISM
PARTY A: Hing Sun Group Hainan Development Co.
REGISTERED ADDRESS: Hainan, PRC
PARTY B: King Yuen Investment & Development Ltd.
REGISTERED ADDRESS: Room 1008-9 Shun Tak Centre West
No. 168-200 Connaught Road Centre
PARTY C: Malee Consultants
LEGAL ADDRESS: P.O. Box 71, Carigmar Chambers, Road Town,
Tortola, British Virgin Islands
CORRESPONDING ADDRESS: Room 1008-0 Shun Tak Centre West
No 168-200 Connaught Road Centre
Both Party A & B signed the consultancy service contract about "The Cultural
City of Chinese Buddhism on 28th December, 1994. Party B has many years of
experience on establishing and investment in China, it also has broad social
network and business connections within and outside China. Part A has prepared
some preparation work for Party B.
With the consents from Part A and Party C, Part B recommend Party C to take over
the consulting contract from Party B. It is mutually agreed among Part A, B and
C that Part C will take over the consulting work as stipulated in the consulting
contract ("Original Contract") previously signed between Party A and Party B.
The Original Contract will become void from the date of this agreement and Part
C shall complete all the outstanding work of the Original Contract and be
responsible for any expenses incurred by Party B during the initial stage of the
project.
A. Summary of the consulting services plan:
1. 1997
- responsible for the invitation of monks to Fa Mun Temple,
- organise ceremony for the celebration of the Buddhism's Day,
- invite the director of Hyundai Group in South Korea to visit
the Fa Mun Temple,
- plan and organise the Buddhism seminars to be held in Xian,
- organise worship tours to Fa Mun Temple for the celebration of
the handover of Hong Kong,
- organise Buddhism ceremonies in Fa Mun Temple for the
disasters in Hong Kong and Taiwan,
- organise worship tours to Fa Mun Temple from South East Asia
- other related consultancy work as requested by Party A
-1-
<PAGE> 2
2. 1998
- recommend outsiders to establish and register a joint venture
- prepare to establish the fund for "The Cultural City of
Chinese Buddhism Famen Temple Shannxi"
- establish the relationship with the Buddhism in Hong Kong,
Macau and Taiwan
- search, plan and design the item of "Chinese Buddhism City"
- recommend the Investment fund to invest
- other related consultancy work as requested by Party A
3. 1999
- promote the "Chinese Buddhism City", fund raising and ask for
donation for "Chinese Buddhism City"
- other related consultancy work as requested by Party A
B. Period of the consultancy service
Since January 1997, Party C provide consulting service to Party A for
the investment of "The Cultural City of Chinese Buddhism"
Party C will provide the service for 3 years. Both parties A and C will
sign the extension of the agreement 3 months before the termination of
this agreement. If Party A terminate the agreement due to the
dissatisfaction of the services provided by Party C, Party A (client
missed nothing).
C. Consultancy Service Fee
Party A pay the consultancy fee to Party C as follow:
1. RMB 9,000,000 in 1997
2. RMB 4,200,000 in 1998
3. RMB 4,200,000 in 1999
D. Breach of the contract
The responsibility of Party A to breach the agreement
If Party A doesn't pay the consultancy fee in accordance with Clause 3,
Party C should pay 3% on consultancy service fee to Party B for each
month overdue.
The responsibility of Party C to breach the agreement
If Party C doesn't execute the term of agreement, Party B should refund
the consulting service fee and at the same time Party B should pay 3%
of consultancy service fee to Party A.
-2-
<PAGE> 3
E. Agreement on argument
In case of the argument arised, Party A and B should agree with each
other. If the argument doesn't solve, the argument should pass to China
International Economic Trade Committee to solve.
F. Other
If Party C recruit international well-known consultancy company to
complete the other service. Party C should notify Party A and agreed by
Party A.
This contract will have 6 copies, each of the above party receive 2
copies.
-3-
<PAGE> 4
Party A : Hing Sun Group Hainan Development Co.
Party B : King Yuen Investment & Development Ltd.
Party C : Malee Consultants Limited
May 13, 1998
-4-
<PAGE> 1
Exhibit 10.6
ABOUT "XIAN OCEAN PARK" CONSULTANT CONTRACT
Party A: "Guangzhou Ocean Life Limited"
Address: Guanzhou.......
Party B: King Yuen Investment Development Limited
Address: 1008 Shen-Tak Centre West 168-200 Connaught Road
"Xian Ocean Park" is one of the major tourism development project in Xian city,
Shanxi Province. The development objective is attracting advance technology,
facilities, management skill and providing public with knowledge about Ocean
Life so as to obtain economic and social efficiency.
To ensure the achievement of the project, a "Xian Ocean Park" consultant
agreement is signed by party A and B.
1. Consultancy services content
Party B has many years' experience in the investment and construction in the
Mainland China and has extensive social network overseas. It is powerful
technically and economically. It will provide consulting services related to the
project according to party B's requirements. The services include advising on
the planning and construction proposal of "Xian Ocean Park", preparing
possibility study and arguments. arranging progress meetings at a hotel in Xian
city, and promoting, financing the "Xian Ocean Park" both in the Mainland China
and overseas.
2. Term of service
Starting from January 1996, Party B provided consultancy services to Party A.
The term of service is five years. Both parties will signed an extension
agreement three months before the termination of this agreement. If party A want
to terminate this consultant contract due to the dissatisfaction of party B's
service, a three month notice is required.
3. Service fee
Party A should pay party B the consulting service fee according to the schedule
as follows:
<TABLE>
<S> <C>
1996 RMB 2.88 M
1997 RMB 3.60 M
1998 RMB 3.60 M
1999 RMB 4.32 M
2000 RMB 4.32 M
</TABLE>
<PAGE> 2
4. Payment schedule
The above service fee will be paid in two equal installments every year. That is
every June 31 and December 31.
5. Default
Party A:
If party A does not pay the service fee to party B according to the schedule,
additional penalty charge of 3% of the balance payable is required every one
month overdue.
Party B:
If party B does not complete part of the task according to the commitment, it
must repay the related consulting fee with 3% additional penalty charge to party
A.
6. Arbitrage
If solution cannot be reached on arguments of this agreement, arbitrage should
be submitted to the China International Economic Trade Arbitrage Committee.
Except the part under arbitrage, the rest of the agreement should continued to
execute.
7. Other
If party B need to employ other international consulting company for some
services, previous notification and approval from party A is required.
This agreement has four copies, both parties keep two copies.
Party A: Guangzhou Ocean Life Limited
Party B: King Yuen Investment Development Limited
Date: December 8, 1995
<PAGE> 3
ABOUT "XIAN OCEAN PARK" CONSULTANT CONTRACT
Party A: Guangzhou Ocean Life Limited
Address: Guanzhou, PRC
Party B: Malee Consultants Limited
Address: P.O. Box 71, Craigmair Chambers, Road Town, Tortola, BVI
Correspondence address: 1008 Shen Tak Centre West 168-200 Connaught Road
"Xian Ocean Park" is one of the major tourism development project in Xian city,
Shanxi Province. The development objective is attracting advance technology,
facilities, management skill and providing public with knowledge about Ocean
Life so as to obtain economic and social efficiency.
To ensure the achievement of the project, a "Xian Ocean Park" consultant
agreement is signed by party A and B.
1. Consultancy services content
Party B has many years' experience in the investment and construction in the
Mainland China and has extensive social network overseas. It is powerful
technically and economically. It will provide consulting services related to the
project according to party B's requirements. The services include advising on
the planning and construction proposal of "Xian Ocean Park", arrange feasibility
study and arguments to be made, arranging progress meetings at a hotel in Xian
city, and promoting , financing the "Xian Ocean Park" both in the Mainland China
and overseas.
2. Term of service
Starting from January 1997, Party B provided consultancy services to Party A.
The term of service is four years. Both parties will signed an extension
agreement three months before the termination of this agreement. If party A want
to terminate this consultant contract due to the dissatisfaction of party B's
service, a three month notice is required,
3. Service fee
Party A should pay party B the consulting service fee according to the schedule
as follows:
<TABLE>
<S> <C>
1997 RMB 6.48 M
1998 RMB 3.60 M
1999 RMH 4.32 M
2000 RMIR 4.32 M
</TABLE>
<PAGE> 4
4. Default
Party A:
If party A does not pay the service fee to party B according to the schedule,
additional penalty charge of 3% of the balance payable is required every one
month overdue.
Party B:
If party B does not complete part of the task according to the commitment, it
must repay the related consulting fee with 3% additional penalty charge to party
A,
5. Arbitrage
If solution cannot be reached on arguments of this agreement, arbitrage should
be submitted to the China International Economic Trade Arbitrage Committee.
Except the part under arbitrage, the rest of the agreement should continued to
execute.
6. Other
If party B need to employ other international consulting company for some
services, previous notification and approval from party A is required.
This agreement has four copies, both parties keep two copies.
Party A: Guangzhou Ocean Life Limited
Signature
Party B: Malee Consultants Ltd
Signature
Date: Jun 2, 1998
<PAGE> 1
Exhibit 10.7
(Canada and HK)
THIS AGREEMENT is made the ______ day of ______________ 1999
BETWEEN
(1) Yellowhead Inn of 1445W, Central Street, Prince George, B.C., V2M 5S5,
Canada ("Party A") of the one part; and
(2) Jenson International Travel Services Limited, a limited company
incorporated in Hong Kong whose registered office is situate at Flats A
and B, 12th Floor, Gold Union Commercial Building, No. 71 Connaught
Road Central, Hong Kong ("Party B") of the other part.
WHEREAS:
(1) Party A is running a tourist business in Canada and is operating
several trips for Xian in the People's Republic of China via Hong
Kong/Hong Kong and Macau ("the Trips"). Details of the Trips and the
prices therefor ("the Prices") (subject to seasonal fluctuation) are
contained in the several brochures ("the Brochures") which are annexed
hereto.
(2) Party A is desirous of sub-contracting out those stages of the Trips to
be operated in Hong Kong/Hong Kong and Macau ("the Hong Kong Stages")
and in China ("the China Stages") in the manners hereinafter
stipulated.
NOW THEREFORE IT IS MUTUALLY AGREED:
1. Party A shall refer/assign all its customers for the Trips ("the
Customers") to Party B (and to Party B only) as its exclusive sub-contractor for
the operation of the Hong Kong Stages of the Trips consisting of (1) the
reception of the Customers from Canada in the Hong Kong airport up to the
departure of the Customers in the Hong Kong airport to Xian and (2) the
reception of the Customers back from Xian in the Hong Kong airport up to the
departure of the
1
<PAGE> 2
Customers in the Hong Kong airport back to Canada. Party B agrees to act as such
exclusive sub-contractor and to take up the operation of the Hong Kong Stages of
the Trips in the manners hereinafter stipulated.
2. Party A shall be responsible for purchasing the round trip tickets for
the whole of the Trips for the Customers and shall ensure that each of the
Customers shall hold a set of valid round trip ticket before departure from
Canada.
3. Party A shall also be responsible for purchasing the round trip
insurance coverage for the whole of the Trips for each of the Customers and
shall ensure that each of the Customers shall hold a valid coverage of such
insurance before departure from Canada.
4. Party B shall be responsible for all the costs and expenses within the
ambit of the operation of the Hong Kong Stages of the Trips in the manners
hereinafter stipulated and in accordance with the Brochures, except the costs of
all the air-tickets and insurance coverage for the whole of the Trips, which are
the responsibilities of Party A. For avoidance of doubt, all costs and expenses
incurred outside the ambit of the operation of the Hong Kong Stages and the
China Stages of the Trips are the responsibility of Party A.
5. In operating the Hong Kong Stages of the Trips, Party B shall ensure
that the routes, the activities, the accommodations, the transportations (except
the airway parts which are the responsibility of Party A), the guide-services
and every other aspects of and incidental to the Hong Kong Stages of the Trips
are operated in strict adherence to and compliance with those modes, qualities
and standards as specified in the Brochures.
6. In operating the Hong Kong Stages of the Trips, Party B shall, when
receiving, entertaining and guiding the Customers, ensure that such trip names
and/or marks, signs or logos as specified in the Brochures shall be clearly,
distinctively and visibly exhibited, erected, posted up or hanged up so as to
allow the Customers to easily identify the same as the Trips for which they are
joining.
2
<PAGE> 3
7. In order to perform its duties in operating the Hong Kong Stages of the
Trips, Party B shall, upon receiving notice from Party A that any of the Trips
is about to commence, make without delay all preliminary arrangements and
checkings such as accommodation bookings, transportation bookings (except the
airway parts which are the responsibility of Party A), sight-seeings
availability and guide-services recruiting etc. so as to ensure that the Hong
Kong Stages of the Trips can be properly and smoothly operated. In case any
problem is encountered or foreseen by Party B, it shall immediately inform Party
A of the same so as to allow Party A of sufficient time to consider the
cancellation of the Trips. Party A undertake to give sufficient prior notice to
Party B of the commencement of any of the Trips so as to allow Party B of
sufficient time to make such preliminary arrangements and checkings.
8. In case any complaint by the Customers is made to Party B or any
problem is encountered by Party B during the operation of the Hong Kong Stages
of the Trips, Party B shall inform Party A of the same immediately and shall try
its best to resolve such complaint or problem promptly and fairly. In operating
the Hong Kong Stages of the Trips, Party B shall be personally liable for and
shall keep Party A indemnified against any claims by the Customers arising from
any breach of or deviation from or non-fulfillment of those modes, qualities or
standards in respect of the Hong Kong Stages of the Trips as specified in the
Brochures PROVIDED that any defense or exclusion or limitation factor available
under the terms and conditions for the provision of the Trips which are
available to Party A to meet such claims shall also be available to Party B in
operating the Hong Kong Stages of the Trips.
9. Party B shall not without the consent in writing of Party A pledge or
engage the credit of Party A or enter into or purport to enter into any contract
on behalf of Party A.
10. Party B shall not without the consent in writing of Party A disclose to
the Customers its name as the sub-contractor or operator of the Hong Kong Stages
of the Trips and shall ensure that such trip names and/or marks, signs or logos
as specified in the Brochures shall throughout the Hong Kong Stages of the Trips
be used as the identifiers for the Trips to the Customers only.
3
<PAGE> 4
11. In consideration of the services to be provided by Party B in the
operation of the Hong Kong Stages of the Trips, Party B shall be entitled to
receive from Party A a remuneration equal to 25% of the Prices paid by the
Customers for the Trips. Such remuneration shall be paid by Party A to Party B
before the commencement of the Trips. In case there is any subsequent
fluctuation in the Prices, the actual amounts to be received by Party B shall
fluctuate accordingly PROVIDED that if there is any reduction in the Prices
without the prior consent of Party B, Party B shall be entitled to refuse to
take up those Trips at the reduced Prices.
12. Party A undertakes that it shall receive the full amounts of the Prices
from the Customers before any of the Trips shall commence.
13. Party A hereby further appoints Party B as its agent for the purposes
of finding suitable operator in China for the operation of the China Stages of
the Trips. Party B hereby accepts the appointment to act as such agent.
14. In acting as such agent, Party B shall do the followings on behalf of
Party A:
(a) to find suitable operator in China ("the China Operator") to
operate the China Stages of the Trips from the reception of
the Customers from Hong Kong in the Xian airport until the
departure of the Customers in the Xian airport back to Hong
Kong;
(b) to sign the sub-contracting agreement for the operation of the
China Stages of the Trips with the China Operator;
(c) to liaise with the China Operator and Party A regarding any
matters arising on the operations of the China Stages of the
Trips.
PROVIDED that Party B shall do the above-mentioned matters in its own name to
the intent that Party B shall act as an undisclosed agent of Party A. Party A
undertake to indemnify Party B
4
<PAGE> 5
against any loss, damages or liability whatsoever that may be incurred or
suffered by Party B by virtue of acting as such undisclosed agent of the Party
A.
15. Party B shall not be responsible or liable for anything which shall
happen within the ambit of the operation of the China Stages of the Trips by the
China Operator PROVIDED that in concluding any sub-contracting agreement with
the China Operator, Party B shall ensure that such sub-contracting agreement
shall contain such terms as similar to the terms in this Agreement to the intent
that the China Operator in operating the China Stages of the Trips shall perform
the similar duties and have the similar rights as Party B in operating the Hong
Kong Stages of the Trips shall perform/have and that the remuneration to the
China Operator shall be fixed at 35% of the Prices (subject to the same
fluctuating provision as contained in clause 11 above). The 35% remuneration
payable to the China Operator shall be forwarded by Party A to Party B before
the commencement of the Trips.
16. In consideration of Party B accepting the appointment as the
undisclosed agent of Party A and performing the agency works as mentioned in
clause 14 above, Party B shall be entitled to receive from Party A a
remuneration equal to 5% of the Price. Such remuneration shall be paid by Party
A to Party B before the commencement of the Trips and shall be subject to the
same fluctuation provision as contained in clause 11 above.
17. This Agreement shall commence on the date hereof and shall continue in
force thereafter until terminated:
(a) By either party giving not less than 3 months' written notice
of termination to the other; or
(b) Forthwith by either party giving written notice to the other
party in any of the following events:
(i) if a distress or execution is levied against any of
the property of the other party and is not paid out
within 14 days; or
5
<PAGE> 6
(ii) if the other party ceases to carry on its business or
substantially the whole of its business; or
(iii) if the other party announces that it is intending to
cease, or considering ceasing to carry on its
business or substantially the whole of its business;
or
(iv) if an encumbrancer takes possession, or a receiver is
appointed of any party of the assets of the other
party.
18. The termination of this Agreement under the preceding clause shall not
prejudice any rights of either party in existence prior to the effective date of
termination. In the event of a termination under sub-clause (a) above the
termination shall not apply in relation to the Trips which have commenced prior
to the effective date of termination and the rights and obligations of each
party under this Agreement in respect of such trips shall survive the
termination and be enforceable notwithstanding such termination. In the event of
a termination under sub-clause (b) above such provision shall apply in relation
to the Trips commenced prior to the effective date of termination as the party
terminating this Agreement shall stipulate as being most appropriate for giving
effect to the substance of this Agreement and the interests of the Customers in
the circumstances which have arisen.
19. Any notice given hereunder by either party to the other may be sent by
facsimile transmission or prepaid recorded delivery post to the party's address
given above in which event it shall be deemed to have been received within 2
working days after the date of posting. Any notice given by facsimile shall be
deemed immediately received upon confirmation of completion of such
transmission.
20. This Agreement shall supersede any and all previous agreements or
arrangements between the parties hereto.
6
<PAGE> 7
21. This Agreement shall take effect on 1st January 1999 and shall be
deemed made on that day.
22. This Agreement shall be interpreted and governed by the English laws
and the parties hereto submit to the non-exclusive jurisdictions of the English
courts.
7
<PAGE> 8
SIGNED by ADRIAN LOH ) For and on behalf of
)
for and on behalf of Party A ) YELLOWHEAD INN
)
in the presence of : ) ---------------------------------------
Authorized Signature
SIGNED by CHENG CHAO MING ) For and on behalf of
)
for and on behalf of Party B ) JENSON INTERNATIONAL TRAVEL SERVICE LTD.
)
in the presence of : ) --------------------------------------
Authorized Signature
8
<PAGE> 1
EXHIBIT 10.8
THIS AGREEMENT is made the _____ day of _______________, 1999
BETWEEN
(1) __________________________________ of ________________________________
__________________________________ ("Party A") of the first part;
(2) Malee Consultants Limited, a limited company incorporated in the
British Virgin Islands and having a place of business in Hong Kong at
Room 1006, West Tower, Shun Tak Centre, 168-200 Connaught Road Central,
Hong Kong ("Party B") of the second part;
(3) Lite Charter (China) Limited, a company incorporated in Hong Kong whose
registered office is situate at Block A2, 8th Floor, Yip Fung
Industrial Building, 28-36 Kwai Fung Crescent, Kwai Chung, New
Territories, Hong Kong ("Party C") of the third part; and
(4) King Yuen Investment & Development Limited (____________________), a
limited company incorporated in Hong Kong whose registered office is
situate at Room 1008-9, West Tower, Shun Tak Centre, 168-200 Connaught
Road Central, Hong Kong ("Party D") of the fourth part.
WHEREAS:
(1) Party A and Party D have signed a Chinese agreement on 28th November
1994 under which Party D was to provide extensive consultancy services
("the Services") to Party A over a period of 5 years with a view to
facilitating the implementation of a project ("the Project")
contemplated by Party A to establish a Chinese Buddhist cultural city
("the City") in Shaanxi Province, the Peoples Republic of China.
(2) By a written Chinese agreement dated 13th May 1998 and signed by Party
A, Party B and Party D ("the Agreement"), it was agreed between Party
A, Party B and Party D that Party B should take up the then remaining
parts of the Services on such terms and conditions as stated therein.
Those remaining parts of the Services are itemized in the First and
Second Schedules hereto and the fees for each of the items ("the
Items") of
<PAGE> 2
those remaining parts of the Services are set out in the First and
Second Schedules hereto against each of the specific items.
(3) Party B has performed those items of the Items as listed in the First
Schedule hereto ("the Performed Services") leaving those items of the
Items as listed in the Second Schedule hereto ("the Unperformed
Services") to be performed in accordance with the Agreement.
(4) With Party A's consent, Party B intends to assign the Unperformed
Services to Party C for its performance in accordance with the
Agreement.
(5) Party B and Party D are willing to act as the guarantors of the
performance of the Unperformed Services by Party C in accordance with
the Agreement.
NOW THEREFORE IT IS MUTUALLY AGREED:
1. Party B hereby assigns to Party C the Unperformed Services to be performed by
Party C at the same fees and on the same terms and conditions as specified in
the Agreement. Party C hereby agrees with Party A and Party B to take up the
performance of the Unperformed Services at the same fees and on the same terms
and conditions as specified in the Agreement.
2. Party A agrees to the assignment of the Unperformed Services from Party B to
Party C as mentioned in the preceding clause to the intent that Party C shall
have the same rights and duties under the Agreement as Party B in the
performance of the Unperformed Services.
3. Party B and Party D warrant that Party C is competent and in possession of
the necessary skill, knowledge, relationships, expertise and ability to take up
the performance of the Unperformed Services in accordance with the Agreement
without any form of assistance, financial or otherwise, from any party including
Party B and Party D. Party B and Party D hereby further jointly and severally
guarantee to Party A that Party C shall perform the Unperformed Services in
strict adherence to and accordance with the Agreement. In case Party C shall
fail to do so and thereby causing any lose or damages to Party A, Party B and
Party D shall jointly and severally indemnify Party A against the same PROVIDED
that no such guarantee or indemnity shall be available to Party A unless and
until, as against Party B, it shall have finally
2
<PAGE> 3
been ascertained from the liquidator of Party C in liquidation the
amount(s)/percentage of dividends receivable by party A, and the extent of such
guarantee and indemnity by Party B shall be the amount of such deficiency
between Party A's claims and the dividends receivable from the liquidator of
Party C, and, as against Party D, it shall have finally been ascertained from
the liquidator of Party B in liquidation the amount(s)/percentage of dividends
receivable by party A, and the extent of such guarantee and indemnity by Party D
shall be the amount of such deficiency between Party A's claims and the
dividends receivable from the liquidators of Party C and Party B.
4. Party C shall not be liable for any disputes or claims in respect of or
arising from the performance of the Performed Services. Any such disputes or
claims shall be resolved or made between Party A and Party B in accordance with
the Agreement and shall not in any event affect the rights and duties between
Party A and Party C in respect of the Unperformed Services.
5. For avoidance of doubt, in case any item of the Performed Services is only
partially performed or defectively performed, Party C shall not be responsible
for the same nor for the completion or making good of the same and clause 4
above shall apply in such circumstances PROVIDED that Party A may request and
Party C may undertake for the completion or making good of the same at such
terms and conditions as by mutual consent.
6. In performing the items of the Unperformed Services, Party C shall adhere to
the scheduled progress as provided in the Agreement PROVIDED that if any such
progress is hindered or delayed by reason only of any such matters as mentioned
in clause 5 above, Party C shall not be liable for any such delay. Any claims on
such delay shall be made between Party A and Party B only.
7. It is hereby declared that no money or property was paid or given or received
by any parties hereto for the entering of this Agreement.
8. It is hereby further declared that the ambit of the Services is of
preliminary consultancy and organization nature only with a view to lay down a
preliminary foundation for the implementation of the Project and does not (nor
shall the Items so construed) including any work involving the actual
implementation of the Project nor the actual establishment of the City
3
<PAGE> 4
(including, but not limited to, any site formation work;
building/premises/structure construction work; machine/facility
installation/assembling work; supervision thereof; etc.).
9. This Agreement shall take effect on 1st January 1999 and shall be deemed made
on that day.
10. This Agreement shall be interpreted and governed by the English laws and the
parties hereto submit to the non-exclusive jurisdictions of the English courts.
FIRST SCHEDULE
(The Performed Services)
See Appendix A
SECOND SCHEDULE
(The Unperformed Services)
See Appendix B
4
<PAGE> 5
SIGNED by ZHANG LIN )
)
for and on behalf of Party A )
)
in the presence of: )
SIGNED by CHENG CHAO MING ) FOR AND ON BEHALF OF
) MALEE CONSULTANTS LIMITED
for and on behalf of Party B )
)
---------------------------------
in the presence of: ) Authorized Signature(s)
SIGNED by SIT HIK LEUNG ) FOR AND ON BEHALF OF
) LITE CHARTER (CHINA) LIMITED
for and on behalf of Party C )
)
---------------------------------
in the presence of: ) Authorized Signature(s)
SIGNED by XIONG PING PO ) FOR AND ON BEHALF OF
) KING YUEN INVESTMENT &
) DEVELOPMENT LTD.
for and on behalf of Party D )
)
---------------------------------
in the presence of: ) Authorized Signature(s)
5
<PAGE> 1
Exhibit 10.9
THIS SALE AND PURCHASE AGREEMENT is made 1st day of January 1999
BETWEEN
(1) CHENG CHAO MING and CHING KWOK LEUNG both of Room 1008-9 Shun Tak
Centre, West Tower, 168-200, Connaught Road Central, Hong Kong ("the
Vendor");
(2) JENSON INTERNATIONAL TRAVEL SERVICES LIMITED whose registered office is
situate at 12/F Flats A & B, Gold Union Commercial Building, 71
Connaught Road Central, Hong Kong ("the Company") and
(3) WONDERWIDE CONSULTANTS LIMITED, a company incorporated in British
Virgin Islands ("the Purchaser").
WHEREAS
(1) The Company is a company limited by shares incorporated in Hong Kong,
with 100,000 ordinary shares of HK$10.00 each at par issued. Mr. Cheng
Chao Ming holds 75,000 shares and Mr. Ching Kwok Leung holds 25,000
shares.
(2) Mr. Cheng and Mr. Ching (collectively "the Vendor") agreed to sell
their respective share of the Company to the Purchaser, and the
Purchaser agrees to purchase the same on the following terms and
conditions.
IT IS HEREBY AGREED that:
1. INTERPRETATION
1.1 (a) "The parties" means all of the parties to this Agreement.
<PAGE> 2
(b) "Warranties" means the representations, warranties and
undertakings on the part of the Vendor set out in the Schedule
hereto.
1.2 A document expressed to be "in the agreed form" means a document the
terms of which have been approved by or on behalf of each of the
parties thereto and a copy of which has been signed for the purposes of
identification by or on behalf of which have been approved by or on
behalf of each of the parties thereto and a copy of which has been
signed for the purposes of identification by or on behalf of each of
them.
1.3 References to Clauses and Schedules relate to this Agreement unless
otherwise stated.
1.4 Words importing the singular number shall include the plural number and
vice versa and words importing a gender shall include every gender.
1.5 Headings of Clauses are for reference only and shall be ignored in
construing this Agreement.
2. SALE AND PURCHASE OF SHARES
2.1 Subject to and on the terms and conditions set out in this Agreement,
the Vendor shall sell and the Purchaser shall purchase 100,000 shares
of HK$10.00 each (collectively called "the Sale Shares") free from all
charges, liens, encumbrances, equities, claims and other third party
rights whatsoever and together with all benefits and rights attached or
accruing to them including but without limitation the right to receive
all dividends and distributions (if any).
2.2 The total consideration payable by the Purchaser to the Vendor for the
Sale Shares shall be HK$200,000.00 which shall be paid on completion.
2.3 Completion of the sale and purchase of the Sale Shares ("Completion")
shall take place upon signing of this Agreement by the parties.
2
<PAGE> 3
2.4 At Completion and against payment of BK$200,000.00 in manner in (b)
below:
(a) The Vendor shall jointly and severally deliver to the
Purchaser:
(i) all original and copies of documents and papers (if
any) now held by the Vendor jointly or severally in
relation to the business of the Company;
(ii) sold notes and Instruments of transfer in respect of
the Sale Shares duly executed by the Vendor
respectively in favour of the Purchaser and its
nominee together with the related share certificates;
(b) The Purchaser shall deliver cashier order or solicitors'
cheque for HK$200,000.00 payable to the Vendor or their
authorised recipient as they may direct in payment and full
discharge of the consideration for the Sale Shares.
2.5 All stamp duty (if any) payable in respect of the sale and purchase of
the Sale Shares shall be borne by the Purchaser solely.
3. WARRANTIES
3.1 The Vendor jointly and severally:
(a) represents, warrants and undertakes to Purchaser that each of
the Warranties will, save as disclosed to the Purchaser prior
to Completion, be true and accurate in all material respects
at Completion and is now and will at all times between the
date hereof and Completion be true and accurate in all
material respects;
(b) accepts that the Purchaser is entering into this Agreement in
reliance upon each of the Warranties; and
3
<PAGE> 4
(c) undertakes to indemnify the Purchaser against any losses,
costs, expenses, charges or liabilities which it may suffer or
incur arising out of or in connection with:
(i) any of the Warranties being untrue, misleading or
having been breached in a material respect;
(ii) the settlement of any claim that any of the
Warranties are untrue, misleading or have been
breached;
(iii) any legal proceedings in which the Purchaser claims
that any of the Warranties are untrue or misleading
or have been breached and in which judgment is given
for the Purchaser; or
(iv) the enforcement of any such settlement or judgment.
3.2 Without prejudice to any other remedy available to the Purchaser or its
ability to claim damages on any basis which is available to it by
reason of any of the Warranties being untrue or misleading or being
breached in a material respect, the Vendor jointly and severally
undertake with the Purchaser that the Vendor will, at the direction of
the Purchaser, pay to the Purchaser or (in the case of a liability to
another person which has not been discharged) the person to whom the
liability has been incurred an amount equal to any loss, deficiency or
liability of the Purchaser arising from any of the Warranties being
untrue, misleading or breached in a material respect and which would
not have existed or arisen if the Warranty in question had not been
untrue, misleading or breached in a material respect.
3.3 Each of the Warranties shall constitute a separate and independent
warranty to the intent that the Purchaser have a separate claim and
right of action in respect of every breach of any of the Warranties
(provided that the Purchaser not be entitled to recover more than once
in respect of the same loss) and save as expressly provided to the
contrary, no Warranty shall limit or govern the extent or application
of any other Warranty.
4
<PAGE> 5
4. LEGAL COSTS
4.1 Each party shall bear its own costs, charges and expenses connected
with the negotiation, preparation and implementation of this Agreement.
5. LAW AND JURISDICTION
5.1 This Agreement shall be governed by and construed in accordance with
Hong Kong law and each of the parties hereto irrevocably submit to the
non-exclusive jurisdiction of the Hong Kong courts in respect of any
claim or matter arising under this Agreement.
6. MISCELLANEOUS
6.1 Each of the parties:
(a) acknowledges and confirms that it has entered into this
Agreement in consideration of each of the other parties
entering into this Agreement; and
(b) agrees to do and execute or procure to be done and executed
all such further acts, deeds, documents and things as may be
necessary to give full effect to the terms and intent of this
Agreement.
6.2 Each notice, demand or other communication given or made under this
Agreement shall be in writing and delivered or sent to the relevant
party at its address set out above. Any notice, demand or other
communication so addressed to the relevant party shall be deemed to
have been delivered, when actually delivered to the relevant address.
6.3 No failure or delay by any party in exercising any right, power or
remedy under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of the same preclude any further
exercise thereof or the exercise of any other right, power or
5
<PAGE> 6
remedy. Without limiting the foregoing, no waiver by any party of any
breach of any provision hereof shall be deemed to be a waiver of any
subsequent breach of that or any other provision hereof. If at any time
any provision of this Agreement is or becomes illegal, invalid or
unenforceable in any respect, the legality, validity and enforceability
of the remaining provisions of this Agreement shall not be affected or
impaired thereby. The rights and remedies herein provided are
cumulative and not exclusive of any rights and remedies provided by
law.
6.4 This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which when
so executed and delivered shall be an original, but all the
counterparts shall together constitute one and the same instrument.
6.5 The Agreement shall be binding on the successors and assigns of the
parties.
As WITNESS whereof the parties hereto have caused this Agreement to be
executed on the date and year first above written.
6
<PAGE> 7
SIGNED by Cheng Chao Ming )
)
in the presence of: )
SIGNED BY Ching Kwok Leung )
in the presence of: )
SIGNED by CHENG CHAO MING )
for and on behalf of the Company )
in the presence of: )
SIGNED by CHENG CHAO MING )
for and on behalf of the Purchaser )
in the presence of: )
7
<PAGE> 8
THE SCHEDULE
The Warranties
The Vendor jointly and severally hereby represents and warrants to and covenants
and undertakes with the Purchaser that as at the date of this Agreement and as
at Completion:
1. Recitals
1.1 The facts stated in the recitals of this Agreement are and will on
Completion be in all respects true, accurate and complete.
2. Shareholding and Shares etc.
2.1 The Vendor are and will at Completion be the beneficial owner of the
Sale Shares.
2.2 The Sale Shares will not at Completion be subject to any claim, option,
charge, lien, encumbrance or equity and no person has any right to call
for the issue of any shares in the capital of the Company.
3. Accounts
3.1 Save as disclosed, the. Company has not outstanding any loan, loan
capital and any deposits which it has not repaid and has not granted
any loans or deposited any money, which has not been repaid; it has not
agreed to borrow or lend any such money; and the Company does not own
the benefit of any debt (whether present or future) other than debts
due to it and it is not a party to any factoring, discounting or other
arrangement with respect to passing the benefit of such debts to any
other person provided always that the foregoing shall not apply to any
transactions performed made or entered into in the ordinary course of
its business.
8
<PAGE> 9
3.2 The Company will, at Completion, be the owner of and will have good
title to all of the assets included in the Accounts given to the
Purchaser and no such assets will, pending completion, be disposed of
without the Purchaser's prior written consent.
3.3 Save as disclosed in this Agreement, the Company has not entered into
any agreement for professional services, construction or for the
purchase of material equipment, plant, machinery, furniture, fixture or
fitting and vehicle or any asset except in the ordinary course of
business.
3.4 Save as disclosed to the Purchaser, the Company has not created any
mortgage, charge, lien, debenture or other security interest or
encumbrance of any kind which is still subsisting over the whole or any
part of its undertakings or assets.
3.5 Save as disclosed in this Agreement, since the incorporation of the
Company:-
(a) the business of the Company has been continued to be carried
on in its ordinary course both as regards the nature, scope
and manner of conducting the business and so as to maintain
the business as a going concern;
(b) there has been no involuntary transfer, other form of security
or encumbrance on, over or affecting the whole or any part of
the undertaking, property or assets of the Company and no
agreement, arrangement or commitment to give or create any of
the foregoing;
(c) the Company has only entered into transactions and incurred
liabilities in the ordinary course of its day-to-day business;
(d) the assets of the Company have not been depleted by any
unlawful or unauthorised act on the part of any person;
9
<PAGE> 10
(e) no dividend has been declared or paid on and no distribution
of capital made in respect of any share capital of the Company
and no loans or loan capital have been repaid In whole or in
part; and
(f) there has been no material adverse change in the financial
position or prospects of the Company.
4. Corporate Records and Affairs
4.1 The Company has since incorporation carried on no business other than
being a travel company.
4.2 The Company is not engaged in any litigation or arbitration proceedings
and no such proceedings are pending or threatened against the Company
and the Vendor knows of no facts or matters likely to give rise to any
such proceedings or prosecutions.
4.3 The Company is not in default of any of its obligation or in breach of
any restriction, whether contractual or statutory or otherwise.
4.4 Save as disclosed in this Agreement, since the incorporation of the
Company and up to and inclusive of Completion, there has not been, nor
will there be, depleting of the assets of the Company regardless of
whether such deletion be due to any unlawful act on the part of any
person or otherwise.
4.5 Save as disclosed to the Purchaser, the Company is not and will not at
Completion be indebted to any person and will not at Completion have
any outstanding mortgages, debentures, loan capital, bank overdraft or
similar indebtedness or contingent liabilities or other contracts or
engagements whatsoever.
4.6 There has been and will at Completion be no material adverse change in
the position, business, finance or prospects of the Company.
10
<PAGE> 11
4.7 Since its incorporation, the company has not entered into any unusual
contracts or undertaken any long term or onerous obligations whatsoever
which has not been disclosed in this Agreement.
4.8 All resolutions passed whether by the directors or the shareholders of
the Company have been, and will until Completion be, duly and
accurately recorded in the minute books of the Company the there are no
resolutions whatsoever which have not been so recorded.
4.9 All resolutions recorded in the minute books of the Company have been
duly and validly passed by the directors or shareholders of the Company
(as the case may be).
4.10 The Company has since its incorporation complied and will up to
Completion comply with all applicable laws and regulations whether of
Hong Kong or elsewhere and there is and will be no violation of, or
default with respect to any statute, regulation, order, decree or
judgment of any court of Hong Kong or any foreign country which could
have a material adverse effect on the assets or operations of the
Company.
4.11 All necessary licenses, consents, permits and authorities (if any) have
been duly obtained by the Company and all such licenses, consents,
permits and authorities are and will until Completion be valid and
subsisting, and the Company is not in breach of any of the terms or
conditions of any such licenses, consents, permits and authorities.
4.12 Save as disclosed to the Purchaser on or before the signing of this
Agreement, there are no outstanding contracts, engagements or
liabilities, whether ascertained or contingent and whether quantified
or disputed, of the Company.
4.13 Save as disclosed in this Agreement as at the date of this Agreement
there are not outstanding with respect to the Company:
11
<PAGE> 12
(a) any agreement or arrangement, whether by way of guarantee,
indemnity or otherwise, under which the company is under a
prospective or contingent liability in respect of the
obligations of any other person;
(b) any liability for any statutory or governmental levy or
charge;
(c) any power of attorney or other authority (express or implied)
which is still outstanding or effective to or in favour of any
person to enter into any contract or commitment or to do
anything on behalf of the Company,
(d) any dispute with any revenue, or other official, department in
Hong Kong or elsewhere, in relation to the affairs of the
Company, and there are no facts which may give rise to any
such dispute.
4.14 Save as disclosed in this Agreement, compliance with the terms of this
Agreement does not and will not:
(a) conflict with, or result in the breach of, or constitute a
default under, any of the terms, conditions or provisions of
any agreement or instrument to which the Company is party, or
any provision of the Memorandum or Articles of Association of
the Company or any encumbrance, lease, contract, order,
judgment, award, Injunction, regulation or other restriction
or obligation of any kind or character by which or to which
any asset of the Company is bound or subject;
(b) relieve any person from any obligation to the Company (whether
contractual or otherwise), or enable any person to determine
any such obligation, or any right or benefit enjoyed by the
Company, or to exercise any right, whether under an agreement
with, or otherwise in respect of, the Company;
12
<PAGE> 13
(c) result in the creation, imposition, crystallization or
enforcement of any encumbrance whatsoever on any of the assets
of the Company; and
(d) result in any present or future indebtedness of the Company
becoming due, or capable of being declared due and payable
prior to its stated maturity.
4.15 The company has not:
(a) committed any breach of any statutory provision, order, by-law
or regulation binding on it, or of any provision of its
Memorandum or Articles of Association, or of any trust deed,
agreement or license to which it is a party, or of any
covenant, mortgage, charge or debenture given by it;
(b) entered into any transaction which is still executory and
which is or may be enforceable by it by reason of the
transaction being voidable at the instance of any other party
or ultra vires, void or illegal; or
(c) omitted to do anything required or permitted to be done by it
necessary for the protection of its title to or for the
enforcement or the preservation of any order of priority any
properties or rights owned by it.
5. Subsidiary
5.1 The company does not have any subsidiary.
6. General Matters
6.1 All the information given in this Agreement including the Recitals,
Schedules and Exhibits is and will at Completion be true, accurate and
complete in all material respects and are not misleading in any respect
for any reason whatsoever.
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<PAGE> 14
6.2 There are no material facts or circumstances, in relation to the
financial condition of the Company, which have not been fully and
fairly disclosed to Rohtak, and which, if disclosed, might reasonably
have been expected to affect the decision of the Purchaser or otherwise
affect the amount of consideration for the Sale Shares to enter into
this Agreement.
7. Compliance with Legal Requirements
7.1 The Company has power and has been duly authorised to carry on its
business and to own its properties and assets and, has complied with
and will at Completion comply with all the provisions of all applicable
laws, regulations and orders relating thereto in the conduct of its
business or otherwise and has duly paid all stamp duty, capital duty,
registration or other fees payable in connection with the Company and
all issues of shares, debentures or other securities.
7.2 All such consents, approvals, licenses, registrations and clearances as
shall be required from any governmental or regulatory authority or any
person for or in connection with the business of the Company have been
obtained (and, if the same have been granted subject to any conditions,
such conditions have been fulfilled) and are validly subsisting and, to
the best of knowledge of the Vendor after having made all reasonable
enquiries, there are no circumstances which might lead to the
cancellation, withdrawal or suspension of the foregoing.
7.3 The Company has not committed and is not liable for any criminal,
illegal, or unauthorised act or is in breach of any obligation whether
imposed by or pursuant to any statute, contract or otherwise and none
of the activities or contracts or rights of the Company Is ultra vires,
unauthorised, invalid or in breach in any material respect of any
contract or covenant and no outstanding notices have been served on the
Company may be interested have been duly stamped and are in the
possession of the Company.
14
<PAGE> 15
7.4 The books and records of the company have been brought up-to-date in
compliance with all the legal requirements and directions to which the
Company is subject and all returns, particulars, resolutions or other
documents required to be delivered by the Company to the relevant
authorities have been duly executed, delivered, filed or registered In
proper form and on due dates, and all resolutions passed whether by the
directors or members of the company have been duly and accurately
recorded in the minute books thereof.
15
<PAGE> 16
Dated the 1st day of January 1999
(1) CHENG CHAO MING
AND
CHING KWOK LEUNG
(2) JENSON INTERNATIONAL
TRAVEL SERVICES LIMITED
(3) WONDERWIDE
CONSULTANTS LIMITED
SALE AND PURCHASE
AGREEMENT
MESSRS. NG, YEUNG & PARTNERS
SOLICITORS
901, 9/F, CROCODILE HOUSE 2
55 CONNAUGHT ROAD CENTRAL,
HONG KONG
TEL: 28549226 FAX: 28549227
REF: WY/1/89098
16
<PAGE> 1
Exhibit 10.10
(Singapore and HK)
THIS AGREEMENT is made the 1st day of February 1999
BETWEEN
(1) King Sun Trading (PTE) Limited, a limited company incorporated in
Singapore whose registered office is situate at 7500A Beach Road,
#10-320, The Plaza, Singapore 0719 ("Party A") of the one part; and
(2) Jenson International Travel Services Limited, a limited company
incorporated in Hong Kong whose registered office is situate at Flats A
and B, 12th Floor, Gold Union Commercial Building, No.71 Connaught Road
Central, Hong Kong ("Party B") of the other part.
WHEREAS :-
(1) Party A is running a tourist business in Singapore and is operating
several trips for Xian in the People's Republic of China via Hong
Kong/Hong Kong and Macau ("the Trips"). Details of the Trips and the
prices therefor ("the Prices") (subject to seasonal fluctuation) are
contained in the several brochures ("the Brochures") which are annexed
hereto.
(2) Party A is desirous of sub-contracting out those stages of the Trips to
be operated in Hong Kong/Hong Kong and Macau ("the Hong Kong Stages")
and in China ("the China Stages") in the manners hereinafter
stipulated.
NOW THEREFORE IT IS MUTUALLY AGREED :-
1. Party A shall refer/assign all its customers for the Trips ("the
Customers") to Party B (and to Party B only) as its exclusive
sub-contractor for the operation of the Hong Kong Stages of the Trips
consisting of (1) the reception of the Customers from Singapore in the
Hong Kong
1
<PAGE> 2
airport up to the departure of the Customers in the Hong Kong airport
to Xian and (2) the reception of the Customers back from Xian in the
Hong Kong airport up to the departure of the Customers in the Hong Kong
airport back to Singapore. Party B agrees to act as such exclusive
sub-contractor and to take up the operation of the Hong Kong Stages of
the Trips in the manners hereinafter stipulated.
2. Party A shall be responsible for purchasing the round trip tickets for
the whole of the Trips for the Customers and shall ensure that each of
the Customers shall hold a set of valid round trip ticket before
departure from Singapore.
3. Party A shall also be responsible for purchasing the round trip
insurance coverage for the whole of the Trips for each of the Customers
and shall ensure that each of the Customers shall hold a valid coverage
of such insurance before departure from Singapore.
4. Party B shall be responsible for all the costs and expenses within the
ambit of the operation of the Hong Kong Stages of the Trips in the
manners hereinafter stipulated and in accordance with the Brochures,
except the costs of all the air-tickets and insurance coverage for the
whole of the Trips, which are the responsibilities of Party A. For
avoidance of doubt, all costs and expenses incurred outside the ambit
of the operation of the Hong Kong Stages and the China Stages of the
Trips are the responsibility of Party A.
5. In operating the Hong Kong Stages of the Trips, Party B shall ensure
that the routes, the activities, the accommodations, the
transportations (except the airway parts which are the responsibility
of Party A), the guide-services and every other aspects of and
incidental to the Hong Kong Stages of the Trips are operated in strict
adherence to and compliance with those modes, qualities and standards
as specified in the Brochures.
6. In operating the Hong Kong Stages of the Trips, Party B shall, when
receiving, entertaining and guiding the Customers, ensure that such
trip names and/or marks, signs or logos as specified in the Brochures
shall be clearly, distinctively and visibly exhibited, erected, posted
2
<PAGE> 3
up or hanged up so as to allow the Customers to easily identify the
same as the Trips for which they are joining.
7. In order to perform its duties in operating the Hong Kong Stages of the
Trips, Party B shall, upon receiving notice from Party A that any of
the Trips is about to commence, make without delay all preliminary
arrangements and checkings such as accommodation bookings,
transportation bookings (except the airway parts which are the
responsibility of Party A), sight-seeings availability and
guide-services recruiting etc. so as to ensure that the Hong Kong
Stages of the Trips can be properly and smoothly operated. In case any
problem is encountered or foreseen by Party B, it shall immediately
inform Party A of the same so as to allow Party A of sufficient time to
consider the cancellation of the Trips. Party A undertake to give
sufficient prior notice to Party B of the commencement of any of the
Trips so as to allow Party B of sufficient time to make such
preliminary arrangements and checkings.
8. In case any complaint by the Customers is made to Party B or any
problem is encountered by Party B during the operation of the Hong Kong
Stages of the Trips, Party B shall inform Party A of the same
immediately and shall try its best to resolve such complaint or problem
promptly and fairly. In operating the Hong Kong Stages of the Trips,
Party B shall be personally liable for and shall keep Party A
indemnified against any claims by the Customers arising from any breach
of or deviation from or non-fulfillment of those modes, qualities or
standards in respect of the Hong Kong Stages of the Trips as specified
in the Brochures PROVIDED that any defence or exclusion or limitation
factor available under the terms and conditions for the provision of
the Trips which are available to Party A to meet such claims shall also
be available to Party B in operating the Hong Kong Stages of the Trips.
9. Party B shall not without the consent in writing of Party A pledge or
engage the credit of Party A or enter into or purport to enter into any
contract on behalf of Party A.
10. Party B shall not without the consent in writing of Party A disclose to
the Customers its name as the sub-contractor or operator of the Hong
Kong Stages of the Trips and shall ensure
3
<PAGE> 4
that such trip names and/or marks, signs or logos as specified in the
Brochures shall throughout the Hong Kong Stages of the Trips be used as
the identifiers for the Trips to the Customers only.
11. In consideration of the services to be provided by Party B in the
operation of the Hong Kong Stages of the Trips, Party B shall be
entitled to receive from Party A a remuneration equal to 30% of the
Prices paid by the Customers for the Trips. Such remuneration shall be
paid by Party A to Party B before the commencement of the Trips. In
case there is any subsequent fluctuation in the Prices, the actual
amounts to be received by Party B shall fluctuate accordingly PROVIDED
that if there is any reduction in the Prices without the prior consent
of Party B, Party B shall be entitled to refuse to take up those Trips
at the reduced Prices.
12. Party A undertakes that it shall receive the full amounts of the Prices
from the Customers before any of the Trips shall commence.
13. Party A hereby further appoints Party B as its agent for the purposes
of finding suitable operator in China for the operation of the China
Stages of the Trips. Party B hereby accepts the appointment to act as
such agent.
14. In acting as such agent, Party B shall do the followings on behalf of
Party A :-
(a) to find suitable operator in China ("the China Operator") to
operate the China Stages of the Trips from the reception of
the Customers from Hong Kong in the Xian airport until the
departure of the Customers in the Xian airport back to Hong
Kong;
(b) to sign the sub-contracting agreement for the operation of the
China Stages of the Trips with the China Operator.
(c) to liaise with the China Operator and Party A regarding any
matters arising on the operations of the China Stages of the
Trips.
4
<PAGE> 5
PROVIDED that Party B shall do the above-mentioned matters in its own name to
the intent that Party B shall act as an undisclosed agent of Party A. Party A
undertake to indemnify Party B against any loss, damages or liability whatsoever
that may be incurred or suffered by Party B by virtue of acting as such
undisclosed agent of the Party A.
15. Party B shall not be responsible or liable for anything which shall happen
within the ambit of the operation of the China Stages of the Trips by the China
Operator PROVIDED that in concluding any sub-contracting agreement with the
China Operator, Party B shall ensure that such sub-contracting agreement shall
contain such terms as similar to the terms in this Agreement to the intent that
the China Operator in operating the China Stages of the Trips shall perform the
similar duties and have the similar rights as Party B in operating the Hong Kong
Stages of the Trips shall perform/have and that the remuneration to the China
Operator shall be fixed at 35% of the Prices (subject to the same fluctuating
provision as contained in clause 11 above). The 35% remuneration payable to the
China Operator shall be forwarded by Party A to Party B before the commencement
of the Trips.
16. In consideration of Party B accepting the appointment as the undisclosed
agent of Party A and performing the agency works as mentioned in clause 14
above, Party B shall be entitled to receive from Party A a remuneration equal to
5% of the Price. Such remuneration shall be paid by Party A to Party B before
the commencement of the Trips and shall be subject to the same fluctuation
provision as contained in clause 11 above.
17. This Agreement shall commence on the date hereof and shall continue in force
thereafter until terminated:
(a) By either party giving not less than 3 months' written notice
of termination to the other; or
(b) Forthwith by either party giving written notice to the other
party in any of the following events:
5
<PAGE> 6
(i) if a distress or execution is levied against any of
the property of the other party and is not paid out
within 14 days; or
(ii) if the other party ceases to carry on its business or
substantially the whole of its business; or
(iii) if the other party announces that it is intending to
cease, or considering ceasing to carry on its
business or substantially the whole of its business;
or
(iv) if an encumbrancer takes possession, or a receiver is
appointed of any party of the assets of the other
party.
18. The termination of this Agreement under the preceding clause shall not
prejudice any rights of either party in existence prior to the effective date of
termination. In the event of a termination under sub-clause (a) above the
termination shall not apply in relation to the Trips which have commenced prior
to the effective date of termination and the rights and obligations of each
party under this Agreement in respect of such trips shall survive the
termination and be enforceable notwithstanding such termination. In the event of
a termination under sub-clause (b) above such provision shall apply in relation
to the Trips commenced prior to the effective date of termination as the party
terminating this Agreement shall stipulate as being most appropriate for giving
effect to the substance of this Agreement and the interests of the Customers in
the circumstances which have arisen.
19. Any notice given hereunder by either party to the other may be sent by
facsimile transmission or prepaid recorded delivery post to the party's address
given above in which event it shall be deemed to have been received within 2
working days after the date of posting. Any notice given by facsimile shall be
deemed immediately received upon confirmation of completion of such
transmission.
20. This Agreement shall supersede any and all previous agreements or
arrangements between the parties hereto.
6
<PAGE> 7
21. This Agreement shall take effect on 1st January 1999 and shall be deemed
made on that day.
22. This Agreement shall be interpreted and governed by the English laws and the
parties hereto submit to the non-exclusive jurisdictions of the English courts.
SIGNED by ANDREW LEE ) For and on behalf of
)
for and on behalf of Party A ) KING SUN TRADING (PTE) LTD.
)
in the presence of :- ) ------------------------------------------
Authorized Signature(s)
SIGNED by CHENG CHAO MING ) For and on behalf of
) JENSON INTERNATIONAL TRAVEL SERVICES LTD.
for and on behalf of Party B )
) -----------------------------------------
in the presence of :- ) Authorized Signature
7
<PAGE> 1
EXHIBIT 10.11
(Thailand and HK)
THIS AGREEMENT is made the 1st day of February 1999
BETWEEN
(1) Jenda Enterprise Company Limited, a limited company incorporated in
Thailand whose registered office is situate at 60 Mahanakorn Road,
Bangrak, Bangkok, 10500, Thailand ("Party A") of the one part; and
(2) Jenson International Travel Services Limited, a limited company
incorporated in Hong Kong whose registered office is situate at Flats A
and B, 12th Floor, Gold Union Commercial Building, No. 71 Connaught
Road Central, Hong Kong ("Party B") of the other part.
WHEREAS:
(1) Party A is running a tourist business in Thailand and is operating
several trips for Xian in the People's Republic of China via Hong
Kong/Hong Kong and Macau ("the Trips"). Details of the Trips and the
prices therefor ("the Prices") (subject to seasonal fluctuation) are
contained in the several brochures ("the Brochures") which are annexed
hereto.
(2) Party A is desirous of sub-contracting out those stages of the Trips to
be operated in Hong Kong/Hong Kong and Macau ("the Hong Kong Stages")
and in China ("the China Stages") in the manners hereinafter
stipulated.
NOW THEREFORE IT IS MUTUALLY AGREED:
1. Party A shall refer/assign all its customers for the Trips ("the Customers")
to Party B (and to Party B only) as its exclusive sub-contractor for the
operation of the Hong Kong Stages
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<PAGE> 2
of the Trips consisting of (1) the reception of the Customers from Thailand in
the Hong Kong airport up to the departure of the Customers in the Hong Kong
airport to Xian and (2) the reception of the Customers back from Xian in the
Hong Kong airport up to the departure of the Customers in the Hong Kong airport
back to Thailand. Party B agrees to act as such exclusive sub-contractor and to
take up the operation of the Hong Kong Stages of the Trips in the manners
hereinafter stipulated.
2. Party A shall be responsible for purchasing the round trip tickets for the
whole of the Trips for the Customers and shall ensure that each of the Customers
shall hold a set of valid round trip ticket before departure from Thailand.
3. Party A shall also be responsible for purchasing the round trip insurance
coverage for the whole of the Trips for each of the Customers and shall ensure
that each of the Customers shall hold a valid coverage of such insurance before
departure from Thailand.
4. Party B shall be responsible for all the costs and expenses within the ambit
of the operation of the Hong Kong Stages of the Trips in the manners hereinafter
stipulated and in accordance with the Brochures, except the costs of all the
air-tickets and insurance coverage for the whole of the Trips, which are the
responsibilities of Party A. For avoidance of doubt, all costs and expenses
incurred outside the ambit of the operation of the Hong Kong Stages and the
China Stages of the Trips are the responsibility of Party A.
5. In operating the Hong Kong Stages of the Trips, Party B shall ensure that the
routes, the activities, the accommodations, the transportations (except the
airway parts which are the responsibility of Party A), the guide-services and
every other aspects of and incidental to the Hong Kong Stages of the Trips are
operated in strict adherence to and compliance with those modes, qualities and
standards as specified in the Brochures.
6. In operating the Hong Kong Stages of the Trips, Party B shall, when
receiving, entertaining and guiding the Customers, ensure that such trip names
and/or marks, signs or logos as specified in the Brochures shall be clearly,
distinctively and visibly exhibited, erected, posted
2
<PAGE> 3
up or hanged up so as to allow the Customers to easily identify the same as the
Trips for which they are joining.
7. In order to perform its duties in operating the Hong Kong Stages of the
Trips, Party B shall, upon receiving notice from Party A that any of the Trips
is about to commence, make without delay all preliminary arrangements and
checkings such as accommodation bookings, transportation bookings (except the
airway parts which are the responsibility of Party A), sight-seeings
availability and guide-services recruiting etc. so as to ensure that the Hong
Kong Stages of the Trips can be properly and smoothly operated. In case any
problem is encountered or foreseen by Party B, it shall immediately inform Party
A of the same so as to allow Party A of sufficient time to consider the
cancellation of the Trips. Party A undertake to give sufficient prior notice to
Party B of the commencement of any of the Trips so as to allow Party B of
sufficient time to make such preliminary arrangements and checkings.
8. In case any complaint by the Customers is made to Party B or any problem is
encountered by Party B during the operation of the Hong Kong Stages of the
Trips, Party B shall inform Party A of the same immediately and shall try its
best to resolve such complaint or problem promptly and fairly. In operating the
Hong Kong Stages of the Trips, Party B shall be personally liable for and shall
keep Party A indemnified against any claims by the Customers arising from any
breach of or deviation from or non-fulfillment of those modes, qualities or
standards in respect of the Hong Kong Stages of the Trips as specified in the
Brochures PROVIDED that any defense or exclusion or limitation factor available
under the terms and conditions for the provision of the Trips which are
available to Party A to meet such claims shall also be available to Party B in
operating the Hong Kong Stages of the Trips.
9. Party B shall not without the consent in writing of Party A pledge or engage
the credit of Party A or enter into or purport to enter into any contract on
behalf of Party A.
10. Party B shall not without the consent in writing of Party A disclose to the
Customers its name as the sub-contractor or operator of the Hong Kong Stages of
the Trips and shall ensure
3
<PAGE> 4
that such trip names and/or marks, signs or logos as specified in the Brochures
shall throughout the Hong Kong Stages of the Trips be used as the identifiers
for the Trips to the Customers only.
11. In consideration of the services to be provided by Party B in the operation
of the Hong Kong Stages of the Trips, Party B shall be entitled to receive from
Party A a remuneration equal to 25% of the Prices paid by the customers for the
Trips. Such remuneration shall be paid by Party A to Party B before the
commencement of the Trips. In case there is any subsequent fluctuation in the
Prices, the actual amounts to be received by Party B shall fluctuate accordingly
PROVIDED that if there is any reduction in the Prices without the prior consent
of Party B, Party B shall be entitled to refuse to take up those Trips at the
reduced Prices.
12. Party A undertakes that it shall receive the full amounts of the Prices from
the Customers before any of the Trips shall commence.
13. Party A hereby further appoints Party B as its agent for the purposes of
finding suitable operator in China for the operation of the China Stages of the
Trips. Party B hereby accepts the appointment to act as such agent.
14. In acting as such agent, Party B shall do the followings on behalf of Party
A:
(a) to find suitable operator in China ("the China Operator") to
operate the China Stages of the Trips from the reception of
the Customers from Hong Kong in the Xian airport until the
departure of the Customers in the Xian airport back to Hong
Kong;
(b) to sign the sub-contracting agreement for the operation of the
China Stages of the Trips with the China Operator.
(c) to liaise with the China operator and Party A regarding any
matters arising on the operations of the China Stages of the
Trips.
4
<PAGE> 5
PROVIDED that Party B shall do the above-mentioned matters in its own name to
the intent that Party B shall act as an undisclosed agent of Party A. Party A
undertake to indemnify Party B against any lose, damages or liability whatsoever
that may be incurred or suffered by Party B by virtue of acting as such
undisclosed agent of the Party A.
15. Party B shall not be responsible or liable for anything which shall happen
within the ambit of the operation of the China Stages of the Trips by the China
Operator PROVIDED that in concluding any sub-contracting agreement with the
China Operator, Party B shall ensure that such sub-contracting agreement shall
contain such terms as similar to the terms in this Agreement to the intent that
the China Operator in operating the China Stages of the Trips shall perform the
similar duties and have the similar rights as Party B in operating the Hong Kong
Stages of the Trips shall perform/have and that the remuneration to the China
Operator shall be fixed at 35% of the Prices (subject to the same fluctuating
provision as contained in clause 11 above). The 35% remuneration payable to the
China operator shall be forwarded by Party A to Party B before the commencement
of the Trips.
16. In consideration of Party B accepting the appointment as the undisclosed
agent of Party A and performing the agency works as mentioned in clause 14
above, Party B shall be entitled to receive from Party A a remuneration equal to
5% of the Price. Such remuneration shall be paid by Party A to Party B before
the commencement of the Trips and shall be subject to the same fluctuation
provision as contained in clause 11 above.
17. This Agreement shall commence on the date hereof and shall continue in force
thereafter until terminated :
(a) By either party giving not less than 3 months' written notice
of termination to the other; or
(b) Forthwith by either party giving written notice to the other
party in any of the following events
5
<PAGE> 6
(i) if a distress or execution is levied against any of
the property of the other party and is not paid out
within 14 days; or
(ii) if the other party ceases to carry on its business or
substantially the whole of its business; or
(iii) if the other party announces that it is intending to
cease, or considering ceasing to carry on its
business or substantially the whole of its business;
or
(iv) if an encumbrancer takes possession, or a receiver is
appointed of any party of the assets of the other
party.
18. The termination of this Agreement under the preceding clause shall not
prejudice any rights of either party in existence prior to the effective date of
termination. in the event of a termination under sub-clause (a) above the
termination shall not apply in relation to the Trips which have commenced prior
to the effective date of termination and the rights and obligations of each
party under this Agreement in respect of such trips shall survive the
termination and be enforceable notwithstanding such termination. In the event of
a termination under sub-clause (b) above such provision shall apply in relation
to the Trips commenced prior to the effective date of termination as the party
terminating this Agreement shall stipulate as being most appropriate for giving
effect to the substance of this Agreement and the interests of the Customers in
the circumstances which have arisen.
19. Any notice given hereunder by either party to the other may be sent by
facsimile transmission or prepaid recorded delivery post to the party's address
given above in which event it shall be deemed to have been received within 2
working days after the date of posting. Any notice given by facsimile shall be
deemed immediately received upon confirmation of completion of such
transmission.
6
<PAGE> 7
20. This Agreement shall supersede any and all previous agreements or
arrangements between the parties hereto.
21. This Agreement shall take effect on 1st January 1999 and shall be deemed
made on that day.
22. This Agreement shall be interpreted and governed by the English laws and the
parties hereto submit to the non-exclusive jurisdictions of the English courts.
7
<PAGE> 8
SIGNED by SANYA HUTAYON ) For and on behalf of
) JENDA ENTERPRISE CO. LTD.
for and on behalf of Party A )
)
in the presence of: ) ___________________________________
Authorized Signature
SIGNED by CHENG CHAO MING ) For and on behalf of
) JENSON INTERNATIONAL TRAVEL SERVICES LTD.
for and on behalf of Party B )
)
in the presence of: ) ____________________________________
) Authorized Signature
8
<PAGE> 1
Exhibit 10.12
HK and Fesco
THIS AGREEMENT is made the 1st day of February, 1999
BETWEEN
(1) Jenson International Travel Services Limited, a limited
company incorporated in Hong Kong whose registered office is
situate at Flats A and B, 12th Floor, Gold Union Commercial
Building, No. 71 Connaught Road Central, Hong Kong ("Party A")
of one part; and
(2) Foreign Enterprise Service Corporation, Beijing, a limited
company incorporated in the Peoples Republic of China whose
registered office is situate at 14, Chaoyangmen Nandajie,
Beijing 100020, Peoples Republic of China ("Party B") of the
other part.
WHEREAS:-
(1) Party A is desirous of appointing Party B as the
sub-contractor of several stages of several trips
from Canada/Thailand/Singapore to Xian in the
People's Republic of China via Hong Kong/Hong Kong
and Macau ("the Trips") for its operation in the
manners hereinafter stipulated.
(2) Details of the Trips and the prices therefore ("the
Prices") (subject to seasonal fluctuation) are
contained in the several brochures ("the Brochures")
which are annexed hereto.
NOW THEREFORE IT IS MUTUALLY AGREED:-
1. Party A hereby appoints Party B as the sub-contractor for the operation of
those stages of the Trips ("the
1
<PAGE> 2
China Stages") from the reception of the customers of the Trips ("the
Customers") from Hong Kong in the Xian airport until the departure of the
Customers in the Xian airport back to Hong Kong. Party B hereby accepts such
appointment.
2. Party B shall not be responsible for any air ticket for the China Stages of
the Trips for the Customers.
3. Party B shall not be responsible for any insurance coverage for China Stages
of the Trips for the Customers.
4. Party B shall be responsible for all the costs and expenses within the ambit
of the operation of the China Stages of the Trips in the manners hereinafter
stipulated and in accordance with the Brochures.
5. In operating the China Stages of the Trips, Party B shall ensure that the
routes, the activities, the accommodations, the transportations (except any
airway parts), the guide-services and every other aspects of and incidental to
the China Stages of the Trips are operated in strict adherence to and compliance
with those modes, qualities and standards as specified in the Brochures.
6. In operating the China Stages of the Trips, Party B shall, when receiving,
entertaining and guiding the Customers, ensure that such trip names and/or
marks, signs or logos as specified in the Brochures shall be clearly,
distinctively and visibly exhibited, erected, posted up or hanged up so as to
allow the Customers to easily identify the same as the Trips for which they are
joining.
7. In order to perform its duties in operating the China Stages of the Trips,
Party B shall, upon receiving notice from Party A that any of the Trips is about
to commence, make without delay all preliminary arrangements and checkings such
as accommodation bookings, transportation bookings (except the airway parts),
sight-seeings availability and guide-services recruiting etc. so as to ensure
that the China Stages of the Trips can be properly and smoothly operated. In
case any problem is encountered or foreseen by Party B, it shall immediately
2
<PAGE> 3
informed Party A of the same so as to allow Party B of sufficient time to
consider the cancellation of the Trips. Party A undertake to give sufficient
prior notice to Party B of the commencement of any of the Trips as to allow
Party B of sufficient time to make such preliminary arrangements and checkings.
8. In case any complaint by the Customers is made to Party B or any problem is
encountered by Party B during the operation of the China Stages of the Trips,
Party B shall inform Party A of the same immediately and shall try its best to
resolve such complaint or problem promptly and fairly. In operating the China
Stages of the Trips, Party B shall be personally liable for and shall keep Party
A indemnified against any claims by the Customers arising from any breach of or
deviation from or non-fulfillment of those modes, qualities or standards in
respect of the China Stages of the Trips as specified in the Brochures PROVIDED
that any defence or exclusion or limitation factor available under the terms and
conditions for the provision of the Trips which are available to Party A to meet
such claims shall also be available to Party B in operating the China Stages of
the Trips.
9. Party B shall not without the consent in writing of Party A pledge or engage
the credit of Party A or enter into or purport to enter into any contract on
behalf of Party A.
10. Party B shall not without the consent in writing of Party A disclose to the
Customers its name as the sub-contractor or operator of the China Stages of the
Trips and shall ensure that such trip names and/or marks, signs or logos as
specified in the Brochures shall throughout the China Stages of the Trips be
used as the identifiers for the Trips to the Customers only.
11. In consideration of the services to be provided by Party B under this
Agreement, Party B shall be entitled to receive from Party A a remuneration
equal to 35% of the Prices paid by the Customers for the Trips. In case there is
any subsequent fluctuation in the Prices, the actual amounts to be received by
Party B shall be fluctuate accordingly PROVIDED that if there is any reduction
in the Prices without the prior consent of Party B, Party B shall be entitled to
refuse to take up those Trips at the reduced Prices.
3
<PAGE> 4
12. This Agreement shall commence on the date hereof and shall continue in force
thereafter until terminated:
(a) By either party giving not less than 3 months' written notice
of termination to the other; or
(b) Forthwith by either party giving written notice to the other
party in any of the following events:
(i) if a distress or execution is levied against any of
the property of the other party and is not paid out
within 14 days; or
(ii) if the other party ceases to carry on its business or
substantially the whole of its business; or
(iii) if the other party announces that it is intending to
cease, or considering ceasing to carry on its
business or substantially the whole of its business;
or
(iv) if an encumbrancer takes possession, or a receiver is
appointed of any party of the assets of the other
party.
13. The termination of this Agreement under the preceding clause shall not
prejudice any rights of either party in existence prior to the effective date of
termination. In the event of a termination under sub-clause (a) above the
termination shall not apply in relation to the Trips which have commenced prior
to the effective date of termination and the rights and obligations of each
party under this Agreement in respect of such trips shall survive the
termination and be enforceable notwithstanding such termination. In the event of
a termination under sub-clause (b) above such provision shall apply in relation
to the Trips commenced prior to the effective date of termination as the party
terminating this Agreement shall stipulation as being most appropriate
4
<PAGE> 5
for giving effect to the substance of this Agreement and the interests of the
Customers in the circumstances which have arisen.
14. Any notice given hereunder by either party to the other may be sent by
facsimile transmission or prepaid recorded delivery post to the party's address
given above in which event it shall be deemed to have been received within 2
working days after the date of posting. Any notice given by facsimile shall be
deemed immediately received upon confirmation of completion of such
transmission.
15. This Agreement shall supercede any and all previous agreements or
arrangements between the parties hereto.
16. This Agreement shall take effect on 1st January 1999 and shall be deemed
made on that day.
17. This Agreement shall be interpreted and governed by the laws of Hong Kong
and the parties hereto submit to the non-exclusive jurisdictions of the courts
of Hong Kong.
5
<PAGE> 6
SIGNED by CHENG CHAO MING )
for and on behalf of Party A )
in the presence of :- )
SIGNED by ______________________ )
for and on behalf of Party B )
in the presence of :- )
6
<PAGE> 1
Exhibit 10.13
THIS AGREEMENT is made the 1st day of February 1999
BETWEEN
(1) Lite Charter (China) Limited, a limited company incorporated in Hong
Kong whose registered office is situate at Block A2, 8th Floor, Yip
Fung Industrial Building, 28-36 Kwai Fung Crescent, Kwai Chung, New
Territories, Hong Kong ("Party A") of the one part; and
(2) Cheng Chao Ming of Rooms 1006, 1008 and 1009, West Tower, Shun Tak
Centre, 168-200 Connaught Road Central, Hong Kong ("Party B") of the
other part.
WHEREBY IT IS AGREED:
1. Party A agrees to engage Party B as its consultant to provide various
consultancy services ("the Consultancy Services") to its clients on the various
consultancy projects undertaken or intended to be undertaken by Party A ("the
Consultancy Projects"). Party B agrees to accept the engagement in accordance
with the terms and conditions and hereinafter provided.
2. The Consultancy Services to be provided by Party B shall include the follows:
(a) To give preliminary advice and opinions on the
feasibility of the Consultancy Projects to Party A
and its clients;
(b) To negotiate with Party A's clients for the terms and
conditions upon which the Consultancy Services shall
be provided;
(c) To prepare consultancy agreements ("the Consultancy
Agreements") to be entered between Party A and its
clients for the provision of the Consultancy
Services;
1
<PAGE> 2
(d) To prepare and provide detailed plannings and
proposals for consideration by Party A and its
clients; and
(e) To perform the works under and in strict adherence to
and compliance with the Consultancy Agreements.
3. In providing/performing the Consultancy Services, Party B shall:
(a) conduct diligently such analysis, inspections,
plannings, co-ordination, negotiation, travelling,
conference holding, promotional activities,
functional events, ceremony holding, discussion,
studying, reporting and all other matters as may be
necessary for or incidental to the proper performance
of the Consultancy Services; and
(b) give such advice, opinions and recommendations from
time to time as to the progress of the Consultancy
Projects to Party A and its clients.
4. In performing the Consultancy Services, Party B may and shall have the
authorities on behalf of Party A:
(a) to engage solicitors, accountants or such other
professionals as may be necessary for the purposes of
obtaining professional advice and opinions; and
(b) generally to incur such expenses as may be necessary
for or incidental to the proper performance of the
Consultancy Services.
5. Party A undertakes:
(a) To provide full supporting services to facilitate
Party B in the performance of the Consultancy
Services, including the provision of
2
<PAGE> 3
office space and facilities and clerical and
secretarial staffing supports; and
(b) To reimburse Party B of all such expenses incurred by
Party B for travelling, entertainment, overseas
accommodations etc. as may be necessary for the
performance of the Consultancy Services.
6. In dealing with the clients of Party A, Party B shall ensure that each and
every aspect of the Consultancy Services shall be provided in the name of Party
A.
7. No employment relationship shall be created between Party A and Party B by
virtue of anything stipulated in this Agreement.
8. During the continuance of this Agreement, Party B may accept other
engagements or carry on its own business(es) PROVIDED that in accepting such
other engagements or carrying on its own business(es) Party B shall not act in
any way which would result in there being any competition (directly or
indirectly) between Party A and Party B or any other person(s).
9. In performing the Consultancy Services, Party B shall ensure that any
information in the business, the clients, the projects and all other aspects of
Party A which shall come to the knowledge of Party B are strictly confidential
and shall not under any circumstances be revealed, divulged, disclosed or
conveyed to any other person except in strict compliance with the instructions
given by Party A or such revelation, divulgence, disclosure or conveyance is
necessarily made under the normal operation of the business of Party A.
10. The Consultancy Services are to be provided/performed by Party B on a best
effort basis only PROVIDED that in giving any advice or opinion or
recommendation, Party B shall bone fide hold the same AND PROVIDED FURTHER that
Party B hereby warrants that it does hold and possess such expertise,
competence, business and social
3
<PAGE> 4
relationship as to make it adequately equipped to provide/perform the
Consultancy Services.
11. In consideration of the provision of the Consultancy Services by Party B in
the manners above-mentioned, Party A agrees that Party B shall receive an annual
consultancy fee equal to 2% of the gross annual incomes (to be ascertained from
the audited accounts) of Party A for every complete accounting year of service
provided by Party B to Party A. In case the Consultancy Services is not provided
for the whole of any complete accounting year of Party A, such consultancy fee
shall be calculated pro-rata.
12. Party A hereby declares and warrants that the ambit of the Consultancy
Services and the Consultancy Projects are of consultancy and organization nature
only with a view to facilitating the implementation of the underlying projects
contemplated by Party A's clients and do no (nor shall anything said above so
construed) include any work involving the actual implementation of such
underlying projects nor the actual realization thereof (including, but not
limited to, any site formation work; building/premises/structure construction
work machine/facility installation/assembling work; supervision thereof; etc.).
13. Party B undertakes that it shall perform its duties under this Agreement in
such a manner that during any continuous period of 12 months, Party B shall not
perform its duties under this Agreement in the Peoples Republic of China for any
period or periods, the length or the aggregated length of which shall exceed 6
months.
14. Party B further undertakes that it shall perform all its duties under this
Agreement outside the territories of the Hong Kong Special Administrative
Region.
15. This Agreement shall be valid for a period of 3 years commencing on the date
hereof PROVIDED that each of the parties may give to the other 3 month's prior
written notice to terminate it. Such notice of termination may not be given by
either party before the expiration of 18 months from the date hereof.
4
<PAGE> 5
16. Any notice required to be served or given under this Agreement shall be in
writing and may be sent to the party's addresses given above by facsimile
transmission or registered post. If sent by registered post, such notice shall
be deemed to be received by the other party with 2 working days of such posting.
If sent by facsimile transmission, such notice shall be deemed to be received
upon confirmation of its transmission.
17. This Agreement shall take effect on 1st January 1999 and shall be deemed
made on that day.
18. This Agreement shall be interpreted and governed by the English laws and the
parties hereto submit to the non-exclusive jurisdictions of the English courts.
5
<PAGE> 6
SIGNED by Sit Yik Leung )
)
for and on behalf of Party A )
)
in the presence of : )
SIGNED by Party B )
)
in the presence of : )
6
<PAGE> 1
Exhibit 10.14
THIS AGREEMENT is made the 1st day of February, 1999 BETWEEN
(1) Beijing City Hotel Company Limited, a limited company incorporated in
the Peoples Republic of China whose registered office is situate at 4
Gong Ti Dong Lu, Chao Yang District, Beijing, Peoples Republic of China
("Party A") of the one part; and
(2) Jenson International Travel Services Limited, a limited company
incorporated in Hong Kong whose registered office is situate at Flats A
and B, 12th Floor, Gold Union Commercial Building, No. 71 Connaught
Road Central, Hong Kong ("Party B") of the other part.
WHEREAS : -
(1) Party A is running a tourist business in China and is operating several
trips from Beijing to Hong Kong via Xian ("the Trips"). Details of the
Trips and the prices therefor ("the Prices") (subject to seasonal
fluctuation) are contained in the several brochures ("the Brochures")
which are annexed hereto.
(2) Party A is desirous of sub-contracting out those stages of the Trips to
be operated in Hong Kong ("the Hong Kong Stages") in the manners
hereinafter stipulated.
NOW THEREFORE IT IS MUTUALLY AGREED : -
1. Party A shall refer/assign all its customers for the Trips ("the Customers")
to Party B (and to Party B only) as its exclusive sub-contractor for the
operation of the Hong Kong Stages of the Trips from the reception of the
Customers from Xian in the Hong Kong airport until the departure of the
Customers in the Hong Kong airport back to Beijing. Party B agrees to act as
such exclusive sub-contractor and to take up the operation of the Hong Kong
Stages of the Trips in the manners hereinafter stipulated.
2
<PAGE> 2
2. Party A shall be responsible for purchasing the round trip tickets for the
whole of the Trips for the Customers and shall ensure that each of the Customers
shall hold a set of valid round trip ticket before departure from Beijing/Xian.
3. Party A shall also be responsible for purchasing the round trip insurance
coverage for the whole of the Trips for each of the Customers and shall ensure
that each of the Customers shall hold a valid coverage of such insurance before
departure from Beijing/Xian.
4. Party B shall be responsible for all the costs and expenses within the ambit
of the operation of the Hong Kong Stages of the Trips in the manners hereinafter
stipulated and in accordance with the Brochures, except the costs of all the
air-tickets and insurance coverage for the whole of the Trips, which are the
responsibilities of Party A. For avoidance of doubt, all costs and expenses
incurred outside the ambit of the operation of the Hong Kong Stages of the Trips
are the responsibility of Party A.
5. In operating the Hong Kong Stages of the Trips, Party B shall ensure that the
routes, the activities, the accommodations, the transportations (except the
airway parts which are the responsibility of Party A), the guide-services and
every other aspects of and incidental to the Hong Kong Stages of the Trips are
operated in strict adherence to and compliance with those modes, qualities and
standards as specified in the Brochures.
6. In operating the Hong Kong Stages of the Trips, Party B shall, when
receiving, entertaining and guiding the Customers, ensure that such trip names
and/or marks, signs or logos as specified in the Brochures shall be clearly,
distinctively and visibly exhibited, erected, posted up or hanged up so as to
allow the Customers to easily identify the same as the Trips for which they are
joining.
7. In order to perform its duties in operating the Hong Kong Stages of the
Trips, Party B shall, upon receiving notice from Party A that any of the Trips
is about to commence, make without delay all preliminary arrangements and
checkings such as accommodation bookings, transportation bookings (except the
airway parts which are the responsibility of Party
3
<PAGE> 3
A), sight-seeings availability and guide-services recruiting etc. so as to
ensure that the Hong Kong Stages of the Trips can be properly and smoothly
operated. In case any problem is encountered or foreseen by Party B, it shall
immediately inform Party A of the same so as to allow Party A of sufficient time
to consider the cancellation of the Trips. Party A undertake to give sufficient
prior notice to Party B of the commencement of any of the Trips so as to allow
Party B of sufficient time to make such preliminary arrangements and checkings.
8. In case any complaint by the Customers is made to Party B or any problem is
encountered by Party B during the operation of the Hong Kong Stages of the
Trips, Party B shall inform Party A of the same immediately and shall try its
best to resolve such complaint or problem promptly and fairly. In operating the
Hong Kong Stages of the Trips, arty B shall be personally liable for and shall
keep Party A indemnified against any claims by the Customers arising from any
breach of or deviation from or non-fulfilment of those modes, qualities or
standards in respect of the Hong Kong Stages of the Trips as specified in the
Brochures PROVIDED that any defence or exclusion or limitation factor available
under the terms and conditions for the provision of the Trips which are
available to Party A to meet such claims shall also be available to Party B in
operating the Hong Kong Stages of the Trips.
9. Party B shall not without the consent in writing of Party A pledge or engage
the credit of Party A or enter into or purport to enter into any contract on
behalf of Party A.
10. Party B shall not without the consent in writing of Party A disclose to the
Customers its name as the sub-contractor or operator of the Hong Kong Stages of
the Trips and shall ensure that such trip names and/or marks, signs or logos as
specified in the Brochures shall throughout the Hong Kong Stages of the Trips be
used as the identifiers for the Trips to the Customers only.
11. In consideration of the services to be provided by Party B in the operation
of the Hong Kong Stages of the Trips, Party B shall be entitled to receive from
Party A a remuneration equal to 60% of the Prices paid by the Customers for the
Trips. Such remuneration shall be paid by Party A to Party B before the
commencement of the Trips. In case there is any subsequent
4
<PAGE> 4
fluctuation in the Prices, the actual amounts to be received by Party B shall
fluctuate accordingly PROVIDED that if there is any reduction in the Prices
without the prior consent of Party B, Party B shall be entitled to refuse to
take up those Trips at the reduced Prices.
12. Party A undertakes that it shall receive the full amounts of the Prices from
the Customers before any of the Trips shall commence.
13. This Agreement shall commence on the date hereof and continue in force
thereafter until terminated :
(a) By either party giving not less than 3 months' written notice
of termination to the other; or
(b) Forthwith by either party giving written notice to the other
party in any of the following events :
(i) if a distress or execution is levied against any of
the property of the other party and is not paid out
within 14 days; or
(ii) if the other party creases to carry on its business
or substantially the whole of its business; or
(iii) if the other party announces that it is intending to
cease, or considering ceasing to carry on its
business or substantially the whole of its business;
or
(iv) if an encumbrancer takes possession, or a receiver is
appointed of any party of the assets of the other
party.
14. The termination of this Agreement under the preceding clause shall not
prejudice any rights of either party in existence prior to the effective date of
termination. In the event of a termination under sub-clause (a) above the
termination shall not apply in relation to the Trips which have commenced prior
to the effective date of termination and the rights and obligations of each
party under this Agreement in respect of such trips shall survive the
termination and be enforceable notwithstanding such termination. In the event of
a termination under sub-clause (b)
5
<PAGE> 5
above such provision shall apply in relation to the Trips commenced prior to the
effective date of termination as the party terminating this Agreement shall
stipulate as being most appropriate for giving effect to the substance of this
Agreement and the interests of the Customers in the circumstances which have
arisen.
15. Any notice given hereunder by either party to the other may be sent by
facsimile transmission or prepaid recorded delivery post to the party's address
given above in which event it shall be deemed to have been received within 2
working days after the date of posting. Any notice given by facsimile shall be
deemed immediately received upon confirmation of completion of such
transmission.
16. This Agreement shall supersede any and all previous agreements or
arrangements between the parties hereto.
17. This Agreement takes effect on 1st January 1999 and shall be deeded made on
that day.
18. This Agreement shall be interpreted and governed by the laws of Hong Kong
and the parties hereto submit to the non-exclusive jurisdictions of the courts
of Hong Kong.
6
<PAGE> 6
SIGNED by ZHANG KEJIAN )
)
for and on behalf of Party A )
)
in the presence of : - )
SIGNED by CHENG CHAO MING )
)
for and on behalf of Party B )
)
in the presence of : - )
7
<PAGE> 1
Exhibit 10.15
(Fesco and Qin Dynasty)
THIS AGREEMENT is made the 1st day of February 1999
BETWEEN
(1) Foreign Enterprise Service Corporation, Beijing, a limited company
incorporated in the Peoples Republic of China whose registered office
is situate at 14, Chaoyangmen Nandajie, Beijing 100020, Peoples
Republic of China ("Party A") of the one part; and
(2) Qin Dynasty Hotel (Xian) Limited, a limited company incorporated in the
People Republic of China whose registered office is situate at No. 55,
Huancheng West Road, Xian City, Shaanxi Province, Peoples Republic of
China ("Party B") of the other part.
WHEREAS:
(1) Party A is the sub-contractor of several stages of several trips from
Canada/Thailand/Singapore to Xian in the People's Republic of China via
Hong Kong/Hong Kong and Macau ("the Trips"). Details of the Trips and
the prices therefor ("the Prices") (subject to seasonal fluctuation)
are contained in the several brochures ("the Brochures") which are
annexed hereto.
(2) Party A is desirous of assigning/sub-contracting out those stages of
the Trips the operation of which have been undertaken by Party A to
Party B for its operation in the manners hereinafter stipulated.
NOW THEREFORE IT IS MUTUALLY AGREED:
1. Party A shall refer/assign all the customers for the Trips ("the Customers")
to Party B for those stages of the Trips from the reception of the Customers
from Hong Kong in the Xian
1
<PAGE> 2
airport until the departure of the Customers in the Xian airport back to Hong
Kong ("the China Stages");
2. Party B shall not be responsible for any air ticket for the China Stages of
the Trips for the Customers.
3. Party B shall not be responsible for any insurance coverage for the China
Stages of the Trips for the customers.
4. Party B shall be responsible for all the costs and expenses within the ambit
of the operation of the China Stages of the Trips in the manners hereinafter
stipulated and in accordance with the Brochures.
5. In operating the China Stages of the Trips, Party B shall ensure that the
routes, the activities, the accommodations. the transportations (except any
airway parts), the guide-services and every other aspects of and incidental to
the China Stages of the Trips are operated in strict adherence to and compliance
with those modes, qualities and standards as specified in the Brochures.
6. In operating the China Stages of the Trips, Party B shall, when receiving,
entertaining and guiding the Customers, ensure that such trip names and/or
marks, signs or logos as specified in the Brochures shall be clearly,
distinctively and visibly exhibited, erected, posted up or hanged up so as to
allow the Customers to easily identify the same as the Trips for which they are
joining.
7. In order to perform its duties in operating the China Stages of the Trips,
Party B shall, upon receiving notice from Party A that any of the Trips is about
to commence, make without delay all preliminary arrangements and checkings such
as accommodation bookings, transportation bookings (except the airway parts),
sight-seeings availability and guide-services recruiting etc. so as to ensure
that the China Stages of the Trips can be properly and smoothly operated. In
case any problem is encountered or foreseen by Party B, it shall immediately
2
<PAGE> 3
informed Party A of the same so as to allow Party A of sufficient time to
consider the cancellation of the Trips. Party A undertake to give sufficient
prior notice to Party B of the commencement of any of the Trips so as to allow
Party B of sufficient time to make such preliminary arrangements and checkings.
8. In case any complaint by the Customers is made to Party B or any problem is
encountered by Party B during the operation of the China Stages of the Trips,
Party B shall inform Party A of the same immediately and shall try its best to
resolve such complaint or problem promptly and fairly. In operating the China
Stages of the Trips, Party B shall be personally liable for and shall keep Party
A indemnified against any claims by the Customers arising from any breach of or
deviation from or non-fulfillment of those modes, qualities or standards in
respect of the China Stages of the Trips as specified in the Brochures PROVIDED
that any defense or exclusion or limitation factor available under the terms and
conditions for the provision of the Trips which are available to Party A to meet
such claims shall also be available to Party B in operating the China Stages of
the Trips.
9. Party B shall not without the consent in writing of Party A pledge or engage
the credit of Party A or enter into or purport to enter into any contract on
behalf of Party A.
10. Party B shall not disclose to the Customers its name as the sub-contractor
or operator of the China Stages of the Trips and shall ensure that such trip
names and/or marks, signs or logos as specified in the Brochures shall
throughout the China Stages of the Trips be used as the identifiers for the
Trips to the Customers only.
11. In consideration of the services to be provided by Party B under this
Agreement, Party B shall be entitled to receive from Party A a remuneration
equal to 33% of the Prices paid by the Customers for the Trips. In case there is
any subsequent fluctuation in the Prices, the actual amounts to be received by
Party B shall be fluctuate accordingly PROVIDED that if there is any reduction
in the Prices without the prior consent of Party B, Party B shall be entitled to
refuse to take up those Trips at the reduced Prices.
3
<PAGE> 4
12. This Agreement shall commence on the date hereof and shall continue in force
thereafter until terminated :
(a) By either party giving not less than 3 months, written notice
of termination to the other; or
(b) Forthwith by either party giving written notice to the other
party in any of the following events
(i) if a distress or execution is levied against any of
the property of the other party and is not paid out
within 14 days; or
(ii) if the other party ceases to carry on its business or
substantially the whole of its business; or
(iii) if the other party announces that it is intending to
cease, or considering ceasing to carry on its
business or substantially the whole of its business;
or
(iv) if an encumbrancer takes possession, or a receiver is
appointed of any party of the assets of the other
party.
13. The termination of this Agreement under the preceding clause shall not
prejudice any rights of either party in existence prior to the effective date of
termination. In the event of a termination under sub-clause (a) above the
termination shall not apply in relation to the Trips which have commenced prior
to the effective date of termination and the rights and obligations of each
party under this Agreement in respect of such trips shall survive the
termination and be enforceable notwithstanding such termination. In the event of
a termination under sub-clause (b) above such provision shall apply in relation
to the Trips commenced prior to the effective date of termination as the party
terminating this Agreement shall stipulate as being most appropriate for
4
<PAGE> 5
giving effect to the substance of this Agreement and the interests of the
Customers in the circumstances which have arisen.
14. Any notice given hereunder by either party to the other may be sent by
facsimile transmission or prepaid recorded delivery post to the party's address
given above in which event it shall be deemed to have been received within 2
working days after the date of posting. Any notice given by facsimile shall be
deemed immediately received upon confirmation of completion of such
transmission.
15. This Agreement shall supersede any and all previous agreements or
arrangements between the parties hereto.
16. This Agreement shall take effect on 1st January 1999 and shall be deemed
made on that day.
17. This Agreement shall be interpreted and governed by the laws of the Peoples
Republic of China and the parties hereto submit to the non-exclusive
jurisdictions of the courts of the Peoples Republic of China.
5
<PAGE> 6
SIGNED by )
for and on behalf of Party A )
in the presence of: )
SIGNED by )
for and on behalf of Party B )
in the presence of: )
6
<PAGE> 1
Exhibit 10.16
(Beijing and Qin Dynasty)
THIS AGREEMENT is made the 1st day of February 1999
BETWEEN
(1) Beijing City Hotel Company Limited, a limited company incorporated in
the Peoples Republic of China whose registered office is situate at 4
Gong Ti Dong Lu, Chao Yang District, Beijing, Peoples Republic of China
("Party A") of the one part; and
(2) Qin Dynasty Hotel (Xian) Limited, a limited company incorporated in the
Peoples Republic of China whose registered office is situate at No. 55,
Huancheng West Road, Xian City, Shaanxi Province, Peoples Republic of
China ("Party B") of the other part.
WHEREAS:
(1) Party A is running a tourist business in China and is operating several
trips from Beijing to Hong Kong via Xian ("the Trips"). Details of the
Trips and the prices therefor ("the Prices") (subject to seasonal
fluctuation) are contained in the several brochures ("the Brochures")
which are annexed hereto.
(2) Party A is desirous of sub-contracting out those stages of the Trips to
be operated in Xian ("the Xian Stages") in the manners hereinafter
stipulated.
NOW THEREFORE IT IS MUTUALLY AGREED:
1. Party A shall refer/assign all its customers for the Trips ("the Customers")
to Party B (and to Party B only) as its exclusive sub-contractor for the
operation of the Xian Stages of the Trips from the reception of the Customers
from Beijing in the Xian airport up to the departure of
1
<PAGE> 2
the Customers in the Xian airport to Hong Kong. Party B agrees to act as such
exclusive sub-contractor and to take up the operation of the Xian Stages of the
Trips in the manners hereinafter stipulated.
2. Party A shall be responsible for purchasing the round trip tickets for the
whole of the Trips for the Customers and shall ensure that each of the Customers
shall hold a set of valid round trip ticket before departure from Beijing.
3. Party A shall also be responsible for purchasing the round trip insurance
coverage for the whole of the Trips for each of the Customers and shall ensure
that each of the Customers shall hold a valid coverage of such insurance before
departure from Beijing.
4. Party B shall be responsible for all the costs and expenses within the ambit
of the operation of the Xian Stages of the Trips in the manners hereinafter
stipulated and in accordance with the Brochures, except the costs of all the
air-tickets and insurance coverage for the whole of the Trips, which are the
responsibilities of Party A. For avoidance of doubt, all costs and expenses
incurred outside the ambit of the operation of the Xian Stages of the Trips are
the responsibility of Party A.
5. In operating the Xian Stages of the Trips, Party B shall ensure that the
routes, the activities, the accommodations, the transportations (except the
airway parts which are the responsibility of Party A), the guide-services and
every other aspects of and incidental to the Xian Stages of the Trips are
operated in strict adherence to and compliance with those modes, qualities and
standards as specified in the Brochures.
6. In operating the Xian Stages of the Trips, Party B shall, when receiving,
entertaining and guiding the Customers, ensure that such trip names and/or
marks, signs or logos as specified in the Brochures shall be clearly,
distinctively and visibly exhibited, erected, posted up or hanged up so as to
allow the Customers to easily identify the same as-the Trips for which they are
joining.
2
<PAGE> 3
7. In order to perform its duties in operating the Xian Stages of the Trips,
Party B shall, upon receiving notice from Party A that any of the Trips is about
to commence, make without delay all preliminary arrangements and checkings such
as accommodation bookings, transportation bookings (except the airway parts
which are the responsibility of Party A), sight seeings availability and
guide-services recruiting etc. so as to ensure that the Xian Stages of the Trips
can be properly and smoothly operated. In case any problem is encountered or
foreseen by Party B, it shall immediately inform Party A the same so as to allow
Party A of sufficient time to consider the cancellation of the Trips. Party A
undertake to give sufficient prior notice to Party B of the commencement of any
of the Trips so as to allow Party B of sufficient time to make such preliminary
arrangements and checkings.
8. In case any complaint by the Customers is made to Party B or any problem is
encountered by Party B during the operation of the Xian Stages of the Trip,
Party B shall inform Party A of the same immediately and shall try its best to
resolve such complaint or problem promptly and fairly. In operating the Xian
Stages of the Trips, Party B shall be personally liable for and shall keep Party
A indemnified against any claims by the Customers arising from any breach of or
deviation from or non-fulfillment of those modes, qualities or standards in
respect of the Xian Stages of the Trips as specified in the Brochures PROVIDED
that any defense or exclusion or limitation factor available under the terms and
conditions for the provision of the Trips which are available to Party A to meet
such claims shall also be available to Party B in operating the Xian Stages of
the Trips.
9. Party B shall not without the consent in writing of Party A pledge or engage
the credit of Party A or enter into or purport to enter into any contract on
behalf of Party A.
10. Party B shall not without the consent in writing of Party A disclose to the
Customers its name as the sub-contractor or operator of the Xian Stages of the
Trips and shall ensure that such trip names and/or marks, signs or logos as
specified in the Brochures shall throughout the Xian Stages of the Trips be used
as the identifiers for the Trips to the Customers only.
3
<PAGE> 4
11. In consideration of the services to be provided by Party B in the operation
of the Xian Stages of the Trips, Party B shall be entitled to receive from Party
A a remuneration equal to 8% of the Prices paid by the Customers for the Trips.
Such remuneration shall be paid by Party A to Party B before the commencement of
the Trips in case there is any subsequent fluctuation in the Prices, the actual
amounts to be received by Party B shall fluctuate accordingly PROVIDED that if
there is any reduction in the Prices without the prior consent of Party B, Party
B shall be entitled to refuse to take up those Trips at the reduced Prices.
12. Party A undertakes that it shall receive the full amounts of the Prices from
the Customers before any of the Trips shall commence.
13. This Agreement shall commence on the date hereof and shall continue in force
thereafter until terminated:
(a) By either party giving not less than 3 months' written notice
of termination to the other; or
(b) Forthwith by either party giving written notice to the other
party in any of the following events:
(i) if a distress or execution is levied against any of
the property of the other party and is not paid out
within 14 days; or
(ii) if the other party ceases to carry on its business or
substantially the whole of its business; or
(iii) if the other party announces that it is intending to
cease, or considering ceasing to carry on its
business or substantially the whole of its business;
or
4
<PAGE> 5
(iv) if an encumbrancer takes possession, or a receiver is
appointed of any party of the assets of the other
party.
14. The termination of this Agreement under the preceding clause shall not
prejudice any rights of either party in existence prior to the effective date of
termination in the event of a termination under sub-clause (a) above the
termination shall not apply in relation to the Trips which have commenced prior
to the effective date of termination and the rights and obligations of each
party under this Agreement in respect of such trips shall survive the
termination and be enforceable notwithstanding such termination. In the event of
a termination under sub-clause (b) above such provision shall apply in relation
to the Trips commenced prior to the effective date of termination as the party
terminating this Agreement shall stipulate as being most appropriate for giving
effect to the substance of this Agreement and the interests of the Customers in,
the circumstances which have arisen.
15. Any notice given hereunder by either party to the other may be sent by
facsimile transmission or prepaid recorded delivery post to the party's address
given above in which event it shall be deemed to have been received within 2
working days after the date of posting. Any notice given by facsimile shall be
deemed immediately received upon confirmation of completion of such
transmission.
16. This Agreement shall supersede any and all previous agreements or
arrangements between the parties hereto.
17. This Agreement shall take effect on 1st January 1999 and shall be deemed
made on that day.
18. This Agreement shall be interpreted and governed by the laws of the Peoples
Republic of China and the parties hereto submit to the non-exclusive
jurisdictions of the courts of the peoples Republic of China.
SIGNED by )
5
<PAGE> 6
)
for and on behalf of Party A )
)
in the presence of: )
SIGNED by )
)
for and on behalf of Party B )
)
in the presence of: )
6
<PAGE> 1
Exhibit 10.17
THIS AGREEMENT is made the 1st day of February 1999
BETWEEN
(1) Guangzhou Universal Ocean Biological Science Corporation of No. 120,
Medium Xianlie Road, Guangzhou, China ("Party A") of the first part;
(2) Malee Consultants Limited, a limited company incorporated in the
British Virgin Islands and having a place of business in Hong Kong at
Room 1006, West Tower, Shun Tak Centre, 168-200 Connaught Road Central,
Hong Kong ("Party B") of the second part; and
(3) Lite Charter (China) Limited, a company incorporated in Hong Kong whose
registered office is situate at Block A2, 8th Floor, Yip Fung
Industrial Building, 28-36 Kwai Fung Crescent, Kwai Chung, New
Territories, Hong Kong ("Party C") of the third part.
WHEREAS:
(1) Party A and Party B has signed a Chinese agreement on 2nd June 1998
("the Agreement") under which Party B was to provide extensive
consultancy services ("the Services") to Party A over a period of 4
years with a view to facilitating the implementation of a project ("the
Project") contemplated by Party A to establish an ocean park ("the
Park") in Xian, the Peoples Republic of China. The Services are
itemized in the First and Second Schedules hereto and the fees for each
of the items ("the Items") of the Services are set out in the First and
Second Schedules hereto against each of the specific items.
1
<PAGE> 2
(2) Party B has performed those items of the Services as listed in the
First Schedule hereto ("the Performed Services") leaving those items of
the Services as listed in the Second Schedule hereto ("the Unperformed
Services") to be performed in accordance with the Agreement.
(3) With Party A's consent, Party B intends to assign the Unperformed
Services to Party C for its performance in accordance with the
Agreement.
NOW THEREFORE IT IS MUTUALLY AGREED:
1. Party B hereby assigns to Party C the Unperformed Services to be performed by
Party C at the same fees and on the same terms and conditions as specified in
the Agreement. Party C hereby agrees with Party A and Party B to take up the
performance of the Unperformed Services at the same fees and on the same terms
and conditions as specified in the Agreement.
2. Party A agrees to the assignment of the Unperformed Services from Party B to
Party C as mentioned in the preceding clause to the intent that Party B shall
not be further responsible or liable for the performance (or non-performance) of
the Unperformed Services and that Party C shall have the same rights and duties
under the Agreement as Party B in the performance of the Unperformed Services.
3. Party B shall not be liable for any disputes or claims in respect of or
arising from the performance (or non-performance) of the Unperformed Services.
Any such disputes or claims shall be resolved or made between Party A and Party
C in accordance
2
<PAGE> 3
with the Agreement and shall not in any event affect the rights and duties
between Party A and Party B in respect of the Performed Services.
4. Party C shall not be liable for any disputes or claims in respect of or
arising from the performance of the Performed Services. Any such disputes or
claims shall be resolved or made between Party A and Party B in accordance with
the Agreement and shall not in any event affect the rights and duties between
Party A and Party C in respect of the Unperformed Services.
5. For avoidance of doubt, in case any item of the Performed Services is only
partially performed or defectively performed, Party C shall not be responsible
for the same nor for the completion or making good of the same and clause 4
above shall apply in such circumstances PROVIDED that Party A may request and
Party C may undertake for the completion or making good of the same at such
terms and conditions as by mutual consent.
6. In performing the items of the Unperformed Services, Party C shall adhere to
the scheduled progress as provided in the Agreement PROVIDED that if any such
progress is hindered or delayed by reason only of any such matters as mentioned
in clause 5 above, Party C shall not be liable for any such delay. Any claims on
such delay shall be made between Party A and Party B only.
7. It is hereby declared that no money or property was paid or given or received
by any parties hereto for the entering of this Agreement.
8. It is hereby further declared that the ambit of the Services is of
consultancy and organization nature only with a view to facilitating the
implementation of the Project
3
<PAGE> 4
and does not (nor shall the Items so construed) include any work involving the
actual implementation of the Project nor the actual establishment of the Park
(including, but not limited to, any site formation work;
building/premises/structure construction work; machine/facility
installation/assembling work; supervision thereof; etc.).
9. This Agreement shall take effect on 1st January 1999 and shall be deemed made
on that day.
10. This Agreement shall be interpreted and governed by the English laws and the
parties hereto submit to the non-exclusive jurisdictions of the English courts.
FIRST SCHEDULE
(The Performed Services)
See Appendix A
SECOND SCHEDULE
(The Unperformed Services)
See Appendix B
4
<PAGE> 5
SIGNED by Huang Zheng )
)
for and on behalf of Party A )
)
in the presence of : )
SIGNED by Cheng Chao Ming )
)
for and on behalf of Party B )
)
in the presence of : )
SIGNED by Sit Yik Leung )
)
for and on behalf of Party C )
)
in the presence of : )
5
<PAGE> 1
Exhibit 10.18
THIS AGREEMENT is made the 7th day of May, 1999 BETWEEN
(1) Wonderwide Consultants Limited ("Party A"); and
(2) King Pacific International Holdings Limited ("Party B").
WHEREBY IT IS AGREED:
1. Party B shall provide to Party A all the management, clerical,
secretarial, administrative and accounting staffing support services
for the proper operation of the daily runnings of the business of Party
A ("the Staffing Services").
2. Party B shall also provide to Party A an office premises (together
with office furniture, equipments and facilities) for the use of Party
A as its office in common with the other clients of Party A as its
office in common with the other clients of Party B. Particulars of the
premises are contained in the First Schedule hereto ("the Premises
Services").
3. In consideration of the provision of the above-mentioned services by
Party B, Party A agrees to pay to Party B a monthly sum a mentioned in
the Second Schedule hereto ("the Service Charge") and is payable on the
1st day of each and every calendar month.
4. In providing the staffing Services, Party B shall ensure that any
information in the business, the clients, the accounts and other
aspects of Party A so come to the knowledge of the staff in the
performing of the staffing Services shall be treated as strictly
confidential and shall not under and circumstances be revealed,
divulged, disclosed or conveyed to and other person except in strict
compliance with be instructions given by Party A or such revelation,
divulgence, disclosure or conveyance is necessarily made under the
normal operation of the business of Party A.
1
<PAGE> 2
5. In providing the Staffing Services to Party A, Party B shall ensure
that the staff so provided to Party A shall be of such quality as could
reasonably be expected from that of a reasonably competent staff.
6. No staff provided under the Staffing Services shall become the
employee of Party A, and no employment relationship shall be created
between the staff so provided and Party A in the performance of the
Staffing Services.
7. In providing the Premises Services to Party A by Party B, Party A
shall be a licensee of the premises so provided only and no tenancy
relationship shall be created between Party A and Party B or the owner
of the premises so provided. Party B warrants that in so far as Party A
shall observe the terms and conditions of this Agreement, no
disturbance or interference shall be caused to Party A in the use and
enjoyment of the premises by Party B or the owner or any person acting
lawfully thereunder.
8. In providing the Premises Services, Party B shall not be liable to
Party A for any mal-functioning of the public or common facilities for
the premises including lifting services, central air-conditioning
services, central cleaning services, public water, lightings and
electricity etc. PROVIDED that upon being informed of such
mal-functioning by Party A, Party B shall diligently and without delay
cause or procure the making good of the same.
9. In providing the Premises Services, Party B shall ensure that the
furniture, the equipments and the facilities in the premises (including
lightings, water, electricity etc.) are in operating conditions. In
case any of such furniture, equipments or facilities are not properly
working, and upon being complained of the same by Party A, Party B
shall diligently and without delay proceed to make good the same.
2
<PAGE> 3
10. This Agreement shall be valid for a period of 2 years commencing on
the date hereof PROVIDED that each of the parties may give to the other
3 month's prior written notice to terminate it.
11. Any notice required to be served or given under this Agreement
shall be in writing and may be sent to the party's address given above
by facsimile transmission or registered post. If sent by registered
post, such notice shall be deemed to be received by the other party
within 2 working days of such posting. If sent by facsimile
transmission, such notice shall be deemed to be received upon
confirmation of its transmission.
12. This Agreement shall be interpreted and governed by the laws of
Hong Kong and the parties hereto submit to the non-exclusive
jurisdiction of the courts of Hong Kong.
3
<PAGE> 4
FIRST SCHEDULE
(The Premises Services)
The premises: Room 1008-9, Shun Tak Centre, West Tower,
168-200 Connaught Road Central,
Hong Kong
SECOND SCHEDULE
(The Services Charge)
HK$ 30.000 per month.
4
<PAGE> 5
Party A
For and on behalf of )
Wonderwide Consultants Limited )
by Xiong P. Paul )
Party B
For and on behalf of )
King Pacific International Holdings Limited )
by Cheng Chao Ming )
5
<PAGE> 1
Exhibit 21
Subsidiaries
------------
Wonderwide Consultants Limited
King Yuen Investment & Development Limited
Qin Dynasty Hotel (Xian) Ltd.
Malee Consultants Limited
Jenson International Travel Services Limited
Lite Charter (China) Limited
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A) THE
COMPANY'S CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 1998 AND CONSOLIDATED
STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1998 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE THERETO AS CONTAINED IN THE COMPANY'S ANNUAL REPORT
ON FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 1998.
</LEGEND>
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<EXCHANGE-RATE> 1
<CASH> 99,450
<SECURITIES> 0
<RECEIVABLES> 356,341
<ALLOWANCES> 0
<INVENTORY> 95,817
<CURRENT-ASSETS> 551,608
<PP&E> 5,749,050
<DEPRECIATION> 0
<TOTAL-ASSETS> 6,300,658
<CURRENT-LIABILITIES> 7,458,040
<BONDS> 8,433,735
0
0
<COMMON> 1,923
<OTHER-SE> (9,591,117)
<TOTAL-LIABILITY-AND-EQUITY> 6,300,658
<SALES> 0
<TOTAL-REVENUES> 2,576,240
<CGS> 0
<TOTAL-COSTS> 2,939,107
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 246,128
<INCOME-PRETAX> (608,995)
<INCOME-TAX> 24,699
<INCOME-CONTINUING> (633,694)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (633,694)
<EPS-BASIC> (0.23)
<EPS-DILUTED> (0.23)
</TABLE>
