Document:

nilam_8ka-ex1003.htm

    EXHIBIT
      10.3

     

    SEÑOR
      NOTARIO:

     

    SÍRVASE
      USTED EXTENDER EN SU REGISTRO DE ESCRITURAS PÚBLICAS UNA EN LA QUE CONSTE EL
      CONTRATO DE TRANSFERENCIA DE DERECHOS MINEROS QUE OTORGA SOCIEDAD MINERA
      DE RESPONSABILIDAD LIMITADA ÉXITO XXIII, CON RUC 20513347520 CON
      DOMICILIO EN CALLE CASIMIRO ESPEJO NRO. 150 URB. SAN ISIDRO, DISTRITO DE SAN
      ISIDRO, DEBIDAMENTE REPRESENTADA POR SU GERENTE GENERAL SR. ELMER MOISÉS
      ROSALES CASTILLO, IDENTIFICADO CON DNI No 19419605 SEGÚN PODER QUE OBRA
      REGISTRADO EN LA PARTIDA No 11053869 DEL LIBRO DE SOCIEDADES LEGALES DE ZONA
      REGISTRAL No V SEDE TRUJILLO SUCESIVO DENOMINADO "LOS
      TRANSFERENTES", A FAVOR DE NILAM RESOURCES PERÚ SAC. CON RUC No
20517612945, DEBIDAMENTE REPRESENTADA POR SU GERENTE GENERAL SR. CARLOS
      ANDRES MENDOZA SALAZAR, PERUANO, CON DNI No 06755665, INDICANDO
      DOMICILIO EN AV. MALECÓN CISNEROS No 810 MIRAFLORES, LIMA, TAL COMO APARECEN DE
      LOS PODERES INSCRITOS EN LA FICHA No 12085101 DEL REGISTRO DE PERSONAS JURÍDICAS
      DE LA SUNARP, EN LOS SUCESIVO DENOMINADO "LA ADQUIRIENTE" EN
      LOS TÉRMINOS Y CONDICIONES SIGUIENTES:

    

    PRIMERO:
      DE LA PROPIEDAD MINERA:

    

    LOS
      TRANSFERENTES SON TITULARES DE LAS CONCESIONES DENOMINADAS:

    NOMBRE----------------------------CODIGO----------------------HECTAREA------------------PARTIDA

    LA
      PROSPERA
      XXI--------------010090904-------------------------1.000----------------------11702916

    UBICADAS
      EN EL DISTRITO DE OCROS, PROVINCIA DE OCROS, DEPARTAMENTO ANCASH.

    LA
      MINA
      PROSPERA--------------010394406------------------133.8649--------------------11616100

    UBICADAS
      EN EL DISTRITO DE LUPA, PROVINCIA DE OCROS, DEPARTAMENTO ANCASH.

    TOTAL:
      1133.8649 HAS.

    EN
      LO
      SUCESIVO DENOMINADAS "PROPIEDADES MINERAS".

    

    LAS
      PROPIEDADES MINERAS FUERON FORMULADAS AL AMPARO DEL SISTEMA DE CUADRÍCULAS
      PREVISTO EN EL DECRETO LEGISLATJVO NO. 708. EN CONSECUENCIA, EL ÁREA DE LAS
      PROPIEDADES MINERAS SÓLO COMPRENDEN EL ÁREA LIBRE DISPONIBLE DE ACUERDO CON SU
      RESPECTIVO TÍTULO DE CONCESIÓN MINERA, SIN INCLUIR EL ÁREA DE OTROS DENUNCIOS,
      CONCESIONES O PETITORIOS MINEROS UBICADOS DENTRO DE SU PERÍMETRO, O SUPERPUESTOS
      A ELLA, NI DE AQUELLOS A LOS QUE LAS PROPIEDADES MINERAS SE PUDIERA SUPERPONER,
      NI DE AQUELLOS FORMULADOS AL AMPARO DE LEGISLACIONES ANTERIORES AL DECRETO
      LEGISLATIVO NO.708 CUYOS VÉRTICES ADQUIERAN O HUBIERAN ADQUIRIDO COORDENADAS UTM
      DEFINITIVAS, DE CONFORMIDAD CON LO PREVISTO EN EL ARTÍCULO 11 DE LA LEY
      NO.26615, EN CUYO CASO DEBERÁN SER RESPETADOS OBLIGATORIAMENTE POR LAS
      PROPIEDADES MINERAS.

    

    SEGUNDO:
      OBJETO DEL CONTRATO Y VALOR DE LA TRANSFERENCIA:

    EN
      VIRTUD
      DEL PRESENTE INSTRUMENTO Y CON ARREGLO A LOS ARTÍCULOS 163 Y 164 DEL TEXTO ÚNICO
      ORDENADO DE LA LEY GENERAL DE MINERÍA, APROBADO POR DECRETO SUPREMO 014-92-EM,
      LOS TRANSFERENTES TRANSFIEREN A LA ADQUIRIENTE LA TOTALIDAD DE LAS PROPIEDADES
      MINERAS.

    

    EL
      VALOR
      DE TRANSFERENCIA DE CADA UNA DE LAS DOS PROPIEDADES MINERAS SON: LA PROSPERA
      XXI
      POR LA SUMA DE OCHENTA Y OCHO MIL CIENTO NOVENTA Y 00/100 DÓLARES AMERICANOS (US
      $ 88,190.00) Y LA MINA PROSPERA POR LA SUMA DE ONCE MIL OCHOCIENTOS DIEZ Y
      00/100 DÓLARES AMERICANOS (US $ 11,810.00), LO QUE TOTALIZA UN CIEN MIL Y 00/100
      DÓLARES AMERICANOS (US $ 100,000.00) SUMA QUE SERÁ PAGADA A LOS TRANSFERENTES,
      EN LA SIGUIENTE FORMA: CINCUENTA MIL Y 00/100 DOLARES AMERICANOS (US $
      50,000.00) A LA FIRMA DE LA MINUTA DE SIN MÁS COMPROBANTE Y CONFORMIDAD QUE LA
      SUSCRIPCIÓN DE ESTE CONTRATO Y EL SALDO DE CINCUENTA MIL Y 00/100 DOLARES
      AMERICANOS (US $ 50,000.00) A LA FIRMA DE LA ESCRITURA PÚBLICA A TRAVES DE UN
      CHEQUE DE GERENCIA DE UN BANCO DE PLAZA DE LIMA, QUE USTED SEÑOR NOTARIO SE
      SERVIRÁ INSERTAR.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    LA
      ADQUIRIENTE DECLARA CONOCER EL ESTADO DEL PROCEDIMIENTO Y EL CONTENIDO DEL
      TÍTULO Y DE LA PARTIDA REGISTRAL DE LAS PROPIEDADES MINERAS, ASÍ COMO DEL PAGO
      DEL DERECHO DE VIGENCIA Y DEMÁS OBLIGACIONES Y DERECHOS APLICABLES A LAS
      PROPIEDADES MINERAS, DECLARANDO SU TOTAL CONFORMIDAD.

    

    TERCERO:
      GASTOS:

    SON
      DE
      CARGO DE LA ADQUIRIENTE LOS GASTOS NOTARIAL Y REGISTRAL NECESARIOS PARA ELEVAR
      ESTE CONTRATO A ESCRITURA PÚBLICA E INSCRIBIRLO EN EL REGISTRO PÚBLICO DE
      MINERÍA.

    

    CUARTO:
      PAGO DE REGALIAS:

    LAS
      PARTES ACUERDAN QUE LA ADQUIRIENTE REALIZARÁ UN PAGO POR DERECHO DE REGALÍAS A
      LA TRANSFERENTE EQUIVALENTE Al 1.5 % DEL VALOR DE VENTA DEL MINERAL NETO QUE
      SE
      OBTENGA DE LA EXPLOTACION. EL 1.5 % DE LA REGALÍA SE APLICARÁ SOBRE EL VALOR
      NETO TOTAL DE LA VENTA, NO SIENDO CARGO DEL TRANSFERENTE LOS GASTOS DE
      EXPLORACIÓN Y/O EXPLOTACIÓN Y/O CONCENTRACIÓN U OTROS. LOS FLETES SON DE CUENTA
      DE LA ADQUIRIENTE y NO ESTÁN CONSIDERADOS DENTRO DE LAS DEDUCCIONES AL PAGO DEL
      1.5% DE LA REGALÍA. LOS PAGOS POR REGALÍA SE ABONARAN MENSUALMENTE DENTRO DE LOS
      VEINTE (20) DÍAS SIGUIENTES A LA VENTA REALIZADA DE LOS CONCENTRADOS U OTROS
      PRODUCTOS INTERMEDIOS A LA COMERCIALIZACIÓN, ACOMPAÑANDO COPIA DE LA LIQUIDACIÓN
      DEFINITIVA RECIBIDA POR LA ADQUIRIENTE, LA QUE SE DETERMINA POR EL MERCADO
      DE
      METALES DE LONDRES. LAS LIQUIDACIONES QUE SEAN OBJETADAS DENTRO DE LOS VEINTE
      (20) DÍAS SIGUIENTES DE CADA MES SE CONSIDERARAN ACEPTADAS Y CONFORMES. SE DEJA
      ESTABLECIDO QUE ESTAS REGALÍAS SE COMENZARAN A ABONAR DESDE El MOMENTO EN QUE SE
      INICIE LA VENTA DE CONCENTRADOS DE MINERALES PROCEDENTES DE LAS CONCESIONES
      MATERIA DE ESTE CONTRATO, DE ACUERDO A LAS CONDICIONES QUE SE MENCIONAN EN
      EL
      PARRAFO ANTERIOR.

     

    AGREGUE
      USTED SEÑOR NOTARIO LA INTRODUCCIÓN Y CONCLUSIÓN DE LEY Y CURSE EL PARTE AL
      REGISTRO PÚBLICO DE MINERÍA PARA SU INSCRIPCIÓN.

    

    LIMA,
      28
      DE NOVIEMBRE DEL 2007.

    

    ELMER
      MOISÉS ROSALES CASTILLO

    DNI
      No
19419605

    SOCIEDAD
      MINERA DE RESPONSABILIDAD LIMITADA ÉXITO XXIII

    

    CARLOS
      ANDRES MENDOZA SALAZAR

    DNI
      N°
06755665

    NlLAM
      RESOURCES PERÚ S.A.C.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    MR.
      NOTARY:

    

    PLEASE
      EXTEND IN YOUR REGISTRY OF PUBLIC DEED, ONE WHICH INCLUDES THE MINING RIGHTS
      TRANSFERENCE CONTRACT THAT SOCIEDAD MINERA DE RESPONSABILIDAD LIMITADA EXITO
      XXIII GRANT, WITH CONTRIBUTOR NUMBER  20513347520, ADDRESSED IN 150
      CASIMIRO MIRROR STREET, SAN ISIDRO, SAN ISIDRO DISTRICT, PROPERLY REPRESENTED
      BY
      ITS GENERAL MANAGER MR. ELMER MOISÉS ROSALES CASTILLO, IDENTIFIED WITH DNI No
19419605 ACCORDING TO POWER REGISTERED IN CERTIFICATE No 11053869 OF LEGAL
      SOCIETIES BOOK OF REGISTRY ZONE No V,  LOCATED IN TRUJILLO, IN THE
      SUCCESSIVE DENOMINATED "THE ASSIGNER", IN FAVOR OF NILAM RESOURCES PERU SAC.
      WITH RUC No 20517612945, PROPERLY REPRESENTED BY ITS GENERAL MANAGER MR. CARLOS
      ANDRES MENDOZA SALAZAR, PERUVIAN, WITH DNI No 06755665, INDICATING ADDRESS IN
      810 MALECON CISNEROS STREET, MIRAFLORES, LIMA, AS THEY APPEAR ON THE REGISTERED
      POWERS, CARD No 12085101 OF THE REGISTRY OF LEGAL PEOPLE OF SUNARP, IN THE
      SUCCESSIVE DENOMINATED "THE ASSIGNEE" IN THE FOLLOWING TERMS AND
      CONDITIONS:

    

    FIRST:
      MINING PROPERTY:

    

    THE
      ASSIGNER IS TITULAR OF THE CONCESSIONS DENOMINATED:

    

    NAME
      ----------------------------------------CODE-------------------HECTARE------------CERTIFICATE

    LA
      PROSPERA
      XXI-------------------010090904--------------------1.000---------------------11702916

    LOCATED
      IN THE DISTRICT OF OCROS, OCROS PROVINCE, ANCASH DEPARTMENT.

    

    LA
      MINA
      PROSPERA----------------010394406------------------133.8649------------------11616100

    LOCATED
      IN LUPA DISTRICT, OCROS PROVINCE, ANCASH DEPARTMENT

    

    TOTAL:
      1133.8649 HAS.

    FROM
      NOW
      ON DEFINED AS "MINING PROPERTIES".

    

    THE
      MINING PROPERTY WAS FORMULATED UNDER A GRIDS SYSTEM, ANTICIPATED IN THE DECREE
      NUMBER 708. THEFORE, THE AREA OF THE MINING PROPERTY ONLY INCLUDES THE FREE
      AVAILABLE AREA ACCORDING WITH THEIR RESPECTIVE MINING CONCESSION TITLE, WITHOUT
      INCLUDING THE AREA OF OTHER DENOUNCEMENTS, CONCESSIONS OR PETITIONER MINERS
      LOCATED WITHIN THEIR PERIMETER, OR SUPERPOSED, NOR OF THOSE TO WHICH THE MINING
      PROPERTIES COULD BE SUPERPOSED, NOR OF THOSE FORMULATED
      UNDER  PREVIOUS LEGISLATIONS TO THE LEGISLATIVE DECREE NUMBER 708
      WHOSE VERTEX WOULD OR HAVE ACQUIRE DEFINITE UTM COORDINATES IN ACCORDANCE WITH
      ARTICLE 11 OF LAW NUMBER 26615, IN WHICH CASE THEY MUST BE RESPECTED BY MINING
      PROPERTIES.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    SECOND:
      TERMS OF THE AGREEMENT AND VALUE OF THE TRANSFER:

    

    THROUGH
      THIS MEANS AND IN ACCORDANCE WITH ARTICLES 163 AND 164 OF THE GENERAL MINING
      LAW
      APPROVED BY SUPREME DECREE 014-92-EM, THE ASSIGNER TRANSFER TO THE ASSIGNEE
      THE
      WHOLE MINING PROPERTY RIGHT.

    

    THE
      TRANSFERENCE VALUE OF THE TWO MINING PROPERTIES ARE: FOR LA PROSPERA XXI EIGHTY
      EIGHT THOUSANDS ONE HUNDRED NINETY AND 00/100 AMERICAN DOLLARS (US $ 88,190.00)
      AND FOR PROSPERA MINE ELEVEN THOUSAND EIGHT HUNDRED TEN AND 00/100 AMERICAN
      DOLLARS (US $ 11,810.00), TOTALIZING ONE HUNDRED THOUSAND AND 00/100 AMERICAN
      DOLLARS (US $ 100,000.00), AMOUNT THAT WILL BE PAID TO THE ASSIGNER IN TH
      FOLLOWING WAY: FIFTY THOUSAND AND 00/100 AMERICAN DOLLARS (US $ 50,000.00)
      AT
      THE SIGNATURE OF THE MINUTE, WITHOUT PROOF AND CONFORMITY THAN THE SUBSCRIPTION
      OF THIS CONTRACT AND FIFTY THOUSAND AND 00/100 AMERICAN DOLLARS (US $ 50,000.00)
      REMINDER AT THE SIGNATURE OF THE PUBLIC DEED THROUGH A CASHIER ́S CHECK FROM A
      LIMA BANK, THAT THE NOTARY INSERT.

    

    THE
      ASSIGNEE DECLARES TO KNOW THE PROCEDURE ́S STATE AND REGISTRY CERTIFICATE OF THE
      MINING PROPERTIES, AS WELL AS THE PAYMENT FOR THE VALIDITY RIGHT AND OTHER
      OBLIGATIONS AND APPLICABLE RIGHTS TO THE MINING PROPERTIES, DECLARING THEIR
      TOTAL CONFORMITY.

    

    THIRD:
      EXPENSES:

    

    THE
      ASSIGNEE WILL ASSUME THE EXPENSES RELATED TO THE NOTARY ́S SERVICE AND PUBLIC
      REGISTRY PROCEDURES, NECESSARY TO ELEVATE THIS CONTRACT FOR PUBLIC DEED AND
      TO
      REGISTER IT IN THE PUBLIC MINING REGISTRY.

    

    FOURTH:
      ROYALTY PAYMENT:

    

    THE
      PARTS
      DECIDE THAT THE ASSIGNEE WILL MAKE A PAYMENT FOR THE ROYALTY RIGHTS TO THE
      ASSIGNER EQUIVALENT TO 1,5 % OF THE NET MINERAL SALES VALUE THAT IS OBTAINED
      FROM EXPLOITATION. THE 1,5 % FROM THE ROYALTIES WILL BE APPLIED ON THE SALE ́S
      TOTAL NET VALUE,  NOT BEING ASSIGNER ́S POSITION THE EXPLORATION AND/OR
      EXPLOITATION (OPERATION) AND/OR CONCENTRATION OR OTHERS EXPENSES. FREIGHT ARE
      PAID BY THE ASSIGNEE AND ARE NOT CONSIDERED WITHIN THE 1.5% DEDUCTIONS PAYMENT
      OF THE ROYALTY. THE ROYALTY PAYMENTS WILL BE DONE BETWEEN THE TWENTY (20)
      FOLLOWING DAYS OF THE CONCENTRATES OR ANY OTHER INTERMEDIATE PRODUCT TO THE
      COMMERCIALIZATION SALES, TOGETHER WITH THE COPY OF THE DEFINITIVE LIQUIDATION
      RECEIVED BY THE ASSIGNEE, WHICH IS DETERMINED BY THE METAL MARKET OF LONDON.
      THE
      LIQUIDATIONS THAT ARE OBJECTED WITHIN THE TWENTY (20) FOLLOWING DAYS OF EVERY
      MONTH, WILL BE CONSIDERED ACCEPTED AND IN AGREEMENT. IT IS ESTABLISHED THAT
      THE
      PAYMENT OF THESE ROYALTIES WILL BEGUIN SINCE THE MOMENT THE MINERAL CONCENTRATES
      COMING FROM THE CONCESSIONS MATTER OF THIS CONTRACT BEGINS, ACCORDING TO THE
      CONDITIONS THAT ARE MENTIONED IN THE PREVIOUS PARAGRAPH.

    

    PLEASE
      ADDS, NOTARY, THE INTRODUCTION AND CONCLUSION OF LAW AND CURSE THE PART TO
      THE
      MINING PUBLIC REGISTRY FOR ITS INSCRIPTION.

     

    LIMA,
      NOVEMBER 28TH, 2007.

    

    ELMER
      MOISÉS ROSALES CASTILLO

    IDENTITY
      CARD NO. 19419605

    SOCIEDAD
      MINERA DE RESPONSABILIDAD LIMITADA EXITO XXIII

    

    CARLOS
      ANDRES MENDOZA SALAZAR

    IDENTITY
      CARD NO. 06755665

    NLLAM
      RESOURCES PERU SACexv4w1

 

EXHIBIT 4.1

Employment Agreement

The parties to this agreement are LJ International Inc., a British Virgin Islands Company (the
“Company”) and YIH Yu Chuan (the “Executive”). The Company and the Executive hereby agree as
follows :

	1.	 	Employment and Duties

The Company shall employ the Executive and the Executive shall serve the Company as
President and Chief Executive Officer of the Company. The Executive shall use his best
efforts to promote the interests of the Company, and shall perform his duties in relation
to the Company and/or its subsidiaries (collectively “the Group”) faithfully and
diligently, consistent with sound business practices.

	2.	 	Term of Employment

The Executive shall be employed by the Company under this Agreement for a period of three
(3) years commencing as of the date of this agreement.

	3.	 	Remuneration and Reimbursement

	 	(A)	 	Subject to Clause 5, the Executive shall receive during the continuance of
the Appointment :

	 	(1)	 	  A salary at the rate of HK$2,400,000 per annum such salary to
accrue on a day to day basis (including any sum receivable by the Executive as
director’s fee from any company in the Group) and to be payable monthly in
twelve equal installments in arrears on the last day of each calendar month
provided that if the Appointment is terminated prior to the end of a calendar
month, the Executive shall only be entitled to a proportionate part of such
salary in respect of the period of service during the relevant month up to the
date of termination. Such salary shall be adjusted on annual basis at a rate
to be determined by the Board as its absolute discretion having regard to the
operating results of the Group and the performance of the Executive.

	 
	 	(2)	 	  An annual management bonus of a sum to be determined by the
Board at its absolute discretion having regard to the operating results of the
Group and the performance of the Executive during the relevant financial year
or any proportionate part thereof in which service of the Executive pursuant
to this Agreement is rendered. The management bonus shall be payable in
arrears in respect of each relevant financial year within one month after the
issue of the consolidated audited accounts of the Group for such financial
year. The amount payable to the Executive shall be decided by majority
decision of the members of the Board present in the meeting called for that
purpose provided that the Executive

 

 

	 	 	 	shall abstain from voting and not be
counted in the quorum in respect of the resolution regarding the amount so
payable to himself.

	 	(B)	 	The Executive shall continue to receive his salary during any period of
absence on medical grounds up to a maximum of 12 weeks in any period of 12 months
provided that the Executive shall if required supply the Company with medical
certificates covering the period of absence.

	 
	 	(C)	 	The Executive shall be reimbursed all reasonable out-of-pocket expenses
(including expenses of entertainment subsistence and travelling) incurred by him on
the Group’s business which expenses shall be evidenced in such manner as the Board may
require.

	 
	 	(D)	 	The Executive will be entitled to the benefits of any medical or provident
fund scheme as maybe maintained by the Group from to time.

	 
	 	(E)	 	The Executive shall be entitled to 12 working days paid vacation each year.

	4.	 	Other Benefits

The Executive shall be entitled, during the continuance of the Executive’s engagement hereunder,
to the use of a motor car and the Company shall pay all vehicle registration fees, taxes and
insurance premiums in respect of the car and shall pay or reimburse against receipts all
maintenance, repair and other running costs in respect of the car and the cost of petrol.

	5.	 	Termination of the Appointment

	 	(A)	 	Without prejudice to the accrued rights (if any) or remedies of either party
under or pursuant to this Agreement :

	 
	 	(1)	 	the Executive shall be entitled to terminate the Appointment by two months’
notice in writing to the Company if any money payable by the Company to the Executive
under or pursuant to this Agreement is not paid in full by the Company to the
Executive within a period of 30 days from any written demand by the Executive for the
payment thereof;

	 
	 	(2)	 	the Company shall be entitled to terminate the Appointment without any
compensation to the Executive :

	 	(a)	 	  by not less than three months’ notice in writing given at any
time while the Executive shall have been incapacitated or prevented by reason
of ill health, injury or accident from performing his duties hereunder for a
period of or periods aggregating 90 days in the proceeding 12 months provided
that if at any time during the currency of a notice given pursuant to this
sub-paragraph the Executive shall provide a medical certificate satisfactory
to the Board to the effect that he has fully recovered his physical and/or
mental health and that no recurrence of illness or incapacity can reasonably
be anticipated the Company shall withdraw such notice; or

	 
	 	(b)	 	  by summary notice in writing if the Executive shall at any
time:

 

 

i.      commit any serious or persistent breach of any of the provisions herein contained (and to
the extent that such breach is capable of remedy shall fail to remedy such breach within 60 days
after within warning given by the Board);

ii be guilty of any given misconduct or willful
neglect in the discharge of his duties (and to the extent that such
breach is capable of remedy shall fail to remedy such breach within 60
days after written warning given by the Board);

iii. become bankrupt or have a receiving order made
against him;

iv. become a lunatic or of unsound mind;

v. absent himself from the meetings of the Board
during a continuous period of three months, without special leave of
absence from the Board, and his alternate director (if any) shall not
during such period have attended in his stead;

vi. become prohibited by law from acting as a director;

vii.      be guilty of conduct tending to bring himself or
any company in the Group into disrepute;

viii.      be prohibited by law from fulfilling his duties
hereunder; or

ix. be convicted of any criminal offence (other than an
offence which in the reasonable opinion of the Board does not effect his
position as a director of the Company).

	 	(B)	 	If the Company becomes entitled to terminate the Appointment pursuant to
sub-clause (A)(2)(b) it shall be entitled (but without prejudice to its right
subsequently to terminate the Appointment on the same or any other ground) to suspend
the Executive without payment of salary in full or in part for so long as it may think
fit.

	 
	 	(C)	 	If the Executive shall have refused or failed to agree to accept without
reasonable grounds an appointment offered to him on terms no less favourable to him
than the terms in effects under this Agreement, either by a company which has acquired
or agreed to acquire the whole or substantially the whole of the undertaking and
assets of the Company or which shall own or has agreed to acquire the whole or not
less than 90% of the issued share capital of the Company, the Executive shall have no
claim against the Company by reason of the subsequent voluntary winding up of any
company in the Group or of the disclaimer or termination of this Agreement by the
Company within three months after such refusal or failure to agree.

	 
	 	(D)	 	On the termination of the Appointment howsoever arising the Executive shall :

(1) at any time and from time to time thereafter at the request of the Company resign from
office as a director of the Company and all offices held by him in any company in the Group
and shall transfer without payment to the Company or as the Company may direct any
qualifying shares provided by it or any shares held by the Executive as

 

 

nominee for the
Company or any company in the Group provided by it and the Executive hereby irrevocable
appoints the Company to be his attorney and in his name and on his behalf to sign and do
any documents or things necessary or requisite to give effect thereto and a certificate in
writing signed by any director or by the secretary of the Company that any instrument or
act falls within the authority hereby conferred shall be conclusive evidence that such is
the case and any third party shall be entitled to rely on such certificate without further
enquiry provided however that such resignation or resignations shall be given and accepted
on the footing that it is or they are without prejudice to any claims which the Executive
may have against any such company or which any such company may have against the Executive
arising out of this Agreement or of the termination of the appointment; and

	 	(2)	 	     forthwith deliver to the Company all books, documents,
papers, materials, credit cards (if any) and other property of or relating to
the business of the Group which may then be in his possession or under his
power or control.

	 	(E)	 	Save as expressly provided herein, neither party may terminate this Agreement.

	6.	 	Confidentiality

The Company shall not, at any time during or after his employment under this agreement,
disclose to any third party, except in the performance of his duties under this agreement,
any confidential information regarding the Company’s customers, suppliers, trade secrets or
business. The Executive shall return all tangible evidence of such confidential
information to the Company prior to or at the termination of his employment.

	7.	 	Waiver

	 	(A)	 	Time is of the essence of this Agreement but no failure or delay on the part
of either party to exercise any power, right or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by either party of any power,
right or remedy preclude any other or further exercise thereof or the exercise of any
other power, right or remedy by that party.

	 
	 	(B)	 	The remedies provided herein are cumulative and are not exclusive of any
remedies provided by law.

	8.	 	Former Service Agreements

This agreement contains a complete statement of all the arrangements between the parties with
respect to its subject matter, supersedes all existing and former agreements between them with
respect to that subject matter, may not be changed or terminated orally and any amendment or
modification must be in writing and signed by the party to be charged.

	9.	 	Notices

 

 

All notices, requests, demands, consents or other communications to or upon the parties
under or pursuant to this Agreement shall be in writing addressed to the relevant party at
such party’s address set out below (or at such other address as such party may hereafter
specify to the other party) and shall be deemed to have been duly given or made :-

	 	(A)	 	in the case of a communication by letter 48 hours after despatch or, if such
letter is delivered by hand, on the day of delivery;

	 
	 	(B)	 	in the case of communication by telex or facsimile, when sent.

The Company’s address :

Unit 12, 12/F., Block A, Focal Industrial Centre

21 Man Lok Street, Hunghom

Kowloon, HONG KONG

The Executive’s address :

House No. K80, Stage IV, Marina Cove, Sai Kung

HONG KONG

	10.	 	Assignability

This Agreement shall be binding upon and ensure to the benefit of each party hereto and its
successors and assigns and personal representatives (as the case may be), provided always
that the Executive may not assign his obligations and liabilities under this Agreement
without the prior written consent of the Company.

	11.	 	Relationship

None of the provisions of this Agreement shall be deemed to constitute a partnership or
joint venture between the parties for any purpose.

	12.	 	Amendment

This Agreement may not be amended, supplemented or modified except by a written agreement or
instrument signed by or on behalf of the parties hereto.

	13.	 	Severability

Any provision of this Agreement prohibited by or unlawful or unenforceable under any
applicable law actually applied by any court of competent jurisdiction shall, to the extent
required by such law, be severed from this Agreement and rendered ineffective so far as is
possible without modifying the remaining provisions of this Agreement. Where,
however, the provisions of any such applicable law may be waived, they are hereby waived by
the parties to the full extent permitted by such law to the end that this Agreement shall
be a valid and binding agreement enforceable in accordance with its terms.

	14.	 	Law and Jurisdiction

 

 

This Agreement shall be governed and construed in all respects in accordance with the laws
of Hong Kong and the parties hereby submit to the non-exclusive jurisdiction of the courts
of Hong Kong.

IN WITNESS whereof this Agreement has been duly executed the 1st day of January, 2007.

Signed by

	 	 	 	 	 
	/s/ Au Ka Man

	 	/s/ YU CHUAN YIH	 	 
	 
	 	 	 	 
	 

LJ International Inc.

	 	 

YIH Yu Chuan

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