1
EXHIBIT 2.8
Dated 1 August 1999
TERMBRAY ELECTRONICS (B.V.I.) LIMITED
and
TERMBRAY INDUSTRIES INTERNATIONAL (HOLDINGS)
LIMITED
and
VIASYSTEMS CANADA, INC.
and
VIASYSTEMS GROUP, INC.
SHARE PURCHASE AGREEMENT
relating to the sale and purchase
of the whole of the issued share capital of
KALEX PRINTED CIRCUIT BOARD LIMITED
XXX LAP & SONS LIMITED
KALEX CIRCUIT BOARD (CHINA) LIMITED
TERMBRAY LAMINATE COMPANY LIMITED
TERMBRAY PROPERTY (B.V.I.) LIMITED
KALEX CIRCUIT BOARD (HONG KONG) LIMITED
KALEX PRINTED CIRCUIT BOARD (S) PTE LTD
- and -
TERMBRAY CIRCUIT BOARD COMPANY LIMITED
LINKLATERS
00xx Xxxxx, Xxxxxxxxx Xxxxx
00-00 Xxxxxx Xxxx
Xxxx Xxxx
Tel: (000) 0000 0000
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TABLE OF CONTENTS
CONTENTS PAGE
1 Interpretation.......................................................................................1
2 Agreement to Sell the Shares.........................................................................5
3 Consideration........................................................................................6
4 Completion...........................................................................................7
5 Warranties...........................................................................................8
6 Vendor's Financial Standing..........................................................................9
7 Restrictions on the Guarantor and the Vendor........................................................10
8 Other Provisions....................................................................................11
Schedule 1...................................................................................................20
Schedule 2 Completion Obligations............................................................................34
Schedule 3 Warranties given by the Vendor and the Guarantor under Clause 5...................................36
Schedule 4 Properties........................................................................................51
Schedule 5 Consultancy Services Agreement....................................................................53
Appendix 1 Certificate of Approval...........................................................................56
Appendix 2 Net Intra-Group Indebtedness......................................................................57
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THIS AGREEMENT is made on 1 August 1999
BETWEEN:
(1) TERMBRAY ELECTRONICS (B.V.I.) LIMITED, a company incorporated in the
British Virgin Islands and having its registered office at PO Box 71,
Craigmuir Xxxxxxxx, Road Town, Tortola, British Virgin Islands (the
"VENDOR");
(2) TERMBRAY INDUSTRIES INTERNATIONAL (HOLDINGS) LIMITED, a company
incorporated in Bermuda and having its registered office at Xxxxxxxxx
Xxxxx, Xxxxxx Xxxxxx, Xxxxxxxx XX00, Xxxxxxx (the "GUARANTOR");
(3) VIASYSTEMS CANADA, INC. whose principal office is at 000 Xxxxxxxxx
Xxxxxxxxx, Xxxxx-Xxxxxx, Xxxxxx, X0X 0X0, Xxxxxx (the "PURCHASER"); and
(4) VIASYSTEMS GROUP, INC. whose principal office is at 000 Xxxxx Xxxxxx Xxxx,
Xx. Xxxxx, Xxxxxxxx, XX 00000, XXX (the "PURCHASER'S GUARANTOR").
IT IS AGREED as follows:
1 INTERPRETATION
In this Agreement the headings shall not affect its interpretation and,
unless the context otherwise requires, the provisions in this Clause 1
apply:
1.1 DEFINITIONS
"AGREED TERMS" means, in relation to a document, such document in the
terms agreed between the parties and signed for identification by the
Purchaser's Solicitors and the Vendor's Solicitors;
"ACCOUNTS" means (a) the audited accounts of each of the Group Companies
and Subsidiaries (except the PRC Subsidiaries and KPCB(S)), (b) the
unaudited accounts of the PRC Subsidiaries, (c) the audited accounts of
KCB(China) and LL&S (in each case, incorporating the revenue and
expenditure, assets and liabilities relating to the operations conducted at
Zhongshan) and (d) the unaudited combined group accounts of the Group, in
each case for the three financial periods ended on the Balance Sheet Date
and including balance sheets, profit and loss statements, retained earnings
statements and, where applicable, cash flow statements for each Group
Company;
"AUDITORS" means up to 30 March 1997, Xxxx Xxxx Xxxx & Xxxx and thereafter,
Deloitte Touche Tohmatsu;
"BALANCE SHEET DATE" means 31 March 1999;
"BORROWED MONEY" comprises (without duplication) any Indebtedness (a) for
or in respect of money borrowed or raised (whether or not for cash), by
whatever means (including acceptances, deposits, discounting, factoring,
finance leases, hire purchase, sale-and-lease back, sale-and-repurchase and
any form of off-balance sheet financing), or evidenced by a note, bond,
debenture, xxxx of exchange, trust receipt or similar instrument, (b) for
or in respect of interest rate, commodity or currency futures, interest
rate options, interest rate caps or other interest rate, commodity or
currency hedge arrangements, and (c) for the deferred purchase price of
assets or services (other than current trade liabilities incurred in the
ordinary course of business and payable in accordance with customary
practices and accrued expenses incurred in the ordinary course of
business);
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"BORROWINGS" means, on any particular date, the aggregate outstanding principal,
capital or nominal amount of the Indebtedness (including any fixed or minimum
premium payable on redemption or repayment on that date) of members of the Group
for or in respect of Borrowed Money;
"BUSINESS DAY" means a day on which banks are open for business in Hong Kong
(excluding Saturdays, Sundays and public holidays);
"CASH" means the book cash balance as reflected in the accounting records for
cash in hand, savings accounts, current accounts, time deposits, margin deposits
and other deposits with any bank or financial institution less US$4 million;
"COMPLETION" means the completion of the sale and purchase of the Shares
pursuant to Clause 4;
"CONSULTANCY SERVICES AGREEMENT" means the consultancy services agreement
substantially in the form set out in Schedule 5 to be entered into at
Completion;
"DEFERRED SHARES" means the LL&S Deferred Shares and the KCB(China) Deferred
Shares;
"DISCLOSURE LETTER" means the letter of even date with this Agreement from the
Vendor to the Purchaser disclosing:
(i) information constituting exceptions and qualifications to the
Warranties; and
(ii) details of other matters referred to in this Agreement;
"ENCUMBRANCE" means any claim, charge, mortgage, security, lien, option, equity,
power of sale or hypothecation or other third party rights, retention of title,
right of pre-emption, right of first refusal or security interest of any kind;
"EQUIPMENT" means the equipment located at Guangzhou detailed in the schedule of
equipment in the agreed terms;
"GROUP" or "GROUP COMPANIES" means KPCB, LL&S, KCB(China), TLC, TP(BVI),
KCB(HK), KPCB(S), TCBC and their Subsidiaries and "GROUP COMPANY" means any one
of them;
"GUARANTEE" also includes an indemnity, and any other obligation (whatever
called) of any Group Company to pay, purchase, provide funds (whether by the
advance of money, the purchase of or subscription for shares or other
securities, the purchase of assets or services, or otherwise) for the payment
of, indemnify against the consequences of default in the payment of, or
otherwise be responsible for, any liability or obligation of any other person;
"HK$" means Hong Kong dollars, the lawful currency of Hong Kong;
"HONG KONG" means the Hong Kong Special Administrative Region of the PRC;
"INDEBTEDNESS" includes, with respect to any Group Company (the "RELEVANT GROUP
COMPANY"), any obligation (whether present or future, actual or contingent,
secured or unsecured, as principal, surety or otherwise) (a) of the Relevant
Group Company for the payment or repayment of money or (b) of any other person
for the payment or repayment of money secured by Security on assets of the
Relevant Group Company, whether or not the Relevant Group Company is liable in
respect of any obligation so secured but excludes any obligations owed to any
other Group Company and also excludes any Shareholder Loans;
"INFORMATION TECHNOLOGY" means all computer systems, communications systems,
software and hardware owned, used or licensed by or to any Group Company;
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"INTELLECTUAL PROPERTY" means trade marks, service marks, trade names, logos,
get-up, patents, inventions, registered and unregistered design rights,
copyrights, semi-conductor topography rights, database rights and all similar
proprietary rights which may subsist in any part of the world (including
know-how) including, where such rights are obtained or enhanced by registration,
any registration of such rights and applications and rights to apply for such
registrations;
"INTRA-GROUP INDEBTEDNESS" means any liability or obligation (whether present or
future, actual or contingent, secured or unsecured, as principal, surety or
otherwise) of the Vendor, the Guarantor or any of their respective subsidiaries
or any other entity controlled directly or indirectly by Xxx Lap (other than of
a Group Company) owed or owing to any Group Company;
"KCB(CHINA)" means Kalex Circuit Board (China) Limited, a wholly-owned
subsidiary of the Vendor, incorporated in Hong Kong;
"KCB(CHINA) DEFERRED SHARES" means the 50,000 non-voting deferred shares of
HK$100.00 each in the share capital of KCB(China);
"KCB(CHINA) SHARES" means the two ordinary shares of HK$100.00 each comprising
the entire issued ordinary share capital of KCB(China);
"KCB(HK)" means Kalex Circuit Board (Hong Kong) Limited, a wholly-owned
subsidiary of the Vendor, incorporated in Hong Kong;
"KCB(HK) SHARES" means the 1,000,000 ordinary shares of HK$10.00 each,
comprising the entire issued ordinary share capital of KCB(HK);
"KPCB" means Kalex Printed Circuit Board Limited, a wholly-owned subsidiary of
the Vendor, incorporated in Hong Kong;
"KPCB SHARES" means the 10,000 ordinary shares of HK$1.00 each, comprising the
entire issued share capital of KPCB;
"KPCB(S)" means Kalex Printed Circuit Board (S) Pte Ltd, a wholly owned
subsidiary of the Vendor, incorporated in Singapore;
"KPCB(S) SHARES" means the 2 ordinary shares of S$1.00 each , comprising the
entire issued share capital of the KPCB(S);
"LL&S" means Xxx Lap & Sons Limited, a wholly-owned subsidiary of the Vendor,
incorporated in Hong Kong;
"LL&S DEFERRED SHARES" means the 2 non-voting deferred shares of HK$1.00 each in
the share capital of LL&S;
"LL&S SHARES" means the two ordinary shares of HK$1.00 each, comprising the
entire issued ordinary share capital of LL&S;
"LOSSES" means all losses, liabilities, costs (including, without limitation,
legal costs), charges, expenses, actions, proceedings, claims and demands;
"MATERIAL CONTRACTS" means those contracts listed in the Disclosure Letter;
"PRC" means the People's Republic of China;
"PRC SUBSIDIARIES" means Guangzhou Termbray Electronics Technology Co. Ltd.,
Guangzhou Termbray Circuit Board Company Limited and Guangzhou Kalex Laminate
Company Limited, details of which are contained in Part 3 of Schedule 1;
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"PROPERTIES" means the properties brief details of which are set out in Parts 1
and 2 of Schedule 4 and includes each and every part of them and "PROPERTY"
means any one of them;
"PROVIDENT FUND" means Termbray's Electronics Co. Ltd. provident fund, forming
part of the National Mutual Central Provident Fund, as in force at the date of
this Agreement details of which are set out in the Disclosure Letter;
"PURCHASER'S SOLICITORS" means Linklaters of 00xx Xxxxx, Xxxxxxxxx Xxxxx, Xxxxxx
Xxxx, Xxxxxxx, Xxxx Xxxx;
"SALE SHARES" means the KPCB Shares, the LL&S Shares, the KCB(China) Shares, the
TLC Shares, the TP(BVI) Shares, the KCB(HK) Shares, the KPCB(S) Shares and the
TCBC Shares;
"SECURITY" includes any mortgage, pledge, lien, hypothecation, security interest
or other charge or encumbrance and any other agreement or arrangement having
substantially the same economic effect (and "SECURED" shall be construed
accordingly);
"SHAREHOLDER LOANS" means any liability or obligation (whether present or
future, actual or contingent, secured or unsecured, as principal, surety or
otherwise) of any Group Company owed or owing to the Vendor, the Guarantor or
any of their respective subsidiaries or any other entity controlled directly or
indirectly by Xxx Lap (other than to a Group Company);
"SINGAPORE" means the Republic of Singapore;
"SUBSIDIARIES" means the subsidiaries of the Group Companies details of which
are contained in Part 3 of Schedule 1;
"TAXATION CLAIM" bears the meaning given to it in the Tax Deed of Indemnity;
"TAX DEED OF INDEMNITY" means the deed of indemnity against Taxation in the
agreed terms to be entered into at Completion;
"TAXATION" and "TRANSACTION" bear the meanings respectively given to them in the
Tax Deed of Indemnity;
"TCBC" means Termbray Circuit Board Company Limited, a wholly-owned subsidiary
of the Vendor, incorporated in Hong Kong;
"TCBC SHARES" means the two ordinary shares of HK$1.00 each, comprising the
entire issued share capital of TCBC;
"TLC" means Termbray Laminate Company Limited, a wholly-owned subsidiary of the
Vendor, incorporated in Hong Kong;
"TLC SHARES" means the 10,000 ordinary shares of HK$1.00 each, comprising the
entire issued share capital of TLC;
"TP(BVI)" means Termbray Property (B.V.I.) Limited, a wholly-owned subsidiary of
the Vendor, incorporated in the British Virgin Islands;
"TP(BVI) SHARES" means the one ordinary share of US$1.00, comprising the entire
issued share capital of TP(BVI);
"VENDOR'S SOLICITORS" means Woo, Xxxx, Xxx & Lo of 00xx Xxxxx, Xxxxxxx Xxxxx, 0
Xxxxxxxxx Xxxxx, Xxxx Xxxx;
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"WARRANTIES" means the warranties and representations set out in Schedule 3
and "WARRANTY" means any one of them;
1.2 SUBORDINATE LEGISLATION
References to a statutory provision include any subordinate legislation
made from time to time under that provision;
1.3 MODIFICATION ETC. OF STATUTES
References to a statute or statutory provision include that statute or
provision as from time to time modified or re-enacted or consolidated
whether before or after the date of this Agreement so far as such
modification or re-enactment or consolidation applies or is capable of
applying to any transactions entered into in accordance with this
Agreement prior to Completion and (so far as liability thereunder may
exist or can arise) shall include also any past statutory provision (as
from time to time modified or re-enacted or consolidated) which such
provision has directly or indirectly replaced;
1.4 ACCOUNTS
Any reference to "AUDITED ACCOUNTS" shall include the directors' and
auditors' reports, relevant balance sheets and profit and loss accounts
and related notes together with all documents which are or would be
required by law to be annexed to the accounts of the company concerned to
be laid before that company in general meeting in respect of the
accounting reference period in question;
1.5 COMPANIES ORDINANCE, CHAPTER 32
The words "HOLDING COMPANY" and "SUBSIDIARY" shall have the same meanings
in this Agreement as their respective definitions in the Companies
Ordinance (Chapter 32 of the Laws of Hong Kong) (as amended from time to
time);
1.6 CLAUSES, SCHEDULES ETC.
References to this Agreement include any Schedules to it and references to
Clauses and Schedules are to Clauses of and Schedules to this Agreement;
1.7 INFORMATION
Any reference to books, records or other information means books, records
or other information in any form including paper, electronically stored
data, magnetic media, film and microfilm; and
1.8 HEADINGS
Headings shall be ignored in construing this Agreement.
2 AGREEMENT TO SELL THE SHARES
2.1 SALE OF SHARES
The Vendor shall sell or procure to be sold and the Purchaser, relying on
(amongst other things) the several representations, warranties and
undertakings contained in this Agreement, shall purchase the Sale Shares
and the Deferred Shares, in each case free from all Encumbrances and
together with all rights and advantages now and hereafter attaching
thereto.
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2.2 RIGHTS OF PRE-EMPTION
The Vendor hereby waives irrevocably, or shall procure the irrevocable
waiver of, any and all rights of pre-emption over the Sale Shares and the
Deferred Shares conferred either by the Articles of Association or other
equivalent document of the relevant Group Company or in any other way.
3 CONSIDERATION
3.1 AMOUNT The total aggregate amount of consideration for the purchase of the
Sale Shares, the Deferred Shares and the Equipment shall be the sum of
US$325 million plus all Cash of the Group Companies as at Completion less
the amount of any Borrowings as at Completion.
3.2 DETERMINATION OF NET INTRA-GROUP INDEBTEDNESS
Appendix 2 sets out the net intra-group indebtedness of the Group
(representing total Intra-Group Indebtedness minus Shareholder Loans) to
the best of the knowledge and belief of the Vendor and the Guarantor. The
Vendor and the Guarantor shall procure that all Shareholder Loans and
Intra-Group Indebtedness are discharged at Completion.
3.3 DETERMINATION OF BORROWINGS AND CASH
3.3.1 The Vendor's estimate of Borrowings and Cash to be used for the
purpose of the determination of the purchase price under Clause
3.1 is detailed in the schedule of net Indebtedness in the
agreed terms.
3.3.2 The Vendor and the Guarantor shall use all reasonable
endeavours to deliver to the Purchaser by 5 p.m. (Hong Kong
time) on the day prior to Completion pay-off letters from each
of the banks and financial institutions to which Borrowings are
owed or owing. Such pay-off letters shall set out the relevant
bank's best estimate of the total Borrowings owed or owing at
Completion. For the purposes of the determination of the
purchase price under Clause 3.1, the estimate of Borrowings
detailed in the schedule of net Indebtedness in the agreed terms
shall be adjusted to reflect the totals set out in the pay-off
letters.
3.3.3 The Vendor and the Guarantor shall use all reasonable endeavours
to deliver to the Purchaser by 5 p.m. (Hong Kong time) on the
day prior to Completion account balance letters from each of the
banks and financial institutions with which the Group holds
Cash. Such account balance letters shall set out the total Cash
of the Group with that bank or financial institution and shall
separately identify the amount of any deposits which are not
repayable on demand. For the purposes of the determination of
the purchase price under Clause 3.1, the estimate of Cash
detailed in the schedule of net Indebtedness in the agreed terms
shall be adjusted to reflect the totals set out in the account
balance letters.
3.3.4 The parties shall within 60 days after Completion jointly
determine the amount of net Indebtedness (representing
Borrowings minus Cash) as at Completion. If such amount is
higher than such amounts as reflected in the schedule of net
Indebtedness in the agreed terms (as adjusted by the pay-off
letters referred to in Clause 3.3.2 and the account balance
letters referred to in Clause 3.3.3), the Vendor, failing whom
the Guarantor, shall within five Business Days of the joint
determination, pay the amount of such difference in US dollars
to such account as may be specified in the notice served by the
Purchaser. If such amount is lower than such amount as reflected
in the
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schedule of net Indebtedness in the agreed terms (as adjusted by
the pay-off letters referred to in Clause 3.3.2 and the account
balance letters referred to in Clause 3.3.3), the Purchaser,
failing whom the Purchaser's Guarantor, shall within five
Business Days of the joint determination, pay the amount of such
difference in US dollars to the account specified in Clause 3.4
below.
3.4 METHOD OF PAYMENT
The Purchaser, failing whom the Purchaser's Guarantor, shall pay the total
aggregate amount of consideration in US dollars on Completion, which shall
take place in accordance with Clause 4 below in immediately cleared funds,
by telegraphic transfer to the following account (such payment
constituting good discharge) or by such other method as the parties may
agree.
Bank : The Hongkong and Shanghai Banking
Corporation Limited
Bank address : Texaco Road Office, 00
Xxxxxx Xxxx, Xxxxx Xxx, Xxx
Xxxxxxxxxxx, Xxxx Xxxx
Beneficiary : Termbray Electronics Company
Limited
Beneficiary Address : Termbray Industrial
Building 00-00 Xxx Xxx Xxxxxx, Xxxx
Xxxxx Xxx Xxxxxxxxxxx, Xxxx Xxxx
Account No. : 004-195-0-800951
Account type : USD saving
The parties agree that the Purchaser shall deduct from its payment of
the total aggregate amount of consideration an amount equal to the net
intra-group indebtedness of the Group referred to in Clause 3.2. The
Purchaser agrees, and shall procure that the relevant Group Companies
agree, that such deduction shall constitute good discharge of the
Intra-Group Indebtedness owed or owing as at Completion. The Vendor
and the Guarantor each agree, and shall procure that their respective
subsidiaries and any other entity controlled directly or indirectly by
Xxx Lap agree, that the netting-off against the Intra-Group
Indebtedness through such deduction shall constitute good discharge of
the Shareholder Loans owed or owing as at Completion.
4 COMPLETION
4.1 DATE AND PLACE
Completion shall take place at the offices of the Purchaser's Solicitors as
soon as practicable after the date of this Agreement on a date to be agreed
between the parties (and, in any event, no later than 6 August 1999) or at
such other place or at such other time as may be agreed between the
Purchaser and the Vendor.
4.2 OBLIGATIONS ON COMPLETION
4.2.1 On Completion the Guarantor and the Vendor shall jointly and
severally procure that the obligations specified in Part A of
Schedule 2 are fulfilled.
4.2.2 On Completion, in addition to its obligation under Clause 4.3,
the Purchaser shall procure that the obligations specified in
Part B of Schedule 2 are fulfilled.
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4.3 PAYMENT OF PRICE
Against compliance with the foregoing provisions the Purchaser shall
satisfy the purchase consideration in the manner specified in Clause 3.4.
4.4 RIGHT TO TERMINATE
If the foregoing provisions of this Clause are not fully complied with by
the Guarantor and the Vendor by or on the date set for Completion (other
than due to the default of the Purchaser), the Purchaser shall be entitled
(in addition to and without prejudice to all other rights or remedies
available to it including the right to claim damages) by written notice to
the Vendor served on such date:
4.4.1 to elect to terminate this Agreement without liability on the
part of the Purchaser; or
4.4.2 to effect Completion so far as practicable having regard to the
defaults which have occurred; or
4.4.3 to fix a new date for Completion (not being more than 20
Business Days after the agreed date for Completion) in which
case the foregoing provisions of this Clause 4.4 shall apply to
Completion as so deferred but provided such deferral may only
occur once.
5 WARRANTIES
5.1 INCORPORATION OF SCHEDULE 3
5.1.1 The Guarantor and the Vendor jointly and severally warrant and
represent to the Purchaser and its successors in title in the
terms set out in Schedule 3 subject only to:
(i) any matter which is fairly disclosed in the Disclosure
Letter and any matter expressly provided for under the
terms of this Agreement;
(ii) any matter or thing hereafter done or omitted to be done
pursuant to this Agreement or otherwise at the request in
writing or with the approval in writing of the Purchaser;
and
(iii) any circumstance whereby any of the Group Companies,
Yongning Termbray Circuit Boards Factory or Zhongshan Kalex
Circuit Boards Factory is liable or sought to be made
liable for any social security payments (statutory pension
insurance, statutory medical insurance, statutory
unemployment insurance, housing contributions and other
applicable statutory benefits) or individual income tax
levied in the PRC in consequence of any event occurring on
or before Completion.
5.1.2 The Guarantor and the Vendor each acknowledge that the Purchaser
has entered into this Agreement in reliance upon, amongst other
things, the Warranties and on the undertakings contained in
Clauses 6, 7 and 8. Save as expressly otherwise provided, the
Warranties shall be separate and independent.
5.2 UPDATING TO COMPLETION
The Guarantor and the Vendor each further jointly and severally warrant to
the Purchaser and its successors in title that in the event Completion is
for any reason delayed:
5.2.1 subject to Clause 5.1, the Warranties will be fulfilled down to
and will be true and accurate in all respects and not misleading
in any respect at Completion as if they had been given again at
Completion; and
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5.2.2 if after the signing of this Agreement and before Completion any
event shall occur or matter arises which results or may result
in any of the Warranties being unfulfilled, untrue, misleading
or incorrect in any respect at Completion the Vendor shall
immediately notify the Purchaser in writing fully thereof prior
to Completion and the Vendor (at its own cost) shall make any
investigation concerning the event or matter which the Purchaser
may require.
5.3 EFFECT OF COMPLETION
The Warranties and all other provisions of this Agreement and the Tax Deed
of Indemnity insofar as the same shall not have been performed at
Completion shall not be extinguished or affected by Completion, or by any
other event or matter whatsoever, except as expressly provided in this
Agreement or in the Tax Deed of Indemnity or by a specific and duly
authorised written waiver or release by the Purchaser.
5.4 RIGHT OF TERMINATION
In the event Completion is for any reason delayed and if prior to
Completion it shall be found that any of the Warranties was, when given, or
will be or would be, at Completion (as if they had been given again at
Completion) not complied with or otherwise untrue or misleading the
Purchaser shall be entitled (in addition to and without prejudice to all
other rights or remedies available to it and its successors in title
including the right to claim damages) by notice in writing to the Vendor to
terminate this Agreement but failure to exercise this right shall not
constitute a waiver of any other rights of the Purchaser or its successors
in title arising out of any breach of Warranty.
5.5 INFORMATION FROM GROUP COMPANIES
Each of the Guarantor and the Vendor agrees with the Purchaser (for itself
and as trustee for each Group Company and their respective officers,
employees and agents) to assign to the Purchaser any rights, remedies or
claims which they may have in respect of any misrepresentation, inaccuracy
or omission in or from any information or advice supplied or given by any
Group Company or its respective officers, employees or agents in connection
with assisting the Vendor in the making of any representation and the
giving of the Warranties or the preparation of the Disclosure Letter and
the Tax Deed of Indemnity.
5.6 LIMITATIONS
Notwithstanding anything contained in this Agreement or in the Tax Deed of
Indemnity:
5.6.1 Any claims in respect of the Warranties made by the Purchaser
(the "Warranty Claims") shall be brought or notified to the
Vendor and the Guarantor within a period of 18 months following
Completion.
5.6.2 The provisions of Clause 3 of the Tax Deed of Indemnity shall
apply to any Warranty Claims.
6 VENDOR'S FINANCIAL STANDING
6.1 NET ASSET VALUE UNDERTAKING
The Guarantor undertakes to the Purchaser that it will maintain a
consolidated net asset value (the "GUARANTOR'S NAV") of not less than
US$100 million for a period of 18 months after Completion.
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6.2 RESTRICTIONS ON THE GUARANTOR
The Guarantor covenants to the Purchaser that it will not make any capital
or income distributions or enter into any intra-group transactions or other
transactions other than in the ordinary course of business if and to the
extent that as a result of such distributions or transactions, the
Guarantor would be in breach of Clause 6.1.
6.3 CONSEQUENCES OF BREACH
If the Guarantor breaches the provisions of Clause 6.1, the Guarantor shall
notify the Purchaser of such breach shall pay or procure payment into an
interest bearing escrow account, operated by a stakeholder acting jointly
for the Purchaser and the Guarantor, of an amount equal to the shortfall in
the Guarantor's NAV. To the extent that any such shortfall shall increase,
an amount equal to the increased amount of such shortfall shall be paid
into such escrow account in accordance with this Clause 6.3.
6.4 ESCROW ACCOUNT
Any amounts paid into an escrow account in accordance with Clause 6.3 shall
remain in the escrow account until the satisfaction of any Warranty Claim
or Tax Claim brought within the period of 18 months following Completion or
the date falling 18 months from the date of Completion, whichever is later,
after which date, any amount paid into such escrow account (subject to any
reduction to satisfy any Warranty Claim or Tax Claim) shall be returned to
the Guarantor.
7 RESTRICTIONS ON THE GUARANTOR AND THE VENDOR
7.1 NOTIFICATIONS
The Guarantor and the Vendor agree to provide the Purchaser with details of
any dividends or other distributions to be made by either the Guarantor or
the Vendor at any time during the period of 18 months following Completion.
The Guarantor shall ensure timely preparation of its audited annual
accounts and unaudited interim accounts during the period of 18 months
following Completion and shall, immediately following preparation (or,
while the Guarantor remains listed on The Stock Exchange of Hong Kong Ltd.,
publication), provide copies thereof to the Purchaser.
7.2 RESTRICTIONS
Each of the Guarantor and the Vendor undertakes with the Purchaser and its
successors in title as trustee for itself and the Group Companies that it
will not and will procure that all entities controlled by it will not
during the Restricted Period:
7.2.1 directly or indirectly, either in Hong Kong or PRC or elsewhere,
engage in any business which competes, directly or indirectly
with the business as now carried on by any Group Company (or as
part of the Zhongshan operations) and which is or is likely to
be in competition with the business of any Group Company as now
carried on; or
7.2.2 knowingly employ any person (other than Xxx Lap, a member of Xxx
Lap's family, Li Xxx Xxxxx or Xxxxxx Xxxx) who is at the date of
this Agreement an officer or employee of any Group Company (or
is otherwise employed in the Zhongshan operations) as employee,
consultant or otherwise with any of the Guarantor, the Vendor or
any of their subsidiaries or fellow subsidiaries or holding
companies, or induce or seek to induce any such person to serve
as employee, consultant or otherwise with any other company or
business, whether or not such person would thereby commit any
breach of his current contract of service.
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7.3 EXCEPTIONS
7.3.1 The restrictions in Clause 7.2.2 shall not prevent:
(i) the provision by Xx Xxx Lap or Li Xxx Xxxxx to the
Purchaser of any consultancy services pursuant to the
Consultancy Services Agreement; or
(ii) the employment in whatever capacity of an officer or
employee of any Group Company who is after Completion
dismissed by that Group Company (other than for cause).
7.3.2 The restrictions in Clause 7.2 shall not restrict each of Xx
Xxxxx Xxx and/or Xx Xxxxxxx Xxx from directly or indirectly
holding or controlling 5% or less interests (which interests
shall not carry with them any voting rights or economic
interests which are not proportionate to his percentage
shareholding in the relevant company) of a company or entity
engaged in the printed circuit board industry and provided
further that nothing in Clause 7.2 shall restrict the leasing or
licensing of premises to a tenant or licensee engaged in the
printed circuit board industry where such leasing or licensing
is on usual commercial terms.
7.3.3 The restrictions in Clause 7.2.1 shall not restrict the
Guarantor, the Vendor, Xxx Lap, Xxxxx Xxx or Xxxxxxx Xxx from
carrying on any laminate or prepreg manufacturing and sales
business or the manufacture and sale of machinery used in
printed circuit board manufacturing.
7.3.4 The restrictions in Clause 7.2.2 shall not restrict the
Guarantor, the Vendor, Xxx Lap, Xxxxx Xxx or Xxxxxxx Xxx from
employing in aggregate up to 20 persons who are currently
employees of any Group Company, provided such persons are
unskilled operators and provided further that there has been no
solicitation of their employment.
7.4 REASONABLENESS OF RESTRICTIONS
The Guarantor and the Vendor each agree that they consider that the
restrictions contained in this Clause are no greater than is reasonable and
necessary for the protection of the interest of the Purchaser but if any
such restriction shall be held to be void but would be valid if deleted in
part or reduced in application, such restriction shall apply with such
deletion or modification as may be necessary to make it valid and
enforceable.
7.5 RESTRICTED PERIOD
For the purposes of this Clause 7, "Restricted Period" means the period of
two years commencing on Completion.
8 OTHER PROVISIONS
8.1 ANNOUNCEMENTS
No announcement or circular in connection with the existence or the subject
matter of this Agreement shall be made or issued by or on behalf of the
Guarantor, the Vendor (or any of their respective directors) or the
Purchaser without the prior written approval of the other parties hereto.
This shall not affect any announcement or circular required by law or any
regulatory body or the rules of any recognised stock exchange but the party
with an obligation to make an announcement or issue a circular shall
consult with the other parties insofar as is reasonably practicable before
complying with such an obligation.
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8.2 SUCCESSORS AND ASSIGNS
The Guarantor and the Vendor each agree that the benefit of every provision
in this Agreement is given to the Purchaser for itself and its successors
in title and assigns. Accordingly, the Purchaser (and its successors and
assigns) may, without the consent of the other parties, assign the benefit
of all or any of the other parties' obligations under this Agreement,
and/or any benefit arising under or out of this Agreement.
8.3 VARIATION
No variation of this Agreement shall be effective unless in writing and
signed by or on behalf of each of the parties to this Agreement.
8.4 TIME OF THE ESSENCE
Time shall be of the essence of this Agreement both as regards any dates
and periods mentioned and as regards any dates and periods which may be
substituted for them in accordance with this Agreement or by agreement in
writing between the parties.
8.5 FURTHER ASSURANCE
At any time after the date of this Agreement the Guarantor and the Vendor
shall each, and shall use their best endeavours to procure that any
necessary third party shall, execute such documents and do such acts and
things as the Purchaser may reasonably require for the purpose of giving to
the Purchaser the full benefit of all the provisions of this Agreement.
8.6 COSTS
The Guarantor and the Vendor shall together bear all costs incurred by them
and the Group in connection with the preparation, negotiation and entry
into of this Agreement (which for the avoidance of doubt shall exclude the
annual audit fees payable by the Group to the Auditors), the Tax Deed of
Indemnity and the sale of the Sale Shares. The Purchaser shall bear all
such costs incurred by it. The Vendor and the Purchaser shall each bear one
half of any Hong Kong stamp duty payable in respect of the sale and
purchase of the Sale Shares.
8.7 INDEMNITY
8.7.1 The Vendor and the Guarantor jointly and severally covenant,
agree and undertake to indemnify and keep indemnified the
Purchaser, for itself and as trustee for the Group Companies,
against any loss, claim, damage, liability, cost or expense
whatsoever suffered by the Group Companies (subject, in the case
of costs and expenses incurred after Completion, to such costs
and expenses being reasonable) resulting from or in connection
with:
(i) the litigation commenced in the High Court of Hong Kong
(action numbers: 99S03111, 99S03112 and 99S03113) in which
Kingboard Laminates Limited is named as plaintiff; and
(ii) the following proceedings in which various Group Companies
have been involved since 1980:
(a) Kalex Circuit Board Company Limited (now known as
Kalex Circuit Board (China) Limited) -v- Orient Xxxxxx
Limited (commenced 3 August 1983);
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(b) Kalex Circuit Board Company Limited (now known as
Kalex Circuit Board (China) Limited) -v- Xxx Xxxx
Weaving and Dyeing Factory Ltd (commenced 2 September
1983);
(c) Dielektra (Hongkong) Ltd -v- Kalex Circuit Board
Company Limited (now known as Kalex Circuit Board
(China) Limited) (commenced 17 April 1984);
(d) Kalex Circuit Board Company Limited (now known as
Kalex Circuit Board (China) Limited) -v- RTA
Electronics Limited (commenced 23 August 1984);
(e) Kalex Circuit Board Company Limited (now known as
Kalex Circuit Board (China) Limited) -v Goodwell
Industries Limited (commenced 24 March 1994);
(f) Xxx Xxx Xxxxx -v- Kalex Circuit Board (Hong Kong)
Limited (commenced 25 June 1999);
(g) Tat Shing Paper Products Xxxxxxx -x- Xxxxx Xxxxxxx
Xxxxx (Xxxx Xxxx) Limited (commenced 14 November
1997);
(h) Xxx Xxx Xxxxx -v- Astec Circuit Boards Limited (now
known as Kalex Circuit Board (Hong Kong) Limited)
(commenced 18 January 1989); and
(i) Meidik Electrical Family Limited -v- Ma Chan Wing and
Astec Circuit Boards Limited (now known as Kalex
Circuit Board (Hong Kong) Limited) (commenced 7
February 1996).
8.7.2 The Vendor and the Guarantor shall be entitled at their own
expense in their absolute discretion to take such action as they
shall deem necessary to avoid, dispute, deny, defend, resist,
appeal, compromise or contest such claim or liability
(including, without limitation, making counterclaims or other
claims against third parties) in the name of and on behalf of
the relevant Group Companies and to have the conduct of any
related proceedings, negotiations or appeals.
8.7.3 The Purchaser will give, subject to being paid all reasonable
costs and expenses, all such information and assistance,
including access to premises and personnel, and the right to
examine and copy or photograph any assets, accounts, documents
and records, for the purpose of avoiding, disputing, denying,
defending, resisting, appealing, compromising or contesting any
such claim or liability as the Vendor, the Guarantor or their
professional advisers reasonably request. The Vendor and the
Guarantor agree to keep all such information confidential and
only to use it for such purpose.
8.7.4 The Vendor and the Guarantor jointly and severally covenant,
agree and undertake to indemnify and keep indemnified the
Purchaser, for itself and as trustee for the Group Companies,
against any loss, claim, damage, liability, cost or expense
whatsoever suffered by the Group Companies resulting from any
Guarantee in respect of any Borrowed Money of any other person
(except for any other Group Company).
8.8 CANCELLATION OF GUARANTEES
8.8.1 The Purchaser shall (subject to all reasonable assistance being
provided by the Vendor and the Guarantor) use all reasonable
endeavours to procure, on Completion,
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the release or discharge of such guarantees (the "FACILITY
GUARANTEES") given in favour of any third party by the
Guarantor, the Vendor or any of their respective subsidiaries
(other than the Group Companies) in respect of obligations owing
by the Group Companies details of which have been notified to
the Purchaser by 5.00 p.m. (Hong Kong time) on the day prior to
Completion as referred to in paragraph 1 of Part B of Schedule
2.
8.8.2 The Purchaser hereby expressly acknowledges that the release of
the Facility Guarantees may involve the cancellation of banking
facilities available to the Group and thus affect the operations
and conditions of the Group and the Purchaser hereby confirms to
the Vendor and the Guarantor that it has made alternative
arrangements to finance the Group on Completion.
8.8.3 Each of the Purchaser and the Purchaser's Guarantor shall
indemnify and keep indemnified the Vendor and the Guarantor (for
itself and as trustee for any of its subsidiaries other than the
Group Companies) in full against any loss, claim, damage,
liability or expense whatsoever suffered by the Vendor or the
Guarantor or any subsidiaries of the Guarantor (other than the
Group Companies) attributable to any claim made under any of the
Facility Guarantees which have not been released or discharged
on or before Completion pursuant to Clause 8.8.1.
8.9 LICENCES
8.9.1 GUANGZHOU STORAGE
The Purchaser hereby agrees with the Vendor to procure the grant
to the Vendor of a licence in the agreed terms permitting
specified items of equipment to remain in the factory in
Guangzhou for a period of up to 12 months following Completion.
8.9.2 HONG KONG OFFICES
In consideration of the licence provided to the Vendor pursuant
to Clause 8.9.1, the Vendor hereby agrees to procure the grant
of a licence to the Purchaser in the agreed terms of the ground
floor, one lorry-parking space, the third and fourth floors of
Termbray Industrial Building, 18-22 Xxx Tin Street, Xxxx Xxxxx,
New Territories, Hong Kong, for a period of 3 months following
Completion.
8.10 PROVIDENT FUND
The Guarantor and the Vendor shall use all reasonable endeavours (with the
cooperation of the Purchaser) to procure that the following actions shall
be taken in relation to the Provident Fund as soon as reasonably
practicable after Completion:-
8.10.1 Xxx Plastics Manufacturing Co. Ltd. and Termbray Electronics Co.
Ltd. shall cease to be participating companies in the Provident
Fund;
8.10.2 Termbray Electronics Co. Ltd. shall be substituted by KCB(China)
as the "representative employer" in relation to the Provident
Fund for the purposes of the Occupational Retirement Schemes
Ordinance.
The Purchaser shall give all notifications required in relation to the
matters set out in Clauses 8.10.1 to 8.10.2 to the Registrar of
Occupational Retirement Schemes and the trustee or administrator of the
Provident Fund, and the Guarantor and the Vendor shall each co-operate
fully with the Purchaser to enable it to meet its obligations in this
respect.
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8.11 GUARANTEE OF PURCHASER'S OBLIGATION
8.11.1 In consideration of the Vendor and the Guarantor entering into
this Agreement at the request of the Purchaser's Guarantor, the
Purchaser's Guarantor hereby guarantees, unconditionally and
irrevocably as primary obligor, the due observance and
performance by the Purchaser of all the agreements,
stipulations, terms and conditions contained in this Agreement
on the part of the Purchaser to be observed and performed, and
all the obligations and liabilities of the Purchaser under this
Agreement, and that in the event the Purchaser shall fail to
observe and perform any of its obligations at the time and in
the manner provided in this Agreement, the Purchaser's Guarantor
shall on demand by the Vendor and/or the Guarantor indemnify and
keep indemnified fully the Vendor and/or the Guarantor against
any loss or damage the Vendor and/or the Guarantor may have
suffered or incurred as a result of such failure on the part of
the Purchaser.
8.11.2 The guarantee provided by the Purchaser's Guarantor in this
Clause 8.11 shall be a continuing guarantee and shall cover all
obligations, covenants and liabilities of the Purchaser under
this Agreement notwithstanding the liquidation, bankruptcy,
incapacity or any change in the constitution or status of the
Purchaser or the Purchaser's Guarantor or any settlement of
account or variation or modification of this Agreement or any
indulgence or waiver given by any parties hereto or other
matters whatsoever until the last claim whatsoever by the Vendor
and/or the Guarantor against each of the Purchaser and the
Purchaser's Guarantor has been satisfied in full.
8.11.3 Should any purported obligation of the Purchaser, which if valid
or enforceable would be the subject of the guarantee under this
Clause 8.11, be or become wholly or in part invalid or
unenforceable against the Purchaser by reason of any defect in
or insufficiency or want of powers of the Purchaser or irregular
or improper purported exercise thereof or breach or want of
authority by any person purporting to act on behalf of the
Purchaser or because the Vendor's or the Guarantor's rights have
become barred by reason of any legal limitation, disability,
incapacity or any other fact or circumstances whether or not
known to the Vendor and/or the Guarantor, the Purchaser's
Guarantor shall nevertheless be liable to the Vendor and/or the
Guarantor (notwithstanding the avoidance or invalidity of any
term or condition of this Agreement whatsoever including
(without limitation) avoidance under any enactment relating to
liquidation) in respect of that purported obligation or
liability as if the same were wholly valid and enforceable. The
Purchaser's Guarantor hereby agrees to keep the Vendor and/or
the Guarantor fully indemnified against all damages, losses,
costs and expenses arising from any failure of the Purchaser to
carry out any obligation, covenant or undertaking under this
Agreement.
8.11.4 The guarantee provided by the Purchaser's Guarantor in this
Clause 8.11 may be enforced against the Purchaser's Guarantor
without the Vendor and/or the Guarantor first instituting legal
proceedings against the Purchaser in the first instance or
joining in the Purchaser as a party in the same proceedings
against the Purchaser's Guarantor.
8.12 ORBOTECH NOVATION
The Guarantor agrees that, as soon as reasonably practicable after
Completion, it will use all reasonable endeavours to procure the novation
of its agreement with Orbotech Pacific Limited (the "ORBOTECH AGREEMENT")
with respect to the provision of service and maintenance of equipment for
the period between 1 April 1999 and 31 May 2000. Such novation shall be
made in favour of such Group Companies that own or operate the equipment
covered by the
-15-
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Orbotech Agreement unless otherwise directed by the Purchaser. Pending
novation of the Orbotech Agreement, the Guarantor agrees to hold the
benefit of the Orbotech Agreement on trust for the relevant Group
Companies.
8.13 STAMP DUTY FILING
The Purchaser undertakes to submit the transfers referred to in paragraph
1.5 of Part A of Schedule 2 to the relevant authorities for stamping within
thirty days after Completion and agrees to indemnify the Vendor for any
penalties attributable to its failure to comply with such undertaking.
8.14 ZHONGSHAN ASSETS
The Vendor and the Guarantor shall each undertake to:
8.14.1 procure that KCB(China) shall remain the investor in Kalex
Multi-layer Circuit Board (Zhongshan) Co. Ltd. (in the process
of incorporation) in the period up to Completion;
8.14.2 procure that as soon as reasonably practicable after Completion,
Zhongshan Xiaolan Yongning Termbray Circuit Board Factory,
Zhongshan Kalex Circuit Board Factory and Zhongshan Xiaolan
Township Yongning Industrial Corporation (the "ZHONGSHAN
VENDORS") shall enter into an agreement for the transfer to
Kalex Multi-layer Circuit Board (Zhongshan) Company Limited (or
such other entity as the Purchaser may direct) of all property,
assets and transferable rights of the Zhongshan Vendors used in
connection with, or held by the Zhongshan Vendors for the
purposes of, the business of processing, manufacturing and
selling printed circuit board products in Zhongshan (the
"ZHONGSHAN BUSINESS");
8.14.3 assist Kalex Multi-layer Circuit Board (Zhongshan) Company
Limited in offering new employment, on such date as the
Purchaser may direct but in any event before 31 October 1999, to
each of the employees of the Zhongshan Vendors who are at the
date of this Agreement employed in the Zhongshan Business, and
procure that such employees' employment with the Zhongshan
Vendors is terminated on terms acceptable to the Purchaser;
8.14.4 provide all reasonable assistance to the Group Companies in
ensuring that, pending the transfer of the assets and employees
referred to in Clauses 8.14.2 and 8.14.3 above, the Zhongshan
Business is carried on in all respects in the ordinary course,
in continuation of the manner of the conduct of the Zhongshan
Business prior to the date of this Agreement and that the assets
referred to in Clause 8.14.2 continue to be utilised and that
the employees referred to in Clause 8.14.3 continue to work for
the purposes of the Zhongshan Business; and
8.14.5 provide all reasonable assistance to the Group Companies in
ensuring that, pending the transfer of the assets referred to in
Clause 8.14.2 above, the processing contract with respect to the
Zhongshan Business continues to be duly performed.
To the extent that the costs of procuring and effecting the transfer of the
assets and employees referred to in Clauses 8.14.2 and 8.14.3 above exceed
HK$7.75 million, such excess costs shall be borne by the Vendor or the
Guarantor.
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8.15 GUANGZHOU DORMITORY LAND AND BUILDINGS
The Vendor and the Guarantor shall each undertake to procure (at their own
cost) the due issue to Guangzhou Termbray Electronics Technology Co. Ltd.
of a land and building title certificate with respect to the approximately
31,000 square metres of land and four dormitory buildings located adjacent
to 000 Xxxxx Xxxx (Xxxx), Xxxxx Xxxx, Xxxxxx, Guangzhou as soon as
reasonably practicable after Completion.
8.16 ZHONGSHAN PCB FACTORY BUILDING OWNERSHIP CERTIFICATE
The Vendor and the Guarantor shall each undertake to procure (at their own
cost) the due issue to KCB(China) of a building ownership certificate with
respect to all the factory buildings located at Luosha Village, Yongning,
Xiaolan, Zhongshan as soon as reasonably practicable after Completion.
8.17 NOTICES
8.17.1 Any notice, claim or demand in connection with this Agreement
shall be in writing in English (a "Notice") and shall be
sufficiently given or served if delivered or sent:
In the case of either the Guarantor or the Vendor to Termbray
Industries International (Holdings) Limited:
Address: Termbray Industrial Building
00-00 Xxx Xxx Xxxxxx
Xxxx Xxxxx, Xxx Xxxxxxxxxxx
Xxxx Xxxx
Fax: (000) 0000 0000
Attention: Xx Xxx Lap
In the case of the Purchaser to Viasystems Group, Inc.:
Address: 000 Xxxxx Xxxxxx Xxxx
Xx Xxxxx
Xxxxxxxx 00000
XXX
Fax: (0) 000 000 0000
Attention: Xx Xxxxx Xxxxxxxx
8.17.2 Any Notice may be delivered by hand or, sent by messenger,
telegram, telex, fax or post. Without prejudice to the
foregoing, any Notice shall conclusively be deemed to have been
received on the next working day in the place to which it is
sent, if sent by messenger, telegram, telex or fax, or 60 hours
from the time of posting, if sent by post, or at the time of
delivery, if delivered by hand.
8.18 INVALIDITY
If any provision in this Agreement shall be held to be illegal, invalid or
unenforceable, in whole or in part, under any enactment or rule of law,
such provision or part shall to that extent be
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deemed not to form part of this Agreement but the legality, validity or
enforceability of the remainder of this Agreement shall not be affected.
8.19 COUNTERPARTS
This Agreement may be entered into in any number of counterparts, all of
which taken together shall constitute one and the same instrument. Any
party may enter into this Agreement by executing any such counterpart.
8.20 GOVERNING LAW AND SUBMISSION TO JURISDICTION
8.20.1 This Agreement and the documents to be entered into pursuant to
it, save as expressly referred to therein, shall be governed by
and construed in accordance with Hong Kong law.
8.20.2 All the parties irrevocably agree that the courts of Hong Kong
are to have exclusive jurisdiction to settle any dispute which
may arise out of or in connection with this Agreement and the
documents to be entered into pursuant to it. All the parties
irrevocably submit to the jurisdiction of such courts and waive
any objection to proceedings in any such court on the ground of
venue or on the ground that proceedings have been brought in an
inconvenient forum.
8.21 APPOINTMENT OF PROCESS AGENTS
8.21.1 The Vendor irrevocably appoints the Guarantor as its agent for
the service of process in Hong Kong in relation to any matter
arising out of this Agreement, service upon whom shall be deemed
completed whether or not forwarded to or received by the
Guarantor.
8.21.2 The Vendor shall inform the Purchaser, in writing, of any change
in the address of its process agents within 28 days.
8.21.3 If such process agents cease to have an address in Hong Kong,
the Vendor irrevocably agrees to appoint new process agents
acceptable to Purchaser and to deliver to Purchaser within 14
days a copy of a written acceptance of appointment by its new
process agents.
8.21.4 Each of the Purchaser and the Purchaser's Guarantor irrevocably
appoints United Chain Consultants Limited of Third Floor,
Termbray Industrial Building, 18-22 Xxx Tin Street, Xxxx Xxxxx,
New Territories, Hong Kong as its agent for the service of
process in Hong Kong in relation to any matter arising out of
this Agreement, service upon whom shall be deemed completed
whether or not forwarded to or received by the Purchaser or the
Purchaser's Guarantor (as the case may be).
8.21.5 Each of the Purchaser and the Purchaser's Guarantor shall inform
the Guarantor, in writing, of any change in the address of its
process agents within 28 days.
8.21.6 If such process agents cease to have an address in Hong Kong,
the Purchaser and the Purchaser's Guarantor each irrevocably
agree to appoint new process agents acceptable to Guarantor and
to deliver to Guarantor within 14 days a copy of a written
acceptance of appointment by its new process agents.
8.21.7 Nothing contained in this Agreement shall affect the right to
serve process in any other manner permitted by law or the right
to bring proceedings in any other jurisdiction for the purposes
of the enforcement or execution of any judgement or other
settlement in any other courts.
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IN WITNESS whereof this Agreement has been duly executed.
SIGNED by XXX LAP
on behalf of TERMBRAY ELECTRONICS Xxx Lap (Sd.)
(B.V.I.) LIMITED
in the presence of:
XXXXX XXXXX XXXXX XXXX
Solicitor
Woo Xxxx Xxx & Lo
27th Floor Jardine House Xxxxx Xxxxx Xxxxx Xxxx (Sd.)
0 Xxxxxxxxx Xxxxx
Xxxx Xxxx
SIGNED by XXX LAP
on behalf of TERMBRAY INDUSTRIES
INTERNATIONAL (HOLDINGS) LIMITED.
in the presence of: Xxx Lap (Sd.)
XXXXX XXXXX XXXXX XXXX
Solicitor
Woo Xxxx Xxx & Lo
27th Floor Jardine House Xxxxx Xxxxx Xxxxx Xxxx (Sd.)
0 Xxxxxxxxx Xxxxx
Xxxx Xxxx
SIGNED by XXX XXXXX on behalf of
VIASYSTEMS CANADA, INC. in the Xxx Xxxxx (Sd.)
presence of:
XXXXX XXXXXXX
Viasystems Group, Inc. Xxxxx Xxxxxxx (Sd.)
000 Xxxxx Xxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx
XX 00000, XXX
SIGNED by XXX XXXXX on behalf of
VIASYSTEMS GROUP, INC. in the Xxx Xxxxx (Sd.)
presence of:
XXXXX XXXXXXX
Viasystems Group, Inc. Xxxxx Xxxxxxx (Sd.)
000 Xxxxx Xxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx
XX 00000, XXX
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SCHEDULE 1
PART 1
PARTICULARS OF SHARES SOLD ETC.
(1) (2)
NAMES AND ADDRESSES OF VENDOR OR SHARES SOLD
NOMINEE
Xxx Lap 1 KPCB Share
1 LL&S Share
1 KCB(China) Share
1 TP(BVI) Share
1 KCB(HK) Share
1 TCBC Share
1 LL&S Deferred Share
44,500 KCB(China) Deferred Shares
1 TLC Share
Termbray Electronics (B.V.I.) Limited 9,999 KPCB Shares
1 LL&S Share
1 KCB(China) Share
9,999 TLC Shares
1 TP(BVI) Shares
999,999 KCB(HK) Shares
1 TCBC Share
Xxxxx Xxx Ping 1 LL&S Deferred Share
5,500 KCB(China) Deferred Shares
Xxxx Xxx Min Xxxxxxx 1 KCBC(S) Share
Thamarai D/O Krishnan 1 KCBC(S) Share
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PART 2
PARTICULARS OF THE PRINCIPAL GROUP COMPANIES
KALEX PRINTED CIRCUIT BOARD LIMITED
REGISTERED NUMBER: 506562
REGISTERED OFFICE: 3/F., Termbray Industrial Building,
18-22 Xxx Tin Street,
Xxxx Xxxxx, New Territories,
Hong Kong
DATE AND PLACE OF INCORPORATION: 28 February 1995 , Hong Kong
DIRECTORS: Xxx Lap
Xxxxx Xxx Ping
SECRETARY: Li Xxx Xxxxx
ACCOUNTING REFERENCE DATE: 31 March
AUTHORISED SHARE CAPITAL: HK$10,000 divided into
10,000 Ordinary Shares of HK$1.00 each
ISSUED AND FULLY PAID-UP SHARE CAPITAL: 10,000 Ordinary Shares of HK$1.00 each
SHAREHOLDERS BENEFICIAL OWNERS NO. OF SHARES
Xxx Lap Termbray Electronics (BVI) 1
Limited
Termbray Electronics (BVI) -- 9,999
Limited ------
10,000
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XXX LAP & SONS LIMITED
REGISTERED NUMBER: 138970
REGISTERED OFFICE: 3/F., Termbray Industrial Building,
18-22 Xxx Tin Street,
Xxxx Xxxxx, New Territories,
Hong Kong
DATE AND PLACE OF INCORPORATION: 10 July 1984, Hong Kong
DIRECTORS: Xxx Lap
Xxxxx Xxx Ping
SECRETARY: Li Xxx Xxxxx
ACCOUNTING REFERENCE DATE: 31 March
AUTHORISED SHARE CAPITAL: HK$10,000 divided into
9,998 Ordinary Shares of HK$1.00 each
2 Non-voting Deferred Shares of HK$1.00 each
ISSUED AND FULLY PAID-UP SHARE CAPITAL: 2 Ordinary Shares of HK$1.00 each
2 Non-voting Deferred shares of HK$1.00 each
SHAREHOLDERS BENEFICIAL OWNERS NO. OF SHARES
Termbray Electronics (BVI) Limited -- 1 Ordinary
Xxx Lap Termbray Electronics (BVI) 1 Ordinary
Limited
Xxxxx Xxx Ping -- 1 Non-voting Deferred
Xxx Lap -- 1 Non-voting Deferred
---------------------
0
-00-
00
XXXXX XXXXXXX XXXXX (XXXXX) LIMITED
REGISTERED NUMBER: 98891
REGISTERED OFFICE: 3/F., Termbray Industrial Building,
18-22 Xxx Tin Street,
Xxxx Xxxxx, New Territories,
Hong Kong
DATE AND PLACE OF INCORPORATION: 9 June 1981, Hong Kong
DIRECTORS: Xxx Lap
Xxxxx Xxx Ping
SECRETARY: Li Xxx Xxxxx
ACCOUNTING REFERENCE DATE: 31 March
AUTHORISED SHARE CAPITAL: HK$5,001,000 divided into
10 Ordinary Shares of HK$100.00 each
50,000 Non-voting Deferred Shares of
HK$100 each
ISSUED AND FULLY PAID-UP SHARE CAPITAL: 2 Ordinary Shares of HK$100.00 each
50,000 Non-voting Deferred Shares of
HK$100 each
SHAREHOLDERS BENEFICIAL OWNERS NO. OF SHARES
Xxx Lap -- 44,500 Non-voting Deferred
Xxxxx Xxx Ping -- 5,500 Non-voting Deferred
Termbray Electronics (BVI) Limited -- 1 Ordinary
Xxx Lap Termbray Electronics 1 Ordinary
(BVI) Limited
--------------------------
50,002
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TERMBRAY LAMINATE COMPANY LIMITED
REGISTERED NUMBER: 494361
REGISTERED OFFICE: 3/F., Termbray Industrial Building,
18-22 Xxx Tin Street,
Xxxx Xxxxx, New Territories,
Hong Kong
DATE AND PLACE OF INCORPORATION: 18 October 1994, Hong Kong
DIRECTORS: Xxx Lap
Xxxxx Xxx Ping
SECRETARY: Li Xxx Xxxxx
AUTHORISED SHARE CAPITAL: HK$10,000 divided into
10,000 Ordinary Shares of HK$1.00 each
ISSUED AND FULLY PAID-UP SHARE CAPITAL: 10,000 Ordinary Shares of HK$1.00 each
SHAREHOLDERS BENEFICIAL OWNERS NO. OF SHARES
Xxx Lap Termbray Electronics (BVI) 1
Limited
Termbray Electronics (BVI) -- 9,999
Limited
------
10,000
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TERMBRAY PROPERTY (B.V.I.) LIMITED
REGISTERED NUMBER: 62296
REGISTERED OFFICE: XX Xxx 00, Xxxxxxxxx Xxxxxxxx, Xxxx Xxxx,
Xxxxxxx, Xxxxxxx Xxxxxx Xxxxxxx
DATE AND PLACE OF INCORPORATION: 14 May 1992, British Virgin Islands
DIRECTORS: Xxx Lap
Xxxxx Xxx Ping
SECRETARY: Xxxxxx Limited
AUTHORISED SHARE CAPITAL: US$50,000 divided into
50,000 Ordinary Shares of US$1.00 each
ISSUED AND FULLY PAID-UP SHARE CAPITAL: 1 Ordinary Share of US$1.00
SHAREHOLDERS BENEFICIAL OWNERS NO. OF SHARES
Termbray Electronics (B.V.I.) -- 1
Limited
-------------
0
-00-
00
XXXXX XXXXXXX XXXXX (XXXX XXXX) LIMITED
REGISTERED NUMBER: 106134
REGISTERED OFFICE: 3/F., Termbray Industrial Building,
18-22 Xxx Tin Street,
Xxxx Xxxxx, New Territories,
Hong Kong
DATE AND PLACE OF INCORPORATION: 1 December 1981, Hong Kong
DIRECTORS: Xxx Lap
Xxxxx Xxx Xxxx
Xxx Hon Kai
SECRETARY: Li Xxx Xxxxx
ACCOUNTING REFERENCE DATE: 31 March
AUTHORISED SHARE CAPITAL: HK$10,000,000 divided into
1,000,000 Ordinary Shares of HK$10.00 each
ISSUED AND FULLY PAID-UP SHARE CAPITAL: 1,000,000 Ordinary Shares of HK$10.00 each
SHAREHOLDERS BENEFICIAL OWNERS NO. OF SHARES
Xxx Lap Termbray Electronics (BVI) 1
Limited
Termbray Electronics (BVI) -- 999,999
Limited ---------
1,000,000
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KALEX PRINTED CIRCUIT BOARD (S) PTE LTD
REGISTERED NUMBER: 199901002N
REGISTERED OFFICE: 000 Xxxxxxx Xxxxx Xxxx, Xxxxxxxxx 000000
DATE AND PLACE OF INCORPORATION: 2 March 1999, Singapore
DIRECTORS: Xxxx Xxx Min, William
Thamarai D/O Krishnan
SECRETARY: Not yet appointed
AUTHORISED SHARE CAPITAL: S$100,000 divided into 100,000 Ordinary
Shares of S$1.00 each
ISSUED AND FULLY PAID-UP SHARE CAPITAL: 2 Ordinary Shares of S$1.00 each
SHAREHOLDERS BENEFICIAL OWNERS NO. OF SHARES
Xxxx Xxx Min Xxxxxxx Termbray Electronics (BVI) 1
Limited
Thamarai D/O Krishnan Termbray Electronics (BVI) 1
Limited
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TERMBRAY CIRCUIT BOARD COMPANY LIMITED
REGISTERED NUMBER: 390002
REGISTERED OFFICE: 3/F., Termbray Industrial Building,
18-22 Xxx Tin Street,
Xxxx Xxxxx, New Territories,
Hong Kong
DATE AND PLACE OF INCORPORATION: 17 November 1992, Hong Kong
DIRECTORS: Xxx Lap
Xxxxx Xxx Ping
SECRETARY: Li Xxx Xxxxx
ACCOUNTING REFERENCE DATE: 31 March
AUTHORISED SHARE CAPITAL: HK$10,000 divided into
10,000 Ordinary Shares of HK$1.00 each
ISSUED AND FULLY PAID-UP SHARE CAPITAL: 2 Ordinary Shares of HK$1.00 each
SHAREHOLDERS BENEFICIAL OWNERS NO. OF SHARES
Xxx Lap Termbray Electronics (BVI) 1
Limited
Termbray Electronics (BVI) -- 1
Limited -------------
2
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PART 3
PARTICULARS OF THE SUBSIDIARIES
KALEX CIRCUIT BOARD (GUANGZHOU) LIMITED
REGISTERED NUMBER: 451638
REGISTERED OFFICE: 0/X Xxxxxxxx Xxxxxxxxxx Xxxxxxxx, 00-00 Xxx
Xxx Xxxxxx, Xxxx Xxxxx, Xxx Xxxxxxxxxxx
DATE AND PLACE OF INCORPORATION: 14 October 1993, Hong Kong
DIRECTORS: Xxx Lap
Xxxxx Xxx Ping
SECRETARY: Li Xxx Xxxxx
AUTHORISED SHARE CAPITAL: US$600,000 divided into 600,000 Ordinary Shares
of US$1.00 each
ISSUED AND FULLY PAID-UP SHARE CAPITAL: 600,000 Ordinary Shares of US$1.00 each
SHAREHOLDERS BENEFICIAL OWNERS NO. OF SHARES
Xxx Lap TCBC 1
TCBC -- 599,999
-------
600,000
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KALEX MULTI-LAYER PRINTED CIRCUIT BOARD COMPANY LIMITED
REGISTERED NUMBER: 136201
REGISTERED OFFICE: 0/X Xxxxxxxx Xxxxxxxxxx Xxxxxxxx, 18-22 Xxx
Tin Street, Xxxx Xxxxx, New Territories, Hong
Kong
DATE AND PLACE OF INCORPORATION: 1 May 1984, Hong Kong
DIRECTORS: Xxx Lap
Xxxxx Xxx Ping
SECRETARY: Li Xxx Xxxxx
AUTHORISED SHARE CAPITAL: HK$10,000 divided into 10,000 Ordinary
Shares of HK$1.00 each
ISSUED AND FULLY PAID-UP SHARE CAPITAL: 2 Ordinary Shares of HK$1.00 each
SHAREHOLDERS BENEFICIAL OWNERS NO. OF SHARES
Xxx Lap KCB (China) 1
KCB(China) -- 1
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GUANGZHOU TERMBRAY ELECTRONICS TECHNOLOGY COMPANY LIMITED
APPROVAL CERTIFICATE NUMBER: Xxx-xxxx-mao-sui-he-zuo-zheng [1993] No. 85
REGISTERED OFFICE: Gaopu Jiufo Town, Baiyun District,
Guangzhou, PRC
DATE OF ESTABLISHMENT: 10 April 1993
GENERAL MANAGER: Xxxxx Xxxx Guang
REGISTERED CAPITAL: US$28.5 million
PRC CJV PARTNER: Guangzhou Jiufo Economic Development
Corporation
FOREIGN CJV PARTNER: KCB(China)
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GUANGZHOU KALEX LAMINATE CO LTD
APPROVAL CERTIFICATE NUMBER: Xxx-xxxx-mao-sui-he-zuo-zheng [1995] No. 0242
REGISTERED OFFICE: Gaopu Jiufo Town, Baiyun District,
Guangzhou, PRC
DATE OF ESTABLISHMENT: 28 December 1995
GENERAL MANAGER: Xxxxx Xxxx Guang
REGISTERED CAPITAL: US$28.5 million
PRC CJV PARTNER: Guangzhou Jiufo Economic Development
Corporation
FOREIGN CJV PARTNER: TLC
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GUANGZHOU TERMBRAY CIRCUIT BOARD COMPANY LIMITED
APPROVAL CERTIFICATE: Xxx-xxxx-mao-sui-he-zuo-zheng [1993]
No. 1170
REGISTERED OFFICE: Gaopu Jiufo Town, Baiyun District,
Guangzhou, PRC
DATE OF ESTABLISHMENT: 25 December 1993
GENERAL MANAGER: Xxxxx Xxxx Guang
REGISTERED CAPITAL: US$28.5 million
PRC CJV PARTNER: Guangzhou Jiufo Economic Development
Corporation
FOREIGN CJV PARTNER: KCB (Guangzhou)
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SCHEDULE 2
COMPLETION OBLIGATIONS
PART A
1 GENERAL
On Completion the Vendor shall deliver or make available to the Purchaser:
1.1 duly certified copy of a written certificate (or, provided acceptable to
The Stock Exchange of Hong Kong Limited, two separate written certificates)
of approval of the transaction by shareholders holding more than 50% of the
issued share capital of the Guarantor in the form of Appendix 1;
1.2 consent of the PRC Partners in the agreed terms;
1.3 duly certified copy of a resolution of the shareholders of the Vendor
approving the transaction contemplated hereby, in the agreed terms;
1.4 duly certified copy of Board resolutions of the Guarantor and the Vendor,
in the agreed terms, approving and authorising the execution of this
Agreement and (where relevant) the other documents referred to herein;
1.5 transfers of the Sale Shares and the Deferred Shares duly executed by the
registered holders in favour of the Purchaser or as it may direct
accompanied by the relative share certificates (or an express indemnity in
a form satisfactory to the Purchaser in the case of any certificate found
to be missing);
1.6 the written resignation of each of the directors and the company secretary
of each Group Company (except the directors of the PRC Subsidiaries and the
company secretary of TP(BVI)) from his office as a director or company
secretary to take effect on the date of Completion with acknowledgements
signed by each of them in a form satisfactory to the Purchaser and executed
as a deed to the effect that he has no claim against any Group Company for
compensation for loss of office (whether contractual, statutory or
otherwise), unfair dismissal, redundancy or otherwise and agreeing to take
such action as may be requested by the Purchaser to preclude him from
making a complaint to or bringing proceedings before an industrial tribunal
in respect of the termination of his contract of employment together with
all credit cards in the name of each Group Company issued to any of the
persons so resigning;
1.7 such waivers or consents as the Purchaser may require signed by members of
each Group Company to enable the Purchaser or its nominees to be registered
as holders of the Sale Shares;
1.8 the certificates of incorporation, corporate seals, company chops, cheque
books, statutory and other books of each Group Company (duly written
up-to-date), the share certificates in respect of each of the Subsidiaries
and transfers of all shares in the Subsidiaries held by nominees in favour
of the Purchaser or as it may direct and the Business licence, company
chop;
1.9 the Tax Deed of Indemnity duly executed by the covenantors named in it;
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1.10 the licence with respect to part of the Termbray Industrial Building, as
referred to in Clause 8.9.2, in the agreed terms duly executed by or on
behalf of Termbray Electronics Company Limited;
1.11 the licence with respect to part of the factory in Guangzhou, as referred
to in Clause 8.9.1, in the agreed terms duly executed by or on behalf of
Xxx Plastic Manufacturing Co Ltd;
1.12 all the financial and accounting books and records of each Group Company
and all title deeds and other documentation relating to the Properties;
1.13 irrevocable powers of attorney (in such form as the Purchaser may
reasonably require) executed by each of the holders of the Sale Shares in
favour of the Purchaser to enable the Purchaser (pending registration of
the relevant transfers) to exercise all voting and other rights attaching
to the Sale Shares and to appoint proxies for this purpose;
1.14 Consultancy Services Agreement duly executed by the Guarantor;
1.15 Deeds of Covenant in the agreed terms duly executed by Xxx Lap, Xxxxx Xxx
Ping, Xxxxxxx Xxx and Xxxxx Xxx in favour of the Purchaser and its
successors in title as trustee for itself and the Group Companies to the
same effect as the provisions of Clause 7.2; and
1.16 the Equipment at 000 Xxxxx Xxxx (Xxxx), Xxxxx Xxxx, Xxxxxx, Guangzhou.
2 BOARD RESOLUTIONS OF THE GROUP COMPANIES
On Completion the Vendor shall procure the passing of board resolutions of
each Group Company inter alia:
2.1 (if so required by the Purchaser) revoking all existing authorities to
bankers in respect of the operation of its bank accounts and giving
authority in favour of such persons as the Purchaser may nominate to
operate such accounts;
2.2 accepting the resignations referred to in paragraph 1.6 of this Schedule
and appointing such persons (within the maximum number permitted by the
Articles of Association or other constitutional documents) as the Purchaser
may nominate as directors and secretary;
2.3 approving the registration of the share transfers referred to in paragraph
1.5 of this Schedule subject (where relevant) only to their being duly
stamped; and shall hand to the Purchaser duly certified copies of such
resolutions.
PART B
On Completion, the Purchaser shall deliver or make available to the Vendor:
3 evidence of the transfers made to effect the repayment of the Borrowings
owed to banks and financial institutions detailed in the pay-off letters
referred to in Clause 3.3.2;
4 copies of the written resolution of the directors of the Purchaser and the
Purchaser's Guarantor approving the execution of this Agreement and (where
relevant) the other documents and agreements referred to herein; and
5 an indemnity from Viasystems, Inc. in favour of the Vendor and the
Guarantor in the terms set out in Clause 8.8.3.
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SCHEDULE 3
WARRANTIES GIVEN BY THE VENDOR AND THE GUARANTOR UNDER CLAUSE 5
1 CAPACITY AND TITLE OF THE VENDOR
1.1 DUE INCORPORATION, AUTHORITY AND CAPACITY OF THE VENDOR AND GUARANTOR
1.1.1 The Vendor, the Guarantor and the Group Companies are companies
duly incorporated and validly existing under their respective
laws of incorporation.
1.1.2 Each of the Vendor and the Guarantor has full power and
authority to enter into and perform this Agreement and the Deed
of Indemnity and this Agreement and the Deed of Indemnity
constitute valid and binding obligations on the Vendor and the
Guarantor enforceable in accordance with their respective terms.
1.1.3 The execution and delivery of, and the performance by each of
the Vendor and the Guarantor of its obligations under this
Agreement and the Deed of Indemnity do not and will not:-
(i) result in a breach of any provision of the memorandum or
articles of association or equivalent constitutive
documents of the Vendor or the Guarantor;
(ii) result in a breach of the laws or regulations of any
jurisdiction to which the Vendor or the Guarantor is
subject; or
(iii) result in a breach of any order, judgement or decree of
any court or governmental agency to which the Vendor or the
Guarantor is a party or by which the Vendor or the
Guarantor is bound.
1.1.4 No shareholders' agreements have been executed between the
shareholders of any of the Group Companies which would in any
way frustrate or restrict the execution and delivery of, and the
performance by either the Vendor or the Guarantor of its
obligations under, this Agreement.
1.2 OWNERSHIP OF THE SHARES AND SHARE CAPITAL
1.2.1 The Vendor is the legal and beneficial owner of the Sale Shares
and is entitled to sell and transfer to the Purchaser the full
legal and beneficial ownership of the Sale Shares on the terms
of this Agreement without the consent of any third party (save
for the approval of its shareholders).
1.2.2 No person, other than a member of the Group Companies, has the
right (whether exercisable now or in the future and whether
contingent or not) to call for the allotment, issue, sale or
transfer of any share or loan capital of any Group Company under
any option or other agreement (including conversion rights and
rights of pre-emption) which are outstanding and there are no
claims, charges, liens, equities or Encumbrances on the shares
or assets of any Group Company.
1.2.3 The Sale Shares represent 100 per cent. of the issued ordinary
share capital of each Group Company and are fully paid up.
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2 SUPPLY OF INFORMATION
2.1 ACCURACY AND ADEQUACY OF INFORMATION DISCLOSED TO THE PURCHASER
2.1.1 All information contained in this Agreement (insofar as it
relates to the Vendor, the Guarantor and the Group Companies)
and all other information contained in the Disclosure Letter is
true and accurate in all material respects and after making due
and careful enquiries neither the Vendor nor the Guarantor is
aware of any fact or matter or circumstances not disclosed in
writing to the Purchaser which renders any such information
untrue, inaccurate or misleading.
2.1.2 The copies of all documents annexed to the Disclosure Letter are
authentic and complete copies of the original documents.
2.2 COPIES OF ACCOUNTS, MEMORANDA AND ARTICLES OF ASSOCIATION ETC.
The copies of the Accounts and of the Memorandum and Articles of
Association or equivalent constitutive documents of the Group Companies
delivered to the Purchaser are complete and accurate in all material
respects and in the case of the Memorandum and Articles of Association or
equivalent constitutive documents contain full details of the rights and
restrictions attached to the share capital of the Group Companies and have
attached to them copies of all such resolutions and agreements as are
required by law to be delivered to the Hong Kong Registrar of Companies or
equivalent authority in the jurisdiction of incorporation of the Group
Companies for registration and all other resolutions passed by the Group
Companies or any class of members, other than resolutions relating to
ordinary business at any Annual General Meeting.
3 ACCOUNTS AND RECORDS
3.1 LATEST ACCOUNTS
The Accounts have each been prepared in accordance with applicable law and
in accordance with accounting principles, standards and practices generally
accepted at the date on which the relevant Accounts were approved by the
relevant company in Hong Kong (or in the case of the PRC Subsidiaries,
according to principles, statements and practices generally accepted at the
date on which the relevant Accounts were approved by the relevant company
in the PRC) and fairly presents the financial position, results of
operation and, where applicable, cash flow of each Group Company as at the
dates of the Accounts and of the profits or losses for the periods
concerned and as at the dates of the Accounts make:-
3.1.1 adequate provision for all actual liabilities;
3.1.2 adequate disclosure for all contingent liabilities; and
3.1.3 provision reasonably regarded as adequate for all bad and
doubtful debts.
3.2 VALUATION OF STOCK AND WORK-IN-PROGRESS
The stock and work-in-progress were included in the Accounts at figures
which:-
3.2.1 were based on the `first in first out' method of valuation with
value given only to items of a quantity and quality useful or
saleable in the normal course of carrying on the businesses of
the Group Companies; and
3.2.2 were stated at the lower of (i) costs, and (ii) the amounts
which could in the circumstances existing at the Balance Sheet
Date reasonably be expected to be
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40
realised in the normal course of carrying on the businesses of
the Group Companies (net of selling and distribution costs and
estimated costs of completion).
3.3 TAXATION
Proper provision or reserve has been made in the Accounts for all Taxation
liable to be assessed on the relevant Company or for which it is or may
become accountable in respect of:-
3.3.1 profits, gains or income (as computed for Taxation purposes)
arising or accruing or deemed to arise or accrue on or before
the Balance Sheet Date;
3.3.2 any transactions effected or deemed to be effected on or before
the Balance Sheet Date or provided for in the Accounts; and
3.3.3 distributions made or deemed to be made on or before the Balance
Sheet Date or provided for in the Accounts.
3.4 EXCEPTIONAL ITEMS
The profits of the Group Companies for the three financial years ended on
the Balance Sheet Date as shown by the Accounts and the trend of profits
thereby shown have not (except (i) as fairly disclosed in such accounts; or
(ii) in the case of transactions between members of the Group, as fairly
reflected in such accounts) been materially affected by changes or
inconsistencies in accounting practices, by the inclusion of non-recurring
items of income or expenditure, by transactions of an abnormal or unusual
nature or entered into otherwise than on normal commercial terms.
3.5 DEBTS
None of the debts receivable or due to any Group Company which are included
in the Accounts (for the fiscal year ended 31 March 1999) or which have
subsequently arisen has been outstanding for more than nine months from its
due date for payment or has been released on terms that the debtor has paid
less than the full value of his debt and all such debts have realised or
will realise in the normal course of collection their full value as
included in the Accounts or in the books of the relevant Group Company
after taking into account the provision for bad and doubtful debts made in
the Accounts. For the avoidance of doubt, a debt shall not be regarded as
realising its full value to the extent that it is paid, received or
otherwise recovered in circumstances in which such payment, receipt or
recovery is or may be void, voidable or otherwise liable to be reclaimed or
set aside.
3.6 ACCOUNTING AND OTHER RECORDS
The statutory books, books of account and other records of whatsoever kind
of each Group Company are reasonably up-to-date and maintained in
accordance with all applicable legal requirements on a proper and
consistent basis and contain, in all material respects, complete and
accurate records of all matters required to be dealt with in such books and
all such books and records and all other documents (including documents of
title and copies of all subsisting agreements to which the relevant Group
Company is a party) which are the property of the relevant Group Company or
ought to be in its possession are in its possession or under its control
and no notice or allegation that any is incorrect or should be rectified
has been received. All accounts, documents and returns required by law to
be delivered or made to the Registrar of Companies or to the equivalent
authority in the jurisdiction of incorporation of the relevant Group
Company or any other authority have been duly and correctly delivered or
made.
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3.7 CHANGES SINCE BALANCE SHEET DATE
Since the Balance Sheet Date, as regards the Group Companies or each Group
Company, as appropriate:-
3.7.1 there has been no material adverse change in the financial
condition of the business of all the Group Companies (taken as a
whole) or their earnings, turnover, profits, assets and
liabilities or cashflow (taken as a whole) and (to the best of
the knowledge, information and belief of the Vendor and the
Guarantor) no event, fact or matter has occurred which will or
is likely to give rise to any such change;
3.7.2 each Group Company's business has been carried on in the
ordinary course, without any material interruption or alteration
in its nature, scope or manner, and so as to maintain the same
as a going concern and the level of its stock has been
maintained at a level which is consistent with past practice;
3.7.3 no Group Company has satisfied or otherwise discharged any
obligation or liability (including contingent liabilities) other
than in the ordinary course of its business;
3.7.4 no Group Company has (i) sold, transferred, leased, mortgaged,
pledged, or otherwise granted any rights in respect of any of
its assets or properties, other than in the ordinary course of
its business; or (ii) cancelled, waived, released or discounted
in whole or in part any debts or claims, other than in the
ordinary course of its business;
3.7.5 the Group Companies have not entered into any commitments or
contracts relating to capital expenditures which, in the
aggregate (in respect of all such commitments and contracts),
involve consideration, expenditure or liabilities in excess of
US$1,000,000;
3.7.6 no Group Company has suffered any actual loss of any important
customer;
3.7.7 no key personnel have resigned from any Group Company and there
has not been any increases in the compensation paid or payable
to any to any employees, other than in the ordinary course of
its business;
3.7.8 no trade discounts or other special terms (in both cases, not
being in the ordinary course of its business) have been
incorporated into any contract entered into by any Group
Company;
3.7.9 the Group Companies have not suffered any damage, destruction or
loss to any of its assets (other than (i) any normal wear and
tear of such assets in the ordinary course of the Group
Companies' business; (ii) normal wastage of raw materials and
stock in the ordinary course of the Group Companies' business;
and (iii) to the extent that such damage, loss or destruction is
recoverable pursuant to a valid insurance claim) in excess of
US$1,000,000 in the aggregate;
3.7.10 no dividend or other distribution has been declared, made or
paid to its members except to another member of the Group or as
provided for in the Accounts (for the fiscal year ended 31 March
1999), and no further dividend or distribution shall be
declared, made or paid in respect of any period the record date
for which is a date which falls either at or after the Balance
Sheet Date; 3.7.11 no share or loan capital has been allotted or
issued or agreed to be issued, except to another member of the
Group;
3.7.12 there has been no changes to the accounting policies or method
of presentation adopted by the Group Company in the preparation
of its financial records; and
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3.8 ACCOUNTS PAYABLE
No more than US$8.2 million of accounts payable of the Group Companies has
been outstanding for more than 90 days.
4 FINANCE
4.1 BORROWINGS
4.1.1 Except as disclosed in this Agreement or the Disclosure Letter,
there are no outstanding material borrowings by any Group
Company.
4.1.2 The Group Companies have no outstanding loan capital, nor has
any Group Company factored any of its debts, or engaged in
financing of a type which would not require to be shown or
reflected in the Accounts.
4.1.3 There has been no default, breach of covenant or other
undertaking by any Group Company under its loan agreements or
other banking facility documentation which is capable of giving
rise to a right on the part of the lender to require early
repayment.
4.2 LIABILITIES
As at the Balance Sheet Date, there are no liabilities (including
contingent liabilities) which are outstanding on the part of any Group
Company, other than those liabilities provided for or disclosed in the
Accounts.
4.3 INSURANCE
Each Group Company has in effect all the insurance policies, the details of
which are set out in the Disclosure Letter. In respect of all such
insurances:-
4.3.1 all premiums have been duly paid to date;
4.3.2 all the policies are in force and are not voidable on account of
any act, omission or non-disclosure on the part of the insured
party; and
4.3.3 no material claim is outstanding and no circumstances exist
which are likely to give rise to any claim.
5 TRADING AND CONTRACTUAL ARRANGEMENTS
5.1 CAPITAL COMMITMENTS
As at the Balance Sheet Date, save as disclosed in the Accounts, no Group
Company has any material capital commitments.
5.2 CONTRACTS
In respect of the Material Contracts:-
5.2.1 in the reasonable opinion of the Vendor and the Guarantor, the
Material Contracts constitute all the material contracts in
respect of the businesses of the Group Companies.
5.2.2 other than the Material Contracts, none of the Group Companies
is a party to or bound by:-
(i) any material agreement or commitment relating to the
borrowing of money;
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(ii) any material agreement or commitment relating to capital
expenditures involving an amount of US$500,000 or more;
(iii) any bonds, debentures, mortgages, notes or other similar
indebtedness or liabilities whatsoever, or any agreement
to create or issue any bonds, debentures, mortgages, notes
or other similar indebtedness;
(iv) any loan or advance to, or investment in, any other person
(except another member of the Group) or any agreement or
commitment relating to the making of any such loan,
advance or investment;
(v) any guarantee or other contingent liability (excluding any
product liability in relation to the Group Companies'
products) in respect of any material (in the context of
the Group Companies taken as a whole) indebtedness or
obligation of any other person (except another member of
the Group), other than the endorsement of negotiable
instruments for collection in the ordinary course of
business;
(vi) any material agreement relating to the supply of materials
or products involving an amount of US$500,000 or more;
(vii) any management, consulting or any other similar agreement
or commitment which is not terminable within six months or
involves an amount of US$250,000 or more; or
(viii) any agreement or commitment limiting the freedom of any
of the Group Companies to engage in any line of business
or to compete with any other person;
5.2.3 each of the Material Contracts is a valid and subsisting
agreement and is in full force and effect without amendment
thereto; and
5.2.4 to the best of the Vendor's and the Guarantor's knowledge, after
due enquiry, there exists no default or event of default or
event, occurrence, condition or act which, with the giving of
notice, the lapse of time or the happening of any other event or
condition, would become a default or event of default
thereunder, and all the covenants to be performed by any party
thereto, including the Group Companies, have been fully
performed in all material respects.
5.3 GUARANTEES ETC.
As at the Balance Sheet Date, save as disclosed in the Accounts, there is
not outstanding in respect of any Group Company, any guarantee, indemnity
or suretyship given by such Group Company.
5.4 DEBTS, CONTRACTS AND ARRANGEMENTS WITH CONNECTED PERSONS ETC.
5.4.1 Except for transactions involving only members of the Group,
there are:-
(i) no loans made by any Group Company to any of the Vendor,
the Guarantor and/or any director of any Group Company
and/or any person connected with any of them in each case
as described in Section 157H(9) of the Companies Ordinance
to which any of the provisions of Section 157H of the
Companies Ordinance apply;
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44
(ii) no debts owing by any Group Company to any of the Vendor,
the Guarantor and/or any director of any Group Company
and/or any such persons as aforesaid; and
(iii) no securities for any such loans or debts as aforesaid.
5.4.2 Except as disclosed in this Agreement or the Disclosure Letter
there are no existing contracts or arrangements to which any
Group Company is a party and in which any of the Vendor, the
Guarantor and/or any director of any Group Company and/or any
person connected with any of them are interested whether
directly or indirectly.
5.4.3 Except as disclosed in this Agreement or the Disclosure Letter,
as at Completion, there are not outstanding, any arrangements
between any Group Company and any company controlled by the
Vendor or the Guarantor, relating to the management of any Group
Company's business, or the appointment or removal of directors
of any Group Company, or the ownership or transfer of ownership
or the letting of any of the assets of the Group Company or,
supply or purchase of finance, goods, services or other
facilities to, by or from any Group Company.
5.4.4 Neither the Vendor nor the Guarantor has any right or interest,
direct or indirect, in any business other than those now carried
on by Group Companies which are, or which, so far as each of the
Vendor and the Guarantor is aware is, are likely to become,
competitive with the business of the Group Companies.
5.5 EFFECT OF SALE OF THE SHARES
5.5.1 Compliance with this Agreement or the Tax Deed of Indemnity does
not and will not conflict with or result in the breach of or
constitute a default under any agreement or instrument to which
any Group Company is now a party or any loan to or mortgage
created by any Group Company or relieve any other party to a
contract with any Group Company of its obligations under such
contract or entitle such party to terminate such contract,
whether summarily or by notice.
5.5.2 So far as each of the Vendor and the Guarantor is aware, neither
entering into nor completing this Agreement or the Tax Deed of
Indemnity, nor completing this Agreement will infringe or cause
any necessary amendment to any constitutive documents, licences
or consents or approvals under which any Group Company is
currently carrying out its business in Hong Kong, the PRC or
elsewhere, nor will require the prior consent or approval of any
government authorities or other third parties (other than in
relation to any changes in the chairman or the general manager
of the PRC Subsidiaries).
5.6 JOINT VENTURES, PARTNERSHIPS, OTHER INTERESTS ETC.
5.6.1 Except as set forth in this Agreement or the Disclosure Letter,
there is no other company or undertaking in respect of which any
Group Company owns or controls any shares or other interest.
5.6.2 None of the Vendor, the Guarantor nor any of their subsidiaries,
other than the Group Companies, owns or otherwise has an
interest in any company or undertaking which competes or is
likely to compete, either directly or indirectly, with the
business of any Group Company.
5.6.3 No Group Company is or has agreed to become, a member of any
joint venture, consortium, partnership or other unincorporated
association in any case which is
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material to the business of such Group Company; and no Group
Company is or has agreed to become, a party to any agreement
(other than with a member of the Group) relating to the sharing
of commissions or other income which is material to the business
of such Group Company.
5.7 SUPPLIERS
The Disclosure Letter sets forth the names of the 10 largest suppliers of
each of the Group Companies during the three fiscal years covered by the
Accounts, as well as the amounts of their respective sales to such Group
Company during such three year period.
5.8 CUSTOMERS
The Disclosure Letter sets forth the names of the 10 largest customers of
each of the Group Companies during the three year period covered by the
Accounts, as well as the amounts of their respective purchases from such
Group Company during such three year period. Since the Balance Sheet Date,
there has not been any material adverse change in the business relationship
of any Group Company with any of its 10 largest customers of the fiscal
year ended 31 March 1999.
5.9 SUFFICIENCY OF ASSETS
The assets owned or leased by each Group Company and the facilities and
services to which each Group Company has a contractual right comprise all
the assets, facilities and services used by it for the purpose of carrying
on its business in the manner in which it is presently conducted.
6 LEGAL MATTERS
6.1 COMPLIANCE WITH LAWS
The Group Companies carry on their respective businesses in accordance with
applicable laws, regulations and byelaws in Hong Kong, the PRC and in any
other relevant jurisdiction in all material respects and, so far as each of
the Vendor and the Guarantor is aware, there is no investigation or enquiry
by, or order, decree or judgement of, any court or any governmental agency
or regulatory body outstanding or anticipated against any Group Company.
6.2 LICENCES AND CONSENTS
All statutory, regulatory and municipal and other licences, concessions,
consents, permits and authorities necessary for the transfer of the Group
Companies, or the carrying on of the business of the Group Companies as now
carried on in Hong Kong, the PRC or elsewhere, have been obtained and are
valid and subsisting and all conditions applicable to any such licence,
consent (including any planning consent) permit or authority have been
complied with in all material respects and none of such licences, consents,
permits or authorities has been breached or is likely to be suspended,
cancelled, refused or revoked.
6.3 LITIGATION
6.3.1 No Group Company (or any person for whose acts or defaults any
Group Company may be vicariously liable) is involved whether as
plaintiff or defendant or other party in any claim, legal
action, proceeding, suit, litigation, prosecution,
investigation, enquiry or arbitration of material importance
before any tribunal (other than as plaintiff in the collection
of debts arising in the ordinary course of its business) and, no
such claim, legal action, proceeding, suit, litigation,
prosecution, investigation, enquiry or
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arbitration is pending or threatened by or against any Group
Company (or any person for whose acts or defaults the Group
Company may be vicariously liable).
6.3.2 So far as each of the Vendor and the Guarantor is aware, there
are no investigations, disciplinary proceedings or other
circumstances likely to lead to any such claim or legal action,
proceeding, suit, litigation, prosecution, investigation,
enquiry or arbitration.
6.3.3 Save as disclosed in the Disclosure Letter, no government or
governmental, supranational or state agency or regulatory body
or trade union or other person or organisation has requested any
information in connection with, or so far as each of the Vendor
and the Guarantor is aware, instituted or threatened, any action
or investigation to restrain, prohibit or otherwise challenge
the operation of any Group Company or any of its employees and
there are no facts which are likely to give rise to such action
or investigation.
6.3.4 Since the Balance Sheet Date no claim for damages or otherwise
has been made against any Group Company.
6.4 INSOLVENCY ETC.
6.4.1 No order has been made, petition presented, resolution passed or
meeting convened for the winding up of any Group Company.
6.4.2 No receiver (including an administrator) has been appointed of
the whole or any part of any of the property, assets and/or
undertaking of any Group Company.
6.4.3 No composition in satisfaction of the debts of any Group Company
or scheme of arrangement of its affairs, or compromise or
arrangement between it and its creditors and/or members or any
class of its creditors and/or members, has been proposed,
sanctioned or approved.
6.4.4 No distress, distraint, charging order, garnishee order,
execution or other process has been levied or applied for in
respect of the whole or any part of any of the property, assets
and/or undertaking of any Group Company.
6.4.5 No event has occurred causing, or which upon intervention or
notice by any third party may cause, any floating charge created
by any Group Company to crystallise or any charge created by it
to become enforceable, nor has any such crystallisation occurred
or is such enforcement in process.
6.4.6 Each of the Group Companies has been able to meet its
obligations as they become due.
6.5 POWERS OF ATTORNEY
No Group Company has given a power of attorney which is still outstanding
or effective to any person to enter into any contract or commitment or do
anything on its behalf, other than any authority to employees or officers
to enter into routine contracts in the normal course of their duties.
6.6 WARRANTIES AND INDEMNITIES
No Group Company has, in respect of transactions which are material to the
business of the Company, have sold or otherwise disposed of any shares or
assets in circumstances such that it is, or may be, still subject to any
outstanding liability (other than (i) product liability in respect of the
sale of goods; or (ii) products sold in the ordinary course of its
business) (whether
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contingent or otherwise) under any representation, warranty or indemnity
given or agreed to be given on or in connection with such sale or disposal.
6.7 NO QUESTIONABLE PAYMENTS
No Group Company has been a party to the making of any direct or indirect
unlawful payment to government officials, employees or political parties;
to the establishment or maintenance of any unlawful funds, monies or other
assets; or to the making of any false or fictitious entries on the books or
records of such Group Company.
6.8 ENVIRONMENTAL LIABILITY
6.8.1 The Disclosure Letter sets forth all environmental reports
relating to the facilities and operations of the Group Companies
and to the best of the knowledge of each of the Vendor and the
Guarantor, there are no other environmental reports relating to
the Group Companies or their facilities and operations.
6.8.2 Each Group Company has complied with all Environmental Laws
relating to it and, in particular, has obtained and complied
with the terms and conditions of all permits, licences and other
authorisations, and has complied with and filed all
notifications, that are required under such Environmental Laws.
6.8.3 There is no civil, criminal or administrative action, claim,
investigation or other proceeding or suit pending or threatened
against any Group Company arising from or relating to
Environmental Laws and there are no circumstances existing which
may lead to any such action, claim, investigation, proceeding or
suit.
6.8.4 No Group Company has manufactured, sold or supplied products
which do not comply with any Environmental Laws.
6.8.5 For the purposes of this Warranty:
ENVIRONMENTAL LAWS means all the laws of any relevant
jurisdiction relating to pollution or protection of the
environment, or to health and safety matters (including, without
limitation, laws relating to workers and public or consumer
health and safety, hygiene, emissions, discharges or threatened
releases of Hazardous Substances into the environment or the
production, processing, distribution, management, use,
treatment, storage, burial, disposal, transport or handling of
any Hazardous Substances) and all byelaws, codes, regulations,
decrees, demands or demand letters, injunctions, judgements,
notices or notice demands, orders or plans issued, promulgated
or approved thereunder or in connection therewith; and
HAZARDOUS SUBSTANCES means wastes, pollutants, contaminants or
other substances (including without limitation liquids, solids,
gases, ions, living organisms, and noise) that may be harmful to
human health or other life or the environment or a nuisance to
any person or that may make the use or ownership of any affected
land or property more costly.
7 EMPLOYEES ETC.
7.1 EMPLOYEES AND TERMS OF EMPLOYMENT
7.1.1 Full particulars of all existing contracts of service with
directors or employees of each Group Company carrying
remuneration at a rate in excess of HK$1,000,000 per annum have
been provided to the Purchaser and there are no consultancy
agreements with any Group Company.
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7.1.2 There are not in existence any contracts of service with
directors or employees of any Group Company, nor any consultancy
agreements with any Group Company, which cannot be terminated by
three months' notice or less or (where not reduced to writing)
by reasonable notice without giving rise to any claim for
damages or compensation (other than a statutory redundancy
payment).
7.2 LIABILITIES TO AND FOR EMPLOYEES
7.2.1 There are no amounts owing to any present or former directors or
employees of any Group Company other than remuneration accrued
due or for reimbursement of business expenses and no directors
or senior employees of any Group Company have given or been
given notice terminating their contracts of employment.
7.2.2 Save as disclosed in the Disclosure Letter, no Group Company has
a scheme or arrangement for the payment of bonuses to employees
of such Group Company.
7.2.3 Save to the extent (if any) to which provision or allowance has
been made in the Accounts:-
(i) no claim has been made by any employee of any Group Company
against such Group Company for breach of any contract of
service or for services, for statutory redundancy payments
or for compensation for wrongful dismissal; and
(ii) no gratuitous payment has been made or promised by any
Group Company in connection with the actual or proposed
termination or suspension of employment or variation of any
contract of employment of any present or former director or
employee.
7.2.4 To the best of the knowledge of each of the Vendor and the
Guarantor, there are no claims against any Group Company:-
(i) by an employee or xxxxxxx, in respect of an accident or
injury which is not fully covered by insurance; or
(ii) by an employee or director in relation to his terms and
conditions of employment or appointment.
7.3 COMPLIANCE WITH STATUTES
Each Group Company has in relation to each of its employees (and so far as
relevant to each of its former employees) complied in all material respects
with all obligations imposed on it by all ordinances, regulations and codes
of conduct relevant to the relations between it and its employees and has
maintained in all material respects current adequate and suitable records
regarding the service of each of its employees.
7.4 SHARE INCENTIVE, BONUS SCHEMES ETC.
No Group Company has in existence, nor is it committed to introduce, any
share incentive scheme, share option scheme or profit sharing scheme for
all or any part of its directors or employees.
7.5 PROVIDENT FUND
All information disclosed to the Purchaser in respect of the Provident Fund
is true and accurate in all material respects.
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8 TAXATION MATTERS
8.1 RETURNS AND INFORMATION
8.1.1 All returns, computations and notices which are or have been
required to be made or given by each Group Company for any
Taxation purpose (i) have been made or given within the
requisite periods and on a proper basis and are up-to-date and
correct in all material respects; (ii) so far as the Vendor is
aware, none of them is, or is likely to be, the subject of any
dispute with the Inland Revenue Department or other Taxation
authorities; and (iii) will continue to be made or given until
Completion in respect of any period prior to Completion.
8.1.2 All information required to be provided to the Inland Revenue
Department or any Taxation authority has been provided within
the requisite period and is accurate in all material respects.
8.2 TAXATION CLAIMS AND LIABILITIES
8.2.1 Except as disclosed in the Disclosure Letter without prejudice
to any liability which may arise under the Tax Deed of Indemnity
there is no liability to Taxation in respect of which a claim
could be made under the Tax Deed of Indemnity and so far as the
Vendor is aware there are no circumstances likely to give rise
to such a liability.
8.2.2 All profits tax, interest tax, salaries tax and property tax,
stamp duties, and other charges and levies assessed or imposed
by any government or governmental or statutory body which have
been assessed upon each Group Company and which are due have
been paid.
9 ASSETS
9.1 SUBSIDIARIES AND ASSOCIATES
No Group Company is the holder or beneficial owner of, or has agreed to
acquire, any share or loan capital of any other company (whether
incorporated in Hong Kong or elsewhere), other than a member of the Group.
9.2 TITLE TO ASSETS
All assets of each Group Company and all debts due which are included in
the Accounts or which have been represented as being the property of or due
to such Group Company or at the Balance Sheet Date used or held for the
purposes of its business were at the Balance Sheet Date the absolute
property of the relevant Group Company and (save for those subsequently
disposed of or realised in the ordinary course of business) all such assets
and all assets and debts which have subsequently been acquired or arisen
are now the absolute property of the relevant Group Company and none is the
subject of any assignment or Encumbrance whatsoever (excepting only liens
arising by operation of law in the normal course of business) or the
subject of any factoring arrangement, hire-purchase, conditional sale or
credit sale agreement.
9.3 PLANT AND MACHINERY
The plant, machinery, vehicles and all other equipment used in connection
with the business of the Group (taken as a whole) are in working order and
have been properly maintained.
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9.4 INTELLECTUAL PROPERTY
9.4.1 No Group Company uses any processes or products and no Group
Company is engaged in any activities which infringe any patents,
copyrights, trade marks, designs and business names or other
registrable or unregistrable intellectual property rights of any
third party.
9.4.2 No Group Company has any right, title and interest in any trade
marks or service marks in relation to the business and affairs
of such Group Company nor has any Group Company made or filed
any registrations or applications to register any trade marks or
service marks.
9.4.3 The Software is in working order in all material respects. For
purposes of this paragraph 9.4.3, "SOFTWARE" includes all
computer programs and software used by any Company or supplied
in or in connection with the business of any Group Company
(whether owned by such Group Company, licensed to such Group
Company by a third party or sub-licensed by a Group Company
pursuant to a licence agreement from a third party).
10 Y2K
The Information Technology is either fully Millennium Compliant and will
not cease to be so prior to, during or after the year 2000 or each Group
Company has implemented a millennium compliance programme which will ensure
that the Information Technology will be Millennium Compliant by no later
than 30 September 1999 and neither the Vendor nor the Guarantor has any
reason to believe that, if such steps are taken, the Information Technology
and each part of it will not be fully Millennium Compliant in all material
respects.
For the purposes of this warranty:-
"MILLENNIUM COMPLIANT" means that neither performance nor functionality is
or will be affected by dates prior to, during or after the year 2000 and in
particular (but without limitation) that the Information Technology does
and will have the ability to provide all of the following functions:-
(i) handle date information before, during and after 1 January
2000, including, but not limited to, accepting date input,
providing date output and performing calculations on dates
or portions of dates;
(ii) function accurately and without interruption before, during
and after 1 January 2000, without any change in operations
associated with the advent of the year 2000 and the new
century;
(iii) respond to two-digit year input in a way that resolves the
ambiguity as to century in a disclosed, defined and
predetermined manner;
(iv) process two-digit year date information in ways that are
similarly unambiguous as to century;
(v) store and provide output of date information in ways that
are similarly unambiguous as to century; and
(vi) to recognise the year 2000 as a leap year.
"INFORMATION TECHNOLOGY" means all computer systems, communication systems,
software and hardware owned, used or licensed by or to any Group Company.
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11 REAL PROPERTY
11.1 The lands and the buildings, details of which are set out in the Disclosure
Letter, comprise all of the lands and buildings owned by the Group.
11.2 In respect of the lands and buildings which comprise the Properties in the
PRC:-
11.2.1 land use rights certificates in respect of each of such lands
and building ownership certificates in respect of each of such
buildings have been duly issued to the relevant member of the
Group as the sole holder or owner, and are current, valid and
subsisting. All legal formalities in relation to the obtaining
of such land use rights certificates and building ownership
certificates (including contracts for the grant or transfer of
the land use rights and titles to the buildings) have been duly
concluded, and all consents, permits, certificates and approvals
of whatsoever nature in connection therewith have been duly
obtained and are valid and subsisting;
11.2.2 good and unencumbered land use rights in respect of each of such
Lands and good and unencumbered title to each of such buildings
have been and are duly and fully vested in the relevant member
of the Group shown in the Disclosure Letter as the property
owner (except to the extent such rights and titles are subject
to mortgages or pledges, details of which are set forth in the
Disclosure Letter), and that member of the Group is entitled to
use such lands and own such buildings for the term set out in
the Disclosure Letter;
11.2.3 all fees, premiums, charges, acquisition considerations, taxes,
duties and other expenses of whatsoever nature in relation to
the acquisition of the land use rights in respect of such lands
and titles to such buildings have been fully paid within the
relevant time limits without default to the relevant government
or regulatory authorities or entities which transferred or sold
to the Group such buildings and/or the land use rights in
respect of such lands. The Group is not required to pay any fee,
premium, charge, tax, duty or other expense in connection with
preserving the legal status of the land use rights in respect of
such lands and the titles to the buildings or to otherwise
ensure that such rights and titles will remain in full force and
effect for their respective terms;
11.2.4 the current use of such Lands and such buildings by the Group is
strictly in accordance with the purpose of land or building use
as approved or permitted by the relevant authorities; and
11.2.5 subject to the rights of mortgagees and pledgees of the
mortgages and pledges set forth in the Disclosure Letter, the
Group is free to transfer the land use rights in respect of such
lands and the titles to such buildings by way of sale, exchange,
gift or otherwise to any PRC and/or foreign entities, and to
encumber such rights and titles by way of lease, license, or the
creation of mortgage or other security interest or otherwise,
without any additional payment, approval or consent.
11.3 In respect of the Property in Hong Kong:-
11.3.1 the relevant member of the Group named in the Disclosure Letter
as the owner of the Hong Kong property has a good marketable
title to such property free and clear from all Encumbrances
(other than mortgages, details of which are set forth in the
Disclosure Letter);
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11.3.2 the Government Leases under which the Hong Kong property are
held by the relevant member of the Group are valid and
subsisting and the relevant member of the Group has paid all
Government Rents or the proportion thereof payable by it and all
other outgoings which as at the date hereof have become due and
payable by it and has observed and performed all the terms and
conditions contained, mentioned or referred to in the said
Government Leases and imposed on the tenant(s) of the Hong Kong
property and the relevant member of the Group is not aware of
any modification by the Hong Kong Government of the terms and
conditions contained, mentioned or referred to in the said
Government Leases;
11.3.3 the Hong Kong property complies (as to construction and use)
with the Town Planning and the Building Ordinances and with all
applicable statutory and bye-law requirements, as to use, fire
precautions, public health and the health and safety of those
who work in or about them;
11.3.4 the Occupation Permits issued by the Building Authority in
respect of the Hong Kong property have been duly issued and the
present use of such property for the purposes of such permit
complies with the terms of such permit and the Crown Lease; and
11.3.5 neither the Hong Kong property nor the relevant member of the
Group is affected by any of the following matters:-
(i) any closing order, demolition order or clearance order;
(ii) any planning application;
(iii) any enforcement notice which has not been complied with;
(iv) any compensation received consequent upon a refusal of any
planning consent or the imposition of restrictions on any
planning consent or the modification or withdrawal of any
such consent; or
(v) any order or proposal publicly advertised or of which
written notice has been received for the compulsory
acquisition or requisition of the whole or any part thereof
or the modification of any planning permission or the
discontinuance of any use or the removal of any building.
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53
SCHEDULE 4
PROPERTIES
PART 1
PARTICULARS OF THE HONG KONG PROPERTIES
PROPERTY ADDRESS REGISTERED OWNER
1 12th Floor of Xxxxx X xx Xxxx Xxx Xxxxxxxxxx Xxxxxxxx, Xxxxxxxx Property (B.V.I.) Limited
Xxx.000-000 Xxxxxx Xxxx Xxxx, Xxxxx Xxx, Xxx
Xxxxxxxxxxx
2 13th Floor of Xxxxx X xx Xxxx Xxx Xxxxxxxxxx Xxxxxxxx, Xxxxxxxx Property (B.V.I.) Limited
Xxx.000-000 Xxxxxx Xxxx Xxxx, Xxxxx Xxx, Xxx
Xxxxxxxxxxx
3 14th Floor of Xxxxx X xx Xxxx Xxx Xxxxxxxxxx Xxxxxxxx, Xxxxxxxx Property (B.V.I.) Limited
Xxx.000-000 Xxxxxx Xxxx Xxxx, Xxxxx Xxx, Xxx
Xxxxxxxxxxx
4 Main Roof B13 of Xxxxx X xx Xxxx Xxx Xxxxxxxxxx Xxxxxxxx, Xxxxxxxx Property (B.V.I.) Limited
Xxx.000-000 Xxxxxx Xxxx Xxxx, Xxxxx Xxx, Xxx
Xxxxxxxxxxx
5 Main Roof B14 of Xxxxx X xx Xxxx Xxx Xxxxxxxxxx Xxxxxxxx, Xxxxxxxx Property (B.V.I.) Limited
Xxx.000-000 Xxxxxx Xxxx Xxxx, Xxxxx Xxx, Xxx
Xxxxxxxxxxx
6 Main Roof B15 of Xxxxx X xx Xxxx Xxx Xxxxxxxxxx Xxxxxxxx, Xxxxxxxx Property (B.V.I.) Limited
Xxx.000-000 Xxxxxx Xxxx Xxxx, Xxxxx Xxx, Xxx
Xxxxxxxxxxx
7 Main Roof B16 of Xxxxx X xx Xxxx Xxx Xxxxxxxxxx Xxxxxxxx, Xxxxxxxx Property (B.V.I.) Limited
Xxx.000-000 Xxxxxx Xxxx Xxxx, Xxxxx Xxx, Xxx
Xxxxxxxxxxx
8 Main Roof B17 of Xxxxx X xx Xxxx Xxx Xxxxxxxxxx Xxxxxxxx, Xxxxxxxx Property (B.V.I.) Limited
Xxx.000-000 Xxxxxx Xxxx Xxxx, Xxxxx Xxx, Xxx
Xxxxxxxxxxx
9 Main Roof B18 of Xxxxx X xx Xxxx Xxx Xxxxxxxxxx Xxxxxxxx, Xxxxxxxx Property (B.V.I.) Limited
Xxx.000-000 Xxxxxx Xxxx Xxxx, Xxxxx Xxx, Xxx
Xxxxxxxxxxx
10 Main Roof B19 of Xxxxx X xx Xxxx Xxx Xxxxxxxxxx Xxxxxxxx, Xxxxxxxx Property (B.V.I.) Limited
Xxx.000-000 Xxxxxx Xxxx Xxxx, Xxxxx Xxx, Xxx
Xxxxxxxxxxx
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54
PART 2
PARTICULARS OF THE PRC PROPERTIES
ADDRESS OF PROPERTY LAND USE RIGHT
Luosha Village, Yongning, 1 Number of Land Use Certificate: Zhong-fu-xxx-xxxx
------------------------- (1999) zi, No. 050250
Xiaolan, Zhongshan
------------------
2 Issuing Date and Authority:
(1) 26/07/1999,
(2) Zhongshan Municipal People's Government
3 Land use right owner: Kalex Circuit Board (China)
Limited
4 Site Area: 61,519.06 m2
5 Nature of land use right: granted
6 Purpose of use: industrial
7 Term: 50 years (26/07/1999 - 22/07/2049)
8 Payment of land grant fees: RMB(Y)298,983 real
property tax remain to be paid
9 All buildings located on the land
000 Xxxxx Xxxx (West), 1 Number of Building and Land Title Certificate: Sui-
---------------------- xxxx-xx-xxxxx-zi No. 0453768
Jiufo Town, Baiyun,
-------------------
Guangzhou 2 Issuing Date and Authority:
---------
(1) 28/07/1999,
(2) Guangzhou Municipal People's Government
3 Owner: Guangzhou Termbray Electronic Technology
Company Limited
4 Site Area: 102,439.19 m2
5 Nature of land use right: granted
6 Purpose of use: industrial
7 Term of land use right: 50 years (from 15/07/1997)
8 Payment of land grant fees: fully paid
9 Building details:
(1) 11 buildings (including factory buildings and
warehouses)
(2) building area: 32,149,87 m(2)
(3) floor area: 104,568,32 m(2)
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SCHEDULE 5
CONSULTANCY SERVICES AGREEMENT
This Agreement is made on between
(1) VIASYSTEMS CANADA, INC. of 000 Xxxxxxxxx Xxxxxxxxx, Xxxxx-Xxxxxx, Xxxxxx,
X0X 0X0, Xxxxxx (the "Company"); and
(2) TERMBRAY INDUSTRIES INTERNATIONAL (HOLDINGS) LIMITED, a company
incorporated in Bermuda, and having its principal place of business at
00-00 Xxx Xxx Xxxxxx, Xxxx Xxxxx, X.X., Xxxx Xxxx (the "VENDOR").
1 INTERPRETATION
In this agreement:
"GROUP COMPANY" bears the same definition as that term bears in the Share
Purchase Agreement of o July 1999 entered into between the parties hereto
and others.
2 TERM OF CONSULTANCY
This Agreement will continue for a period of six months from the date of
this Agreement.
3 THE CONSULTANT'S SERVICES
3.1 The Vendor agrees to provide the consultancy services of Xx Xxx Lap (the
"FIRST CONSULTANT") and Li Xxx Xxxxx (the "SECOND CONSULTANT" and, together
with the First Consultant, the "CONSULTANTS") to the Company and the
Company agrees to accept such services.
3.2 The Vendor, through the First Consultant, agrees to provide the following
services (the "FIRST CONSULTANT'S SERVICES"):
3.2.1 to advise and assist the Company in remedying the ownership and
compliance issues relating to the operations of the Group
Companies (including the operations to be carried out after
Completion by Kalex Multi-layer Circuit Board (Zhongshan) Co.
Ltd.);
3.2.2 to advise and assist the Company in the ongoing relationship of
the Group Companies with customers, joint venture partners and
governmental authorities; and
3.2.3 to carry out any tasks the Company determines and the Vendor
agrees from time to time.
3.3 The Vendor, through the Second Consultant, agrees to provide the following
services (the "SECOND CONSULTANT'S SERVICES" and, together with the First
Consultant's Services, the "SERVICES"):
3.3.1 to advise and assist on all aspects of the business, finances
and affairs of the Group Companies to the extent that the Second
Consultant fulfils such functions prior to the date of this
Agreement; and
3.3.2 to carry out any tasks the Company determines and the Vendor
agrees from time to time.
for so long as the Second Consultant remains employed by the Vendor.
3.4 The Vendor shall procure that the Consultants shall provide the Services
personally.
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56
4 THE CONSULTANTS' RESPONSIBILITIES
The Vendor shall procure that:
4.1 the First Consultant shall devote whatever time, attention and skill is
required properly to perform the First Consultant's Services. The Company
shall from time to time agree with the Vendor what is necessary to achieve
this but it is understood that the First Consultant shall not be required
to devote more than 48 hours (inclusive of travelling time) at mutually
convenient times in any calendar month to the First Consultant's Services;
4.2 the Second Consultant shall devote such time, attention and skill is
required properly to perform the Second Consultant's Services. The Company
shall from time to time agree with the Vendor what is necessary to achieve
this but it is understood that, for the first three months after the date
of this Agreement, the Second Consultant shall not be required to devote
more time than he devoted to the relevant functions prior to this Agreement
and that thereafter the Second Consultant shall not be required to devote
more than 50 per cent. of his total working hours.
5 FEES AND CHARGES
5.1 The Company shall pay the Vendor on the date hereof an aggregate fee of
US$100,000 for the provision of the First Consultant's Services.
5.2 The Company shall pay the Vendor monthly in arrear an aggregate fee in US
dollars equivalent to the direct employment costs of the Vendor in making
available the services of the Second Consultant for the provision of the
Second Consultant's Services (such direct employment costs not to exceed
the level of such costs at the date of this Agreement). For this purpose,
the Company shall bear such proportion of the Second Consultant's salary
and other employment costs as equates to the proportion of his time the
Second Consultant devotes to the provision of the Second Consultant's
Services.
5.3 The Company shall also reimburse the Vendor for all reasonable travel,
accommodation and entertainment expenses incurred by the Consultants in the
course of providing the Services.
6 INDEPENDENT CONTRACTOR STATUS
6.1 Nothing in this Agreement will make either Consultant an employee, agent or
partner of the Company or its subsidiaries or any other Group Company and
neither Consultant will hold himself out as such.
6.2 Nothing in this Agreement will make the Vendor an agent or partner of the
Company or any Group Company.
7 DISCLAIMER OF LIABILITY
The Company agrees that neither the Vendor nor the Consultants shall have
any liability in connection with the provision of the Services.
8 GOVERNING LAW
This Agreement will be governed by and interpreted in accordance with the
laws of Hong Kong. Each of the parties submits to the exclusive
jurisdiction of the Hong Kong courts as regards any claim or matter arising
under this agreement.
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57
SIGNED by )
for and on behalf of )
VIASYSTEMS CANADA, INC. )
SIGNED by )
for and on behalf of TERMBRAY )
INDUSTRIES INTERNATIONAL )
(HOLDINGS) LIMITED )
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58
APPENDIX 1
CERTIFICATE OF APPROVAL
XXX & XXXXX (B.V.I.) LIMITED
(Incorporated in British Virgin Islands)
To: Termbray Industries International (Holdings) Limited
RE: DISPOSAL OF PRINTED CIRCUIT BOARD BUSINESS OF TERMBRAY ("DISPOSAL")
We refer to the share purchase agreement proposed to be entered into between
Termbray Electronics (B.V.I.) Limited (the "VENDOR"), Termbray Industries
International (Holdings) Limited ("TERMBRAY"), Viasystems Canada Inc. (the
"PURCHASER"), and Viasystems Group, Inc. (the "AGREEMENT"). Pursuant to the
Agreement, Termbray will dispose of its printed circuit board business to the
Purchaser at a total consideration of US$325 million less the Borrowings (as
defined in the Agreement) plus all Cash (as defined in the Agreement) of the
printed circuit board business.
We understand that the entering into of the Agreement by Termbray and the Vendor
constitutes a major transaction for Termbray within the meaning of the Rules
Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
and is subject to the approval of the shareholders of Termbray.
We, the undersigned being the holders together of 79,234,039 shares of HK$0.10
each in Termbray (representing approximately 52.31% of the total issued share
capital of Termbray) hereby unconditionally and irrevocably approve the entering
into of the Agreement by Termbray and the Vendor and all the transactions
contemplated by the Agreement.
Date:
For and on behalf of For and on behalf of
XXX & XXXXX (B.V.I.) LIMITED HONGKONG & SHANGHAI BANKING
CORPORATION (NOMINEES) LIMITED
------------------------ ------------------------
Authorised Signature Authorised Signature
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59
APPENDIX 2
NET INTRA-GROUP INDEBTEDNESS
-----------------------------------------------------------------------------------------------------------------------------------
TERMBRAY INDUSTRIES INTERNATIONAL (HOLDINGS) LTD
-----------------------------------------------------------------------------------------------------------------------------------
PCB GROUP Amount due
from/
-----------------------------------------------------------------------------------------------------------------------------------
AS AT 30 JUNE, 1999 INTER-COMPANY BALANCES (Amount due to) Amount due from (Amount due to)
-----------------------------------------------------------------------------------------------------------------------------------
(Expressed in Hongkong Dollars) within PCB group non PCB companies non PCB companies
-----------------------------------------------------------------------------------------------------------------------------------
NAMES OF PCB SUBSIDIARIES
-----------------------------------------------------------------------------------------------------------------------------------
0748 Kalex Printed Circuit Board Ltd (399,635,655.11) 43,739,624.96 0.00
-------------- -------------- --------------
0705 Xxx Lap & Sons Ltd 139,511,885.60 237,350,972.78 (23,827,267.82)
-------------- -------------- --------------
0000 Xxxxx Xxxxxxx Xxxxx (Xxxxx) Ltd 314,366,668.83 139,647,881.53 (68,983,987.41)
-------------- -------------- --------------
0000 Xxxxxxxx Xxxxxxx Xx Ltd 123,124,905.46 35,497.23 (24,399,826.07)
-------------- -------------- --------------
0719 Termbray Property (BVI) Ltd (13,330,497.50) 25,588,824.50 (35,220,529.50)
-------------- -------------- --------------
0723 Kalex Circuit Board (HK) Ltd (Astec Circuit Boards Ltd) 81,482,190.31 11,104,000.00 (88,406,710.47)
-------------- -------------- --------------
0000 Xxxxxxxx Xxxxxxx Xxxxx Xx Ltd (1,204,716.02) 2.00 (4,176,277.00)
-------------- -------------- --------------
0745 Kalex Circuit Board (Guangzhou) Ltd 3,647,101.76 0.00 (15,718,728.83)
-------------- -------------- --------------
0746 Guangzhou Termbray Circuit Board Co Ltd (129,322,114.04) 300,000.00 (2,661,493.91)
-------------- -------------- --------------
0714 Kalex Multi-Layer Printed Circuit Board Co Ltd 2,489,928.20 0.00 (3,608,218.54)
-------------- -------------- --------------
0742 Guangzhou Termbray Electronics Technology Co Ltd (120,959,177.97) 19,087,934.77 (25,524,417.68)
-------------- -------------- --------------
0754 Guangzhou Kalex Laminate Co Ltd (170,515.44) 10,234.00 0.00
-------------- -------------- --------------
4.08 476,864,971.77 (292,527,457.23)
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
TERMBRAY INDUSTRIES INTERNATIONAL (HOLDINGS) LTD
-----------------------------------------------------------------------------------------------------------
PCB GROUP
-----------------------------------------------------------------------------------------------------------
AS AT 30 JUNE, 1999 INTER-COMPANY BALANCES Guarantee given for
-----------------------------------------------------------------------------------------------------------
(Expressed in Hongkong Dollars) Total non PCB companies
-----------------------------------------------------------------------------------------------------------
NAMES OF PCB SUBSIDIARIES
-----------------------------------------------------------------------------------------------------------
0748 Kalex Printed Circuit Board Ltd (355,896,030.15) --
-------------- --------------
0705 Xxx Lap & Sons Ltd 353,035,590.56 --
-------------- --------------
0000 Xxxxx Xxxxxxx Xxxxx (Xxxxx) Ltd 385,030,562.95 --
-------------- --------------
0747 Termbray Laminte Co Ltd 98,760,576.62 --
-------------- --------------
0719 Termbray Property (BVI) Ltd (22,962,202.50) --
-------------- --------------
0723 Kalex Circuit Board (HK) Ltd (Astec Circuit Boards Ltd) 4,179,479.84 --
-------------- --------------
0000 Xxxxxxxx Xxxxxxx Xxxxx Xx Ltd (5,380,991.02) --
-------------- --------------
0745 Kalex Circuit Board (Guangzhou) Ltd (12,071,627.07) --
-------------- --------------
0746 Guangzhou Termbray Circuit Board Co Ltd (131,683,607.95) --
-------------- --------------
0714 Kalex Multi-Layer Printed Circuit Board Co Ltd (1,118,290.34) --
-------------- --------------
0742 Guangzhou Termbray Electronics Technology Co Ltd (127,395,660.88) --
-------------- --------------
0754 Guangzhou Kalex Laminate Co Ltd (160,281.44) --
-------------- --------------
184,337,518.62 0.00
-----------------------------------------------------------------------------------------------------------
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