EXHIBIT 4.8
EXECUTION COPY
ALPHA STAR INVESTMENTS LIMITED
SUBSCRIPTION AGREEMENT
EXECUTION COPY
TABLE OF CONTENTS
CLAUSE NO. CLAUSE HEADING PAGE
1. DEFINITIONS AND INTERPRETATION ............................... 1-3
2. SUBSCRIPTION OF SHARES ....................................... 3
3. CONSIDERATION AND PAYMENT .................................... 3
4. CLOSING ...................................................... 3-4
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY ................ 4-5
6. UNDERTAKING OF THE COMPANY ................................... 5
7. COSTS ........................................................ 5
8. COMPLETE AGREEMENT ........................................... 5
9. ASSIGNMENT ................................................... 5
10. WAIVER, FORBEARANCE, VARIATION ............................... 5
11. NOTICES ...................................................... 6
12. SEVERABILITY ................................................. 6
13. COUNTERPARTS ................................................. 6
14. GOVERNING LAW AND JURISDICTION ............................... 6
SCHEDULE 1 DETAILS OF THE COMPANY ....................................... 8
SCHEDULE 2 THE WARRANTIES ............................................... 9-19
SCHEDULE 3 FORM OF APPLICATION FOR SHARES ............................... 20
SCHEDULE 4 FORM OF SHAREHOLDERS AGREEMENT ............................... 21-25
EXECUTION COPY
THIS
SUBSCRIPTION AGREEMENT is made on the 6th day of January 2003
BETWEEN
(1) ALPHA STAR INVESTMENTS LIMITED, a company incorporated in the British
Virgin Islands whose registered office is situated at Jipfa Building, 3rd
Floor, Road Town, Tortola, British Virgin Islands (the "Company"); and
(2) NAM TAI ELECTRONICS, INC., a company incorporated in the British Virgin
Islands whose registered office is situated at XxXxxxxx Xxxxxxxx, P.O. Box
3342, Road Town, Tortola, British Virgin Islands (the "Subscriber").
WHEREAS
(A) The Company was incorporated in the British Virgin Islands as a company
limited by shares with an authorized share capital of US$30,000,000 divided
into 30,000,000 ordinary shares of US$1.00 each (the "Shares"), of which
4,875,000 Shares have been issued and allotted by the Company. The
particulars of the Company are set out in Schedule 1 hereto.
(B) The said 4,875,000 Shares are presently held by:
Sun Crown Limited ("Sun") : 1,625,000 Shares;
Power Century Investments Limited ("Power") : 2,275,000 Shares; and
Global Champion International Limited ("Global") : 975,000 Shares;
(C) In order to finance the working capital of the Company, the Company wishes
to issue and allot the Subscription Shares (as hereinafter defined),
representing 25% of the enlarged issued share capital of the Company to the
Subscriber and the Subscriber desires to subscribe for such Subscription
Shares from the Company upon the terms and subject to the conditions set
forth in this Agreement.
NOW THE PARTIES HERETO AGREE AS FOLLOWS:
1. DEFINITIONS AND INTERPRETATION
1.1 As used in this Agreement, and unless the context otherwise requires, the
following terms have the meanings set out below:
1.1.1 "Accounts" means the management accounts of the Group as at 31
October 2002 which has been provided by the Company to the
Subscriber.
1.1.2 "Accounts Date" means 31st October 2002.
1.1.3 "Agreement" means this
subscription agreement.
1.1.4 "Business Day" means any day (other than Saturday) on which
licensed banks in
Hong Kong are open for general banking
transactions.
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1.1.5 "Closing" means the closing of the issue and allotment of the
Subscription Shares pursuant to Clause 4 hereof and "Closing
Date" means the date on which the Closing takes place.
1.1.6 "Constitutional Documents" means the Memorandum and Articles of
Association of the Company.
1.1.7 "Existing Shareholders" means Sun, Power and Global.
1.1.8 "
Hong Kong" means The
Hong Kong Special Administrative Region of
PRC.
1.1.9 "HK$" or "HK Dollars" means the lawful currency of
Hong Kong for
the time being.
1.1.10 "Intellectual property Rights" means any and all intangible legal
rights or interests evidenced by or embodied in (1) any idea,
design, concept, method, process, technique, apparatus, software,
invention, discovery or improvement, including any patents,
patent applications, trade secrets and know-how; (2) any work of
authorship, including any copyrights, industrial designs, mask
works or moral rights; (3) any trademarks, or any applications
thereof, trade names, service marks, trade designations, trade
dress and associated goodwill; (4) any other proprietary
technology or material in which similar rights exist by virtue of
or pursuant to any law in force in any part of the world; and (5)
other rights, and other identifying information, including but
not limited to any software (including any enhancements,
additions, modifications, new versions or sub-versions).
1.1.11 "Group" means the Company and its subsidiaries.
1.1.12 "RF Modules" means radio frequency modules.
1.1.13 "PRC" means the People's Republic of China.
1.1.14 "Shares" means ordinary shares of U$1.00 each in the capital of
the Company.
1.1.15 "Shareholders Agreement" means the shareholders agreement among
the Company and its shareholders, including the Subscriber, in
the form attached as Schedule 4.
1.1.16 "Subscription Shares" means the 1,625,000 Shares to be issued and
allotted by the Company to the Subscriber in accordance with
Clause 2 hereof.
1.1.17 "Transaction Documents" means this Agreement, the Shareholders
Agreement and such other documents or agreements as may be
necessary or desirable to consummate the transactions
contemplated hereby or thereby.
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1.1.18 "US$" or "US Dollars" means the lawful currency of the United
States of America for the time being.
1.1.19 "Warranties" means the warranties contained in Schedule 2.
1.2 References to statutory provisions shall be construed as references to
those provisions as amended or re-enacted as their application is
modified by other provisions (whether before or after the date hereof)
from time to time and shall include any provisions of which they are
re-enactments (whether with or without modification).
1.3 References herein to clauses and schedules are to clauses in, and
schedules to this Agreement unless the context requires otherwise, and
the schedule to this Agreement shall be deemed to form part of this
Agreement.
1.4 The headings are inserted for convenience only and shall not affect the
construction of this Agreement.
1.5 Unless the context requires otherwise, words importing the singular
include the plural and vice versa and words importing a gender include
every gender.
2. SUBSCRIPTION OF SHARES
Subject to the terms and conditions herein set forth, the Subscriber
shall subscribe for, and the Company shall issue and allot to the
Subscriber, the Subscription Shares free and clear of all liens, charges
and encumbrances and together with all rights attaching thereto.
3. CONSIDERATION AND PAYMENT
In consideration of the Company's agreement to issue and allot the
Subscription Shares as set forth in Clause 2 hereof, the Subscriber shall
pay to the Company a total subscription price of US$10,000,000 which
shall be payable by the Subscriber to the Company upon Closing.
4. CLOSING
The completion of the subscription for and issue to the Subscriber of the
Subscription Shares shall take place at the office of the Company at
Xxxx 0000X, Xxxxx 0, Xxxxx Xxxx Xxxx City. Xx. 00 Xxxxxx Xxxx,
Xxxxxxxxxxx, Xxxxxxx, Xxxx Xxxx on or before 30th January 2003 when all
the acts and requirements mentioned in this Clause shall be complied with:
(A) At Closing, the Subscriber shall deliver to the Company:
(a) a cheque drawn in favour of the Company in the sum of US$10,000,000;
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(b) the consent to act as director of the Company duly signed and
completed by the person nominated by the Subscriber;
(c) an application for allotment of the Subscription Shares in the form
attached hereto as Schedule 3 duly completed and signed by the
Subscriber; and
(d) the Shareholders Agreement duly signed by the Subscriber.
(B) At Closing, the Company shall:
(a) issue and allot the Subscription Shares and issue the share
certificate therefor to the Subscriber;
(b) deliver to the Subscriber the Shareholders Agreement duly signed by
the Company and the Existing Shareholders; and
(c) deliver or cause to be delivered to the Subscriber copy of the
executed board resolutions approving and authorizing:-
(i) the issue and allotment of the Subscription Shares to the
Subscriber or its nominees and the registration of the
Subscriber or its nominees as the member(s) of the Company;
(ii) the execution by the Company of the Transaction Documents to
which it is a party; and
(iii) the appointment of the new director of the Company as nominated
by the Subscriber.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
5.1 The Company represents, warrants and undertakes to and with the Subscriber
in the terms set out in Schedule 2.
5.2 The Company accepts that the Subscriber is entering into this Agreement
in reliance upon each of the Warranties notwithstanding any
investigations which the Subscriber, its agents or advisors may have made
and undertake to indemnify the Subscriber against any costs (including
all legal costs on a solicitor and own client basis), expenses or other
liabilities which it may incur in connection with:-
(i) the settlement of any claim that any of the Warranties are untrue or
misleading or have been breached;
(ii) any legal proceedings in which the Subscriber claims that any of the
Warranties are untrue or misleading or have been breached and in
which judgment is given for the Subscriber; or
(iii) the enforcement of any such settlement or judgment.
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5.3 Each of the Warranties shall be construed as a separate Warranty and (save
as expressly provided to the contrary) shall not be limited or restricted
by reference to or inference from the terms of any other Warranty or any
other terms of this Agreement.
5.4 The Company hereby undertakes that it will from time to time and at any
time, whether before or after Completion, forthwith disclose in writing
to the Subscriber any event, fact or circumstance which may become known
to them after the date hereof and which is inconsistent with any of the
Warranties or which could reasonably be expected to affect a subscriber
for value of the Subscription Shares or which may entitle the Subscriber
to make any claim under this Agreement.
6. UNDERTAKING OF THE COMPANY
In consideration of the Subscriber entering into this Agreement, the
Company undertakes to place at least 50% of the orders received by the
Company or any of its subsidiaries for RF Modules with the Subscriber or
such company as nominated by the Subscriber to manufacture the RF Modules
for the Company or its subsidiaries at a price comparable to the market
price for the manufacturing of RF Modules.
7. COSTS
Each party to this Agreement shall pay its own costs (including legal
costs) in relation to the negotiations leading up to the allotment of the
Subscription Shares and to the preparation, execution and carrying into
effect of this Agreement.
8. COMPLETE AGREEMENT
This Agreement represents the entire and complete agreement between the
parties in relation to the subject matter hereof and supersedes any
previous agreement whether written or oral in relation thereto. No
variation to this Agreement shall be effective unless made or confirmed
in writing and signed by all the parties hereto.
9. ASSIGNMENT
This Agreement shall be binding upon and inure for the benefit of each
party's successors and assigns but, except as expressly provided herein,
none of the rights of the parties under this Agreement shall be assigned
or transferred.
10. WAIVER, FORBEARANCE, VARIATION
10.1 The rights of any party hereto shall not be prejudiced or restricted by
any indulgence or forbearance extended to the other parties and no
waiver by any party in respect of any breach shall operate as a waiver
in respect of any subsequent breach.
10.2 This Agreement shall not be varied or cancelled, unless such variation or
cancellation shall be expressly agreed in writing by a duly authorised
director of each party.
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11. NOTICES
11.1 Any notice required to be given hereunder shall be sufficiently given if
forwarded by registered post or sent by facsimile transmission to the
address of the addressee as set out in this Clause or to such other
address as the addressee may have notified the other party in writing for
the purpose of this Clause.
11.2 Any notice sent by pre-paid registered post shall be deemed to have been
served 48 hours after the time at which it was posted and in proving such
service it shall be sufficient to prove that the notice was properly
addressed and posted by prepaid registered letter post and notices sent
by facsimile transmission shall be deemed to have been served on the
receipt of an answer-back advice.
11.3 The address and facsimile number of each party for the purpose of this
Clause 11, are as follows:-
The Company
c/o Jiang Xxxxx Xxxx Wireless Technology Limited
Address : Xxxx 0000X, Xxxxx 0, Xxxxx Xxxx Xxxx City, Xx. 00
Xxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxx, Xxxx Xxxx
Facsimile Number: (000) 0000-0000
The Subscriber
c/o Nam Tai Group Management Limited
Address : 00xx Xxxxx, Xxxxx Merchants Tower, Shun Tak Centre,
Nos. 000-000 Xxxxxxxxx Xxxx Xxxxxxx, Xxxx Xxxx
Facsimile Number: (000) 0000-0000
12. SEVERABILITY
In case any provision of the Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
13. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one
instrument.
14. GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by and construed in accordance with the
laws of
Hong Kong and the parties hereto irrevocably submit to the
non-exclusive jurisdiction of the
Hong Kong courts for the purpose of
enforcing any claim arising hereunder.
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IN WITNESS WHEREOF, the parties hereto have executed this
SUBSCRIPTION AGREEMENT
as of the date set forth in the first paragraph hereof.
SIGNED by ) FOR AND ON BEHALF OF
Xxx Xxx, the director ) ALPHA STAR INVESTMENTS LIMITED
)
)
for and on behalf of the Company ) /s/ Xxx Xxx
) -------------------------------
) Authorized Signature(s)
in the presence of:- )
/s/ [ILLEGIBLE]
SIGNED by ) FOR AND ON BEHALF OF
Koo Xxxx Xxxx, the director ) NAM TAI ELECTRONICS, INC.
)
)
for and on behalf of the Subscriber ) /s/ Koo Xxxx Xxxx
) -------------------------------
) Authorized Signature 23HA
in the presence of:- )
/s/ [ILLEGIBLE]
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SCHEDULE 1
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DETAILS OF THE COMPANY
----------------------
1. Name : Alpha Star Investments Limited
2. Registered Office : Jipfa Building, 3rd Floor, Road Town,
Tortola, British Virgin Islands
3. Date of Incorporation : 18 January 2002
4. Place of Incorporation : British Virgin Islands
5. Authorised share capital : US$30,000,000 divided into 30,000,000 Shares
of US$1.00 each
6. Issued and paid up : US$4,875,000 divided into 4,875,000 Shares
share capital of US$1.00 each
7. Directors : Mr. Xxxx Xxxx Xxxxx, Xxxxxx
Mr. Xxx Xxx
8. Subsidiaries : Jiang Xxxxx Xxxx Wireless
Technology Limited (100%)
[CHINESE CHARACTERS] (100%)
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SCHEDULE 2
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THE WARRANTIES
--------------
1. THE COMPANY
-----------
(A) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the British Virgin Islands. The
information contained in Schedules 1 hereto is up-to-date, true,
accurate and complete and is not misleading. The Company has all
requisite corporate power and authority to execute and deliver this
Agreement, to issue and allot the Subscription Shares and to carry out
the provisions of this Agreement. This Agreement, when executed and
delivered, will be valid and binding on the Company.
(B) There is no option, right to acquire, mortgage, charge, pledge, lien
or other form of security or encumbrances on, over or affecting any
of the Subscription Shares or any part of the unissued share capital
or registered capital (as the case may be) of the Company or any of
its subsidiaries and there is no agreement or commitment to give or
create any of the foregoing and no claim has been made by any person
to be entitled to any of the foregoing which has not been waived in
its entirety or satisfied in full.
(C) The authorized share capital of the Company is US$30,000,000 divided
into 30,000,000 Shares. As of the Closing Date, after giving effect
to the Closing, there will be 6,500,000 Shares issued by the Company.
On the Closing Date, except for the Subscription Shares, there will
be no outstanding securities convertible into or exchangeable for
shares in the capital of the Company or options, warrants for other
rights to purchase or subscribe for Shares.
(D) There is no agreement or commitment outstanding which calls for the
allotment or issue of or accords to any person the right to call for
the allotment or issue of any shares or debentures in the Company or
any of its subsidiaries.
(E) The Company has no subsidiaries or associated companies (as defined
in the Companies Ordinance) and no shareholding or other interest in
any company, partnership, firm or other entity, save as specified in
Schedule 1.
(F) The Company has not repaid, redeemed or purchased any of its share
capital or issued any share capital or registered capital (as the
case may be) as paid up otherwise than by receipt of consideration
therefor.
(G) None of the Company or any of its subsidiaries has been directly or
indirectly engaged or involved in any scheme of reconstruction or
amalgamation or any reorganisation or reduction of share capital or
registered capital (as the case may be) or conversion of securities
nor has any Group company transferred any business carried on by it.
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(H) Subject to the approval of the Board of Directors of the Company and
the relevant provisions, if any, in the Articles of Association of the
Company and applicable laws to the contrary, no consent of any third
party is required to the issue and allotment of the Subscription
Shares.
2. ACCURACY AND ADEQUACY OF INFORMATION
(A) The information given in the Recitals and the Schedules and in the
Accounts is true and accurate in all respects and is not misleading
because of any omission or ambiguity or for any other reason.
(B) The copies of the Memorandum and Articles of Association or (as the
case may be) the business licence and articles of association of each
member of the Group which has been supplied to the Subscriber and, for
the purposes of identification, signed by the Company and the
Subscriber are current, complete and accurate in all respects, have
attached to them copies of all resolutions and other documents
required by law to be so attached, and fully set out the rights and
restrictions attaching to each class, if any, of the share or
registered capital of the relevant Group company.
(C) All the accounts, books, ledgers and financial and other records of
the Group have been properly kept in accordance with normal business
practice and are in the possession of the Group or under its control
and all transactions relating to its business have been duly and
correctly recorded therein and there are, as at the date hereof, no
inaccuracies or discrepancies of any kind contained or reflected in
such accounts, books, ledgers and financial and other records and at
the date hereof they are sufficient to give a true and fair view of
the state of the Group's affairs and to explain its transactions.
(D) The statutory books (including all registers and minute books) of each
member of the Group have been properly kept and contain (in respect of
matters up to but not including Closing) an accurate and complete
record of the matters which should be dealt with in those books and
contain no inaccuracies or discrepancies of any kind and no notice or
allegation that any of them is incorrect or should be rectified has
been received.
(E) All copies of documents supplied to the Subscriber or its professional
advisors, agents or representatives have been true and complete copies
of such documents.
(F) All information relating to the Group which would be expected to
influence the decision of a subscriber for value of the Subscription
Shares has been given to the Subscriber by the Company.
3. COMPLIANCE WITH LEGAL REQUIREMENTS
(A) Compliance has been made with all legal and procedural requirements
and other formalities in connection with the Group concerning (a) the
Memorandum and Articles of Association, business licence or other
constitutional documents of each Group company (including all
resolutions passed or purported to have been
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passed), (b) the filing of all documents required by the applicable
law to be filed with any government authorities or regulatory bodies,
(c) issues of shares debentures or other securities, (d) payments of
interest and dividends and making of other distributions, and (e)
their Directors and other officers.
(B) Each Group company is empowered and duly qualified to carry on its
business in
Hong Kong and in each other country, state or territory in
which such business is presently carried on.
(C) There has been no breach by any Group company or any of its officers
or employees (in their capacity as such) of any legislation or
regulations affecting the Group or its business.
4. ACCOUNTS
(A) The Accounts:
(i) comply with the requirements of all other applicable
legislation;
(ii) were prepared in accordance with
Hong Kong GAAP at the time
they were prepared and commonly adopted by companies carrying
on businesses similar to that carried on by the Group;
(iii) are complete and accurate in all material respects and, in
particular, do or will make full provision for all established
liabilities or make proper provision for (or contain a note in
accordance with good accounting practice respecting) all
deferred or contingent liabilities (whether liquidated or
unliquidated) at the date thereof including deferred Taxation
where appropriate;
(iv) give a true and fair view of the state of affairs and financial
position of the Group at the date thereof and of the Group's
results for the financial period ended on such date; and
(v) are not adversely affected by any unusual or non-recurring
items which are not disclosed in the Accounts.
(B) Without limitation to paragraph (A), due provision has been made in
the Accounts:
(i) for depreciation of assets;
(ii) for any foreseeable liabilities in relation to the disposal of
any assets or the cessation or diminution of any part of the
business of the Group; and
(iii) for bad or doubtful debts.
(C) No member of the Group has any outstanding liability for taxation of
any kind which has not been provided for or is not provided for in the
Accounts.
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(D) Save in the ordinary course of business, no member of the Group has
any capital commitment or is engaged in any scheme or project
requiring the expenditure of capital.
(E) Each member of the Group owns and will own free from encumbrances all
its undertaking and assets shown or comprised in the relevant accounts
and all such assets are in its possession or under its control.
(F) No member of the Group holds any security (including any guarantee or
indemnity) which is not valid and enforceable by such member against
the grantor thereof in accordance with its terms.
5. EVENTS SINCE THE ACCOUNTS DATE
Since the Accounts Date:
(i) there has been no adverse change in the financial condition or
prospects of any member of the Group and each Group company has
entered into transactions and incurred liabilities solely in the
ordinary course of trading;
(ii) no resolution of any members of any Group company in general meeting
has been passed other than resolutions relating to the business of
the annual general meeting which was not special business;
(iii) no Group company has declared, paid or made or is proposing to
declare, pay or make any dividend or other distribution;
(iv) the financial year end of the Group company has not changed from 31st
December of each year;
(v) no event has occurred which would entitle any third party (with or
without the giving of notice) to call for the repayment of
indebtedness prior to its normal maturity date;
(vi) the business of each member of the Group has been carried on in the
ordinary and usual course and in the same manner (including nature
and scope) as in the past, no fixed asset or stock has been written
up nor any debt written off and no unusual or abnormal contract has
been entered into by any member of the Group;
(vii) no asset of any member of the Group has been acquired or disposed of
on capital account, or has been agreed to be acquired or disposed of,
otherwise than in the ordinary course of business and no member of
the Group has disposed of or parted with possession of any of its
property, assets (including know-how) or stock in trade or made any
payments, and no contract involving expenditure by it on capital
account has been entered into by any member of the Group, and no
liability has been created or has otherwise arisen (other than in the
ordinary course of business as previously carried on);
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(viii) there has been no disposal of any asset (including stock) or supply
of any service or business facility of and kind (including a loan of
money or the letting, hiring or licensing of any property whether
tangible or intangible) in circumstances where the consideration
actually received or receivable for such disposal or supply was
less than the consideration which could be deemed to have been
received for tax purposes;
(ix) no event has occurred which gives rise to a tax liability to any
member of the Group on deemed (as opposed to actual) income, profits
or gains or which results in any member of the Group becoming liable
to pay or bear a tax liability directly or primarily chargeable
against or attributable to another person, firm or company;
(x) no remuneration (including bonuses) or benefit payable to any
officer or employee of the Company has been increased nor has any
member of the Group undertaken any obligation to increase any such
remuneration at any future date with or without retrospective
effect;
(xi) all book debts of each member of the Group shown in the Accounts
which have been realised since the Accounts Date have been realised
at the amounts at which they were included in the Accounts and no
indication has been received that any debt now owing to any member
of the Group is bad or doubtful; and
(xii) no transaction of any importance to which any member of the Group
has been party has taken place, which if it had taken place on or
before the Accounts Date would require to be disclosed or reflected
in the audited accounts of the relevant Group company as at the date
thereof or in the report of the Directors accompanying such
accounts.
6. CONTRACTS, COMMITMENTS AND FINANCIAL AND OTHER ARRANGEMENTS
(A) There are not now outstanding, nor will there be outstanding at
Closing, with respect to the Group:
(i) any contracts of service with directors or employees which
cannot be terminated by one month's 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);
(ii) any agreements or arrangements to which any member of the
Group is a party for profit sharing, share incentives, share
options, incentive payments or payment to employees of
bonuses;
(iii) any obligation or arrangement to pay any pension, gratuity,
retirement annuity or benefit or any similar obligation or
arrangement in favour of any person;
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(iv) any agreement (whether by way of guarantee indemnity
warranty representation or otherwise) under which any member
of the Group is under any actual or contingent liability in
respect of:-
(a) any disposal by any Group company of its assets or
business or any part thereof except such as are usual
in the ordinary and proper course of its normal day to
day trading as carried on at the date hereof; or
(b) the obligations of any other person;
(v) any contract to which any member of the Group is a party
which is of a long-term and non-trading nature or which
contains any unusual or unduly onerous provision disclosure
of which could reasonably be expected to influence the
decision of a Subscriber for value of any or all of the
Subscription Shares;
(vi) any agreement entered into by any member of the Group
otherwise than by way of bargain at arm's length;
(vii) any arrangements (contractual or otherwise) between any
member of the Group and any party which will or may be
terminated or prejudicially affected as a result of the
issue and allotment of the Subscription Shares or of
compliance with any other provision of this Agreement; or
(viii) any contract which restricts the freedom of any member of
the Group to carry on the business now carried on by it in
any part of the world.
(B) There is no invalidity, or any grounds for determination,
rescission, avoidance or repudiation of any agreement to which any
member of the Group is a party.
(C) Compliance with this Agreement 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 member of the Group is now a
party or any loan to or mortgage created by any member of the Group
or relieve any other party to a contract with any member of the
Group of its obligations under such contract or entitle such party
to terminate such contract, whether summarily or by notice.
(D) Neither entering into nor completing this Agreement will or is
likely to cause any member of the Group to lose the benefit of any
right or privilege it currently enjoys or any person who normally
does business with or gives credit to any member of the Group not to
continue to do so on the same basis or any officer or senior
employee of any Group company to leave its employment.
(E) No charges, rights of security or third party rights of any kind
whatsoever have been created or agreed to be created or permitted to
arise over any of the assets of any member of the Group other than
liens arising in the ordinary course of business.
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(F) No member of the Group is under any obligation, nor is it a party to
any contract, which cannot readily be fulfilled or performed by it
on time and without undue or unusual expenditure of money or effort.
(G) No member of the Group is under any obligation, nor is it a party to
any forward contract relating to foreign currency.
(H) No member of the Group is a party to nor has it any liability
(present or future) under any loan agreement, debenture, guarantee,
indemnity or letter of credit or leasing, hiring, hire purchase,
credit sale or conditional sale agreement nor has it entered into
any contract or commitment involving, or likely to involve,
obligations or expenditure of an unusual or exceptional nature or
magnitude.
(I) There are no debts owing by any member of the Group other than the
debts which have arisen in the ordinary course of business and shown
in the Accounts.
(J) No member of the Group has any outstanding bid or tender or sale or
service proposal which, if accepted, would be likely to result in a
loss to the relevant Group company.
(K) Save for any guarantee or warranty implied by law, no member of the
Group has given any guarantee or warranty, or made any
representation, in respect of goods or services supplied or
contracted to be supplied by it or accepted any liability or
obligation that would apply after any such goods or services had
been supplied by it.
(L) The stock-in-trade held by any member of the Group at the date
hereof is in good undamaged and merchantable condition.
7. INSOLVENCY
(A) No receiver has been appointed of the whole or any part of the
assets or undertaking of any member of the Group.
(B) No petition has been presented, no order has been made and no
resolution has been passed for the winding-up or dissolution of any
member of the Group.
(C) No member of the Group has stopped payment nor is it insolvent or
unable to pay its debts within the meaning of section 178 of the
Companies Ordinance.
(D) No unsatisfied judgment is outstanding against any member of the
Group.
8. INSURANCE
(A) Each member of the Group has effected and maintains valid policies
of insurance in an amount and to the extent that it is prudent to do
so in the business carried on by the relevant Group company. All
premiums due in respect of such policies of insurance have been paid
in full and all the other conditions of the said policies have been
performed and observed in full.
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Nothing has been done or omitted to be done whereby any of the said
policies has or may become void or voidable and none of the said
policies is subject to any special or unusual terms or restrictions or
to the payment of any premium in excess of the usual rate.
(B) No claim is outstanding either by the insurer or the insured under
any of the said policies and no claim against any member of the Group
by any third party is outstanding in respect of any risk covered by
any of the policies or by any policy previously held by the relevant
Group company.
(C) There are no circumstances which would or might entitle any member of
the Group to make a claim under any of the said policies or which
would or might be required under any of the said policies to be
notified to the insurers.
9. LITIGATION
No member of the Group is engaged (whether as plaintiff, defendant or
otherwise) in any litigation or arbitration, administrative or criminal or
other proceeding and no litigation or arbitration, administrative or
criminal or other proceedings against any member of the Group is pending,
threatened or expected and there is no fact or circumstance likely to give
rise to any such litigation or arbitration, administrative or criminal or
other proceedings or to any proceedings against any director, officer or
employee (past or present) of any member of the Group in respect of any
act or default for which any member of the Group might be vicariously
liable.
10. DELINQUENT ACTS
No member of the Group has committed nor is it liable for any criminal,
illegal, unlawful or unauthorised act or breach of any obligation whether
imposed by or pursuant to statute, contract or otherwise.
11. TAX RETURNS
(A) All members of the Group has, in respect of all years of assessment
since incorporation falling before the date of this Agreement, made
or caused to be made all proper returns, and has supplied or caused
to be supplied all information regarding taxation matters which it is
required to make or supply to any tax, revenue, finance and customs
authority and there is, at the date hereof, no dispute or
disagreement nor is any contemplated with any such authority
regarding the liability or potential liability to any tax or duty
(including in each case penalties and interest) or any member of the
Group or regarding the availability to any member of the Group of any
relief from tax or duty.
(B) The Group has sufficient records relating to past events during the
years prior to the date of this Agreement to calculate the tax
liability or relief which would arise on any disposal or realisation
of any asset owned at the date of this Agreement.
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(C) The Group has submitted or will submit all claims and disclaimers
which will be assumed to have been made for the purposes of the
Accounts.
12. ANTI-AVOIDANCE
--------------
No member of the Group has at any time been a party or otherwise involved
in any transaction or series of transactions involving steps taken without
any commercial or business purpose apart from the obtaining of a tax
advantage.
13. STAMP AND OTHER DUTIES
----------------------
Each member of the Group has paid promptly all sums payable by it under
any applicable law or legislation and no sums are presently payable by any
member of the Group under any such law or legislation.
14. EMPLOYMENT
----------
(A) No employee or consultant or former employee or consultant has
currently outstanding any claims against any member of the Group
whatsoever.
(B) Full provision has been made in the Accounts for all and any
compensation, severance payment or long service payment for which any
member of the Group is liable (including accrued entitlements) in
respect of loss of office, wrongful dismissal, redundancy, unfair
dismissal or termination of employment.
(C) The Group is not paying, nor is it under any liability (actual or
contingent) to pay or secure, any pension or other benefit on
retirement, death or disability or on the attainment of a specified
age or on the completion of a specified number of years of service or
on termination of employment. No proposal has been announced to
establish any retirement, death or disability benefit schemes for
directors or employees nor are there any obligations to or in respect
of present or former directors or employees with regard to
retirement, death or disability pursuant to which the Group is or may
become liable to make payments and no pension or retirement or
sickness gratuity is currently being paid or has been promised by any
member of the Group to or in respect of any former director or former
employee.
(D) No member of the Group has any outstanding undischarged liability to
pay to any governmental or regulatory authority in any jurisdiction
any contribution, taxation or other impose arising in connection with
the employment or engagement of personnel by any company.
(E) Save as mentioned in the Shareholders Agreement, there is not in
existence nor is any member of the Group proposing to introduce any
share incentive scheme, share option scheme or profit sharing scheme
for all or any part of its directors or employees.
(F) No member of the Group is a party to any agreement or arrangement
with or does not have commitment to any trade unions or staff
associations.
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(G) There is no outstanding claim against any member of the Group by any
person who is now or has been an officer or employee of the relevant
Group company or any dispute between any member of the Group and a
material class of its employees.
(H) There is not outstanding any contract or arrangement to which any
member of the Group is a party for the payment to any person or body
of any consultancy or like fees.
15. POWER OF ATTORNEY
-----------------
No member of the Group has given any power of attorney or other authority
(express, implied or ostensible) which is outstanding or effective to any
person to enter into any contract or commitment on its behalf other than
to its employees and the bankers of the Group to enter into routine
trading contracts in the normal course of their duties.
16. INTELLECTUAL PROPERTY
---------------------
(A) No patents, patentable and other inventions, trade marks, trade names,
registered designs, label designs and copyrights owned or licensed to
be used by the Group (if any) and used by it in connection with its
business is liable to cease to be available for use by the Group or
has been or can be the subject of a claim that it is not the sole
property of Group or is otherwise subject to encumbrances or that the
Group is not the sole beneficial owner thereof or for the purposes of
use other than by the Group.
(B) No licences, registered user or other rights have been granted in
respect of the Intellectual Property and none of the Intellectual
Property is being or has been used by any person other than the Group.
(C) The Group does not use, require to use or otherwise have an interest
in any other intellectual property other than the Intellectual
Property.
(D) To the best knowledge of the Company the processes employed and the
products and services provided by the Group do not use, embody or
infringe any patents, registered designs, know-how or trade secrets,
copyrights, trademarks or similar intellectual property rights
(whether registered or not) of third parties and no claims have been
made and no applications are pending.
17. DEDUCTIONS AND WITHHOLDINGS
---------------------------
The Group has made all deductions in respect, or on account, of any tax
from any payment made by it which it is obliged or entitled to make, and
has accounted in full to the tax and/or other appropriate authority for
all amounts so deducted.
18. LICENCES
--------
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(A) All licences, consents, permissions and other approvals required for
or in connection with the carrying on of businesses now being carried
on by each member of the Group have been disclosed in writing to the
Subscriber, are not limited in duration or subject to onerous
conditions, and are in full force and effect as at the date hereof,
and will be in full force and effect as at the Closing.
(B) All reports, returns and information required by law or, as a
condition of any licence, consent, permit or approval, required to be
made or given to any person or authority in connection with the
businesses of each member of the Group have been made or given to the
appropriate person or authority, and there is no circumstance which
indicates that any such licence, consent, permission or approval
required for or in connection with the carrying on of businesses now
being carried on by each member of the Group is likely to be revoked
for any reason, or which may confer a right of revocation upon or
following the subscription of the Subscription Shares by the
Subscriber.
19. TENANCY AGREEMENTS
------------------
(A) Each member of the Group is at the date hereof entitled to use all
the properties which it occupies and exercise all of its rights under
any tenancy agreements or licences of such properties free from any
third party rights whatsoever.
(B) The properties in relation to such tenancy or licence agreements are
occupied or otherwise used by the relevant member of the Group in
connection with its business, and is not in contravention of any
applicable laws, regulations, orders or official directions and there
is no development thereon in contravention of such laws,
regulations, orders or directions.
(C) The properties in relation to such tenancy or licence agreements are
in good and substantial repair and fit for the purposes for which they
are currently used.
20. CLOSING
-------
All the warranties, representations and undertakings contained in the
foregoing paragraphs of this Schedule shall be deemed to be repeated
immediately before Closing and relate to the facts then existing.
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SCHEDULE 3
FORM OF APPLICATION FOR SHARES
[date]
To: Alpha Star Investments Limited
Dear Sirs,
SUBSCRIPTION FOR SHARES
We refer to the
Subscription Agreement dated [date] (the "Agreement") entered
into between ourselves and yourselves (the "Company"). Expressions defined in
the Agreement shall have the same meanings where used herein.
Pursuant to the provisions of the Agreement, we, Nam Tai Electronics, Inc.
hereby apply for 1,625,000 Shares in the capital of the Company, subject to the
Constitutional Documents of the Company, at the subscription price of
US$10,000,000.
We hereby enclose evidence of payment for the Shares subscribed hereunder in the
aggregate sum of US$10,000,000 payable by us to the Company and request the
Company to register the following name on the Register of Members of the
Company:
Registered Owner No. of Shares
Nam Tai Electronics, Inc. 1,625,000 Shares
Yours faithfully,
For and on behalf of
Nam Tai Electronics, Inc.
---------------------------------
Name: [Koo Xxxx Xxxx]
Title: [Chief Financial Officer]
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SCHEDULE 4
----------
FORM OF SHAREHOLDERS AGREEMENT
------------------------------
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