INTEGRATED INTERNATIONAL LTD. STOCK PURCHASE AGREEMENT Among and DESWELL INDUSTRIES, INC. August 17, 2007
Exhibit 4.3
INTEGRATED INTERNATIONAL LTD.
Among
X. X. XXX and
X. X. XXX
X. X. XXX
and
DESWELL INDUSTRIES, INC.
August 17, 2007
/s/ Xxxxxx Xxx
/s/ Xxx Xxx Xxxx /s/ Tam Man Chi
/s/ Xxx Xxx Xxxx /s/ Tam Man Chi
This Stock Purchase Agreement (this “Agreement”) dated as of August 17, 2007 is
executed by and among XXX XXX XXXX, (X. X. Xxx), HKID no. X000000(0) (“Xxx”) and TAM MAN CHI (X. X.
Xxx), HKID no. X000000(0) (“Tam” and collectively with Xxx, the “Sellers”), each a shareholder of
INTEGRATED INTERNATIONAL LTD., a corporation organized under the laws of Samoa (the “Company”) and
DESWELL INDUSTRIES, INC., a British Virgin Islands International Business Company (the
“Purchaser”).
WHEREAS, each of Xxx and Tam owns 48 shares or 12% of the outstanding capital stock of the
Company, which together amounts to 96 shares or 24% of the outstanding capital stock of the
Company;
WHEREAS, the Purchaser owns 304 shares or 76% of the outstanding capital stock of the Company
and desires to increase its ownership in the Company to 100% of the outstanding capital stock of
the Company;
WHEREAS, each of Xxx and Xxx desires to sell to Purchaser, and Purchaser desires to purchase
from each of them, 48 shares or 12% of the outstanding capital stock of the Company, which together
amounts to 96 shares or 24% of the outstanding capital stock of the Company, increasing Purchaser’s
ownership in the Company to a total of 400 shares or one hundred percent of the outstanding capital
stock of the Company;
Now Therefore The Parties Hereby Agree As Follows:
1. Purchase and Sale of Stock.
1.1 Sale of the Securities
(A) Subject to the terms of this Agreement, each of Xxx and Tam shall sell to the Purchaser,
and the Purchaser shall purchase from each of them, 48 shares or 12% of the outstanding capital
stock of the Company, which together equals 96 shares or 24% of the outstanding capital stock of
the Company held by them (the “Integrated Shares”).
(B) The aggregate purchase price for the Integrated Shares shall consist of (a) six hundred
thirty-two thousand eighty (632,080) common shares of the Purchaser (the “Deswell Common Shares”)
and (b) three million two hundred thirty-four thousand one hundred eighty Hong Kong dollars
(HK$3,234,180) (equal to approximately US$413,578 on August 15, 2007), which the Purchaser shall
issue and deliver, and pay, respectively, to the Sellers at the Closing (as defined below), of
which at the Closing
(i) one-half or 316,040 Deswell Common Shares shall be issued and delivered, and HK$1,617,090
shall be paid, to Xxx, and
(ii) one-half or 316,040 Deswell Common Shares shall be issued and delivered, and HK$1,617,090
shall be paid to Tam.
1.2 Closing. The purchase by the Purchaser, and the sale by the Sellers, of the
Integrated Shares shall take place on August 21, 2007, at the principal executive offices of the
Purchaser, located at 17B, Edificio Comercial Xxxxxxxxx, 000 Xxxxxxx xx Xxxxx Xxxxxx, Xxxxx,
/s/ Xxxxxx Xxx
/s/ Xxx Xxx Xxxx /s/ Tam Man Chi
/s/ Xxx Xxx Xxxx /s/ Tam Man Chi
1
Special Administrative Region, People’s Republic of China, or such other date, time and
location as the Purchasers and the Sellers agree upon orally or in writing (the date on which the
closing occurs, the “Closing” or “Closing Date”). At the Closing,
(A) the Purchaser shall
(i) issue an aggregate of 632,080 Deswell Common Shares and deliver stock certificates
representing one-half of such shares or 316,040 of such Deswell Common Shares to each of the
Sellers, and
(ii) deliver to each of the Sellers HK$1,617,090 by Company checks,
(B) each of the Sellers shall deliver to the Purchaser a stock certificate or certificates
representing 48 Integrated Shares so that Sellers together will deliver 96 Integrated Shares or an
aggregate of 24% of the outstanding capital stock of the Company. Each share certificate for
Integrated Shares so delivered shall be endorsed in blank by, or accompanied by duly executed
assignment documents from, Xxx and Xxx as applicable to the certificates for Integrated Shares so
delivered.
2. Representations and Warranties of the Sellers. Each of the Sellers hereby
represents and warrants as of the Closing Date:
2.1 Validity. This Agreement has been duly and validly executed and delivered by
Sellers and constitutes a valid and binding obligation of each of the Sellers enforceable against
each in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of
creditors’ rights generally and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.
2.2 Consents or Approvals. Sellers are not required to obtain the consent or approval
of any person or governmental agency or organization to effect the sale of Integrated Shares or the
purchase of the Deswell Common Shares.
2.3 No Defaults. This Agreement will not violate or constitute a default under any
order of any judicial, arbitral or government instrumentality or any agreement or instrument to
which either of Sellers is a party or by which he is bound.
2.4 Ownership. Each of the Sellers is the owner of 48 shares or 12% of the
outstanding capital stock of the Company, and together are the owners 96 shares or 24% of the
outstanding capital stock of the Company, representing all of the remaining issued and outstanding
shares of capital stock of the Company that are not owned by the Purchaser. Each of the Sellers
now has and on the Closing Date will have valid and marketable title to the Integrated Shares to be
sold by him hereunder, free and clear of any pledge, lien, security interest, encumbrance, claim or
equitable interest other than pursuant to this Agreement; and upon delivery of the Integrated
Shares under this Agreement and payment and delivery of the purchase price as herein contemplated,
the Purchaser will obtain valid and marketable title to the Integrated Shares purchased by it from
each of the Sellers, free and clear of any pledge, lien, security interest pertaining to the
Sellers or either of the Sellers’ property, encumbrance, claim or equitable interest, including any
liability for or claim of
/s/ Xxxxxx Xxx
/s/ Xxx Xxx Xxxx /s/ Tam Man Chi
/s/ Xxx Xxx Xxxx /s/ Tam Man Chi
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any transfer tax or duty, any liability for or claim of any estate or inheritance taxes, any
liability to or claim of any creditor, devisee, legatee or beneficiary of either of the Sellers.
2.5 Investment. Each of the Sellers is acquiring the Deswell Common Shares pursuant to
this Agreement for his own account for investment, not as a nominee or agent, and not with a view
to the resale or distribution of any part thereof, and neither of the Sellers has any present
intention of selling, granting any participation in, or otherwise distributing the same.
2.6 Experience. Each of the Sellers is an executive officer of the Purchaser within
the meaning of the United States securities laws and has made detailed inquiry concerning the
Purchaser, its business and its personnel; the officers of the Purchaser have made available to the
Sellers any and all written information which either of them have requested and have answered to
the Sellers’ satisfaction all inquiries made by the Sellers; and the Sellers each has sufficient
knowledge and experience in finance and business, including evaluating and investing in securities
in companies similar to the Purchaser, that he is capable of evaluating the risks and merits of his
investment in the Purchaser and is able financially to bear the risks thereof.
2.7 Transfer or Resale.
2.7.1 For a period of one-year from the Closing Date (the “Lock-up Period”, each of the
Sellers agrees not to offer to sell, contract to sell, or otherwise sell, dispose of, loan,
pledge or grant any rights with respect to (collectively, a “Disposition”) any of the
Deswell Common Shares acquired under this Agreement, or grant any options or warrants to
purchase any of the Deswell Common Shares acquired under this Agreement or any securities
convertible into or exchangeable for the Deswell Common Shares acquired under this Agreement
(collectively, “Securities”) otherwise than (i) as a bona fide gift or gifts, provided the
donee or donees thereof agree in writing to be bound by this restriction, or (ii) with the
prior written consent of the Purchaser. The foregoing restriction is expressly agreed to
preclude the Sellers from engaging in any hedging or other transaction which is designed to
or reasonably expected to lead to or result in a Disposition of Securities during the
Lock-up Period, even if such Securities would be disposed of by someone other than either of
Sellers. Such prohibited hedging or other transactions includes, without limitation, any
short sale (whether or not against the box) or any purchase, sale or grant of any right
(including, without limitation, any put or call option) with respect to any Securities or
with respect to any security (other than a broad-based market basket or index) that
includes, relates to or derives any significant part of its value from Securities. Each of
the Sellers further agrees and consents to the entry of stop transfer instructions with the
Company’s transfer agent against the transfer of the Securities held by the undersigned
except in compliance with this Agreement.
2.7.2 Each of the Sellers understands that the Deswell Common Shares he is acquiring
under this Agreement have not been registered under the United States Securities Act of 1933
(the “Securities Act”) or the securities laws of any state thereof or any other country, and
may not be transferred unless:
| (i) | subsequently registered under the Securities Act; or | ||
| (ii) | he shall have delivered to the Purchaser an opinion of counsel reasonably acceptable to the Purchaser (which opinion shall be in |
/s/ Xxxxxx Xxx
/s/ Xxx Xxx Xxxx /s/ Tam Man Chi
/s/ Xxx Xxx Xxxx /s/ Tam Man Chi
3
| form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the Deswell Common Shares to be sold or transferred may be sold or transferred under an exemption from such registration; or | |||
| (iii) | sold under Rule 144 promulgated under the Securities Act (or a successor rule). |
2.8 Accredited Investor. Each of the Sellers is an “accredited investor” within the
meaning of United States Securities and Exchange Commission (“SEC”) Rule 501 of Regulation D, as
presently in effect.
2.9 Restricted Securities. Each of the Sellers understands that:
(A) the Deswell Common Shares purchased pursuant to this Agreement are characterized as
“restricted securities” under the United States securities laws inasmuch as the shares are being
acquired from the issuer in a transaction not involving a public offering, and
(B) under such laws and applicable regulations, such securities may be resold without
registration under the Securities Act only in certain limited circumstances. In this connection,
the Sellers represent that each is familiar with SEC Rule 144, as presently in effect, and
understands the resale limitations imposed thereby and by the Securities Act.
2.10 Legend. Each of the Sellers understand that unless and until the Deswell Common
Shares have been registered under the Securities Act or may be sold by the Seller under Rule 144,
the certificates for the Deswell Common Shares shall bear a restrictive legend in substantially the
following form (the “Legend”):
“The shares represented by this certificate have not been registered under the Securities
Act of 1933, as amended, and may not be offered, sold or otherwise transferred, pledged or
hypothecated unless and until such shares are registered under such Act or an opinion of
counsel satisfactory to the Company is obtained to the effect that such registration is not
required.”
In addition to the Legend, during the Lock-up Period, the certificates for the Deswell Common
Shares may bear a restrictive legend in substantially the following form:
“Transfer of the shares represented by certificate is restricted 200 pursuant to the terms
of that certain Stock Purchase Agreement dated as of August 17, 2007/ by and among Xxx
Xxx Xxxx and Xxx Man Chi and Deswell Industries, Inc., a copy of which is on file and
available for inspection at the principal executive offices of Deswell Industries,
Inc.”
2.11 Representations as Foreign Investor Each of the Sellers represents that he has
satisfied himself as to the full observance of the laws of his jurisdiction in connection with any
invitation to purchase the Deswell Common Shares or any use of this Agreement, including (i) the
legal requirements within his jurisdiction for the purchase of the Deswell Common Shares or sale of
the Integrated Shares, (ii) any foreign exchange restrictions applicable to such purchase or sale,
(iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and
other tax consequences, if any, that may be relevant to the purchase and sale, holding, redemption,
sale or
/s/ Xxxxxx Xxx
/s/ Xxx Xxx Xxxx /s/ Tam Man Chi
/s/ Xxx Xxx Xxxx /s/ Tam Man Chi
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transfer of the Deswell Common Shares. Sellers’ sale of the Integrated Shares and purchase of
the Deswell Common Shares, and his continued beneficial ownership of the Deswell Common Shares will
not violate any applicable securities or other laws of his jurisdiction.
3. Representations and Warranties of the Purchaser. The Purchaser hereby represents
and warrants that:
3.1 Authorization and Validity. The Purchaser has full power and authority to enter
into this Agreement, and the Agreement constitutes a valid and legally binding obligation,
enforceable against it in accordance with its terms except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application affecting enforcement
of creditors’ rights generally, and (ii) as limited by laws relating to the availability of
specific performance, injunctive relief or other equitable remedies.
3.2 Consents or Approvals. Purchaser is not required to obtain the consent or
approval of any person or governmental agency or organization to effect the purchase of the
Integrated Shares or the sale of the Deswell Common Shares.
3.3. No Defaults. This Agreement will not violate or constitute a default under any
order of any judicial, arbitral or government instrumentality or any agreement or instrument to
which Purchaser is a party or by which it is bound.
3.4 Purchase Entirely for Own Account. The Integrated Shares to be received by the
Purchaser are being acquired for investment for the Purchaser’s own account, not as a nominee or
agent, and not with a view to the resale or distribution of any part thereof, and the Purchaser
has no present intention of selling, granting any participation in, or otherwise distributing the
same.
3.5 Disclosure of Information. The Purchaser has received all the information it
considers necessary or appropriate for deciding whether to purchase the Integrated Shares.
3.6 Investment Experience. The Purchaser acknowledges that it can bear the economic
risk of its investment, and has such knowledge and experience in financial or business matters
that it is capable of evaluating the merits and risks of the investment in the Integrated Shares.
If other than an individual, such Investor also represents it has not been organized for the
purpose of acquiring the Integrated Shares.
3.7 Accredited Investor. The Purchaser is an “accredited investor” within the
meaning of SEC Rule 501 of Regulation D, as presently in effect.
3.8 Restricted Securities. The Purchaser understands that:
(A) the Integrated Shares purchased pursuant to this Agreement are characterized as
“restricted securities” under the federal securities laws inasmuch as the shares are being acquired
from the Seller in a transaction not involving a public offering, and
(B) under such laws and applicable regulations, such securities may be resold without
registration under the Securities Act only in certain limited circumstances. In this connection,
the Purchaser represents that it is familiar with SEC Rule 144, as presently in effect, and
understands the resale limitations imposed thereby and by the Securities Act.
/s/ Xxxxxx Xxx
/s/ Xxx Xxx Xxxx /s/ Tam Man Chi
/s/ Xxx Xxx Xxxx /s/ Tam Man Chi
5
3.9 Representations as Foreign Investor. Purchaser represents that it has satisfied
itself as to the full observance of the laws of its jurisdiction in connection with any invitation
to purchase the Integrated Shares or any use of this Agreement, including (i) the legal
requirements within its jurisdiction for the purchase of the Integrated Shares or the issuance and
sale of the Deswell Common Shares, (ii) any foreign exchange restrictions applicable to such
purchase or sale, (iii) any governmental or other consents that may need to be obtained, and (iv)
the income tax and other tax consequences, if any, that may be relevant to the purchase and sale,
holding, redemption, sale or transfer of the Integrated Shares. Purchaser’s sale of the Deswell
Common Shares and purchase of the Integrated Shares, and its continued beneficial ownership of the
Integrated Shares will not violate any applicable securities or other laws of its jurisdiction.
4. Conditions of Investors’ Obligations at the Closing. The obligations of the
Purchaser to Sellers under this Agreement are subject to the fulfillment on or before the Closing
of each of the following conditions:
4.1 Representations and Warranties. The representations and warranties of the
Sellers contained in Section 2 shall be true on and as of the Closing Date with the same effect as
though such representations and warranties had been made on and as of the date of Closing.
4.2 Performance. The Sellers shall have performed and complied with all agreements,
obligations and conditions contained in this Agreement that are required to be performed or
complied with by them on or before the Closing Date.
4.3 Qualifications. All authorizations, approvals or permits, if any, of any
governmental authority or regulatory body of the United States or of any state or country that are
required in connection with the lawful issuance and sale of the securities pursuant to this
Agreement shall be duly obtained and effective as of the Closing Date.
4.4 Proceedings and Documents. All corporate and other proceedings in connection with
the transactions contemplated at the Closing and all documents incidental thereto shall be
reasonably satisfactory in form and substance to Purchaser’s counsel, and Purchaser shall have
received all such counterpart original and certified or other copies of such documents as it may
reasonably request.
5. Conditions of the Seller’s Obligations at Closing. The obligations of the Sellers
to the Purchaser under this Agreement are subject to the fulfillment on or before the Closing of
each of the following conditions by the Purchaser:
5.1 Representations and Warranties. The representations and warranties of the
Purchaser contained in Section 3 shall be true on and as of the Closing with the same effect as
though such representations and warranties had been made on and as of the Closing.
5.2 Performance. The Purchaser shall have performed and complied with all agreements,
obligations and conditions contained in this Agreement that are required to be performed or
complied with by it on or before the Closing Date.
5.3 Qualifications. All authorizations, approvals or permits, if any, of any
governmental authority or regulatory body of the United States or of any state or country that are
required in connection with the lawful issuance and sale of the securities pursuant to this
Agreement shall be duly obtained and effective as of the Closing.
/s/ Xxxxxx Xxx
/s/ Xxx Xxx Xxxx /s/ Tam Man Chi
/s/ Xxx Xxx Xxxx /s/ Tam Man Chi
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6. Miscellaneous.
6.1 Survival of Warranties. The warranties, representations and covenants of the
Seller and Purchaser contained in or made pursuant to this Agreement shall survive the execution
and delivery of this Agreement and the Closing and shall in no way be affected by any investigation
of the subject matter thereof made by or on behalf of the Seller or the Purchaser.
6.2 Successors and Assigns. Except as otherwise provided herein, the terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective successors and
assigns of the parties (including transferees of any securities). Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or liabilities under or by
reason of this Agreement, except as expressly provided in this Agreement.
6.3 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the British Virgin Islands without regard to choice of law principles thereof.
6.4 Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.
6.5 Titles and Subtitles. The titles and subtitles used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting this Agreement.
6.6 Notices. All notices, requests, waivers and other communications (collectively,
“notices”) made pursuant to this Agreement shall be in writing and shall be conclusively deemed to
have been duly given:
(A) when hand delivered to the other party;
(B) when received when sent by facsimile at the address and number set forth below;
(C) five business days after deposit in the mail with first class or certified mail receipt
requested postage prepaid and addressed to the other party as set forth below; or
(D) the next business day after deposit with a international overnight delivery service,
charges prepaid, addressed to the parties as set forth below with next business day delivery
guaranteed, provided that the sending party receives a confirmation of delivery from the delivery
service provider.
Each person sending a notice under this Agreement by facsimile shall promptly confirm by telephone
to the person to whom such notice was addressed each notice made by it by facsimile pursuant to
this section but the absence of such confirmation shall not affect the validity of any such notice.
All notices to the Sellers shall be delivered to the following addresses:
X. X. Xxx
/s/ Xxxxxx Xxx
/s/ Xxx Xxx Xxxx /s/ Tam Man Chi
/s/ Xxx Xxx Xxxx /s/ Tam Man Chi
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c/o Kwanasia Electronics (MCO Limited
17E Edificio Comercial Xxxxxxxxx,
000 Xxxxxxx xx Xxxxx Xxxxxx
Xxxxx, Xxxxx
Fax no.: (000) 0000-0000
17E Edificio Comercial Xxxxxxxxx,
000 Xxxxxxx xx Xxxxx Xxxxxx
Xxxxx, Xxxxx
Fax no.: (000) 0000-0000
X. X. Xxx
c/o Kwanasia Electronics (MCO Limited
17E Edificio Comercial Xxxxxxxxx,
000 Xxxxxxx xx Xxxxx Xxxxxx
Xxxxx, Xxxxx
Fax no.: (000) 0000-0000
c/o Kwanasia Electronics (MCO Limited
17E Edificio Comercial Xxxxxxxxx,
000 Xxxxxxx xx Xxxxx Xxxxxx
Xxxxx, Xxxxx
Fax no.: (000) 0000-0000
Whenever any notice is required to be given by law or by this Agreement, a written waiver of
such notice, signed by the person entitled to notice, whether before or after the time stated
therein, will be deemed equivalent to the giving of that notice.
6.7 Amendments and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written consent of the Purchaser
and the Seller. Any amendment or waiver effected in accordance with this paragraph shall be binding
upon the Purchaser and the Seller.
6.8 Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this Agreement and the
balance of the Agreement shall be interpreted as if such provision were so excluded and shall be
enforceable in accordance with its terms.
6.9 Further Assurances. Purchaser and Sellers shall from time to time and at all
times hereafter make, do, execute, or cause or procure to be made, done and executed such further
acts, deeds, conveyances, consents and assurances without further consideration, which may
reasonably be required to effect the transactions contemplated by this Agreement.
6.10 Entire Agreement. This Agreement and the documents referred to herein constitute
the entire agreement among the parties and no party shall be liable or bound to any other party in
any manner by any warranties, representations or covenants except as specifically set forth herein
or therein.
6.11 Expenses. Each party shall pay all costs and expenses that it incurs with
respect to the negotiation, execution, delivery and performance of the Agreement.
6.12 Taxes. The Purchaser shall pay all original issue taxes, if any, applicable to
the issuance of the Deswell Common Shares to Sellers. The Sellers shall pay any transfer taxes, if
any, applicable to the transfer of the Integrated Shares to the Purchaser.
[Signatures on next page]
/s/ Xxxxxx Xxx
/s/ Xxx Xxx Xxxx /s/ Tam Man Chi
/s/ Xxx Xxx Xxxx /s/ Tam Man Chi
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In Witness Whereof, the parties have executed this Agreement as of the date first
above written.
| SELLERS |
||||
| /s/ Xxx Xxx Xxxx | ||||
| Name: | Xxx Xxx Xxxx | |||
| /s/ Tam Man Chi | ||||
| Name: | Tam Man Chi | |||
| PURCHASER DESWELL INDUSTRIES, INC. |
||||
| By: | /s/ Xxxxxx Xxx | |||
| Name: | Xxxxxx Xxx | |||
| Its: Chief Executive Officer | ||||
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