DATED 28 JANUARY 2000
(1) GLOBAL TELEPHONE COMMUNICATION INC.
(2) SPIDERWEB CORPORATION
(3) CMS DEVELOPMENT LIMITED
(4) XXXXX XXXXXXX XXXX
(5) NANO TECHNOLOGY LIMITED
-----------------------------
SHAREHOLDERS AGREEMENT
relating to
NANO TECHNOLOGY LIMITED
-----------------------------
Xxxxxx Xxx & Co.
19th Floor, Tower II
Xxx Xxxxxxx
00 Xxxxxx Xxxx
Xxxx Xxxx
THIS AGREEMENT is made on 28 January 2000
BETWEEN:
(1) GLOBAL TELEPHONE COMMUNICATION INC., a company incorporated in the British
Virgin Islands (IBC No. 346782) and having its registered office at East
Asia Xxxxxxxx, P.O. Box 901, Road Town, Tortola, British Virgin Islands
("GTCI");
(2) SPIDERWEB CORPORATION, a company incorporated in the British Virgin Islands
(IBC No. 230382) and having its registered office at P.O. Box 957, Offshore
Incorporations Centre, Road Town, Tortola, British Virgin Islands
("SPIDERWEB");
(3) CMS DEVELOPMENT LIMITED, a company incorporated in the British Virgin
Islands (IBC No. 128319) and having its registered office at Columbus
Centre Building, Wickhams Cay, Road Town, Tortola, British Virgin Islands
("CMS");
(4) XXXXX XXXXXXX XXXX, holder of Canadian Passport No. XX000000 of Xxxxx 0X,
Xxxxx XX, Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxx Xxxx ("XX. XXXX"); and
(5) NANO TECHNOLOGY LIMITED, a company incorporated in the British Virgin
Islands (IBC No. 355222) and having its registered office at Offshore
Incorporations Centre, P.O. Box 957, Road Town, Tortola, British Virgin
Islands (the "COMPANY").
WHEREAS:
(A) The particulars of the Company as at the date hereof are set out in
Schedule 1.
(B) Cyber 2000 Limited ("CYBER 2000") is a company incorporated in Hong Kong
(company no. 684198) having its registered office at Room 0000, Xxxxxxxx
Xxxxxx, 00-00 Xxxxx'x Xxxx Xxxx, Xxxx Xxxx and is a wholly owned subsidiary
of the Company.
(c) The parties wish to co-operate in developing the voice over internet
protocol and the business of providing re-sale services of voice over
internet protocol (the "PROJECT") and to enter into this Agreement which
sets out the terms and conditions upon which the parties will invest in the
Company and to regulate the management and business affairs of the Company
and its subsidiaries.
IT IS HEREBY AGREED as follows:
1. INTERPRETATION
1.1 In this Agreement unless the context requires otherwise, the following
words and expressions shall have the following meanings:
"ARTICLES" the articles of association of
the Company as amended from
time to time;
"AUDITORS" the auditors of the Company from time to
time;
"BOARD" the board of directors of the Company as
constituted from time to time;
"BUSINESS" the business of the Company as described
in Clause 3;
"DEED OF ADHERENCE" the deed of adherence, the form of which
is set out in Schedule 2;
"DEFAULTING PARTY" any Shareholder who is in breach of its
obligations hereunder;
"DIRECTORS" the directors of the Company;
"ENCUMBRANCE" any mortgage, pledge, lien, charge,
equity, third party right, option, right
of pre-emption or any other encumbrance,
priority or security interest or
arrangement of whatsoever nature and
references to Encumbrancer shall be
construed accordingly;
"EVENT OF DEFAULT" any of the events specified in Clause 9.5;
"HONG KONG" Hong Kong Special Administrative Region
of the People's Republic of China;
"LOAN" the outstanding principal amount at any
relevant time of all advances made by the
Shareholders to the Company in their
capacity as Shareholders and interest
thereon (if any);
"SALE VALUE" as defined in Clause 9.3;
"SHAREHOLDERS" registered holders of the Shares from
time to time;
"SHARES" shares of US$1.00 each in the Company;
"SIMPLE MAJORITY" a majority of the Board or of
Shareholders which majority shall be
comprised of nominees of Shareholders or
Shareholders holding more than 50 per
cent of all Shares issued by the Company;
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"SPECIAL MAJORITY" a majority of the Board or of
Shareholders which majority shall be
comprised of nominees of Shareholders or
Shareholders holding 75 per cent or more
of all Shares issued by the Company; and
"SUBSIDIARY" AND "HOLDING COMPANY" as defined in section 2 of the Companies
Ordinance (Cap. 32 of the laws of Hong
Kong).
1.2 In this Agreement:
(a) the Recitals and the Schedules form part of this Agreement and
shall have the same force and effect as if expressly set out in the
body of this Agreement and any reference to this Agreement shall be
to this Agreement as from time to time supplemented, varied or
amended and shall include the Recitals and Schedules;
(b) statutes or statutory provisions shall be construed as references
to those statutes or provisions as amended from time to time
(whether before or after the date of this Agreement) and to any
orders, regulations, instruments or subordinate legislation under
the relevant statute or statutory provision;
(c) a "person" shall include any person, body corporate, association,
entity or partnership (whether or not having separate legal
personality) and "parties" shall mean parties to this Agreement;
(d) the headings are for convenience only and shall not affect the
construction of this Agreement;
(e) the masculine gender shall include the feminine and neuter, and the
singular number shall include the plural, and vice versa;
(f) save as otherwise specified herein, any approval, agreement or
consent of the Shareholders or Directors or any majority thereof
required by this Agreement shall be deemed duly given in a duly
convened general meeting of the Company or meeting of the Directors
or in writing in accordance with the Articles; and
(g) unless otherwise specified, all acts required to be done under this
Agreement on a day which is not a business day shall be done on the
next business day.
2. ARRANGEMENTS FOR PARTICIPATION
2.1 Forthwith or as soon as practicable after execution of this
Agreement, each of the parties shall take or cause to be taken the
following steps:
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(a) hold the first Board meeting to resolve the business set out in
the agenda in the agreed form;
(b) in addition to the existing Directors, appoint the following
nominees respectively as Directors:
Name of Nominee Nominated by
--------------- ------------
Xxx Xxxxxxxxxxx, Xxxxx Xxxx, GTCI
Xxxxxx Xxxxxxxx and two other
nominees to be nominated later
Xxxxxxx Xxxx Man-Hao CMS
Xx. Xxxx Xx. Xxxx
(c) appoint the Auditors.
3. BUSINESS
The Company shall carry on the business of being the investment
holding company of Cyber 2000 and other subsidiaries of the Company
to be established from time to time for the purposes of acquiring,
developing and managing the Project and engaging in such other
businesses as from time to time agreed in writing by the
Shareholders.
4. TRANSFER OF SHARES
4.1 No Shareholder shall sell or dispose of any interest in any Shares
owned by it without first notifying the Company and offering such
Shares to the other Shareholders on the same or more favourable
terms. Any such offer shall remain open for acceptance for 14 days
and if not accepted by one or more of such offerees within such
period shall be deemed to have been refused. In respect of any offer
which is not accepted, the proposing seller shall be at liberty
(subject to the provisions of Clauses 4.2 and 4.3) to sell such
Shares to a third party within 14 days of such refusal but not on
more favourable terms than those at which they were so offered
provided that if the original offer did not specify both the
identity of the proposed transferee and the terms of the proposed
sale, the proposing seller shall not be entitled to effect any such
sale without first giving the other Shareholders further 14 days
notice so specifying and during such period the other Shareholders
may accept such offer upon the terms so specified.
4.2 Each of the Shareholders hereby undertakes that if it shall transfer
any of its Shares (or any interest therein) it shall require the
transferee to execute a Deed of Adherence which the Company shall
execute for itself and on behalf of any as agent of all parties to
this Agreement for the time being (which the parties irrevocably
authorize the Company to do), and the compliance with this Clause
shall be a condition precedent to registration of any such transfer.
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4.3 Without prejudice to Clause 4.1, GTCI shall, before disposing of any
of Shares or any interest thereof held by it (the "GTCI SALE
SHARES") to a third party (the "PURCHASER"), procure that the
Purchaser shall simultaneously offer to purchase from each of the
other Shareholders (the "REMAINING SHAREHOLDERS"):
(a) the same proportionate part of the respective Shares held by
such Remaining Shareholders as the number of the GTCI Sale Shares
bears to all the Shares then held by GTCI; and
(b) a like proportion of the Loan then owing to the respective
Remaining Shareholders.
4.4 The offer made by the Purchaser to each of the Remaining
Shareholders under Clause 4.3 shall:
(a) be conditional upon GTCI actually disposing of the GTCI Sale
Shares;
(b) in all respects be on the same terms as those applicable to the
GTCI Sale Shares including without limitation, the price per
Share, time of payment, sharing of stamp duty, etc.;
(c) in relation to the Loan due to each of the Remaining
Shareholders, be at a consideration that is proportional to that
offered to GTCI by the Purchaser; and
(d) not otherwise be subject to any other more onerous terms,
conditions, warranties or indemnities than those apply to the
GTCI Sale Shares.
4.5 No Shareholder shall transfer any interest in any Share without at
the same time assigning to the transferee a proportion of the Loan
owed to it by the Company equal to the proportion that the interest
transferred bears to the total number of Shares in which the
Shareholder is then beneficially interested.
4.6 Notwithstanding the above provisions and provided in each case the
provisions of Clause 4.2 are complied with, a Shareholder may sell
of transfer all or part of its Shares to a subsidiary or holding
company of such Shareholder or a subsidiary of such holding company
and any such person so holding such Shares may in turn sell or
transfer such Shares to any other subsidiary or holding company of
the said original Shareholder or a subsidiary of such holding company
at any time, provided that when such a person so holding such Shares
ceases to be a subsidiary or holding company of the said original
Shareholder or a subsidiary of such holding company, such Shares
shall be transferred to the said original Shareholder and each
such person hereby authorizes the Company to execute on its behalf all
documents necessary to effect such transfer.
4.7 The parties agree to procure that the Directors shall approve for
registration, but shall only approve for registration, any transfer
of Shares in relation to which compliance has been made with Clause
4 and the relevant provisions of the Articles.
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4.8 If a party ceases to be a Shareholder, it shall no longer be bound by
this Agreement other than enforcing provision in Clause 10 (in
respect of information relating to itself) or in respect of any
antecedent breach.
5. ADDITIONAL FINANCE
5.1 Notwithstanding the provisions of Clause 7.1 (but otherwise subject
as provided in Clause 7.1), the Shareholders shall on request made
by the Company severally provide by way of loan to the Company or by
way of additional share capital such sums as shall be required by
the Company and/or Cyber 2000 and/or any of its subsidiaries to be
established from time to time for the proper conduct of the
Business and to enable it to meet its obligations and liabilities.
Such additional finance shall be provided by Shareholders in the
proportions in which they hold Shares. If any Shareholder shall fail
to advance its share of any such additional finance within a period
of 14 days from the Board's call therefor, the provisions of Clause
9 shall apply.
5.2 If the Company shall issue new Shares to a Shareholder resulting in
dilutions to the respective shareholdings of the other Shareholders,
each of the other Shareholders shall have a right, exercisable
within 7 days after such issue, to subscribe for additional Shares
such that the level of its shareholding in the Company shall not in
any way be reduced (the "TOP-UP SUBSCRIPTIONS"). The terms and
conditions (if any) for issuing of the new Shares (including without
limitation the subscription price of each new Share) applicable to
all the Shareholders pursuant to this Clause 5.2 shall in all respect
be the same. Completion of the Top-up Subscriptions shall take place
simultaneously and, unless otherwise agreed, be 14 days after the
first new issue of Shares which trigger the Top-up Subscriptions.
5.3 Subject as otherwise provided in this Agreement, this Clause 5 shall
be without prejudice to the right of the Company to borrow sums from
third parties on the most favourable terms obtainable as to interest,
repayment and security, but without allowing any prospective lender a
right to participate in the Share capital of the Company as a
condition or term of any loan or advance.
5.4 Save with the unanimous agreement of the Shareholders, no Shareholder
will be obliged to guarantee or provide or give security in respect
of any indebtedness of the Company.
6. DIRECTORS AND MANAGEMENT
6.1 Unless the Shareholders shall otherwise agree, the number of
Directors shall be nine. GTCI shall have the right to nominate and
have appointed a total of six Directors.
6.2 Without prejudice to the Company's right against the Directors
personally at law or in equity, each Shareholder agrees that it
shall be liable for all acts or omissions of the person for the time
being nominated by it to be a Director or to be a signatory of any
documents and bank account of the Company.
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6.3 Subsequent to the appointment of Directors pursuant to Clause 2.1(b)
the Board consisting of the Directors representing the respective
Shareholders are those individuals whose names are set out therein.
6.4 The chairman of the Company shall be nominated by GTCI and shall be
appointed by the Board. The first chairman shall be Xx. Xxxxxx X.
Xxxxxxxxxxx.
6.5 If any vacancy occurs in the Board with respect to any Director
nominated by any Shareholder, such Shareholder shall have the rights
and power to fill such vacancy. Each Shareholder shall have the
right to remove or replace a Director nominated by it at any time.
Any replacement Director nominated by any Shareholder shall be a
person appropriately qualified for the office of Director.
6.6 The quorum for the meeting of the Board shall be such number of
Directors which collectively representing 80 per cent of the entire
shareholdings of the Company from time to time.
6.7 A meeting of the Directors at which a quorum is present shall be
competent to exercise all powers and discretions for the time being
exercisable by the Directors subject to the provisions of this
Agreement and the Articles.
6.8 A meeting of the Board may be held by means of conference telephone
or similar communications equipment by means of which all persons
participating in the meeting can hear each other and participation
in a meeting of the Board in such manner shall constitute presence
in person at such meeting. A resolution in writing or by facsimile
by all Directors shall be as effective for all purposes as a
resolution of the Directors duly passed at a meeting of the Board
duly convened and held. Any such resolution may consist of several
counter-parts which together shall constitute as one document.
6.9 Unless otherwise agreed in writing among the Shareholders, the
financial year of the Company shall end on 31st December.
6.10 The Company shall maintain accurate and complete accounting records
and each Shareholder's duly authorized representative shall have
full access to all accounting and all other records of the Company at
all reasonable times. The accounts of the Company shall be kept in
accordance with accepted accounting principles in Hong Kong and
audited annually.
6.11 The Board shall appoint a managing director for the day to day
management of the affairs of the Company. The managing director
shall be a nominee of GTCI. The managing director shall report and
be supervised as decided by the Board and shall exercise all of the
powers as duly authorized by the Board.
6.12 The Auditors shall be a firm of certified public accountants of
internally recognized reputation nominated by GTCI.
6.13 Any guarantees required to be given by the Shareholders shall be
given by each of them and any payments which fall due pursuant to
such guarantees shall be borne by the Shareholders pro rata to their
shareholding from time to time. Any payment
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properly made by any Shareholder pursuant to a guarantee of the
Company's obligations in excess of such Shareholder's pro rata share
of the total payment made shall be immediately recoverable by such
Shareholder from the other Shareholder pro rata to such other
Shareholder's shareholding.
6.14 The provisions of this Clause 6 shall, with necessary changes made,
apply to Cyber 2000 and each of the other subsidiaries of the
Company to be established from time to time unless it is not wholly
owned by the Company and has a significant minority interest.
7. KEY DECISIONS
7.1 Save as provided herein, the Company shall not, and each of the
Shareholders hereby agrees and undertakes that it shall use its
reasonable endeavours to procure that the Company shall not, without
the approval of a Special Majority, transact any of the following
businesses in relation to the Company:
(a) amend the memorandum of association or Articles;
(b) change the name of the Company;
(c) change in any way the capital structure of the Company or issue
or agree to issue or grant any option over or right to acquire
any additional Shares or purchase or redeem any Shares (except
for granting of options over Shares pursuant to any share option
scheme of the Company for the benefit of the executives and/or
employees of the Company and its subsidiaries);
(d) vary any rights attaching to any Shares;
(e) pass any resolution the result of which would be its voluntary
winding up, liquidation or receivership, or make any composition
or arrangement with creditors;
(f) merge or amalgamate with or into any third party;
(g) mortgage or charge of any of the assets of the Company or the
provision of any guarantees by the Company in excess of
guidelines from time to time laid down by the Shareholders or by
the Board;
(h) borrow any money or incur any debt or the making of any loan or
advance to security to or for the benefit of any person or entity
in excess of guidelines from time to time laid down by the
Shareholders or by the Board;
(i) enter into any new business or change the nature of the Business
or the territories in which the Business is to be carried on;
(j) enter into any agreement by any Shareholder (or such Shareholder's
subsidiary or associated company) with the Company or with any
subsidiary or associated company of the Company;
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(k) change the Auditors;
(l) acquire any premises, whether on a freehold or leasehold basis;
(m) invest in any third party or dispose of any such investment;
(n) commence any legal or arbitration proceedings (other than
routine collection of trade debts and contract claims arising out
of the ordinary course of business), in each case where the
amount claimed is more than HK$1,000,000; and
(o) repay any Loan to a particular Shareholder (other than
repayment made to it in proportion to repayments made by other
Shareholders in respect of their Loans).
7.2 Save as provided herein, the Company shall not, and each of the
Shareholders hereby agrees and undertakes that it shall use its
reasonable endeavours to procure that the Company shall not, without
the prior approval of a Simple Majority, transact any of the
following businesses in relation to the Company:
(a) approve any annual revenue and capital budgets (excluding the
case where any additional monetary obligations or liabilities of
the Company or the Shareholders are attached or imposed),
financial statements or the amount of dividends to be distributed
to the Shareholders with respect to each financial year of the
Company and its subsidiaries;
(b) approve the annual business plan; and
(c) determine the remuneration of Directors.
7.3 The Shareholders shall each procure that the requirements of Clause 7
are fully observed and shall, without limitation, use their best
endeavours to procure that the Directors which they have nominated
shall vote to cause the requirements of Clause 7 to be fully
observed.
7.4 The provisions of this Clause 7 shall, with necessary changes made,
apply to Cyber 2000 and each of the other subsidiaries of the Company
to be established from time to time unless it is not wholly owned by
the Company and has a significant minority interest.
8. DIVIDEND POLICY
The dividend policy of the Company from time to time shall be agreed
by a Simple Majority of the Board. If the Directors are unable to
agree a dividend policy at any time then the amount which shall be
declared as a dividend shall be the whole of the amount which is
legally available for distribution less any amount which in the
opinion of the Auditors ought to be retained within the Company as a
matter of prudent financial management including allowance for
future working capital and
9
provisions for tax. In the absence of manifest error such opinion of
the Auditors shall be final and binding on the Shareholders.
9. EVENTS OF DEFAULT
9.1 If any Shareholder commits or suffers an Event of Default then the
party (including the Company) which has knowledge of such event shall
notify all the other Shareholders immediately. The other Shareholders
or any of them shall be entitled in their entire discretion and in
proportion to their respective shareholdings to require the Defaulting
Party to sell all of the Shares held or beneficially owned by the
Defaulting Party by delivering written notice within [14] days of
being notified of the Event of Default to the Defaulting Party with
copies to the other non-defaulting Shareholders stating that the
option hereby conferred (the "OPTION") is exercised at any time within
14 days from the date of the such a notice.
9.2 If there are more than one non-defaulting Shareholders proposing to
exercise the Option, the non-defaulting Shareholder offering the
highest price for the Shares held or beneficially owned by the
Defaulting Party shall be entitled to exercise the Option. In the
event that the same price is offered by more than one Shareholders,
the Shares held or beneficially owned by the Defaulting Party shall be
divided between such Shareholders in proportion to their then
respective shareholdings in the Company.
9.3 If and when the Option is exercised, the Defaulting Party shall
deliver to the other Shareholders exercising the Option within 14 days
of the date of the notice exercising the Option duly executed
transfers of all its Shares in favour of the other Shareholders (or as
the Shareholders may direct) upon full payment to it of a sum equal to
the sale value (the "SALE VALUE").
9.4 The Sale Vale of the offered Shares shall be as mutually agreed or
failing which shall be the average of the values determined by two
arbitrators respectively appointed by the Defaulting Party and by the
other Shareholders jointly on the basis of an agreed list of
arbitrators, or if there are more than one Shareholders proposing to
exercise the Option, the highest price offered for the offered Shares.
The Shares so transferred shall be deemed to be sold by the transferor
as beneficial owner with effect from the date of such transfer free
from any lien, charge or Encumbrance with all rights attaching thereto.
9.5 An Event of Default occurs if:
(a) a Shareholder commits a material breach of its obligations
under this Agreement including, without limitation, failing to
pay its proportionate share of any additional finance as
required pursuant to Clause 5.1 and, in the case of a breach
capable of remedy fails to remedy the same within 14 days of
being specifically required in writing to do so by the other
Shareholders;
(b) any distress, execution, sequestration or other process is
levied or enforced upon or against the property of a
Shareholder;
(c) a Shareholder is unable to pay its debts in the normal course
of business;
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(d) a Shareholder ceases or threatens to cease wholly or
substantially to carry on its business otherwise than for the
purpose of a reconstruction or amalgamation without insolvency
previously approved by the other Shareholder (such approval not
to be unreasonably withheld);
(e) any Encumbrancer takes possession of or a receiver or trustee
is appointed over the whole or any part of the undertaking,
property or assets of a Shareholder;
(f) a shareholder becomes or is adjudicated or declared bankrupt or
insolvent, convenes a meeting of its creditors or proposes or
makes any arrangement or composition with its creditors or an
order is made or a resolution is passed for the winding up of a
Shareholder, otherwise than for the purpose of a reconstruction
or amalgamation without insolvency previously approved by the
other Shareholder (such approval not to be unreasonably
withheld); or
(g) any events occur which under the laws of any country has an
analogous effect to any of the events referred to above.
10. CONFIDENTIALITY
10.1 Any Director shall be free at any time to disclose in confidence to
the Shareholders any information he receives relating to the Company
and its subsidiaries (if any) and their respective business (other
than information in respect of which the Company or such subsidiary or
associated company owes a duty of confidentiality to a third party)
for the purpose of enabling the Shareholders to reach business
decisions in relation to the running of the Company or enabling the
Shareholders to prepare their consolidated accounts but for no other
purpose whatsoever.
10.2 The Shareholders undertake with each other to use all reasonable
endeavors to ensure that all information received by them relating to
the Company or its Subsidiaries (if any) and their respective
businesses shall not be disclosed to any third party.
10.3 The obligation to observe the confidentiality provisions of Clauses
10.1 and 10.2 shall not apply to information:
(a) which is or becomes contained in a printed publication
available to the general public through no wrongful act of the
Shareholder concerned;
(b) which is required to be disclosed by a Shareholder or any
subsidiary of such Shareholder in the performance of its
obligations arising under this Agreement or by any law of Hong
Kong or the rules of any stock exchange (including without
limitation the rules governing the listing of shares on the
NASDAQ OTC Bulletin Board in the case of GTCI) on which its
shares are listed, or the rules of any governmental or
regulatory authority within Hong Kong whether or not having the
force of law; or
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(c) the disclosure of which is agreed upon by all Shareholders.
11. REPRESENTATIONS AND WARRANTIES
11.1 Each party which is a body corporate (and where appropriate, each party
which is an individual) warrants to all other parties that:
(a) it is duly incorporated and validly existing under the laws of its
place of incorporation and has the power, legal capacity and
authority to enter into and perform its obligations under this
Agreement;
(b) the execution, delivery and performance of this Agreement have been
duly authorized by all necessary corporate actions of that party
under all applicable laws and regulations;
(c) all necessary authorizations, approvals and consents required from
any person for or in connection with the execution and performance
of this Agreement have been obtained and all such authorizations,
approvals and consents are in full force and effect; and
(d) the execution, delivery and performance of this Agreement do not
violate any provision or result in the breach of its constituent
documents or of any applicable law, rule or regulation of any
governmental body or any agreement or arrangement to which it is a
party.
11.2 Each party undertakes with the others that:
(a) to perform and observe or, so far as it is otherwise able to do, to
procure that it shall at all times act in accordance with the
provisions of this Agreement;
(b) to procure (so far as it is able) that there shall be a quorum for
any general meeting or Board meeting; and
(c) to take all necessary steps to give full effect to the provisions
of this Agreement including, without prejudice to the generality of
the foregoing, by procuring that any person representing that party
at a general meeting of the Company and each person nominated by it
as Director shall act in accordance with and give effect to the
provisions of this Agreement and shall refrain from acting in any
manner which does not accord with the provisions of this Agreement.
11.3 Each party undertakes to indemnity and keep indemnified all the other
parties hereto against any loss or liability suffered by any of them as
a result of or in connection with any breach of warranties provided
under this Clause and any costs and expenses incurred as a result of
such breach.
12. ANNOUNCEMENTS
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No party shall make any announcement relating to this Agreement without
having first discussed the contents of the announcement with all other
Shareholders and having given such Shareholders a reasonable time in
which to comment thereon provided that this Clause shall not apply to:
(a) any announcement connected with any breach of this Agreement by
the other party hereto; or
(b) any announcement which applicable laws or regulatory authorities
require to be made (including without limitation as required by the
rules governing the listing of shares on the NASDAQ OTC Bulletin
Board in the case of GTCI).
13. CONFLICT WITH ARTICLES
In the event of any conflict or inconsistency between the provisions of
the Articles and the provisions of this Agreement, the provisions of
this Agreement shall prevail as between the Shareholders and the
Shareholders shall amend the Articles to give effect to this Agreement.
14. OBLIGATION TO VOTE
Each of the Shareholders undertakes to each other that it shall vote or
procure any Director nominated by it to vote at meetings of the Board
and in its capacity as Shareholder it shall vote against any resolution
which would if passed be in contravention of any of the provisions of
this Agreement.
15. NO PARTNERSHIP
None of the provisions of this Agreement shall be deemed to constitute a
partnership or agency between the Shareholders other than as
shareholders.
16. NOTICES
16.1 All notices given in connection with this Agreement must be in writing
and must be left at the address or sent by ordinary post (airmail if
outside Hong Kong) to the address of the addressee or by facsimile to
the facsimile number of the addressee which is specified in this Clause
16 or if the addressee notifies another address or facsimile number then
to that address or facsimile number.
16.2 Unless a later time is specified in it, a notice takes effect from the
time it is received except that if it is received after 5:00 p.m. in the
place of receipt or on a non-working day in that place it is to be taken
to be received at 9:00 a.m. on the following business day in that place.
16.3 A letter or facsimile transmission shall be taken to have been received:
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(a) in the case of a letter, on the second (seventh for
international mail) day after posting; and
(b) in the case of a facsimile transmission, on production of a
transmission report by the machine from which the transmission
was sent which indicates that the transmission was sent in its
entirety to the facsimile number of the recipient notified for
the purpose of this Clause.
16.4 All notices in connection with this Agreement, must be addressed to the
relevant party and sent to:
GTCI
address : x/x Xxxxxx Xxx & Xx.
00xx Xxxxx, Xxxxx XX, The Gateway
00 Xxxxxx Xxxx, Xxxx Xxxx
facsimile no. : (000) 0000 0000
for the attention of : Xx. Xxxxx Xxxx
SPIDERWEB
address : Xxxxx 0X, Xxxxx XX
Xxxxxx Xxxxx
Xxxxx Xxxxx
Xxxx Xxxx
facsimile no. : [*]
for the attention of : Xx. Xxxxx Xxxxxxx Xxxx
CMS
address : Xxxx X-0, 00 Xxxxxxx Xxxx, Xxxx Xxxx
facsimile no. : (000) 0000 0000
for the attention of : Xx. Xxxx Man-Xxx, Xxxxxxx
XX. XXXX
address : Xxxxx 0X, Xxxxx XX
Xxxxxx Xxxxx
Xxxxx Xxxxx, Xxxx Xxxx
facsimile no. : [*]
for the attention of : Xx. Xxxxx Xxxxxxx Xxxx
THE COMPANY
address : Xxxx X-0, 00 Xxxxxxx Xxxx, Xxxx Xxxx
facsimile no. : (000) 0000 0000
for the attention of : Xx. Xxxx Man-Xxx, Xxxxxxx
14
16.5 Nothing in this Clause shall preclude the service of communication or
the proof of such service by any other mode permitted by law.
17. NON-ASSIGNABILITY
Save as agreed in writing by all parties hereto, neither the benefits
nor the obligations of each of the Shareholders shall be assigned or
transferred or be the subject matter of any Encumbrance created by
either of the Shareholders.
18. WAIVER
18.1 Time shall be of the essence of this Agreement and no failure to
exercise and no delay in exercising any right, power, remedy or
privilege arising hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power, remedy
or privilege preclude any other or further exercise thereof or the
exercise of any other right, power, remedy or privilege.
18.2 Without limiting the foregoing, no waiver by any party of any breach of
any provision hereof shall be deemed to be a waiver of any subsequent
breach of that or any other provision hereof.
19. SEVERABILITY
If at any time any one or more of the provisions of this Agreement is
or becomes illegal, invalid or unenforceable in any respect under the
law of any jurisdiction, the remaining provisions of this Agreement
shall continue in full force and effect as if the illegal, invalid or
unenforceable provision were omitted herefrom.
20. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the
Shareholders relating to the subject matter hereof and supersedes all
prior agreements or undertakings oral or written.
21. TERMINATION
21.1 The rights and obligations of the parties under this Agreement shall
remain in force unless terminated in one of the following ways:
(a) forthwith by written notice by any Shareholder (other than the
Defaulting Party) to the other parties, at any time after a
Shareholder has committed an Event of Default;
(b) forthwith by written notice by any Shareholder not in breach
to the other parties, if the Company or any Shareholder:
15
(i) is in material breach of its obligations hereunder and, if
capable of remedy, such breach is not remedied within 14 days
thereof; or
(ii) persistently commits breaches of its obligations hereunder
which are either not themselves material, or are remedied as
provided in (i) above; or
(c) by written consents of all Shareholders from time to time.
21.2 All rights and obligations of the parties shall cease to have effect
forthwith upon termination under Clause 21.1, save that such termination
shall be without prejudice to the accrued rights and liabilities of the
parties hereunder and without prejudice to the continued existence and
validity of their respective rights and obligations under Clauses 10 and
12 and any provisions of this Agreement necessary for the interpretation
or enforcement thereof.
22. EXPENSES
Each Shareholder shall bear its own legal costs and expenses incurred in
connection with the negotiation, preparation, completion and execution of
this Agreement. The costs and expenses incurred in the establishment of
the Company shall be borne by the Company.
23. FURTHER ASSURANCE
23.1 The Company agrees for itself and for its successors and assigns that:
(a) insofar as is required, it consents to this Agreement;
(b) it will not transfer or reissue Shares in violation of this
Agreement or without requiring proof of compliance with this
Agreement;
(c) it will not issue any Shares from and after the date hereof without
having first made the provisions hereof known to the person to whom
such Shares are to be issued;
(d) all certificates for Shares issued by the Company during the term of
this Agreement and which are subject to this Agreement shall bear
the legend as above stated; and
(e) it will cooperate in the enforcement of this Agreement and pay all
fees and expenses required to be paid by it hereunder.
23.2 Each party hereto undertakes to do all such things reasonably within its
power (including, but not limited to, executing such further documents or
exercising votes on voting Shares in the capital of the Company held by it
or causing Directors appointed by it to vote) as may be necessary or
desirable to carry into effect more
16
fully the provisions of this Agreement and the transactions contemplated
herein and in the case of parties other than the Company to ensure that
the Company complies with its obligations under this Agreement.
24. AMENDMENTS
No amendment or variation of or supplement to this Agreement shall be
valid unless it is in writing and signed by or on behalf of each of the
parties hereto.
25. GOVERNING LAW AND JURISDICTION
25.1 This Agreement and the rights and obligations of the parties shall be
governed by and construed in accordance with the laws of Hong Kong.
25.2 Each party hereby irrevocably and unconditionally submits to the
non-exclusive jurisdiction of the courts of Hong Kong. Nothing in this
Agreement shall restrict the right of the parties to take proceedings
against any party liable hereunder in any other courts having, claiming or
accepting jurisdiction over any party liable hereunder or any of their
assets, nor shall the taking of proceedings in any one or more
jurisdictions preclude the taking of proceedings in any other
jurisdictions whether concurrently or not.
25.3 GTCI, Spiderweb and CMS hereby respectively and irrevocably appoints
Xxxxxx Xxx & Co. (solicitors, of 00xx Xxxxx, Xxxxx XX, Xxx Xxxxxxx, 00
Xxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx), Xx. Xxxx and Xx. Xxxxxxx Xxxx (of 0xx
Xxxxx, Xxxxx X, Xxxxxxx Xxxxxxx, 00 Xxxxxxx Xxxx, Xxxx Xxxx) (each, the
"PROCESS AGENT") as its agent to receive and acknowledge on its behalf
service of any writ, summons, order judgement or other notice of legal
process in Hong Kong. Such service shall be deemed completed on delivery
to each party's Process Agent or, if sent by registered post to the
aforesaid or last known address of such Process Agent, on the second
Business Day after posting or, if there is a letter box for the aforesaid
or last known address of such Process Agent, upon inserting the writ
and/or any other relevant documents through the letter box (whether or not
it is forwarded to and received by it). In the event that a party's
Process Agent cannot continue to act as such, such party shall forthwith
appoint another agent in Hong Kong for the same purpose and notify such
appointment to all the other parties hereto in writing.
17
IN WITNESS whereof this Agreement has been executed on the day and year first
above written.
SIGNED by )
XXXXXX XXXXXXXXXXX )
for and on behalf of ) /s/ Xxxxxx Xxxxxxxxxxx
GLOBAL TELEPHONE )
COMMUNICATION INC. )
in the presence of: )
/s/ Simon Y.S. Xxxx
XXXXX X.X. XXXX
Solicitor
Xxxxxx Xxx & Co.
Hong Kong SAR
SIGNED by )
XXXXX XXXXXXX XXXX )
for and on behalf of ) /s/ Xxxxx XxxXxxx Xxxx
SPIDERWEB CORPORATION )
in the presence of: )
/s/ Simon Y.S. Xxxx
XXXXX X.X. XXXX
Solicitor
Xxxxxx Xxx & Co.
Hong Kong SAR
SIGNED by )
XXXXXXX XXXX )
for and on behalf of ) /s/ Xxxxxxx Xxxx
CMS DEVELOPMENT LIMITED )
in the presence of: )
/s/ Simon Y.S. Xxxx
XXXXX X.X. XXXX
Solicitor
Xxxxxx Xxx & Co.
Hong Kong SAR
SIGNED by )
XXXXX XXXXXXX XXXX ) /s/ Xxxxx XxxXxxx Xxxx
in the presence of: )
/s/ Simon Y.S. Xxxx
XXXXX X.X. XXXX
Solicitor
Xxxxxx Xxx & Co.
Hong Kong SAR
SIGNED by )
XXXXXXX XXXX )
for and on behalf of ) /s/ Xxxxxxx Xxxx
NANO TECHNOLOGY LIMITED )
in the presence of: )
/s/ Simon Y.S. Xxxx
XXXXX X.X. XXXX
Solicitor
Xxxxxx Xxx & Co.
Hong Kong SAR
18
SCHEDULE 1
PARTICULARS OF THE COMPANY
Company Name : Nano Technology Limited
Date of Incorporation : 1 December 1999
Place of Incorporation : British Virgin Islands
Company Number : 355222
Share Capital
(a) Authorized: US$50,000 divided into 50,000 ordinary shares of
US$1.00 each
(b) Issued: 6,000 ordinary shares
Registered Office : Offshore Incorporations Centre, P.O. Box 957, Road
Town, Tortola, British Virgin Islands
Directors : Xxxx Man-Hao, Xxxxxxx
Xxxxx Xxxxxxx Xxxx
Shareholders : Name Number of Shares held
---- ---------------------
Spiderweb Corporation 2,000
CMS Development Limited 2,000
Xxxxx Xxxxxxx Xxxx 2,000
-----
6,000
Registered Agent : Offshore Incorporations Limited
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SCHEDULE 2
FORM OF DEED OF ADHERENCE
THIS DEED OF ADHERENCE is made on
BETWEEN
(1) [X LIMITED], a company incorporated in [*] whose registered office is at
[ADDRESS] (the "NEW SHAREHOLDER"); and
(2) NANO TECHNOLOGY LIMITED, a company incorporated in the British Virgin
Islands whose registered office is at Offshore Incorporations Centre,
P.O. Box 957, Road Town, Tortola, British Virgin Islands (the
"COMPANY").
WHEREAS this Deed is supplemental to a shareholders agreement in relation to
the Company dated [DATE] made between [NAMES OF PARTIES] and the Company (the
"SHAREHOLDERS AGREEMENT").
NOW THIS DEED WITNESSETH as follows:
1. Words and expressions defined in the Shareholders Agreement shall have
the same meanings when used herein.
2. The New Shareholder hereby confirms that it has been supplied with a copy
of the Shareholders Agreement and hereby covenants with the Company to
observe, perform and be bound by all the terms of the Shareholders
Agreement (other than Clause 2 thereof) which are capable of applying to
the New Shareholder and which have not been performed at the date hereof
to the intent and effect that the New Shareholder shall be deemed with
effect from the date on which the New Shareholder is registered as a
Shareholder of the Company to be party to the Shareholders Agreement.
3. This Deed shall be governed by and construed in accordance with the laws
of Hong Kong.
EXECUTED as a deed the day and year first before written.
[Execution Clause]
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