EXHIBIT 7.1
SHAREHOLDERS AGREEMENT, DATED AS OF JANUARY 28, 2000
BY AND AMONG GLOBAL TELEPHONE COMMUNICATION INC.,
SPIDERWEB CORPORATION, CMS DEVELOPMENT LIMITED,
XXXXX XXXXXXX XXXX, AND NANO TECHNOLOGY LIMITED.
DATED 28 JANUARY 2000
(1) GLOBAL TELEPHONE COMMUNICATION INC.
(2) SPIDERWEB CORPORATION
(3) CMS DEVELOPMENT LIMITED
(4) XXXXX XXXXXXX XXXX
(5) NANO TECHNOLOGY LIMITED
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SHAREHOLDERS AGREEMENT
relating to
NANO TECHNOLOGY LIMITED
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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;
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"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 respect 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
or 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 Clauses 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 right to nominated 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 endeavors 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
endeavors 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
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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 Value 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
endeavours 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 of the addressee 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/ Xxx Xxxx Chen
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/ Xxx Xxxx Chen
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 dividend 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
Director : 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
19
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]
20
