1
SHARE SUBSCRIPTION AGREEMENT
This Share Subscription Agreement (the "AGREEMENT") is made and entered into
this 5 day of Dec., 2000 by and between:
(1) Celeritek Inc., a company organized and existing under the laws of
California, U.S.A., having its registered office at 0000 Xxxxx Xxxx.,
Xxxxx Xxxxx, XX 00000, X.X.X. (hereinafter referred to as "CELERITEK");
(2) Suntek Compound Semiconductor Co. Ltd., a company organized and existing
under the laws of the Republic of China ("ROC"), having its registered
address at Xx. 0, Xxxxx-Xx Xxxx, Xxxx-Xxx Industrial Park, Hsin-Xxx
Xxxxx, Taiwan, 303 R.O.C. (hereinafter referred to as the "COMPANY");
(3) Procomp Informatics Ltd., a company organized and existing under the
laws of the ROC, having its registered office at 5F, 69-10, Section 0,
Xxxxx-Xxxx X. Xx., Xxxxxxx, Xxxxxx Xxxxx, Xxxxxx, ROC (hereinafter
referred to as "Procomp"); and
(4) Acer Communications & Multimedia Inc., a company organized and existing
under the laws of the ROC, having its registered office at 000,
Xxxx-Xxxx Xx., Xxxxxxxx, Xxxxxxx 000, Xxxxxx, ROC (hereinafter referred
to as "ACM").
(The term "PARTIES" shall refer to Celeritek, the Company, Procomp and ACM and
the term "PARTY" shall refer to any one of them. Procomp and ACM shall sometimes
refer to the Principal Shareholders for the purpose of this Agreement.)
W I T N E S S E T H
WHEREAS, the Company currently has an authorized capital of NT$2,800,000,000
divided into 280,000,000 shares of common stock at a par value of NT$10 each, of
which 70,000,000 shares are fully issued and outstanding;
1
2
WHEREAS, the Company has resolved to increase its paid-in capital to
NT$2,150,000,000 by issuing 145,000,000 shares of common stock at the par value
of NT$10 per share (hereinafter referred to as "CONTEMPLATED CAPITAL INCREASE").
WHEREAS, Celeritek desires to invest in the Company by subscribing to 7,500,000
shares of common stock to be issued by the Company under the Contemplated
Capital Increase;
WHEREAS, after the Contemplated Capital Increase, Procomp will own 100,000,000
shares, constituting approximately 46.5% of the issued and outstanding shares of
the Company and ACM, through its subsidiary Xxxxx Venture, will indirectly own
57,816,000 shares, constituting approximately 26.8% of the issued and
outstanding shares of the Company;
NOW, THEREFORE, in consideration of the premises and the representations,
warranties and agreements herein contained, the Parties hereto agree as follows:
ARTICLE 1
SUBSCRIPTION TO SHARES
1.01 ISSUANCE OF SHARES. Subject to and in accordance with the terms and
conditions set forth herein, Celeritek agrees to subscribe to 7,500,000 shares
(hereinafter referred to as the "SHARES") of common stock of the Company to be
newly issued under the Contemplated Capital Increase at a subscription price of
NT$10 per share and NT$75,000,000 in aggregate (hereinafter referred to as the
"SUBSCRIPTION PRICE"), and the Company agrees to, and the Principal Shareholders
agree to cause the Company to, reserve the Shares for subscription by Celeritek.
The Shares shall represent 3.48% of the total issued and outstanding shares of
the Company after the Contemplated Capital Increase.
1.02 CORPORATE ACTIONS. The Company shall take any and all corporate actions to
issue the Shares for subscription by Celeritek and the Principal Shareholders
agree to waive their respective preemptive rights to subscribe to the Shares, if
applicable.
2
3
ARTICLE 2
PAYMENT OF SUBSCRIPTION PRICE
2.01 TIME. Celeritek shall make, through wire transfer, the payment of the
Subscription Price for the Shares to the bank account as designated by the
Company on or before the date to be further notified by the Company, provided
that at least a one business day prior written notice shall be given to
Celeritek. Immediately after receipt of the Subscription Price, the Company
shall deliver to Celeritek a certificate acknowledging receipt of payment of the
Subscription Price.
2.02 DELIVERIES OF SHARE CERTIFICATES. The Company shall deliver the share
certificates representing the Shares to Celeritek within seven (7) days after
the Company amendment registration reflecting Contemplated Capital Increase has
been approved by the Ministry of Economic Affairs.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
The Company hereby represents and warrants to Celeritek as follows:
3.01 ORGANIZATION. The Company is a corporation duly organized and validly
existing under the laws of the ROC and has obtained all the government
approvals, certificates and permits necessary for the rights, benefits and
incentives that it is entitled to under the laws and regulations of the ROC.
3.02 AUTHORITY RELATIVE TO THIS AGREEMENT. The Company and the Principal
Shareholders have the authority to enter into this Agreement and to carry out
its obligations hereunder.
3.03 CAPITALIZATION. The Company has an authorized and issued share capital of
NT$2,800,000,000 divided into 280,000,000 shares of common stock at a par value
of NT$10 each, of which 215,000,000 shares will be validly issued and
outstanding and fully paid after the Contemplated Capital Increase.
3.04 COMPLIANCE WITH LAW. The Company is in compliance with its organizational
and corporate documents and with all laws, ordinances, regulations and orders
applicable to its business. The Company is not aware of any non-compliance of
such laws, ordinances, regulations and orders of a material nature that have not
been corrected.
3
4
3.05 MATERIAL CONTRACTS. All of the material contracts, agreements and
instruments to which the Company is a party are valid, binding and in full force
and effect in all material respects, including but not limited to the Company's
contracts with Mitsubishi Electric Corporation and Procomp Informatics Ltd.
3.06 INTELLECTUAL PROPERTY. The Company owns or possesses sufficient legal
rights to all patents, trademarks, service marks, tradenames, copyrights, trade
secrets, licenses, information and proprietary rights and processes necessary
for its business as presently conducted, to the Company's knowledge with respect
to any such rights in recipes, without any conflict with, or infringement of,
the rights of others. The Company has not received any communications alleging
that the Company has violated or, by conducting its business, would violate any
of the patents, trademarks, service marks, tradenames, copyrights, trade secrets
or other proprietary rights or processes of any other person or entity.
3.07 BOARD MEMBERSHIP. Within thirty (30) days after the payment of the
Subscription Price by Celeritek, the Principal Shareholders shall cause the
Chairman of the Company to call a board meeting and adopt a board resolution in
writing approving to invite the Celeritek appointee to attend the board meeting
for a period of three years after the date of such a board meeting. Written
notice of the date, time, and place of any meeting of the board of the Company
and the specific purpose or purposes for which the meeting is convened, shall be
delivered to Celeritek or its designated person no less than seven days before
the date of the meeting. Notices sent to Directors shall be written in both
Chinese and English. In the event that the board meeting is convened at any time
without such prescribed notice in case of an emergency, a notice and the minutes
of such a board meeting shall be provided to Celeritek within five (5) days
after such a board meeting.
3.08 FINANCIAL STATEMENTS. Celeritek shall have the right to receive the
quarterly, semi-annual and annual financial statements of the Company as well as
the audited annual financial statements during the period when Celeritek remains
as a shareholder of the Company.
4
5
ARTICLE 4
SHARE TRANSFER RESTRICTION
Except as otherwise agreed by and between the Parties hereto, the Parties agree
not to sell, assign, pledge or in any other manner transfer title to or
otherwise encumber any of the shares of the Company held by them before the
shares of the Company are listed or traded on any internationally recognized
stock exchange, including, without limitation, listed on the Taiwan Stock
Exchange or traded on Taiwan OTC market.
ARTICLE 5
EXECUTION OF CAPACITY PURCHASE AGREEMENT
The Company shall, and the Principal Shareholders shall cause the Company to,
enter into a Capacity Purchase Agreement with Celeritek within six (6) calendar
weeks after execution of this Agreement, under which the Company shall agree to
sell to Celeritek and Celeritek shall agree to purchase from the Company up to
18% of the production capacity of the GaAs wafers manufactured by the Company on
terms and conditions mutually acceptable to the Company and Celeritek.
ARTICLE 5
INITIAL PUBLIC OFFERING OF THE COMPANY
Each of the Principal Shareholders shall endeavor to cause the shares of the
Company listed or traded on any internationally recognized stock exchange,
including, without limitation, listed on the Taiwan Stock Exchange or traded on
Taiwan OTC market by November 30, 2004.
ARTICLE 6
GENERAL PROVISIONS
6.01 GOVERNING LAW AND JURISDICTION. This Agreement shall be construed and
enforced in accordance with the laws of the ROC. Any disputes arising out of or
relating to this Agreement shall be submitted for arbitration in Taipei in
accordance with the ROC Arbitration Law.
5
6
6.02 AMENDMENT. This Agreement may be amended by the Parties in writing.
6.03 NOTICES. All notices and other communications hereunder shall be in writing
and shall be deemed given when received personally or by mail, telex or
transmission directed to the Parties at the following addresses (or at such
other address of a Party as shall be specified by like notice):
(1) if to Celeritek:
Attention: Ms. Xxxxxxxx Xxxxx
Address: 0000 Xxxxx Xxxx., Xxxxx Xxxxx, XX 00000, X.X.X.
Fax: (000) 000-0000
(2) if to the Company:
Attention: Xxxxxx Xxx
Address: Xx. 0, Xxxxx-Xx Xxxx, Xxxx-Xxx Industrial Park Hsin-Xxx
Xxxxx, Taiwan, 303 R.O.C.
Fax: (00) 000-0000
(3) if to Procomp:
Attention: Xxxxxx Xxx
Address: 5F, 69-10, Section 0, Xxxxx-Xxxx X. XX., Xxxxxxx, Xxxxxx
Xxxxx, Xxxxxx R.O.C.
Fax: (00) 0000-0000
(4) if to ACM:
Attention:
Address:
Fax:
6.04 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral, made
by the Parties hereto with respect to the subject matter hereof.
6
7
IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date
first written above.
Celeritek Inc.
By
-----------------------------------
Name: Xxxxxxxx Xxxxx
Title: CFO
Suntek Compound Semiconductor Co. Ltd.
By
-----------------------------------
Name: Yeh Xxx Xxx
Title: Chairperson
Procomp Informatics Ltd.
By
-----------------------------------
Name: Yeh Xxx Xxx
Title: Chairperson
Acer Communications and Multimedia Inc.
By
-----------------------------------
Name:
Title:
7
