STOCK PURCHASE AGREEMENT
Exhibit
10.1
STOCK
PURCHASE AGREEMENT, dated August 27, 2007, by and among Comtech Group, a
company
incorporated in the Cayman Islands, the registered office of which is situated
at XX Xxx 000XX, Xxxxxx Xxxxx, Xxxxx Church Street, Grand Cayman, Cayman
Islands (the “Purchaser”),
Xxxxxxxxx Group Ltd., a company incorporated in the British
Virgin Islands, the registered office of which is situated at OMC
Xxxxxxxx, P.O. Box 3152, Road Town, Tortola, British Virgin
Islands (the “Seller”), Broad Wise Holdings
Limited, a company incorporated in the British Virgin Islands, the registered
office of which is situated at X.X. Xxx 000, Xxxxxxxx Xxxxxxxxxxxxxx Xxxxxx,
Xxxx Xxxx, Xxxxxxx, the British Virgin Islands ( the
“Company”), and Comtech Broadband Corporation Limited,
a company organized and existing under the laws of Hong Kong (the
“HK Company”, together with the Company, the “Company
Group”) on the other hand.
W
I T N E
S S E T H:
WHEREAS,
as at the date hereof the Seller owns all issued and outstanding shares of
the
Company (the “Shares”);
WHEREAS,
as at the date hereof the Company and the Purchaser collectively own all
issued
and outstanding shares of the HK Company, of which the Company holds 45%
of the
issued and outstanding shares in the HK Company (the “HK
Shares”) and the Purchaser holds 55% of the issued and outstanding
shares in the HK Company;
WHEREAS,
the Seller desires to sell all its entire Shares of the Company to the
Purchaser, and the Purchaser desires to purchase the Shares from the Seller
for
the purpose of directly and indirectly owning all issued and outstanding
shares
of the HK Company, for the consideration and on the terms set forth in this
Agreement;
WHEREAS,
certain capitalized terms used in this Agreement are defined in
Section 10.13 below.
NOW,
THEREFORE, in consideration of the mutual covenants hereinafter set forth,
and
for other good and valuable consideration, the receipt and adequacy of which
are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE
I
Purchase
and Sale of Shares.
Section
1.1 Sale
of Shares. Subject to the terms and conditions of this Agreement,
the Seller shall sell, transfer, convey, assign and set over
(“Transfer”) to the Purchaser at the Closing, and the
Purchaser shall at the Closing purchase and acquire from the Seller, all
of the
Seller’s right, title and interest in and to the Shares. In
furtherance of the foregoing, the Seller shall at the Closing Transfer
beneficial and record ownership of the Shares to the Purchaser, and execute
one
or more stock powers, endorsements or assignments as the Purchaser may
reasonably request.
ARTICLE
II
Purchase
Price.
Section
2.1. Purchase
Price. In consideration of the Transfer to the Purchaser of the
Shares at the Closing, and of the other representations, warranties and
covenants herein:
1
(a) Subject
to satisfaction of all relevant operating and financial milestones of the
HK
Company agreed upon by the Parties and on the terms and conditions contained
herein, the Purchaser shall pay to the Seller US$15 million (the
“Purchase Price”), consisting of US$10 million in cash
and US$5 million in shares of Comtech Group, Inc., the parent company of
the
Purchaser (“COGO Shares”). The schedule of
payment and adjustment of the Purchase Price shall be separately agreed upon
by
the Parties.
Section
2.2
COGO Shares. Subject to all applicable conditions and
requirements of the US securities law, the COGO Shares granted to the Seller
pursuant to Article II may be traded freely on the NASDAQ. In the
event that COGO Shares is changed into or exchanged for a different number
or
kind of shares of the Purchaser or other securities of the Purchaser or of
any
third corporation, by reason of reorganization, merger, consolidation,
recapitalization, reclassification, stock split up, stock dividend or
combination of shares, the Purchaser shall make an appropriate and equitable
adjustment to the number of COGO Shares to be issued to the Seller or any
appropriate substitution of a different security for such COGO Shares as
the
case may be. Any such adjustment made by the Purchaser shall be final
and binding upon the Seller.
Section
2.3 Offset
Right. Notwithstanding anything herein to the contrary, the
Purchaser shall be entitled to offset, against any consideration otherwise
payable to the Seller pursuant to Article II pursuant to the terms of this
Agreement (whether before, at or after the Closing) or any other Closing
Documents.
ARTICLE
III
Closing.
Section
3.1 Closing
Date. The closing of the transactions contemplated hereby (the
“Closing”) shall be held in Shenzhen, China, on the
Closing Date. All matters at the Closing shall be considered to take
place simultaneously. As used herein, the term “Closing
Date” shall mean the date which is two Business Days after all of
the conditions in Article VII have been satisfied (or waived in writing by
the
party entitled to provide such a waiver), provided that the Closing Date
shall
not be later than August 31, 2007,
unless the parties hereto mutually agree otherwise in writing.
Section
3.2 Documents
of Conveyance, Etc. The Seller and the Purchaser shall deliver to
each other at the Closing such certificates, consents, approvals, agreements,
and documents relating to the transactions contemplated by this Agreement
(collectively with this Agreement, the “Closing
Documents”) as set forth in Appendix 1. Each party
hereto further agrees that at or subsequent to the Closing, upon the written
request of the other party, it will promptly execute and deliver or cause
to be
promptly executed and delivered any further assignments, instruments of transfer
and bills of sale or conveyances reasonably necessary or desirable to vest
fully
in the Purchaser all of the Seller’ right, title and interest in and to the
Shares.
ARTICLE
IV
Representations
and Warranties by the Warrantors.
Section
4.1 Representations
and Warranties. Each of the Warrantors hereby jointly and
severally makes the following representations and warranties to the
Purchaser:
2
(a) The
Seller is a company duly organized, validly existing and in good standing
under
the Laws of the British Virgin Islands and has all requisite corporate power
and
authority to execute, deliver and perform this Agreement and the Closing
Documents to be executed by it and to consummate the transactions contemplated
hereby and thereby. The execution and delivery of this Agreement and
the Closing Documents to be executed by the Seller and the consummation by
the
Seller of the transactions contemplated hereby and thereby have been duly
authorized by all requisite corporate action. This Agreement and the
Closing Documents to be executed by the Seller constitute valid and binding
obligations of the Seller enforceable against it in accordance with their
respective terms.
Both
the
Shares and the HK Shares are duly authorized, validly issued and are fully
paid
and non-assessable. The Seller is not entitled to the payment of any
dividends or other distributions from the Company after the date hereof on
account of the Seller’s ownership of the Shares on or before the date
hereof.
The
Company has not conducted any business or incur any debt or liabilities,
whether
actual or contingent, since its formation other than owning the HK
Shares.
(b) (i) Neither
the execution and delivery by each of the Warrantors of this Agreement and
the
Closing Documents to be executed by each of the Warrantors, nor the consummation
by each of the Warrantors of the transactions contemplated hereby or thereby:
(1) violates or will violate any Law applicable to any of the Warrantors;
(2)
violates or will violate any order, ruling, writ, judgment, injunction or
decree
of any Governmental Entity (an “Order”) applicable to
any of the Warrantors; (3) conflicts or will conflict with, or results or
will
result in a breach of or default under, the Charter Documents of the Company,
the HK Company or the Seller; or (4) results or will result in the imposition
of
any Lien on any of the Assets, the Shares or the HK Shares. No
consent, authorization, or approval from, or registration or filing with,
any
Governmental Entity or other third party (not obtained or made as of the
date
hereof) is required to be obtained or made by or with respect to the Seller,
the
Company or the HK Company in connection with the execution and delivery of
this
Agreement or the Closing Documents or the consummation by each of Warrantors
of
the transactions contemplated hereby or thereby.
As
used herein, the term
“Lien” means any lien, mortgage, security interest,
charge, pledge or encumbrance of any kind.
(ii) The
execution, delivery and performance by each of Warrantors of this Agreement
and
the other Closing Documents, and the consummation of the transactions hereunder
and thereunder, will not create a default by the Company or the HK Company
under, or give any Governmental Entity or other third party the right to
terminate or accelerate any Commitment, any permits, licenses, approvals,
consents and authorizations issued by any Governmental Entity (collectively,
“Licenses”).
(c) The
Seller does not, and to the knowledge of each of Warrantors, none of the
officers or key employees of the Company Group currently directly or indirectly,
owns, manages, operates, finances, or controls, or participates in the
ownership, management, operation, financing or control of, or is associated
as a
director, partner, lender, investor or representative in connection with,
any
profit or not-for-profit business or enterprise which competes with the
Purchaser and the Company Group.
(d) No
representation or warranty contained in this Agreement, and no statement
in any
certificate, list, report, or other writing furnished to the Purchaser pursuant
to any provision of this Agreement, contains any untrue statement of a material
fact or omits to state a material fact that in light of the circumstances
under
which they were made would have made them not misleading.
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ARTICLE
V
Representations
and Warranties of the Purchaser
Section
5.1 Representations
and Warranties. The Purchaser represents and warrants to the
Seller that:
(a) Existence
and Qualification of The Purchaser; Due Execution, Etc. The
Purchaser is a company duly organized, validly existing and in good standing
under the Laws of Cayman Islands and has all requisite corporate power and
authority to execute, deliver and perform this Agreement and the Closing
Documents to be executed by it and to consummate the transactions contemplated
hereby and thereby. The execution and delivery of this Agreement and
the Closing Documents to be executed by the Purchaser and the consummation
by
the Purchaser of the transactions contemplated hereby and thereby have been
duly
authorized by all requisite corporate action. This Agreement and the
Closing Documents to be executed by the Purchaser constitute valid and binding
obligations of the Purchaser enforceable against it in accordance with their
respective terms.
(b) No
Violation. Neither the execution and delivery by the Purchaser of
this Agreement or the Closing Documents to be executed by the Purchaser,
nor the
consummation of the transactions contemplated hereby or thereby: (1) violates
or
will violate any Order applicable to the Purchaser or (2) results or will
result
in a breach of or default under the Charter Documents of the
Purchaser.
ARTICLE
VI
Pre-Closing
Covenants
Section
6.1.
Covenants Regarding Closing Conditions. The
parties shall use their respective reasonable efforts to bring about the
satisfaction as soon as practicable of all the conditions to Closing contained
in Article VII. Without limiting the generality of the
foregoing, the parties shall apply for and diligently prosecute all
applications for, and shall use their respective reasonable efforts promptly
to
obtain, (1) such consents, waivers, releases, authorizations and approvals
from
such Governmental Entities as shall be necessary to permit the consummation
of
the Contemplated Transactions (as defined in Section 7.3); (2) such consents,
waivers, valuations, authorizations and approvals as may be required under
Charter Documents of the Company; and (3) such consents, waivers, releases,
authorizations and approvals from such third parties as shall be necessary
to
permit the consummation of the Contemplated Transactions.
Section
6.2 Notification. Between
the date of this Agreement and the Closing, the Warrantors will promptly
notify
the Purchaser in writing if the Warrantors become aware of any fact or condition
that causes or constitutes a breach of any of the Warrantors’ representations
and warranties as of the date of this Agreement, or if the Warrantors become
aware of the occurrence after the date of this Agreement of any fact or
condition that would (except as expressly required by this Agreement) cause
or
constitute a breach of any such representation or warranty had such
representation or warranty been made as of the time of occurrence or discovery
of such fact or condition.
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Section
6.3 No
Solicitation or Negotiation. The Seller will not, nor will it
authorize or allow the Company Group or any officer, director or employee
of, or
any investment banker, attorney or other advisor or representative of, the
Seller or the Company Group to, directly or indirectly, engage in, solicit,
initiate, or encourage any inquiries or proposals from any Person (other
than
the Purchaser) relating to any transaction involving the transfer or sale
of all
or any part of the Shares or the HK Shares, or any merger, consolidation,
business combination, investment or financing in the Company or the HK Company
or similar transaction involving the Company or the HK Company (any such
transaction, a “Competing Transaction”) or participate
in any discussions or negotiations regarding, or furnish to any Person any
information with respect to, any Competing Transaction.
Section
6.4 Publicity. No
press release or public announcement related to this Agreement, or the
transactions contemplated hereby or thereby, shall be issued or made without
the
approval of the Purchaser, unless required by Law (in the reasonable opinion
of
outside counsel) or other Governmental Entity, rule or regulation, in which
case
the Seller or the Company Group shall use reasonable efforts to give the
Purchaser the opportunity to review such press release or announcement prior
to
publication and, where practicable, agree to the form and wording of such
release or announcement.
ARTICLE
VII
Closing
Conditions
The
Purchaser’s obligation to purchase the Shares and to take the other actions
required to be taken by the Purchaser at the Closing, is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by the Purchaser, in whole or in part):
Section
7.1 Accuracy
of Representations. Each of the Warrantors’ representations and
warranties set forth in this Agreement must have been true and correct as
of the
date of this Agreement, and must be true and accurate as of the Closing Date
as
if made on the Closing Date (except for representations and warranties made
as
of a certain date, which shall be true and correct as of such
date).
Section
7.2 Warrantors’
Performance. Each of the covenants and obligations that the
Warrantors are required to perform or to comply with pursuant to this Agreement
at or prior to the Closing must have been duly performed and complied with,
and
the Warrantors must have executed and delivered each of the documents required
to be delivered by it hereunder, including under Section 3.2 and Schedule
3.2.
Section
7.3
No Injunction. Since the date of this Agreement, there must
not be in effect any injunction or other Order issued by a court of competent
jurisdiction restraining or prohibiting the consummation of the transactions
contemplated by this Agreement, or in any other Closing Document (the
“Contemplated Transactions”).
Section
7.4
Non-Competition, Confidentiality and Labor Agreements Each of
the management personnel and key employees of the HK Company as designated
by
the Purchaser has entered into a 2-year Non-Competition Agreement after the
later of the termination of his or her employment with the HK Company or
the
expiration of the three (3) year period after this Closing, Non-solicitation
and
Confidentiality Agreement and a 3-year Labor Agreement with the HK Company
in
which he or she agrees to commit substantially all of his or her working
time to
the HK Company in form and substance reasonably satisfactory to the Purchaser,
and he or she shall not conduct any other business or transfer or assign
any
business or employees of the HK Company to a third party.
5
Section
7.5
Board Resolution. Board resolutions have been passed approving
the transfer of all the Shares held by the Seller to the Purchaser upon stamping
and due presentation.
Section
7.6
No Prohibition. The proposed Transfer of the Shares
contemplated hereunder will not contravene, or materially conflict with,
or
result in a violation of any applicable Law or Order.
Section
7.7
No Material Adverse Event. There shall have been no Material
Adverse Events with respect to the Company Group since the date
hereof.
Section
7.8
Due Diligence. The Purchaser shall have completed its
business, legal, financial and other due diligence review on the Company
Group
and its conditions and affairs and the results of such review are to the
Purchaser’s satisfaction.
ARTICLE
VIII
Post
Closing Covenants
Section
8.1
Maintenance of Management Personnel. The Seller shall procure
Xxxxxxx Xxxx as the senior management personnel of the HK Company to continue
working for the HK Company within 36 months after the Closing.
Section
8.2
Endeavor to Growth of Business. The Purchaser shall use
commercially reasonable efforts to grow the Business, and to assist the HK
Company in achieving the best economic results and efficiency in operational
and
financial administrations.
ARTICLE
IX
Termination
Rights
Section
9.1 Termination
Events. This Agreement may, by notice given prior to or at the
Closing, be terminated:
(a) by
mutual written consent of the Purchaser, the Seller;
(b) by
the Purchaser, if any of the conditions in Article VII has not been satisfied
as
of the Closing or if satisfaction of any such condition is or becomes impossible
(other than through the failure of the Purchaser to comply with its obligations
under this Agreement) and the Purchaser has not waived such condition at
or
before the Closing;
(c) by
either the Purchaser, on the one hand, or the Seller, on the other hand,
if the
other party (or parties) has materially breached their obligations hereunder
such that the conditions set forth in Article VII (as appropriate) cannot
be
satisfied within 10 days following receipt of notice of a breach from the
non-breaching party;
(d) by
either the Purchaser, on the one hand, or the Seller, on the other hand,
if the
Closing has not occurred (other than through the failure of any party seeking
to
terminate this Agreement to comply fully with its obligations under this
Agreement) on or before August 31, 2007 or such later date as the parties
may
mutually agree upon in writing; or
6
(e) by
either the Purchaser, on the one hand, or the Seller, on the other hand,
if any
court of competent jurisdiction or any Governmental, Entity shall have issued
an
Order or taken any other action permanently enjoining, restraining or otherwise
prohibiting the Transfer of the Shares.
Section
9.2 Procedures
for Termination. In the event of termination by the Seller, on
the one hand or the Purchaser, on the other hand, pursuant to Section 9.1,
written notice thereof shall forthwith be given to the other parties in
accordance with Section 10.8, and the Contemplated Transactions shall be
terminated without further action by any party.
ARTICLE
X
Miscellaneous.
Section
10.1 Entire
Agreement; Amendment. This Agreement and the documents referred
to herein constitute the entire agreement among the parties with respect
to the
subject matter of this Agreement. Any prior or contemporaneous
agreement, discussion, understanding or correspondence among the parties
(including any prior representations or warranties given by the parties)
regarding the subject matter of this Agreement is superseded by this
Agreement.
Section
10.2 Amendments. Any
term of this Agreement may be amended only with the written consent of the
parties hereto.
Section
10.3 Successors
and Assigns. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, and their respective successors and permitted
assigns. This Agreement is freely assignable by the Purchaser after
the Closing Date but may not be assigned by the Seller without the prior
written
consent of the Purchaser; provided, however, that any such assignment by
the
Purchaser shall not relieve it of its obligations hereunder.
Section
10.4 Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original for all purposes and all of which together shall
constitute one and the same instrument.
Section
10.5 Headings
and Section References. The headings of the sections and
paragraphs of this Agreement are included for convenience only and are not
intended to be a part of, or to affect the meaning or interpretation of,
this
Agreement. All section references herein, unless otherwise clearly
indicated, are to sections within this Agreement.
Section
10.6 Waiver. No
failure or delay by either the Purchaser, on the one hand or the Seller,
on the
other hand, in exercising any right, power or privilege hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other right,
power
or privilege. The rights and remedies herein provided are cumulative
and not exclusive of any rights or remedies otherwise provided by
law.
Section
10.7 Expenses. Except
as otherwise specifically provided for in this Agreement the Seller and the
Purchaser shall each pay all costs and expenses incurred by it or on its
behalf
in connection with this Agreement and the transactions contemplated hereby,
including, without limitation, fees and expenses of its own financial
consultants, accountants and counsel.
7
Section
10.8 Notices. Unless
otherwise provided, any notice required or permitted under this Agreement
shall
be given in writing and shall be deemed effectively given upon personal delivery
to the party to be notified or on the 10th day after the date mailed, by
registered or certified mail, postage prepaid and addressed to the party
to be
notified at the address indicated for such party on the signature page hereof,
or at such other address as such party may designate by ten (10) days' advance
written notice to the other parties, or on the first business day following
the
date of transmission by facsimile.
Section
10.9 Governing
Law and Arbitration. This Agreement and the legal relations among
the parties hereto shall be construed in accordance with, and all disputes,
controversies or claims arising out of or in connection with this Agreement
or
the breach, termination or invalidity thereof (collectively,
“Disputes”) hereunder shall be governed by, the laws
of Hong Kong without regard to conflicts of laws principles thereof. In
the event of a Dispute, the parties shall use their good faith efforts to
resolve the same. If no resolution can be reached through such efforts
within 30 days from the date on which one party first notifies the other
party
in writing of the existence of a Dispute, then the Dispute shall be settled
by
arbitration in accordance with the Rules of Arbitration of the Hong Kong
International Arbitration Center by three arbitrators appointed in accordance
with the said Rules (the “Arbitrators”). The
arbitration shall be conducted by the Arbitrators in English and shall be
held
in Hong Kong. Each party hereby submits to the jurisdiction of the
Arbitrators, and expressly and irrevocably waives any claim or defense based
on
any alleged lack of personal jurisdiction, improper venue, forum non conveniens,
or any similar basis with respect to such arbitration. The
arbitration award shall be final and binding upon the parties, and the parties
agree to be bound thereby and to act accordingly. The costs of arbitration
and the costs of enforcing the arbitration award (including in each case
witness
expenses and reasonable attorneys’ fees and disbursements) shall be borne by the
losing party, unless otherwise determined by the arbitration award. In any
arbitration proceeding, any legal proceeding to enforce any arbitration award
and in any legal action between the parties pursuant to or relating to this
Agreement, each party expressly waives any defense based on the fact or
allegation that it is an agency or instrumentality of a sovereign state.
When any Dispute occurs and when any Dispute is under arbitration or any
other
proceedings, the parties shall continue to exercise their respective rights,
and
fulfill their obligations under this Agreement.
Section
10.10 Severability. If
any provisions hereof shall be held by any court of competent jurisdiction
to be
illegal, void, or unenforceable, such provisions shall be of no force and
effect, but the illegality or unenforceability shall have no effect upon,
and
shall not impair the enforceability of, any other provision of this
Agreement.
Section
10.11 Rights
of Third Parties. Nothing expressed or implied in this Agreement
is intended or will be construed to confer upon or give any person or entity
other than the parties hereto and their respective successors and permitted
assigns any rights or remedies under or by reason of this Agreement or any
transaction contemplated hereby.
8
Section
10.12 Indemnification:
Survival of Representations and Warranties.
(a) Indemnification
by Seller. The Seller agrees to defend, hold harmless and indemnify the
Purchaser and its Affiliates and their respective employees, officers,
directors, stockholders, partners and representatives from and against any
losses, assessments, liabilities, claims, damages, costs and expenses (including
without limitation reasonable attorneys’ fees and disbursements) which arise out
of or relate to any actions or incidents caused by the Seller or the Company
Group or any misrepresentation in, breach of or failure to comply with, any
of
the representations, warranties, covenants or agreements of any Warrantor
contained in this Agreement, or in any other Closing Document or in any
certificate or other instrument or document furnished or to be furnished
by any
Seller or other Warrantors pursuant to this Agreement or any of the Closing
Documents or in connection with the transactions contemplated hereby or thereby,
or which are referred to hereinafter as the “Purchaser’s
Losses.”
(b) Survival
of Representations and Warranties. The Warrantors’ and the Purchaser’s
representations and warranties under this Agreement, and the indemnification
obligations arising solely from such representations and warranties under
Section 10.12(a), respectively, shall survive the Closing and shall expire
and
terminate on the date(s) ninety (90) calendar days following the expiration
of
the maximum applicable statutes of limitations applicable to any claim giving
rise to the Purchaser’s Losses, to which such representations and warranties
relate. Notwithstanding the foregoing, the termination of the
representations and warranties as aforesaid shall not affect the rights of
a
party in respect of any claim made by such party prior to such
termination.
(c) Procedures.
(i) In
the event that any Legal Proceeding shall be threatened or instituted in
respect
to which indemnification may be sought by one party hereto from another party
under the provisions of this Section 10.12, the party seeking indemnification
(“Indemnitee”) shall, reasonably promptly after
acquiring actual knowledge of such threatened or instituted Legal Proceeding,
cause written notice in reasonable detail of such threatened or instituted
Legal
Proceeding and which is covered by this indemnification, to be forwarded
to the
other party from which indemnification is being sought
(“Indemnitor”), provided, however, that the failure to
provide such notice as of any particular date as aforesaid will not affect
any
rights to indemnification hereunder, except to the extent, and only to such
extent, that such failure to provide such notice actually and materially
prejudices the Indemnitor’s ability to adequately defend such Legal
Proceeding.
(ii) In
the event of the initiation of any Legal Proceeding against an Indemnitee
by a
third party, the Indemnitor shall have the absolute right after the receipt
of
the notice described in Section 10.12(c)(i), at its option and at its own
expense, to be represented by counsel of its choice, and (subject to Section
10.12(c)(iii)) to defend against, negotiate, settle or otherwise deal with
any
Legal Proceeding or demand that relates to any Purchaser’s Losses, indemnified
against hereunder, and, in such event, the Indemnitee will reasonably cooperate
with the Indemnitor and its representatives in connection with such defense,
negotiation, settlement or dealings (and the Indemnitee’s costs and expenses
arising therefrom or relating thereto shall constitute Purchaser’s Losses, if
the Indemnitee is the Purchaser); provided, however, that the Indemnitee
may
directly participate in any such Legal Proceeding so defended with counsel
of
its choice at its own expense, except that, if the Indemnitor fails to take
reasonable steps necessary to defend diligently such third party claim within
15
business days after receiving written notice from the Indemnitee that the
Indemnitee reasonably believes the Indemnitor has failed to take such steps
or
if the Indemnitor has not undertaken fully to indemnify the Indemnitee in
respect of all such Purchaser’s Losses, relating to the matter and as required
hereunder, the Indemnitee may assume its own defense, and, in such event
(a) the
Indemnitor will be liable for all Purchaser’s Losses, reasonably paid or
incurred in connection therewith, and (b) the Indemnitor shall, in any case,
reasonably cooperate, at its own expense, with the Indemnitee and its
representatives in connection with such defense.
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(iii) Without
the prior written consent of the Indemnitee, which shall not be unreasonably
withheld, the Indemnitor will not enter into any settlement of any third
party
claim which would lead to Liability or create any financial or other obligation
on the part of the Indemnitee for which the Indemnitee is not entitled to
indemnification hereunder or which would otherwise adversely affect the Assets
or the Business. If a firm offer is made to settle a third party
claim without leading to Liability or the creation of a financial or other
obligation on the part of the Indemnitee for which the Indemnitee is not
entitled to indemnification hereunder and the Indemnitor desires to accept
and
agree to such offer, the Indemnitor will give written notice to the Indemnitee
to that effect. If the Indemnitee notifies the Indemnitor that it
does not consent to such firm offer within 10 calendar days after its receipt
of
such notice from the Indemnitor, the Indemnitee may continue to contest or
defend such third party claim and, in such event, the maximum Liability of
the
Indemnitor as to such third party claim will not exceed the amount of such
settlement offer, plus the Purchaser’s Losses, reasonably paid or incurred by
the Indemnitee through the end of such 10-calendar day period.
(iv) After
any final judgment or award shall have been rendered by a Governmental Entity
of
competent jurisdiction and the time in which to appeal therefrom has expired,
or
a settlement shall have been consummated, or the Indemnitee and the Indemnitor
shall have arrived at a mutually binding agreement with respect to each separate
matter alleged to be indemnified by the Indemnitor hereunder, the Indemnitee
shall forward to the Indemnitor notice of any sums due and owing by it with
respect to such matter, and the Indemnitor shall pay all of the sums so owing
to
the Indemnitee by wire transfer or certified or bank cashier’s check within 30
days after the date of such notice. Any and all Purchaser’s Losses
other than those described in the preceding sentence (including Purchaser’s
Losses incurred in the absence of any threatened or pending Legal Proceeding,
or
Purchaser’s Losses incurred after any such Legal Proceeding has been threatened
or instituted but prior to the rendering of any final judgment or award in
connection therewith), shall be paid by the Indemnitor on a current basis,
and,
without limiting the generality of the foregoing, the Indemnitee shall have
the
right to invoice the Indemnitor for such Purchaser’s Losses, as frequently as it
deems appropriate, and the amount of any such Purchaser’s Losses, which are
described or listed in any such invoice shall be paid to the Indemnitee,
by wire
transfer or certified or bank cashier’s check, within 30 days after the date of
such invoice.
Section
10.13 Certain
Definitions and Interpretive Matters.
(a) Certain
Definitions. The following terms shall have the following
meanings:
|
(i)
|
“Affiliate”
means, with respect to a Person, any other Person that, directly
or
indirectly, controls, is controlled by or is under common control
with
such Person.
|
|
(ii)
|
“Assets”
means all of the properties, rights, claims, contracts and assets
relating
to the business, tangible or intangible, xxxxxx or inchoate, and
wherever
located, of the Company Group.
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|
(iii)
|
“Charter
Documents” means, with respect to any entity, means the
memorandum and articles of association, corporate charter, certificate
or
articles of incorporation or formation, by-laws, partnership or
operating
agreement, and similar documents of such entity, as
applicable.
|
|
(iv)
|
“Commitments”
means all contracts, agreements, other rights of a contractual
nature and
franchises of the Company Group.
|
10
|
(v)
|
“Governmental
Entity” means any domestic or foreign court, government,
governmental agency, authority, entity or instrumentality.
|
|
(vi)
|
“Laws”
shall mean any federal, state, county or local statute, law, ordinance,
rule, regulation, order, judgment or
ruling.
|
|
(vii)
|
“Material
Adverse Effect” means any fact, circumstance, event, change
or effect that is materially adverse to (a) the Company, the HK
Company,
the Assets or the financial condition of the Business or (b) the
ability
to operate the Business as operated by the Company Group as of
the Closing
Date.
|
|
(viii)
|
“Person”
means any person, company, corporation, joint venture, partnership,
legal
association, or other entity, including any Governmental
Entity.
|
|
(ix)
|
“Schedule”
shall mean the Schedules, inclusive, attached hereto, which Schedules
are
incorporated herein and made a part hereof, fully as if the same
were
herein set forth in their entirety.
|
|
(x)
|
“Warrantors”
means the Seller, the Company and the HK
Company.
|
Unless
the context otherwise requires, (i) each accounting term not otherwise defined
in this Agreement has the meaning assigned to it in accordance with the United
States Generally Accepted Accounting Principles, consistently applied
(“US GAAP”), (ii) “or” is disjunctive but not
necessarily exclusive, and (iii) all references to “US$” or dollar amounts mean
lawful currency of the United States of America.
(b) Interpretive
Matters. No provision of this Agreement will be interpreted in
favor of, or against, any of the parties hereto by reason of the extent to
which
any such party or its counsel participated in the drafting thereof or by
reason
of the extent to which any such provision is inconsistent with any prior
draft
hereof or thereof.
[The
remainder of this page has been intentionally left blank]
11
IN
WITNESS WHEREOF the parties have executed and delivered this Agreement as
of the
date first set forth above.
Purchaser
Comtech
Group
/s/
Xxxxxxx Xxxx
Name:
Xxxxxxx Xxxx
Title:
CEO
Address:
XX Xxx 000XX, Xxxxxx Xxxxx, Xxxxx Church Street, Grand Cayman, Cayman
Islands
Seller
Xxxxxxxxx
Group Ltd.
/s/
Name:
Title:
Shareholder
Address:
XXX Xxxxxxxx, X.X. Xxx 0000, Xxxx Xxxx, Xxxxxxx, Xxxxxxx Virgin
Islands
Company
Broad
Wise Holdings Limited
/s/
Name:
Title:
Director
|
Address:
P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola,
the
British Virgin Islands
|
HK
Company
Comtech
Broadband Corporation Limited
/s/
Name:
Title:
Director
Address:
Suite 514 Manhattan Center, 0 Xxxx Xxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxxxxxxx,
Xxxx
Xxxx
12
Appendix
1
Closing
Documents
1.
|
an
Officers’ Certificate of the Seller regarding the accuracy of the
Warrantors’ representations and warranties, in form reasonably acceptable
to the Purchaser, and an Officers’ Certificate of the Company certifying
Closing Conditions set forth in Article VII have been
satisfied;
|
2.
|
valid
share certificates for all of the issued Shares of the Company
under its
name or other evidence satisfactory to the Purchaser that the above
said
shares are legally and beneficially owned by the
Seller;
|
3.
|
valid
instrument(s) of transfer duly executed by the Seller in relation
to all
the issued Shares of the Company under its name in favour of the
Purchaser;
|
4.
|
evidence
of all necessary updates to the Company’s Register of Members with respect
to the Transfer of the Shares to the
Purchaser;
|
5.
|
valid
share certificates for all of the issued HK Shares of the HK Company
under
its name or other evidence satisfactory to the Purchaser that the
above
said shares are legally and beneficially owned by the
Company;
|
6.
|
valid
instrument(s) of transfer duly executed by the Seller in relation
to all
the issued HK Shares of the HK Company under its name in favour
of the
Company; and
|
7.
|
evidence
of all necessary updates to the HK Company’s Register of Members with
respect to the Transfer of the HK Shares to the
Company.
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13