EXHIBIT 10.5
Dated 2nd October 2001
1. BRIGHTPOINT INTERNATIONAL (ASIA PACIFIC) PTE. LIMITED
2. CHINATRON GROUP HOLDINGS LIMITED
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SALE AND PURCHASE AGREEMENT
for up to 80% of the share capital of
BRIGHTPOINT CHINA LIMITED
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XXXXXXXX XXXXXX
20th Floor, Xxxxxxxxx Xxxxx
00-00 Xxxxxx Xxxx
Xxxxxxx
Xxxx Xxxx
CONTENTS
CLAUSE PAGE
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1. INTERPRETATION 1
2. SALE AND PURCHASE 5
3. CONDITIONS 6
4. COMPLETION 7
5. VENDOR WARRANTIES 8
6. PURCHASER WARRANTIES 10
7. CONDUCT OF BUSINESS 10
8. OPTION 11
9. GENERAL 12
10. NOTICES 14
11. GOVERNING LAW 14
SCHEDULE 1 - PART A - VENDOR WARRANTIES 15
PART B - PURCHASER WARRANTIES 19
SCHEDULE 2 - COMPANY RESOLUTION 23
APPENDIX A - CHINATRON SHAREHOLDERS' AGREEMENT 00
XXXXXXXX X - CLASS B PREFERENCE SHARE TERMS 27
APPENDIX C - BRIGHTPOINT SHAREHOLDERS' AGREEMENT 28
APPENDIX D - EXERCISE NOTICE 29
THIS AGREEMENT is dated 2nd October, 2001.
PARTIES:
1. BRIGHTPOINT INTERNATIONAL (ASIA PACIFIC) PTE. LTD., a company incorporated
in Singapore and having its registered office at Xxxxxxxxx & Xxxxxxxxxx, 00
Xxxxxxx Xxxxx #00-00, Xxxxxxxx Xxxxxx, Xxxxxxxxx 000000 (the "Vendor").
2. CHINATRON GROUP HOLDINGS LIMITED, a company incorporated in Hong Kong and
having its registered office at Xxxxx 000, Xxxx Xxxxxx Xxxx, Xxxxxxx, Xxxx
Xxxx (the "Purchaser").
INTRODUCTION:
1. The Company is a company incorporated in Hong Kong with an issued share
capital of HK$10,000 divided into 10,000 shares of HK$1.00 each.
2. The Vendor beneficially holds 10,000 Shares, representing the entire issued
share capital of the Company.
3. The Vendor has agreed to sell and the Purchaser has agreed to purchase, or
procure the purchase of, the Sale Shares (representing 50% of the entire
issued share capital of the Company) upon the terms set out in this
Agreement.
NOW IT IS AGREED:
1. INTERPRETATION
1.1 In this Agreement, including the Schedules and in the Introduction hereto,
unless the context otherwise requires, the following terms shall have the
following meanings:
"Associate" (a) in relation to an individual means his spouse
and children or step-children under the age of
18 years ("family") and any company in which the
individual and/or his family or family trusts
directly or indirectly own, or control the
exercise of, 50% or more of the voting power at
general meetings and any Associate of such
company; and
(b) in relation to a company means all its subsidiaries,
all its holding companies and all
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subsidiaries of any such holding companies;
"Brightpoint Shareholders' the shareholders' agreement in respect of the Company to be
Agreement" entered into on Completion in the form attached as Appendix C
(subject to amendments to reflect factual information);
"Brightpoint Trademark the trademark licence in the form to be agreed between the
Licence" parties pursuant to Clause 3.1(f);
"Business Day" a day (other than a Saturday or a Sunday) on which banks are
generally open for business in Hong Kong;
"Chinatron Shareholders' the shareholders' agreement in respect of the Purchaser to be
Agreement" entered into on Completion in the form annexed as Appendix A
(subject to amendments to reflect factual information);
"Companies Ordinance" the Companies Ordinance, Chapter 32 of the Laws of Hong Kong;
"Company" Brightpoint China Limited, details of which are set out in the
disclosure letter referred to in Clause 5.5;
"Company Accounts" the audited consolidated balance sheet and profit and loss
account of the Company as at the Company Accounts Date and
all notes, reports and other documents annexed thereto, copies
of which have previously been provided to the Purchaser;
"Company Accounts 31 December 2000;
Date"
"Completion" the date fixed for completion pursuant to Clause 4.1 or, where
the context so requires, completion of the sale and purchase of the
Sale Shares in accordance with the provisions in Clause 4;
"Consideration" the consideration payable for the Sale Shares in accordance with
Clause 2;
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"Consideration Preference such number of fully paid Class B Preference Shares of par
Shares" value US$0.01 each in the capital of the Purchaser as would, at
the date of their issue, have a redemption value (exclusive of
redemption premium) of US$10 million and would convert into 10%
of the fully diluted capital of the Purchaser at the date of issue;
"Exercise Notice" notice exercising the Option in the form attached as Appendix "D";
"Exercise Price" US$10,000,000 to be satisfied by the issue of the Option
Preference Shares;
"Group" the Company and the Subsidiaries;
"Group Company" the Company or any Subsidiary or such one or more of them as the
context may indicate;
"HK$" Hong Kong dollars;
"Hong Kong" the Hong Kong Special Administrative Region of the PRC;
"intellectual property" patents, trade and service marks, registered designs, applications for
any of the foregoing, copyright, design rights and analogous rights,
software and source code, trade and business names, domain names,
rights in confidential information, know-how (including client lists,
records, books, databases and historical files and all other know-how
in respect of clients and business contacts) howsoever arising and any
right or interest in any of the foregoing;
"Non-Competition Deed" the deed of non-competition to be in the form agreed between the
parties pursuant to Clause 3.1(f);
"Option Completion" completion of the matters referred to in Clause 8.6;
"Option Period" the period from the date of this Agreement until the first
anniversary of the date of Completion;
"Option Preference such number of fully paid Class B Preference Shares of par value
Shares" US$0.01 each in the capital of the Purchaser as would, at the
date of their issue, have a redemption
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value (exclusive of redemption premium) of US$10,000,000 and would
convert into 10% of the fully diluted capital of the Purchaser at the
date of issue, to be issued by the Purchaser on the same terms as the
Consideration Preference Shares in full satisfaction of the Exercise
Price;
"Option Shares" 3,000 Shares and any additional bonus Shares issued to the Vendor,
at any time prior to the expiry of the Option Period, by reason of the
Vendor being an existing holder of the Option Shares;
"Option" the option granted by Clause 8.1;
"PRC" the People's Republic of China;
"Purchaser Accounts" the audited consolidated balance sheet and profit and loss account of
the Purchaser prepared as at the Purchaser Accounts Date and all notes,
reports and other documents annexed thereto, copies of which have previously
been provided to the Purchaser;
"Purchaser Accounts 31 December 2000;
Date"
"Purchaser Group" the Purchaser and its subsidiaries;
"Purchaser Group either the Purchaser or any of its subsidiaries or such one or
Company" more of them as the context may indicate;
"Purchaser Warranties" the warranties on the part of the Purchaser given pursuant to
Clause 6.1 and contained in Part B of Schedule 1.
"Sale Shares" 5,000 Shares beneficially held by the Vendor representing 50%
all of the issued share capital of the Company at Completion (which
shares shall include the 1 Share held as nominee by Brightpoint
Holdings B.V.);
"Shares" shares of HK$ each in the capital of the Company;
"Subsidiaries" the companies details of which are to be set out in the disclosure letter
referred to in Clause 5.5;
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"Taxation" liability to any form of taxation (including, taxes, withholding
taxes, duties, imposts, levies, rates or any other amounts
payable to any revenue, customs or similar authorities in any
part of the world) whenever and wherever created and including an
amount equal to any deprivation of any relief from taxation and
all costs, interest, penalties, charges and expenses incurred in
connection with such taxation of failure to pay such taxation;
"US$" United States dollars; and
"Vendor Warranties" the warranties on the part of the Vendor given pursuant
to Clause 5.1 and contained in Part A of Schedule 1.
1.2 In this Agreement, unless the context otherwise requires, any reference to
a "Clause" or a "Schedule" or an "Appendix" is a reference to a clause, a
schedule or an appendix of this Agreement and, unless otherwise indicated,
includes all the sub-clauses of that clause.
1.3 In this Agreement, words importing the singular include the plural and vice
versa, words importing gender or the neuter include both genders and the
neuter and references to persons include bodies corporate or unincorporate.
1.4 The headings and the table of contents in this Agreement are for
convenience only and shall not affect its interpretation.
1.5 References herein to statutory provisions shall be construed as references
to those provisions as respectively amended or re-enacted (whether before
or after the date hereof) from time to time and shall include any provision
of which they are re-enactments (whether with or without modification) and
any subordinate legislation made under provisions.
1.6 References herein to "subsidiary" or "holding company" have the meanings
ascribed thereto in the Companies Ordinance.
2. SALE AND PURCHASE
2.1 The Vendor, as beneficial owner, shall sell or procure the sale of the Sale
Shares, and the Purchaser shall purchase the Sale Shares, free from all
rights of pre-emption, options, liens, claims, equities, charges,
encumbrances or third-party rights of any nature and with all dividends,
benefits and other rights now or hereafter becoming attached or accruing
thereto as from the date of this Agreement.
2.2 The aggregate consideration for the purchase of the Sale Shares payable to
the Vendor shall
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be US$10,000,000 which shall be payable in full at Completion not in cash
but shall instead be satisfied by the issue and allotment to Vendorof the
Consideration Preference Shares.
3. CONDITIONS
3.1 Completion of this Agreement is conditional upon:
(a) the Vendor and its Associates reducing its working capital
indebtedness, financial exposure and liabilities to a US$10 million
line of credit for the issue of standby letters of credit, guarantees
or other agreements to induce manufacturers to provide trade credit,
which the Vendor has agreed to procurefor up to one year from the date
of Completion to be used for the sole purpose of securing the
obligations of the Company to manufacturers of wireless devices for
it, such line of credit to be issued by an independent third party not
affiliated with either the Purchaser or the Vendor and otherwise to be
on such terms as are agreeable to both parties;
(b) the Purchaser procuring a US$10 million line of credit for the issue
of standby letters of credit, guarantees or other agreements to induce
manufacturers to provide trade credit, for up to one year from the
date of Completion to be used for the sole purpose of securing the
obligations of the Company to manufacturers of wireless devices for
it, such line of credit to be issued by an independent third party not
affiliated with either the Purchaser or the Vendor and otherwise to be
on such terms as are agreeable to both parties;
(c) approval of this Agreement by the board of directors of Brightpoint
Inc. and by the board of directors of the Purchaser;
(d) the receipt of all third party, bank, customer, governmental and
administrative consents and approvals required (if any) by law or by
contract, including the acceptable release of any guarantees or other
facilities or financial assistance granted by Brightpoint Inc. or its
subsidiaries for the benefit of the Group (save as provided in Clause
3.1(a)) and return of any collateral or other security granted to any
creditor by Brightpoint, Inc. or its subsidiaries for the benefit of
the Group; and
(e) the satisfactory review by the Vendor and the Purchaser of the
existing employment contracts between Xxxx Xxxxx and the Company and
Xxxx Xxxxxxx Arnott and the Purchaser that such employment contracts
are on terms acceptable to all parties thereto; and
(f) the parties agreeing the form of the Brightpoint Trademark Licence
(being a licence of the Brightpoint trademark to the Company) and the
Non-Competition Deed (being a deed containing non-competition
undertakings given by both the Vendor and the Purchaser in favour of
each other).
3.2 If the conditions set out in Clause 3.1 are not fulfilled on or prior to 30
December 2001 (or
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such later date as may be agreed between the Vendor and the Purchaser),
this Agreement shall terminate and neither of the parties shall have any
claim against the other for costs, damages, compensation or otherwise (save
in respect of any prior breach of this Agreement).
4. COMPLETION
4.1 Completion shall take place at 11:30 a.m. on the third Business Day after
satisfaction of the conditions in Clause 3.1 at the offices of Xxxxxxxx
Xxxxxx at 20th Floor, Xxxxxxxxx Xxxxx, 00-00 Xxxxxx Xxxx, Xxxxxxx, Xxxx
Xxxx, or at such other time and/or place as the parties may agree at which
time all (but not part only) of the following business shall be transacted:
(a) the Vendor shall deliver to the Purchaser:
(i) signed copies of the resolutions in the form set out in Schedule
2 duly passed;
(ii) instruments of transfer and bought and sold notes in respect of
the Sale Shares duly executed by the Vendor and/or its nominees
in favour of the Purchaser and/or its nominee(s), together with
a cheque made payable to the "Government of the Hong Kong
Special Administrative Region" for the vendor's ad valorem stamp
duty payable on such transfer and all other documents of the
Vendor or the Company as may be required for stamping;
(iii) all share certificates in respect of the Sale Shares;
(iv) letters of resignation of those of the existing directors of the
Company and any Subsidiaries other than Xxxxxx Xxxxx and Xxxxxxx
X. Xxxxxxxx who the parties agree are to resign, such
resignation to include a confirmation that such person has no
claim of any nature whatsoever against any Group Company
(including without limitation, compensation for loss of office);
and
(v) all minute books, registers and other corporate records of the
Group;
(vi) a certified copy written resolution of shareholders of the
Vendor approving the transactions contemplated by this
Agreement;
(b) the Purchaser shall deliver to the Vendor:
(i) signed copies of board and shareholder resolutions of the
Purchaser duly passed, in a form reasonably approved by the
Vendor, approving the entering into and execution of this
Agreement and all documents referred to herein including the
issue of the Consideration Preference Shares, the amendment of
the Purchaser's articles of association to reflect the terms of
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all preference shares issued by the Company, and the execution
of all documents to be entered into by the Purchaser as
contemplated in this Agreement;
(ii) duly signed certificates in the name of the Vendor for the
Consideration Preference Shares; and
(iii) four (4)copies of the Brightpoint Shareholders' Agreement, two
(2) copies of the Chinatron Shareholders' Agreement,
two(2)copies of the Brightpoint Trademark Licence and
two(2)copies of the Non-Competition Deed duly signed by all
parties other than the Vendor and the Company; at Completion the
Vendor shall sign and shall procure that the Company shall sign
all such copies and return the same (save for one copy of each
document) to the Purchaser; and
(c) the parties shall exchange evidence of the satisfaction of the
conditions precedents in Clause 3.1.
4.2 Neither party shall be obliged to complete the sale and purchase of the
Sale Shares or perform any obligations hereunder unless the other party
complies in full with its obligations under Clause 4.1.
4.3 Following Completion, the Purchaser shall within two Business Days thereof
present the instrument of transfer, bought and sold notes, full payment for
all stamp duty and such other documents as may be required for stamping.
4.4 If the Vendor on the one hand or the Purchaser on the other shall be unable
to or shall not comply with any of its obligations under Clause 4.1 on or
before the date fixed for Completion the party not in default may:
(a) defer Completion to a date not more than 28 days after the said date
(and so that the provisions of this sub-paragraph (a) shall apply to
Completion as so deferred); or
(b) proceed to Completion so far as practicable; or
(c) rescind this Agreement,
without prejudice, in each case, to that party's rights (whether under this
Agreement generally or under this Clause) to the extent that the other
party shall not have complied with its obligations thereunder.
5. VENDOR WARRANTIES
5.1 The Vendor hereby warrants to the Purchaser in the terms set out in Part A
of Schedule 2.
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5.2 The Vendor acknowledges that the Purchaser has entered into this Agreement
in reliance on each of the Vendor Warranties and other representations made
by the Vendor in this Agreement and none of the Vendor Warranties shall be
limited or restricted by reference to or inference from the terms of any
other Vendor Warranties or any other term of this Agreement.
5.3 The Vendor undertakes to promptly notify the Purchaser in writing of any
matter or thing of which it becomes aware which is or may be a breach of or
inconsistent with any of the Vendor Warranties or other representations
before Completion.
5.4 The Vendor hereby waives any and all claims which it might otherwise have
against any Group Company in respect of the completeness or accuracy of any
information supplied, or of any failure to supply information, by or on
behalf of any Group Company or any director or employee thereof to the
Purchaser, the Vendor or any of their advisers in connection with this
Agreement or otherwise.
5.5 Each of the Vendor Warranties is qualified to the extent of any matters
fairly and clearly disclosed in the disclosure letter given by the Vendor
to the Purchaser (and accepted by the Purchaser) on or before the date 14
days after the date of this Agreement.
5.6 The Vendor shall not be liable for any claim made under or in connection
with the Vendor Warranties unless:
(a) a written notice giving full particulars of the claim, is made within
one month of the completion of the audited accounts for the Group for
the year ended 31 December 2002;
(b) the amount of the claim exceeds any provision therefor in the Company
Accounts;
(c) the amount of the claim exceeds the amount which the Group is able to
claim under any policy of insurance (in respect of such claim) in
which regard the Purchaser will use the Purchaser's best endeavours to
recover such claim first from the insurers; and
(d) the amount of the claim exceeds HK$387,500 and the amount of the
claim when aggregated with other claims exceeds HK$3,875,000.
5.7 The Vendor's liability in respect of all matters under this Agreement shall
not exceed a sum equal to the Consideration plus all reasonable legal and
other costs of recovery properly incurred by or on behalf of the Purchaser
in pursuing any claim or claims and provided further, such amount shall not
be in excess of US$10,000,000 (in the event that the Option is not
exercised) or US$20,000,000 (in the event that the Option is exercised).
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6. PURCHASER WARRANTIES
6.1 The Purchaser hereby warrants to the Vendor in the terms set out in Part B
of Schedule 2.
6.2 The Purchaser acknowledges that the Vendor has entered into this Agreement
in reliance on each of the Purchaser Warranties and other representations
made by the Purchaser in this Agreement and none of the Purchaser
Warranties shall be limited or restricted by reference to or inference from
the terms of any other Purchaser Warranties or any other term of this
Agreement.
6.3 The Purchaser undertakes to promptly notify the Vendor in writing of any
matter or thing of which it becomes aware which is or may be a breach of or
inconsistent with any of the Purchaser Warranties or other representations
before Completion.
6.4 Each of the Purchaser Warranties is qualified to the extent of any matters
fairly and clearly disclosed in the disclosure letter given by the
Purchaser to the Vendor (and accepted by the Vendor) on or before the date
14 days after the date of this Agreement.
6.5 The Purchaser shall not be liable for any claim made under or in connection
with the Purchaser Warranties unless:
(a) a written notice giving full particulars of the claim, is made within
one month of the completion of the audited accounts for the Purchaser
for the year ended 31 December 2002;
(b) the amount of the claim exceeds any provision therefor in the
Purchaser Accounts;
(c) the amount of the claim exceeds the amount which the Purchaser is able
to claim under any policy of insurance (in respect of such claim) in
which regard the Purchaser will use the Purchaser's best endeavours to
recover such claim first from the insurers;
(d) the amount of the claim exceeds HK$387,500 and the amount of the
claim when aggregated with other claims exceeds HK$3,875,000; and
6.6 The Purchaser's liability in respect of all matters under this Agreement
shall not exceed a sum equal to the Consideration plus all reasonable legal
and other costs of recovery properly incurred by or on behalf of the Vendor
in pursuing any claim or claims. and provided further, such amount shall
not be in excess of US$10,000,000 (in the event that the Option is not
exercised) or US$20,000,000 (in the event that the Option is exercised).
7. CONDUCT OF BUSINESS
7.1 The Vendor undertakes that prior to Completion the business of the Group
shall be operated in a normal and usual basis and the Vendor shall procure
that each Group Company shall
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not do or omit to do any act or thing which is material to the relevant
company that is not in the ordinary and usual course of business
(including, without limitation, issuing any new securities, declaring any
dividends, or entering into any significant or material new contracts),
without prejudice to the foregoing, the parties acknowledge that the Vendor
will in consultation with the Purchaser undertake a restructuring of the
Company prior to Completion including a return of capital to the Vendor or
its Associates so that the indebtedness and financial exposure of
Brightpoint Inc. and its subsidiaries to the Group as at Completion will
not exceed the amount provided for in Clause 3.1(a) and that steps are
taken to reduce the cost structure of the Company but so that such
restructuring shall not result in a reduction of fixed assets or otherwise
have a materially adverse effect of the operations of the Group.
7.2 The Purchaser undertakes that prior to Completion the business of the
Purchaser Group shall be operated in a normal and usual basis and the
Purchaser shall procure that each Purchaser Group Company shall not do or
omit to do any act or thing which is material to the relevant company that
is not in the ordinary and usual course of business (including, without
limitation, issuing any new securities, declaring any dividends, or
entering into any significant or material new contracts).
8. OPTION
8.1 In consideration of the Purchaser entering into this Agreement, the Vendor
hereby grants to the Purchaser an option to purchase all (but not part
only) of the Option Shares at the Exercise Price at any time during the
Option Period, subject to and on the terms of this Agreement. The Option is
not transferable by Purchaser and any such attempted transfer shall be null
and void.
8.2 The Vendor shall on exercise of the Option sell or procure the sale of the
Option Shares and the Purchaser shall purchase the Option Shares, free from
all rights of pre-emption, options, liens, claims, equities, charges,
mortgages, pledges and encumbrances or third party rights of whatsoever
nature and with all rights attached, accrued or accruing or becoming
attached thereto on and after date of such exercise at the Exercise Price,
payable not in cash but instead by the issue of the Option Preference
Shares upon Option Completion.
8.3 The Vendor undertakes not to transfer, encumber or deal with in any way the
Option Shares during the Option Period, except with the prior written
consent of the Purchaser.
8.4 An Exercise Notice may be given by the Purchaser to the Vendor at any time
during the Option Period in respect of all (but not part only) of the
Option Shares.
8.5 Option Completion shall take place at such time (being not earlier than 3
business days and not later than 7 business days after the date of the
Exercise Notice) and at such place in Hong Kong as may be specified in the
Exercise Notice.
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8.6 At Option Completion, all (but not part only) of the following business
shall be transacted:
(a) the Vendor shall deliver or cause to be delivered to the Purchaser
duly executed instrument(s) of transfer and sold notes in respect of
the Option Shares in favour of the Purchaser or its specified
nominee(s) accompanied by the certificate(s) for the relevant Option
Shares; and
(b) the Purchaser shall deliver to the Vendor signed bought notes and
copies of board and shareholder resolutions, in a form reasonably
approved by the Vendor, issuing the Option Preference Shares, together
with a duly signed certificate for the Option Preference Shares in the
name of the Vendor;
(c) the Vendor and the Purchaser shall procure that the directors
nominated by each of them to the board of directors of the Company
shall exercise their votes so as to approve the transfer of the Option
Shares.
9. GENERAL
9.1 Each party shall at all times keep confidential and not directly or
indirectly make or allow any disclosure or use to be made of any
information in its possession relating to the other party or to the
existence or subject matter of this Agreement, except to the extent
required by law or with the consent of the other party (which consent shall
not be unreasonably withheld).
9.2 Each party shall bear its own legal and professional fees, costs and
expenses incurred in connection with this Agreement.
9.3 Any stamp duty payable on the sale and purchase of the Sale Shares or the
Option Shares shall be borne by the Vendor and the Purchaser in equal
shares.
9.4 Time shall be of the essence of this Agreement.
9.5 This Agreement shall be binding on and shall enure for the benefit of the
successors and assigns of the parties hereto but shall not be capable of
being assigned by either party without the prior written consent of the
other.
9.6 This Agreement, and the documents referred to in it, constitutes the entire
agreement, and supersedes any previous agreement, between the parties in
relation to the subject matter of this Agreement. Each of the parties
acknowledges and agrees that in entering into this Agreement, and the
documents referred to in it, it does not rely on, and shall have no remedy
in respect of, any statement, representation, warranty or understanding
(together a "Representation") (whether negligently or innocently made) of
any person (whether a party to this Agreement or not) other than as
expressly set out in this Agreement as a Warranty.
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The only remedy available to either party for breach of any Representation
shall be for breach of contract under the terms of this Agreement. Nothing
in this Clause shall operate to limit or exclude any liability for fraud.
9.7 This Agreement may be signed in any number of counterparts, all of which
taken together shall constitute one and the same instrument. Either party
may enter into this Agreement by signing any such counterpart.
9.8 All provisions of this Agreement shall so far as they are capable of being
performed or observed continue in full force and effect notwithstanding
Completion except in respect of those matters then already performed.
9.9 No delay or failure by a party to exercise or enforce (in whole or in
part) any right provided by this Agreement or by law shall operate as a
release or waiver, or in any way limit that party's ability to further
exercise or enforce that, or any other, right. A waiver of any breach of
any provision of this Agreement shall not be effective, or implied, unless
that waiver is in writing and is signed by the party against whom that
waiver is claimed.
9.10 Each party shall at its own cost, execute and do all acts, documents and
things (reasonably within its powers) as may reasonably be required by the
other so as to vest beneficial and registered unencumbered ownership of
the Sale Shares (and, if applicable, the Option Shares) in the Purchaser
and beneficial and registered unencumbered ownership of the Consideration
Preference Shares and, if applicable, the Option Preference Shares in the
Vendor and otherwise to implement the terms of this Agreement whether
before or after Completion, provided that this obligation shall cease 6
months after the date of Completion or, if the Option is exercised 6
months after the date of Option Completion.
9.11 No amendment to this Agreement will be effective unless it is in writing
and signed by both the parties. No consent or approval to be given
pursuant to this Agreement will be effective unless it is in writing and
signed by the relevant party.
9.12 In the event of a default by either party in the performance of its
obligations under this Agreement, the non-defaulting party shall have the
right to obtain specific performance of the defaulting party's
obligations, such remedy to be in addition to any other remedies provided
under this Agreement or at law.
9.13 On termination of this Agreement, each party's rights and obligations will
immediately cease provided that such termination shall not affect any
accrued rights and obligations of the parties which are expressed to
relate to any period following termination (and including the provisions
of Clauses 9 to 11 inclusive) nor shall it effect any accrued rights and
obligations of the parties as at the date of termination.
9.14 All amounts due under this Agreement or the terms of the Consideration
Preference Shares shall be paid in full on the due date (without any
restriction, condition, deduction or withholding, except as required by
law for any taxation) and neither party shall be entitled to assert any
credit, set-off, counterclaim or similar claim against the other party
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in order to justify withholding part or all of such amount.
10. NOTICES
Any notice required to be given under this Agreement shall be deemed duly
served if served by hand delivery or by facsimile transmission to the
addresses provided below or to such other address as may have been last
notified in writing by or on behalf of the relevant party to the other
party hereto. Any such notice shall be deemed to be served at the time
when left at the address of the party to be served or, if served by
facsimile transmission, when sent. In proving service it shall be
sufficient, in the case of service by facsimile transmission, to prove
that the transmission was confirmed as sent by the originating machine.
To the Vendor:
Address: 0000 Xxxxxxxxx Xx., Xxxxxxxxxxxx, XX 00000 X.X.X.
Facsimile: 1 317 387 5479
Attention: Xxxxxx X. Xxxxx, Executive Vice President and General Counsel
To the Purchaser:
Address: Xxxx 000, Xxxx Xxxxx'x Xxxx, Xxxxxxx, Xxxx Xxxx
Facsimile: 852 2869 8628
Attention: Xxxx Xxxxxxx-Xxxxxx
11. GOVERNING LAW
10.1 This Agreement is governed by and shall be construed in accordance with
the laws of Hong Kong, and the parties hereto hereby submit to the non
exclusive jurisdiction of the Courts of Hong Kong in connection herewith
but this Agreement may be enforced in any court of competent jurisdiction.
10.2 The Vendor irrevocably appoints Xxxxxxxx Xxxxxx at 20th Floor, Xxxxxxxxx
Xxxxx, 00-00 Xxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx as its agent, to receive,
for it and on its behalf, service of process in any proceedings in Hong
Kong. Such service shall be deemed completed on delivery to such agent
(whether or not it is forwarded to and received by the Vendor). If for any
reason the process agent ceases to be able to act as such or no longer has
an address in Hong Kong, the Vendor irrevocably agrees to appoint a
substitute process agent within 30 days.
- 14 -
SCHEDULE 1
PART A - VENDOR WARRANTIES
The Vendor hereby represents and warrants to the Purchaser that all
representations and statements set out in this Part A of Schedule 2 are and will
be true and accurate as at the date hereof and as at all times up to and
including Completion with reference to the facts and circumstances subsisting at
such time.
SALE SHARES
1. The Sale Shares are legally and beneficially owned by the Vendor. The Sale
Shares are fully paid up and free from any liens, charges and encumbrances
or third-party rights of any nature whatsoever. The Sale Shares constitute
50% of the issued share capital of the Company.
GENERAL
2. The Company has no direct or indirect equitable, financial, management or
other interest in any person (including any company, partnership,
unincorporated company or association).
3. The only issued securities of any nature whatsoever, including without
limitation options or convertible securities, of any Group Company, are
those to be detailed in the disclosure letter referred to in Clause 5.5.
There is no option, right to acquire, mortgage, charge, pledge, lien or
other form of security or encumbrance on, over or affecting any part of the
issued or unissued share capital of any Group Company and there is no
agreement or commitment to give or create any of the foregoing and no claim
has been made by any person to be entitled to any of the foregoing which
has not been waived in its entirety or satisfied in full.
COMPLIANCE
4. So far as the Vendor is aware, each Group Company has materially complied
with all legislation and holds all necessary licences, consents and other
permissions and approvals required to undertake the business as carried on
by such company and has complied with all legal and contractual
requirements in relation to all transactions to which such company has been
a party.
COMPANY ACCOUNTS
5. The Company Accounts have been prepared in accordance with generally
accepted
- 15 -
accounting practices in Hong Kong and give a true and fair view of the
state of affairs and financial and trading positions of the Group at the
date to which they were prepared and of the Company's results for the
financial period ended on that date.
6. The Company has no present intention to discontinue or write down
investments in any other businesses other than those disclosed in the
Company Accounts nor is any such write down considered necessary or
prudent.
ASSETS
7. All assets of each Group Company owned by the Group Company (including,
without limitation all assets referred to in the Company Accounts):
(a) are legally and beneficially owned free from any mortgage, charge,
lien or other encumbrance;
(b) are in the possession or under the control of the relevant Group
Company which has good and marketable title thereto; and
(c) are not subject to any hire purchase, leasing arrangements or other
arrangements of a similar nature.
TAXATION
8. Each Group Company has paid or accounted for all taxation (if any) due to
be paid or accounted for by it before the date of this Agreement. The
provisions included in the Company Accounts are sufficient to cover all
taxation in respect of all periods ending on or before the date of the
Company Accounts. No liability for taxation has been incurred after the
date of the Company Accounts otherwise than in the ordinary course of
trading business.
LITIGATION
9. No Group Company is a party to any litigation, arbitration, prosecutions,
claims, disputes, investigations or to any other legal or contractual
proceedings (together "Proceedings") and so far as the Vendor is aware,
there are no facts or circumstances subsisting which can reasonably be
expected to give rise to such Proceedings and there are no unfulfilled or
unsatisfied judgments or court orders against any Group Company.
- 16 -
TRANSACTIONS AFTER COMPANY ACCOUNTS DATE
10. Since the Company Accounts Date, each Group Company has carried on its
business in the ordinary course so as to maintain the same as a going
concern and has not:
(a) declared, made or paid any dividends or made any other distribution
out of profits, reserves or capital and no loans or loan capital has
been repaid in whole or in part;
(b) engaged in, or entered into, any business activities or transactions
which are either outside its ordinary course of day-to-day trading
operations or which have not been entered into for full value, on
normal commercial terms and on an arms length basis;
(c) been affected by any abnormal factor in any material respect;
(d) defaulted in any of its contractual obligations; or
(e) suffered any material adverse change in its turnover or financial or
trading position.
CONTRACTS
11. All contracts under which any Group Company has any outstanding liabilities
or obligations, or under which it is due remuneration, for an amount in
excess of HK$ 500,000 have been disclosed to the Purchaser. So far as the
Vendor is aware, all contracts to which any member of the Group is a party
are valid and binding on the parties thereto and no party is in breach of
the terms thereof. There are no debts (other than trade credit incurred in
the ordinary course of business) owed by or to any Group Company to or by
any third party. There are no contracts between any Group Company and any
shareholder or director of any Group Company or any Associates of such
director or shareholder.
EMPLOYEES
12. All contracts of service to which any Group Company is a party can be
terminated by it without payment of compensation (save as provided by
legislation) by not more than 60 days' notice.
13. No Group Company is under any obligation (whether actual or contingent) to
make any payment either now or at anytime in the future to or for the
benefit of any past or present employee other than monthly salary
entitlement.
INSURANCE
14. Each Group Company has effected and maintains valid and current policies of
insurance in an amount and to the extent (including third party liability)
that it is prudent to do so in
- 17 -
the business carried on by it.
PREMISES
15. No Group Company owns any premises and no Group Company leases any premises
other than as to be set out in the disclosure letter referred to in Clause
5.5 (the "Leased Property").
16. The lease of the Leased Property is in writing, is valid and subsisting,
has not been breached by any Group Company and there is no circumstance
which can reasonably be expected to affect or prejudice the relevant lease
or otherwise affect the relevant Group Company's occupation as tenant of
the Leased Property.
INTELLECTUAL PROPERTY
17. Subject to Clause 18 below, all intellectual property registered in the
name of any Group Company or developed or represented as being developed or
owned, by any Group Company excluding any software used in day to day
office administration applications) is beneficially owned by the relevant
Group Company, is unencumbered, is not subject to any claims from employees
or others and is valid and subsisting.
18. In respect of all agreements and licences for the use by any Group Company
of intellectual property not owned by the relevant Group Company (the "IP
Licences"):
(a) the IP Licences are valid and subsisting, require payment of only a
nominal fee and are not restricted in any way;
(b) the relevant Group Company is not in breach of any of the provisions
of the IP Licences; and
(c) in so far as the Company is aware, the licensor or grantor of the
rights to the Group Company under the IP Licences has the right to
licence such rights to the Group.
19. The use by the relevant member of the Group of the intellectual property
rights referred to in Clauses 17 and 18 of this Part A above and the
operation of the Company's business generally does not infringe the rights
(including, without limitation, intellectual property rights) of any third
party.
- 18 -
SCHEDULE 1
PART B - PURCHASER WARRANTIES
The Purchaser hereby represents and warrants to the Vendor that all
representations and statements set out in this Part B of Schedule 2 are and will
be true and accurate as at the date hereof and as at all times up to and
including Completion with reference to the facts and circumstances subsisting at
such time.
SHARES
1. The Consideration Preference Shares will once issued be fully paid up and
free from any liens, charges and encumbrances or third-party rights of any
nature whatsoever.
GENERAL
2. The Purchaser has no direct or indirect equitable, financial, management or
other interest in any person (including any company, partnership,
unincorporated company or association).
3. The only issued securities of any nature whatsoever, including without
limitation options or convertible securities of any Purchaser Group
Company, are those to be detailed in the disclosure letter referred to in
Clause 6.4. There is no option, right to acquire, mortgage, charge, pledge,
lien or other form of security or encumbrance on, over or affecting any
part of the issued or unissued share capital of any Purchaser Group Company
and there is no agreement or commitment to give or create any of the
foregoing and no claim has been made by any person to be entitled to any of
the foregoing which has not been waived in its entirety or satisfied in
full.
COMPLIANCE
4. So far as the Purchaser is aware, each Purchaser Group Company has
materially complied with all legislation and holds all necessary licences,
consents and other permissions and approvals required to undertake the
business as carried on by such company and has complied with all legal and
contractual requirements in relation to all transactions to which such
company has been a party.
PURCHASER ACCOUNTS
- 19 -
5. The Purchaser Accounts have been prepared in accordance with generally
accepted accounting practices in Hong Kong and give a true and fair view of
the state of affairs and financial and trading positions of the Purchaser
Group at the date to which they were prepared and of the Purchaser's
results for the financial period ended on that date.
6. The Purchaser has no present intention to discontinue or write down
investments in any other businesses other than those disclosed in the
Purchaser Accounts nor is any such write down considered necessary or
prudent.
ASSETS
7. All assets of each Purchaser Group Company owned by the Purchaser Group
Company (including, without limitation all assets referred to in the
Purchaser Accounts):
(d) are legally and beneficially owned free from any mortgage, charge,
lien or other encumbrance;
(e) are in the possession or under the control of the relevant Purchaser
Group Company which has good and marketable title thereto; and
(f) are not subject to any hire purchase, leasing arrangements or other
arrangements of a similar nature.
TAXATION
8. Each Purchaser Group Company has paid or accounted for all taxation (if
any) due to be paid or accounted for by it before the date of this
Agreement. The provisions included in the Purchaser Company Accounts are
sufficient to cover all taxation in respect of all periods ending on or
before the date of the Company Accounts. No liability for taxation has been
incurred after the date of the Purchaser Accounts otherwise than in the
ordinary course of trading business.
LITIGATION
9. No Purchaser Group Company is a party to any litigation, arbitration,
prosecutions, claims, disputes, investigations or to any other legal or
contractual proceedings (together "Proceedings") and so far as the
Purchaser is aware, there are no facts or circumstances subsisting which
can reasonably be expected to give rise to such Proceedings and there are
no unfulfilled or unsatisfied judgments or court orders against any
Purchaser Group Company.
- 20 -
TRANSACTIONS AFTER PURCHASER ACCOUNTS DATE
10. Since the Purchaser Accounts Date, each Purchaser Group Company has carried
on its business in the ordinary course so as to maintain the same as a
going concern and has not:
(a) declared, made or paid any dividends or made any other distribution
out of profits, reserves or capital and no loans or loan capital has
been repaid in whole or in part;
(b) engaged in, or entered into, any business activities or transactions
which are either outside its ordinary course of day-to-day trading
operations or which have not been entered into for full value, on
normal commercial terms and on an arms length basis;
(c) been affected by any abnormal factor in any material respect;
(d) defaulted in any of its contractual obligations; or
(e) suffered any material adverse change in its turnover or financial or
trading position.
CONTRACTS
11. All contracts under which any Purchaser Group Company has any outstanding
liabilities or obligations, or under which it is due remuneration, for an
amount in excess of HK$500,000 have been disclosed to the Vendor. So far as
the Purchaser is aware, all contracts to which any member of the Purchaser
Group is a party are valid and binding on the parties thereto and no party
is in breach of the terms thereof. There are no debts (other than trade
credit incurred in the ordinary course of business) owed by or to any
Purchaser Group Company to or by any third party. There are no contracts
between any Purchaser Group Company and any shareholder or director of any
Purchaser Group Company or any Associates of such director or shareholder.
EMPLOYEES
12. All contracts of service to which any Purchaser Group Company is a party
can be terminated by it without payment of compensation (save as provided
by legislation) by not more than 60 days' notice.
13. No Purchaser Group Company is under any obligation (whether actual or
contingent) to make any payment either now or at anytime in the future to
or for the benefit of any past or present employee other than monthly
salary entitlement.
INSURANCE
14. Each Purchaser Group Company has effected and maintains valid and current
policies of
- 21 -
insurance in an amount and to the extent (including third party liability)
that it is prudent to do so in the business carried on by it.
PREMISES
15. No Purchaser Group Company owns any premises and no Purchaser Group Company
leases any premises other than as to be set out in the disclosure letter
referred to in Clause 6.4 (the "Leased Property").
16. The lease of the Leased Property is in writing, is valid and subsisting,
has not been breached by any Purchaser Group Company and there is no
circumstance which can reasonably be expected to affect or prejudice the
relevant lease or otherwise affect the relevant Purchaser Group Company's
occupation as tenant of the Leased Property.
INTELLECTUAL PROPERTY
17. Subject to Clause 18 below, all intellectual property registered in the
name of any Purchaser Group Company or developed or represented as being
developed or owned, by any Purchaser Group Company excluding any software
used in day to day office administration applications) is beneficially
owned by the relevant Purchaser Group Company, is unencumbered, is not
subject to any claims from employees or others and is valid and subsisting.
18. In respect of all agreements and licences for the use by any Purchaser
Group Company of intellectual property not owned by the relevant Purchaser
Group Company (the "IP Licences"):
(d) the IP Licences are valid and subsisting, require payment of only a
nominal fee and are not restricted in any way;
(e) the relevant Purchaser Group Company is not in breach of any of the
provisions of the IP Licences; and
(f) in so far as the Purchaser is aware, the licensor or grantor of the
rights to the Purchaser Group Company under the IP Licences has the
right to licence such rights to the Purchaser Group.
19. The use by the relevant member of the Group of the intellectual property
rights referred to in Clauses 17 and 18 above and the operation of the
Purchaser Group's business generally does not infringe the rights
(including, without limitation, intellectual property rights) of any third
party.
- 22 -
SCHEDULE 2
COMPANY RESOLUTION
BRIGHTPOINT CHINA LIMITED (THE "COMPANY")
Written resolutions of the directors of the Company (the "Directors") dated
2001 and confirmed by the directors as being passed in
accordance with the constitutional documents of the Company.
--------------------------------------------------------------------------------
BACKGROUND:
1. The Vendor entered into a sale and purchase agreement (the "Agreement")
with the Purchaser whereby the Vendor agreed to, amongst other things, sell
[ ] shares (the "Sale Shares") to the Purchaser.
2. It is proposed that [each of] [ ] be appointed as a Director and
that the resignations of the existing Directors be accepted.
3. The Directors declared their respective interests in the transaction
contemplated by the Agreement.
4. Defined terms in the Agreement shall have the same meaning in these
resolutions.
IT IS UNANIMOUSLY RESOLVED that:
1. Each of [ ] be and is hereby appointed as a Director with effect
from the date of this resolution.
2. The secretary of the Company shall:
(a) register the Purchaser or its nominee(s) on the register of members of
the Company in respect of the Sale Shares;
(b) issue new share certificates in the name of the Purchaser and/or its
nominees in respect of the Sale Shares;
(c) cancel the relevant share certificates for the Sale Shares issued in
the name of the Vendor; and
(d) accept the resignation of [ ] as directors and [ ]
as secretary of the Company with immediate effect.
- 23 -
3. Any Director or the secretary of the Company be and is hereby authorised to
execute or sign any further documents and/or take such further acts as he
shall in his discretion think fit to give effect to the Agreement.
SIGNED BY ALL THE DIRECTORS
---------------------------
---------------------------
---------------------------
---------------------------
---------------------------
- 24 -
EXECUTION PAGE
SIGNED for and on behalf of ) /s/ Xxxxxx X. Xxxxx
BRIGHTPOINT INTERNATIONAL ) Xxxxxx X. Xxxxx
(ASIA PACIFIC) PTE. LIMITED ) Director
in the presence of: )
SIGNED for and on behalf of ) /s/ Xxxx Xxxxxxx-Xxxxxx
CHINATRON GROUP HOLDINGS LIMITED ) Xxxx Xxxxxxx-Xxxxxx
in the presence of: )
/s/
- 25 -
APPENDIX A
CHINATRON SHAREHOLDERS' AGREEMENT
- 26 -
APPENDIX B
CLASS B PREFERENCE SHARE TERMS
- 27 -
APPENDIX C
BRIGHTPOINT SHAREHOLDERS' AGREEMENT
- 28 -
APPENDIX D
EXERCISE NOTICE
[Date]
To : [The Vendor]
[Address]
Dear Sirs,
PURCHASE OF SHARES IN BRIGHTPOINT CHINA LIMITED (THE "COMPANY")
We refer to the sale and Purchase Agreement dated [ ] (the "Agreement")
between ourselves. Terms defined in that Agreement shall have the same meaning
when used herein.
Pursuant to Clause 8 of the Agreement, we hereby give you notice of the exercise
of the Option in respect of, and hereby require you to transfer to us, the
Option Shares:
No. of Option Shares
---------------------------------------------------------
Name of transferee
---------------------------------------------------------
Address of transferee
---------------------------------------------------------
Completion time
---------------------------------------------------------
(this should be not less than 3 nor more than 7 business
days after the date of this notice)
Completion place
---------------------------------------------------------
Yours faithfully,
For and on behalf of
[Purchaser]
- 29 -
APPENDIX A
DATED THE 18TH DAY OF JANUARY, 2002
----------------------------------------------------------------------
SHAREHOLDERS' AGREEMENT
IN RELATION TO
CHINATRON GROUP HOLDINGS LIMITED
----------------------------------------------------------------------
AMONG
(1) ARGO II: THE WIRELESS - INTERNET FUND LIMITED PARTNERSHIP
(2) ARGC IV, L.P.
(3) DIGIWIRELESS LIMITED
(4) BRIGHTPOINT INTERNATIONAL (ASIA PACIFIC) PTE. LIMITED
(5) CHINA WORLD INTERNATIONAL COMPANY LIMITED
(6) XXXX XXXXXXX XXXXXXX-XXXXXX
(7) CHI KONG XXXX XXXXX
(8) CHINATRON GROUP HOLDINGS LIMITED
THIS SHAREHOLDERS' AGREEMENT (the "AGREEMENT") is made the 18th day of January,
2002
AMONG:
(1) ARGO II: THE WIRELESS - INTERNET FUND LIMITED PARTNERSHIP, a limited
partnership established under the laws of the State of Delaware, the United
States of America, with its principal place of business at Lynnfield Xxxxx
Office Park, 000 Xxxxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000, X.X.X. ("ARGO");
(2) ARGC IV, L.P., a limited partnership established under the laws of the
State of Delaware, the United States of America, with its principal place
of business at Lynnfield Xxxxx Office Park, 000 Xxxxxxxx, Xxxxx 000,
Xxxxxxxxx, XX 00000, X.X.X. ("ARGC");
(3) DIGIWIRELESS LIMITED, a company incorporated under the laws of Hong Kong
with its registered address at [ ] ("DIGIWIRELESS");
(4) BRIGHTPOINT INTERNATIONAL (ASIA PACIFIC) PTE. LIMITED a company
incorporated under the laws of [ ] with its registered address at [ ]
("BRIGHTPOINT");
(5) CHINA WORLD INTERNATIONAL COMPANY LIMITED, a company incorporated under the
laws of Hong Kong with its registered address at 5/F., Xxxx Xxxx Centre,
000 Xxxxx'x Xxxx Xxxx, Xxxxxxx, Xxxx Xxxx ("CWI");
(6) XXXX XXXXXXX XXXXXXX-XXXXXX of [Flat B, 36/F., Tavistock II, Xx. 00X
Xxxxxxxxx Xxxx, Xxxx Xxxx ]("XXXXXXX-XXXXXX");
(0) XXX XXXX XXXX XXXXX of [House 21, Windsor Park, Nos. 2-88 Ma Ling Path, Kau
To Shan, Shatin, New Territories] ("XXXXX"); and
(8) CHINATRON GROUP HOLDINGS LIMITED, a company incorporated under the laws of
Hong Kong with its registered address at Xxxxx 000, Xxxx Xxxxx'x Xxxx,
Xxxxxxx, Xxxx Xxxx (the "COMPANY").
(ARGO and ARGC are hereinafter individually referred to as an "INVESTOR" and
collectively as the "INVESTORS"; each of CWI, Xxxxxxx-Xxxxxx and Xxxxx are
hereinafter individually referred to as a "FOUNDING SHAREHOLDER" and
collectively as the "FOUNDING SHAREHOLDERS"; the Investors, Brightpoint,
Digiwireless and the Founding Shareholders are hereinafter individually referred
to as a "SHAREHOLDER" and collectively referred to as the "SHAREHOLDERS".
WHEREAS:
(A) The Company is a company limited by shares incorporated in Hong Kong and is
validly existing under the laws of Hong Kong. The details of the share
capital of the
1
Company immediately prior to the date hereof are set forth in paragraphs 1,
2 and 3 of Schedule 1.
(B) This Agreement is entered into for the purpose of regulating the
relationship between the Parties and setting out the rights and obligations
of the Parties in respect of the Company.
THEREFORE IN CONSIDERATION OF THE PREMISES AND THE MUTUAL COVENANTS HEREIN
CONTAINED IT IS HEREBY AGREED AS FOLLOWS:
1. DEFINITIONS AND INTERPRETATION.
1.1 DEFINITION. In this Agreement, all other capitalized terms shall have the
meaning subscribed to them in the Subscription Agreement except as
expressly provided below or unless the context otherwise requires:
"1934 ACT" the Securities Exchange Act of 0000 (xx
xxxxxxx) xx xxx Xxxxxx Xxxxxx xx Xxxxxxx;
"ACT" the Securities Act of 1933 (as amended) of
the United States of America;
"AFFILIATE" (i) with respect to any legal entity,
another entity that, directly or
indirectly through one or more
intermediaries, Controls, is
Controlled by or is under common
Control with such entity; and
(ii) with respect to any natural person,
any of his Associates;
"ARM'S LENGTH BASIS" on a normal commercial basis and not taking
account of any special relationship between
the parties;
"ARTICLES" the articles of association of the Company
(as amended from time to time);
"ASSOCIATES" in relation to an individual means his
spouse and issues and any of his parents and
grandparents, his brothers and sisters, and
the spouses and issues of his brothers and
sisters (collectively "RELATIVES") and any
company or trust which is directly or
indirectly Controlled by such individual or
any of his relatives and for the purpose of
this definition a trust is Controlled by one
or more persons if his or their wishes will
generally be adhered to by the relevant
trustees and "issues" shall include the
spouses of such issues;
"AUDITOR" the Company's appointed auditor;
"BOARD" the Board of Directors of the Company;
2
"BUDGET" the budget adopted under Clause 5.1;
"BUSINESS" the business of the Company described in
Clause 2;
"BUSINESS DAY" a day on which banks are generally open for
business in Hong Kong excluding a Saturday;
"BUSINESS PLAN" a detailed business plan of the Company for
carrying on the Business during a Financial
Year that is adopted by the Board from time
to time in accordance with Clause 5.2;
"CLASS A PREFERENCE SHARES" the redeemable convertible preference shares
issued by the Company on [ ], the terms of
which are attached as Annexure A;
"CLASS B PREFERENCE SHARES" the redeemable convertible preference
shares issued by the Company on [ ], the
terms of which are attached as Annexure B;
"COMPENSATION COMMITTEE" the committee comprising three (3)
non-executive directors appointed by the
Board;
"CONFIDENTIAL INFORMATION" all information relating to customers,
accounts, and operation of the Business;
"CONTROL": (a) the power (whether directly or
indirectly and whether by the
ownership of share capital, the
possession of voting power, contract
or otherwise) to appoint and/or
remove all or such of the members of
the board of directors or other
governing body of an entity or
partnership as are able to cast a
majority of the votes capable of
being cast by the members of that
board or body on all, or
substantially all, matters, or
otherwise to control or have the
power to control the policies and
affairs of that person; and/or
(b) the holding and/or the possession of
the beneficial interest in and/or
the ability to exercise the voting
rights applicable to shares or other
securities in any person which
confer in aggregate on the holders
thereof more than 50% of the total
voting rights exercisable at general
meetings of that person on all, or
substantially all, matters;
"DIRECTORS" the directors of the Company from time to
time;
"ENCUMBRANCE" any option, right to acquire, mortgage,
charge, pledge, lien, assignment,
hypothecation, title retention, preferential
right, trust arrangement or
3
other form of security or encumbrance and
including without limitation any agreement
or commitment to give or create any of the
above;
"EQUITY SECURITIES" has the meaning ascribed thereto in Clause
6.1(a);
"FINANCIAL YEAR" each period of 12 months commencing on 1
January and ending on 31 December or such
other period as the Board may determine and
includes (a) the period commencing on
Completion and ending on 31 December 2000;
and (b) the period commencing on the last 1
January before the date of termination of
this Agreement and ending on that date of
termination;
"HONG KONG" the Hong Kong Special Administrative Region
of the People's Republic of China;
"MEMORANDUM" the memorandum of association of the
Company;
"OFFICER" in relation to a body corporate, a director
or secretary of that body corporate;
"ORDINARY SHARES" ordinary shares with par value of US$0.01
each in the share capital of the Company;
"PARTY" a party to this Agreement;
"PERMITTED TRANSFEREE" has the meaning given in Clause 6.3;
"PREFERENCE SHARES" the Class A Preference Shares and the Class
B Preference Shares;
"QUALIFIED IPO" an initial public offering of Ordinary
Shares on the New York Stock Exchange or the
NASDAQ national market, on the London, Hong
Kong or Singapore stock exchanges, or on
another internationally recognized stock
exchange (such other stock exchange being
acceptable to a majority of the holders of
the Preference Shares) at a per share price
that is: (a) during the period ended on 8th
February 2002 greater than or equal to
US$[1.7878]; or (b) following the expiry of
such period, greater than or equal to
US$[2.0432] and that results in aggregate
gross offering proceeds to the Company of at
least US$30 million prior to underwriter
commissions and expenses);
"REGISTER, REGISTERED AND as used in Clause 7 refer to a U.S.
REGISTRATION" securities registration effected by
preparing and filing a registration
statement or similar document in compliance
with the Act, and the declaration or
ordering of effectiveness of such
registration statement or document;
"REGISTRABLE SECURITIES" (i) the Ordinary Shares issued to the
Shareholders; (ii)
4
the Preference Shares issued to the
Shareholders; (iii) the Ordinary Shares
issuable or issued upon conversion of the
Preference Shares, and (iv) any Ordinary
Shares of the Company issued as (or issuable
upon the conversion or exercise of any
warrant, right or other security that is
issued as) a dividend or other distribution
with respect to, or in exchange for, or in
replacement of, the shares referenced in (i)
above, excluding in all cases, however, any
Registrable Securities sold by a person in a
transaction in which his rights under Clause
7 are not assigned;
"SEC" the U.S. Securities and Exchange Commission;
"SHAREHOLDERS' at any time the holders of the Ordinary
Shares at that time;
"TAX" a tax, levy, charge, impost, fee, deduction,
withholding or duty of any nature,
including, without limitation, stamp and
transaction duty which is imposed or
collected by a government agency and
includes, but is not limited to, any
interest, fine, penalty, charge, fee or
other amount imposed in addition to those
amounts; and
"WARRANT" any option, right or warrant to acquire
Ordinary Shares by way of subscription,
purchase, exchange, conversion or otherwise.
1.2 References to statutory provisions shall be construed as references to
those provisions as amended or re-enacted or as their application is
modified by other provisions (whether before or after the date hereof) from
time to time and shall include any provisions of which there are
re-enactments (whether with or without modification).
1.3 Reference to subsidiary or holding company shall have the same meaning as
defined in Section 2 of the Companies Ordinance (Cap.32 of the Laws of Hong
Kong).
1.4 Reference to any agreement, document or instrument means such agreement,
document or instrument as modified, varied, supplemented or novated from
time to time in accordance with the terms hereof.
1.5 References herein to Clauses and Schedules are to clauses in and schedules
to this Agreement unless the context requires otherwise and the Schedules
to this Agreement shall form part of this Agreement.
1.6 The expressions the "Parties", the "Company", the "Investors", Brightpoint,
the "Founding Shareholders" and the "Shareholders" shall, where the context
permits, include their respective successors, personal representatives and
permitted assigns.
5
1.7 The headings are inserted for convenience only and shall not affect the
construction of this Agreement.
1.8 Unless the context requires otherwise, words importing the singular include
the plural and vice versa and words importing a gender include every other
gender.
2. NATURE OF BUSINESS
The business of the Company shall be diversified telecommunications
investment holding and any other business determined by the Directors from
time to time in accordance with Clause 4.2.
3. BOARD OF DIRECTORS
3.1 Number and Appointment of Directors
(a) Except as otherwise provided herein, the number of Directors and the
manner of appointment of Directors shall be determined in accordance
with the Articles.
(b) The Shareholders shall procure that and shall cast their votes and
exercise their powers of control to ensure that, up until the
completion of a Qualified IPO, each of the Investors (collectively)
and separately Brightpoint shall, provided that their respective
direct and/or indirect shareholding (on a fully converted basis and
assuming full exercise of any outstanding Warrants) does not fall
below 3% of the entire issued share capital of the Company, be
entitled by notice in writing to the Company to appoint 1 Director and
one non-voting observer each to attend Board meetings and shall, by
similar notice in writing to the Company, have the right to remove
and/or replace any Director or non-voting observer appointed by them.
(c) The Shareholders shall exercise their powers of control to ensure that
a Director shall only be removed by a Shareholder who appointed that
Director.
3.2 Board meeting.
Board meetings shall be held at least once in every quarter or such more
frequent time and at such place as the Board may from time to time decide.
3.3 Quorum for Board meeting
(a) The quorum for a Board meeting is four (4) Directors present in person
or by alternate provided that the provisions of Clause 3.4 have been
complied with. Without a quorum, the Directors present shall not be
authorized to act.
6
(b) A Board meeting will be adjourned to the same time and place fourteen
(14) Business Days later if a quorum is not present at that Board
meeting. If at such adjourned meeting a quorum is still not present
within forty-five minutes from the time appointed for the meeting, the
Director(s) present shall constitute a quorum. Except for the business
as outlined in the notice, no other business shall be transacted
thereat.
3.4 Notice of meetings
(a) Each Director shall be entitled to receive at least fourteen (14)
Business Days' notice of a Board meeting unless all Directors agree
otherwise.
(b) The Board can only pass a resolution on a matter if notice of the
general nature of the matter is included in the notice of meeting,
unless all the Directors agree otherwise.
(c) Notwithstanding the foregoing provisions, the Directors present at a
Board meeting and who constitute a quorum may, in writing, waive the
notice requirement set forth in (a) above (in which event all the
Directors shall be deemed to have waived the requirement or agreed to
shorter notice, as the case may be) provided however that no
resolution concerning any of the matters covered by Clause 4.2 shall
be adopted at such a meeting.
3.5 The Company shall reimburse Directors appointed by the Investors and
Brightpoint respectively for their reasonable expenses related to attending
Board meetings.
3.6 In the event that a Director is unable to attend a Board meeting, he or she
may appoint an alternate to attend and vote on his or her behalf and such
alternate shall have the same rights and powers as the absent Director. If
a Director fails to attend or appoint an alternate to attend, he or she
will be deemed to have waived his or her right to attend and vote at such
meeting.
3.7 Subject to Clauses 4.2, 4.3 and 4.4, a resolution in writing signed by a
majority of the Directors entitled to receive notice of a meeting of
Directors (or their respective alternates) shall be as valid and effectual
for all purposes as a resolution of Directors duly passed at a meeting of
the Board duly convened, held and constituted provided that:
(a) where such resolution is in relation to any contract or arrangement in
which a Director or Directors are interested, it shall not be
effective unless the number of Directors signing the resolution who
are not interested in the contract or arrangement would have
constituted a quorum of directors if a meeting had been held for the
purpose of considering the contract or arrangement;
(b) when a Director has approved a resolution by facsimile, the original
of the signed copy shall be deposited with the Company in its
registered office or such other office as the Company may designate
for this purpose from time to time by such Director as soon as
possible thereafter. Any such resolution may
7
consist of several documents, provided each such document is signed by
one or more Directors; and
(c) resolutions relating to matters provided in Clause 4.2 shall require
the signatures of at least a majority of the Directors; and
(d) draft copies of the written resolutions were provided to all Directors
at their usual office address a reasonable period before the
resolutions were signed.
3.8 A meeting of the Directors may be held by way of a conference between
Directors some or all of whom are in different places provided that each
Director who participates in the meeting is able:
(a) to hear each of the other participating Directors addressing the
meeting; and
(b) if he so wishes, to address each of the other participating Directors
simultaneously,
whether directly, by conference telephone or by any other form of
communication equipment (whether in use at the date hereof or developed
subsequently) or by a combination of such methods. A quorum shall be deemed
to be present if those conditions are satisfied in respect of at least the
number and designation of Directors required to form a quorum. A meeting
held in this way shall be deemed to take place at such place as determined
by the Board (which shall be where at least one Director sits). Any
Director may by prior notice to the secretary of the Company indicate that
he wishes to attend by tele-conference facilities, in which event the
Shareholders will procure that the Board provides, so long as practicable,
the appropriate tele-conference facilities.
3.9 Each Shareholder will exercise or refrain from exercising any voting rights
or other powers of Control so as to ensure the passing of any and every
resolution necessary to procure the affairs of the Company are conducted in
accordance with the provisions of this Agreement and otherwise to give full
effect to the provisions of this Agreement and likewise to ensure that no
resolution is passed which is incompatible with such provisions.
4. DECISION MAKING
4.1 Voting by Directors
(a) Each of the Directors will have one vote.
(b) The Chairman of the Board shall not have a casting or second vote.
(c) No Director may vote on any matter or decision where there is a
conflict between the interest of the Company and the interest of such
Director or the Shareholder who appointed such Director.
4.2 Board Resolutions
8
Decisions on and implementation of the following matters shall require the
approval of the Board by a majority vote of the Directors present in person
or by their alternative:
(a) annual budget: approval of the annual budget and financial statements
of the Company (which is to take place 2 months prior to the beginning
of each Financial Year or such later date as the Board may approve in
each year) and any material deviation therefrom;
(b) capital expenditure: any single item of capital expenditure exceeding
20% of the amount stated in the Budget;
(c) assets: acquiring or disposing of assets (excluding inventory) of the
Company in any year other than approved in the Budget, in aggregate,
with a book value or market value of more than HK$4,000,000;
(d) borrowings: the Company incurring debts other than approved in the
Budget in excess of HK$1,000,000;
(e) provision of loans: the Company providing loans to any person
(excluding normal trade credit);
(f) guarantees: giving a guarantee, indemnity or other assurance for a
debt of another person or about the financial condition of that person
other than approved in the Budget;
(g) Encumbrance: creating an Encumbrance other than approved in the Budget
over an asset of the Company over an amount of HK$500,000;
(h) ordinary course: entering into an arrangement or incurring a liability
outside the ordinary course of the Group's business over an amount
approved in the Budget or HK$500,000, whichever is higher;
(i) arm's length transaction: entering into an arrangement or incurring a
liability which is not on an Arm's length basis;
(j) senior executives: appointing or removing the Chief Executive Officer,
the Chief Technical Officer, the Chief Financial Officer, the
President and the Chief Operating Officer;
(k) dividends: recommending or declaring an interim or a final dividend on
Ordinary Shares;
(l) litigation: commencing, defending or compromising litigation or a
similar procedure involving a claim of more than US$500,000;
(m) business plan: adopting a Business Plan and any material deviation
from a Business Plan;
9
(n) change in Business: materially changing the Business;
(o) new issues: issuing shares, debentures, convertible notes, options or
other equity or debt securities of the Company; adopting, implementing
or varying any stock option plans for directors, employees or
consultants;
(p) public offerings: an initial public offering of Ordinary Shares of the
Company or its subsidiaries on the New York Stock Exchange or the
NASDAQ national market, on the London, Hong Kong or Singapore stock
exchanges, or on any other stock exchange (whether or not
internationally recognised), other than a public offering requested by
the Investors and/or Brightpoint in accordance with Clause 7.2 hereto.
4.3 Class A Preference Shareholder's Approval
So long as any Class A Preference Shares are outstanding, decisions on and
implementation of the following matters by or in relation to the Company
shall require the approval of the holders of at least a majority of the
then outstanding Class A Preference Shares:
(a) sell, convey, or otherwise dispose of all or substantially all of its
property or business, or otherwise sell or purchase material assets
outside the ordinary course of business contemplated by the Business
Plan from time to time, or effect any transaction or series of related
transactions which would result in a change of the Control of the
Company (other than the transactions described in Clause 6);
(b) alter or change the rights, preferences or privileges of the
Preference Shares;
(c) increase or decrease (other than by redemption or conversion) the
total number of Preference Shares;
(d) authorize or issue or obligate itself to issue any Equity Securities,
(including but not limited to any security convertible into or
exercisable for any equity security): (i) having a preference over the
Preference Shares with respect to dividends or voting or (ii) having a
preference over or being on a parity with the Preference Shares with
respect to liquidation and redemption;
(e) the Company redeeming, purchasing or otherwise acquiring any Ordinary
or Preference Shares; provided, however, that this restriction shall
not apply to the redemption of any Preference Shares pursuant to the
exercise of the right of redemption by the holder thereof or by the
Company, as the case may be, pursuant to the Articles;
(f) amend the Memorandum or Articles (other than in connection with a
Qualified IPO);
10
(g) increase the number of Ordinary Shares issued or reserved for issuance
to employees, officers, directors, consultants or other persons
performing services for the Company beyond a number which exceeds 10%
of the entire issued share capital of the Company from time to time
pursuant to incentive agreements or option plans approved by the
Board;
(h) other than in the case of insolvent winding-up, appoint a liquidator
to the Company or propose a winding-up of the Company;
(i) undertake an initial public offering of Ordinary Shares of the Company
or its subsidiaries other than pursuant to a Qualified IPO or a public
offering requested by the Investors and/or Brightpoint in accordance
with Clause 7.2 hereto.
4.4 Class B Preference Shareholders Approval
So long as any Class B Preference Shares are outstanding, decisions on and
implementation of the following matters by or in relation to the Company
shall require the approval of the holders of at least a majority of the
then outstanding Class B Preference Shares:
(a) sell, convey, or otherwise dispose of all or substantially all of its
property or business, or otherwise sell or purchase material assets
outside the ordinary course of business contemplated by the Business
Plan from time to time, or effect any transaction or series of related
transactions which would result in a change of the Control of the
Company (other than the transactions described in Clause 6);
(b) alter or change the rights, preferences or privileges of the
Preference Shares;
(c) increase or decrease (other than by redemption or conversion) the
total number of Preference Shares;
(d) authorize or issue or obligate itself to issue any Equity Securities,
(including but not limited to any security convertible into or
exercisable for any equity security): (i) having a preference over the
Preference Shares with respect to dividends or voting or (ii) having a
preference over or being on a parity with the Preference Shares with
respect to liquidation and redemption;
(e) the Company redeeming, purchasing or otherwise acquiring any Ordinary
or Preference Shares; provided, however, that this restriction shall
not apply to the redemption of any Preference Shares pursuant to the
exercise of the right of redemption by the holder thereof or by the
Company, as the case may be, pursuant to the Articles;
(f) amend the Memorandum or Articles (other than in connection with a
Qualified IPO);
(g) increase the number of Ordinary Shares issued or reserved for issuance
to employees, officers, directors, consultants or other persons
performing
11
services for the Company beyond a number which exceeds 10% of the
entire issued share capital of the Company from time to time pursuant
to incentive agreements or option plans approved by the Board;
(h) other than in the case of insolvent winding-up, appoint a liquidator
to the Company or propose a winding-up of the Company;
(i) undertake an initial public offering of Ordinary Shares of the Company
or its subsidiaries other than pursuant to a Qualified IPO or a public
offering requested by the Investors in accordance with Clause 7.2
hereto; and
(j) any transaction between the Group and any Shareholder, Director or any
of their Affiliates with an aggregate value in any Financial Year
exceeding US$750,; and
(k) for so long as the Company is in breach of any of the terms of the
Class B Preference Shares, any of the matters specified in Clause 4.2.
5. BUDGET AND BUSINESS PLAN; INSPECTION RIGHTS
5.1 Annual budget
The Company and each Shareholder shall use reasonable endeavors to ensure
that the Directors adopt an annual budget for the following Financial Year:
(a) before October 31st of each Financial Year; and
(b) in a form and content approved by the Directors.
5.2 Business plan
(a) The Company and each Shareholder shall use reasonable endeavors to
ensure that the Directors adopt a business plan for the Company before
October 31st of each Financial Year.
(b) The Business Plan shall include but not be limited to the following
information:
(i) business strategy and target;
(ii) product and service strategy and target;
(iii) pricing policy;
(iv) personnel policy and hiring plans;
(v) investment strategy;
(vi) financing requirements for working capital, investment and
expansion;
(vii) profit targets; and
(viii) a marketing plan.
12
5.3 The Company shall permit each Shareholder or any of its authorized
representatives to visit and inspect the properties of the Company,
including its corporate and financial records, to make copies of such
records and to discuss the Company's business and finances with officers of
the Company during normal business hours following reasonable notice for as
often as may be reasonably requested.
5.4 The Company shall deliver to each Shareholder:
(a) within twenty-five (25) days of the end of each calendar month, an
unaudited income statement, statements of cash flows and shareholders
equity, and balance sheet for and as of the end of such month;
(b) as soon as practicable, but in any event within forty-five (45) days
after the end of each calendar quarter, an unaudited income statement,
statements of cash flows and shareholders equity for such fiscal
quarter and an unaudited balance sheet as of the end of such fiscal
quarter;
(c) as soon as practicable, but in any event within ninety (90) days after
the end of each Financial Year, an income statement for such Financial
Year, a balance sheet of the Company and statement of shareholder's
equity as of the end of such year, and a statement of cash flows for
such year, such year-end financial reports to be in reasonable detail,
prepared in accordance with Hong Kong generally accepted accounting
principles ("GAAP") and audited and certified by independent public
accountants of internationally recognized standing selected by the
Company together with a statement of the approximate effects, for each
financial year, of the differences which would have resulted if such
financial statements had been prepared in accordance with US GAAP;
(d) as soon as practicable, but in any event within sixty (60) days prior
to the end of each Financial Year, operating and capital budgets and a
business plan for the next Financial Year, prepared on a monthly
basis, including balance sheets, income statements and statements of
cash flows for such months; and
(e) with respect to the financial statements called for in subsections (a)
and (b) of this Clause, an instrument executed by the Chief Financial
Officer or a Director of the Company certifying his/her good faith
belief that such financial statements were prepared in accordance with
Hong Kong GAAP consistently applied with prior practice for earlier
periods (with the exception of footnotes that may be required by GAAP)
and fairly present the financial condition of the Company and its
results of operation for the period specified, subject to year-end
audit adjustment; and
(f) such other information relating to the financial condition, business,
prospects or corporate affairs of the Company as the Shareholders may
from time to time reasonably request.
13
6. RESTRICTIONS ON SHARE ISSUANCE AND TRANSFER
6.1 Right of First Offer on Sale of Shares by Shareholders
(a) Except as otherwise provided in this Agreement, none of the
Shareholders shall sell, assign, transfer, pledge, hypothecate, or
otherwise encumber or dispose of in any way, all or any part of or any
interest in the Equity Securities (as defined below) now or hereafter
owned or held by such Shareholder. Any sale, assignment, transfer,
pledge, hypothecation or other encumbrance or disposition of Equity
Securities not made in conformance with this Agreement shall be null
and void and shall not be recorded on the books of the Company. For
purposes of this Agreement, the term "Equity Securities" shall mean
any securities having voting rights in the election of the Board not
contingent upon default, or any securities evidencing an ownership
interest in the Company, or any securities convertible into or
exercisable for any shares of the foregoing, or any agreement or
commitment to issue any of the foregoing.
(b) Each of the Shareholders hereby grants to all the other Shareholders a
right of first offer with respect to the Equity Securities held by
such Shareholder (the "SALE SHARES"). Each time any of the
Shareholders proposes to sell all or any portion of the Sale Shares
held by him (the "SELLING SHAREHOLDER"), the Selling Shareholder shall
first offer such Sale Shares to the non-selling Shareholders in
accordance with the provisions of this Clause 6.1.
(c) The Selling Shareholder shall deliver a written notice (the "TRANSFER
NOTICE") to each of the other Shareholders stating (i) his bona fide
intention to sell the Sale Shares, (ii) the number of the Sale Shares
to be offered, and (iii) the price and terms upon which he proposes to
offer such Sale Shares;
(d) By written reply to the Selling Shareholder within fourteen (14)
Business Days after receipt of said notice, any of the other
Shareholders (or such person as they may nominate who is not a direct
trade competitor of the Company) may elect to purchase or obtain, at
the price and on the terms specified in the Selling Shareholder's
notice, up to that portion of such Sale Shares that equals the
proportion that the number of Ordinary Shares issued and held by such
Shareholder (or issuable upon conversion of the Preference Shares and
exercise of Warrants then held by such Shareholder) bears to the total
number of Ordinary Shares held by all the other Shareholders (assuming
full conversion of Preference Shares and full exercise of all
Warrants);
(e) The Selling Shareholder shall promptly inform in writing each
Shareholder that elects to purchase all the Sale Shares available to
it (a "FULLY-EXERCISING SHAREHOLDER") of any other Shareholder's
failure to do likewise. During the ten (10) Business Day period
commencing after such information is given, each Fully-Exercising
Shareholder may elect to purchase that portion of the Sale Shares for
which the other Shareholder(s) were entitled to purchase but which
were not purchased by such other Shareholder(s) that is equal to the
proportion that the number of Ordinary Shares issued and held (or
issuable
14
upon conversion of the Preference Shares and exercise of Warrants
held) by such Fully-Exercising Shareholder bears to the total number
of Ordinary Shares issued and held (or issuable upon conversion of the
Preference Shares and exercise of Warrants then held) by all
Fully-Exercising Shareholders who wish to purchase some of the unsold
shares.
(f) To the extent that the Shareholders do not elect to purchase all the
Sale Shares, the Selling Shareholder shall, subject to the co-sale
rights set out in Clause 6.2 (if applicable), during the sixty (60)
calendar day period following the expiration of the period for the
Fully-Exercising Shareholder to purchase provided in Clause 6.1(e),
offer the unsold portion of the Sale Shares to any bona fide third
party or parties at a price not less than, and upon terms no more
favorable to the offeree than those specified in the Transfer Notice.
If the Selling Shareholder does not enter into an agreement for the
sale of the Sale Shares within the aforementioned sixty (60) day
period, or if such agreement is not consummated within sixty (60)
calendar days of the execution thereof, the right provided hereunder
shall be deemed to be revived and such Sale Shares shall not be
offered unless first re-offered to the Shareholders in accordance
herewith.
(g) Each of the Shareholders shall procure all directors nominated by each
of them to approve such share transfers that are effected in
compliance with the provisions of this Clause 6.1.
(h) Subject to Clause 6.1(i), each of the Founding Shareholders undertake
that they shall not dispose of any interest they have in any Ordinary
Shares, Preference Shares, options, warrants or other securities of
the Company for a period of two years from the date of this Agreement,
except with the prior written approval of Brightpoint which approval
may be given at Brightpoint's absolute discretion.
(i) All Shareholders, including the Founding Shareholders, shall be
entitled to sell their Ordinary Shares in connection with or following
a Qualified IPO, pursuant to Clause 7 and subject to any restrictions
on sale imposed by any regulatory body.
15
6.2 Right of Co-Sale
(a) Subject to Clause 6.1 above, in the event that any of the Founding
Shareholders that holds 2% or more of the issued capital of the
Company (the "SELLING FOUNDING SHAREHOLDER") proposes to sell all or a
portion of its Ordinary Shares, each Investor and/or Brightpoint that
does not exercise its right of purchase under the right of first offer
pursuant to Clause 6.1 shall have the right to participate in such
sale on the same terms and conditions as specified in the Transfer
Notice. Such Investor and/or Brightpoint (a "PARTICIPATING
SHAREHOLDER") shall exercise this right of co-sale, if at all, by
written notice to the Selling Founding Shareholders to be given within
fourteen (14) Business Days of the Transfer Notice indicating the
number of Ordinary or Preference Shares or Warrants that the
Participating Shareholder wishes to sell under its right to
participate, subject to Clause 6.2(b) below. To the extent one or more
of the Investors exercise such right of participation in accordance
with the terms and conditions set forth below, the number of Ordinary
Shares that the Selling Founding Shareholder may sell shall be
correspondingly reduced.
(b) Each Participating Shareholder may sell all or any part of that number
of Ordinary Shares equal to the product obtained by multiplying (i)
the aggregate number of Ordinary Shares covered by the Transfer
Notice, by (ii) a fraction, the numerator of which is the number of
Ordinary Shares (including Ordinary Shares issuable upon conversion of
Preference Shares or exercise of Warrants) owned by the Participating
Shareholder on the date of the Transfer Notice and the denominator of
which is the total number of Ordinary Shares (including Ordinary
Shares issuable upon conversion of Preference Shares or exercise of
Warrants) owned by all the Selling Founding Shareholders and the
Participating Shareholders on the date of the Transfer Notice.
(c) Each Participating Shareholder shall deliver, within 10 Business Days
upon the Selling Founding Shareholder securing a binding offer for the
sale of the Sale Shares, to the Selling Founding Shareholder for
transfer to the prospective purchaser a duly executed instrument of
transfer and sold note together with one or more certificates,
properly endorsed for transfer (if necessary), which represent:
(i) the type and number of Ordinary Shares which such Participating
Shareholder elects to sell; or
(ii) that number of Preference Shares or Warrants which are at such
time convertible into the number of Ordinary Shares which such
Participating Shareholder elects to sell; provided, however, that
if the prospective third-party purchaser objects to the delivery
of Preference Shares or Warrants in lieu of Ordinary Shares, such
Participating Shareholder shall convert such Preference Shares or
exercise such Warrants into Ordinary Shares and deliver Ordinary
Shares as provided in this Clause 6.2. The Company agrees to make
any such conversion
16
(provided that the same can be lawfully carried out)
concurrent with the actual transfer of such shares to the
purchaser and contingent on such transfer.
(d) The transfer documents and share certificate or certificates that
the Participating Shareholder delivers to the Selling Founding
Shareholder pursuant to Clause 6.2(c) shall be transferred to the
prospective purchaser upon consummation of the sale of the Sale
Shares pursuant to the terms and conditions specified in the
Transfer Notice, and the Selling Founding Shareholder shall
concurrently therewith remit to such Participating Shareholder
that portion of the sale proceeds to which such Participating
Shareholder is entitled by reason of its participation in such
sale. To the extent that any prospective purchaser or purchasers
prohibits such assignment or otherwise refuses to purchase shares
or other securities from a Participating Shareholder exercising
its rights of co-sale hereunder, the Selling Founding Shareholder
shall not sell to such prospective purchaser or purchasers the
Sale Shares unless and until, simultaneously with such sale, the
Selling Founding Shareholder shall purchase such shares or other
securities from such Participating Shareholder for the same
consideration and on the same terms and conditions as the
proposed transfer described in the Transfer Notice.
(e) In the event the Selling Founding Shareholder should sell any
Sale Shares in contravention of the co-sale rights of the
Investors and Brightpoint under this Clause 6.2 (a "PROHIBITED
TRANSFER"), each of the Investors and Brightpoint, in addition to
such other remedies as may be available at law, in equity or
hereunder, shall have the right to put to the Selling Founding
Shareholder the type and number of Ordinary Shares or Preference
Shares or Warrants equal to the number of Ordinary Shares each
such Investor or Brightpoint (as appropriate) would have been
entitled to transfer to the third-party transferee(s) had the
Prohibited Transfer been effected pursuant to and in compliance
with the terms hereof. Such sale shall be made on the following
terms and conditions:
(i) The price per share at which the shares are to be sold to
the Selling Founding Shareholder shall be equal to the price
per share paid by the third-party transferee(s) to the
Selling Founding Shareholder in the Prohibited Transfer. The
Selling Founding Shareholder shall also reimburse each
Investor for any and all fees and expense, including legal
fees and expenses, incurred pursuant to the exercise or the
attempted exercise of such Investor's or Brightpoint's
rights under Clause 6.2.
(ii) Within ninety (90) days after the later of the dates on
which the Investors or Brightpoint receive notice of the
Prohibited Transfer or otherwise become aware of the
Prohibited Transfer, each Investor and Brightpoint shall, if
exercising the put option created hereby, put into escrow
with an escrow agent appointed by the Investors or
Brightpoint (as appropriate) the certificate or certificates
representing shares to be
17
sold, each certificate to be properly endorsed for transfer,
together with duly executed instruments of transfer and sold
notes.
(iii) The Selling Founding Shareholder shall, upon written notice
from the Investors or Brightpoint (as appropriate), promptly
pay the aggregate purchase price therefor and the amount of
reimbursable fees and expenses as specified in subparagraph
(e)(i) in cash or by other means acceptable to the Investors to
their designated escrow agent. Upon receipt of such payment,
the escrow agent shall deliver the certificate or certificates
for the shares sold by the Investors to the Selling Founding
Shareholder.
6.3 Limitations to Rights of First Offer and Co-Sale
Without being required to comply with the provisions of Clauses 6.1 and 6.2
of this Agreement,
(a) each of the Founding Shareholders may sell or otherwise transfer, with
or without consideration, Ordinary Shares to any spouse or member of
the Founding Shareholder's immediate family, executor, or trustee
(including a trustee of a voting trust) for the account of the
Founding Shareholder's spouse or members of the Founding Shareholder's
immediate family, or to a trust for the Founding Shareholder's own
self (the "PERMITTED TRANSFEREE"), provided that the Founding
Shareholder selling or assigning the Ordinary Shares aforesaid shall
continue to participate in the management of the Company in the same
manner as before such sale or assignment and shall guarantee the
performance by such transferee or assignee of its obligations
hereunder and further provided that each such transferee or assignee,
prior to the completion of the sale, transfer, or assignment shall
have executed documents assuming the obligations of the Founding
Shareholder under this Agreement with respect to the transferred
securities;
(b) the Investors and/or Brightpoint may transfer, with or without
consideration, Ordinary Shares or Preference Shares or Warrants to any
of their respective Affiliates (the "PERMITTED TRANSFEREE"), provided
that: (i) such transferee or assignee shall not be a direct trade
competitor of the Company; (ii) the assigning Shareholder shall
guarantee the performance by such transferee or assignee of its
obligations hereunder; (iii) such transferee or assignee, prior to the
completion of the sale, transfer, or assignment shall have executed
documents assuming the obligations of the assigning Shareholder under
this Agreement with respect to the transferred securities; (iv) the
Investors and/or Brightpoint (as appropriate) shall procure that such
transferee or assignee, shall immediately prior to it ceasing to be an
Affiliate of the Investors and/or Brightpoint (as appropriate),
re-transfer such Ordinary Shares or Preference Shares or Warrants back
to the Investors or Brightpoint (as appropriate); and
(c) Xxxxxxx-Xxxxxx and Xxxxx may sell or otherwise transfer any or all of
his Ordinary Shares to CWI (the "PERMITTED TRANSFEREE").
18
6.4 Rights of First Offer on Future Share Offerings
(a) The Company hereby grants to each Shareholder a right of first offer
with respect to future issues by the Company of any shares of, or
securities convertible into or exchangeable or exercisable for any
shares of, any class of its capital (collectively, the "NEW SHARES")
in proportion to such Shareholder's percentage holding of Ordinary
Shares (assuming full conversion of Preference Shares and full
exercise of Warrants) in the Company from time to time. Each time the
Company proposes to offer New Shares, the Company shall first offer
such New Shares to each Shareholder in accordance with the provisions
of this Clause 6.4.
(b) The Company shall deliver a written notice to each Shareholder stating
(i) its bona fide intention to offer New Shares, (ii) the number of
such New Shares to be offered, and (iii) the price and terms upon
which it proposes to offer such New Shares;
(c) By written reply to the Company within fourteen (14) Business Days
after receipt of said notice, the Shareholder may elect to subscribe,
at the price and on the terms specified in the Company's notice, up to
that portion of such New Shares that equals the proportion that the
number of Ordinary Shares issued and held (or issuable upon conversion
of the Preference Shares and exercise of Warrants then held by any
Shareholders) bears to the total number of Ordinary Shares held by all
the Shareholders (assuming full conversion of Preference Shares and
exercise of Warrants);
(d) The Company shall promptly, in writing, inform each Shareholder that
elects to purchase all the New Shares available to it (a
"Fully-Exercising Shareholder") of any other Shareholder's failure to
do likewise. During the ten (10) Business Day period commencing after
such information is given, each Fully-Exercising Shareholder may elect
to subscribe for that portion of the New Shares for which the other
Shareholders were entitled to subscribe but which were not subscribed
for by such other Shareholders that is equal to the proportion that
the number of Ordinary Shares issued and held, or issuable upon
conversion of Preference Shares and exercise of Warrants then held, by
such Fully-Exercising Shareholder bears to the total number of
Ordinary Shares issued and held, or issuable upon conversion of the
Preference Shares and exercise of all Warrants then held, by all
Fully-Exercising Shareholders who wish to purchase some of the
unsubscribed shares.
(e) To the extent that the Shareholders do not elect to subscribe for all
the New Shares, the Company may, during the ninety (90) calendar day
period following the expiration of the period provided in this Clause,
offer the remaining unsubscribed portion of such New Shares to any
person or persons at a price not less than, and upon terms no more
favorable to the offeree than those specified in the Company's notice.
If the Company does not enter into an agreement for the subscription
of the New Shares within such period, or if
19
such agreement is not consummated within thirty (30) calendar days of
the execution thereof, the right provided hereunder shall be deemed to
be revived and such New Shares shall not be offered unless first
re-offered to the Shareholders in accordance herewith.
(f) The right of first offer in this Clause shall not be applicable to (i)
the allotment of Ordinary Shares (or options therefor) to employees,
directors and consultants pursuant to Board approved option plans for
the primary purpose of soliciting or retaining their services; (ii)
the issuance of securities pursuant to a bona fide, firmly
underwritten public offering of Ordinary Shares in connection with a
Qualified IPO; (iii) the issuance of securities pursuant to the
conversion or exercise of convertible or exercisable securities, or
(iv) the issuance of securities in connection with a bona fide
business acquisition of or by the Company, whether by merger,
consolidation, sale of assets, sale or exchange of stock or otherwise.
6.5 (a) In the event that (i) the Founding Shareholders effect any
transaction or series of related transactions which would result in
Xxxxxxx-Xxxxxx and Xxxxx no longer having Control (individually or
collectively) of CWI; or (ii) Xxxxxxx-Xxxxxx'x ultimate beneficial
interest in the Company falls below 15% of the entire issued share
capital of the Company, then each of the Investors and Brightpoint
shall for a period of 60 days of becoming aware of such event have an
option exercisable by written notice to CWI, to require CWI to
purchase all or part only of the Equity Securities held by them in the
Company at such time based on the fair market value of the Company as
determined in accordance with paragraph (b) below (the "FAIR MARKET
VALUE"), and CWI shall be bound to purchase such Equity Securities put
to it based on the Fair Market Value of the Company and bear all stamp
duty and other similar duties payable on any transfer of shares under
this Clause 6.5. If two or more Investors and/or Brightpoint exercise
their rights under this Clause 6.5 and CWI fails to complete such
purchases in full, then without prejudice to any other remedy which
each of the Investors and/or Brighpoint may have, CWI shall effect the
repurchases on a pro-rata basis between the relevant Shareholders
according to the number of Equity Securities requested to be
repurchased.
(b) For the purposes of this Clause 6.5, Fair Market Value of the Company
shall be an amount to be negotiated and agreed between CWI and
relevant Shareholder(s) exercising their rights under Clause 6.5(a)
within [30] days after the date of the relevant Shareholder(s) notice
of sale to CWI. Failing such agreement, the relevant parties shall
jointly select an independent appraiser who shall determine the Fair
Market Value of the Company as a going concern based on applicable
industrial benchmarks at such time. The determination by the
independent appraiser of the Fair Market Value of the Company, in the
absence of fraud or manifest error, shall be final, conclusive and
binding on all parties concerned. The cost of obtaining such
independent appraisal shall be borne by CWI.
20
6.6 Effect of Change in Company's Capital Structure
If, from time to time, there is any stock dividend, stock split or other
change in the character or amount of any of the outstanding stock of the
Company, then in such event any and all new, substituted or additional
securities to which any of the Shareholders is entitled by reason of such
Shareholder's ownership of the stock shall be immediately subject to the
rights and obligations set forth in Clause 6 with the same force and effect
as the stock subject to such rights immediately before such event.
6.7 Obligations Binding on Transferees
It shall be a condition precedent to the right of any Shareholder to
transfer any shares pursuant to this Clause 6 that the transferee executes
a deed of adherence under which the transferee shall agree to be bound by
and shall be entitled to the benefits of this Agreement as if it were an
original party hereto.
7. PUBLIC OFFERING OF SHARES
7.1 Public Offering of Shares
If the Board at any time pursuant to Clause 4.2 resolves to seek a public
offering of the Ordinary Shares of the Company, each Shareholder shall:
(a) cooperate fully with, and procure that any Permitted Transferee to
which it has transferred Shares cooperate fully with the Company and
its financial and other advisers in order to achieve such public
offering;
(b) agree with the other Parties (and procure that any such Permitted
Transferee agrees) such amendments to or termination of this Agreement
and to the Articles as are determined by the Board to be reasonably
necessary in order to achieve such public offering or as are required
by any internationally recognized exchange and/or relevant regulatory
authority as a condition of such public offering; provided, however,
that no Shareholder shall be thereby required to agree to any such
amendment which shall have the effect of imposing upon it an
obligation to contribute a greater amount of capital (whether in cash
or in kind) than it is already obliged to contribute; and
(c) procure the Company to allow all Shareholders to participate in such
public offering and obtain a listing for shares held by it in
proportion to other Shareholders.
7.2 Request for Registration
(a) If the Company shall receive at any time after the earlier of (i) four
(4) years after the date of this Agreement or (ii) six (6) months
after the effective date of the Qualified IPO, a written request from
the Investors or Brightpoint (or any one of them) holding at least
forty percent (40%) in aggregate of any class of
21
outstanding issued Preference Shares or at least fifteen percent (15%)
in aggregate of the issued Ordinary Shares (the "Initiating Investor")
that the Company conduct a public offering of at least sixty percent
(60%) of Registrable Securities in North America, then the Company
shall, within sixty (60) days of the receipt thereof, give written
notice of such request to all Shareholders and use best efforts to
effect, as soon as practicable and to the extent permitted by
applicable law, the public offering of all Registrable Securities that
the Initiating Investor requests to be registered. In the event that
the Initiating Investor requests that the Company file a registration
statement under the Act, the following provisions of Clause 7.3 shall
apply.
(b) At any time after the Company becomes eligible to file a Registration
Statement on Form F-3 (or any successor form relating to secondary
offerings), an Investor or Investors or Brightpoint may request, in
writing, that the Company effect the registration on Form F-3 (or such
successor form), of Registrable Shares having an aggregate value of at
least US$1,000,000 (based on the then current public market price).
7.3 Registration Rights for US Securities Offering
(a) If the Initiating Investors intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they
shall so advise the Company as a part of their request made pursuant
to Clause 7.2 and the Company shall include such information in the
written notice referred to in Clause 7.2. In such event the right of
any Initiating Investor to include their respective Registrable
Securities in such registration shall be conditioned upon such
Shareholder's participation in such underwriting and the inclusion of
such Shareholder's Registrable Securities in the underwriting (unless
otherwise mutually agreed by a majority in interest of the Initiating
Investors and such Shareholder) to the extent provided herein. All
investors proposing to distribute their securities through such
underwriting shall enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such
underwriting by the Company (which underwriter or underwriters shall
be reasonably acceptable to the Initiating Investors holding a
majority of the relevant Registrable Securities). Notwithstanding any
other provision of this Clause 7.3, if the underwriter advises the
Company that marketing factors require a limitation of the number of
securities underwritten (including Registrable Securities), then the
Company shall so advise all holders of Registrable Securities that
would otherwise be underwritten pursuant hereto, and the number of
shares that may be included in the underwriting shall be allocated to
the holders of such Registrable Securities on a pro rata basis based
on the number of Registrable Securities held by all such holders
(including the Initiating Investors). Any Registrable Securities
excluded or withdrawn from such underwriting shall be withdrawn from
the registration.
(b) The Company shall not be required to effect a registration pursuant to
this Clause 7.3:
22
(i) in any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in
effecting such registration, unless the Company is already
subject to service in such jurisdiction and except as may be
required under the Act; or
(ii) after the Company has effected two (2) registrations pursuant to
Clause 7.3(a), and such registrations have been declared or
ordered effective; or
(iii) during the period starting with the date sixty (60) days prior
to the Company's good faith estimate of the date of the filing
of, and ending on a date one hundred eighty (180) days following
the effective date of, a Company-initiated registration subject
to Clause 7.4 below, provided that the Company is actively
employing in good faith all reasonable efforts to cause such
registration statement to become effective; or
(iv) if the Company shall furnish to those Investors and/or
Brightpoint requesting a registration statement pursuant to this
Clause 7.3, a certificate signed by the Company's Chief
Executive Officer or Chairman of the Board stating that in the
good faith judgment of the Board of Directors of the Company, it
would be seriously detrimental to the Company and its
shareholders for such registration statement to be effected at
such time, in which event the Company shall have the right to
defer such filing for a period of not more than one hundred
twenty (120) days after receipt of the request of the Initiating
Investors, provided that such right to delay a request shall be
exercised by the Company not more than once in any twelve
(12)-month period.
7.4 Company Registration
(a) If (but without any obligation to do so) the Company proposes to
register (including for this purpose a registration effected by the
Company for shareholders other than the Investors and/or Brightpoint)
any of its stock or other securities under the Act in connection with
the public offering of such securities (other than a registration
relating solely to the sale of securities to participants in a Company
stock plan, a registration relating to a corporate reorganization or
other transaction under Rule 145 of the Act, a registration on any
form that does not include substantially the same information as would
be required to be included in a registration statement covering the
sale of the Registrable Securities), the Company shall, at such time,
promptly give each Investor and Brightpoint written notice of such
registration. Upon the written request of each Investor and
Brightpoint given within twenty (20) days after mailing of such notice
by the Company in accordance with Clause 7.6, the Company shall,
subject to the provisions of Clause 7.4(c), use all reasonable efforts
to cause to be registered under the Act all of the Registrable
Securities that each such Investor and/or Brightpoint has requested to
be registered.
23
(b) The Company shall have the right to terminate or withdraw any
registration initiated by it under this Clause 7.4 prior to the
effectiveness of such registration whether or not any Investor or
Brightpoint has elected to include securities in such registration.
The expenses of such withdrawn registration shall be borne by the
Company in accordance with Clause 7.7 hereof.
(c) In connection with any offering involving an underwriting of shares of
the Company's capital stock, the Company shall not be required under
this Clause 7.4 to include any of the Investors' or Brightpoint's
securities in such underwriting unless they accept the terms of the
underwriting as agreed upon between the Company and the underwriters
selected by it (or by other persons entitled to select the
underwriters) and enter into an underwriting agreement in customary
form with an underwriter or underwriters selected by the Company, and
then only in such quantity as the underwriters determine in their sole
discretion will not jeopardize the success of the offering by the
Company. If the total amount of securities, including Registrable
Securities, requested by shareholders to be included in such offering
exceeds the amount that the underwriters determine in their sole
discretion is compatible with the success of the offering, then the
Company shall be required to include in the offering only that number
of such securities, including Registrable Securities, that the
underwriters determine in their sole discretion will not jeopardize
the success of the offering (the securities so included to be
apportioned pro rata among the selling Investors and Brightpoint (as
appropriate) according to the total amount of securities entitled to
be included therein owned by each selling Investor or Brightpoint (as
appropriate) or in such other proportions as shall mutually be agreed
to by such selling Investors or Brightpoint (as appropriate)), but in
no event shall (i) the aggregate amount of securities of the selling
Investors and/or Brightpoint (as appropriate) included in the offering
be reduced below twenty percent (20%) of the total amount of
securities included in such offering, unless such offering is the
initial public offering of the Company's securities, in which case the
selling Investors and Brightpoint may be excluded if the underwriters
make the determination described above and no other shareholder's
securities are included, or (ii) notwithstanding (i) above, any shares
being sold by a shareholder exercising a demand registration right
similar to that granted in Clause 7.3 be excluded from such offering.
For purposes of the preceding parenthetical concerning apportionment,
for any selling Investor or Brightpoint that is a holder of
Registrable Securities and that is a partnership or corporation, the
partners, retired partners and shareholders of such Investor or
Brightpoint, or the estates and family members of any such partners
and retired partners and any trusts for the benefit of any of the
foregoing persons shall be deemed to be a single selling person and
any pro rata reduction with respect to such selling person shall be
based upon the aggregate amount of Registrable Securities owned by all
such related entities and individuals.
7.5 Obligations of the Company
24
Whenever required under this Clause 7 to effect the registration of any
Registrable Securities, the Company shall, as expeditiously as reasonably
possible:
(a) prepare and file with the SEC a registration statement with respect to
such Registrable Securities and use best efforts to cause such
registration statement to become effective, and, upon the request of
the Investors and/or Brightpoint holding a majority of the Registrable
Securities registered thereunder, keep such registration statement
effective for a period of up to one hundred twenty (120) days or, if
earlier, until the distribution contemplated in the Registration
Statement has been completed;
(b) prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the
provisions of the Act with respect to the disposition of all
securities covered by such registration statement;
(c) furnish to the Shareholders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may
reasonably request in order to facilitate the disposition of
Registrable Securities owned by them;
(d) use best efforts to register and qualify the securities covered by
such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the
Investors, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any
such states or jurisdictions;
(e) in the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering;
(f) notify each Shareholder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto
is required to be delivered under the Act or the happening of any
event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then
existing;
(g) cause all such Registrable Securities registered pursuant hereunder to
be listed on each securities exchange on which similar securities
issued by the Company are then listed; and
25
(h) provide a transfer agent and registrar for all Registrable Securities
registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date
of such registration;
(i) promptly make available for inspection by the selling Shareholders,
any managing underwriter participating in any disposition pursuant to
such Registration Statement, and any attorney or accountant or other
agent retained by any such underwriter or selected by the selling
Shareholders, all financial and other records, pertinent corporate
documents and properties of the Company and cause the Company's
officers, directors, employees and independent accountants to supply
all information reasonably requested by any such seller, underwriter,
attorney, accountant or agent in connection with such Registration
Statement;
(j) notify each selling Shareholder, promptly after it shall receive
notice thereof, of the time when such Registration Statement has
become effective or a supplement to any Prospectus forming a part of
such Registration Statement has been filed; and
(k) following the effectiveness of such Registration Statement, notify
each selling Investor of such Registrable Securities of any request by
the SEC for the amending or supplementing of such Registration
Statement of Prospectus.
7.6 Information from Shareholder
It shall be a condition precedent to the obligations of the Company to take
any action pursuant to this Clause 7 with respect to the Registrable
Securities of any selling Shareholder that such Shareholder shall furnish
to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such
securities as shall be required to effect the registration of such
Shareholder's Registrable Securities.
7.7 Expenses of Registration
All expenses other than underwriting discounts and commissions incurred in
connection with registrations, filings or qualifications pursuant to
Clauses 7.3 and 7.4, including (without limitation) all registration,
filing and qualification fees, printers' and accounting fees, fees and
disbursements of counsel for the Company and the reasonable fees and
disbursements of one counsel for the selling Shareholders shall be borne by
the Company. Notwithstanding the foregoing, the Company shall not be
required to pay for any expenses of any registration proceeding begun
pursuant to Clause 7.3(a) if the registration request is subsequently
withdrawn at the request of any Initiating Investor (in which case such
Initiating Investor(s) Shareholders shall bear such expenses pro rata based
upon the number of Registrable Securities that were to be requested in the
withdrawn registration), unless, in the case of a registration requested
under Clause 7.3, the relevant Initiating Investor(s) agree to forfeit
their right to one demand registration pursuant to Clause 7.3(a), provided,
however, that if at the time of such withdrawal, the Initiating Investor(s)
have learned of a material
26
adverse change in the condition, business, or prospects of the Company from
that known to the Initiating Investor(s) at the time of their request and
have withdrawn the request with reasonable promptness following disclosure
by the Company of such material adverse change, then such Initiating
Investor(s) shall not be required to pay any of such expenses and shall
retain their rights pursuant to Clause 7.3(a).
7.8 Delay of Registration
No Shareholder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any such registration as the result of
any controversy that might arise with respect to the interpretation or
implementation of this Clause 7.
7.9 Indemnification
In the event any Registrable Securities are included in a registration
statement under this Clause 7:
(a) To the extent permitted by law, the Company will indemnify and hold
harmless each participating Shareholder, the partners or officers,
directors and shareholders of each participating Shareholder, legal
counsel and accountants for each participating Shareholder, any
underwriter (as defined in the Act) for such participating Shareholder
and each person, if any, who controls such participating Shareholder
or underwriter within the meaning of the Act or the 1934 Act, against
any losses, claims, damages or liabilities (joint or several) to which
they may become subject under the Act, the 1934 Act or any state
securities laws, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based
upon any of the following statements, omissions or violations
(collectively a "VIOLATION"): (i) any untrue statement or alleged
untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (ii) the
omission or alleged omission to state therein a material fact required
to be stated therein, or necessary to make the statements therein not
misleading, or (iii) any violation or alleged violation by the Company
of the Act, the 1934 Act, any state securities laws or any rule or
regulation promulgated under the Act, the 1934 Act or any state
securities laws; and the Company will reimburse each such
participating Shareholder, underwriter or controlling person for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the indemnity agreement contained in
this subclause 7.9(a) shall not apply to amounts paid in settlement of
any such loss, claim, damage, liability or action if such settlement
is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any
such case for any such loss, claim, damage, liability or action to the
extent that it arises out of or is based upon a Violation that occurs
in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by any such
participating Shareholder, underwriter or controlling person;
27
provided further, however, that the foregoing indemnity agreement with
respect to any preliminary prospectus shall not inure to the benefit
of any participating Shareholder or underwriter, or any person
controlling such participating Shareholder or underwriter, from whom
the person asserting any such losses, claims, damages or liabilities
purchased shares in the offering, if a copy of the prospectus (as then
amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) was not sent or given by or on
behalf of such participating Shareholder or underwriter to such
person, if required by law so to have been delivered, at or prior to
the written confirmation of the sale of the shares to such person, and
if the prospectus (as so amended or supplemented) would have cured the
defect giving rise to such loss, claim, damage or liability.
(b) To the extent permitted by law, each participating Shareholder will
indemnify and hold harmless the Company, each of its directors, each
of its officers who has signed the registration statement, each
person, if any, who controls the Company within the meaning of the
Act, legal counsel and accountants for the Company, any underwriter,
any other Shareholder selling securities in such registration
statement and any controlling person of any such underwriter or other
Shareholder, against any losses, claims, damages or liabilities (joint
or several) to which any of the foregoing persons may become subject,
under the Act, the 1934 Act or any state securities laws, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished by
such participating Shareholder expressly for use in connection with
such registration; and each such participating Shareholder will
reimburse any person intended to be indemnified pursuant to this
subclause 7.9(b), for any legal or other expenses reasonably incurred
by such person in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this subclause 7.9(b) shall not apply
to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent
of the participating Shareholder (which consent shall not be
unreasonably withheld), provided that in no event shall any indemnity
under this subclause 7.9(b) exceed the gross proceeds from the
offering received by such participating Shareholder.
(c) Promptly after receipt by an indemnified party under this Clause 7.9
of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party under
this Clause 7.9, deliver to the indemnifying party a written notice of
the commencement thereof and the indemnifying party shall have the
right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed,
to assume the defense thereof with counsel mutually satisfactory to
the parties; provided, however, that an indemnified party (together
with all other indemnified parties that may be represented without
conflict by one counsel) shall have the right to
28
retain one separate counsel, with the fees and expenses to be paid by
the indemnifying party, if representation of such indemnified party by
the counsel retained by the indemnifying party would be inappropriate
due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in
such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any
such action, if prejudicial to its ability to defend such action,
shall relieve such indemnifying party of any liability to the
indemnified party under this Clause 7.9, but the omission so to
deliver written notice to the indemnifying party will not relieve it
of any liability that it may have to any indemnified party otherwise
than under this Clause 7.9.
(d) If the indemnification provided for in this Clause 7.9 is held by a
court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage or expense
referred to herein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such
loss, liability, claim, damage or expense in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on
the one hand and of the indemnified party on the other in connection
with the statements or omissions that resulted in such loss,
liability, claim, damage or expense, as well as any other relevant
equitable considerations. The relative fault of the indemnifying party
and of the indemnified party shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of
a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified
party and the parties' relative intent, knowledge, access to
information, and opportunity to correct or prevent such statement or
omission.
(e) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public
offering are in conflict with the foregoing provisions, the provisions
in the underwriting agreement shall control.
(f) The obligations of the Company and the Shareholder under this Clause
7.9 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Clause 7 and
otherwise.
7.10 Reports Under Securities Exchange Act of 1934
With a view to making available to the Investors and Brightpoint the
benefits of Rule 144 promulgated under the Act and any other rule or
regulation of the SEC that may at any time permit a Shareholder to sell
securities of the Company to the public without registration or pursuant to
a registration on Form F-3, the Company agrees to:
29
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times ninety (90) days
after the effective date of the Qualified IPO;
(b) file with the SEC in a timely manner all reports and other documents
required of the Company under the Act and the 1934 Act; and
(c) furnish to any Shareholder, so long as the Shareholder owns any
Registrable Securities, forthwith upon request (i) a written statement
by the Company that it has complied with the reporting requirements of
SEC Rule 144 (at any time after ninety (90) days after the effective
date of the first registration statement filed by the Company), the
Act and the 1934 Act (at any time after it has become subject to such
reporting requirements), or that it qualifies as a registrant whose
securities may be resold pursuant to Form F-3 (at any time after it so
qualifies), (ii) a copy of the most recent annual or quarterly report
of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably
requested in availing any Shareholder of any rule or regulation of the
SEC that permits the selling of any such securities without
registration or pursuant to such form.
7.11 Assignment of Registration Rights
The rights to cause the Company to register Registrable Securities pursuant
to this Clause 7 may be assigned (but only with all related obligations) by
a Shareholder to a transferee or assignee of such securities that (i) is a
subsidiary, parent, partner, limited partner, retired partner or
shareholder of a Shareholder, (ii) is a Shareholder's family member or
trust for the benefit of an individual Shareholder, or (iii) after such
assignment or transfer, holds at least 5% shares of Registrable Securities
(subject to appropriate adjustment for stock splits, stock dividends,
combinations and other recapitalizations), provided: (a) the Company is,
within a reasonable time after such transfer, furnished with written notice
of the name and address of such transferee or assignee and the securities
with respect to which such registration rights are being assigned; (b) such
transferee or assignee agrees in writing to be bound by and subject to the
terms and conditions of this Agreement, including without limitation the
provisions of Clause 7.13 below; and (c) such assignment shall be effective
only if immediately following such transfer the further disposition of such
securities by the transferee or assignee is restricted under the Act.
7.12 Limitations on Subsequent Registration Rights
From and after the date of this Agreement, the Company shall not, without
the prior written consent of the Investors and Brightpoint holding a
majority of the Registrable Securities, enter into any agreement with any
holder or prospective holder of any securities of the Company that would
allow such holder or prospective holder (a) to include such securities in
any registration filed under Clause 7.4 hereof, unless under the terms of
such agreement, such holder or prospective holder may include such
securities in any such registration only to the extent that the inclusion
of such
30
securities will not reduce the amount of the Registrable Securities of the
Investors or Brightpoint that are included or (b) to demand registration of
their securities.
7.13 "Market Stand-Off" Agreement
Each Shareholder hereby agrees that it will not, without the prior written
consent of the managing underwriter, during the period commencing on the
date of the final prospectus relating to the Company's initial public
offering and ending on the date specified by the Company and the managing
underwriter (such period not to exceed one hundred eighty (l80) days) (i)
lend, offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any shares of Ordinary Shares or any securities convertible
into or exercisable or exchangeable for Ordinary Shares (whether such
shares or any such securities are then owned by the Shareholder or are
thereafter acquired), or (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences
of ownership of the Ordinary Shares, whether any such transaction described
in clause (i) or (ii) above is to be settled by delivery of Ordinary Shares
or such other securities, in cash or otherwise. The foregoing provisions of
this Clause 7.13 shall apply only to the Company's initial public offering
of equity securities, shall not apply to the sale of any shares to an
underwriter pursuant to an underwriting agreement, and shall only be
applicable to the Shareholder if all officers and directors and greater
than five percent (5%) shareholders of the Company enter into similar
agreements. The underwriters in connection with the Company's initial
public offering are intended third party beneficiaries of this Clause 7.13
and shall have the right, power and authority to enforce the provisions
hereof as though they were a party hereto.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of
each Shareholder (and the shares or securities of every other person
subject to the foregoing restriction) until the end of such period.
7.14 Termination of Registration Rights
No Shareholder shall be entitled to exercise any right provided for in this
Clause 7 after four (4) years following the consummation of a Qualified IPO
or, as to any Shareholder, such earlier time at which all Registrable
Securities held by such Shareholder (and any affiliate of the Shareholder
with whom such Investor or Brightpoint must aggregate its sales under Rule
144) can be sold in any three (3)-month period without registration in
compliance with Rule 144 of the Act.
8. CONFIDENTIALITY
8.1 The Parties shall (and shall procure that their respective officers,
employees, advisers and Affiliates shall), during the term of this
Agreement, maintain the secrecy and confidentiality of, and not disclose to
any third party or use for its own purpose, the Confidential Information.
Each Party may disclose any information relating to this Agreement to its
investors, legal advisers, accountants and other professional advisers,
31
but such party shall procure that such persons comply with the foregoing
undertaking of confidentiality. A Party receiving Confidential Information
may only use the information in relation to its involvement with the
Company. Such undertaking shall not be applicable to information that has
already been disclosed for other reasons or to the extent that it is or
comes into the public domain, nor will it prevent any party from disclosing
information as required by law or by any stock exchange.
8.2 None of the Parties shall make or release to any person any announcement
concerning this Agreement or the transactions contemplated thereby without
the prior consent in writing (such consent not to be unreasonably withheld
or delayed) of the other Parties to this Agreement as to the contents
thereof and the place, manner and timing of its presentation and
publication provided that nothing shall restrict the making by any Party
(even in the absence of agreement by the other parties) of any announcement
which may be required by law or called for by the requirements of any stock
exchange.
8.3 The obligations of each Party under Clauses 8.1 and 8.2 shall survive the
termination of this Agreement or the termination and dissolution or
liquidation of the Company and shall continue to exist for a period of one
(1) year from the date of such termination, dissolution or liquidation,
whichever is the earlier.
9. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
Each Party hereby represents, warrants and undertakes with the other Party
that:
(a) (other than Xxxxxxx-Xxxxxx and Xxxxx) it is a company or limited
partnership duly incorporated or established and validly existing in
all respects under the laws of its place of incorporation or
established with full power and authority to own its assets and to
carry on its business as it is now being conducted and no action has
been taken or threatened (whether by it or any third party) for or
with a view to its liquidation, receivership or analogous process. The
execution of this Agreement and all other ancillary documents on its
behalf has been validly authorized;
(b) the obligations expressed as being assumed by it under this Agreement
constitutes its valid, legal and binding obligations enforceable
against it in accordance with its terms;
(c) neither the execution nor delivery by it of this Agreement or of any
ancillary document nor the performance or observance of any of its
obligations hereunder and thereunder, does or will:
(i) conflict with, or result in any breach or violation of, any
judgment, order or decree, trust deed, mortgage, agreement or
other instrument or arrangement by which it is bound; or
(ii) cause any limitation on any of its powers whatsoever, howsoever
imposed, or on the right or ability of the directors of it to
exercise such powers, to be exceeded.
32
(d) it has the power to enter into this Agreement and to exercise its
rights and to perform its obligations under this Agreement; and
(e) it has taken all necessary action to authorize the execution of and
the performance of its obligations under this Agreement.
10. NON-COMPETITION
Each of the Founding Shareholders agree that during the term hereof and for
a period of twelve (12) months thereafter:
(a) he shall not carry on or be employed, concerned or interested directly
or indirectly (whether as shareholder, director, employee, partner,
agent or otherwise and whether alone or jointly with others) in any
business in competition with the Company in any country or place where
the Company has carried on business (other than as a holder of not
more than five per cent (5%) of the issued shares or debentures of any
company listed on any recognized stock exchange); and
(b) he shall not, on his own account or in conjunction with or on behalf
of any other person or party, directly or indirectly solicit or entice
away from the Company any employee of the Company or any person or
party who has been a customer or supplier or may have been a
prospective customer or supplier of the Company.
11. MISCELLANEOUS
11.1 Successors and Assigns
Except as otherwise provided herein, the terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express
or implied, is intended to confer upon any party other than the Parties or
their respective successors and assigns any rights, remedies, obligations,
or liabilities under or by reason of this Agreement, except as expressly
provided in this Agreement.
11.2 Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of Hong Kong
11.3 Counterparts
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
and the same instrument.
33
11.4 Titles and Subtitles
The titles and subtitles used in this Agreement are used for convenience
only and are not to be considered in construing or interpreting this
Agreement.
11.5 Notices
(a) Each notice, demand or other communication given or made under this
Agreement shall be in writing in English and delivered or sent to the
relevant Party at its address or fax number set out below (or such
other address or fax number as the addressee has by five (5) days'
prior written notice specified to the other Parties):
To the Company:
CHINATRON GROUP HOLDINGS LIMITED
Xxxxx 000,
Xxxx Xxxxx'x Xxxx,
Xxxxxxx, Xxxx Xxxx
Attention: Xxxx Xxxxxxx-Xxxxxx
Fax No.: (000) 0000-0000
To the Investors:
ARGO II: THE WIRELESS-INTERNET FUND LIMITED PARTNERSHIP
c/o Perkins Coie LLP
17th Floor, Standard Chartered Bank Xxxxxxxx
0 Xxx Xxxxx Xxxx Xxxxxxx, Xxxx Xxxx
Attention: Xxxxxxx X. Xxxx
Fax: (000) 0000-0000
with copies to:
Argo Global Capital
Lynnfield Xxxxx Office Park
000 Xxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000, X.X.X.
Attention: X.X. Xxxxxx
Fax: (0-000) 000-0000
Xxxxx Xxxx & Xxxxx LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000, X.X.X.
Attention: Xxxxx X. Xxxxx
Fax: (0-000) 000-0000
ARGC IV, L.P. c/o Perkins Coie LLP
17th Floor, Standard Chartered Bank Xxxxxxxx
00
0 Xxx Xxxxx Xxxx Xxxxxxx, Xxxx Xxxx
Attention: Xxxxxxx X. Xxxx
Fax: (000) 0000-0000
with copies to:
Argo Global Capital
Lynnfield Xxxxx Office Park
000 Xxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000, X.X.X.
Attention: X.X. Xxxxxx
Fax: (0-000) 000-0000
Xxxxx Xxxx & Xxxxx LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000, X.X.X.
Attention: Xxxxx X. Xxxxx
Fax: (0-000) 000-0000
To Brightpoint:
C/O BRIGHTPOINT INC.
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxxxx, XX00000
XXX
Attention: Xxxxxx X. Xxxxx
Fax No.: (0-000) 000 0000
To the Founding Shareholders:
C/O CHINATRON GROUP HOLDINGS LIMITED
Xxxxx 000,
Xxxx Xxxxx'x Xxxx,
Xxxxxxx, Xxxx Xxxx
Attention: Xxxx Xxxxxxx-Xxxxxx
Fax No.: (000) 0000-0000
Any notice, demand or other communication so addressed to the relevant
Party shall be deemed to have been delivered (a) if given or made by
letter, when actually delivered to the relevant address; (b) if given or
made by fax, 24 hours after it has been despatched with a confirmation that
all pages have been transmitted.
11.6 Expenses
If any action at law or in equity is necessary to enforce or interpret the
terms of this Agreement, the prevailing Party shall be entitled to
reasonable legal fees, costs and
35
necessary disbursements in addition to any other relief to which such party
may be entitled.
11.7 Entire Agreement: Amendments and Waivers
This Agreement and the Schedules hereto constitute the full and entire
understanding and agreement among the Parties with regard to the subject
matter hereof and thereof and (without prejudice to any accrued rights or
liabilities which any Party may have) supersede and cancel in all respects
all previous correspondence, understandings, agreements and undertakings
(if any) among the Parties with respect to the subject matter hereof,
whether such be written or oral. This Agreement shall not be amended except
by a written instrument duly signed by or on behalf of the Parties.
11.8 Severability
If one or more provisions of this Agreement are held to be unenforceable
under applicable law, such provision shall be excluded from this Agreement
and the balance of the Agreement shall be interpreted as if such provision
were so excluded and shall be enforceable in accordance with its terms.
11.9 Agreement to Prevail
If any provisions of the Memorandum or of the Articles conflict with any
provisions of this Agreement, the provisions of this Agreement, as between
the Shareholders, shall prevail. The Shareholders shall procure that the
necessary amendments are made to the Memorandum and Articles as soon as
practicable after the signing of this Agreement (and in any event not later
than 30 days from the date hereof) to reflect the terms of this Agreement.
11.10 Not a Partnership
Nothing herein shall be taken to constitute or create a partnership between
the Parties. No Party shall be deemed to be the agent of the other Parties
nor have any authority to bind the other Parties in any way.
11.11 Performance of Party
Failure of any Party at any time to require performance by any other Party
of any provision under this Agreement shall in no way affect the right of
such party to require performance of that or any other provision, and any
waiver by such party of any breach of this Agreement shall not be construed
as a waiver of any continuing or succeeding breach of any provision, a
waiver of the provision itself or a waiver of any other right under this
Agreement.
12. TERMINATION
36
This Agreement and the rights and obligations hereunder, with exception of
the obligations under Clause 7 hereof, shall terminate and be of no further
force or effect upon the consummation of a Qualified IPO of shares of the
Company.
AS WITNESS the hands of the Parties or their duly authorised representatives the
day and year first above written.
ARGO II: THE WIRELESS - INTERNET FUND LIMITED PARTNERSHIP
By: ARGO GLOBAL CAPITAL II PARTNERS L.P., its General Partner
By: XXXX XX, INC., its General Partner
/s/ X.X. Xxxxxx
------------------------------
Authorized Signatory
ARGC IV, L.P.
By: , Its General Partner
/s/ X.X. Xxxxxx
------------------------------
Authorized Signatory
DIGIWIRELESS LIMITED
/s/ Xxxxx X. Xxxxxxx
------------------------------
Authorized Signatory
[BRIGHTPOINT NOMINEE]
/s/ Xxxxxx X. Xxxxx
------------------------------
Authorized Signatory
37
CHINA WORLD INTERNATIONAL COMPANY LIMITED
/s/ Xxxx Xxxxxxx-Xxxxxx /s/ Chi Kong Xxxx Xxxxx
-------------------------------------------------------
Authorized Signatory
XXXX XXXXXXX XXXXXXX-XXXXXX
/s/ Xxxx Xxxxxxx-Xxxxxx
------------------------------
CHI KONG XXXX XXXXX
/s/ Chi Kong Xxxx Xxxxx
------------------------------
CHINATRON GROUP HOLDINGS LIMITED
/s/ Xxxx Xxxxxxx-Xxxxxx /s/ Chi Kong Xxxx Xxxxx
-------------------------------------------------------
Authorized Signatory
38
SCHEDULE 1
[to be amended to reflect current position after merger with Brightpoint]
(1) AUTHORIZED SHARE CAPITAL: US$500,000 divided into 50,000,000
shares of US$0.01 each
(2) ORDINARY SHARES
NAME OF SHAREHOLDER NOS. OF ORDINARY SHARES
------------------- -----------------------
China World International Co. Ltd. 21,999,998
Xxxx Xxxxxxx Xxxxxxx-Xxxxxx 1
Chi Kong Xxxx Xxxxx 1
[Xxxxxx Xxx Xxxxxx 11,000,000]
Digiwireless Limited 6,000,000
Mankato Consultants Ltd. 100,000
Xxxxx Xxxxxx Xxxxxxx 100,000
Xxxxx Xxxxx 100,000
Xxxxx Xxx Xxxxx 100,000
Xxxxxx Xxxxxxx 100,000
(3) SHARE OPTIONS
Xxxxx Xxxxxx Xxxxxxx 100,000
Xxxxx Xxxxx 100,000
Xxxxx Xxx Xxxxx 100,000
Xxxxxx Xxxxxxx 100,000
Xxxxxx X. Xxxxxxx 100,000
Xxxxxxx Xxxx Tat Wing 600,000
Xxxx Xxxx 300,000
Xxx Xxxxxxx 1,500,000
39
(4) PREFERENCE SHARES
NAME OF INVESTOR TRANCHE A SHARES TRANCHE B SHARES
---------------- ---------------- ----------------
ARGO II: the Wireless-Internet 4,663,999 2,332,000
Fund Limited Partnership
ARGC IV, L.P. 47,112 23,556
(5) WARRANTS
NAME OF INVESTOR TRANCHE A WARRANTS TRANCHE B WARRANTS
---------------- ------------------ ------------------
ARGO II: the Wireless-Internet 932,799 466,399
Fund Limited Partnership
ARGC IV, L.P. 9,423 4,712
00
XXXXXXXX X
RIGHTS OF CLASS B PREFERENCE SHARES
The rights attaching, and provisions applicable, to the Class B Preference
Shares of which 6,414,607 have been issued for US$1.559 each (the "Subscription
Price" representing US$0.01 nominal value and US$1.549 premium), are as
follows:-
1. AS REGARDS INCOME
The Class B Preference Shares shall rank pari passu with Ordinary Shares
and all other classes of Shares in issue, as if the Class B Preference
Shares had been converted into Ordinary Shares in accordance with the
provisions of Article 6 below, in respect of the right to receive dividends
or other distributions from the Company. The holders of Class B Preference
Shares (the "Class B Preference Shareholders") shall be entitled to receive
out of distributable profits, if any, of the Company on a full
participating basis such that the total amount of dividend or distribution
declared, paid or distributed on each Class B Preference Share for any year
shall not be less than the total dividend declared, paid or distributed on
each of any other shares or other securities of the Company for such year.
2. AS REGARDS CAPITAL
2.1 On a return of capital on liquidation, dissolution, winding up or otherwise
(together a "Liquidation") the assets of the Company available for
distribution amongst the Shareholders shall be applied, in priority to any
payment to the holders of any other class of shares in the capital of the
Company (other than the Class A Preference Shares), in paying to the Class
B Preference Shareholders the greater of:
(a) the aggregate Subscription Price paid in respect of the outstanding
Class B Preference Shares, or
(b) the value (as defined in Article 2.3) of such Class B Preference
Shares based on their full conversion into Ordinary Shares immediately
prior to Liquidation,
provided that as between the Class A Preference Shares and the Class B
Preference Shares, they shall rank equally for any return of capital.
2.2 If the assets of the Company available for distribution amongst the Class A
Preference Shareholders and the Class B Preference Shareholders shall not
be sufficient to permit the payment referred to above in full then all the
assets legally
- 1 -
available for distribution shall be applied rateably amongst the Class A
Preference Shareholders and the Class B Preference Shareholders in
proportion to the number of such shares held by each such holder.
2.3 For the purposes of Article 2.1(b) the Ordinary Shares shall be valued as
follows:-
(a) Shares or securities not subject to any restrictions on free
marketability (which are covered by (b) below):
(i) if traded on an internationally recognised securities exchange or
through the Nasdaq National Market, the value shall be deemed to be
the average of the closing prices of the Ordinary Shares on such
exchange or system over the thirty (30) day period ending three (3)
days prior to the closing;
(ii) if actively traded over-the-counter, the value shall be deemed to
be the average of the closing bid or sale prices (whichever is
applicable) over the thirty (30) day period ending three (3) days
prior to the closing; and
(iii) if there is no active public market, the value shall be the fair
market value thereof, as mutually determined by the Company and the
holders of a majority of the then outstanding Class B Preference
Shares. If no agreement is reached on the value within 30 calendar
days from the date of the Liquidation, then the value shall be the
fair market value as determined by an independent appraiser appointed
jointly by the Company and the holders of a majority in nominal value
of the then outstanding Class B Preference Shares.
(b) The method of valuation of shares or securities subject to
restrictions on free marketability (other than restrictions arising
solely by virtue of a shareholder's status as an affiliate or former
affiliate) shall be to make an appropriate discount from the value as
determined in (a) to reflect the approximate fair market value thereof
as mutually determined by the Company and the holders or a majority in
nominal value of the then outstanding Class B Preference Shares.
3. AS REGARDS VOTING
Class B Preference Shareholders shall be entitled to receive notice of and
to attend and speak and to vote at all General Meetings of the Company. At
any General Meeting of the Company and (save as provided in these Articles)
on a show of hands each Class B Preference Shareholder present in person or
(being a corporation) present by a duly authorised corporate representative
or by proxy shall have one vote and on a poll every Class B Preference
Shareholder present in person or by proxy shall have such number of votes
as he would have been entitled to if, immediately
- 2 -
prior to such meeting, he had exercised his Conversion Right (as defined in
Article 6) in respect of all of his Class B Preference Shares.
4 MATTERS REQUIRING CONSENT OF CLASS B PREFERENCE SHAREHOLDERS
So long as any Class B Preference Shares are outstanding, decisions on and
implementation of the matters set out in Clause 4.4 of the shareholders
agreement in respect of the Company dated 2002 by or in relation to
the Company or its subsidiaries shall require the approval of the holders
of a majority of the Class B Preference Shares outstanding from time to
time.
5 REDEMPTION OF CLASS B PREFERENCE SHARES
5.1 The Class B Preference Shares shall be redeemed in the following
circumstances:
(a) if the annual free cash flow (all of the components of which shall be
computed in accordance with Hong Kong GAAP) (equal to EBITDA (earnings
before interest, taxes, depreciation and amortization), minus taxes on
EBIT (earnings before interest and taxes), minus capital expenditures
and plus the change in working capital (positive or negative)) of
either the Company and its subsidiaries or Brightpoint China Limited
("BPC") and its subsidiaries is greater than the annual free cash flow
projected in the annual budget for each of the Company and BPC
respectively, then 50% of such excess shall be applied in redeeming
part or all of the Class B Preference Shares within 15 business days
of the relevant company's financial year end accounts being adopted by
its directors (or, to the extent that the Company needs to make a
"permissible capital payment" (as referred to in section 49I of the
Companies Ordinance (Cap. 32 of the Laws of Hong Kong), within 15
business days of the statutory procedures required to authorise such
permissible capital payment being complied with);
(b) (i) if the Company or BPC shall raise any further equity or debt
capital (but excluding any bank borrowings, letters of credit,
trade financing or trade credit) in the period prior to the
first anniversary of the issue of the Class B Preference
Shares, 25% of the capital so raised (excluding Jianghe related
financing activities (or, if less, the total amount of
redemption monies payable upon full redemption of Class B
Preference Shares)) shall be applied in redeeming part or all
of the Class B Preference Shares within 5 business days of
receipt of such capital by the Company (or, to the extent that
the Company needs to make a "permissible capital payment" (as
referred to in section 49I of the Companies Ordinance (Cap. 32
of the Laws of Hong Kong),
- 3 -
within 15 business days of the statutory procedures required to
authorise such permissible capital payment being complied
with); and
(ii) if the Company or BPC shall raise any further equity or debt
capital (but excluding any bank borrowings, letters of credit,
trade financing or trade credit) in the period on or after the
first anniversary of the issue of the Class B Preference
Shares, 50% of the capital so raised (including Jianghe related
financing activities) (or, if less, the total amount of
redemption monies payable upon full redemption of Class B
Preference Shares) shall be applied in redeeming part or all of
the Class B Preference Shares within 5 business days of receipt
of such capital by the Company (or, to the extent that the
Company needs to make a "permissible capital payment" (as
referred to in section 49I of the Companies Ordinance (Cap. 32
of the Laws of Hong Kong), within 15 business days of the
statutory procedures required to authorise such permissible
capital payment being complied with), provided that if the
Company has exercised its option to acquire a further 30% of
the share capital of BPC, the requirement to apply 50% of the
capital so raised shall be reduced to 25% of the capital so
raised;
(c) part or all of the Class B Preference Shares may be redeemed by the
Company giving at least 15 business days prior written notice to the
holders of the Class B Preference Shares (provided that any voluntary
redemption by the Company of any of the Class B Preference Shares
pursuant to this paragraph (c) shall be effected on a pro-rata basis
amongst all holders of Class B Preference Shares) subject to the
rights of conversion under Article 6.1; and
(d) all outstanding Class B Preference Shares shall be redeemed on the
fifth anniversary of the date of their issue.
Provided that if the permissible capital payment procedure referred to in
paragraphs (a) and (b) of this Article 5.1 cannot be satisfied for any
reason (including, without limitation, the insolvency of the Company) then
such procedure shall be satisfied and the relevant redemption of the Class
B Preference Shares made, by the Company as soon as it is able to do so.
The amount payable on redemption (the "Redemption Price") shall be paid in
cash and be the aggregate of the Subscription Price plus interest at 8% per
annum calculated on such Subscription Price from the date of issue until
the date of redemption of the relevant Class B Preference Shares.
5.2 The Redemption Price shall be determined and be payable in US dollars.
5.3 On the redemption date the holders of the Class B Preference Shares are
bound to deliver to the Company the certificate (or certificates) for those
shares (or, in the case
- 4 -
of lost certificates, an indemnity in a form reasonably satisfactory to the
Board). On receipt, the Company shall redeem the Class B Preference Shares
and pay to the holders the redemption money due to the holders.
5.4 Upon the date for redemption of any Class B Preference Shares, the
Redemption Price shall become a debt due and payable by the Company in
respect of those Shares to be redeemed to the Class B Preference
Shareholders and upon receipt of the relevant share certificates (or an
indemnity in respect thereof in a form reasonably satisfactory to the
Company) the Company shall forthwith pay the Redemption Price to the
appropriate Class B Preference Shareholders. Any claim for repayment of the
Redemption Price shall rank equally with all other unsecured creditors of
the Company.
5.5 The Company shall in the case of a redemption in full cancel the share
certificate of the Class B Preference Shareholder concerned and in the case
of a redemption of part of the Class B Preference Shares included in the
certificate either (a) enface a memorandum of the amount and date of the
redemption on such certificate or (b) cancel the same and without charge
issue to the Class B Preference Shareholder delivering such certificate to
the Company a new certificate for the balance of Class B Preference Shares
not redeemed on that occasion.
5.6 If any Class B Preference Shareholder whose Class B Preference Shares are
liable to be redeemed shall fail or refuse to deliver up the certificate
for his Class B Preference Shares, the Company may retain the Redemption
Price until delivery of the certificate (or of an indemnity in respect
thereof in a form reasonably satisfactory to the Company) but shall
thereupon pay the Redemption Price to the Class B Preference Shareholder.
5.7 All rights in respect of any Class B Preference Shares becoming liable to
redemption under the foregoing provisions shall cease as from the
redemption date, unless, upon the holder of such shares tendering the
certificate or certificates for such shares, payment of the Redemption
Price is refused or otherwise not made within 2 business days (except where
the Company validly exercises the right of set-off).
5.8 If the funds of the Company legally available for redemption of Class B
Preference Shares on a redemption date are insufficient to redeem the total
number of Class B Preference Shares to be redeemed on such date, then
without prejudice to any other rights and remedies of the Class B
Preference Shareholders, those funds that are legally available will be
used to redeem the maximum possible number of such shares rateably among
the holders of such shares to be redeemed such that each holder of Class B
Preference Shares requesting redemption receives the same percentage of the
applicable Redemption Price. The Class B Preference Shares not redeemed
shall remain outstanding and entitled to all the rights attaching thereto
including the right to receive dividends. At any time thereafter when
additional funds of the Company are legally available for the redemption of
Class B Preference
- 5 -
Shares, such funds will immediately be used to redeem the balance of the
Class B Preference Shares that the Company has become obliged to redeem on
the redemption date but that it has not redeemed. If any other preference
shares issued by the Company are also to be redeemed at the same time as
the Class B Preference Shares or become entitled to receive distributions
pursuant to Article 2.1 and the Company has insufficient funds to effect
all such redemptions and/or distributions, then the redemptions and/or
distributions shall be effected on a pro-rata basis as between holders on
the basis of the number of Ordinary Shares which such preference shares
would convert into.
5.9 If the Company is unable to pay the full Redemption Price on the required
redemption date for any reason, then all Class B Preference Shares shall
accrue interest from the redemption date until the Redemption Price is
paid in full at an annual interest rate of 11% per annum (the "Redemption
Dividend").
5.10 If any Class B Preference Shares are not redeemed by the Company on the
due date, the Redemption Price and the Redemption Dividend shall become a
debt of the Company immediately due and payable (whether declared or not).
5.11 Notwithstanding any other terms of the Class B Preference Shares, if at
anytime the Class B Preference Shares are not redeemed on their due date,
the rights of the holders of the Class B Preference Shares to require
immediate repayment of all Class B Preference Shares shall not affect the
rights of such holders to exercise their rights of conversion at any time
prior to repayment in full occurring provided that, for the avoidance of
doubt, any obligation on the part of the Company to make a redemption or
repayment shall lapse upon conversion of the relevant Class B Preference
Shares into Ordinary Shares.
5.12 If any of the events specified below occurs, the Company shall forthwith
give notice thereof to each Class B Preference Shareholder, and each Class
B Preference Shareholder may at any time after such event give a
redemption notice to the Company in respect of part or all of the Class B
Preference Shares held by it, whereupon such number of Class B Preference
Shares specified in the redemption notice shall become immediately due for
redemption. For the avoidance of doubt, such right shall be exercisable
regardless of the fact that the Class B Preference Shares in question may
in whatever capacity have voted in favour of or otherwise approved the
relevant event. The relevant events are:
(a) a default is made for more than five business days in the payment of
any amount due in respect of the Class B Preference Shares when and
as the same ought to be paid in accordance with these terms;
(b) a default is made by the Company in the performance or observance of
any undertaking given by it under these terms (other than the
covenants to pay any amount due in respect of the Class B Preference
Shares) and such default is
- 6 -
incapable of remedy, or if capable of remedy is not remedied within
seven business days of service by any Class B Preference Shareholder
on the Company of notice requiring such default to be remedied;
(c) a resolution is passed or an order of a court of competent
jurisdiction is made that the Company or any of its Subsidiaries (as
defined below) be wound up or dissolved, otherwise than for the
purposes of or pursuant to and followed by a consolidation,
amalgamation, merger or reconstruction the terms of which shall have
previously been approved in writing by the holders of 75% or more of
the then outstanding Class B Preference Shares;
(d) an encumbrancer takes possession or a receiver is appointed over the
whole or a material part of the assets or undertaking of the Company
or any of its Subsidiaries and such possession or appointment is not
terminated within 60 days;
(e) a distress, execution or seizure order before judgement is levied or
enforced upon or sued out against the whole or a material part of the
property of the Company or any of its Subsidiaries (as the case may
be) and is not discharged within 60 days thereof;
(f) the Company or any of its Subsidiaries is unable to pay its debts up
to an aggregate amount of HK$50,000 as and when they fall due or makes
an assignment for the benefit of, or enter into any composition with,
its creditors;
(g) proceedings shall have been initiated against the Company or any of
its Subsidiaries under any applicable bankruptcy, reorganisation or
insolvency law and such proceedings shall not have been discharged or
stayed within a period of 60 days;
(h) the Company (on a consolidated basis) is insolvent as evidenced by its
latest financial statements issued from time to time;
(i) any event occurs which has an analogous effect to any of the events
referred to in paragraphs (a) to (i) above; and
(j) for any reason (other than as a result of or following an initial
public offering of shares in the Company) China World International
Company Limited ("CWI") shall at any time cease to solely legally and
beneficially hold and own Ordinary Shares and/or preference shares
which in aggregate entitle CWI to exercise less than 45% of the voting
rights attributable to the share capital of the Company from time to
time (such right to exercise voting rights be calculated on the basis
that all securities, including options, convertible or exchangeable
into Ordinary Shares have been as converted or exchanged);
- 7 -
(k) any persons, other than the existing shareholders of CWI as at the
date of issue of the Class B Preference Shares, shall have the ability
to direct the affairs of CWI whether by way of contract, direct or
indirect ownership of shares, or otherwise; or
(l) the Company or any of its Subsidiaries shall sell all or at least 70%
by value of the assets of the Group (as defined below).
For the purposes of this Article 5.12 only, "Subsidiaries" shall include
all subsidiaries of the Company, and all other companies or entities owned
or controlled (by way of ownership of securities, control of the
appointment of half the board of directors, by way of contract or
otherwise) by the Company, the net assets of which exceeded 10% of the net
assets of the Group, or the net income of which exceeded 10% of the net
income of the Group, in each case determined as at the end of the latest
financial year. The term "Group" shall mean the Company and all its
subsidiaries.
6. CONVERSION
6.1 Subject as hereinafter provided and without prejudice to any rights with
respect to any accrued but unpaid dividends on Class B Preference Shares,
each holder of Preference Shares shall be entitled at any time (which for
the avoidance of doubt shall include after the issue by the Company of a
redemption notice under Article 5.1(c) and at any time prior to actual
redemption occurring) and in the manner set out in this Article 6.1 to
convert all or a portion of his Class B Preference Shares into fully paid
Ordinary Shares (the "Conversion Right") at the rate of one Ordinary Share
for every one Preference Share to be converted (subject to adjustment in
accordance with Article 6.10 below (the "Conversion Rate"). The Ordinary
Shares which are issued on conversion shall be credited as fully paid and
rank pari passu and form one class in all respects with the Ordinary Shares
then in issue.
6.2 Each Class B Preference Share shall automatically be converted into
Ordinary Shares at the Conversion Rate at the time in effect for such Class
B Preference Shares immediately upon the Company's issue of ordinary shares
in a firm commitment underwritten Qualified IPO (and "issue" for this
purpose means the day on which the shares offered in that Qualified IPO are
issued to those entitled thereto). A "Qualified IPO" shall have the meaning
given to it in the Shareholders Agreement in relation to the Company dated
on or about the same date as the issue of the Class B Preference Shares.
6.3 The Conversion Right shall be exercisable by a Class B Preference
Shareholder by completing the notice of conversion endorsed on the
certificate relating to the Class B Preference Shares to be converted or a
notice in such other form that may from time to time be prescribed by the
Board in lieu thereof (a "Conversion Notice")
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(which notice shall specify a date being not less than 14 days after the
date of the Conversion Notice as the date for the conversion to be effected
("Conversion Date")) in respect of all or a portion of the Class B
Preference Shares held by such Class B Preference Shareholders and
delivering the same to the Company or to the agent of the Company appointed
for such purpose at any time not less than 14 days prior to a Conversion
Date, together with such other evidence, if any, as the Board may
reasonably require to prove the title of the person exercising such right
and the payment of all taxes and stamp, issue and registration duties (if
any) arising on conversion in any jurisdiction. A Conversion Notice, once
given, may not be withdrawn without the consent in writing of the Company.
Subject to Article 6.4 below, conversion shall take place on the Conversion
Date specified in the Conversion Notice (in the place of delivery).
6.4 Conversion of the Class B Preference Shares as are due to be converted as
aforesaid on any Conversion Date (the "Relevant Shares") may be effected in
such manner as the Board may, subject to the Companies Ordinance and the
consent of the Class B Preference Shareholders exercising the Conversion
Right (which consent shall not be unreasonably withheld), determine and as
they may allow and without prejudice to the generality of the foregoing may
be effected by the redemption of Relevant Shares at par and the application
of the redemption moneys on behalf of the holder of the Class B Preference
Share so redeemed in subscription for Ordinary Shares at such premium (if
any) as shall represent the amount by which the redemption moneys exceed
the nominal amount of the Ordinary Shares to be subscribed.
6.5 In the case of a conversion effected by means of the redemption of Relevant
Shares as provided in Article 6.4 above, the Board may determine to effect
such redemption of the Relevant Shares out of profits of the Company which
would otherwise be available for dividend or out of the proceeds of a fresh
issue of shares or in any other manner for the time being permitted by law,
the Articles and the Shareholders' Agreement. In the case of redemption out
of such profits, the Board may apply the redemption moneys in the name of
the holder of the Relevant Shares in subscribing for the appropriate number
of fully paid Ordinary Shares at such premium (if any) as shall represent
the amount by which the redemption monies exceed the nominal amount of the
Ordinary Shares to be subscribed. In the case of redemption out of the
proceeds of a fresh issue of shares, the Board may arrange for the issue of
the appropriate number of Ordinary Shares at par or at such premium as
shall be necessary to provide redemption monies for the redemption at par
of the Relevant Shares to a person selected by the Board and the
renunciation of the allotment of the Ordinary Shares issued to such
subscriber in favour of the holder of the Relevant Shares against payment
to such subscriber by the Company of the redemption monies in respect of
the Relevant Shares so redeemed.
6.6 Class B Preference Shares in respect of which the right to convert shall
have been duly exercised shall not rank for any fixed dividend in respect
of the period after the relevant Conversion Date but otherwise shall be
entitled to be paid any accrued but
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unpaid dividends prior to the Conversion Date. The Ordinary Shares to
which any holder of Class B Preference Shares shall become entitled in
consequence of exercising his right to convert shall carry the right to
receive all dividends declared on such Ordinary Shares and other
distributions declared made or paid upon the Ordinary Shares in respect of
the financial year of the Company in which such shares are allotted and
shall rank pari passu in all other respects and form one class with the
Ordinary Shares in issue at the relevant Conversion Date and fully paid
save that they will not be entitled to any dividends or other
distributions declared, paid or made either in respect of any financial
period ended prior to such Conversion Date or by reference to a record
date prior to such Conversion Date or to the extent that the Class B
Preference Shares so converted shall already have participated in such
dividend.
6.7 Within 14 days after the relevant Conversion Date, the Company shall
forward to each holder a definitive certificate for the appropriate amount
of fully paid Ordinary Shares and, if appropriate, a cheque in respect of
any fractional entitlement.
6.8 So long as Class B Preference Shares remain capable of being converted
into Ordinary Shares, then if the Company is placed in liquidation the
Company shall forthwith give notice thereof in writing to all Class B
Preference Shareholders.
6.9 If any fractions of Ordinary Shares shall arise on conversion of Class B
Preference Shares a cash payment in US$ will be made to the converting
Class B Preference Shareholder in respect of any such fraction, unless the
payment would amount to less than US$5 in aggregate payable to any single
converting Class B Preference Shareholder in which case such amount will
not be distributed but shall be retained for the benefit of the Company.
6.10 The Conversion Rate shall, except with the prior agreement of the holders
of all then outstanding Class B Preference Shares, be subject to
adjustment in the following circumstances:-
(a) any alteration in the value of the Ordinary Shares as a result of
consolidation or sub-division, in which circumstances the Conversion
Rate shall be adjusted in the manner described in Clause 6.13;
(b) the issue for cash or other form of consideration of any Ordinary
Shares (other than Ordinary Shares issued on exercise of the
conversion rights attaching to any preference shares or warrants
issued by the Company prior to the issue of the Class B Preference
Shares, or the Class B Preference Shares themselves or upon the
exercise of any rights, options or warrants pursuant to any stock
option plans for directors, employees or consultants approved by a
three-fourths majority of the Board) for a consideration less than
the then applicable Conversion Price in which circumstances the
Conversion Rate shall be adjusted in the manner provided in Article
6.11; provided that the
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provisions of this Article 6.10(b) shall not apply unless at the
time of such conversion a default by the Company under Article 5.12
has occurred (in which circumstances the provisions of this Article
6.10(b) shall apply); and
(c) the issue of Ordinary Shares credited as fully paid to the Ordinary
Shareholders by way of capitalization of profits or reserves in
which circumstances the Conversion Price shall be adjusted in the
manner provided in Article 6.13.
For Article 6.10(b), the Conversion Rate shall be adjusted by a multiple
equal to the applicable Subscription Price per share divided by the
Conversion Price determined in Article 6.11. For example, if the
applicable Subscription Price is US$25 and the Conversion Price as
determined in Article 6.11 is US$5, then the multiple shall be 5 and the
adjusted Conversion Rate shall be the rate of five (5) Ordinary Shares for
every one Preference Share. Any share issued by the Company as mentioned
in this Article 6.10 shall be referred to in this Article 6 as "Additional
Shares".
6.11 (a) If the Company shall issue any Additional Shares without
consideration, the Conversion Price shall, in respect of a
conversion following a default by the Company under Article 5.12, be
US$0.01. If the Company shall issue any Additional Shares for a
consideration per share less than applicable Subscription Price,
then the Conversion Price for such Additional Shares shall, in
respect of a conversion following a default by the Company under
Article 5.12, be the price paid per share for such Additional Shares
(before deducting any discounts, commissions or other expenses
allowed, paid or incurred by the Company for any underwriting or
otherwise); provided, however, that if the Company subsequently
shall issue Additional Shares for a consideration per share less
than the Conversion Price then in effect, then the Conversion Price
shall be further reduced to equal the lower consideration per share
in respect of such issue. No adjustment of the Conversion Price
shall have the effect of increasing the Conversion Price above the
Conversion Price in effect immediately prior to such adjustment.
(b) No adjustment of the Conversion Price shall be made in an amount
less than US$0.01 per share, provided that any adjustments that are
not required to be made by reason of this sentence shall be carried
forward and shall be either taken into account in any subsequent
adjustment made within three (3) years from the date of the event
giving rise to the adjustment being carried forward, or shall be
made at the end of three (3) years from the date of the event giving
rise to the adjustment being carried forward.
(c) In the case of the issuance of Additional Shares for a consideration
in whole or in part other than cash, the consideration other than
cash shall be deemed to be the fair value thereof irrespective of
any accounting treatment as
- 11 -
determined by a majority of the Board of Directors and approved by a
majority of the holders of the then outstanding Class B Preference
Shares.
6.12 In the case of the issuance of options to purchase or rights to subscribe
for Ordinary Shares, or securities by their terms convertible into or
exchangeable for Ordinary Shares or options to purchase or rights to
subscribe for such convertible or exchangeable securities (other than
options granted to employees, consultants, directors of the Company
directly or pursuant to a stock option plan or restricted stock plan
approved by the Board of Directors of the Company) (hereinafter
collectively referred to as "Options"), the aggregate maximum number of
Ordinary Shares deliverable upon exercise of the Options shall be deemed
to have been issued at the time the Options were issued and for a
consideration equal to the consideration, if any, received by the Company
upon the issuance of the Options plus the minimum exercise price provided
in the Options. If the consideration is lower than the Conversion Price in
effect at the time of issuance of the Options, then the Conversion Price
shall, in respect of a conversion following a default under Article 5.12,
be adjusted to the lower price forthwith, but no further adjustment shall
be made for the actual issuance of ordinary shares or any payment of such
consideration upon the exercise of the Options.
6.13 In the event the Company effects a stock dividend or bonus share scheme
entitling the holders of Ordinary Shares to receive additional Ordinary
Shares (hereinafter referred to as "Ordinary Shares Equivalents") without
requiring payment of any consideration by such holder for the Ordinary
Shares Equivalents, then the Conversion Rate shall be appropriately
adjusted so that the number of Ordinary Shares issuable on conversion of
each Preference Share shall be increased in proportion to such increase of
the aggregate of Ordinary Shares issued and issuable with respect to such
Ordinary Shares Equivalents. If the number of Ordinary Shares issued at
any time is adjusted by a subdivision or consolidation of the issued
Ordinary Shares, then the Conversion Rate shall be appropriately adjusted
so that the number of Ordinary Shares issuable on conversion of each Class
B Preference Share shall be increased or decreased (as appropriate) in
proportion to such increase or decrease in the outstanding Ordinary
Shares.
7. RECAPITALISATIONS
If at any time there shall be a recapitalisation of the Ordinary Shares
(other than a subdivision, consolidation or merger or sale of assets
transaction permitted elsewhere in the Articles) provision shall be made
so that the holders of the Class B Preference Shares shall thereafter be
entitled to receive upon conversion of the Class B Preference Shares the
number of shares of securities or property of the Company or otherwise to
which a holder of Ordinary Shares deliverable upon conversion would have
been entitled on such recapitalisation. In any such case, appropriate
adjustment shall be made in the application of the provisions relating to
conversion with respect
- 12 -
to the rights of the holders of the Class B Preference Shares after the
recapitalisation so that the provisions relating to conversions (including
adjustment of the Conversion Rate and Conversion Price then in effect and
the number of shares purchasable upon conversion of the Class B Preference
Shares) shall be applicable after that event as nearly equivalent as may
be practicable.
8. NO FRACTIONAL SHARES AND CERTIFICATE AS TO ADJUSTMENTS
8.1 The number of Ordinary Shares to be issued shall be rounded to the nearest
whole share such that no fractional shares shall be issued upon the
conversion of any Class B Preference Shares. Whether or not fractional
shares are issuable upon such conversion shall be determined on the basis
of the total number of Class B Preference Shares the holder is at the time
converting into Ordinary Shares and the number of Ordinary Shares issuable
upon such aggregate conversion.
8.2 Upon the occurrence of each adjustment or readjustment of the Conversion
Price pursuant to these Articles, the Company, at its expense, shall
promptly compute such adjustment or readjustment in accordance with the
terms hereof and prepare and furnish to each holder of Class B Preference
Shares a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is
based. The Company shall, upon the written request at any time of any
holder of Class B Preference Shares, furnish or cause to be furnished to
such holder a like certificate setting forth (a) such adjustment and
readjustment, (b) the Conversion Price for such series of Class B
Preference Shares at the time in effect, and (c) the number of Ordinary
Shares and the amount, if any, of other property that at the time would be
received upon the conversion of a Class B Preference Share.
9. NOTICES OF RECORD DATE
In the event of any taking by the Company of a record of the holders of
any class of securities for the purpose of determining the holders thereof
who are entitled to receive any dividend (other than a cash dividend) or
other distribution, any right to subscribe for, purchase or otherwise
acquire any shares of any class or any other securities or property, or to
receive any other right, the Company shall mail to each holder of Class B
Preference Shares, at least twenty (20) days prior to the date specified
therein, a notice specifying the date on which any such record is to be
taken for the purpose of such dividend, distribution or right, and the
amount and character of such dividend, distribution or right.
10. RESERVATION OF SHARES ISSUABLE UPON CONVERSION
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The Company shall at all times reserve and keep available out of its
authorised but unissued Ordinary Share capital, solely for the purpose of
effecting the conversion of the Class B Preference Shares, such number of
Ordinary Shares as shall from time to time be sufficient to effect the
conversion of all the Class B Preference Shares; and if at any time the
number of authorised but unissued Ordinary Shares shall not be sufficient
to effect the conversion of all the Class B Preference Shares, in addition
to such other remedies as shall be available to the holder of such
preference shares, the Company will take such corporate action as may be
necessary to increase its authorised but unissued Ordinary Share capital
to such number of shares as shall be sufficient for such purposes,
including, without limitation, engaging in best efforts to obtain the
requisite shareholder approval of any necessary amendment to the
Memorandum and Articles of Association.
11. TRANSFER
The Class B Preference Shares shall be freely transferable subject to the
restrictions (if any) contained in the Shareholders' Agreement in respect
of the Company on 18th January, 2002.
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APPENDIX C
Dated 18th January, 2002
1. BRIGHTPOINT INTERNATIONAL (ASIA PACIFIC)
PTE. LIMITED
2. CHINATRON GROUP HOLDINGS LIMITED
3. BRIGHTPOINT CHINA LIMITED
---------------------------
SHAREHOLDERS' AGREEMENT
relating to
BRIGHTPOINT CHINA LIMITED
---------------------------
XXXXXXXX XXXXXX
00xx Xxxxx
Xxxxxxxxx Xxxxx
00-00 Xxxxxx Xxxx
Xxxx Xxxx
CONTENTS
CLAUSE PAGE
------ ----
1. INTERPRETATION 1
2. BUSINESS 3
3. DIRECTORS 3
4. MANAGEMENT 4
5. ADMINISTRATION 5
6. SHAREHOLDERS' MEETINGS 6
7. SHAREHOLDER FUNDING AND ISSUING NEW SHARES 6
8. TRANSFER OF SHARES 7
9. CO-SALE RIGHTS 10
10. TERMINATION 11
11. CONFIDENTIALITY 13
12. GENERAL 13
13. NOTICES 15
14. GOVERNING LAW 16
SCHEDULE 1 - DEED OF ADHERENCE 17
SCHEDULE 2 - UNANIMOUS CONSENT MATTERS 19
THIS AGREEMENT is dated 18th January, 2002.
PARTIES:
1. BRIGHTPOINT INTERNATIONAL (ASIA PACIFIC) PTE. LTD, a company incorporated
in Singapore and having its registered office at Xxxxxxxxx & Xxxxxxxxxx, 00
Xxxxxxx Xxxxx, #00-00, Xxxxxxxx Xxxxxx, Xxxxxxxxx 000000 ("SHAREHOLDER A").
2. CHINATRON GROUP HOLDINGS LIMITED, a company incorporated in Hong Kong and
having its registered office at Xxxxx 000, Xxxx Xxxxx'x Xxxx, Xxxxxxx, Xxxx
Xxxx ("SHAREHOLDER B").
3. BRIGHTPOINT CHINA LIMITED, a company incorporated in Hong Kong and having
its registered office at 14/F, Lu Plaza, 2, Wing Yip Street, Xxxx Xxxx,
Kowloon, Hong Kong (the "COMPANY").
INTRODUCTION:
1. The Company is incorporated in Hong Kong and has an authorised share
capital of $HK10,000 divided into 10,000 Shares of which 10,000 Shares
have been issued. As at the date of this Agreement, 5,000 Shares are held
by Shareholder A and 5,000 Shares are held by Shareholder B.
2. This Agreement sets out the terms and conditions on and subject to which
the Company is to be operated as a joint venture company and the manner in
which the affairs of the Company are to be regulated.
IT IS HEREBY AGREED:
1. INTERPRETATION
1.1 In this Agreement, including the Introduction and the Schedules,
unless the context otherwise requires, the following expressions shall have
the following meanings:
"Articles" the constitutional documents of the Company from
time to time;
"Associate" (a) in relation to an individual means his spouse and
children or step-children under the age of 18
years ("family") and any company in which the
individual and/or his family directly or
indirectly own, or control the exercise of, 50% or
more of the voting power at general meetings and
any Associate of such company; and
(b) in relation to a company means all its
subsidiaries, all its holding companies and all
subsidiaries of any such holding companies;
- 1 -
"Auditors" the auditors of the Company from time to time;
"Board" the board of Directors;
"Business" the meaning given to it in Clause 2.1;
"business day" a day (other than a Saturday or Sunday) on which
banks in Hong Kong are open for business;
"Business Plan" the annual business plan to be approved and adopted
by the Board each year;
"Director" a director of the Company from time to time;
"Group" the Company and its subsidiaries from time to time;
"Group Company" each of the companies comprised in the Group;
"Market Value" the fair market value of the relevant Shares and
Shareholder Loan (if any) as determined by the Auditor;
"Related Company" in relation to a company means any subsidiary, holding
company or any subsidiary of such holding company;
"Sale and Purchase the sale and purchase agreement between the
Agreement" Shareholders in respect of 50% of the Shares dated
2nd October, 2001;
"Shares" ordinary shares of HK$1.00 each in the capital of
the Company;
"Shareholder(s)" Shareholder A and Shareholder B, or their successors or
permitted assigns from time to time; and
"Shareholder Loans" any loan made by a Shareholder (or another company in
that Shareholder's group) to the Company or any other
Group Company.
1.2 References to Clauses and Schedules are to Clauses of and Schedules to this
Agreement.
1.3 Words importing the singular include the plural and vice versa, words
importing gender or the neuter include both genders and the neuter and
references to persons include bodies corporate or unincorporate.
1.4 References in this Agreement to statutory provisions shall be
construed as references to those provisions as respectively amended or
re-enacted (whether before or after the date hereof) from time to time and
shall include any provision of which they are re-enactments (whether with
or without modification) and any subordinate legislation made under such
provisions.
- 2 -
1.5 References in this Agreement to "subsidiary" and "holding company" shall
bear the meanings ascribed thereto in the Companies Ordinance.
2. BUSINESS
2.1 The Shareholders agree that the Group shall, on the terms and
conditions set out in this Agreement, carry on the primary business of
value added selling and distribution of wireless devices and related value
added logistics services..
2.2 Each of the Shareholders shall exercise all voting rights and other powers
of control as may be available to it in relation to the Company, including
procuring that the Directors appointed by them pursuant to Clause 3
exercise their voting rights, so as to procure compliance with the terms of
this Agreement by itself and the Company. Each of the Shareholders shall
procure that it shall use all reasonable endeavours to assist the Company
in developing and promoting the Business in accordance with the Business
Plan.
3. DIRECTORS
3.1 Unless and until otherwise agreed in writing by all the Shareholders, the
Board shall consist of 5 Directors who shall be appointed and removed as
provided in this Clause 3. Subject to Clause 3.4, the Chairman of the Board
shall be an independent Director who shall be appointed by mutual agreement
between Shareholder A and Shareholder B.
3.2 Subject to Clause 3.4, Shareholder A shall have the right by notice in
writing to require the appointment of 2 Directors and by like notice to
require the removal of any or all such Directors and the appointment of
other person(s) to act in place of such Directors.
3.3 Subject to Clause 3.4, Shareholder B shall have the right by notice in
writing to require the appointment of 2 Directors and by like notice to
require the removal of any or all such Directors and the appointment of
other person(s) to act in place of such Directors.
3.4 Notice of any appointment or removal required by any of the Shareholders
under Clause 3.2 or 3.3 shall be given to the other Shareholders and to the
Company at its registered office and within seven days after receipt of
such notice the parties hereto shall join in procuring (so far as lies
within their respective powers) that such action is taken as is necessary
under the Articles to effect the appointment or removal concerned. The
Shareholders agree that if either Shareholder shall at anytime hold more
than 50% of the Shares, that Shareholder shall be entitled to appoint 3
Directors, one of whom shall be the Chairman and requirement that an
independent Director be appointed as Chairman as referred to in Clause 3.1
shall be deemed to be deleted. If at any time any Shareholder shall hold
80% or more of the issued Shares, it shall be entitled to appoint 4
Directors and the other Shareholder shall be entitled to appoint 1
Director.
3.5 Subject to all matters requiring approval under Clause 4.3, each of
the Shareholders shall procure that all decisions at meetings of the Board
shall be put to the vote and shall require a simple majority vote of all
directors present. The chairman of the Board shall not be entitled to a
casting vote in the event of a deadlock. Resolutions of the Board shall be
deemed to be validly passed if passed by a written resolution signed by all
the Directors or their respective alternates.
- 3 -
3.6 Each of the parties acknowledges that each Director may by giving written
notification to the Company nominate any other person (including another
Director) to be his alternate Director for such period of absence from Hong
Kong or such period of unavailability for such meeting as may be specified
therein, and may in like manner at any time determine such appointment.
3.7 Meetings of the Board shall be held at such times as the Board shall
determine, or at such time as any Shareholder(s) holding at least 10% of
the issued Shares shall request, provided that, unless otherwise agreed
between the Shareholders, they shall procure (so far as it lies within
their respective powers) that meetings of the Board shall be held in Hong
Kong at least [once every calendar quarter]. Seven days notice of all
meetings shall be given and that a complete agenda shall be circulated to
each member of the Board with such notice by the person giving the notice.
3.8 No business shall be transacted at any meeting of the Board or a duly
appointed committee of the Board unless there shall be present throughout
the meeting at least one Director appointed by Shareholder A and one
Director appointed by Shareholder B. If such Directors are not present the
meeting shall be adjourned for at least 48 hours, all Directors will be
given notice of the adjourned meeting and for such adjourned meeting the
quorum will be any Director(s) present. No business may be transacted at an
adjourned meeting other than that proposed in the agenda for the initial
meeting. A Director shall be deemed to be present at a meeting of Directors
if he participates by telephone or other electronic means and all Directors
participating in the meeting are able to speak to and hear each other.
3.9 If the Board so authorises or requests, the auditors, consultants, advisers
and management employees shall be permitted to attend and speak at meetings
of the Board, but not to vote nor be counted towards a quorum at any
meeting of the Board.
3.10 Minutes of all meetings of the Board shall be sent to each Director and
Shareholder as soon as practicable after the holding of the relevant
meeting.
3.11 The Company hereby agrees, to the fullest extent permitted by law, to
indemnify all directors of each Group Company for any liability they may
incur in connection with their actions as a director of the relevant Group
Company, save where such liability arises as a result of any negligent act
of such director.
3.12 If requested by any Shareholder, the Shareholders shall procure that the
foregoing provisions of this Clause 3 (including, without limitation, the
right of the Shareholders to appoint directors) will apply to each Group
Company from time to time, to the fullest extent practicable, as if
references to Board and Directors were references to the board and
directors of the relevant Group Company.
4. MANAGEMENT
4.1 Subject to Clause 4.3, the Board shall be responsible for determining the
overall policy of the Company.
4.2 Subject to the overall authority of the Board as provided in Clause 4.1 and
the provisions of Clause 4.3, the day-to-day management and control of the
affairs of the Company shall be vested in the managing director of the
Company from time to time and who shall be nominated by Shareholder B and
shall be appointed by the Board with such powers and authorities as the
Board
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may determine, provided that in any event such managing director shall not
have authority to incur any liability in respect of the matters referred to
in Clause 4.3 unless such matters have been approved in accordance with
Clause 4.3.
4.3 The Shareholders shall procure that none of the matters set out in Schedule
2 in relation to any Group Company shall take place, that no obligation or
liability in connection therewith is entered into or accepted by or on
behalf of any Group Company and that no other step in relation thereto is
taken, except with the prior written approval of both the Shareholders.
Each of the Shareholders undertakes that it shall not withhold its consent
to any of the matters set out in Schedule 2 except on the basis of a bona
fide belief that such proposal is not in the best interests of the Group.
5. ADMINISTRATION
5.1 The accounts of the Company shall be kept in accordance with accounting
principles generally accepted in Hong Kong and shall be audited annually by
an internationally recognised accountancy firm. The audited accounts and
report of the Auditors shall be made available to the Shareholders within 7
days after the issue thereof by the Auditors.
5.2 The financial year of the Company shall end on 31st December in each year.
5.3 The Company's bank accounts shall be with such bank or banks as may from
time to time be approved by the Board.
5.4 The company secretary, chief financial officer and the Auditors shall be
appointed by the Board. The existing chief financial officer of the Asia
Pacific region shall remain in that position for at least 3 months but not
more than 6 months following the date of this Agreement. Thereafter the
chief financial officer shall be nominated by Shareholder B, and if
approved by the Board, shall be appointed as chief financial officer of the
Company.
5.5 Monthly management accounts shall be prepared and made available to the
Shareholders within 20 days of the end of each month.
5.6 The Company shall from time to time on request provide each of the
Shareholders with such information concerning any Group Company as that
Shareholder may reasonably require. The Company shall send a copy of each
such request and its response thereto to the other Shareholders.
5.7 The Shareholders shall, unless otherwise agreed, procure that in each
financial year during the continuance of this Agreement the Company shall
declare and pay 50% of the profits of the Company available for
distribution in respect of the previous financial year by way of dividend
to the holders of the Shares within two months of the issue of the audited
accounts of the Company.
5.8 If the Board shall approve the reorganisation of the Company by the
creation of a new holding company with substantially the same corporate
structure as the Company at that time, each Shareholder agrees to execute
such documents as are necessary to give effect to such reorganisation. If
any Shareholder shall fail to execute irrevocable power to execute
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such documents and to receive on behalf of the Shareholder the new shares
in the new holding company.
6. SHAREHOLDERS' MEETINGS
6.1 No general meeting of the Company shall be held without a quorum being
present at the time the meeting proceeds to business and throughout the
meeting. The quorum for a general meeting of the Company shall be a person
or persons holding at least 51% of the Shares (including at least one
representative of each Shareholder), provided that if such Shareholders are
not present the meeting shall be adjourned for at least 48 hours, all
Shareholders will be given notice of the adjourned meeting and for such
adjourned meeting the quorum will be any Shareholder(s) present. No
business may be transacted at an adjourned meeting other than that proposed
in the agenda for the initial meeting.
6.2 In the case of an equality of votes at a general meeting of the Company,
whether the vote is taken on a show of hands or on a poll, the Chairman of
the meeting at which such vote is taken shall not have a second or casting
vote. A poll may be requested by any Shareholder.
6.3 Unless agreed by the Shareholders, all general meetings of the Company
shall take place in Hong Kong.
7. SHAREHOLDER FUNDING AND ISSUING NEW SHARES
7.1 Save as provided in this Clause 7, no Shareholder shall be obliged to
provide any additional finance or financial assistance to any Group Company
or to subscribe for any Shares or other securities in the Company or to
make any loans to or transfer any assets to any Group Company (other than
those agreed to be provided under this Agreement), nor shall any
Shareholder have any obligation to guarantee or provide security for any
obligations of any Group Company or to indemnify any third party in respect
of such obligations or liabilities.
7.2 Notwithstanding Clause 7.1, the Shareholders' acknowledge that they will
procure for the benefit of the Company the Brightpoint Credit Facility and
the Chinatron Credit Facility as provided for in the Sale and Purchase
Agreement.
7.3 If the Company requires additional funding over and above that provided for
in Clause 7.2 and such funding is approved by the Board, the Company shall
use all reasonable endeavours to raise such funds by way of bank borrowings
(if necessary secured against the assets of the Group). If the Company is
unable to obtain such bank borrowings, each Shareholder shall advance its
pro rata share (as between themselves based on their shareholding in the
Company) of such additional funding ("Pro Rata Share") through an interest
free (or if approved by the Board interest bearing) Shareholder Loan to the
Company.
7.4 If one Shareholder fails to contribute all its Pro Rata Share pursuant to
Clause 7.3 (the "Defaulting Share"), the non-defaulting Shareholder may, at
its sole discretion and without limitation to its other rights, either
require the Company to forthwith repay its Pro Rata Share, or contribute
part or all of the Defaulting Share as a Shareholder Loan, with interest on
such Defaulting Share at 3% above the HK$ prime lending rate as quoted by
the relevant Shareholder's principal bankers. Payment of such Defaulting
Share shall be given priority over payment of any
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other amounts to the Shareholders and in addition the non-defaulting
shareholder may at anytime apply such Defaulting Share in subscribing for
additional Shares in the Company at 75% of Market Value.
7.5 Save as agreed between the Shareholders, if the Company intends to issue or
grant any new Shares, options or other securities of any nature whatsoever
(together "Securities"), and such issue or grant is approved pursuant to
Clause 4.3, such Securities shall first be offered to the existing
Shareholders of the Company on a pro-rata basis, provided that if any
Shareholder does not take up its pro-rata share the other Shareholders
shall be entitled to subscribe for such Securities on a pro-rata basis. Any
Securities not subscribed for by the Shareholders may be offered by the
Board to any third party provided that such third party shall, as a
condition of being registered as the holder of such Securities, enter into
a new shareholders' agreement with the Company and the Shareholders on
substantially the same terms as this Agreement, in which regard the parties
agree that they will not unreasonably refuse to sign such new shareholders'
agreement.
7.6 Save as agreed between the Shareholders, no shares, options or other
securities shall be issued by any subsidiary of the Company other than to
the then existing shareholders of such subsidiary.
8. TRANSFER OF SHARES
8.1 No Shareholder may, without the consent of the other Shareholders, create
or permit to subsist any mortgage, charge, pledge, lien, encumbrance or
other security interest whatsoever on or over or in respect of all or any
of the Shares held by it, and shall not otherwise dispose of any of its
Shares or otherwise purport to deal with the beneficial or economic
interest therein (including but not limited to its voting rights) or any
right relating thereto except by a transfer in accordance with this Clause
8 or the terms of this Agreement. Any transfer or other disposal of Shares
that is made other than in accordance with this Clause 8 or the terms of
this Agreement shall be void and deemed to be of no effect and the parties
shall procure that such transfer shall not be registered in the statutory
books and records of the Company.
8.2 Save as provided in Clause 8.12 and Clause 8.13, no sale or transfer or
other disposition of any Shares shall be made by any Shareholder unless the
transferring shareholder (the "transferor") complies with the provisions of
this Clause 8 and:
(a) if the transferee is acquiring all of the Shares held by the
transferor, the transferee enters into a Deed of Adherence
substantially in the form set out in Schedule 1 agreeing to abide by
the terms of this Agreement as if the transferor were named herein as
the transferee;
(b) if the transferee is not acquiring all of the Shares held by the
transferor, the transferee and the other Shareholders shall enter into
a new shareholders' agreement in respect of the Company on
substantially the same terms as this Agreement, in which regard the
parties agree that they will not unreasonably refuse to sign such new
shareholders' agreement; and
(c) the transferee agrees to and takes an assignment of any outstanding
Shareholder Loans made by the transferor (or any related company of
that transferor), in proportion to the
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Shares being transferred,
so that the transferee shall have all of the rights and be subject to all
of the obligations in respect of those Shares as the transferor hereunder.
Subject to compliance with this Clause, if any Shareholder disposes of all
of its Shares it shall cease to have any rights or obligations under this
Agreement except in respect of any antecedent breaches or any obligations
which are expressed to continue after it ceases to hold any Shares.
8.3 If any Shareholder (the "Transferor") wishes to transfer any of its Shares
or to dispose of any interest therein, it shall serve on the other
Shareholders and the Company a notice (the "Transfer Notice") in writing of
its wish to do so. The Transfer Notice shall:
(a) state the number of Shares (the "Sale Shares"), the face value of
Shareholder Loan and accrued interest if any (the "Sale Shareholder
Loan") and the Sale Price (as defined in Clause 8.11) proposed to be
transferred;
(b) give details of the person (the "Third Party") to whom the Transferor
wishes to transfer the Sale Shares and Sale Shareholder Loan (or part
thereof) in the event that the other parties do not purchase all the
Sale Shares in accordance with the provisions of this Clause 8,
together with the principle terms of such proposed transfer and any
conditions or regulatory approvals required, and shall confirm and
represent that the Third Party has made a bona fide arms length offer
for the relevant Sale Shares and Sale Shareholder Loan (if
applicable); and
(c) be irrevocable, once given.
8.4 Within 10 Business Days after receipt by the other Shareholders of a
Transfer Notice (or if the Sale Price has not been determined within 10
Business Days after the Sale Price is determined in accordance with Clause
8.11), each of the other Shareholders shall give notice in writing as to
whether it is willing to purchase any of the Sale Shares (and corresponding
portion of the Sale Shareholder Loan) at the Sale Price and if so the
maximum number of Sale Shares that it is prepared to purchase.
8.5 If any of the other Shareholders (a "Transferee") applies for all or any of
the Sale Shares and Sale Shareholder Loan then:
(a) if the aggregate number of Sale Shares applied for is equal to
the number of Sale Shares, the Transferor shall allocate the Sale
Shares and corresponding portion of the Sale Shareholder Loan in
accordance with the applications;
(b) if the aggregate number of Sale Shares applied for is less than the
number of the Sale Shares, the provisions of Clause 8.8 shall apply;
or
(c) if the number of Sale Shares applied for is more than the number of
Sale Shares, the Transferor shall allocate the Sale Shares and
corresponding portion of the Sale Shareholder Loan as between the
Transferees pro rata (or as nearly as is practicable) to their
holdings of Shares but so that no Transferee shall be allocated more
Sale Shares than applied for.
8.6 Subject to Clause 8.5, on the expiry of the 10 Business Day period referred
to in Clause 8.4, the
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Transferor shall forthwith give notice (the "Allocation Notice") of the
allocation of Sale Shares and Sale Shareholder Loan in accordance with
Clause 8.5 to each Transferee and shall specify in the Allocation Notice
the number of Sale Shares and value of Sale Shareholder Loan allocated to
each such Transferee and the place and time (being not later than 5
Business Days after the date of the Allocation Notice) at which the
Transferor and Transferee shall be bound to complete the sale of such Sale
Shares and Sale Shareholder Loan. The Transferor shall be bound, on receipt
of payment of the Sale Price, to transfer the relevant Sale Shares and Sale
Shareholder Loan comprised in the Allocation Notice to the Transferee named
therein at the time and place therein specified.
8.7 If the Transferor defaults in giving the Allocation Notice or transferring
the Sale Shares and Sale Shareholder Loan:
(a) the Chairman for the time being of the Company, or failing him one of
the Directors or some other person duly nominated by a resolution of
the Board shall be deemed to be the duly authorised agent of the
Transferor with full irrevocable power to execute, complete and
deliver in the name of and on behalf of the Transferor an instrument
or instruments of transfer and any associated sold contract notes of
the relevant Sale Shares and an assignment of the relevant Sale
Shareholder Loan to the Transferee;
(b) the agent may receive and give a good discharge for the purchase money
on behalf of the Transferor and (subject to the transfer being duly
stamped) enter the name of the Transferee in the register of members
as the holder by transfer of the relevant Sale Shares; and
(c) the agent shall forthwith pay the purchase money into a separate bank
account in the Company's name, and when the Transferor shall deliver
up its certificate or certificates for the relevant Sale Shares to the
Company, the Transferor shall thereupon be paid the purchase money,
without interest and less any sums owed to the Company by the
Transferor.
8.8 If, at the end of the 10 Business Day period referred to in Clause 8.4, the
other Shareholders shall not have agreed to purchase all of the Sale Shares
and Sale Shareholder Loan, the Transferor shall be at liberty to transfer
all (but not part only) of the Sale Shares and Sale Shareholder Loan] at
any time within 60 days of the expiry of such period to the person
specified in the Transfer Notice at a price not less than the Sale Price
and otherwise on terms not more favourable than those offered under this
Clause 8.
8.9 If there is a change of control in respect of any Shareholder without the
consent of the other Shareholder, such Shareholder which is the subject of
the change of control shall be deemed to have given a Transfer Notice
pursuant to Clause 8.3 in respect of all the Shares held by such
Shareholder and the provisions of this Clause 8 shall thereupon apply in
respect of all the Shares so held, determined and certified by the
Auditors. For the purposes of making such determination and certification,
the Auditors shall be treated as experts and not as arbitrators, the
Auditors shall consider such factors as they consider appropriate, and
their determination and certification shall be final and binding. The costs
of the Auditors incurred in the determination of the Sale Price shall be
borne by the Transferor. A "change of control" in respect of Shareholder A
shall mean it ceasing to be a subsidiary of Brightpoint Inc.. A "change of
control" of Shareholder B shall, at any time prior to an initial public
offering of shares of Shareholder B in a Qualified IPO, mean either (i) for
any reason China World International
- 9 -
Company Limited ("CWI") shall at any time cease to solely legally and
beneficially hold and own ordinary shares and/or preference shares which in
aggregate entitle CWI to exercise less than 45% of the voting rights
attributable to the share capital of Shareholder B from time to time (such
right to exercise voting rights be calculated on the basis that all
securities, including options, convertible or exchangeable into ordinary
shares have been as converted or exchanged) or (ii) any persons, other than
the existing shareholders of CWI as at the date of issue of this Agreement,
shall have the ability to direct the affairs of CWI whether by way of
contract, direct or indirect ownership of shares, or otherwise, provided
that this provision shall cease to bind Shareholder B upon an initial
public offering of shares of Shareholder B in a Qualified IPO.
8.10 Each certificate representing any Share(s) shall bear the following
statement.
"None of the Shares represented by this certificate may be sold,
transferred, charged, encumbered or otherwise disposed of except in
accordance with the restrictions on sales, transfers or other disposals set
out in the Shareholders' Agreement dated between
and the Company, and the constitutional documents of the
Company."
8.11 The Sale Price shall be:
(a) the price specified by the Transferor (which price shall be inclusive
of both the Sale Shares and the Sale Shareholder Loan; or
(b) in the case of a deemed transfer on a change of control pursuant to
Clause 8.9 shall be 75% of the Market Value; and
(c) in the case of a deemed transfer on the giving of a notice of
termination pursuant to Clause 11 shall be the price determined in
accordance with Clause 11.3.
8.12 Notwithstanding anything to the contrary contained in this Agreement or in
the Articles, any Shareholder shall have the right to transfer its entire
holding of Shares and/or Shareholder Loan to its Related Company (or in the
case of an individual Shareholder to any family trust established by or for
the benefit of that Shareholder) without being required to comply with the
restrictions on transfer of Shares and/or Shareholder Loan as set out in
this Clause 8 provided that before such transfer takes place, the relevant
transferee complies with Clause 8.2(a) and if such transferee ceases to be
its Related Company (or a family trust established by or for the benefit of
the relevant Shareholder) the entire holding of Shares and Shareholder Loan
shall be transferred back to the previous Shareholder and such previous
Shareholder shall at all times remain bound by this Agreement and shall
procure that the transferee performs its obligations under this Agreement.
If the Shares and Shareholder Loan are not transferred back to the previous
Shareholder, a change of control pursuant to Clause 8.9 shall be deemed to
have arisen in respect of that Shareholder.
8.13 Notwithstanding the foregoing provisions of this Clause 8, no Shareholder
may transfer or dispose of any interest in its Shares or Shareholder Loan
prior to the first anniversary of this Agreement except to the other
Shareholder.
9. CO-SALE RIGHTS
If any Shareholder (in this Clause, the "Offeree") is proposing to sell to
a third party (the
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"Offeror") (other than as permitted under Clause 8.12) some or all of the
Shares and/or the corresponding Shareholder Loan, if any, held by it, the
Offeree shall:
(a) forthwith inform all the other Shareholders and the Company of the
identity of the Offeror and details of such offer;
(b) procure that the pre-emptive rights provisions of Clause 8 are
complied with;
(c) procure that either:
(i) an offer is extended by the Offeror to the other Shareholders
for the relevant percentage (as defined below) of the Shares and
Shareholder Loan held by the other Shareholders, at the same
price and on no less favourable terms and with the same
completion date as those offered to the Offeree, the "relevant
percentage" being the proportion which the Shares or Shareholder
Loan subject to the offer to the Offeree bears to the total
number of Shares or the total amount of Shareholder Loans, as
the case may be, held by the Offeree; or
(ii) the offer to the Offeree is withdrawn and an offer is extended
by the Offeror to all the Shareholders on a pro rata basis for
the relevant number of Shares (and corresponding Shareholder
Loan (if any)), at the same price and on no less favourable
terms and with the same completion date as those originally
offered to the Offeree so that each Shareholder will have the
ability to participate in the offer on a basis pro rata to their
shareholding, provided that if any Shareholder does not accept
such offer the accepting Shareholders may elect to accept such
offer and sell their Shares on a pro rata basis as between
themselves; or
(iii) the Offeree offers to acquire such number of Shares and value of
Shareholder Loan referred to in paragraph (i) above from the
other Shareholders, at the same price per Share (and otherwise
upon the same terms) as offered by the Offeror;
provided that nothing in this Clause 9 shall oblige any Shareholder to
accept such offer. If any Shareholder elects to accept any such offer, it
must agree to give substantially the same representations, warranties and
indemnities as the Offeree gives, provided that any such accepting
Shareholder shall not be obliged to pay any amount with respect to any
liabilities arising from such representations, warranties and indemnities
in excess of the amount of the consideration received by the accepting
Shareholder.
10. TERMINATION
10.1 Each Shareholder shall be entitled to serve a notice of termination on a
Shareholder ("Defaulting Shareholder") if an order is made or an effective
resolution is passed or analogous proceedings are taken for the winding up
of the Defaulting Shareholder, or all or substantially all of the assets of
the Defaulting Shareholder are expropriated or otherwise placed under the
direct control of any government, or the Defaulting Shareholder is unable
to pay its debts (within the meaning of Section 178 of the Companies
Ordinance) or makes a general assignment for the benefit of its creditors
or has a receiver or manager appointed over its Shares or all or a
substantial part of its undertaking or assets (other than for the purposes
of amalgamation or
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reorganisation not involving or arising out of insolvency) or anything
similar or analogous to the foregoing occurs in respect of the
Defaulting Shareholder.
10.2 Any notice of termination under Clause 10.1 may be served at anytime
following the occurrence of the event specified in Clause 10.1, provided
that if such event is capable of remedy, any such notice may not be given
after such event has been duly remedied.
10.3 If a notice of termination is served under Clause 10.1 by a Shareholder
(the "Non-Defaulting Shareholder"):
(a) the Defaulting Shareholder shall be deemed to have served a Transfer
Notice in respect of all of its Shares (and associated Shareholder
Loan, if any, and which for the avoidance of doubt will exclude any
Shares or Shareholder Loan to be acquired by it pursuant to Clause
10.3(b)) pursuant to Clause 8 (with the Sale Price being an amount
equal to 75% of the Market Value as at the date on which notice of
termination is served); or
(b) notwithstanding Clause 10.3(a), if the Non-Defaulting Shareholder so
elects, it may in its notice of termination offer all of its Shares
(and associated Shareholder Loan if any) pursuant to Clause 8 with the
Sale Price being an amount equal to 125% of the Market Value as at the
date on which notice of termination is served, provided that;
(i) if and to the extent that any of the Shares and Shareholder Loan
are not acquired by any other Non-Defaulting Shareholders
pursuant to Clause 8, the Defaulting Shareholder shall be
required to purchase all those remaining Shares and Shareholder
Loan of the Non-Defaulting Shareholder at the specified price;
and
(ii) if more than one Non-Defaulting Shareholder shall have given
notice and made an election pursuant to Clause 10.3(b) and the
Defaulting Shareholder has insufficient financial means to
purchase such Shares and Shareholder Loan as it is obliged to
purchase, then without prejudice to its obligations to purchase
such relevant Shares and Shareholder Loan, the Defaulting
Shareholder shall purchase the relevant Shares and Shareholder
Loan on a pro-rata basis.
10.4 For the avoidance of doubt, Clause 8 shall not apply to a transfer of
Shares and Shareholder Loan pursuant to Clause 10.3 and nothing in this
Agreement shall prevent any Non-Defaulting Shareholder from giving a notice
of termination pursuant to Clause 10.1 by reason only of a notice of
termination having already then been given by another Non-Defaulting
Shareholder.
10.5 The transfer of the Shares and Shareholder Loan (pursuant to Clause 10.3)
shall be completed within 14 days of the later of the date of the notice of
termination or the date of the determination of the consideration, at which
time payment will be made in cleared funds and the relevant party will
deliver an instrument of transfer and share certificate for the relevant
Shares together with an assignment of the relevant Shareholders' Loan (if
any) to the transferee.
10.6 If following the transfers of Shares and Shareholder Loan pursuant to
Clauses 10.3 and 10.5, the Defaulting Shareholder remains a Shareholder, it
shall have no further rights under this Agreement but shall remain obliged,
for so long as it remains a Shareholder, to comply with its obligations
under this Agreement (including, without limitation, its obligations under
Clauses 8 to 11.
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10.7 This Agreement shall continue in full force and effect until the Company
is wound up or otherwise ceases to exist as a separate entity or the
Agreement is terminated pursuant to Clause 10.1.
10.8 If an order is made or an effective resolution is passed or analogous
proceedings are taken for the winding up of the Company or all or
substantially all of the assets of the Company are expropriated or
otherwise placed under the direct control of any government or the
Company is unable to pay its debts (within the meaning of Section 178 of
the Companies Ordinance) or makes a general assignment for the benefit of
its creditors or has a receiver or manager appointed over all or a
substantial part of its undertaking or assets, any Shareholder shall be
entitled forthwith to terminate this Agreement by delivery of a notice of
termination to the other parties.
10.9 Termination of this Agreement pursuant to this Clause 10 shall not
release any of the parties hereto from any other liability under any
obligation which at the time thereof has already fallen due for
performance nor affect in any way the survival of any of the rights,
duties and obligations of the parties hereunder. Nothing in the
immediately preceding sentence of this Clause shall affect or be
construed or operate as a waiver of the rights of any Shareholder
aggrieved by any breach of this Agreement to be compensated for any
injury or damage resulting therefrom which is incurred either before or
after such termination.
11. CONFIDENTIALITY
11.1 No announcement (other than public disclosures required by law) on any
matter concerning or connected with this Agreement, the joint venture
contemplated by this Agreement or any matter ancillary thereto shall be
made without the prior written approval of all Shareholders. So far as
reasonably practicable, the Shareholders shall consult as to the content,
manner of making, and timing of any such announcement (whether one made
with the approval of Shareholders or one required by law) and each
Shareholder shall comply with such requests in respect thereof as the
other Shareholder shall reasonably make.
11.2 Each of the parties agrees that it shall not either during the
continuance of this Agreement or at any time thereafter disclose or
divulge to any person whatsoever or use or exploit for its or his own
purpose or benefit or for the purpose or benefit of any other person,
firm or corporation any information relating to any other party or to any
of the respective clients or business contacts of any such party which
may have come to its knowledge (except to the extent such information is
in the public domain).
12. GENERAL
12.1 Each of the parties warrants that this Agreement is a legal, valid and
binding agreement on it, enforceable in accordance with its terms, and
each party undertakes to do or procure to be done all such things as may
be within its powers, including (without prejudice to the foregoing) the
passing of resolutions (whether by the Board or in general meeting of the
Company), to ensure that all the provisions of this Agreement are
observed and performed.
12.2 The failure of any party hereto at any time to require performance or
observance by any other party of any provision of this Agreement shall in
no way affect the right of such first party to require performance of
that provision and any waiver by any party of any breach of any
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provision of this Agreement shall not be construed as a waiver of any
continuing or succeeding breach of such provision, a waiver of the
provision itself or a waiver of any right under this Agreement.
12.3 Should any provision of this Agreement be declared null and void by any
competent government agency or court this shall not affect the other
provisions of this Agreement which are capable of severance and which
shall continue unaffected.
12.4 Shareholders shall be entitled to payment for or reimbursement of any
costs, expenditure or other disbursements or for any management time or
efforts incurred in connection with the Group, the Business, or in the
entering into of this Agreement to the extent provided for in the Annual
Business Plan or as expressly agreed by the Shareholders.
12.5 All the incorporation and ongoing legal, accounting and administrative
costs of the Company and the Business shall be borne by the Company.
12.6 The parties shall bear their own legal costs in relation to the
negotiation and finalisation of this Agreement.
12.7 Nothing herein shall be taken to constitute a partnership or agency
relationship between any of the parties hereto and none of the parties
hereto shall have any authority to bind any of the other parties in any
way.
12.8 This Agreement is personal to the parties hereto and the benefits and
rights of the parties hereunder are not capable of assignment in whole or
in part by any party, except with the written consent of the other
parties or on the transfer of Shares in accordance with the provisions
hereof. This Agreement shall be binding on the successors and permitted
assigns of the parties.
12.9 No variation of this Agreement shall be effective unless made in writing
and signed by or on behalf of all of the parties hereto.
12.10 This Agreement embodies all the terms and conditions agreed upon between
the parties hereto as to the subject matter of this Agreement and
supersedes and cancels in all respects all previous letters of intent,
correspondence, understandings, agreements, and undertakings, (if any),
between the parties hereto with respect to the subject matter hereof,
whether such be written or oral.
12.11 Should any of the terms and conditions herein contained conflict with
those of the Articles, the provisions of this Agreement shall prevail and
the provisions herein shall apply equally to each member of the Group.
Each of the parties hereto undertakes with each of the others to procure
that the constitutional documents of each member of the Group are amended
when and to the extent necessary to enable effect to be given to all the
provisions of this Agreement.
12.12 The parties acknowledge and agree that in the event of a default by
either party in the performance of their respective obligations under
this Agreement, the non-defaulting party shall have the right to specific
performance of the defaulting party's obligations. Such remedy shall be
in addition to any other remedies provided under this Agreement or
otherwise at law.
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12.13 Each of the Shareholders hereby irrevocably appoints the Company to act
as its agent in connection with any Deed of Adherence to be entered into
by the Company and any new Shareholder.
12.14 If any transfer of Shares and/or Shareholder Loan pursuant to the terms
of this Agreement shall be subject to stamp duty, the transferor and
transferee shall be liable to pay such stamp duty in equal shares, both
parties shall sign (at the same time as the instrument of transfer of the
Shares, if relevant, is signed) such bought and sold notes or other
documents as are required to be signed for stamping purposes, and the
transferee shall be entitled to deduct from the consideration payable to
the transferor the stamp duty payable by the transferor provided that the
transferee undertakes to the transferor to effect stamping and pay the
stamp duty on the transfer of the Shares and/or Shareholder Loan.
13. NOTICES
Any notice required to be given under this Agreement shall be deemed duly
served if served by hand delivery or by facsimile transmission to the
addresses provided below or to such other address as may have been last
notified in writing by or on behalf of the relevant party to the other
parties hereto. Any such notice shall be deemed to be served at the time
when left at the address of the party to be served or, if served by
facsimile transmission, when the transmission was confirmed as sent by
the originating machine.
SHAREHOLDER A
Address: 000 Xxxx 00xx Xxxxxx, Xxxxx 000, Xxxxxxxxxxxx, XX 00000, XXX
Facsimile: x0 000 000 0000
Attn: Xxxxxx X. Xxxxx, Executive vice President and General Counsel
SHAREHOLDER B
Address: Xxxx 000, Xxxx Xxxxx'x Xxxx, Xxxxxxx, Xxxx Xxxx
Facsimile: x000 0000 0000
Attn: Xxxx Xxxxxxx-Xxxxxx
THE COMPANY
Address: Xxxx 000, Xxxx Xxxxx'x Xxxx, Xxxxxxx, Xxxx Xxxx
Facsimile: x000 0000 0000
Attn: Xxxx Xxxxxxx-Xxxxxx
Copied to:-
Address: 000 Xxxx 00xx Xxxxxx, Xxxxx 000 Xxxxxxxxxxxx, XX 00000, XXX
Facsimile: x0 000 000 0000
Attn: Xxxxxx X. Xxxxx, Executive Vice President and General Counsel
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14. GOVERNING LAW
14.1 This Agreement is governed by and shall be construed in all respects in
accordance with the laws of Hong Kong and all the parties hereto hereby
submit to the non-exclusive jurisdiction of the Courts of Hong Kong in
connection herewith but this Agreement may be enforced in any court of
competent jurisdiction.
14.2 Shareholder A irrevocably appoints RB Secretariat Limited, to receive,
for it and on its behalf, service of process in proceedings in Hong Kong.
Such service shall be deemed completed on delivery to the process agent
(whether or not it is forwarded to and received by Shareholder A). If for
any reason the process agent ceases to act as such or no longer has an
address in Hong Kong, Shareholder A irrevocably agrees to appoint a
substitute Hong Kong process agent within 30 days.
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SCHEDULE 1
DEED OF ADHERENCE
THIS DEED OF ADHERENCE is made the day of
PARTIES:
1. [ ], a company incorporated in the [ ]
having its principal office in Hong Kong at (the "COMPANY").
2. [Name and address of Old Shareholder] (the "OLD SHAREHOLDER").
3. [Name and address of New Shareholder] (the "NEW SHAREHOLDER").
INTRODUCTION:
1. On [ ], the Company and its shareholders entered into a
shareholders agreement (the "SHAREHOLDERS' AGREEMENT") to which a
pro forma version of this Deed forms a Schedule.
2. The New Shareholder wishes to have transferred to [it] all of the shares
(the "NEW SHARES") in the Company held by the Old Shareholder and in
accordance with Clause [ ] of the Shareholders' Agreement has agreed
to enter into this Deed.
3. The Company enters into this Deed on behalf of itself and as agent for all
the existing Shareholders.
NOW THIS DEED WITNESSES as follows:
1. INTERPRETATION
In this Deed, except as the context may otherwise require, all words and
expressions defined in the Shareholders Agreement shall have the same
meanings when used herein.
2. NOVATIONS
The Old Shareholder hereby novates all its rights and obligations under the
Shareholders' Agreement to the New Shareholder and the Company (on behalf
of itself and all other Shareholders) hereby consents to such novation.
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3. COVENANT
The New Shareholder hereby covenants to the Company as trustee for all
other persons who are at present or who may hereafter become bound by the
Shareholders' Agreement, and to the Company itself to adhere to and be
bound by all the duties, burdens and obligations of the Old Shareholder
imposed pursuant to the provisions of the Shareholders' Agreement and all
documents expressed in writing to be supplemental or ancillary thereto as
if the New Shareholder were named as the Old Shareholder under the
Shareholders' Agreement.
4. ENFORCEABILITY
The Old Shareholder and/or the Company shall be entitled to enforce the
Shareholders' Agreement against the New Shareholder and the New Shareholder
shall be entitled to all rights and benefits and vice versa under the
Shareholders' Agreement as if the New Shareholder had been an original
party to the Shareholders' Agreement since the date hereof.
5. GOVERNING LAW
This Deed shall be governed by and construed in all respects in accordance
with the laws of Hong Kong.
IN WITNESS WHEREOF this Deed has been executed on the date first above written.
THE COMMON SEAL of )
)
)
--------------------------------------- )
was affixed in the presence of:
---------------------------------------
Director
---------------------------------------
Director
SIGNED, SEALED and DELIVERED by )
)
)
--------------------------------------------)
in the presence of:
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SCHEDULE 2
UNANIMOUS CONSENT MATTERS
The matters referred to in Clause 4.3 are:
1. undertaking any business outside the scope of the Business;
2. resolving to liquidate, dissolve, reorganise or restructure the company;
3. resolving to amend, waive or not strictly comply with its constitutional
documents;
4. acquiring or disposing of any assets (including shares or assets in a new
or existing business, but excluding acquisitions or disposals in the
ordinary course of business) save as expressly provided for in the Business
Plan;
5. issuing new Shares or any other securities;
6. issuing or granting any form of security or granting of any options or
other rights over any of the assets or shares of any Group Company;
7. making any material change in the accounting policies or practices of the
company;
8. increasing the aggregate borrowings of the Group to more than the amount
provided for in the Business Plan;
9. declaring any dividends, other than in accordance with Clause 5;
10. approving or amending the annual Business Plan; or
11. entering into any agreement (or modifying, varying or terminating any
existing agreement) with any officer, director or shareholder (or any of
the respective Associates) of any Group Company;
provided that for so long as any Shareholder shall hold 80% or more of the
issued Shares, paragraphs 4, 8 and 9 above shall not apply, and shall not
require unanimous consent.
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EXECUTION PAGE
SIGNED by ) /s/ Xxxxxx X. Xxxxx
for and on behalf of )
BRIGHTPOINT INTERNATIONAL )
(ASIA PACIFIC) PTE. LIMITED )
in the presence of: )
SIGNED by ) /s/ Xxxx Xxxxxxx-Xxxxxx
for and on behalf of )
CHINATRON GROUP HOLDINGS LIMITED )
in the presence of: )
SIGNED by ) /s/ Chi Kong Xxxx Xxxxx
for and on behalf of )
BRIGHTPOINT CHINA LIMITED )
in the presence of: )
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