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NAMED IN PART A OF SCHEDULE 1
AGREEMENT
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CLAUSE | PAGE | |||
1. INTERPRETATION | 5 | |||
2. AGREEMENT TO PURCHASE SHARES | 12 | |||
3. COMPLETION | 19 | |||
4. PROCEDURES POST COMPLETION | 22 | |||
5. CONDITIONS PRECEDENT | 23 | |||
6. CONDUCT BEFORE COMPLETION | 24 | |||
7. ADDITIONAL COVENANTS | 25 | |||
8. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS | 26 | |||
9. INDEMNITIES | 28 | |||
10. CAPITAL AND FURTHER FINANCE | 28 | |||
11. DIRECTORS AND MANAGEMENT | 29 | |||
12. CORPORATE GOVERNANCE | 31 | |||
13. CONFIDENTIALITY | 31 | |||
14. EXIT AND TRANSFER OF SHARES | 33 | |||
15. DEED OF ADHERENCE | 34 | |||
16. EXERCISING RIGHTS | 35 | |||
17. USE OF PROCEEDS | 35 | |||
18. ASSIGNMENT AND NOVATION | 35 | |||
19. WAIVER OF RIGHTS | 36 | |||
20. AMENDMENTS | 36 | |||
21. INVALIDITY | 36 | |||
22. NO PARTNERSHIP OR AGENCY | 36 | |||
23. ANNOUNCEMENTS | 36 | |||
24. OTHER COVENANTS | 37 | |||
25. ENTIRE AGREEMENT | 37 | |||
26. CONFLICT WITH ARTICLES | 37 | |||
27. FUTURE SUBSIDIARIES | 38 | |||
28. NOTICES | 38 | |||
29. COUNTERPARTS | 39 | |||
30. DISPUTE RESOLUTION | 39 | |||
31. GOVERNING LAW AND LANGUAGE | 39 |
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CLAUSE | PAGE | |||
SCHEDULE 1 | 43 | |||
Part A Current details of the Company | 43 | |||
Part B Details of the Subsidiary of the Company | 44 | |||
Part C Details of the share capital of the Company prior to the Completion | 46 | |||
Part D Details of the share capital of the Company immediately after Completion | 47 | |||
Part E Selling Shareholder | 48 | |||
Part F Material Assets | 49 | |||
Part G Copyrighted Music Components | 50 | |||
SCHEDULE 2 Representations and Warranties | 51 | |||
1. INTERPRETATION | 51 | |||
2. GENERAL | 51 | |||
3. CORPORATE MATTERS | 51 | |||
4. AUTHORIZATION AND VALIDITY OF TRANSACTIONS | 53 | |||
5. LEGAL COMPLIANCE | 54 | |||
6. ASSETS | 55 | |||
7. PROPERTY | 55 | |||
8. INTELLECTUAL PROPERTY AND INFORMATION TECHNOLOGY | 57 | |||
9. CONTRACTS AND TRANSACTIONS | 60 | |||
10. FINANCIAL MATTERS RELATING TO THE LAST ACCOUNTS | 62 | |||
11. POSITION SINCE LAST ACCOUNTS DATE | 62 | |||
12. CLAIMS AND PROCEEDINGS | 63 | |||
13. DIRECTORS AND EMPLOYEES | 64 | |||
14. DISCLOSURE | 65 | |||
SCHEDULE 3 Deed of Adherence | 66 | |||
SCHEDULE 4 Service Agreement | 68 | |||
SCHEDULE 5 Key Personnel | 69 | |||
SCHEDULE 6 Corporate Structure of the Group at Completion | 70 | |||
SCHEDULE 7 Restated Articles | 71 | |||
SCHEDULE 8 Limitations on Liability | 72 | |||
SCHEDULE 9 Last Accounts | 73 | |||
SCHEDULE 10 Cooperation Agreement | 74 |
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(1) | SEED MUSIC GROUP LIMITED,a company incorporated under the laws of the British Virgin Islands, whose registered office is at P.O. Box 3321, Drake Chambers, Road Town, Tortola, British Virgin Islands (theCompany); |
(2) | SEED MUSIC CO., LTD (), a limited liability company organized under the laws of Taiwan, wholly owned by the Company; |
(3) | DONGYI MUSIC LIMITED () , a limited liability company organized under the laws of Taiwan, wholly owned by SEED MUSIC CO., LTD; |
(4) | PROFITA PUBLISHING LIMITED () , a limited liability company organized under the laws of Taiwan, wholly owned by the Company; |
(5) | LEGUAN SEED (BEIJING) CULTURE CONSULTING CO. LTD. (), a limited liability company organized under the laws of the People’s Republic of China, wholly owned by SEED MUSIC CO., LTD (together with SEED MUSIC CO., LTD, DONGYI MUSIC LIMITED and PROFITA PUBLISHING LIMITED), theCompany Subs); |
(6) | HURRAY! HOLDING CO., LTD., a company duly organised and existing under the laws of the Cayman Islands, whose registered office is at Codan Trust Company (Cayman) Limited, Century Yard, Cricket Square, Hutchins Drive, P.O. Box 2681GT, Georgia Town, Grand Cayman, Cayman Islands (the “Hurray! Holding”); |
(7) | HURRAY! MUSIC HOLDING CO., LTD., a company duly organised and existing under the laws of the Cayman Islands, whose registered office is at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111 (theInvestor); |
(8) | HURRAY ! DIGITAL MEDIA TECHNOLOGY CO., LTD, () , a wholly owned subsidiary of HURRAY! HOLDING CO., LTD. organized under the laws of the People’s Republic of China (“Hurray ! Digital Media”); and |
(9) | the persons whose names and addresses are set out in Part A of Schedule 1 (together with any person signing a Deed of Adherence as a Shareholder, theShareholdersand each aShareholder). |
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(i) | a Director (or any connected person of a Director) of a Shareholder (or any member of a Shareholder’s group); and | ||
(ii) | any Group Member. |
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(a) | words denoting the singular shall include the plural and vice versa; | |
(b) | words denoting one gender shall include each gender and all genders; | |
(c) | references to persons shall be deemed to include references to natural persons, to firms, to partnerships, to bodies corporate, to associations, to organisations and to trusts (in each case whether or not having separate legal personality), but references to individuals shall be deemed to be references to natural persons only; | |
(d) | references to Clauses and schedules are references to Clauses and schedules of this Agreement; |
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(e) | references to paragraphs are, unless otherwise expressly provided, references to paragraphs of the schedule in which the references appear; | |
(f) | references to the parties include their respective successors in title, permitted assignees, estates and legal personal representatives; | |
(g) | words defined in the Articles but not herein defined shall have the same meaning as in the Articles; | |
(h) | where the wordincludingis used it shall be deemed to read “including without limitation” and | |
(i) | an undertaking is asubsidiary undertakingof another undertaking (itsparent undertaking) if that other undertaking, directly or indirectly, through one or more subsidiary undertakings: |
(i) | holds a majority of the voting rights in it; or |
(ii) | is a member or shareholder of it and has the right to appoint or remove a majority of its board of directors or other equivalent managing body; or |
(iii) | has a right to exercise a dominant influence over it: |
(A) | by virtue of provisions contained in its memorandum or articles or equivalent constitutional documents; or |
(B) | by virtue of a contract with that undertaking or other members or shareholders of that undertaking; |
(iv) | is a member or shareholder of it and controls alone, or pursuant to an agreement with other shareholders or members, a majority of the voting rights in it; |
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(a) | If the Actual Net Profit for Financial Year 2008 is no less than US$800,000, the Consideration shall be adjusted from US$2,244,000 to US$2,992,000. The amount of Subscription Shares shall be adjusted from 7,813 shares to 7,026 shares. The Valuation Adjustment will be carried out within 2 months after the issuance of an audited report prepared by a Big 4 Accounting Firm in accordance with USGAAP and shall be effected by the payment of US$748,000 to Huang, Tien-Zan by the Investor and the transfer of 787 shares from and by the Investor to Tien, Ting-Feng. |
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(b) | If the Actual Net Profit of Financial Year 2008 is equal to or more than US$600,000, and less than US$800,000, the Consideration shall be adjusted in accordance with the following formula (“Formula I”): |
(c) | If the Actual Net Profit of Financial Year 2008 is equal to or more than US$400,000, but less than US$600,000, the Consideration shall be determined in accordance with Formula I and the Subscription Shares shall be determined in accordance with Formula II. |
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(d) | If the Actual Net Profit of Financial Year 2008 is less than US$400,000, the Consideration shall be determined in accordance with Formula I. The Subscription Shares shall be adjusted in accordance with Formula II. In addition, whereas the Parties agree that the Investor shall pay for the Sale Shares by US$1,496,000 as the minimum payment, which is higher than the due Adjusted Consideration calculated from Formula I, Tien, Ting-Feng will compensate the Investor by transferring a certain number of shares (Compensation Shares), calculated as below: |
(e) | In the event the Company suffers loss in Financial Year 2008, the valuation of the Company shall be subject to adjustment in accordance with the Clause 2.10(d), and Tien, Ting-Feng shall compensate the Company in such an amount to at least cover the loss of the Company in such Financial Year so that the Company’s Net Profit shall be a positive number. |
(f) | If the growth of the Net Profit of the Company in Financial Year 2009 is less than 50 percent, or the Actual Net Profit of Financial Year 2009 is less than US$900,000, Tien, Ting-Feng shall compensate the Company so that the Company’s Net Profit in Financial Year 2009 shall reach US$900,000 and the growth of the Net Profit of the Company shall be at least 50 percent (the “Compensation Payment”). The Compensation Payment may be paid in the form of dividends of the Shares held by Tien, Ting-Feng or by Tien, Ting-Feng transferring a certain amount of Shares to the Investor. Unless the Compensation Payment has been paid off, any or all of the dividends received by Tien, Ting-Feng or all of the consideration from the share transfer (if any) shall be automatically paid in preference to the Investor as the Compensation Payment. |
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(a) | In the event that the Net Profit of the Company in Financial Year 2008 is no less than US$600,000, and Tien, Ting-Feng retains its current status as an employee, consultant, advisor or director of the Company until June 30, 2010 (“Continuous Service”), then, within 120 days from the date on which the financial statements are provided to Tien, Ting-Feng, Tien Ting-Feng shall be entitled to request the Company to repurchase his shares up to the number of shares such that Tien, Ting-Feng continues to hold at least twenty-six percent (26%) of the Company’s shares and Huang Tien-Zan shall be entitled to request the Company to repurchase his shares up to the number of shares such that Huang Tien-Zan continues to hold at least six-point-five percent (6.5%) of the Company’s shares. The purchase price per share for such repurchases shall be calculated based on the total value of the Company equal to the Net Profit of the Company in Financial Year 2009 multiplied by sixty percent (60%) of the Forward P/E of Hurray! Holding; |
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(b) | In the event that the Net Profit of the Company in Financial Year 2008 is no less than US$600,000, and Tien, Ting-Feng retains its current status as an employee, consultant, advisor or director of the Company until June 30, 2011 (“Continuous Service”), then, within 120 days from the date on which the financial statements are provided to Tien, Ting-Feng, Tien, Ting-Feng shall be entitled to request that the Company to repurchase his shares up to the number of shares such that Tien, Ting-Feng continues to hold at least twenty-one percent (21%) of the Company’s shares and Huang Tien-Zan shall be entitled to request the Company to repurchase his shares up to the number of shares such that Huang Tien-Zan continues to hold at least five-point-two-five percent (5.25%) of the Company’s shares. The purchase price per share for such repurchase shall be calculated based on the total value of the Company equal to the Net Profit of the Company in Financial Year 2010 multiplied by sixty percent (60%) of the Forward P/E of Hurray! Holding; |
(c) | In the event that the Net Profit of the Company in Financial Year 2008 is no less than US$600,000, and Tien, Ting-Feng retains its current status as an employee, consultant, advisor or director of the Company until June 30, 2012 (“Continuous Service”), then, within 120 days from the date on which the financial statements are provided to Tien, Ting-Feng, Tien, Ting-Feng shall be entitled to request that the Company to repurchase his shares up to the number of shares such that Tien, Ting-Feng continues to hold at least ten-point-five percent (10.5%) of the Company’s shares and Huang Tien-Zan shall be entitled to request the Company to repurchase his shares up to the number of shares such that Huang Tien-Zan continues to hold at least two-point-seven-five percent (2.75%) of the Company’s shares. The purchase price per share for such repurchase shall be calculated based on the total value of the Company equal to the Net Profit of the Company in Financial Year 2011 multiplied by sixty percent (60%) of the Forward P/E of Hurray! Holding; and |
(d) | In the event that the Net Profit of the Company in Financial Year 2008 be no less than US$600,000, and Tien, Ting-Feng retains its current status as an employee, consultant, advisor or director of the Company until June 30, 2013, then, within 120 days from the date on which the financial statements are provided to Tien, Ting-Feng, Tien, Ting-Feng and Huang Tien-Zan shall be entitled to severally or jointly request that the Company to repurchase up to all of their shares. The purchase price per share for such repurchase shall be calculated based on the total value of the Company equal to the Net Profit of the Company in Financial Year 2012 Net Profit multiplied by sixty percent (60%) of the Forward P/E of Hurray! Holding. |
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(a) | On the Completion Date (the fifth Business Day after the date of receipt of a notice from Huang, Tien-Zan and the Company to the Investor that following conditions have been fulfilled or otherwise waived by the Investor in this Clause3.3), the Investor shall pay US$1,907,400 of the Consideration as provided in the Clause 2.4 and US$600,038.4 of the Subscription Price as provided in the Clause 2.6 hereof to Huang, Tien-Zan and the Company respectively by wire transfer to a bank account nominated by Huang, Tien-Zan and the Company; |
(b) | Huang, Tien-Zan and the Company shall each deliver to the Investor duly executed forms of share transfer in respect of the Sale Shares and share issuance in respect of the Subscription Shares, together with the relative share certificates; |
(c) | subject to the applicable laws of the British Virgin Islands and the Articles, the Company shall hold a meeting of its Board and/or Shareholders (as the case may be), at which the following shall be approved: |
(i) | each Investor Director shall be appointed as an additional director of the Company; |
(ii) | the transfer of the Sale Shares to the Investor from Huang, Tien-Zan and the issuance of the Subscription Shares to the Investor; |
(iii) | the entry of the name of the Investor in the Company’s share register as the holder of the Sale Shares and the Subscription Shares, together with the issue of a share certificate in the name of the Investor; |
(iv) | the terms of this Agreement and the entry into thereof; and |
(v) | adoption of the Restated Articles as attached hereto as Schedule 7. |
(d) | the Company shall deliver to the Investor: |
(i) | certified true copies of the resolutions passed in relation to the matter set out in Clause 3.3(c) above; |
(ii) | a certificate stating that there has not been any breach of the covenants contained in this Agreement or any of the Warranties, and that the Warranties remain true and accurate on Completion as if given at that date; and |
(iii) | subject to the applicable laws of the British Virgin Islands and the Articles, certified true copies of the resolutions passed by the Board and/or the Shareholders of the Company adopting the Restated Articles. |
(e) | the Shareholders shall procure that each of the Key Personnel listed in of Schedule 5 shall enter or have entered into a Service Agreement; |
(f) | Tien, Ting-Feng shall enter into a non-competition agreement with the Company, which shall provide that within the Non-competition Period, Tien, Ting-Feng shall not to, directly or indirectly engage in any music-related business activities in competition with the Company or any affiliate of the Company, nor directly or indirectly induce employees, consultants or directors of the Company or any affiliate of the Company, to engage in activities hereby prohibited to him or to terminate his services or employment with the Company or any affiliate of the Company. |
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(g) | the Company shall furnish to the Investor a Register of Members, or such other equivalent document in its jurisdiction evidencing that the Investor is a member of the Company with the number of shares in accordance with this Agreement. |
(h) | Hurray! Digital Media and the Company shall enter into a cooperation agreement in the form attached hereto as Schedule 10, which shall provide, without limitation, that Hurray! Digital Media shall have an exclusive right to publish and distribute any and all music owned by and licensed to the Company for Financial Year 2009 and thereafter. The right to publish shall include, but not be limited to the right to publish through internet, SP service or any other digital means. Furthermore, the cooperation agreement shall also provide that, (i) for the Financial Year 2009, Hurray! Digital Media will guarantee to pay the Company a revenue no less than the gross profit that the Company achieves from digital publishing and distributing of its music in mainland China in the Financial Year 2008; (ii) from the Completion, the Company shall not authorize, approve, or effect any digital music license agreement () with a term of longer than one year, unless otherwise approved by the Board of Directors of the Company, including the Director appointed by the Investor, and the Company shall not authorize, approve, or effect any digital music license agreement with a price unfair to the Company or which may in any other way adversely affect the Company or its ability to enter into any like-kind agreement after July 1, 2009, and, (ii) Hurray! Digital Media shall reasonably use and promote the brand and products of the Company; |
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(i) | Mr. Huang, Tien-Zan shall issue a waiver letter to waive any loan(s) extended prior to March 31, 2007 to the Company in the amount of no less than NT$83,844,872 in such form acceptable by the Investor, and, after the Completion, the Company shall be liable for any loan extended after April 1,2007 by Mr. Huang, Tien-Zan in such a total amount no more than US$300,000 plus accrued interests as set forth in Clause 2.8 of this Agreement; |
(j) | The Investors shall be provide a legal opinion issued by the legal advisers to the Company as to British Virgin Islands’ law confirming the validity of the transactions set forth in this Agreement and such other matters as from time to time requested by Investors; |
(k) | the cash balance of the Company shall be no less than US$25,000; |
(l) | subject to the applicable laws of the British Virgin Islands and the Articles, Huang, Tien-Zan and Tien, Ting-Feng shall procure the resolutions of the Board and/or the Shareholders of the Company (as the case may be) adopting the Restated Articles on or before Completion. |
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(a) | the Investors shall have been satisfied in all respects with the results of their and their advisors’ business, technology, intellectual property, legal, tax and accounting due diligence investigation of each of the Group Companies. The Company shall provide any additional information as needed during the draft and negotiation of the definitive legal documents and all the information regarding any change to the Company’s business; |
(b) | Mr. Huang, Tien-Zan shall have procured four-point-five (4.5) percent of the Company’s outstanding shares from Mr. Tien, Ting-Feng and nine (9) percent of the Company’s outstanding shares from the shareholders other than Mr. Tien, Ting-Feng, and shall have owned, 64% percent of the Company’s outstanding shares. Mr. Huang, Tien-Zan shall ensure that the aforesaid transfers are legally effective and all due consideration in respect of such transfers has been paid, and all such transfers were duly approved by the relevant approval authority under applicable law and are legally effective under applicable law; |
(c) | the Company does not have any agreement, in writing or not, that will give any obligation to the Company other than the loan that shall have been waived by Mr. Huang, Tien-Zan prior to Completion and the loan in the amount up to US$300,000 as set forth in Clause 2.8 of this Agreement, excluding any obligations from the contracts in ordinary course of business; |
(d) | the financing statement of the Company shall have been in a good status that accepted by the Investor, which, among others, states the company shall have sufficient operation working capital and have no need to have any financing within one year following the completion unless otherwise approved by the Investor in advance. The Company will provide the Investor with the financial statements of the Company prior to the Completion, including the Company’s cash reserve, loan and net assets, etc.; |
(e) | no Material Adverse Change having occurred at or prior to Completion; |
(f) | Tien, Ting-Feng shall have deposit the Deposited Shares to the escrow agent designated by the Investor; |
(g) | the Company shall set up an appropriate accounting report system as satisfactory to the Investor, and the Investor shall be entitled to appoint the financial directors of the Company and the Company Subs. The Company and the Investor shall bear the costs of the compensation of such financial directors equally. Such management fee shall not be calculated into the expenses for the purpose of calculating the Company’s Net Profit. |
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(a) | the affairs of each Group member are conducted only in the ordinary and usual course and that no Group member makes or agrees to make any payment other than routine payments in the ordinary and usual course of business; | |
(b) | all reasonable steps are taken to preserve and protect the assets of each Group member, to maintain the validity of the Business IP, and to preserve and retain its goodwill (including the existing relationships with customers and suppliers); | |
(c) | no Group member transfers or assigns any of the Owned IP to any entity other than Group Members; | |
(d) | subject to Clause 13 (Confidentiality), the Investor’s representatives shall be allowed such access as is reasonably requested, upon reasonable notice and during Working Hours, to (i) the books and records of each Group member (including all statutory books, minute books, leases, contracts, supplier lists and customer lists), with the right to take copies and (ii) the premises used by, and management of, each Group member; | |
(e) | no Group member does, allows or procures any act or omission which would constitute or give rise to a breach of any Warranty if the Warranties were repeated at any time before Completion by reference to the facts and circumstances then existing as if references in the Warranties to the date of this Agreement were references to the relevant date; | |
(f) | all relevant information which comes to its notice or that of any other member of the Shareholders in relation to any fact or matter (whether existing on or before the date of this Agreement or arising afterwards) which may constitute a breach of any Warranty if the Warranties were to be repeated on or at any time before Completion by reference to the facts and circumstances then existing as if references in the Warranties to the date of this Agreement were references to the relevant date, is promptly disclosed to the Investor; |
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(g) | no Group member declares, authorises, makes or pays any dividend or other distribution (whether in cash, stock or in kind) or reduces, purchases or redeems an part of its paid-up share capital; | |
(h) | no Group member (i) creates, allots or issues or agrees to create, allot, or issue any share or loan capital or other security or (ii) grants any option over or right to subscribe for any share or loan capital or other security; | |
(i) | no Group member sells or purchases or disposes of any interest in any share or loan capital or other security of any Group member; |
(a) | an event or occurrence has given rise to a Material Adverse Change; or | |
(b) | the Company or any Group Member is involved in, or has pending or threatened material litigation, or | |
(c) | there has been any breach of any of the Warranties; |
(a) | give the Investor and its representatives full access to the facilities, properties, assets, books, contracts, commitments, reports and records of the Company and the Group; and |
(b) | furnish to the Investor all such documents, records and information with respect to the properties, assets and business of the Company and the Group, minutes of meetings of the Board and of the boards of the Group and any committees thereof and the management (including attachments and exhibits) and in each case, copies of any working papers relating thereto, as the Investor may from time to time request. |
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(a) | the amount which would be necessary to put the Investor and/or any member of the Investor’s Group or the relevant member of the Company’s Group into the financial position which would have existed had there been no breach of the Warranty in question; or |
(b) | all Losses suffered or incurred by the Investor and/or any of the Investor’s Group (or any member of the Company’s Group), directly or indirectly, as a result of or in connection with such breach of Warranty. |
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(a) | any act, omission or conduct of or by the Company or any Group Member, the Shareholders or their employees or agents as a result of which, in whole or in part, such Investor Director is made a party to, or otherwise incurs any Losses pursuant to, any action, suit, claim or proceeding arising out of or relating to any such conduct; |
(b) | any act, omission or conduct by any Investor Director at the request of or with the consent of the Company or any Group Member or any of the Shareholders; or |
(c) | contravention of any Law including, without limiting the generality of the foregoing, Laws relating to provident fund, gratuity, labour, environment and pollution; and any action or proceedings taken against such Investor Director in connection with any such contravention or alleged contravention, |
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(a) | make suggestions regarding the financing function of the management of the Company in order to develop world class management capabilities; and |
(b) | appoint the chief executive officer or legal representative of each of the Company Subs at it sole discretion. |
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(a) | in the case of a Shareholder who is an employee of any Group Member, information which is used, divulged, disclosed or communicated by him before the Termination Date in the proper performance of his duties pursuant to his Employment; |
(b) | information which at the date of disclosure is within the public domain (otherwise than as a result of a breach of this Clause 13; |
(c) | the disclosure of information to the extent required to be disclosed by law, regulation or any regulatory authority; |
(d) | information which is independently developed by the relevant person from information provided or obtained other than pursuant to or in connection with this Agreement to the extent that it is acquired with the right to disclose or use the same; |
(e) | the disclosure by any party in confidence to its officers, employees, agents, and professional and other advisers or, in the case of the Investor, those of any of those persons listed in (h) below, of information reasonably required to be disclosed for a purpose reasonably incidental to this Agreement or for the purpose of assessing such party’s investment in the Group; |
(f) | any announcement made in accordance with the terms of Clause 23; |
(g) | the disclosure of information to any third party in contemplation of a Listing or Sale provided that the conduct of the discussions with the third party has been approved by Investor Consent; |
(h) | the disclosure of information by an Investor to any current or prospective member of its Investor Group where the disclosure is for a purpose reasonably incidental to this Agreement or for the purpose of assessing such person’s actual or prospective investment in the Group or Investor Group; |
(a) | to keep it confidential on the terms of and otherwise to comply with, this Clause 13; and |
(b) | not to disclose it to any third party (other than those persons to whom it has already been disclosed in accordance with the terms of this Agreement). |
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(a) | sell, transfer or otherwise dispose of any interest in Shares or in shares of any Group Member; or |
(b) | create or permit to exist any pledge, lien, fixed or floating charge or other Encumbrance over any Shares or any shares held by them in any Group Member, save with prior Investor Consent. |
(a) | In the case of a Transfer Notice from the Shareholders to the Investor, the Investor shall have the option to purchase all or any part of the Offered Shares. If the Investor desires to purchase all or any part of the Offered Shares, the Investor must, within thirty (30) days from receipt of the Transfer Notice (the “Investor Refusal Period”), give written notice to the Transferor of the Investor’s election to purchase the Offered Shares at a price per share equal to the Offered Price. To the extent that the Investor elects not to purchase any or all of the Offered Shares, the remaining Offered Shares may be transferred by the Seller to the proposed Transferee. A failure by the Investor to exercise its right of first refusal within the Investor Refusal Period shall be deemed a waiver of such right. |
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(b) | In the case of a Transfer Notice from the Investor to the Shareholders, each Shareholder shall have the option to buy all of the Offered Shares or its pro rata proportion in the event that more than one Shareholder makes an offer for such Shares. If each Shareholder desires to purchase all or any part of the Offered Shares, such Shareholder must, within thirty (30) days from receipt of the Transfer Notice (the “Shareholder Refusal Period”) give written notice to the Transferor of such Shareholder’s election to purchase the Offered Shares at a price per share equal to the Offered Price. A failure by a Shareholder to exercise its Right of First Refusal within the Shareholder Refusal Period shall be deemed a waiver of such right. |
(a) | by the Investor to any member(s) of the Investor’s Group; or |
(b) | by any Shareholder i) in the case of a natural person, to any of his or her Relatives, or ii) in the case of an entity, to its shareholders, members, partners or other equity holders, provided that in all cases, such transfer shall be bona fide and any transferee under such transfer shall sign a Deed of Adherence. |
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(a) | act in violation of the Laws applicable to it/them; or |
(b) | make improper payments to public officials in order to secure a business advantage. |
(a) | exercise all voting and other rights and powers available to them to give effect to the provisions of this Agreement; and |
(b) | procure that any amendment required to give effect to the provisions of this Agreement is made to the Memorandum, Articles or the constitutional documents of any Group Member. |
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(a) | sent by fax to the relevant number set out in Clause 28.2; or |
(b) | delivered by hand or sent by prepaid recorded delivery, special delivery or registered post to the relevant address in Clause 28.2. |
(c) | if hand delivered, when delivered; | |
(d) | if sent by fax, twelve (12) hours after the time of despatch; or | |
(e) | if sent by recorded delivery, special delivery or registered post, at 10 a.m. on the third Business Day from the date of posting |
(a) | The Company: |
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(b) | The Investor: |
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SEED MUSIC GROUP LIMITED | ||||
Title: | ||||
SEED MUSIC CO., LTD | ||||
Title: | ||||
DONGYI MUSIC LIMITED | ||||
Title: | ||||
PROFITA PUBLISHING LIMITED | ||||
Title: | ||||
LEGUAN SEED (BEIJING) CULTURE CONSULTING CO. LTD. | ||||
Title: |
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HURRAY ! HOLDING CO., LTD. | ||||
Title: | ||||
HURRAY ! MUSIC HOLDING CO., LTD. | ||||
Title: | ||||
HURRAY ! DIGITAL MEDIA TECHNOLOGY CO., LTD | ||||
Title: |
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Date of Incorporation: | 26 July 2006 | |
Registered Office: | P.O. Box 3321, Drake Chambers, Road Town, Tortola, British Virgin Islands | |
Authorised Share Capital: | US$100,000 divided into 100,000 Ordinary Shares with a par value of US$1.00 each | |
Issued Share Capital: | US$50,000 divided into 50,000 Ordinary Shares with a par value of US$1.00 each | |
Shareholders: | see Part C of Schedule 1 | |
Directors: | Huang, Tien-Zan | |
Secretary: | N/A | |
Auditors: | N/A | |
Accounting Reference Date: |
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Registered Office: | 11F.-7, No. 142, Sec 4, Jhongsiao E. Rd, Da-an District, Taipei City 106, Taiwan | |
Authorised Share Capital: | N/A | |
Issued Share Capital: | NT$ 1,200,000 | |
Shareholders: | SEED MUSIC GROUP LIMITED | |
Directors: | Huang, Tien-Zan | |
Secretary: | N/A | |
Auditors: | N/A | |
Accounting Reference Date: |
Registered Office: | 11F.-7, No. 142, Sec 4, Jhongsiao E. Rd, Da-an District, Taipei City 106, Taiwan | |
Authorised Share Capital: | N/A | |
Issued Share Capital: | NT$ 1,200,000 | |
Shareholders: | SEED MUSIC CO., LTD | |
Directors: | Huang, Tien-Zan | |
Secretary: | N/A | |
Auditors: | N/A | |
Accounting Reference Date: |
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Registered Office: | 11F.-7, No. 142, Sec 4, Jhongsiao E. Rd, Da-an District, Taipei City 106, Taiwan | |
Authorised Share Capital: | N/A | |
Issued Share Capital: | NT$1,000,000 | |
Shareholders: | SEED MUSIC GROUP LIMITED | |
Directors: | Huang, Tien-Zan | |
Secretary: | N/A | |
Auditors: | N/A | |
Accounting Reference Date: |
Registered Office: | Building A6, Huitong Office Park, No. 71, Jianguo Road, Chaoyang District, Beijing 100025, China | |
Authorised Share Capital: | N/A | |
Issued Share Capital: | RMB2,000,000 | |
Shareholders: | SEED MUSIC CO., LTD | |
Legal Representative: | Tien, Ting-Feng | |
Secretary: | N/A | |
Auditors: | N/A | |
Accounting Reference Date: |
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Number of Ordinary | Percentage of Ordinary | |||||||
Shareholder | Shares | Share capital | ||||||
Huang, Tien-Zan | 32,000 | 64 | % | |||||
Tien, Ting-Feng | 18,000 | 36 | % | |||||
Total | 50,000 | 100 | % | |||||
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Number of Ordinary | Percentage of Ordinary | |||||||
Shareholder | Shares | Share capital | ||||||
Investor | 35,313 | 61.08 | % | |||||
Tien, Ting-Feng | 18,000 | 31.13 | % | |||||
Huang, Tien-Zan | 4,500 | 7.78 | % | |||||
Total | 57,813 | 100 | % | |||||
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Number of Shares | ||||
Shareholder | to be sold | |||
Huang, Tien-Zan | 27,500 |
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(a) | Organization, Good Standing and Qualification Each Group Member has been duly incorporated and organized, and is validly existing (i) in good standing and (ii) in compliance with all registration and approval requirements in the jurisdiction where it was incorporated and the places where it carries on business. Each Group Member has the corporate power and authority to own and operate its Assets and properties and to carry on its business as currently conducted. |
(b) | Constitutional Documents The constitutional documents (having attached thereto all such resolutions as are by law required to be attached thereto and all amendments made to date) of each Group Member are true and complete. All legal and procedural requirements and other formalities concerning such constitutional documents and the arrangements set forth therein have been duly and properly complied with in all material respects. |
(c) | Ownership and Capitalization of the Group Members (other than the Company) |
(i) | The information set out in this Agreement with regard to the registered capital of the Subsidiaries, their equityholders and the equityholders’ percentage equity interests as of the date of this Agreement is true and correct. |
(ii) | The equity holders set out in Part C of Schedule 1 each paid in full their respective capital contributions to the registered capital of such Group Members, and the capital contributions have been duly verified by qualified accounting firms with relevant capital verification reports issued, and, there have been no false contributions or illicit withdrawals of capital contributions, and the equity interests in such Group Member are free of any Encumbrances. |
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(iii) | The registered owners of such Group Members are also their beneficial owners, and no registered owner of such Group Member holds its equity interests in such entity for any other Person pursuant to any form of understanding or agreement, oral or written. |
(iv) | All equity transfers relating to equity interests in such Group Members are legally effective and all due consideration in respect of such transfers has been paid. All such transfers were duly approved by the relevant approval authority under applicable law and are legally effective under applicable law. |
(d) | Ownership and Capitalization of the Company |
(i) | The information set out in Part C of Schedule 1 of this Agreement with regard to the shareholding of the Company as of the date of this Agreement is true and correct. |
(ii) | The information set out in Part D of Schedule 1 of this Agreement with regard to the shareholding of the Company as of the Completion Date shall be true and correct. |
(iii) | Each Person (excluding the Investor) named as a Shareholder of the Company in Part C of Schedule 1 of this Agreement is the sole and beneficial owner of the Shares set out against his/her name in such Schedule and owns the Shares free from Encumbrances, and no such Shareholder holds its equity interests in the Company for any other Person pursuant to any form of understanding or agreement, oral or written. |
(e) | Subsidiaries Other than the Subsidiaries or as set out in the Disclosure Letter, none of the Group Members has any subsidiaries or owns or controls, directly or indirectly, any interest in any other corporation, partnership, trust, joint venture, association or other entity. |
(f) | Other Rights With Respect to Shares No voting or similar agreements exist relating to the securities of any of the Group Members which are presently outstanding or that may hereafter be issued. |
(g) | Corporate Records The registers of shareholders, resolutions and all other documents of the Group Members required to be filed with any Governmental Authority have been filed or submitted for filing, and all resolutions required by applicable laws or the respective constitutional documents of any such entity have been passed. |
(h) | Shareholders’ Competitive Activities None of the Key Personnel directly or indirectly holds any Equity Securities in any entity that carries on any business that competes with the business of any Group Member as presently conducted or as contemplated to be conducted. |
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(a) | Authorization Each party (excluding the Investor) has the power and authority to execute, deliver and perform the Transaction Documents to which it is a party. All actions on the part of the parties (excluding the Investor) necessary for the authorization, execution, delivery of and the performance of all of its obligations under this Agreement and other Transaction Documents, have been taken or will be taken prior to Completion. All actions on the part of any of the parties (excluding the Investor) necessary for the due adoption of the Articles as the articles of association of the Company and the filing of the Articles have been taken or will be taken prior to Completion. |
(b) | Enforceability Each of the Transaction Document to which each of the parties (excluding the Investor) is or will be a party will when executed be the valid and binding obligation of such party, enforceable against such party in accordance with their respective terms. |
(c) | Consents and Approval No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any Governmental Authority or any other competent corporate authority is required in connection with the execution, delivery and performance by each party (excluding the Investor) of any of the Transaction Documents or the consummation of the transactions contemplated hereby or thereby. |
(d) | No Breach The execution and delivery by each party (excluding the Investor) of any Transaction Document to which it is a party, and the performance by each such party of its obligations under this such Transaction Document in all material respects, do not and will not: |
(i) | breach or constitute a default under any constitutional document of such entity or of the memorandum of association, articles of association, by-laws or other constitutional document of such party; |
(ii) | result in a breach of, or constitute a default under, any contract to which such party is a party or by which such entity or its properties or Assets is bound or result in the acceleration of any obligation under any loan agreement; or |
(iii) | result in a violation or breach of or default under any applicable law or regulation or of any order, writ, injunction, judgment or decree of any Governmental Authority by which such party is bound. |
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(a) | No Violation of Law None of the parties (excluding the Investor) is or has at any time been in violation of any applicable law or regulation, which may result in any liability or criminal or administrative sanction with a material adverse effect or otherwise have a material adverse effect on the ability of each Group Member to conduct its business as currently conducted. |
(b) | Permit Each Group Member has all permits, approvals, authorizations, franchises and licenses necessary for the conduct of its business as currently conducted. None of the parties (excluding the Investor) is in breach of or default under any such permit, approval, authorization, franchise or license. |
(c) | Compliance with all Laws Each Group Member has carried on its business in compliance with all applicable laws and regulations, and none of parties (excluding the Investor), nor any of their directors, officers or the Key Personnel, has committed any criminal offence or any tort or any breach of the requirements or conditions of any statute, treaty, regulation, by-law or other obligation relating to it or the carrying on of its business with a material adverse effect or otherwise have a material adverse effect on the ability of each Group Member to conduct its business as currently conducted and, without prejudice to the generality of the foregoing, each of the parties (excluding the Investor) has obtained all registrations, licenses and consents necessary to own its Assets and properties and for the carrying on of its business and all such registrations, licenses and consents are valid and subsisting and there is no reason why any of them should be suspended, cancelled or revoked. |
(d) | Government Authorities With regard to each party (excluding the Investor), there is no Governmental Authority or other Person that has: |
(i) | requested any information in connection with any governmental approval required for any of the transactions contemplated under this Agreement and other Transaction Documents, or instituted or threatened any action or investigation to restrain, prohibit or otherwise challenge the subscription or purchase of the Shares by the Investor or taken any action or investigation in connection with any of the transactions contemplated under this Agreement and other Transaction Documents; |
(ii) | threatened to take any action as a result of or in anticipation of the implementation of such purchase, subscription or transactions; or |
(iii) | to the best knowledge of each party, proposed or enacted any statute or regulation which would prohibit, materially restrict or materially delay implementation of the subscription or purchase of the Shares by the Investor or the operations of each Group Member. |
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(a) | Title to Assets Except as disclosed in the Last Accounts, the Assets are the absolute property of the relevant Group Member and are not the subject of any leasing, hiring or hire-purchase agreement or agreement for payment on deferred terms or assignment or factoring or other similar agreement, and all such Assets are in the possession or under the control of such Group Member. |
(b) | Status of Assets Each Group Member owns or has the right to use all Assets required for the conduct of its business as currently conducted. The Assets owned by each Group Member are free and clear of all Encumbrances. Each Group Member has made available to the Investor true and complete copies of the leases relating to all Assets leased by such Group Member. Each Group Member is in compliance with all such leases. The Assets of each Group Member have been properly maintained and are in good working condition. |
(c) | Confidential Information |
(i) | No Group Member uses any processes or is engaged in any activities that involve the misuse of any Confidential Information belonging to any third party. |
(ii) | No Group Member is in breach of any such agreement or arrangement or is aware of the existence of any circumstances under which its right to use Confidential Information may be terminated. |
(iii) | No Group Member is aware of any actual or alleged misuse by any Person of any Confidential Information of any Group Member. No Group Member has disclosed to any Person any of its Confidential Information except where such disclosure was properly made in the normal course of its business and was made subject to an agreement under which the recipient is obliged to maintain the confidentiality of such Confidential Information and is restrained from further disclosing it or using it other than for the purposes for which it was disclosed by such entity. |
(a) | Identification of the Leased Properties |
(i) | The Leased Properties represent all of the land and buildings anywhere used or occupied by the Group Members or in respect of which any Group Member has any interest, right or liability. |
(ii) | The particulars set out in the Disclosure Letter in respect of each of the Leased Properties (including the term of each Lease and rental payments) are true, correct and complete. |
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(b) | Leased Properties |
(i) | original executed Leases are in the possession or under the control of the relevant Group Member; |
(ii) | all rent and other charges payable under the Leases have been promptly paid as and when due; |
(iii) | each Group Member has paid the rent, rates and all other charges for which the tenant is responsible under the Leases up to the last payment date and have observed and/or performed all restrictions and covenants on the part of the tenant and the conditions contained in the tenancy agreements or Leases in all material respects and all such tenancies or leases are valid, binding and in full force; |
(iv) | the Leases are all good, valid and subsisting and in no way have become void or voidable and have been registered with the relevant real property and housing bureau (if required); |
(v) | all covenants and restrictions imposed upon any of the Group Members under the Leases have been duly and promptly observed and performed; |
(vi) | no contract has been entered into or agreed to be entered into by any of the Group Members to sell or otherwise dispose of an interest in or part with the possession or occupation of any of the Lease Properties or any part thereof; |
(vii) | all utilities and all other outgoings in respect of the Leased Properties have been duly paid; |
(viii) | the present use of the Leased Properties is permitted under the relevant planning legislation or regulations and allocation or grant of the land use rights and there are no restrictions contained in the grant that limit the continued use or reasonable expansion of the present use of the Lease Properties; |
(ix) | no action, claim, demand, dispute, notice, complaint or liability in respect of the Leased Properties or any part thereof is pending or outstanding; and |
(x) | there have been no unauthorised structures erected upon or unauthorised alterations made to the Leased Properties or any part thereof. |
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(a) | Business IP |
(i) | The list of Owned IP in the Disclosure Letter, to the best knowledge of the Shareholders and the Company, is a complete and accurate list of the Owned IP and there are no other Business IP. The owner or applicant for each Intellectual Property Right specified in the Disclosure Letter is correctly stated. The Owned IP is valid and subsisting. The owner of each Intellectual Property Right specified in the Disclosure Letter owns all of the rights and interests in and has title to all of the relevant Intellectual Property Rights. |
(ii) | A Group member owns all of the rights and interests in and has title to, or has validly licensed to it, all of the Business IP. The Business IP comprises all the Intellectual Property Rights required to carry on the Group’s businesses as they are currently carried on. |
(iii) | The Owned IP is not subject to amendment, challenge, removal or surrender. There is nothing that might prevent applications from being granted. All fees relating to the Owned IP have been paid. |
(iv) | No compulsory licences, licences of right or anything similar have been, or are likely to be, granted for the Owned IP. |
(b) | Source Code of the Software | |
None of the Shareholders is aware of any unauthorised use of any Software source code owned by the Group and no Group member has disclosed or provided the source code of the Software to any customer, escrow agent or any other Person except to the employees or directors of the Group members, or to any Person in violation of any agreement with its customer. | ||
(c) | Licences | |
The licences of Intellectual Property Rights granted to, and by, any Group Member are binding and in force. None of the parties to them is in default and there are no grounds on which they might be terminated. No disputes have arisen or are foreseeable in connection with them. | ||
(d) | No Infringement by Group Members | |
To the best knowledge of the Company, the Company Subs and the Shareholders, none of the operations of any Group Member infringes or has in the last 2 years infringed, the Intellectual Property Rights of a third party. No third party has disputed the right of a Group Member to use the Business IP and none of the Shareholders nor the Company is aware of any circumstances likely to give rise to a dispute. | ||
(e) | No infringement by Third Parties |
(i) | To the best knowledge of the Company, the Company Subs and the Shareholders, no third party is infringing the Business IP. No Group Member has disputed the right of a third party to use the Intellectual Property Rights owned or used by the third party and none of the Shareholders nor the Company is aware of any circumstances likely to give rise to a dispute. |
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(ii) | No Group Member has acquiesced in the unauthorised use by a third party of the Business IP. |
(iii) | To the best knowledge of the Company, the Company Subs and the Shareholders, there have been no acts or omissions that would prejudice the rights of the Company or any Group Member to enforce the Business IP. Transactions relating to the Business IP have been registered promptly, and within applicable time limits. |
(f) | Confidential Information | |
Confidential information of, or that has been used by, any Group Member has been kept confidential and has not been disclosed to third parties except in the ordinary course of business and subject to written confidentiality obligations from the third party. These confidentiality obligations have not been breached. | ||
(g) | Encumbrances | |
The Business IP is not subject to any security interest, option, mortgage, charge or lien. | ||
(h) | Restrictions on Use | |
There are no agreements or arrangements which restrict the disclosure, use or assignment by any Group Member of the Business IP. | ||
(i) | Loss of Intellectual Property Rights | |
To the best knowledge of the Company, the Company Subs and the Shareholders, the Business IP will not be lost, or rendered liable to right of termination or cessation by any third party, by virtue of subscription of the Subscription Shares, the purchase of the Sale Shares or otherwise as a result of the performance of this Agreement. | ||
(j) | Disclosure, Assignment and Inventions | |
Each employee and independent contractor of a Group Member who, either alone or with others, has created, developed or invented Intellectual Property Rights which a Group Member uses or might use has entered into a written agreement with a Group Member which obliges him to disclose and assign the Intellectual Property Rights to a Group Member. No claims have been made or threatened by employees or ex-employees of a Group Member in any jurisdiction for inventor compensation or anything similar. |
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(k) | Documentation | |
Complete and accurate records, files and documents have been maintained for all material Business IP and the records, files and documents are in the possession or under the control of a Group Member. |
(l) | Information Technology |
(i) | The IT Systems are owned by, or properly licensed, leased or supplied under third party contracts to, a Group Member (Third Party Contracts). The relevant Group Member is not in default under the Third Party Contracts. There are no grounds on which the Third Party Contracts might be terminated and there are no disputes or material service delivery issues existing or likely. There is no reason to believe that the Third Party Contracts will not be renewed when they expire on the same or substantially similar terms. |
(ii) | There are no circumstances in which the ownership, benefit, or right to use the IT Systems may be lost by virtue of the subscription of the Subscription Shares or the purchase of the Sale Shares or otherwise as a result of the performance of this Agreement. |
(iii) | The IT Systems have not failed to any material extent and the data that they process has not been corrupted to any material extent. To the best knowledge of the Company, the Company Subs and the Shareholders, the IT Systems do not contain viruses, bugs or things that materially distort their proper functioning, permit unauthorised access or disable them without the consent of the user. |
(iv) | No Group Member has authorised a third party to modify, reverse engineer or create derivative works of software or systems included in the IT Systems or licensed by a Group Member to third parties. |
(v) | No Group Member has disclosed the source code of software included in the IT Systems, or licensed by a Group Member to third parties, to any third party other than under a binding agreement with a reputable escrow agent on the agent’s standard terms. Nothing has happened which might, and the subscription of the Subscription Shares or the purchase of the Sale Shares by the Investor will not, trigger release of the source code to a third party under an escrow agreement. |
(vi) | The Group Members have, in accordance with best industry practice, taken precautions to preserve the availability, security and integrity of the IT Systems and the data and information stored on the IT Systems. |
(vii) | The IT Systems are adequate for the needs of the businesses of the Group Members as carried out at the date of this Agreement. |
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(a) | Contracts No Group Member is in default in any material respect in the performance, observance or fulfilment of any of its obligations or covenants contained in any contract to which it is a party with a Material Customer (theMaterial Contracts). Each Material Contract to which any Group Member is a party has been duly authorized, executed and delivered by such entities and by each other party thereto and constitutes the valid and binding obligation of each party thereto, enforceable against each party thereto in accordance with its terms, except where such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally. No Group Member is in breach of any Material Contract, and no party to a Material Contract has indicated any intention to terminate any Material Contract prior to the expiration of its term. |
(b) | Compliance with Laws To the best knowledge of the Company, the Company Subs and the Shareholders, there are no contracts or obligations, agreements, arrangements or concerted practices to which any of the Group Members is a party or by which any of the Group Members is bound, and there are no practices in which any of the Group Members is engaged, which are void, illegal, unenforceable or which contravene any applicable laws and regulations. |
(c) | No Breach With respect to each Contract, understanding, tender and bid to which each of the Group Members is party or by which it is bound and to the best knowledge of the Company, the Company Subs and the Shareholders: |
(i) | such entity has duly performed and complied in all material respects with each of its obligations thereunder; |
(ii) | there has been no delay, negligence or other default on the part of such entity and no event has occurred which, with the giving of notice or passage of time, may constitute a default thereunder; |
(iii) | such entity is under no obligation which cannot readily be fulfilled, performed or discharged by it on time and without undue or unusual expenditure or effort; |
(iv) | such entity has the technical and other capabilities and the human and material resources to enable it to fulfil, perform and discharge all its outstanding obligations in the ordinary course of business and without realising a material loss on completion of performance; |
(v) | there are no grounds for rescission, avoidance, repudiation or termination and such entity has not received any notice of termination. |
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(d) | Finance Documents Save as disclosed in the Disclosure Letter, there are no loans, guarantees, Encumbrances or unusual liabilities given, made or incurred by or on behalf of any of the Group Members (and, in particular but without limiting the foregoing, no loans have been made by or on behalf of any of the Group Members to any directors or shareholders of such entities) and no Person has given any guarantee of or security for any overdraft, loan or loan facility granted to such entities. |
(e) | Change in Control None of the current agreements to which any Group Members is a party can be terminated by virtue of the occurrence of an event of a change in control of any Group Members or in the composition of the board of directors of such entities or as a result of this Agreement. |
(f) | Connected Party Transactions with respect to the Shareholders Save as disclosed in the Disclosure Letter, (A) there are no Contracts, understandings, transactions or proposed transactions between any Group Member, on the one hand and any Shareholder or Connected Party of any Shareholder on the other hand, (B) no Shareholder or his/her Connected Party is indebted to any Group Member, nor is any Group Member indebted (or committed to make loans or extend or guarantee credit) to any Shareholder or his/her Connected Person, and (C) none of the Shareholders or Connected Parties of any Shareholder Controls any business entity with which any Group Member is affiliated or with which any Group Member has a business relationship, or any business entity that competes with any Group Member. |
(g) | Authority to Enter into Contracts No Group Member has given any powers of attorney or other authority express, implied or ostensible which is still outstanding or effective to any Person to enter into any contract or commitment to do anything on its behalf other than the authority of employees to enter into routine contracts in the normal course of their duties. |
(h) | Company’s Business Save for holding the equity interest in the Subsidiaries, the Company does not carry on any other business and does not have any other assets, liabilities or obligations. |
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(a) | Last Accounts The Last Accounts were prepared based on the accounts of each Group Member which were properly prepared by the internal accounting staffs of the Company who believe, in good faith, that the accounts are accurate. On the basis of the accounting bases, practices and policies used in theirpreparation and having regard to the purpose for which they were prepared, the Last Accounts: |
(i) | are true and accurate in all material respects, and are not misleading in any material respect; |
(ii) | do not materially over-state the value of the assets nor materially under-state the liabilities of the Group, as at the dates to which they were drawn up; and |
(iii) | do not materially over-state the profits or materially under-state the losses of the Group, in respect of the periods to which they relate. |
(b) | During the preparation of the Last Accounts, each Group Member provided all material information that is relevant for the preparation of the Last Accounts. |
(a) | Position Since Last Accounts Date Since the Last Accounts Date the business of each Group Member has been carried on in the ordinary and usual course in all material respects; there has not been any material interruption or alteration in the nature, scope or manner of the business of any Group Member; there has been no material adverse change in any customer relationship, the business, operations, financial condition, Assets or liabilities of any Group Member as compared with the position disclosed by the Last Accounts; no Group Member has made or agreed to make any payment other than routine payments in the ordinary and usual course of trading; and there has not been any failure by any Group Member to pay its creditors in the ordinary course of business. |
(b) | In particular: |
(i) | no share or loan capital has been allotted or issued or agreed to be allotted or issued by any Group Member other than as provided in the Transaction Documents; |
(ii) | there has been no change in the level of borrowing or in the working capital requirements of each Group Member; |
(iii) | there has not been any acquisition, sale, transfer or disposal of any Assets of whatsoever nature by any Group Member; |
(iv) | there has not been payment of any sum or benefit to any director of any Group Member or any Key Personnel by way of remuneration, bonus, incentive or otherwise in excess of the amounts paid or distributed to them by such entities at the Last Accounts Date so as to increase their total remuneration; |
(v) | there has not been any material change or amendment to any Material Contract by which any Group Member is bound; |
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(vi) | there has not been any declaration or payment of any dividend or other distribution by any Group Member; and |
(vii) | there has not been any material debt, obligation or liability or any contingent liability (whether on and off balance sheet)incurred, assumed or guaranteed by any Group Member, except amounts incurred in the ordinary course of business. |
(c) | Current Operations There is no existing fact or circumstance that may have a material adverse effect on the ability of any Group Member to conduct its business as currently conducted and contemplated to be conducted. |
(a) | No Litigation No Group Member is engaged in or has been notified that it is the subject of any litigation, arbitration or administrative or criminal proceedings (collectively,Litigation), whether as plaintiff, defendant or otherwise, which may have a material adverse effect on such Group Member (excluding the Investor). No Shareholder nor any director, officer or agent of any such entity is engaged in or has been notified that it is the subject of any Litigation, whether as plaintiff, defendant or otherwise, which has or is likely to have, a material adverse effect on its ability to perform its obligations under this Agreement. There are no facts or circumstances to give rise to any such Litigation against any of the Group Members, or any Shareholder or any director, officer or agent of any of such parties. |
(b) | No Pending Proceedings No Litigation that may have a material adverse effect on any of the parties (excluding the Investor) is pending or, threatened against any of such Persons. |
(c) | No Insolvency No order has been made and no resolution has been passed for the winding up or liquidation as dissolution of any of the parties (excluding the Investor). No distress, execution or other process has been levied on any of the Assets or properties of any of the parties (excluding the Investor). None of the parties (excluding the Investor) is insolvent or unable to pay its debts as they fall due. |
(d) | No bankruptcy No bankruptcy order has been made or petition presented against any Shareholder nor has any person threatened to present such an order or petition, nor has any Shareholder made any composition with his creditors or requested a suspension of payment of his debts nor has any steps been taken in relation to any Shareholder in respect of any of the foregoing. |
(e) | No Investigation or Inquiry To the best knowledge of any Group Member, no Group Member is the subject of any material investigation or inquiry that may have a material adverse effect on any Group Member, there are no facts which are likely to give rise to any such investigation or inquiry and none have received notice with respect to any such matter from the Tax authorities, administrative authorities of industry and commerce or labour and social security authorities. |
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(a) | Employees |
(i) | The list provided to the Investor and initialled on behalf of the Investor and the Company sets out a list of all Key Personnel and division managers of each Group Member showing, by reference to appropriate grades or categories, the remuneration payable and other principal benefits which each of such entities is bound to provide. |
(ii) | All employment agreements, other undertakings or agreements, either orally or in writing, between each director and employee of each Group Member and such entities set out the confidentiality obligations, non-compete obligations and termination rights in relation to their employment with a Group Member. |
(b) | Employment Agreements and Termination |
(i) | Subject to any exception provided under applicable laws, there is not in existence any written or unwritten contract of employment with a director or an employee of any Group Member (or any contract or services with any person) which cannot be terminated by three (3) months’ notice or less without giving rise to a claim for damages or compensation (other than statutory payments on termination of employment). |
(ii) | No outstanding liability has been incurred by any Group Member for breach of any contract of employment or for services or redundancy payments, protective awards, compensation for wrongful dismissal or unfair dismissal or for failure to comply with any order for the reinstatement or re-engagement of any employee or for any other liability accruing from the termination of any contract of employment or for services. |
(iii) | No gratuitous payment has been made or benefit given (or promised to be made or given) by any Group Member in connection with the actual or proposed termination or suspension of employment, or variation of any contract of employment, of any present or former director or employee of any Group Member. |
(c) | Compliance |
(i) | Except in relation to the matters described in Schedule 13, each Group Member has in relation to each of its employees (and so far as relevant to each of its former employees) complied in all material respects with all statutes, regulations, codes of conduct, collective agreements, terms and conditions of employment, orders and awards relevant to their employment, conditions of service or to the relations between it and its employees (or former employees, as the case may be) or any recognised trade union. |
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(ii) | Based on all gross wages and all compensation paid to all employees, each Group Member has complied with all applicable laws and regulations in declaring such wages and compensation to relevant Governmental Authorities, and in withholding and paying all Taxes to the relevant Governmental Authorities based on such wages and compensation paid to all its employees. |
(iii) | To the best knowledge of each Group Member (as the case may be), there have been no violations, no breaches of confidentiality or non-compete (within his or her tenure) obligations by any of the Key Personnel or division managers of the Group Members. |
(d) | Disputes | |
To the best knowledge of each Group Member (as the case may be), no dispute that may have a material adverse effect on any Group Member has arisen within the last two (2) years between any Group Member and a material number or category of its employees (or any trade union or labour union or other body representing all or any of such employees) and there are no present circumstances which are likely to give rise to any such dispute. |
(e) | Incentive Schemes | |
No Group Member has in existence any share incentive scheme, share option scheme or profit sharing scheme other than bonus or commission for all or any of its directors or employees. |
(a) | No Misrepresentation. No representation, warranty or statement by the parties (excluding the Investor) in this Agreement or any other Transaction Documents, or in any Schedule, statement or certificate furnished to the Investor pursuant to this Agreement or any other Transaction Document, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements made herein, in light of the circumstances under which they were made, not misleading. |
(b) | Full disclosure. To the best knowledge of the parties (excluding the Investor) there is no fact or circumstance relating to the Investor and which if disclosed might reasonably have been expected to influence the decision of the Investor to enter into the proposed transaction under this Agreement. |
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(a) | the parties to the Investment Agreement as at the date of the Investment Agreement; and |
(b) | any other person or persons who may after the date of the Investment Agreement (and whether prior to or after the date hereof) assume any rights or obligations under the Investment Agreement and be permitted to do so by the terms thereof. |
(a) | makes any representations or warranty or assumes any responsibility with respect to the legality, validity, effectiveness, adequacy or enforceability of the Investment Agreement or any agreement entered into pursuant thereto; |
(b) | makes any representation or warranty or assumes any responsibility with respect to the content of any information regarding the Company or any Group Member or otherwise related to the acquisition of shareholder instruments in the Company; or |
(c) | assumes any responsibility for the financial condition of the Company or any Group Member or any other party to the Investment Agreement or any other document; or |
(d) | assumes any responsibility for the performance and observance by the Company or any other party to the Investment Agreement or any other document (save as expressly provided therein) of the Investment Agreement or any other document, |
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EXECUTED | ) | |
andDELIVEREDas aDEEDby | ) | |
[ ] | ) | |
acting by two directors/a director and the secretary | ) |
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Name | Nationality | ID Number | Domicile | Title | ||||||||||||
Tien, Ting-Feng | Taiwan | A123446603 |
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(a) | if and to the extent that the fact, matter, event or circumstance giving rise to such claim was fairly and specifically disclosed in the Disclosure Letter; or |
(b) | if and to the extent the matter is specifically provided or reserved for (and not released prior to Completion) in the Last Accounts. |
(a) | after the signature of the audit report on the Group’s audited consolidated financial statements in respect of the second full Financial Year after Completion; or |
(b) | in respect of any amount in excess of the Consideration. |
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