EXHIBIT 10.3


 


SHARE PURCHASE AGREEMENT


 


THIS SHARE PURCHASE AGREEMENT (the “Agreement”) is entered into as of this 27th day of December 2005
by and among:


 


(1)   Hardinge
Taiwan Limited (the “Purchaser”),
a company organized and existing under the laws of the R.O.C., having its
registered office at 4 Tse-Chiang San Road, Nan-Kang Industrial Park, Nanto
City, Taiwan, R.O.C. (“Purchaser”);


 


(2)   Mr. Gordon G. R. Yang (), a citizen of the Republic of China
and having his domicile at No.22, Sinping Lane, Taiping City, Taichung County
411, Taiwan, R.O.C.;


 


Ms. Yang
Lin, Hsueh-O (), an ROC citizen and having her
domicile at 15F., No.356-3, Yongsing St., North District, Taichung City 404,
Taiwan, R.O.C., and


 


Mr. Mon
How Wu (), an ROC citizen and having his
domicile at 1F., No.206, Sec. 1, Chongde Rd., North District, Taichung City
404, Taiwan, R.O.C. (hereinafter
referred to individually as a “Seller”,
and collectively, the “Sellers”.)


 


(Each of the Purchaser and
the Sellers is hereinafter referred to individually as a “Party” and collectively, the “Parties”.)


 


W I T N E S
S E T H:


 


WHEREAS, U-Sung Co. Ltd. (the “Company”), a company limited by shares
organized and existing under the laws of the R.O.C., has a paid-in capital of
NT$17,000,000 with 170,000 issued and outstanding shares of common stock, at a
par value of One Hundred New Taiwan Dollars (NT$100) per share;


 


WHEREAS, the Sellers collectively own 100% of
the issued and outstanding shares in the Company with each of their
shareholding as indicated in Schedule 1
hereof; and


 


WHEREAS, the Sellers intend to sell to the
Purchaser and the Purchaser intends to purchase from the Sellers all of the
Sellers’ shares in the Company (the “Sale
Shares”) on the terms and conditions hereinafter set forth.


 


NOW,
THEREFORE,
in consideration of the foregoing and of the covenants and agreements herein
contained and intending to be legally bound, the Parties agree as follows:


 





















 


ARTICLE 1.  PURCHASE AND SALE OF THE SALE SHARES


 


1.01         Purchase and Sale of the Sale Shares. 
Upon the terms and subject to the conditions of this Agreement, on the
Closing Date (as defined in Article 2.01 hereof), the Sellers shall sell,
assign, transfer and deliver to the Purchaser, and the Purchaser shall purchase
and acquire from the Sellers, all the Sale Shares, together with all rights
attached or accrued thereto including the right to all dividends and
distributions declared, paid or made in respect thereof on or after the date
hereof.


 


1.02         Purchase Price. 
In consideration of the sale and purchase of the Sale Shares as provided
in Article 1.01 hereof, the purchase price for Mr. Kuo Jung Yang’s
76,500 shares shall be NT$59,730,653; for Ms. Hsueh O Lin’s 76,500 shares
shall be NT$59,730,653; for Mr. Mong Hao Wu’s 17,000 shares shall be NT$
13,273,478 and the total purchase price for the entire Sale Shares shall be
NT$132,734,785 (collectively the “Purchase
Price”).


 


ARTICLE 2.  THE CLOSING


 


2.01         The Closing. 
Upon the terms and subject to the conditions of this Agreement, the
Closing of the transactions contemplated herein (the “Closing”) shall take place at the
office of Lee & Li, Attorneys-at-law at 7th Fl., 201 Tun
Hua North Road, Taipei, Taiwan, R.O.C on December 29, 2005 or such other
date as agreed to by the Parties (the “Closing
Date”).


 


2.02         Deliveries by the Sellers and the
Company.  At the Closing, the Sellers shall or the
Sellers shall cause the Company to, as applicable, deliver each of the
following to the Purchaser in form and substance satisfactory to the Purchaser:


 


(1)           A receipt issued by the Sellers acknowledging the receipt of payment
of the Purchase Price and specifying the number of Sale Shares being
transferred to the Purchaser as of the Closing Date;


 


(2)           Share Certificates representing all the Sale Shares, duly endorsed by
each of the Sellers, together with all necessary documents as required by the
Purchaser for registration of share transfer for the Sale Shares;


 


(3)           The shareholders’ roster of the Company having registered therein the
Purchaser as the shareholder holding the Sale Shares (the shareholders roster
shall be duly affixed with seals of the Company and its Chairman of the Board
of Directors);


 


(4)           All other documents, certificates, instruments, chops and writings
required to be delivered by the Sellers pursuant to this Agreement or otherwise
required in connection therewith.


 


2.03         Payment by the Purchaser. The Purchase Price shall be divided into two 


 





















 


installments.
The Purchaser shall pay an initial payment of NT$39,820,435, equivalent to 30%
percent of the Purchase Price (the “Initial
Payment”), to the Sellers on the Closing Date to the accounts
designated by the Sellers as set forth in Schedule 1
hereof, and the second payment of NT$, 92,914,350 equivalent to 70% percent of
the Purchase Price (the “Second Payment”),
on or prior to March 31, 2006.  When
making the Initial Payment, the Purchaser shall withhold the amount of
NT$398,204, which shall represent the 0.3% Securities and Transaction Tax on
the entire Purchase Price, The Purchaser shall forthwith pay to the competent
tax authorities the withheld amount of the Securities and Transaction Tax
payable on the sale of the Sale Shares.


 


The
Parties acknowledge that the Purchase Price is based on the assumption that the
net book value of the Company on the Closing Date (the “Closing Book Value”)
will be equal to the net book value reflected on the unaudited balance sheet of
the Company as of December 25, 2005 (the “December Book Value”).  Accordingly, the Parties agree that if the
Closing Book Value turns out to be different from the December Book Value,
the Parties shall make an upward or downward adjustment to the Purchase Price
by March 31, 2006, on a dollar for dollar basis based on the balance sheet
as of December 31, 2005.  The amount
of the adjustment hereto shall be deducted from or added to the amount of the
Second Payment.


 


ARTICLE 3.  CONDITIONS PRECEDENT


 


3.01         Purchaser’s Conditions to Closing. 
The obligation of the Purchaser to purchase the Sale Shares is subject
to the satisfaction of following conditions precedent on or before the Closing
Date, unless waived by the Purchaser in writing:


 


(1)           All government approvals for the transaction contemplated herein have
been obtained, including without limitation to the approvals of the R.O.C.
Investment Commission (the “FIA Approval”)
for the Purchaser’s purchase of the Sale Shares.


 


(2)           The Sellers’ representations and warranties set out in Schedule 2 shall remain true and
correct as of the Closing Date.


 


(3)           No material adverse change in the financial and business conditions,
operations or prospects of the Company shall have occurred and be continuing.


 


(4)           Each of the directors and supervisors of the Company shall have
resigned from his/her office effective immediately upon the Closing Date and
the originals of their respective resignation letters are provided to the
Purchaser at the Closing.


 





















 


ARTICLE 4.  COVENANTS, UNDERTAKINGS, AND GUARANTEES


 


4.01         Continuing Operation. The Sellers hereby covenant and
undertake to cause the Company to operate its business in all material respects
in the ordinary course of business consistent with past practice following the
signing date of this Agreement to the Closing Date.  The Sellers further undertake to assure that
the Company will not, from signing of the Agreement to the Closing Date, (i) issue
and/or agree to issue any dividends or other distributions or loans to their
shareholders; (ii) pay and/or agree to pay any bonuses to employees; (iii) enter
into any finance agreement, lease or mortgage agreement for existing and new
assets; (iv) redeem or repay any shares or corporate bonds; (v) issue
or offer to issue any new shares or corporate bonds in whatsoever class or
type; (vi)increase salaries other than in the normal course of business at the
normal review dates; (vii) acquire or dispose any assets, including any
intangible assets or equity stocks; (viii) take any corporate action to
amend any corporate constitutive documents or by-laws, elect any new directors
or supervisors, or remove any corporate officers; (ix) grant any license
concerning any of the Intellectual Property Rights of the Company; or (x)
conduct any other activities materially deviating from the normal course of the
business of the Company.


 


4.02         Further Assurance.              Each of Sellers and Purchaser shall
use its best efforts to consummate in a timely manner the purchase and sale of
the Sale Shares. The Parties further agree to perform (or procure the
performance of) all further acts and things, and execute and deliver (or
procure the execution and delivery of) such further documents, as may be
required by law or as the other third parties may reasonably require, whether
on or after Closing, to implement and/or give effect to this Agreement and the
sale of the Sale Shares contemplated by it and for the purpose of vesting in
the Purchaser the Sale Shares to be transferred to it pursuant to the
provisions of this Agreement. The Sellers further undertake to facilitate the
Purchaser to take over the operation of the Company after the Closing,
including without limitation to assisting in the replacement of directors,
supervisors, officers, or company secretaries, the application(s) for amendment
to the corporate registration of the Company, delivering or causing to be
delivered any and all of the license certificates, permits, corporate
documents, bank account passbooks, keys, books and accounts, agreements and
contracts, and corporate seals of the Company, any other seals or chops that
the Company may be using in its daily operation, the chops or seals of the
chairman of the Company, and such other things or documents that are required
for the operation of the Company.


 


4.03         Non Competition. In consideration of the amount of payment received under this
Agreement, the Sellers agree not to, for one year from the execution of this
Agreement, directly or indirectly, in the R.O.C., conduct any business that is
same or related to either (i) the business of the Company or (ii) the
business directly or indirectly owned by the Purchaser that is same or related
to the business of the Company (“Non-compete
Business”), including without limitation, the provision of
services or products that are same or similar to Non-compete Business, or
concerning the Non-compete Business, the solicitation or diversion of any of
the 


 





















 


customers
or accounts of the Company, or the entity directly or indirectly owned by the
Purchaser for any purpose.


 


4.04         Non Disclosure.   Each of the Sellers shall not divulge, disclose, reproduce or
distribute to any person or entity any confidential information pertaining to
the Company, or the Purchaser including, without limitation, the Proprietary
Information (as defined below) of the Company, or the Purchaser, or any of
their respective shareholders, directors, officers, employees or customers.  Each of the Sellers shall abide by his/her
obligations under the R.O.C. Trade Secrets Act and other relevant laws. For the
purpose of this Agreement, “Proprietary Information” shall mean all materials,
vendors and users lists, designs, plans, specifications, intellectual property
and intellectual property applications, trade secrets, sales and marketing
information, computer applications, methods and policies of doing business, and
any other proprietary information and data.


 


4.05         Termination of Lease Agreements and
Release.  The Purchaser executed a Lease Agreement with
the Company on March 16, 1999 for the lease of land and factory buildings
located at 4 Tse-Chiang San Road, Nan-Kang Industrial Park, Nanto City (the “Premises”).  The Sellers acknowledge that at the Closing Date,
as soon as the Purchaser acquires the ownership of the Premises, the Lease
Agreement shall be terminated automatically. 
The Sellers agree that all rentals as well as any other compensation in
connection with the Lease Agreement have been fully paid by the Purchaser and
the Sellers have no interest or claims against the Company or the Purchaser in
connection with the Lease Agreement.  The
Sellers further agree to waive any and all claims and legal rights against the
Company, the Purchaser and their directors, employees, and shareholders arising
out of the lease of the Premises or any other operations of the Company.


 


4.06         Repayment of Company Loans. 
The Parties acknowledge that the Company has certain borrowings from
several individuals amounting to NT$102,015,216 in total (the “Company Debts”).  In order to strengthen the finance of the
Company, the Purchaser hereby agrees to repay, or to cause the Company to
repay, the full amount of the Company Debts as set forth in details in Schedule 3.  The repayment shall be divided into two
installments.  The first installment
shall be NT$30,604,565, equivalent to 30% percent of the amount of the Company
Debts, and paid upon the Closing, and the second installment shall be
NT$71,410,651, equivalent to 70% percent of the Company Debts, and paid on or
prior to March 31, 2006.


 


The
obligation of the Purchaser to effect the payments to the creditors is subject
to the satisfaction of the following conditions, unless waived by the Purchaser
in writing:


 


(1)   The creditors shall each provide a certificate of repayment to the
Purchaser, which shall be notarized if so requested by the Purchaser and shall
be in a form satisfactory to the Purchaser, to prove the complete repayment and
discharge of the borrowings.


 





















 


(2)   The creditors shall provide the Purchaser with proof of the
borrowings in form and substance satisfactory to the Purchaser.


 


(3)   The creditors shall provide any documentation and necessary help as
requested by the Purchaser in the event that the competent tax authority
demands the Purchaser to submit more evidence for the existence of the
borrowings and their repayment.


 


ARTICLE 5.  SURVIVAL OF WARRANTIES; INDEMNIFICATION


 


5.01         Indemnification by Each Seller. 
Each of the Sellers hereby agrees to jointly and severally indemnify,
defend and hold harmless the Purchaser (including its officers, employees,
directors, shareholders, assigns and successors) from and against any and all
claims, actions, deficiencies, assessments, liabilities, losses, damages,
costs, expenses, judgments and settlements against the Company and/or the
Purchaser, including reasonable legal fees, of any kind (collectively, “Claims”) relating to or arising out of
or in connection with or incidental to any breach by any Seller of any
representation or warranty under Schedule 2
of this Agreement or the failure of any Seller to perform any of his/her
covenants, undertakings or obligations under this Agreement and compensate any
damages or losses that the Purchaser may suffer from the breach of this
Agreement by any Seller. The indemnification obligations described herein shall
survive the termination, rescission or expiration of this Agreement.  For the purpose of this Article 5.01,
any damages or losses to the Company shall be deemed as the losses or damages
to the Purchaser.


 


ARTICLE 6.  CANCELLATION


 


6.01         Cancellation Prior to Closing. 
This Agreement may be canceled at any time prior to the Closing:


 


(1)           by mutual written consent of the Purchaser and the Sellers;


 


(2)           by the Purchaser, if the FIA Approval cannot be obtained within a
certain period of time for causes not attributable to the Purchaser;


 


(3)           by the Purchaser, if there has been a material violation or breach by
any of the Sellers of any agreement, representation or warranty contained in
this Agreement and Schedule 2;
or


 


(4)           by the Purchaser, in the event that by December 31, 2005, the
Sellers are not able to complete the transfer of Sale Shares to the Purchaser.


 


6.02         Procedure and Effect of Cancellation
Prior to Closing.  In the event of 


 





















 


cancellation
of this Agreement pursuant to Article 6.01, written notice thereof shall
forthwith be given to the other Party and this Agreement shall be canceled and
the transactions contemplated hereby shall be abandoned, without further action
by any of the Parties.  If this Agreement
is canceled as provided in Article 6.01:


 


(1)           no Party nor any of its directors, officers or affiliates shall have
any liability or further obligation to any other Party or to its directors,
officers or affiliates pursuant to this Agreement; provided, that this
is not intended to release any Party of any liability it may otherwise have for
a breach of any provision of this Agreement before the cancellation, and


 


(2)           all filings, applications and other submissions made pursuant to this
Agreement shall, to the extent practicable, be withdrawn from the agency of
other person to which made.


 


ARTICLE 7.  MISCELLANEOUS


 


7.01         Non-Waiver. 
Any failure or delay by any Party in exercising any right, power or
remedy shall not preclude the further exercise thereof, and every right, power
of remedy of the Parties hereto shall continue in full force and effect until
such right, power or remedy is specifically waived in writing by the relevant
Party.


 


7.02         Transactional Expenses. 
Whether or not the transactions contemplated by this Agreement are
consummated, each Party shall pay its own fees and expenses incident to the
negotiation, preparation, execution, delivery and performance hereof, including
without limitation, the fees and expenses of its counsel, accountants and other
experts.


 


7.03         Notices. 
Any notice required or permitted to be given under this Agreement shall
be in writing and shall be (i) personally delivered, (ii) transmitted
by telecopier (with confirmation by mail, postage prepaid, registered or
certified, return receipt requested, or by airmail in the event of mailing for
delivery outside of the country in which mailed), or (iii) transmitted by
an overnight courier, to the other Party as follows, as elected by the Party
giving such notice:


 


	
  To the Purchaser:

  
	
  Attention: J. Patrick Ervin

  
	
  Address: 

  	
  One Hardinge Drive

  
	
   

  	
  Elmira, NY 14902-1507

  
	
   

  	
  USA

  
	
   

  	
  Fax: 002-1-607-735-0474

  
	
   

  
	
  To the Sellers:

  
	
  Attention: Gordon G. R.
  Yang

  
	
  Address: No.22, Sinping
  Lane, Taiping City, Taichung County 411, Taiwan, R.O.C.

  
	
  Fax: 04-278-9323

  



 





















 


Except
as otherwise specified herein, all notices and other communications shall be
deemed to have been duly given on the date of receipt.  Any Party may change its address for purposes
hereof by notice as aforesaid to the other Party.  The Sellers specifically authorize Mr. Gordon
G. R. Yang to receive and issue any and all notices in connection with this
Agreement and be bound by such notices as if made by themselves.


 


7.04         Assignment. 
This Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of the Parties and their respective successors and
permitted assigns, but neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the Parties without the
prior written consent of the other Party, except that the Purchaser may assign
its rights under this Agreement to its affiliates by serving a written notice
to the Sellers without the prior consent of the Sellers.


 


7.05         Governing Law. 
This Agreement shall be construed, interpreted and governed by the laws
of the R.O.C., and the Parties hereby consent to the exclusive jurisdiction of
the Taipei District Court for the first instance in any dispute arising
hereunder.


 


7.06         Entire Agreement. 
This Agreement, including the Schedules hereto, and the other documents
and certificates delivered pursuant to the terms hereof, constitute the entire
agreement of the Parties in respect of the transactions contemplated
herein.  There are no restrictions,
promises, representations, warranties, covenants or undertakings, other than
those expressly set forth or referred to herein.  This Agreement supersedes all prior
agreements and understandings among the Parties with respect to the transaction
contemplated herein.


 


7.07         Severability. 
In the event that any one or more of the provisions of this Agreement
shall be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any of the other
provisions hereof, which shall nevertheless remain in full force and effect,
and this Agreement shall be construed as if such invalid, illegal or
unenforceable provisions had never been contained herein.


 


7.08         Language. 
This Agreement shall be executed in the English language.  Any version hereof in any other language
shall be for reference only.  In the
event of any conflicts or discrepancies between the English and translated
versions, the English one shall prevail and govern the meaning of this
Agreement.


 





















 


IN WITNESS WHEREOF, the
Parties have caused this Agreement to be duly executed as of the day and year
first above written.


 


	
  Hardinge Taiwan Limited

  
	
   

  
	
   

  
	
  /S/ J.PATRICK ERVIN-

  	
   

  
	
  By: J. Patrick Ervin

  
	
  Title: Chairman

  
	
   

  
	
   

  
	
  /S/ GORDON G. R. YANG-

  	
   

  
	
  Gordon G. R. Yang ()

  
	
  ID No.:

  
	
  Address: No.22, Sinping
  Lane, Taiping City, Taichung County 411, Taiwan, R.O.C.

  
	
   

  
	
   

  
	
  /S/ YANG LIN, HSUEH-O

  	
   

  
	
  Yang Lin, Hsueh-O ()

  
	
  ID No.:

  
	
  Address: 3 Fl.-6, 286
  Mei-Chuan West Road, Section 4, Taichung City, Taiwan, R.O.C.

  
	
   

  
	
   

  
	
  /S/ MON HOW WU—

  	
   

  
	
  Mon How Wu ()

  
	
  ID No.:

  
	
    Address: 1F., No.206, Sec. 1,
  Chongde Rd., North District, Taichung City 404, Taiwan, 

  
					



 


R.O.C.Schedule 1


 




	
  Shareholder

  	
   

  	
  Number of Shares

  	
   

  	
  Purchase Price (NT$)

  	
   

  
	
  Gordon G. R. Yang

  ()

  	
   

  	
  76,500

  	
   

  	
  59,730,653

  	
   

  
	
  Yang Lin, Hsueh-O

  ()

  	
   

  	
  76,500

  	
   

  	
  59,730,653

  	
   

  
	
  Mon How Wu

  ()

  	
   

  	
  17,000

  	
   

  	
  13,273,479

  	
   

  






 


SCHEDULE 2: REPRESENTATIONS AND
WARRANTIES


 


This Schedule is
incorporated by reference into the Share Purchase Agreement and constitutes the
Sellers legal, valid and binding obligations.


 


1.             Each Seller. 
Each of the Sellers hereby represents and warrants to the Purchaser
that:


 


(1)           He/she owns the portion of the Sale Shares registered under his/her
name free and clear of any trusts, liens, pledges, security agreements, options,
restrictions, encumbrances or charges of whatever nature, and has full legal
right, power and authority, without the prior or subsequent approval of any
person, government body or court, to sell, transfer, assign and


 





















 


deliver
the Sale Shares as provided in this Agreement, and such delivery will convey to
the Purchaser lawful, valid, marketable and indefeasible title to the Sale
Shares, free and clear of any trusts, liens, pledges, security agreement,
options, restrictions, encumbrances or charges of whatsoever nature.


 


(2)           There is no legal action, suit, proceeding, litigation, claim,
administrative proceeding or governmental action currently pending or
threatened that does or might affect: (i) such Seller’s interest in the
Sale Shares, or (ii) such Seller’s ability to convey to the Purchaser
good, marketable and unencumbered title to the Sale Shares, or (iii) such
Seller’s authority to enter into and perform this Agreement.


 


(3)           The Company is a company duly organized under the laws of the R.O.C. and
properly operates its business in accordance with all applicable laws and
regulations.  As of the date hereof, the
Company has not issued any preferred stock or entered into any agreement or
made any similar arrangements with any third parties granting such third party
a privilege to subscribe new shares to be issued by the Company in the future.


 


(4)     (a)  The Sellers have delivered to the
Buyer accurate and complete copies of:


 


(i)                the Company’s Articles of Association
and Bylaws, including all amendments thereto, as presently in effect;


(ii)               the shareholders roster of the
Company; and


(iii)              the minutes and other records of the
meetings and other proceedings (including any actions taken by written consents
or otherwise without a meeting) of the shareholders of the Company and the
board of the Company since 1999; and


(iv)              the amended corporate registration
card and business license


 


(b) There
does not exist any violation of any of the provisions of the Company’s Articles
of Association or of any resolution adopted by the Company’s shareholders.


 


(5)           The Sellers have provided the Buyer with (i) unaudited
consolidated balance sheet of the Company as of December 31, 2004, and
corresponding consolidated statements of income and cash flow statements; and (ii) the
unaudited balance sheet of the Company as of December 25, 2005, and
corresponding statements of income.  Such
balance sheets and the notes thereto are true, complete and accurate and fairly
represent the assets and liabilities of the Company as at the respective dates
thereof, and fairly represent the results of operations for the periods therein
referred to, all in accordance with the applicable generally accepted
accounting principles consistently applied throughout the periods involved. The
Company has full and exclusive title to all assets and properties reflected in
the balance sheets.


 





















 


(6)           The Company has performed and duly and timely taken all action
necessary to enable it to perform when due all obligations under all agreements
and contracts and does not owe any duty or liabilities to any counterparties of
the agreements or the contracts.


 


(7)           The Company has never been subject to any insolvency, liquidation,
bankruptcy or similar proceedings.


 


(8)           The Company has timely and duly filed its tax returns, and has fully
paid up its tax obligations that are due and made reserve fully to cover all
tax assessed, including without limitation, the Income Tax through the year of
2005.  In addition, the Company has also
paid, withheld, or reserved all labor insurances and national health insurance
premium, pension fund reserve, and withholding tax for its employees.


 


(9)           Annex 1 set forth a true and complete list of
all Intellectual Property Rights (as defined below) that are owned by and
registered in the name of the Company. 
For the purpose of this Agreement, “Intellectual
Property Rights” shall mean all inventions, patents, copyrights,
trade secrets, trademarks, service marks, trade names, internet domain names
and other intellectual property rights, whether registered or pending
registration.  To the best of the Sellers’
knowledge, no employee or any other third party has any claim to joint
ownership of any Intellectual Property Rights of the Company.  None of the Intellectual Property Rights is
subject to any licensing arrangement of whatever nature with any person or
entity, or to any lien, pledge, or any other encumbrance of whatever kind.  To the best of the Sellers’ knowledge, the
products and the Intellectual Property Rights of the Company are not being
infringed upon by any third party to such extent that it affects the business
of the Company.


 


(10)         Annex 2 set forth a true and complete asset
lists of the Company that the Company has furnished to the Purchaser which
represent all of the assets owned by the Company and these assets are free and
clear of any trusts, liens, pledges, security agreements, restrictions,
encumbrances or charges of whatever nature.


 


(11)         The Company has at all times complied with all applicable
environmental laws and regulations and no assets or properties owned by the
Company, regardless of whether actually used by the Company, are in a state
that would give rise to liability, including without limitation, for water,
soil, waste, and noise pollution, under applicable environmental laws and
regulations in force on or before the Closing Date.


 


(12)         The Company is in compliance with all material respects with its
obligations under all applicable laws, executive orders and other governmental


 





















 


regulations
governing its employment practices, including, without limitation, provisions
relating to wages, hours, equal opportunity, and working conditions.


 


ANNEX 1: LIST OF INTELLECTUAL PROPERTY RIGHTS


 


	
  Trademarks

  	
   

  	
  Nation/ Type

  	
   

  	
  Certificate Number

  	
   

  	
  The term of Validity

  	
   

  
	
  ADVART

  	
   

  	
  Taiwan/ Trademark- Type 7

  	
   

  	
  900554

  	
   

  	
  2000/8/16-2010/8/15

  	
   

  
	
  Shen-Long ()

  	
   

  	
  Taiwan/ Trademark- Type 7

  	
   

  	
  922155

  	
   

  	
  2001/1/1-2010/12/31

  	
   

  



 


ANNEX 2: LIST OF
ASSETS


 


	
  Title

  	
   

  	
  Quantity

  	
   

  	
  Obtaining

  Time

  	
   

  	
  Original

  Obtaining

  Price (NT$)

  	
   

  	
  Residual

  Value

  (NT$)

  	
   

  	
  Original

  Obtaining Price

  - Residual Value

  (NT$)

  	
   

  	
  Original

  Statement

  	
   

  	
  New

  Statement

  	
   

  	
  Additional

  Depreciation

  amount in this

  period (NT$)

  	
   

  	
  Accumulated

  Depreciation

  (NT$)

  	
   

  	
  Undiscounted

  Balance (NT$)

  	
   

  
	
  Land

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Land

  	
   

  	
  6000 Ping

  	
   

  	
  87.07.15.

  	
   

  	
  6,225,003

  	
   

  	
  6,225,003

  	
   

  	
  —

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  6,225,003

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  6,225,003

  	
   

  	
  6,225,003

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  6,225,003

  	
   

  
	
  Construction

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Building

  	
   

  	
  1

  	
   

  	
  69.06.01.

  	
   

  	
  7,866,302

  	
   

  	
  174,806

  	
   

  	
  7,691,496

  	
   

  	
  44

  	
   

  	
  44

  	
   

  	
  174,807

  	
   

  	
  4,419,094

  	
   

  	
  3,447,208

  	
   

  
	
  Plant

  	
   

  	
  1

  	
   

  	
  88.07.01.

  	
   

  	
  72,772,074

  	
   

  	
  2,021,446

  	
   

  	
  70,750,628

  	
   

  	
  35

  	
   

  	
  35

  	
   

  	
  2,021,447

  	
   

  	
  13,139,405

  	
   

  	
  59,632,669

  	
   

  
	
  Office Building

  	
   

  	
  1

  	
   

  	
  89.10.01

  	
   

  	
  71,400,739

  	
   

  	
  1,983,353

  	
   

  	
  69,417,386

  	
   

  	
  35

  	
   

  	
  35

  	
   

  	
  1,983,354

  	
   

  	
  10,413,097

  	
   

  	
  60,987,642

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  152,039,115

  	
   

  	
  4,179,605

  	
   

  	
  147,859,510

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  4,179,606

  	
   

  	
  27,971,594

  	
   

  	
  124,067,521

  	
   

  
	
  Communication and Transportation Equipment

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Miscellaneous Equipment

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   (Polestar Elevator)

  	
   

  	
  1

  	
   

  	
  88.09.09.

  	
   

  	
  428,571

  	
   

  	
  47,619

  	
   

  	
  380,952

  	
   

  	
  8

  	
   

  	
  8

  	
   

  	
  47,619

  	
   

  	
  301,587

  	
   

  	
  126,984

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  428,571

  	
   

  	
  47,619

  	
   

  	
  380,952

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  47,618

  	
   

  	
  301,586

  	
   

  	
  126,985

  	
   

  
	
  Production Equipment (Machine)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   (Automatic Capsule
  Manufacturing Machine)

  	
   

  	
  1

  	
   

  	
  74.07.24.

  	
   

  	
  15,000,000

  	
   

  	
  483,870

  	
   

  	
  14,516,130

  	
   

  	
  30

  	
   

  	
  30

  	
   

  	
  483,871

  	
   

  	
  9,519,969

  	
   

  	
  5,480,031

  	
   

  
	
  (Automatic
  Capsule Manufacturing Machine)

  	
   

  	
  1

  	
   

  	
  75.03.25.

  	
   

  	
  10,000,000

  	
   

  	
  322,580

  	
   

  	
  9,677,420

  	
   

  	
  30

  	
   

  	
  30

  	
   

  	
  322,581

  	
   

  	
  6,030,123

  	
   

  	
  3,969,877

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  25,000,000

  	
   

  	
  806,450

  	
   

  	
  24,193,550

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  806,452

  	
   

  	
  15,550,092

  	
   

  	
  9,449,908

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  188,971,600

  	
   

  	
  11,557,768

  	
   

  	
  177,413,832

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  5,033,676

  	
   

  	
  43,823,272

  	
   

  	
  139,869,417

  	
   

  



 


SCHEDULE 3:
Creditors of the Company


 


	
  Creditor

  	
   

  	
  Amount of Borrowing
  (NT$)

  	
   

  
	
  Gordon G. R. Yang
()

  	
   

  	
  52,267,210

  	
   

  
	
  Shu Huei Wu

  ()

  	
   

  	
  21,387,184

  	
   

  
	
  Paul Ling

  ()

  	
   

  	
  6,935,322

  	
   

  
	
  Hsueh O Lin
()

  	
   

  	
  21,425,500