1
Exhibit 2.1
DATED JANUARY 19, 1998
BETWEEN
▇▇▇▇▇▇ FOO LOKE KIEAN
▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇ PAN
FOO KHOON ▇▇▇▇
SAE FOO KITIPONGSE @ FOO LOKE KHEE
AS VENDORS
- AND -
NHANCEMENT TECHNOLOGIES INC.
AS PURCHASER
---------------------------------------------
A G R E E M E N T
RELATING TO
THE SALE AND PURCHASE OF 500,000
ORDINARY SHARES IN THE CAPITAL OF
INFOTEL TECHNOLOGIES (PTE) LTD
---------------------------------------------
RQ/WTST/13764/972
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Advocates & Solicitors
Singapore
2
INFOTEL - Share Sale Agmt
2.
CONTENTS
CLAUSE HEADING PAGE
------ ------- ----
1. INTERPRETATION 1
2. SALE OF SHARES 4
3. ESCROW ARRANGEMENTS 5
4. CONSIDERATION 5
5. REPRESENTATIONS BY PURCHASER 11
6. COMPLETION 11
7. PURCHASER'S RIGHT OF ACCESS 14
8. RESTRICTIONS ON VENDORS 14
9. WARRANTIES 17
10. CONFIDENTIALITY 23
11. ANNOUNCEMENTS 24
12. PROVISIONS RELATING TO THIS AGREEMENT 24
13. GOVERNING LAW AND JURISDICTION 28
SCHEDULE 1 29
I - VENDORS
II - DIRECTORS
III - SPECIFIED EMPLOYEES
IV - PARTICULARS OF THE COMPANY
SCHEDULE 2 - WARRANTIES AND REPRESENTATIONS 31
SCHEDULE 3 - ADJUSTMENT OF CONSIDERATION 52
SCHEDULE 4 - PROPERTY 58
SCHEDULE 5 - PROVISIONS APPLICABLE TO CLAUSE 4(F)(iv) 59
APPENDIX A - FORM OF ESCROW AGENT AGREEMENT 62
APPENDIX B - FORM OF SERVICE AGREEMENT 63
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INFOTEL - Share Sale Agmt
3.
THIS AGREEMENT is made on January 19, 1998 BETWEEN:-
(1) THE PERSONS SPECIFIED IN PART I OF SCHEDULE 1 (together, the
"Vendors", which expression shall include their respective
successors); and
(2) NHANCEMENT TECHNOLOGIES INC. (the "Purchaser", which expression shall
include its successors and permitted assigns), a corporation
incorporated in the State of Delaware, United States of America and
having a principal place of business at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America.
WHEREAS the Purchaser wishes to acquire from the Vendors the entire issued
share capital of Infotel Technologies (Pte) Ltd, a company incorporated in
Singapore with its registered office at ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ #▇▇-▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ (the "Company"), upon the terms and subject to the conditions of this
Agreement.
IT IS HEREBY AGREED as follows:-
1. INTERPRETATION
(A) In this Agreement and the Schedules, unless the context otherwise
requires:-
"Additional Consideration Shares" means the additional shares in the
common stock of the Purchaser defined as such in clause 4(C)(i)
credited as fully paid.
"Affiliates" means in respect of any Vendor, any member of his
immediate family, any partnership in which that Vendor is a partner
and any company in which that Vendor has for purposes of Section 7 of
the Companies Act an interest in shares in that company of a nominal
value equal to 20 per cent. or more of the nominal value of the equity
share capital of that company.
"Audited Accounts" means the audited balance sheet of the Company made
up as at the Balance Sheet Date including the notes thereto and the
directors" report and auditors" report, true copies of all of which
are annexed to the Disclosure Letter.
"Balance Sheet Date" means 30th June 1997.
"Business Day" means a day on which banks are open for ordinary
banking business in Singapore.
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INFOTEL - Share Sale Agmt
4.
"Cash Portion" means S$3,750,000.00.
"Companies Act" means the Companies Act, Chapter 50 of Singapore.
"Completion" means completion of the sale and purchase of the Sale
Shares.
"Completion Accounts" means the accounts prepared in accordance with
paragraph 2 of Schedule 3 and agreed or determined in accordance with
paragraph 4 of Schedule 3.
"Completion Date" means 16th March 1998 (or such other date as the
parties may agree but, in any event, being a date not later than 30th
June 1998).
"Consideration Shares" means the Initial Consideration Shares and the
Additional Consideration Shares.
"Directors" means the persons named in Part II of Schedule 1.
"Disclosure Letter" means the letter dated the date of this Agreement
written by or on behalf of the Vendors to the Purchaser in agreed
terms.
"Escrow Agent" means Messrs. BDO Binder.
"Escrow Agent Agreement" means the agreement between the Vendors, the
Purchaser and the Escrow Agent substantially in the form annexed hereto
as Appendix A, as amended, modified or supplemented from time to time.
"First Anniversary" means the first anniversary of the date of
Completion.
"ICS Value" means the amount in United States Dollars derived by
multiplying the number of Initial Consideration Shares by US$5.00.
"Initial Consideration Shares" means the number of shares in the common
stock of the Purchaser determined in accordance with paragraph 5 of
Schedule 3.
"Management Accounts" means the management accounts of the Company for
the period from the Balance Sheet Date to 31st December 1997.
"Net Tangible Assets" means the aggregate value of all fixed and
current assets (excluding goodwill, patents, trade marks and other
intangible assets) minus the aggregate value of all liabilities and
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INFOTEL - Share Sale Agmt
5.
provisions and excluding any reserves or capital created by the upward
revaluation of assets subsequent to the Balance Sheet Date.
"Performance Payments" means the payments (if any) of such amounts as
shall be determined in accordance with clause 4(F).
"Purchaser's Accountants" means Messrs. BDO Binder, a firm of
certified public accountants with a place of business at ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ #▇▇-▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
"Relevant Financial Year" shall have the meaning ascribed to it in
clause 4(G)(i).
"Relevant NHancement Shares" shall have the meaning ascribed to it in
paragraph 8 in Part II of Schedule 5.
"Sale Shares" means the shares to be bought and sold pursuant to
clause 2(A).
"SAS" means Statement of Accounting Standard published by the
Institute of Certified Public Accountants of Singapore.
"SEC" means the Securities and Exchange Commission of the United
States of America.
"Second Anniversary" means the second anniversary of the date of
Completion.
"Service Agreements" means the service agreements to be entered into
between the Company and each of the Specified Employees, substantially
in the form annexed hereto as Appendix B, as amended, modified or
supplemented from time to time.
"Shareholding Proportion" means the proportion in which the Sale
Shares are held by each Vendor as set out opposite his name in the
second column of Part I of Schedule 1.
"Singapore Dollars" and "S$" mean the lawful currency of the Republic
of Singapore.
"Specified Employees" means the employees of the Company as at the
date of this Agreement, whose names are set out in Part III of
Schedule 1.
"Taxation" means all forms of taxation and, without limiting the
generality of the foregoing, shall include all forms of income tax,
corporation tax and any taxation of a similar nature, goods and
services tax, stamp duty and all levies, imposts, duties, penalties,
charges,
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INFOTEL - Share Sale Agmt
6.
fees, deductions and withholdings whatsoever charged or imposed by any
statutory, governmental, state, provincial, local government or
municipal authority in Singapore or any taxing jurisdiction in which
the Company owns assets or conducts business;
"United States Dollars" and "US$" mean the lawful currency of the
United States of America.
"US Dollar Equivalent" means the amount of United States Dollars
(conclusively determined by the Purchaser) which a Singapore Dollar
amount will purchase by using the closing rate of exchange for
Singapore Dollars into United States Dollars furnished by the Bank of
America to the public on the Business Day prior to the date of this
Agreement.
"Warranties" means the warranties and representations set out in
paragraph 2 of Schedule 2.
(B) Modification of Statutes
Any reference to a statutory provision shall include that provision and
any regulations made in pursuance thereof as from time to time modified
or re-enacted whether before or after the date of this Agreement so far
as such modification or re-enactment applies or is capable of applying
to any transactions entered into prior to Completion and (so far as
liability thereunder may exist or can arise) shall include also any
past statutory provision or regulation (as from time to time modified
or re-enacted) which such provision or regulation has directly or
indirectly replaced.
(C) Vendors
(i) References to the Vendors include a reference to each of them.
(ii) Unless otherwise expressly provided, all warranties, representations,
indemnities, covenants, agreements and obligations given or entered
into by more than one person in this Agreement are given or entered
into jointly and severally.
(D) Miscellaneous
(i) Except where the context otherwise requires, words denoting the
singular include the plural and vice versa; words denoting any gender
include all genders; words denoting persons include firms and
corporations and vice versa.
(ii) All references to "related corporation" shall have the meaning ascribed
to it in the Companies Act.
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INFOTEL - Share Sale Agmt
7.
(iii) Unless otherwise stated, a reference to a clause, schedule or appendix
is a reference to a clause of, a schedule to, or an appendix to,this
Agreement. A reference to a sub-clause is a reference to a sub-clause
in the clause in which that sub-clause is found, and a reference to a
paragraph is a reference to a paragraph of the sub-clause in which
that paragraph is found.
(iv) Clause and sub-clause headings are for ease of reference only and do
not affect the construction of this Agreement.
2. SALE OF SHARES
(A) Sale and purchase
Subject to the terms of this Agreement, each of the Vendors shall sell
and the Purchaser shall purchase, free from all liens, charges,
equities and encumbrances and together with all rights now or
hereafter attaching thereto the number of ordinary shares with a par
value of S$1/- each set opposite his name in the third column of Part
I of Schedule 1 (which shares together comprise the entire issued
share capital of the Company) as at Completion.
(B) Simultaneous completion
The Purchaser shall not be obliged to complete the purchase of any of
the Sale Shares unless the purchase of all the Sale Shares is
completed simultaneously.
(C) Waiver of pre-emption rights
Each of the Vendors hereby waives any pre-emption rights he may have
relating to the Sale Shares, whether conferred by the Company's
Articles of Association or otherwise.
3. ESCROW ARRANGEMENTS
(A) Appointment of Escrow Agent
The parties agree to jointly appoint the Escrow Agent on the terms and
conditions of the Escrow Agent Agreement and shall enter into and
execute the Escrow Agent Agreement on the date of this Agreement. The
Purchaser agrees to bear all costs and expenses incidental to such
appointment.
(B) Vendors' obligations
The Vendors shall:-
(i) no later than 14 days after the date of this Agreement,
deliver to the Escrow Agent duly executed transfers of the
Sale Shares
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INFOTEL - Share Sale Agmt
8.
by the registered holders thereof in favour of the Purchaser
together with the relative share certificates; and
(ii) on the date of this Agreement, deliver to the Purchaser the
Disclosure Letter complete with the annexures thereto.
4. CONSIDERATION
(A) Total Consideration: The total consideration for the Sale Shares shall
be:-
(i) the Cash Portion;
(ii) the allotment to the Vendors of the Initial Consideration
Shares;
(iii) the allotment to the Vendors of the Additional Consideration
Shares (if any) issued and delivered in accordance with
sub-clause (C); and
(iv) the Performance Payments (if any) made in accordance with
sub-clause (F),each payable to the Vendors in the Shareholding
Proportion; and
(v) the obligation on the part of the Purchaser to provide funds to
the Company in accordance with sub-clause (G).
(B) Initial Consideration Shares
(i) The Initial Consideration Shares shall carry the right to receive in
full all dividends and other distributions declared, made or paid in
respect thereof on and after Completion.
(ii) In addition to and notwithstanding the provisions of sub-clause (D)(i),
the Vendors will not be permitted to sell, transfer, assign or
otherwise dispose of any of the Initial Consideration Shares at any
time before the First Anniversary and, unless any of the Initial
Consideration Shares are otherwise redeemed under paragraph (ii) or
(iii) of sub-clause (D), the Vendors may only dispose of up to one-half
of their respective shareholdings of the Initial Consideration Shares
during the one year period commencing on the First Anniversary. After
the Second Anniversary, all Initial Consideration Shares then held by
any Vendor may be disposed of at his discretion. The agreements entered
into by each Vendor under this paragraph (ii) are entered into by the
Vendors severally (and not jointly).
(C) Additional Consideration Shares
(i) Subject to paragraphs (ii) and (iii) of sub-Clause (D) and paragraph
(ii) of this sub-clause, in the event that
9
INFOTEL - Share Sale Agmt
9.
the fair market value of an Initial Consideration Share is less than X
(as defined below) per share on the First Anniversary or on the Second
Anniversary, the Purchaser will issue and deliver to the Vendors
additional shares of the common stock of the Purchaser (the
"Additional Consideration Shares") in an amount equal to the lesser
of:-
(aa) the quotient obtained by dividing one-half of the ICS Value
by the fair market value (as defined below) per share of the
Purchaser's common stock as at the First Anniversary or the
Second Anniversary, as the case may be, less one-half of the
number of all of the Initial Consideration Shares; and
(bb) the quotient obtained by dividing one-half of the ICS Value
by 0.55X, less one-half of the number of all of the Initial
Consideration Shares,
where:-
the "fair market value" of a share of the Purchaser's common stock on
the First Anniversary and the Second Anniversary shall be the average
of the closing sale price of the Purchaser's common stock as reported
on The NASDAQ Small Cap Market System (or any alternative exchange on
which the Purchaser's common stock is then being traded) for the five
trading days immediately preceding the First Anniversary and the
Second Anniversary, as the case may be; and
"X" means US$5.00 (unless the Purchaser's stock of which Initial
Consideration Shares form part, are split or a rights offering is made
in respect thereof, in which case "X" shall be adjusted accordingly).
(ii) In the event that in accordance with the foregoing paragraph (i)
Additional Consideration Shares are to be issued as at the First
Anniversary or the Second Anniversary, as the case may be, and
redemption(s) of Initial Consideration Shares shall have been effected
under sub-clause (D), then the number of Additional Consideration
Shares to be issued shall be reduced by the same proportion as the
proportion which the number of Initial Consideration Shares which have
been redeemed bears to all the Initial Consideration Shares.
(iii) For the avoidance of doubt, in the event that the Completion Accounts
shall not have become binding for purposes of paragraph 4.4 of
Schedule 3 and the final number of Initial Consideration Shares shall
accordingly not have been determined by the First Anniversary, the
10
INFOTEL - Share Sale Agmt
10.
Additional Consideration Shares to be issued by the Purchaser with
reference to the First Anniversary shall, in accordance with paragraph
(i), be issued as soon as practicable after the final number of Initial
Consideration Shares shall have been determined.
(iv) For the avoidance of doubt, it is hereby acknowledged and agreed that
the Purchaser shall have no further obligation to issue Additional
Consideration Shares to the Vendors after the Second Anniversary.
(D) Redemption
(i) At any time and from time to time up to the Second Anniversary, the
Purchaser shall have the option (but not the obligation) to redeem in
the Shareholding Proportion all or any portion of the Initial
Consideration Shares and the Additional Consideration Shares. The
aggregate redemption price for all of the Initial Consideration Shares
and any Additional Consideration Shares which shall have been issued to
the Vendors under sub-Clause (C)(i) shall be an amount equivalent to
the Cash Portion.
(ii) In the event of a redemption (either in a single transaction or series
of transactions) of all of the Initial Consideration Shares:-
(aa) at any time on or before the First Anniversary, then all of the
Initial Consideration Shares issued to date shall be deemed to
have been redeemed and the Purchaser shall have no obligation
to issue any Additional Consideration Shares to the Vendors
under sub-Clause (C)(i) whether on the First Anniversary or the
Second Anniversary; and
(bb) at any time after the First Anniversary but before the Second
Anniversary, then all of the Initial Consideration Shares and
Additional Consideration Shares issued to date shall be deemed
to have been redeemed and the Purchaser shall have no
obligation to issue any Additional Consideration Shares to the
Vendors under sub-Clause (C)(i) on the Second Anniversary.
(iii) If the Purchaser elects to redeem only a portion of the Initial
Consideration Shares, Additional Consideration Shares (if any) then
issued prior to the redemption date shall be redeemed in the same
proportion (the "Relevant Proportion") as the portion of the Initial
Consideration Shares being redeemed bears to all of the Initial
Consideration Shares. The redemption price payable for the Initial
Consideration Shares and Additional Consideration Shares being
redeemed, shall be equal to the Relevant Proportion of the Cash
Portion.
(iv) The Purchaser will be entitled to exercise its option to redeem the
Initial Consideration Shares and the Additional Consideration Shares,
regardless of whether or not the restrictions on transfer of any of the
Initial Consideration Shares described in sub-clause (B)(ii) are
effective, provided however that the Purchaser will not be entitled to
redeem the Initial Consideration Shares and the Additional
11
INFOTEL - Share Sale Agmt
11.
Consideration Shares which shall have been properly sold, transferred,
assigned or otherwise disposed by the Vendors in accordance with the
provisions of sub-clause (B)(ii).
(v) In the event that any Vendor so sells, transfers, assigns or otherwise
disposes of his Initial Consideration Shares and/or Additional
Consideration Shares, the aggregate price payable to all Vendors for
redemption of all Initial Consideration Shares and Additional
Consideration Shares shall be reduced in the same proportion as the
proportion which the number of Initial Consideration Shares and/or
Additional Consideration Shares so sold, transferred, assigned or
otherwise disposed bears to all Initial Consideration Shares and (as
then issued) all Additional Consideration Shares respectively.
(vi) For the avoidance of doubt, the Initial Consideration Shares and the
Additional Consideration Shares shall not be redeemable by the
Purchaser under the provisions of this sub-Clause (D) following the
Second Anniversary.
(vii) The agreements entered into by each Vendor under this sub-clause (D)
are entered into by each Vendor severally (and not jointly).
(E) Consideration Shares: The Consideration Shares will not be registered
under the Securities Act of 1933 of the United States of America, as
amended (the "Securities Act"), or under any state securities laws,
and will be subject to restrictions on transfer until such time as the
Consideration Shares may be sold in reliance upon the exemption from
registration afforded by Rule 144 promulgated by the SEC under the
Securities Act, or another exemption from registration, or until such
shares are registered.
(F) Performance Payments
(i) In respect of the Company's financial years ending 30th June 1998 and
30th June 1999 respectively (each, a "Pay-Out Financial Year"), the
Purchaser agrees to pay the Vendors S$2.00 for every S$1.00 of Profit
After Tax (as defined in paragraph (ii)) earned by the Company in the
ordinary course of business during each Pay-Out Financial Year;
provided however that the Purchaser shall cease to be liable to make
any further payments to the Vendors under this sub-Clause (F) once it
shall have paid up to an amount of S$3,200,000.00 in aggregate.
(ii) For purposes of this sub-Clause (F), the amount of "Profit After Tax"
shall be conclusively determined by the Purchaser's Accountants on the
basis of the Company's audited accounts in respect of a Pay-Out
Financial Year
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INFOTEL - Share Sale Agmt
12.
in question (which accounts shall be prepared in accordance with
generally accepted accounting principles by the Company's auditors for
the time being); provided however that:-
(aa) for the purposes of determining such amount, the ordinary
course of business of the Company during that Pay-Out Financial
Year shall exclude net losses suffered from business and
activities which the Company does not carry on in the ordinary
course as at the date of this Agreement;
(bb) the amount of Profit After Tax shall exclude all amounts by way
of incentive bonuses (referred to in clause 3.4 of the Service
Agreement) paid to Specified Employees in respect of that
Pay-Out Financial Year;
(cc) in respect of the Pay-Out Financial Year ending 30th June 1999,
there shall be taken into account any net losses incurred by
the Company in respect of the Pay-Out Financial Year ending
30th June 1998 (but net losses suffered from business and
activities which the Company does not carry on in the ordinary
course as at the date of this Agreement are not required to be
taken into account).
(iii) Any payment due to the Vendors as aforesaid shall (subject to the
Vendors having given to the Purchaser payment instructions therefor) be
made to the Vendors no later than 30 days after the date of filing with
the SEC of the Purchaser's annual report on Form 10-KSB or other
similar form for the year ended on the last day of each Pay-Out
Financial Year.
(iv) In the event that the Purchaser fails in respect of any Pay-Out
Financial Year to make a payment under this sub-clause (F) to any one
or more of the Vendors, the provisions of Schedule 5 shall take effect
in accordance with the terms thereof.
(G) Incentive Bonuses
(i) The Purchaser shall provide the Company with funds of up to
S$300,000.00 for purposes of making payments to the Specified Employees
of the incentive bonuses in accordance with the provisions of clause
3.4 of and Schedule 2 to the Service Agreements. The incentive bonuses
shall be payable if the Company earns Profit After Tax (as defined
below) in respect of each of the Company's financial years ending 30th
June 1998, 30th June 1999 and 30th June 2000 respectively (each, a
"Relevant Financial Year"). "Profit After Tax" shall have the
13
INFOTEL - Share Sale Agmt
13.
meaning ascribed to it in paragraph 1 of Schedule 2 to the Service
Agreements.
(ii) The Specified Employees (or their respective successors who shall have
completed not less than six months employment with the Company) shall
participate in the amount of incentive bonus declared in respect of
any one Relevant Financial Year according to the percentage (the
"Participation Percentage") of the Profit After Tax for that Relevant
Financial Year set against their respective names:-
(a) Managing Director - 1.5%
(b) Director, Sales and Marketing - 1.5%
(c) Sales and Marketing Manager, Test Instruments - 4.0%
(d) Finance Manager - 2.4%
(e) Manager, CSD - 2.4%
(f) Business Development Manager - 1.0%
(g) Manager, Projects and Radio Systems - 1.6%
(h) Sales and Marketing Manager, Networking Systems - 1.6%
-----
Total- 16.0%
=====
Provided however that if a Specified Employee shall have been in the
employ of the Company for less than one year, the amount of incentive
bonus received by him in respect of that Relevant Financial Year,
shall be pro- rated according to the number of months he has been
employed by the Company in that Relevant Financial Year.
(iii) In the event that less than S$300,000.00 in aggregate shall have been
declared by the Company as at the end of the Relevant Financial Year
ending 30th June 2000, the Company shall, irrespective of whether the
Company shall have earned any Profit After Tax for the Company's
financial year ending 30th June 2001, pay to the Specified Employees
in the same proportion as their proportionate entitlements to the
Participation Percentage the amount of the shortfall below
S$300,000.00, within sixty (60) days of finalisation of the Company's
audited accounts for that financial year.
(iv) In calculating all incentive bonuses to be paid to the Specified
Employees, any and all contributions which the Company (as employer)
is required to make to the Central Provident Fund in connection with
such incentive bonuses shall be taken into account for purposes of
aggregating the S$300,000.00 limit referred to in paragraph (i).
(v) The incentive bonus payable to a Specified Employee under the Service
Agreement, shall only be paid to a Specified
14
INFOTEL - Share Sale Agmt
14.
Employee on condition that he remains in the employment of the Company
at the time when payment thereof is due to be made under the Service
Agreement.
5. REPRESENTATIONS BY PURCHASER
The Purchaser represents and warrants to and for the benefit of each of
the Vendors that:-
(a) it has the power to enter into, exercise its rights and
perform and comply with its obligations under this Agreement;
(b) all action, conditions and things required to be taken,
fulfilled and done (including the obtaining of any necessary
consents and approvals) in order to (i) enable it lawfully to
enter into, exercise its rights and perform and comply with
its obligations under this Agreement and (ii) ensure that
those obligations are valid, legally binding and enforceable
shall be taken, fulfilled and done as at Completion;
(c) its obligations under this Agreement are valid, binding and
enforceable; and
(d) the allotment and issue of the Consideration Shares to be
allotted and issued pursuant to the provisions of this
Agreement shall on the date(s) of allotment and issue
thereof, be duly authorised by the Purchaser and each of the
Consideration Shares shall when issued be valid, fully paid
and (unless otherwise provided in this Agreement) free from
any liens, charges and encumbrances.
6. COMPLETION
(A) Date and place of Completion: Completion shall take place on the
Completion Date at the offices of Messrs. ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ of ▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ #▇▇-▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ at 2:00 p.m. (unless
otherwise agreed between the parties).
(B) Vendors' Obligations
On Completion the Vendors shall:-
(i) together with the Purchaser, instruct the Escrow Agent to
deliver to the Purchaser duly executed transfers of the Sale
Shares by the registered holders thereof in favour of the
Purchaser together with the relative share certificates;
(ii) deliver to the Purchaser as agent for the Company:-
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INFOTEL - Share Sale Agmt
15.
(aa) all the statutory and other books (duly written up to
date) of the Company and its certificate of
incorporation, any certificates of incorporation on
change of name and common seal; and
(bb) the Service Agreements, each executed by the relevant
Specified Employee;
(iii) procure a board meeting of the Company to be duly convened
and held at which there shall be:-
(aa) passed a resolution to register the transfers of the
Sale Shares and (subject only to due stamping) to
register, in the register of members, the Purchaser
as the holder of the shares concerned;
(bb) revoked all existing authorities to banks and new
authorities shall be given to such banks and on such
terms as the Purchaser may direct;
(cc) approved and entered into such supplemental or other
agreements and/or security documents (if any) as may
be required by any of the Company's lenders as a
condition of such lender's consent to the release of
any security given by any one or more of the Vendors
for banking facilities granted to the Company;
(dd) approved and entered into Service Agreements between
each of the Specified Employees and the Company; and
(iv) (if so required by the Purchaser by reasonable prior notice)
procure the discharge (by Completion or within a reasonable
period thereafter) of all guarantees and like obligations
given by the Company in respect of the obligations of any
other person (and including the guarantees and obligations
stipulated to be discharged at Completion in the Disclosure
Letter), such discharge to be given in the agreed terms.
(C) Purchaser's Obligations
On Completion, the Purchaser shall:-
(i) pay the Cash Portion, by delivery to the Escrow Agent of the
relevant cashier's orders made in favour of each of the
Vendors;
(ii) deliver to the Escrow Agent the share certificates in respect
of the Initial Consideration Shares;
(iii) together with all the Vendors, instruct the Escrow Agent to
deliver to each Vendor in his Shareholding Proportion:-
16
INFOTEL - Share Sale Agmt
16.
(aa) the relevant cashier's order for the Purchaser's
payment of the Cash Portion; and
(bb) (subject to sub-clause (E)) the Initial Consideration
Shares;
(iv) provide evidence reasonably satisfactory to the Vendors that
all personal guarantees given by any one or more of the Vendors
as security for banking facilities granted to the Company,
shall be discharged as at Completion or within a reasonable
period thereafter.
(D) Failure to complete
If in any respect the obligations of the Vendors or Purchaser are not
complied with on the Completion Date the party not in default may:-
(i) defer Completion to a date not more than 28 days after the
Completion Date (and so that the provisions of this sub-clause
(D), apart from this item, shall apply to Completion as so
deferred); or
(ii) proceed to Completion so far as practicable (without prejudice
to its rights hereunder); or
(iii) rescind this Agreement.
(E) Escrow Arrangements
In the event that the Completion Accounts shall not have become binding
for purposes of paragraph 4.4 of Schedule 3 by the Completion Date, the
parties agree that the following provisions shall take effect (and the
Escrow Agent shall be instructed accordingly):-
(i) share certificates for a provisional number of 428,560
Initial Consideration Shares shall prior to the Completion
Date, be delivered to the Escrow Agent for purposes of
sub-clause (C)(ii);
(ii) share certificates in respect of half of the provisional
number of 428,560 Initial Consideration Shares shall be
released by the Escrow Agent to the Vendors on Completion
Date;
(iii) share certificates in respect of the remaining half of the
provisional number of 428,560 Initial Consideration Shares
shall not be released to the Vendors on Completion Date,
but instead be held in escrow by the Escrow Agent under
the Escrow Agent Agreement pending release thereof;
17
INFOTEL - Share Sale Agmt
17.
(iv) after the Completion Accounts shall have become binding
for purposes of paragraph 4.4 of Schedule 3, the parties
shall determine the final number of Initial Consideration
Shares in accordance with paragraph 5 of Schedule 3;
(v) the Purchaser shall forthwith furnish to the Escrow Agent
substitute or further share certificates in respect of
shares in its common stock as may be appropriate, with
the intent that, after taking into account half of the
provisional number of 428,560 Initial Consideration
Shares released to the Vendors on Completion Date, the
Vendors shall in their respective Shareholding Proportion
receive the final number of Initial Consideration Shares;
(vi) the parties shall instruct the Escrow Agent as to the
Escrow Agent's release to (aa) each of the Vendors in his
Shareholding Proportion, of all or part of the share
certificates in respect of the Initial Consideration
Shares then held by it in escrow and any substitute or
further share certificates furnished to the Escrow Agent
under the foregoing paragraph (v) and (bb) the Purchaser
of the remaining share certificates;
(vii) if the final number of Initial Consideration Shares as
finally determined shall be less than half of the
provisional number of 428,560 Initial Consideration
Shares, (aa) the Vendors shall be required to forthwith
deliver up to the Purchaser the share certificates
released to the Vendors on Completion Date in exchange
for share certificates allotted to each Vendor for the
final number of Initial Consideration Shares in his
Shareholding Proportion and (bb) the Vendors and the
Purchaser shall instruct the Escrow Agent to forthwith
deliver up to the Purchaser all share certificates then
held by it in escrow;
(viii) the release of share certificates under the foregoing
paragraph (vii) shall take place 15 Business Days after
the Completion Accounts shall have become binding for
purposes of paragraph 4.4 of Schedule 3 (or if such day
is not a Business Day, on the immediately succeeding
Business Day).
7. PURCHASER's RIGHT OF ACCESS
From the date of this Agreement, the Purchaser and any persons
authorised by it shall be allowed full access to
18
INFOTEL - Share Sale Agmt
18.
all the premises, books and records of the Company, and the Vendors
shall supply or procure the supply of any information reasonably
required by the Purchaser relating to the Company and its affairs.
8. RESTRICTIONS ON VENDORS
(A) Restricted Business: In this clause, "Restricted Business" means the
business of distribution and/or servicing and/or maintenance of
telecommunications equipment within Singapore and which directly or
indirectly competes with the business of the Company carried on at the
date of this Agreement.
(B) Covenants
Each Vendor undertakes with the Purchaser (as trustee for itself and
the Company) and its successors in title that he will not:-
(i) for the period commencing from the date of this Agreement up to
and including the Specified Date (as defined below), either on
his own account or in conjunction with or on behalf of any
person, firm or company, carry on or be engaged, concerned or
interested (directly or indirectly and whether as principal,
shareholder, director, employee, agent, consultant, partner or
otherwise) in carrying on any Restricted Business (other than
as a holder of less than five per cent. of any class of shares
or debentures listed on the Stock Exchange of Singapore Limited
or any other recognised stock exchange);
(ii) for the period commencing from the date of this Agreement up to
and including the Specified Date, either on his own account or
in conjunction with or on behalf of any person, firm or
company, solicit or endeavour to entice away from the Company
any person who at the date of this Agreement is (or who within
a period of one year prior to the date of this Agreement has
been) a director, officer, manager, employee or servant of the
Company whether or not such person would commit a breach of
contract by reason of leaving service or office;
(iii) for the period commencing from the date of this Agreement up to
and including the Specified Date, either on his own account or
in conjunction with or on behalf of any person, firm or
company, in connection with any Restricted Business deal with,
solicit the custom of or endeavour to entice away from the
Company any person who at the date of this Agreement is (or who
within a period of one year prior to the date of this Agreement
has been) a customer of the Company whether or not such person
would commit a breach of contract by reason of transferring
business;
(iv) for the period commencing from the date of this Agreement up to
and including the Specified Date, either on his own account or
in conjunction with or on behalf of any person, firm or
19
INFOTEL - Share Sale Agmt
19.
company, in connection with any Restricted Business endeavour
to entice away from the Company any person who at the date of
this Agreement is (or who within a period of one year prior
to the date of this Agreement has been) a supplier of the
Company whether or not such person would commit a breach of
contract by reason of transferring business; and
(v) at any time after the date of this Agreement, directly or
indirectly use or attempt to use in the course of any
business on his own account or in conjunction with or on
behalf of any person, firm or company, any trade or service
▇▇▇▇, trade name, design or logo (whether registered or not)
used in the business of the Company or any other name, logo,
trade or service ▇▇▇▇ or design which is or might be
confusingly similar thereto.
For purposes of this sub-clause (B), the "Specified Date" means the
earlier of:-
(aa) the date falling one year after the date on which the
Purchaser shall have paid up to $3,200,000.00 in aggregate by
way of performance payments under clause 4(F); and
(bb) 30th June 1999.
(C) Vendors to procure compliance
Each Vendor undertakes to take all such steps as shall from time to
time be necessary to ensure compliance with the terms of sub-clause
(B) by his employees and agents.
(D) Separate Covenants
Each of the undertakings in sub-clauses (B) and (C) shall be construed
as a separate and independent undertaking and if one or more of the
undertakings is held to be void or unenforceable, the validity of the
remaining undertakings shall not be affected.
(E) Reasonableness
The Vendors agree that the restrictions and undertakings contained in
sub-clauses (B) and (C) are reasonable and necessary for the
protection of the Purchaser's legitimate interests in the goodwill of
the Company, but if any such restriction or undertaking shall be found
to be void or voidable but would be valid and enforceable if some part
or parts of the restriction or undertaking were deleted, such
restriction or undertaking shall apply with such modification as may
be necessary to make it valid and enforceable.
(F) Void or Unenforceable Restrictions
Without prejudice to sub-clause (E), if any restriction or undertaking
is found by any court or other competent authority to be void or
unenforceable the parties shall negotiate in good faith to
20
INFOTEL - Share Sale Agmt
20.
replace such void or unenforceable restriction or undertaking with a
valid provision which, as far as possible, has the same legal and
commercial effect as that which it replaces.
(G) Confidential Information Concerning the Company
(i) The Vendors shall not and shall procure that none of their respective
officers or employees shall, make use of or divulge to any third party
(other than to the Vendors" professional advisers for the purpose of
this Agreement in which case the Vendors shall use all reasonable
endeavours to procure that such advisers keep such information
confidential on terms equivalent to this Clause) any confidential
information relating to the Company save only:-
(aa) insofar as the same has become public knowledge otherwise than,
directly or indirectly, through any Vendor's breach of this
paragraph (i) or the failure of the officers, employees or
professional advisers referred to above to keep the same
confidential; or
(bb) to the extent required by law or by any supervisory or
regulatory body whether in Singapore or United States of
America,
provided however that any Vendor who is also employed by the Company
may use or divulge confidential information relating to the Company in
the manner and to the extent permitted under his service agreement with
the Company.
(ii) In the event that the sale and purchase of the Sale Shares is for any
reason not completed hereunder, the Purchaser shall not and shall
procure that none of its officers or employees shall, make use of or
divulge to any third party (other than to the Purchaser's professional
advisers for the purpose of this Agreement in which case the Purchaser
shall use all reasonable endeavours to procure that such advisers keep
such information confidential on terms equivalent to this Clause) any
confidential information relating to the Company save only:-
(aa) insofar as the same has become public knowledge otherwise than,
directly or indirectly, through the Purchaser's breach of this
paragraph (ii) or the failure of the officers, employees or
professional advisers referred to above to keep the same
confidential; or
(bb) to the extent required by law or by any supervisory or
regulatory body whether in Singapore or United States of
America.
(H) Obligations several
The undertakings and agreements given or entered into by each Vendor
under this clause 8 are given and entered into by the Vendors severally
(and not jointly).
21
INFOTEL - Share Sale Agmt
21.
9. WARRANTIES
(A) General
The Vendors hereby jointly and severally warrant and represent to the
Purchaser in the terms of the Warranties and acknowledge and accept
that the Purchaser is entering into this Agreement in reliance upon
each of the Warranties, and each of the Warranties is deemed to be
repeated by the Vendors from day to day and on each day during the
period from the date of this Agreement up to (and including) the date
of Completion.
(B) Purchaser's knowledge
The Warranties are given subject to matters fairly disclosed in this
Agreement or in the Disclosure Letter, but no other information
relating to the Company of which the Purchaser has knowledge (actual
or constructive) shall prejudice any claim made by the Purchaser under
the Warranties or operate to reduce any amount recoverable.
(C) Warranties to be independent
Each of the Warranties shall be separate and independent and, save as
expressly provided, shall not be limited by reference to any other
Warranty or anything in this Agreement.
(D) Damages
Without restricting the rights of the Purchaser or the ability of the
Purchaser to claim damages on any basis in the event that any of the
Warranties is broken or proves to be untrue or misleading, the Vendors
hereby jointly and severally covenant to pay, on demand, to the
Purchaser:-
(i) the amount necessary to put the Company into the position
which would have existed if the Warranties had not been
broken and had been true and not misleading; and
(ii) all costs and expenses incurred by the Purchaser or the
Company, directly or indirectly, as a result of such breach,
provided however that all amounts, costs and expenses paid under the
foregoing paragraphs (i) and (ii) shall be subject to the limitations
set out in sub-clause (I).
(E) Liaison on Conduct of Business
The Vendors shall procure that, from the date of this Agreement until
Completion, the business of the Company is carried on in the usual and
normal course and that the Company shall not enter into any contract
or commitment or do anything which, in any such case, is either out of
the ordinary and usual course of its business or of a
22
INFOTEL - Share Sale Agmt
22.
material nature without the prior consent in writing of the Purchaser.
In particular, but without limiting the foregoing, the Vendors shall
procure that from the date of this Agreement until Completion, save
with the prior consent in writing of the Purchaser, the Company shall
not:-
(i) make any alteration to its memorandum or articles of
association or any other document or agreement establishing,
evidencing or relating to its constitution or operation;
(ii) alter the nature or scope of its business;
(iii) manage its business otherwise than in accordance with its
business and trading policies and practice to date as currently
practised, except as may be necessary to comply with any
legislative changes;
(iv) enter into any agreement or arrangement or permit any action
whereby another company becomes its subsidiary or another
business becomes its subsidiary undertaking;
(v) enter into any transaction other than on arm's length terms and
for valuable consideration;
(vi) (other than transactions entered into in the ordinary course of
business relating to inventory) acquire or enter into any
agreement to acquire (whether by one transaction or by a series
of transactions) the whole or a substantial or material part of
the business, undertaking or assets of any other person;
(vii) (other than transactions entered into in the ordinary course of
business relating to inventory) dispose of or enter into any
agreement to dispose of (whether by one transaction or by a
series of transactions) the whole or any substantial or
material part of its business, undertaking or assets;
(viii) (save in respect of the purchase of a new car for ▇▇▇▇▇ ▇▇▇ Pan
as disclosed in the Disclosure Letter) incur or agree to incur
any capital expenditure with a value in excess of S$25,000.00;
(ix) (other than forward contracts entered into and bank guarantees
furnished in the ordinary course of business) take or agree to
take any loans, borrowings or other form of funding or
financial facility or assistance, or enter into or agree to
enter into any foreign exchange contracts, interest rate swaps,
collars, guarantees or agreements or other interest rate
instruments;
(x) (other than subsisting banking facilities extended to the
Company for purposes of its business) grant or agree to grant
any loans or other financial facilities or assistance
23
INFOTEL - Share Sale Agmt
23.
to or any guarantees or indemnities for the benefit of any
person or create or allow to subsist any mortgage, charge or
other encumbrance over the whole or any part of its
undertaking, property or assets (other than liens arising by
operation of law);
(xi) enter into or agree to enter into any joint venture,
partnership or agreement or arrangement for the sharing of
profits or assets;
(xii) (save for the Service Agreements) enter into or agree to
enter into any death, retirement, profit sharing, bonus,
share option, share incentive or other scheme for the benefit
of any of its officers or employees or make any variation
(including, but without limitation, any increase in the rates
of contribution) to any such existing scheme or effect any
key man insurance;
(xiii) commence, compromise or discontinue any legal or arbitration
proceedings (other than routine debt collection);
(xiv) prematurely repay or prepay any loans, borrowings or other
financial facilities or assistance made available to it;
(xv) terminate the employment or office of any of its directors,
officers or Specified Employees or appoint any new director,
officer or senior employee or (save in the ordinary course of
business) any consultant or materially alter the terms of
employment or engagement of any director, officer, senior
employee or consultant;
(xvi) declare, make or pay any dividend or distribution (whether of
capital or of profits);
(xvii) (save where (aa) prior written notice is given to the
Purchaser in respect of any contract or arrangement having a
value in excess of S$1,000,000.00 and (bb) the prior written
consent of the Purchaser is obtained in respect of any
contract or arrangement having a value in excess of
S$2,500,000.00) make or agree to any material amendment,
variation, deletion, addition, renewal or extension to or of,
or terminate or give any notice or intimation of termination
of, or breach or fail to comply with the material terms of
any contract or arrangement; and
(xviii) pay or agree to pay any remuneration, fee or other sum to any
Vendor or any Affiliate (other than remuneration properly
accrued due or reimbursement of business expenses properly
incurred, in each case as disclosed in the Disclosure
Letter),
24
INFOTEL - Share Sale Agmt
24.
provided however that the Directors may prior to Completion (without
the Purchaser's consent) and subject to the requirements of Section 403
of the Companies Act, declare interim net dividends of an aggregate
amount not exceeding S$3,000,000.00 in respect of the Company's
financial year ending on 30th June 1998 and in connection therewith:-
(1) such interim net dividends shall be declared on the basis
that they shall be payable after the Directors have
ascertained the quantum of cash, cash equivalents and
marketable securities owned by the Company as at 31st
December 1997;
(2) if the quantum so determined has an aggregate value equal
to or greater than S$1,500,000.00, the Directors shall
thereupon be entitled to pay the full amount of the
interim dividends so declared;
(3) if the quantum so determined has an aggregate value of
less than S$1,500,000.00, the Directors shall forthwith
revoke the interim net dividends so declared by the amount
of the difference between the quantum so determined and
S$1,500,000.00, and pay out to the Vendors the amount
remaining as interim net dividends;
(4) for purposes of calculating the said S$1,500,000.00
quantum, the sum of S$450,000.00 paid to Motorola ISG on
29th December 1997 in respect of invoice nos. 2786375,
2808046, 2855730, 96/03076, 96/09728 and 97/03480, may be
added back and deemed not to have been paid out by the
Company; and
(5) in the event that the profits of the Company distributable
as dividends shall, on the basis of the audited accounts
in respect of financial year ending on 30th June 1998, be
less than the amount of interim net dividends declared and
paid under this proviso, the Vendors shall forthwith on
demand by the Company repay the difference between the
amounts of the distributable profits and the interim net
dividends.
(F) Further Disclosure by Vendors
The Vendors without prejudice to sub-clause (E) shall forthwith
disclose in writing to the Purchaser any matter or thing which may
arise or become known to any Vendor after the date hereof and before
Completion which is inconsistent with any of the Warranties in any
material respect or which might make any of them inaccurate or
misleading in any material respect if they were given at any and all
times from the date hereof up to Completion or which is material to be
known to a purchaser for value of the Sale Shares.
(G) Rescission
In the event of any act or omission which would make any of the
Warranties inaccurate or misleading in any material respect becoming
25
INFOTEL - Share Sale Agmt
25.
known to the Purchaser before Completion or in the event of it
becoming apparent on or before Completion that any Vendor is in breach
of any of the Warranties in any material respect or any other material
term of this Agreement, the Purchaser may at its option either:-
(i) rescind this Agreement by notice in writing to the Vendors;
or
(ii) proceed to Completion but without prejudice to its right to
claim for breach of this Agreement or such Warranties.
(H) Waiver of Claims
Each Vendor undertakes to the Purchaser that it will not make or
pursue any claim which it has or may have against the Company or any
of the Employees (referred to in paragraph 2.11(B)(1) of Schedule 2)
in respect of or arising out of the Warranties or any information
supplied by them to or on behalf of the Vendors or any Vendor's
professional advisers on or prior to the date hereof.
(I) Vendor Protection
The liability of the Vendors in respect of any claim under or in
connection with the Warranties (each such claim, a "Relevant Claim")
shall be limited as follows:-
(i) the aggregate liability of the Vendors in respect of Relevant
Claims shall be limited to S$11,000,000.00;
(ii) the Vendors shall not be liable in respect of a Relevant
Claim unless the aggregate liability of the Vendors in
respect of all Relevant Claims exceeds S$100,000.00 in which
case the Vendors shall jointly and severally be liable for
the whole amount and not merely the excess over S$100,000.00;
(iii) the Vendors shall have no liability in respect of any
Relevant Claim unless the Purchaser shall have given notice
in writing to the Vendors of such claim on or before 31st
December 1999;
(iv) if the Vendors pay to or for the benefit of the Purchaser an
amount in respect of any Relevant Claim and any of the
Purchaser or the Company subsequently receives from any other
person any payment in respect of the matter giving rise to
the Relevant Claim, the Purchaser shall thereupon pay to the
Vendors (unless otherwise requested, in the Shareholding
Proportion) an amount equal to the payment received, after
having taken into account any cost, liability (including tax
liability) or expense in respect thereof and except to any
extent that the liability of the Vendors in respect of the
26
INFOTEL - Share Sale Agmt
26.
Relevant Claim was reduced to take account of such payment;
(v) in respect of any claim made by or against the Company in
relation to third parties which is subject- matter of a
Relevant Claim, the Purchaser shall at its absolute discretion,
acting reasonably and in good faith, take all reasonable steps
to defend or pursue such claim;
(vi) the Vendors shall not be liable to the extent that any Relevant
Claim arises out of any voluntary act or omission of the
Purchaser or its directors, employees or agents after
Completion;
(vii) the Vendors shall not be liable to the extent that any Relevant
Claim arises out the passing or any change in any law, rule,
regulation or administrative practice of any government,
governmental department, agency or regulatory body affecting
the Company after the date of this Agreement,
Provided However that the foregoing limits on the Vendors" liability
shall not apply in respect of any Relevant Claim if it is (or the delay
in the discovery of which is) the consequence of fraud, falsification
or wilful concealment by any Vendor.
10. CONFIDENTIALITY
(A) Confidentiality
Subject to sub-clause (B) and to Clause 11 and without prejudice to
clause 8(G), each party:-
(i) shall treat as strictly confidential information obtained or
received by it as a result of its entering into or performing
its obligations under this Agreement or relating to the
negotiations concerning, or the provisions or subject matter
of, this Agreement or the other party ("confidential
information"); and
(ii) shall not, except with the prior written consent of the other
party (which shall not be unreasonably withheld or delayed),
publish or otherwise disclose to any person any confidential
information.
(B) Permitted Disclosures
Sub-clause (A) shall not apply if and to the extent that:-
(i) such disclosure is required by law or by any securities
exchange or regulatory or governmental body having jurisdiction
over it and whether or not the requirement has the force of
27
INFOTEL - Share Sale Agmt
27.
law;
(ii) the confidential information was lawfully in its possession
prior to its disclosure by the other party (as evidenced by
written records) and had not been obtained from that other
party; or
(iii) the confidential information has come into the public domain
other than through its fault or the fault of any person to
whom the confidential information has been disclosed.
(C) Continuance of Restrictions
The restrictions contained in this Clause on the part of the Vendors
shall survive Completion.
(D) Obligations several
The agreements entered into be each Vendor under this clause 10 are
entered into by the Vendors severally (and not jointly).
11. ANNOUNCEMENTS
(A) Restriction
Subject to sub-clause (B), neither the Vendors nor the Purchaser shall
make any announcement, whether to the public, to the customers or
suppliers of the Company, or to all or any of the employees of the
Company, concerning the subject matter of this Agreement without the
prior written approval of the other (which shall not be unreasonably
withheld or delayed).
(B) Permitted Announcements
Sub-clause (A) shall not apply if and to the extent that such
announcement is required by law or by any securities exchange or
regulatory or governmental body having jurisdiction over it and
whether or not the requirement has the force of law and provided that
any such announcement shall be made only after consultation with the
other party.
(C) Continuance of Restrictions
The restrictions contained in this Clause on the part of the Vendors
shall survive Completion.
(D) Obligations several
The agreements entered into by each Vendor under this clause 11 are
entered into by the Vendors severally (and not jointly).
28
INFOTEL - Share Sale Agmt
28.
12. PROVISIONS RELATING TO THIS AGREEMENT
(A) Assignment
This Agreement shall be binding upon and inure for the benefit of the
successors of the parties but shall not be assignable, save that the
Purchaser may at any time after having given prior notice to the
Vendors assign all or any part of its rights and benefits under this
Agreement, including the Warranties and any cause of action arising
under or in respect of any of them, to any Transferee (as defined
below) of the share capital of the Company who may enforce them as if
it had also been named in this Agreement as the Purchaser. A
"Transferee" for purposes of this sub-clause (A) means either (i) any
corporation in which the Purchaser beneficially owns a majority
interest or (ii) any other corporation approved by the Vendors (whose
approval shall not be unreasonably withheld).
(B) Whole Agreement
(i) This Agreement, together with any documents referred to in it,
constitutes the whole agreement between the parties relating to its
subject matter and supersedes and extinguishes any prior drafts,
agreements, undertakings, representations, warranties, assurances and
arrangements of any nature, whether in writing or oral, relating to
such subject matter.
(ii) The Purchaser acknowledges that it has not been induced to enter into
this Agreement by any representation, warranty, promise or assurance by
the Vendors or any other person save for those contained in this
Agreement and in the Disclosure Letter. The Purchaser agrees that
(except in respect of fraud) it shall have no right or remedy in
respect of any other representation, warranty, promise or assurance
save for those contained in this Agreement. The Purchaser acknowledges
that its legal advisers have explained to it the effect of this
paragraph (ii).
(iii) No variation of this Agreement shall be effective unless made in
writing and signed by each of the parties.
(C) Agreement Survives Completion
The Warranties and all other provisions of this Agreement in so far as
the same shall not have been performed at Completion, shall remain in
full force and effect notwithstanding Completion.
(D) Rights etc Cumulative and Other Matters
(i) The rights, powers, privileges and remedies provided in this Agreement
are cumulative and are not exclusive of any rights, powers, privileges
or remedies provided by law or otherwise.
(ii) No failure to exercise nor any delay in exercising any right, power,
privilege or remedy under this Agreement shall in any way impair or
affect the exercise thereof or operate as a waiver thereof in whole or
in part.
29
INFOTEL - Share Sale Agmt
29.
(iii) No single or partial exercise of any right, power, privilege or remedy
under this Agreement shall prevent any further or other exercise
thereof or the exercise of any other right, power, privilege or
remedy.
(E) Release of One Vendor
The Purchaser may release or compromise the liability of any of the
Vendors hereunder without affecting the liability of the other
Vendors.
(F) Further Assurance
At any time after the date hereof each of the Vendors shall, at the
request and cost of the Purchaser, execute or procure the execution of
such documents and do or procure the doing of such acts and things as
the Purchaser may reasonably require for the purpose of vesting the
Sale Shares in the Purchaser or its nominees and giving to the
Purchaser the full benefit of all the provisions of this Agreement.
(G) Invalidity
If any provision of this Agreement shall be held to be illegal, void,
invalid or unenforceable under the laws of any jurisdiction, the
legality, validity and enforceability of the remainder of this
Agreement in that jurisdiction shall not be affected, and the
legality, validity and enforceability of the whole of this Agreement
in any other jurisdiction shall not be affected.
(H) Counterparts
This Agreement may be executed in any number of counterparts, which
shall together constitute one Agreement. Any party may enter into
this Agreement by signing any such counterpart.
(I) Costs
Each party shall bear its own costs arising out of or in connection
with the preparation, negotiation and implementation of this
Agreement.
(J) Notices
(i) Any notice or other communication required to be given under this
Agreement or in connection with the matters contemplated by it shall,
except where otherwise specifically provided, be in writing and shall
be addressed as provided in paragraph (ii) and may be:-
(aa) personally delivered, in which case it shall be deemed to
have been given upon delivery at the relevant address; or
(bb) if within Singapore, sent by pre-paid post, in which case it
30
INFOTEL - Share Sale Agmt
30.
shall be deemed to have been given two Business Days after the
date of posting; or
(cc) if from or to any place outside Singapore, sent by pre-paid
airmail, in which case it shall be deemed to have been given
seven Business Days after the date of posting; or
(dd) sent by fax, in which case it shall be deemed to have been
given when despatched, subject to confirmation of uninterrupted
transmission by a transmission report provided that any notice
despatched by fax after 5:00 p.m. (at the place where such fax
is to be received) on any day shall be deemed to have been
received at 8:00 a.m. on the next Business Day.
(ii) The addresses and other details of the parties referred to in paragraph
(i) are, subject to paragraph (iii):-
Purchaser
Name: NHancement Technologies Inc.
Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America.
Fax number: (▇▇▇) ▇▇▇ ▇▇▇▇
For the attention of: ▇▇▇▇▇▇ ▇. ▇▇▇▇/▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Vendors
1. Name: ▇▇▇▇▇▇ Foo Loke Kiean
Address: ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇
Fax number: (▇▇▇) ▇▇▇ ▇▇▇▇
2. Name: ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax number: -
3. Name: ▇▇▇▇▇ ▇▇▇ Pan
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax number: -
4. NAME: FOO KHOON ▇▇▇▇
Address: ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇
Fax number: -
31
INFOTEL - Share Sale Agmt
31.
5. Name: Sae Foo Kitipongse @ Foo Loke Khee
Address: 869/243 Muang Thong ▇
▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇
Fax number: ▇▇-▇-▇▇▇▇▇▇▇
(iii) Any party to this Agreement may notify the other parties of any change
to its address or other details specified in paragraph (ii), provided
that such notification shall be effective only on the date specified
in such notice or five Business Days after the notice is given,
whichever is later.
(K) Good faith
Each of the Vendors and the Purchaser agrees to at all times exercise
good faith towards bringing the sale and purchase of the Sale Shares
to Completion.
13. GOVERNING LAW AND JURISDICTION
(A) Governing Law
This Agreement shall be governed by, and construed in accordance with,
the laws of Singapore.
(B) Jurisdiction
In relation to any legal action or proceedings to enforce this
Agreement or arising out of or in connection with this Agreement
("proceedings") each of the parties irrevocably submits to the
exclusive jurisdiction of the Singapore courts and waives any
objection to proceedings in such courts on the grounds of venue or on
the grounds that the proceedings have been brought in an inconvenient
forum; provided however that the Vendors hereby acknowledge and agree
that the parties" agreement to submit to the exclusive jurisdiction of
the Singapore courts shall exclude and not apply to any action, claim,
indemnity or proceeding made by the Purchaser against any one or more
of the Vendors arising out of the Vendors' shareholding of
Consideration Shares and/or Relevant NHancement Shares.
32
INFOTEL - Share Sale Agmt
32.
SCHEDULE 1
PART I
The Vendors
SHAREHOLDING SALE
NAME AND PARTICULARS OF VENDOR PROPORTION SHARES
1. ▇▇▇▇▇▇ FOO LOKE KIEAN (MALAYSIA IC FIVE PER 25,000
NO. A3516527) OF 10 PERSIARAN CANTON CENT.
▇▇▇▇▇▇▇▇ ▇▇▇▇, 30250 IPOH, PERAK, MALAYSIA
2. ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇ (NRIC NO. ▇▇▇▇▇▇▇▇▇) 25 PER CENT. 125,000
OF ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
3. ▇▇▇▇▇ ▇▇▇ PAN (NRIC NO. ▇▇▇▇▇▇▇▇▇) OF 25 PER CENT. 125,000
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
4. FOO KHOON ▇▇▇▇ (MALAYSIAN IC NO. 1376406) 20 PER CENT. 100,000
OF ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
5. Sae Foo Kitipongse @ Foo Loke Khee 25 PER CENT. 125,000
(Malaysian IC No. 7231358) 869/243
Muang Thong ▇, ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇
PART II
Directors
1. ▇▇▇▇▇ ▇▇▇ Pan
2. ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
33
INFOTEL - Share Sale Agmt Schedule 1
33.
PART III
Specified Employees
1. ▇▇▇▇▇ ▇▇▇ Pan, Managing Director
2. ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇, Director, Sales and Marketing
3. Ng Yam Sing, Sales and Marketing Manager, Test Instruments
4. ▇▇▇▇▇▇ ▇▇▇, Finance Manager
5. ▇▇▇▇▇ ▇▇▇▇▇, Manager, CSD
6. ▇▇▇▇▇▇ ▇▇▇▇▇▇, Business Development Manager
7. Yeo York Hong, Manager, Projects and Radio Systems
8. (position vacant as at date of this Agreement) Sale and Marketing
Manager, Networking Systems
PART IV
Particulars of the Company
Name: INFOTEL TECHNOLOGIES (PTE) LTD
Number: 198305034M
Registered Office: ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ #▇▇-▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Authorised Capital: S$500,000.00
Issued Capital: S$500,000.00
Directors and other
directorships: ▇▇▇▇▇ ▇▇▇ Pan (no other directorships)
▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇ (no other directorships)
Secretary: Tan Lay Hiong
Accounting Reference
Date: 30th June
Auditors: Ernst & Young
34
INFOTEL - Share Sale Agmt
34.
SCHEDULE 2
Warranties and representations
1 INTERPRETATION
1.1 In this Schedule, where the context admits:
"Computer Systems" means the Hardware, Software and Data;
"Data" means any data or information used by or for the benefit of the
Company at any time and stored electronically at any time;
"Hardware" means any computer equipment used by or for the benefit of
the Company at any time including, without limitation, PCs, mainframes,
screens, terminals, keyboards, disks, printers, cabling, associated and
peripheral electronic equipment but excluding all Software;
"Intellectual Property" means patents, trade marks, service marks,
rights (registered or unregistered) in any designs; applications for
any of the foregoing; trade or business names; copyright (including
rights in computer software) and topography rights; know-how; secret
formulae and processes; lists of suppliers and customers and other
confidential and proprietary knowledge and information; rights
protecting goodwill and reputation; database rights and rights under
licences and consents in relation to such things and all rights or
forms of protection of a similar nature to any of the foregoing or
having equivalent effect anywhere in the world;
"Software" means any set of instructions for execution by
microprocessor used by or for the benefit of the Company at any time
irrespective of application, language or medium.
Where, in this Schedule, a term is defined in and for the purposes of a
particular paragraph or sub-paragraph the relevant definition shall
apply, where the context admits, for all other purposes of this
Schedule.
2 WARRANTIES AND REPRESENTATIONS
The Vendors hereby jointly and severally warrant and represent to and
for the benefit of the Purchaser in the following terms.
2.1 THE COMPANY AND THE VENDORS
(A) Capacity Each of the Vendors has full power and authority to enter into
and perform this Agreement, may execute and deliver this Agreement and
perform his obligations under this Agreement without requiring or
obtaining the consent of any other person, authority or
35
INFOTEL - Share Sale Agmt Schedule 2 - Warranties
35.
body and this Agreement constitutes valid and binding obligations on
each of the Vendors in accordance with its terms.
(B) Ownership of Sale Shares Each of the Vendors is the registered and
sole beneficial owner of his Sale Shares free from any encumbrances.
(C) Liabilities Owing to or by Vendors There is not outstanding any
indebtedness or other liability (actual or contingent) owing by the
Company to any Vendor, Affiliate or Director, nor is there any
indebtedness owing to the Company by any Vendor, Affiliate or
Director, and no promise or representation has been made by the
Company to any of the Vendors in connection with the Warranties or the
Disclosure Letter in respect of which the Company might be liable.
(D) Competing Interests So far as the Vendors are aware, no Affiliate has
any interest, direct or indirect, in any business other than that now
carried on by the Company which is or is likely to be or become
competitive with the business of the Company (save as the registered
holder or beneficial owner of not more than 5 per cent of any class of
securities of any company which is listed in the Stock Exchange of
Singapore Limited or other recognised stock exchange).
2.2 THE COMPANY'S CONSTITUTION
(A) Share Capital The Sale Shares comprise the whole of the issued and
allotted share capital of the Company, are fully paid and are
beneficially owned and registered as set out in the third column of
Schedule 1 against the name of each Vendor free from any encumbrances.
(B) Options etc No person has the right (whether exercisable now or in the
future and whether contingent or not) to call for the allotment,
issue, sale, transfer or conversion of any share or loan capital of
the Company under any option or other agreement (including conversion
rights and rights of pre-emption).
(C) Memorandum and Articles The copy of the memorandum and articles of
association of the Company annexed to the Disclosure Letter is true
and complete and has embodied therein or annexed thereto a copy of
every resolution or agreement as is required by law to be embodied in
or annexed to it, and sets out completely the rights and restrictions
attaching to each class of authorised share capital of the Company.
(D) Company Resolutions Neither the Company nor any class of its members
has passed any special resolution.
2.3 THE COMPANY AND ITS INVESTMENTS
(A) Particulars of the Company The particulars of the Company set out in
Part IV of Schedule 1 are true and complete and the Company has no
subsidiaries.
36
INFOTEL - Share Sale Agmt Schedule 2 - Warranties
36.
(B) Investments, Associations and Branches The Company:-
(1) is not the holder or beneficial owner of, and has not agreed to
acquire, any class of the share or other capital of any other
company or corporation (whether incorporated in the Singapore
or elsewhere), save as the registered holder or beneficial
owner of not more than 5 per cent of any class of securities of
any company which is listed in the Stock Exchange of Singapore
Limited or other recognised stock exchange;
(2) is not, and has not agreed to become, a member of any
partnership, joint venture, consortium or other unincorporated
association, body or undertaking in which it is to participate
with any other in any business or investment; and
(3) has no branch, agency or place of business outside Singapore
and no permanent establishment (as that expression is defined
in the relevant double taxation relief orders current at the
date of this Agreement) outside Singapore.
2.4 THE COMPANY AND THE LAW
(A) Compliance with Laws The Company has conducted its business in all
material respects in accordance with all applicable laws and
regulations of Singapore and any relevant foreign country or authority
and so far as the Vendors are aware there is no order, decree or
judgment of any court or any governmental or other competent authority
or agency of Singapore or any foreign country outstanding against the
Company or any person for whose acts the Company is vicariously liable
which may have a material adverse effect upon the assets or business of
the Company.
(B) Licences etc
(1) All necessary licences, consents, permits, approvals and authorisations
(public and private) have been obtained by the Company to enable the
Company to lawfully carry on its business in the places and in the
manner in which such business is now carried on, the non-obtaining of
which will materially and adversely affect the business of the Company,
and all such licences, consents, permits, approvals and authorisations
are in full force and effect and are not subject to onerous conditions
which the Company is incapable of complying with.
(2) All material reports, returns and information required by law or as a
condition of any licence, consent, permit, approval or other
authorisation as aforesaid to be made or given to any person or
authority in connection with the Company's business have been made or
given to the appropriate person or authority.
(3) The utilisation of any of the assets of the Company or the carrying
37
INFOTEL - Share Sale Agmt Schedule 2 - Warranties
37.
on of any aspect of the Company's business or any business now being
carried on at ▇▇. ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ #▇▇- ▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (and/or
such other principal place of business of the Company) is not in
breach of any of the material terms and conditions of any of such
licences, consents, permits, approvals and authorisations and so far
as any of the Vendors is aware there is no circumstance which
indicates that any such licence, consent, permit, approval or
authorisation is likely to be suspended or revoked or prematurely
terminated before Completion.
(4) At Completion there will be no restriction on the right of the Company
to carry on its business which does not now apply to the Company.
(C) Breach of Statutory Provisions Neither the Company, nor any of its
officers, agents or employees (during the course of their duties in
relation to the Company) have committed, or omitted to do, any act or
thing the commission or omission of which is, or could be, in
contravention of any Act, Order, Regulation, or the like in Singapore
or elsewhere which is punishable by fine or other penalty and the
commission or omission of which will materially and adversely affect
the business of the Company, and no notice or communication has been
received with respect to any alleged, actual or potential violation of
or failure to comply with such Act, Order, Regulation or the like or
any other law or legal requirement.
(D) Litigation
(1) Neither the Company nor (so far as any Vendor is aware) any of its
officers, agents or employees is (during the course of their duties in
relation to the Company) engaged in or the subject of any litigation,
arbitration or administrative proceedings in relation to any claim
exceeding S$250,000.00 or criminal proceedings whether as plaintiff,
defendant or otherwise, which materially and adversely affects or is
likely to have a material adverse effect on the Company's business
and/or the ability of the Company to carry on the Company's business
in the same manner and to the same extent as previously carried on.
(2) No litigation or arbitration or administrative or criminal proceedings
are pending or threatened, by or against the Company; and so far as
any of the Vendors is aware there are no facts or circumstances likely
to give rise to any such litigation or arbitration or administrative
or criminal proceedings.
(3) Neither the Company nor (so far as any Vendor is aware) any officer or
employee of the Company (during the course of his duties in relation
to the Company) has not been a party to any undertaking or assurance
given to any court or governmental agency or the subject of any
injunction which is still in force.
(E) Product Liability
38
INFOTEL - Share Sale Agmt Schedule 2 - Warranties
38.
(1) There is no claim in respect of Product Liability (as hereinafter
defined) outstanding or threatened against the Company in relation to
its business and so far as any Vendor is aware there are no
circumstances which are likely to give rise to any such claim. For this
purpose "Product Liability" means a liability arising out of death,
personal injury or damage to property caused by a defective product or
defective services sold supplied or provided by the Company in the
course of its business on or prior to the date hereof.
(2) So far as the Vendors are aware (after having made due and careful
inquiries), the Company has not manufactured, sold or supplied any
product or service which does not comply in any material respect with
any warranty or representation, express or implied, made by or on
behalf of the Company in respect of it or with all laws, regulations,
standards and requirements applicable to it.
(F) Inducements So far as any Vendor is aware no officer, agent or employee
of the Company has paid any bribe (monetary or otherwise) for purposes
of the Company's business.
2.5 THE COMPANY'S AND VENDOR's SOLVENCY
(A) Winding Up & Bankruptcy No order has been made, petition presented or
resolution passed for the winding up of the Company and no meeting has
been convened for the purpose of winding up the Company. The Company
has not been a party to any transaction which could be avoided in its
winding up. No application has been made in relation to any Vendor
under the Bankruptcy ▇▇▇ ▇▇▇▇ of Singapore for an interim order.
(B) Administration and Receivership No steps have been taken for the
appointment of an administrator or receiver (including an
administrative receiver) of all or any part of the Company's assets. No
receiver has been appointed in respect of any Vendor's property.
(C) Compositions The Company has not made or proposed any arrangement or
composition with its creditors or any class of its creditors. None of
the Vendors has made a proposal to his creditors for a composition in
satisfaction of his debts or a scheme of arrangement of his affairs.
(D) Insolvency The Company is not insolvent, is not unable to pay its debts
and has not stopped paying its debts as they fall due. None of the
Vendors is unable or has no reasonable prospect of being to pay his
debts.
(E) Unsatisfied Judgments No distress, execution or other process has been
levied against the Company or action taken to repossess goods in the
Company's possession. No unsatisfied judgment is outstanding against
the Company.
(F) Floating Charges No floating charge created by the Company has
39
INFOTEL - Share Sale Agmt Schedule 2 - Warranties
39.
crystallised and, so far as any of the Vendors is aware, there are no
circumstances likely to cause such a floating charge to crystallise.
(G) Analogous Events No event analogous to any of the foregoing has
occurred in or outside Singapore.
2.6 THE COMPANY'S ACCOUNTS AND RECORDS
(A) Books and records All accounts, books, ledgers, financial and other
statutory records of whatsoever kind ("Records") of the Company:-
(1) have been fully, properly and accurately maintained on a
consistent basis and will at Completion be up to date and are
in the possession and control of the Company (or agents duly
authorised for such purpose) and contain true, complete and
accurate records of all matters required by law to be entered
therein;
(2) do not contain or reflect any material inaccuracies or
discrepancies; and
(3) give and reflect a true and fair view of the financial,
contractual and trading position of the Company and of its
fixed and current assets and liabilities (actual and
contingent) and debtors and creditors (as appropriate),
and no notice or allegation that any of the records is incorrect or
should be rectified has been received.
(B) Accounts The Audited Accounts:-
(1) were prepared in accordance with the requirements of all
relevant statutes and accounting practices generally accepted
in Singapore at the time they were audited;
(2) show a true and fair view of the assets and liabilities of
the Company as at, and the profits of the Company for the
accounting reference period ended on, the Balance Sheet Date;
(3) are not affected by any unusual or non-recurring items; and
(4) apply bases and policies of accounting which have been
consistently applied in the audited financial statements of
the Company for the financial year of the Company ending on
the Balance Sheet Date.
(C) Provision for Liabilities Full provision has been made in the Audited
Accounts for all actual liabilities of the Company outstanding at the
Balance Sheet Date and proper provision (or note) in accordance with
generally accepted accounting principles in Singapore at the time they
were audited has been made therein for all other liabilities of the
Company then outstanding whether contingent, quantified, disputed
40
INFOTEL - Share Sale Agmt Schedule 2 - Warranties
40.
or not including (without limitation) the cost of any work or material
for which payment has been received or credit taken, any future loss
which may arise in connection with uncompleted contracts and any claims
against the Company in respect of completed contracts.
(D) Valuation of Stock and Work in Progress
(1) For the purposes of the Audited Accounts all stock in trade was valued
at the lower of cost and net realisable value and all work in progress
was valued on a basis excluding profit, including proper provision for
losses which are or could reasonably be anticipated.
(2) None of the stock in trade of the Company is obsolete, redundant (being
out of fashion or demand), slow moving or likely to realise less than
its book value to any extent not provided for or reflected in the
Company's books in accordance with accounting principles generally
acceptable in Singapore.
(3) The respective amounts of raw materials, work in progress, finished
goods, packaging and promotional material held or on order by the
Company are appropriate and normal for its present level of business.
(E) Management Accounts The Management Accounts have been carefully
prepared in accordance with accounting policies consistent with those
used in preparing the Audited Accounts and on a basis consistent with
the management accounts prepared in the preceding year. The cumulative
profits, assets and liabilities of the Company stated in the Management
Accounts have not been misstated and are not inaccurate in any respect
and each of the Vendors does not consider the Management Accounts
misleading.
(F) Returns The Company has complied with the provisions of the Companies
Act and all returns, particulars, resolutions and other documents
required under any legislation to be delivered on behalf of the Company
to the Registrar of Companies or to any other authority whatsoever have
been properly made and delivered. All such documents delivered to the
Registrar of Companies or to any other authority whatsoever, whether or
not required by law, were true and accurate when so delivered and the
Company has not received notification of the levy of any fine or
penalty for non-compliance by the Company or any director of the
Company.
2.7 THE COMPANY'S BUSINESS AND THE EFFECT OF SALE
(A) Business Since the Balance Sheet Date Since the Balance Sheet Date:-
(1) the Company has carried on its business in the ordinary and
usual course so as to maintain it as a going concern and
without any material interruption or alteration in the nature,
scope or manner of its business;
(2) there has been no material deterioration in the financial
41
INFOTEL - Share Sale Agmt Schedule 2 - Warranties
41.
position or turnover of the Company;
(3) there has been no significant event or occurrence (including,
but not limited to the loss of any significant customer or
supplier) which has had or is following Completion likely to
have a material adverse affect on the Company's business;
(4) the Company has not borrowed or raised any money or taken any
form of financial facility (whether pursuant to a factoring
arrangement or otherwise);
(5) the Company has paid its creditors in accordance with their
respective credit terms or (if not) within the time periods
usually applicable to such creditors and save as disclosed
there are no debts outstanding by the Company which have been
due for more than three months;
(6) there has been no unusual change in the book value of the
Company's stock in trade;
(7) (save in respect of the purchase of a new car for ▇▇▇▇▇ ▇▇▇
Pan as disclosed in the Disclosure Letter) the Company has
not entered into, or agreed to enter into, any capital
commitments or any commitment to acquire or dispose of on
capital account any asset, of a value in excess of
S$100,000.00 or any commitment involving expenditure by it on
capital account;
(8) no share or loan capital has been issued or agreed to be
issued by the Company; and
(9) no distribution of capital or income has been declared, made
or paid in respect of any share capital of the Company and
(excluding fluctuations in overdrawn current accounts with
bankers) no loan or share capital of the Company has been
repaid in whole or part or has become liable to be repaid in
whole or part.
(B) Commission No one is entitled to receive from the Company any finder's
fee, brokerage, or other commission in connection with this Agreement
or the sale and purchase of shares in the Company.
(C) Consequence of Share Acquisition by the Purchaser The acquisition of
the Sale Shares by the Purchaser or compliance with the terms of this
Agreement will not:-
(1) (so far the Vendors are aware and to the extent that the
Company's business is materially and adversely affected)
cause the Company to lose the benefit of any right or
privilege it presently enjoys or relieve any person of any
obligation to the Company (whether contractual or otherwise)
or enable any person to determine any such obligation or any
contractual right or benefit enjoyed by the Company or to
exercise any right whether
42
INFOTEL - Share Sale Agmt Schedule 2 - Warranties
42.
under an agreement with the Company or otherwise;
(2) result in any present or future indebtedness of the Company
becoming due or capable of being declared due and payable prior
to its stated maturity;
(3) give rise to or cause to become exercisable any right of
pre-emption;
(4) result in a breach of, or constitute a default under any
provision of the memorandum or articles of association of the
Company;
(5) result in a breach of, or constitute a default under any order,
judgment or decree of any court or government agency by which
the Company is bound or subject; or
(6) result in a breach of, or constitute a default under the
material terms, conditions or provisions of any of the
Company's contracts,
and, in the view of the Vendors arrived at in good faith, the Company's
relationships with clients, customers, suppliers and employees will not
be adversely affected thereby and none of the Vendors is aware of any
circumstances (whether or not connected with the Purchaser and/or the
sale of the Sale Shares hereunder) indicating that, nor has it been
informed or is otherwise aware that, any person who now has business
dealings with the Company would or might cease to do so from and after
Completion.
(D) Insurances
(1) Full particulars of all the insurance policies (including, without
limitation, the limit and basis of cover under each policy and the
amount of the applicable excess) in which the Company has an interest
(the "Company's Insurances") are given in the Disclosure Letter.
(2) All the Company's Insurances are in full force and effect and will be
maintained in full force without alteration pending Completion, and
there are no circumstances likely to give rise to any liability under
any of the Company's Insurances being avoided by the insurers or the
premiums being increased. In relation to the Company's Insurances,
there are no special or unusual terms, restrictions or rates of premium
and all premiums have been paid on time. There is no claim outstanding
under any of the Company's Insurances nor is any of the Vendors aware
of any circumstances likely to give rise to a claim nor (if the Vendors
were to renew the Company's Insurances) are the Vendors aware of any
circumstances as to why the insurers would refuse to renew them.
(E) Trading Name The Company does not trade under any name other than its
corporate name and any other name given in the Disclosure Letter (if
any).
43
INFOTEL - Share Sale Agmt Schedule 2 - Warranties
43.
(F) Trade Associations Full particulars of all trade or business
associations of which the Company is a member (if any) are set out in
the Disclosure Letter.
2.8 THE COMPANY'S ASSETS
(A) Assets and Charges
(1) Except for current assets disposed of by the Company in the ordinary
course of its business, the Company is the owner legally and
beneficially of and has good title to all assets included in the
Audited Accounts and all assets which have been acquired by the
Company since the Balance Sheet Date and no encumbrance is outstanding
(other than liens arising by operation of law) nor is there any
agreement or commitment to give or create or allow any encumbrance
over or in respect of the whole or any part of the Company's assets,
undertaking, goodwill or uncalled capital and no claim has been made
by any person that he is entitled to any such encumbrance.
(2) Since the Balance Sheet Date, save for disposals in the ordinary
course of its business, the assets of the Company have been in the
possession of, or under the control of, the Company.
(3) No asset is shared by the Company with any other person and the
Company does not depend for its business upon any assets, premises,
facilities or services owned or supplied by any Vendor or any
Affiliate.
(4) No charge in favour of the Company is void or voidable for want of
registration.
(B) Debts Save to the extent of the provision or reserve therefor
contained or reflected in the Completion Accounts, any debts owed to
the Company as recorded in the Company's books and records are good
and collectable in the ordinary course of business and will realise
their full face value within three months of Completion. The rights
of the Company in respect of such debts are valid and enforceable so
far as the Vendors are aware and are not subject to any defence, right
of set-off or counter-claim, withholding or other deduction and so far
as the Vendors are aware no act has been done or omission permitted
whereby any of them has ceased or might cease to be valid and
enforceable in whole or in part. No amount included in the Audited
Accounts as owing to the Company at the Balance Sheet Date has been
released for an amount less than the value at which it was included in
the Audited Accounts or is now regarded by the Vendors as
irrecoverable in whole or in part. The Company has not factored or
discounted any of its debts or other receivables or agreed to do so.
(C) Title Retention The Company has not acquired or agreed to acquire any
44
INFOTEL - Share Sale Agmt Schedule 2 - Warranties
44.
fixed asset on terms that title therein does not pass until full
payment is made.
(D) Plant All plant and machinery, including fixed plant and machinery,
vehicles, Computer Systems and other equipment used in, or in
connection with, the business of the Company:-
(1) (subject to fair wear and tear) is in good repair and condition
and in satisfactory working order and has been regularly and
properly serviced and maintained and none is dangerous,
obsolete or in need of renewal or replacement;
(2) (subject to fair wear and tear) is capable, and there are no
circumstances known to the Vendor rendering it incapable, over
the period of time during which it will be written down to a
nil value in the accounts of the Company, of doing the work for
which it was designed or purchased; and
(3) is not surplus to the Company's current or proposed
requirements to any material extent.
(E) Confidential information & know-how The Company operates and fully
complies with procedures disclosed in the Disclosure Letter which
maintain confidentiality of its confidential information and know-how.
None of the Vendors is aware of any such confidentiality having been
breached and the Company has not disclosed (except in the ordinary
course of its business) any of its know-how, trade secrets or list of
customers to any other person, which breach or disclosure has a
material adverse effect on the Company.
(F) Property
(1) Title to Property
(a) The particulars of the Property shown in Schedule 4 are true and
correct. Except as shown the Company has no other interest in land and
does not occupy any other property and has not entered into any
agreement to acquire or dispose of any land or premises or any interest
therein which has not been completed.
(b) The Company is entitled to exclusive occupation of the Property.
(c) The sub-lease more particularly described in Schedule 4 under which the
Property is held, is valid and subsisting against all persons,
including any person in whom any superior estate or interest is vested.
(d) To the best of the Vendors" knowledge, there are appurtenant to the
Property all rights and easements necessary for its current use and
enjoyment.
(2) Matters affecting Property
45
INFOTEL - Share Sale Agmt Schedule 2 - Warranties
45.
(a) The Property is in a tenantable state of repair and condition and fit
for the current use (fair wear and tear excepted).
(b) All restrictions, conditions and covenants (including any imposed by
or pursuant to the sub-lease more particularly described in Schedule
4 and any arising in relation to any superior title) affecting the
Property have been observed and performed, the non-observance or
non-performance of which will have a material adverse effect on the
Company, and no notice of any breach of any of the same has been
received or is to the Vendors" knowledge likely to be received.
(c) The current use of the Property and all machinery and equipment
therein and the conduct of any business therein complies in all
respects with all relevant statutes and regulations made thereunder
and all necessary licences and consents required thereunder have been
obtained, the non-compliance or non-obtaining of which will have a
material adverse effect on the Company.
(d) The Property is not used for any purpose other than the use specified
therefor in Schedule 4.
(e) In respect of the interest of the Company in the Property being
leasehold, (save as disclosed in the Disclosure Letter) there is no
right for the landlord to determine the lease except in the event of
non-payment of rent or other breach of covenant by the tenant.
(3) Outstanding Property Liabilities
Except in relation to the Property more particularly described in
Schedule 4, the Company has no liabilities (actual or contingent)
arising out of the conveyance, transfer, lease, tenancy, licence,
agreement or other document relating to land or premises or an
interest in land or premises, including, without limitation, leasehold
premises assigned or otherwise disposed of.
2.9 THE COMPANY'S CONTRACTS
(A) No Other Contracts There are not in force in relation to the Company's
business, assets or undertaking any agreements, undertakings,
understandings, arrangements or other engagements, whether written or
oral to which any Vendor or any Affiliate is a party or has the
benefit of or is otherwise subject, the benefit of which would be
required to be assigned to or otherwise vested in the Company to
enable the Company to carry on its business and/or to enjoy all the
rights and privileges attaching thereto and/or to any of its assets
and undertaking in the same manner and scope and to the same extent
and on the same basis as the Company has carried on business or
enjoyed such rights prior to the date hereof.
(B) The Company's Contracts Each of the Company's contracts of a value in
excess of S$500,000.00 are valid and binding so far as the Vendors are
aware and no notice of termination of any such contract has been
46
INFOTEL - Share Sale Agmt Schedule 2 - Warranties
46.
received or served by the Company and none of the Vendors is aware of
the invalidity of, or of any grounds for determination, rescission,
avoidance or repudiation of any such contracts.
(C) Contractual Arrangements The Company is not a party to or subject to
any agreement, transaction, obligation, commitment, arrangement or
liability which is material in the context of the Company's business
and which:-
(1) is known by any Vendor or by the Company to be likely to result
in a material loss to the Company on completion of performance;
or
(2) cannot readily be fulfilled or performed by the Company on time
and without undue or unusual expenditure of money and effort; or
(3) requires the Company to pay any commission, finder's fee,
royalty or the like; or
(4) in any way restricts the Company's freedom to carry on the whole
or any part of its business in any part of the world in such
manner as it thinks fit; or
(5) is a contract for the sale of shares, or assets (excluding the
Company's stock-in-trade) of a value exceeding S$25,000.00 which
contains warranties or indemnities under which the Company still
has a remaining liability or obligation; or
(6) can be terminated as a result of any change in the underlying
ownership or control of the Company; or
(7) is in any way otherwise than in the ordinary course of the
Company's business.
(D) Substantial or significant contracts No contract, agreement,
transaction, obligation, commitment, arrangement or liability entered
into by the Company and now outstanding or unperformed involves any of
the following:-
(1) obligations on the part of the Company which will cause or are
likely to cause the Company to incur expenditure or an
obligation to pay money in excess of S$500,000.00;
(2) obligations on the part of the Company to purchase any
specified minimum quantity or any specified minimum percentage
of its total requirement for telecommunications equipment or
other stock in trade from any one supplier;
(3) the supply by the Company of telecommunications equipment or
other products or services whether by way of lease or outright
sale or otherwise to any one customer such that the value of
such supplies exceeds or is likely to exceed ten per cent. of
the total turnover of the Company in the financial year ending
47
INFOTEL - Share Sale Agmt Schedule 2 - Warranties
47.
the Balance Sheet Date.
(E) Defaults
(1) Neither the Company nor (so far as the Vendors are aware) any other
party to any agreement with the Company is in default thereunder, and
the Company is not aware of any invalidity or grounds for termination,
avoidance, rescission or repudiation of any agreement to which the
Company is a party which, in any such case, would be material and
adverse in the context of the financial or trading position of the
Company nor (so far as any of the Vendors is aware) are there any
circumstances likely to give rise to any such event.
(2) Full details of any past or present customers who have defaulted in
the payment when due of any monies exceeding S$50,000.00 to the
Company during the last 12 months and which remain unpaid, are
specified in the Disclosure Letter.
(F) Sureties Neither the Vendors nor any Affiliate nor any third party has
given any guarantee of or security for, any overdraft loan, loan
facility or off-balance sheet financing granted to the Company nor has
the Company given any guarantee of or security for any overdraft loan,
loan facility or off-balance sheet financing granted to any of the
Vendors or any Affiliate and there is not now outstanding in respect
of the Company any guarantee or warranty or agreement for indemnity or
for suretyship given by or for the accommodation of the Company or in
respect of the Company's business in relation to financing
obligations.
(G) Powers of Attorney No powers of attorney given by the Company (other
than to the holder of an encumbrance solely to facilitate its
enforcement) are now in force. No person, as agent or otherwise, is
entitled or authorised to bind or commit the Company to any obligation
not in the ordinary course of the Company's business, and none of the
Vendors is aware of any person purporting to do so.
(H) Insider Contracts
(1) There is not outstanding, and there has not at any time during the
last 18 months been outstanding, any agreement or arrangement of a
value in excess of S$50,000.00 to which the Company is a party and in
which:-
(a) any Vendor;
(b) any Affiliate;
(c) any person beneficially interested in the Company's share
capital; or
48
INFOTEL - Share Sale Agmt Schedule 2 - Warranties
48.
(d) any Director,
is or has been interested, whether directly or indirectly.
(2) The Company is not a party to, nor have its profits or financial
position during such period been affected by, any agreement or
arrangement which is not entirely of an arm's length nature.
(3) All costs incurred by the Company have been charged to the Company and
not borne by any Affiliate.
(I) Debts There are no debts owing by or to the Company other than debts
which have arisen in the ordinary course of business, nor has the
Company lent any money which has not been repaid.
(J) Options and Guarantees The Company is not a party to any option or
pre-emption right of a value exceeding S$250,000.00, or a party to nor
has it given any guarantee, suretyship, comfort letter or any other
obligation (whatever called) of a value exceeding S$250,000.00 to pay,
provide funds or take action in the event of default in the payment of
any indebtedness of any other person or in the performance of any
obligation of any other person.
(K) Tenders, etc No offer, tender, or the like is outstanding which is
capable of being converted into an obligation of the Company of a value
exceeding S$500,000.00 by an acceptance or other act of some other
person and the Company is not in negotiations with, nor has it put
proposals forward or entered into discussions with any customer or
supplier for the renewal of any existing business or acquisition of any
new business of a value exceeding S$500,000.00.
(L) Documents All title deeds and agreements to which the Company is a
party and other documents owned by or which properly ought to be in the
possession or control of the Company and which are material in the
context of the Company's business, are in the possession or control of
the Company (or its agents duly authorised for such purpose) and are
properly stamped (if so required) and are free from any encumbrance.
2.10 THE COMPANY AND ITS BANKERS
(A) Borrowings The total amount borrowed by the Company from its bankers
does not exceed its facilities and the total amount borrowed by the
Company from whatsoever source does not exceed any limitation on its
borrowing contained in its articles of association, or in any debenture
or loan stock deed or other instrument.
(B) Continuance of Facilities Full and accurate details of all overdrafts,
loans or other financial facilities outstanding or available to the
Company are given in the Disclosure Letter and true and correct copies
of all documents relating thereto are annexed to the Disclosure Letter
and (save for the sale and purchase of the Sale
49
INFOTEL - Share Sale Agmt Schedule 2 - Warranties
49.
Shares under this Agreement) neither the Vendors nor the Company has
done anything whereby the continuance of any such facilities in full
force and effect might be affected or prejudiced.
(C) Off-balance Sheet Financing The Company has not engaged in any
borrowing or financing not required to be reflected or noted in the
Audited Accounts.
2.11 THE COMPANY AND ITS EMPLOYEES
(A) Directors Part II of Schedule 1 shows the full names and offices held
by each person who is a director of the Company and no other person is
a director or shadow director of the Company.
(B) Particulars of Employees
(1) The individuals, details (in the form agreed between the parties) of
which are given in or annexed to the Disclosure Letter (the
"Employees") are all employed by the Company at the date of this
Agreement and (save in the case of conduct giving rise to grounds for
dismissal) notice of termination will not be given by the Company on
or before Completion. There are no other individuals employed at the
date of this Agreement in the Company wheresoever. There will be no
other individuals employed at the date of Completion by the Company
wheresoever save on the usual employment terms for purposes of filling
up any vacancy in the Company existing at the date of this Agreement.
(2) All contracts of service of any of the Employees are terminable on not
more than three months" notice without compensation.
(3) The particulars shown in the Disclosure Letter show true and complete
details of lengths of continuous service of all of the Employees and
by reference to each of the Employees remuneration payable and other
benefits provided or which the Company is bound to provide (whether
now or in the future) to each category of the Employees at Completion
and (without limiting the generality of the foregoing) include
particulars of all profit sharing, incentive, bonus, commission
arrangements and any other benefit to which any such category of the
Employees is entitled or which is regularly provided or made available
to them (including details of their notice period and their
entitlement to holiday).
(4) There are no subsisting contracts for the provision by any person of
any consultancy services to the Company.
(5) None of the Employees has given notice terminating his contract of
employment.
(6) None of the Employees is under notice of dismissal or has any
outstanding dispute with the Company in connection with or arising
from his employment nor is there any liability outstanding to such
50
INFOTEL - Share Sale Agmt Schedule 2 - Warranties
50.
persons except for remuneration or other benefits accruing due and no
such remuneration or other benefit which has fallen due for payment has
not been paid.
(7) During the period of six months ending with the execution of this
Agreement the Company has not directly or indirectly terminated the
employment of any person employed in or by the Company.
(8) None of the Employees belongs or has belonged at any material time to
an independent trade union recognised by the Company.
(9) There are no employee representatives representing all or any of the
Employees.
(10) There is no plan, scheme, commitment, custom, or practice relating to
redundancy affecting any of the Employees more generous than the
statutory redundancy requirements.
(11) There are no loans owed by any of the Employees to the Company.
(12) Since the Balance Sheet Date, no change has been made in (i) the rate
of remuneration, or the emoluments or pension benefits or other
contractual benefits, of any officer of the Company or any of the
Employees or (ii) the terms of engagement of any such officer or any of
the Employees.
(13) There is no outstanding undischarged liability to pay to any
governmental, statutory or regulatory authority in any jurisdiction any
contribution, taxation or other duty arising in connection with the
employment or engagement of any of the Employees.
(14) Save for the Specified Employees with each of whom the Company shall
enter into a Service Agreement on or before Completion, none of the
Employees will become entitled by virtue of their contract of service
to any enhancement in or improvement to their remuneration, benefits or
terms and conditions of service only by reason of completion of the
sale and purchase under or pursuant to this Agreement.
(C) Service Contracts There is not outstanding any contract of service
between the Company and any of its directors, officers or employees
which is not terminable by the Company without compensation (other than
any compensation payable by statute) on not more than three months"
notice given at any time.
(D) Disputes with Employees There is no:-
(1) outstanding or (so far as the Vendors are aware) threatened
claim by any person who is now or has been an employee of the
Company or any dispute outstanding with any of the said persons
or with any unions or any other body representing all or any of
them in relation to their employment by the Company or (so far
as the Vendors are aware) of any circumstances likely to give
51
INFOTEL - Share Sale Agmt Schedule 2 - Warranties
51.
rise to any such dispute;
(2) industrial action involving any employee, whether official or
unofficial, currently occurring or threatened; or
(3) industrial relations matter which has been referred to any
governmental agency in the applicable jurisdiction for
advice, conciliation or arbitration.
(F) Industrial Relations
(1) The Company is not involved in any industrial or trade dispute or any
dispute or negotiation regarding a claim of material importance with
any trade union or association of trade unions or organisation or body
of employees and there are no facts known, or which would on
reasonable enquiry be known, to the Vendors which might indicate that
there may be any such dispute.
(2) The Company has not entered into any union membership, security of
employment, recognition or other collective agreement (whether legally
binding or not) with a trade union nor has it done any act which might
be construed as recognition.
(G) Share Incentive, Bonus Schemes etc.
The Company does not have in existence and is not proposing to
introduce any share incentive scheme, share option scheme or profit
sharing scheme for all or any part of its directors or employees other
than as set out in the Disclosure Letter.
(H) Pensions
The Company has no pension or other scheme pursuant to which the
Company makes or could become liable to make payments for providing
retirement, death, disability, life assurance or medical benefits. No
proposal has been announced by the Company to establish any pension or
other scheme for providing any such benefits and the Company does not
provide and has not promised to provide any such benefits.
2.12 TAXATION MATTERS
(A) Returns, Information and Clearances
(1) All returns, computations and notices which are or have been required
to be made or given by the Company for any Taxation purpose (a) have
been made or given within the requisite periods and on a proper basis
and are up- to-date and correct and (b) none of them is, or is likely
to
52
INFOTEL - Share Sale Agmt Schedule 2 - Warranties
52.
be, the subject of any dispute with the Inland Revenue Authority of
Singapore ("IRAS") or other Taxation authorities.
(2) All information required to be provided to IRAS or any Taxation
authority has been provided within the requisite period and is full and
accurate.
(3) The Disclosure Letter contains full and accurate particulars of all
transactions, acts, events or omissions of whatever nature effected
since the Balance Sheet Date in respect of which the Company is
required to make a specific return or provide information to the
relevant Taxation authorities and in respect of which the time for
making such return or providing such information will expire on or
after Completion.
(4) No transaction, act, event or omission of whatever nature has been
effected since the Balance Sheet Date by the Company in respect of
which any consent or clearance from IRAS or other governmental
authorities was required or was or could have been sought (a) without
such consent or clearance having been validly obtained before such
transaction, act, event or omission was effected and (b) otherwise than
in accordance with the terms of and so as to satisfy any conditions
attached to such consent or clearance, and (c) otherwise than at a time
when and in circumstances in which such consent or clearance was valid
and effective.
(5) All particulars furnished to IRAS or other governmental authorities, in
connection with the application for any consent or clearance by the
Company, made since the Balance Sheet Date fully and accurately
disclosed all facts and circumstances material to the decision of IRAS
or such other authorities.
(6) There are no circumstances that have arisen since any application for
any such consent or clearance was made which might reasonably be
expected to cause such consent or clearance to be or become invalid or
to be withdrawn by IRAS or the governmental authority concerned.
(7) The Company has not since the Balance Sheet Date taken any action which
has had, or will have, the result of altering, prejudicing or in any
way disturbing any arrangement or agreement which it has previously had
with IRAS or customs and excise or other Taxation authorities.
(B) Penalties and Interest Neither the Company nor any of its directors or
officers (in the course of their duties) has
53
INFOTEL - Share Sale Agmt Schedule 2 - Warranties
53.
since the Balance Sheet Date paid, or become liable to pay, any fine,
penalty or interest charged by virtue of any other statutory provision
relating to Taxation.
(C) Taxation Claims, Liabilities and Reliefs
(1) There is no liability to Taxation in respect of which a claim could be
made under this Agreement and there are no circumstances likely to
give rise to such a liability.
(2) There are set out in the Disclosure Letter, with express reference to
this paragraph, particulars of all matters relating to Taxation in
respect of which the Company (either alone or jointly with any other
person) has, or at Completion will have, an outstanding entitlement:-
(a) to make any claim, including a supplementary claim, for
relief under the Income Tax Act, Chapter 134 of Singapore or
any other statutory provision relating to Taxation;
(b) to make any election, including an election for one type of
relief, or one basis, system or method of Taxation, as
opposed to another;
(c) to make any appeal (including a further appeal) against an
assessment to Taxation;
(d) to make any application for the postponement of, or payment
by instalments of, Taxation; or
(e) to disclaim or require the postponement of any allowance or
relief.
(3) The Company is not nor may it become, liable to pay, or make
reimbursement or indemnity in respect of, any Taxation (or amounts
corresponding thereto) in consequence of the failure by any other
person to discharge that Taxation within any specified period or
otherwise, where such Taxation relates to a profit, income or gain,
transaction, event, omission or circumstance arising, occurring or
deemed to arise or occur (whether wholly or partly) prior to
Completion.
(4) No relief (whether by way of deduction, reduction, set-off, exemption,
postponement, roll-over, hold-over, repayment or allowance, or
otherwise) from, against or in respect of any Taxation has been
claimed and/or given to the Company which could or might be
effectively withdrawn, postponed, restricted, clawed back or otherwise
lost after Completion, as a result of any act, omission, event or
circumstance arising or occurring in
54
INFOTEL - Share Sale Agmt Schedule 2 - Warranties
54.
the ordinary course of business at or at any time before Completion.
(5) The Company has not incurred a loss on the disposal or deemed disposal
of an asset other than trading stock in relation to which its ability
to set the whole of that loss against any chargeable gain arising in
the same or a later accounting period is or may be restricted or
excluded.
(6) No asset owned by the Company has at any time since its acquisition by
the Company or any company which has at any time been a member of a
group (as defined from time to time for any Taxation purpose) of which
the Company has at any time been a member been subjected to a reduction
in value such that any allowable loss arising on its disposal is likely
to be reduced or eliminated or any chargeable gain arising on its
disposal is likely to be increased.
(D) Deductions from Payments The Company has complied in all respects with
all statutory provisions relating to Taxation and requiring the
deduction of tax from any payment made by it, and has properly
accounted for any such tax which ought to have been accounted for.
(E) Anti-avoidance Provisions The Company has not since the Balance Sheet
Date engaged in, or been a party to, any transaction or series of
transactions or scheme or arrangement of which the main purpose, or one
of the main purposes, was or could be said to be the avoidance of, or
deferral of or a reduction in the liability to, Taxation.
(F) Stamp Duty All documents to which the Company is a party or which form
part of the Company's title to any asset owned or possessed by it or
which the Company may need to enforce or produce in evidence in the
courts of Singapore have been duly stamped and (where appropriate)
adjudicated.
2.13 MISCELLANEOUS
All Material Matters Disclosed All information contained or referred to
in this Agreement (including the Schedules and the documents in agreed
terms) and in the Disclosure Letter or in any annexure thereto or which
has otherwise been disclosed by or on behalf of the Vendors to the
Purchaser or its advisers on or prior to the date hereof is true and
accurate in all material respects and none of the Vendors is aware of
any other fact or matter which renders any such information misleading
in any material respect because of any omission, ambiguity or for any
other reason. The Vendors have disclosed to the Purchaser all
information and facts relating to the Company and its business,
55
INFOTEL - Share Sale Agmt Schedule 2 - Warranties
55.
assets and undertaking (including financial information) which to the
best of the knowledge and belief of the Vendors, having made due and
careful inquiries, are or may be material for disclosure to a
purchaser of the Company on the terms of this Agreement and all
information and facts so disclosed are true and accurate in all
material respects.
56
INFOTEL - Share Sale Agmt
56.
SCHEDULE 3
Adjustment of Consideration
1 INTERPRETATION
In this Schedule, where the context admits, any defined term used in
this Schedule shall have the same meanings as in the Agreement and the
Schedules.
2 COMPLETION ACCOUNTS
2.1 PREPARATION
The Vendors shall as soon as practicable, and in any event by 16th
February 1998, procure that accounts for the Company shall be prepared
in accordance with this Schedule. The Purchaser shall bear the costs
and expenses charged by the Company's auditors in respect of their
preparation of such accounts.
2.2 DESCRIPTION
The Completion Accounts shall consist of a balance sheet of the Company
as at the close of business on 31st December 1997 and a profit and loss
account of the Company in respect of the period from the day following
the Balance Sheet Date to 31st December 1997 (both dates inclusive).
2.3 GENERAL REQUIREMENTS
Subject to the specific requirements of paragraph 2.4 of this Schedule
3, the Completion Accounts shall:-
(A) make full provision for all actual, future and contingent
liabilities of the Company as at 31st December 1997;
(B) be prepared under the historic cost convention and in
accordance with the requirements of all relevant statutes and
generally accepted accounting practices and principles and
SASs;
(C) show a true and fair view of the state of affairs of the
Company at 31st December 1997 and the profits (or loss) of the
Company for the period from the Balance Sheet Date to 31st
December 1997;
(D) apply and adopt the same bases and policies of accounting as
applied or adopted for the purposes of the Audited Accounts.
2.4 SPECIFIC REQUIREMENTS
In preparing the Completion Accounts:-
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INFOTEL - Share Sale Agmt Schedule 3 - Adjustments
57.
(A) no value shall be attributed to goodwill or any other
intangible asset;
(B) other fixed assets shall be included at the value at which
they were included in the Audited Accounts, (or, if acquired
after the Balance Sheet Date, their cost) on a pro rata basis
at the rates for allowance used in preparing the Audited
Accounts and, in each case, less provisions for damage or
impairment on the same basis used in preparing the Audited
Accounts;
(C) stock shall be determined in accordance with paragraph 3 of
this Schedule 3 and valued on the same basis as used in the
Audited Accounts (details of any change(s) of such basis are
described in the Disclosure Letter) and full provision on a
pro rata basis at the rates used in preparing the Audited
Accounts will be made for unusable, unsaleable, slow moving
or deteriorated stocks on the same basis used in preparing
the Audited Accounts;
(D) no value shall be attributed to any assets (including in
particular any prepayment or debt) except to the extent that
(following 31st December 1997) the Company will have the
benefit of the same;
(E) full provision shall be made for rebates or discounts that
will fall due and fees and commissions that will become
payable after 31st December 1997 in either case in respect of
sales or other transactions that took place before 31st
December 1997;
(F) full provision shall be made for any liability arising as a
result of the change of control of the Company on Completion;
(G) to the extent that it is not capable of being set off against
the liability of the Company for corporation tax for the
current financial year or any previous financial year, full
provision shall be made for the advance corporation tax
payable on any distribution declared or paid before
Completion;
(H) full provision shall be made in respect of the cost of making
good dilapidations and/or wants of repair on or to the
Property (referred to in paragraph 2.8(F) of Schedule 2);
(I) full provision shall be made for any debts due in the
ordinary course of trading outstanding and uncollected at
31st December 1997 and proper provision or reserve shall be
made for all other bad or doubtful debts included in the
Completion Accounts on the same basis used in preparing the
Audited Accounts;
(J) full provision shall be made in accordance with SASs for any
repairs or other servicing required in relation to any
vehicles or other plant and machinery;
58
INFOTEL - Share Sale Agmt Schedule 3 - Adjustments
58.
(K) full provision shall be made in accordance with SASs for
liabilities disclosed in the Disclosure Letter; and
(L) provision shall be made for deferred tax in accordance with SAS.
3. STOCK VALUATION
For the purposes of the preparation of the Completion Accounts, the
value of stock shall be ascertained in accordance with the provisions
of this paragraph 3.
(A) The Vendors and the Purchaser shall cause a stocktaking to be
made of all the stock insofar as it then belongs to the Company
as at 31st December 1997.
(B) Unless otherwise agreed by the parties such stocktaking shall
consist of a physical check of the amount, quality and
condition of all such stock situated on the Properties prior to
Completion and an inspection of the books and records and
contractual documentation (of the Company) for all stock not so
situated together with confirmation from the person or persons
having physical possession of such stock of the extent of any
interest in or encumbrance claimed over such stock (if any).
(C) When such stocktaking has been completed the stock shall be
valued by the Purchaser in accordance with paragraph 2.4(C) of
this Schedule 3 and included in the Completion Accounts.
4 PROCEDURE
4.1 SUBMISSION OF DRAFT
(A) As soon as the Completion Accounts (or any sections thereof) shall have
been prepared, the Vendors shall send a copy to the Purchaser together
with such working papers used in connection with the preparation of the
same as the Vendors reasonably consider necessary or appropriate to
understand and agree to the Completion Accounts and shall in addition,
at the same time, send to the Purchaser its calculation of the Net
Tangible Assets.
(B) The Vendors shall promptly supply all such information and provide
access to all such records and personnel as the Purchaser shall
reasonably request or require to review the Completion Accounts and
verify the Vendors" calculation.
(C) Unless the Purchaser shall within seven days of receipt of the
Completion Accounts (and associated papers and calculation as provided
in Sub-Paragraph (A)) serve a notice in writing on the Purchaser that
it objects to the Completion Accounts (identifying the reason for any
objection and the amount(s) or item(s) in the Completion Accounts
and/or calculation which is/are in dispute) (such notification being,
for the purposes of this paragraph 4, an "Objection Notice") the
Purchaser shall be deemed to have agreed to
59
INFOTEL - Share Sale Agmt Schedule 3 - Adjustments
59.
the Completion Accounts and the Vendors" calculation of the Net
Tangible Assets for all purposes of this Agreement.
4.2 AGREEMENT OF DRAFT
If, within the period referred to in paragraph 4.1(C), the Purchaser
shall give the Vendors an Objection Notice then the Purchaser and the
Vendors shall use their best endeavours to reach agreement upon
adjustments to the draft and the value of Net Tangible Assets.
4.3 INDEPENDENT ACCOUNTANT
In the event that the Vendors and the Purchaser are unable to reach
agreement within seven days following service of the Objection Notice,
either any Vendor or the Purchaser shall be entitled to refer the
matter or matters in dispute to an independent firm of chartered
accountants agreed upon between them or (failing agreement) to be
selected (at the instance of either party) by the President for the
time being of the Institute of Certified Public Accountants of
Singapore. Such independent firm of chartered accountants shall act as
experts not as arbitrators and shall determine the matter or matters
in dispute and whose decision shall, save in the event of fraud or
manifest error, be binding. The costs of the independent firm of
accountants shall be borne by the Vendors and the Purchaser equally.
4.4 COMPLETION ACCOUNTS FINAL AND BINDING
If:-
(a) the Purchaser accepts, or is deemed to accept, the Completion
Accounts so furnished by the Vendors, the Completion Accounts
so furnished; or
(b) (if paragraph 4.3 shall apply) the final draft of the
Completion Accounts as determined by the independent
accountant,
shall be the Completion Accounts for the purposes of this Agreement
and shall be final and binding on the parties.
4.5 INFORMATION AND EXPLANATIONS
The Vendors shall, and shall procure that the auditors for the time
being of the Company, provide such information and explanations
relating to the draft Completion Accounts and their preparation as the
Purchaser's Accountants, or any independent chartered accountant
appointed pursuant to paragraph 4.3, shall reasonably request or
require.
60
INFOTEL - Share Sale Agmt Schedule 3 - Adjustments
60.
5 DETERMINATION OF NUMBER OF INITIAL CONSIDERATION SHARES
The number of Initial Consideration Shares (denoted "N" below) to be
issued by the Purchaser to the Vendors as at Completion, shall be
calculated in accordance with the following formula (rounded downwards
to the nearest whole number):-
N = ( P - R )
---------
X
where:-
"P" means the US Dollar Equivalent of S$3,750,000.00;
"R" means the US Dollar Equivalent of the amount (if any) by which
the Net Tangible Assets of the Company as at 31st December 1997
as shown by the Completion Accounts, are less than S$4,800,000
by an amount in excess of S$200,000; and
"X" means US$5.00 (unless the Purchaser's stock of which the
Initial Consideration Shares form part, are split or a rights
offering is made in respect thereof, in which case "X" shall be
adjusted accordingly),
Provided however that:-
(a) If, as calculated in accordance with this paragraph 5, "N"
(rounded downwards to the nearest whole number) shall either be
zero or a negative number, the number of Initial Consideration
Shares to be issued shall be zero.
(b) If, during the period from the date of this Agreement up to the
date of Completion, any dividends shall have been declared in
relation to shares in the common stock of the Purchaser, the
number of Initial Consideration Shares shall be increased by
the amount (denoted "I") calculated in accordance with the
following formula (rounded downwards to the nearest whole
number):-
I = V
-------
X
where:-
"V" is the value (in US Dollars) of dividends notionally
payable in respect of the number of Initial
Consideration Shares denoted "N" calculated in
accordance with this paragraph 5 (rounded downwards to
the nearest whole number); and
"X" is as defined above.
(c) If, during the period from the date of this Agreement up to the
date of Completion, the aggregate percentage interest of the
Vendors in the capital of the Purchaser shall be diluted by
reason only that any rights offering or bonus issue is made by
61
INFOTEL - Share Sale Agmt Schedule 3 - Adjustments
61.
the Purchaser, the number of Initial Consideration Shares
shall be adjusted accordingly such that such aggregate
percentage interest of the Vendors is maintained. Such
aggregate percentage interest shall be ascertained on the
basis of the proportion which the number of Initial
Consideration Shares denoted "N" calculated in accordance
with this paragraph 5 (rounded downwards to the nearest whole
number), bears to all shares in the common stock of the
Purchaser which are issued as at the date of this Agreement.
For the avoidance of doubt, there shall be no adjustment of
the number of Initial Consideration Shares under this
sub-paragraph (c) in the event that the Purchaser allots
fresh shares in its common stock otherwise than by reason of
a rights offering or bonus issue.
6 INTERACTION WITH OTHER PROVISIONS
If the Purchaser shall have any claim against the Vendors under this
Agreement in respect of any liability or deficiency which is taken
into account in the Completion Accounts the amount of such liability
or deficiency so taken into account shall be deducted from the amount
of the Purchaser's claim but, save as aforesaid, preparation and
acceptance of the Completion Accounts by the Purchaser shall be
without prejudice to any claim which the Purchaser may have against
any Vendor under or in respect of any breach of this Agreement.
62
INFOTEL - Share Sale Agmt
62.
SCHEDULE 4
Property
Description: JTC Private lot A14638 at No. 19 ▇▇▇ ▇▇▇▇ Drive
Address: ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ #▇▇-▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Manner of
holding: As sub-tenant of Singapore Technologies Pte Ltd (the
"Landlord"), the Landlord in turn being a lessee of
Jurong Town Corporation ("JTC") under a principal
agreement dated 15th August 1991.
Term: Two years commencing from 1st October 1997.
Area: 805.00 square metres
Permitted Use: Production/factory/workshop and office for system
design and assembly, software production, consultancy,
project management, installation, repair and
maintenance of electronic products in the fields of
telecom and information technologies and related
activities agreed to by JTC and the Landlord.
Special
Provisions: By its letter of 15th September 1997 to the Landlord,
JTC, as a condition of its approval to the Landlord's
sub-letting of the Property to the Company, reserved
the right to withdraw its consent to such sub-letting
by giving three months" notice in writing to the
Landlord.
63
INFOTEL - Share Sale Agmt
63.
SCHEDULE 5
Provisions applicable to clause 4(F)(iv)
1. In the event that the Purchaser fails in respect of any Pay-Out
Financial Year (as defined in clause 4(F)(iv)) to make a payment under
clause 4(F)(iv) to any one or more Vendors (each, a "Buyer"), each
Buyer shall, by notice in writing to the Purchaser made no later than
45 days after the date of the Purchaser's failure to make such
payment, (provided that such non-payment to that Buyer is continuing)
be entitled to either:-
(a) require the Purchaser to sell to him issued ordinary shares
with a par value of $1/- each in the capital of the Company,
to which the provisions of Part I of this Schedule shall
apply; or
(b) require the Purchaser to allot to him shares in the common
stock of the Purchaser, to which the provisions of Part II of
this Schedule shall apply.
2. In the event that the Purchaser does not receive notice from any Buyer
within the aforesaid 45 day period, (a) that Buyer's entitlement as
set out in paragraph 1 above shall thereafter lapse and no longer be
capable of exercise and (b) the amount due and unpaid shall carry
interest (accrued daily and compounded monthly) at the rate of three
per cent. per annum above the prime lending rate of The Development
Bank of Singapore Limited from time to time prevailing from the date
falling 45 days after the due date until the date of actual payment.
PART I
3. If any Buyer elects under paragraph 1(a) of this Schedule 5 to
purchase from the Purchaser issued shares in the capital of the
Company, the number of issued ordinary shares of S$1/- each in the
capital of the Company (the "Relevant Infotel Shares") to be sold by
the Purchaser and purchased by that Buyer shall be specified by the
Buyer, which number shall not be greater than the limit (rounded
downwards to the nearest whole number) determined by dividing the
amount (in Singapore Dollars) which the Purchaser shall have failed to
pay that Buyer under clause 4(F)(iv), by S$22.00.
4. Completion of the sale and purchase of the specified number of
Relevant Infotel Shares shall take place at the registered office of
the Company on the date falling 30
64
INFOTEL - Share Sale Agmt Schedule 5
64.
days after the notice under paragraph 1 of this Schedule 5 is given.
5. The specified number of Relevant Infotel Shares sold under this Part I
shall be sold free of all liens, charges and encumbrances and together
with all rights attaching to them at the last day of the Pay-Out
Financial Year in respect of which the Purchaser failed to make payment
to that Buyer under clause 4(F)(i).
6. On completion, in exchange for the purchase price of S$22.00 per
Relevant Infotel Share payable by that Buyer (after deducting any
amount due and unpaid to that Buyer under clause 4(F)(i)), the
Purchaser shall deliver to that Buyer, duly executed share transfers
for the Relevant Infotel Shares in question, in favour of that Buyer
(or as he may direct) together with the relevant share certificate(s).
7. If a Buyer specifies under the paragraph 3 of this Schedule 5 that he
wishes to purchase fewer Relevant Infotel Shares than the limit to
which he is entitled (as determined under paragraph 3 of this Schedule
5), the balance of the amount outstanding under clause 4(F)(iv) after
deducting the purchase price for the Relevant Infotel Shares purchased
under this Part I shall be the amount due and outstanding for purposes
of paragraph 2(b) of this Schedule 5.
PART II
8. If any Buyer elects under paragraph 1(b) of this Schedule 5 to require
the Purchaser to allot to him shares in the common stock of the
Purchaser, the number of shares in the common stock of the Purchaser to
be allotted by the Purchaser to that Buyer shall be specified by him
(the "Relevant NHancement Shares", denoted "N" below), which number
shall not be greater than the limit calculated in accordance with the
following formula:-
N = DP
----------
MV
where:-
"DP" means the United States Dollar equivalent of the amount in
Singapore Dollars which the Purchaser shall have failed to that
Buyer under clause 4(F)(i), calculated by using the closing
rate of
65
INFOTEL - Share Sale Agmt Schedule 5
65.
exchange (conclusively determined by the Purchaser) for
Singapore Dollars into United States Dollars furnished by the
Bank of America to the public on the Business Day prior to
the day on which the notice under paragraph 1 of this
Schedule 5 is given; and
"MV" means the fair market value of a share of the Purchaser's
common stock on the trading day immediately prior to the day
on which the notice under paragraph 1 of this Schedule 5 is
given, being the average of the closing sale price of the
Purchaser's common stock as reported on The NASDAQ Small Cap
Market System (or any alternative exchange on which the
Purchaser's common stock is then being traded) on that
trading day,
and where N shall be rounded downwards to the nearest whole number.
9. The Relevant NHancement Shares shall carry the right to receive in
full all dividends and other distributions declared, made or paid in
respect thereof on Completion.
10. Allotment of the sale and purchase of the Relevant NHancement Shares
shall take place on the date falling 30 days after the notice under
paragraph 1 of this Schedule 5 is given.
11. If a Buyer specifies under the paragraph 8 of this Schedule 5 that he
wishes to purchase fewer Relevant NHancement Shares than the limit to
which he is entitled (as calculated under paragraph 8 of this Schedule
5), the balance of the amount outstanding under clause 4(F)(iv) after
deducting the purchase price for the Relevant NHancement Shares
purchased under this Part II shall be the amount due and outstanding
for purposes of paragraph 2(b) of this Schedule 5.
66
IN WITNESS WHEREOF this Agreement has been entered into on the date stated at
the beginning.
The Vendors
SIGNED by /S/ ▇▇▇▇▇▇ FOO LOKE KIEAN )
-----------------------------
in the presence of:- /S/ ▇▇▇▇▇▇▇ )
TAN CHING PING, Advocate )
and Solicitor for Singapore )
SIGNED by /S/ ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇ )
-----------------------------
in the presence of:- /S/ ▇▇▇▇▇▇▇ )
TAN CHING PING, Advocate )
and Solicitor for Singapore )
SIGNED by /S/ ▇▇▇▇▇ ▇▇▇ PAN )
-----------------------------
in the presence of:- /S/ ▇▇▇▇▇▇▇ )
TAN CHING PING, Advocate )
and Solicitor for Singapore )
SIGNED by /S/ FOO KHOON ▇▇▇▇ )
-----------------------------
in the presence of:- /S/ ▇▇▇▇▇▇▇ )
TAN CHING PING, Advocate )
and Solicitor for Singapore )
SIGNED by /S/ SAE FOO KITIPONGSE @ )
-----------------------------
FOO LOKE KHEE in the presence of:- )
/S/ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, Advocate )
and Solicitor for Singapore )
67
The Purchaser
SIGNED by /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇ )
-----------------------------
for and on behalf of )
NHANCEMENT TECHNOLOGIES INC. )
in the presence of:- )
68
APPENDIX A
Form of
Escrow Agent Agreement
69
DATED ______________ 1998
Between
▇▇▇▇▇▇ FOO LOKE KIEAN
▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇ PAN
FOO KHOON ▇▇▇▇
SAE FOO KITIPONGSE @ FOO LOKE KHEE
as Vendors
NHANCEMENT TECHNOLOGIES INC.
as Purchaser
- AND -
MESSRS. BDO BINDER
AS ESCROW AGENT
---------------------------------------------
FORM OF
ESCROW AGENT AGREEMENT
IN CONNECTION WITH
THE SALE AND PURCHASE OF 500,000
ORDINARY SHARES IN THE CAPITAL OF
INFOTEL TECHNOLOGIES (PTE) LTD
---------------------------------------------
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Advocates & Solicitors
Singapore
70
THIS AGREEMENT is made on ____________, 1998 BETWEEN:-
(1) THE PERSONS SPECIFIED IN PART I OF SCHEDULE 1 (together, the
"Vendors");
(2) NHANCEMENT TECHNOLOGIES INC. (the "Purchaser", which expression shall
include its successors and assigns), a corporation incorporated in the
State of Delaware, United States of America and having a principal
place of business at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America; and
(3) MESSRS. BDO BINDER, a firm of certified public accountants with a place
of business at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ #▇▇-▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
(the "Escrow Agent").
WHEREAS:-
(A) Pursuant to the Agreement dated 1998 (the "Share
Sale Agreement") entered into between the Vendors and the Purchaser,
the Purchaser agreed to acquire from the Vendors the entire issued
share capital of Infotel Technologies (Pte) Ltd, upon the terms and
subject to the conditions of the Share Sale Agreement.
(B) Under clause 3(A) of the Share Sale Agreement, the Purchaser and the
Vendors have agreed to enter into this Agreement to appoint the Escrow
Agent to act as escrow agent in connection with the Share Sale
Agreement, and the Escrow Agent has agreed to accept such appointment,
upon the terms and subject to the conditions of this Agreement.
IT IS AGREED as follows:-
1. INTERPRETATION
In this Agreement and the Appendices hereto, unless the context
otherwise requires, all terms and references used in this Agreement
shall, unless otherwise defined or construed herein, have the same
meaning and construction as set out in the Share Sale Agreement.
2. APPOINTMENT
(A) Each of the Vendors and the Purchaser hereby appoints the Escrow Agent
to act as escrow agent in connection with the Share Sale Agreement upon
the terms and subject to the conditions of this Agreement.
71
(B) The sole duty of the Escrow Agent shall be to act in accordance with
the provisions of this Agreement, which the Escrow Agent is hereby
unconditionally and irrevocably authorised and instructed to do by
each of the Vendors and the Purchaser.
3. DOCUMENTS
(A) The parties hereto agree that duly executed transfers of the Sale
Shares by the registered holders thereof in favour of the Purchaser
together with the relative share certificates (the "Sale Share
Documents") shall be delivered by the Vendors to the Escrow Agent
within 14 days of the date hereof and that the Sale Share Documents
shall be held by the Escrow Agent in accordance herewith.
(B) Subject to sub-clause (C), the Escrow Agent shall receive and hold in
escrow the Sale Share Documents until it shall have received notice in
writing (substantially in the form of Appendix A) from the Vendors and
the Purchaser setting out instructions which shall require the Escrow
Agent on the Completion Date, to:-
(i) receive from the Purchaser the Cash Portion, by way of
cashier's orders made in favour of each of the Vendors;
(ii) receive from the Purchaser share certificates in respect of
the final number of Initial Consideration Shares specified in
such instructions,
and against such receipt:-
(iii) release to the Purchaser the Sale Share Documents;
(iv) deliver to each Vendor the relevant cashier's order for the
Purchaser's payment of his share of the Cash Portion; and
(v) deliver to each Vendor share certificates for the specified
number of Initial Consideration Shares allotted to him.
(C) In the event that that the final number of Initial Consideration
Shares shall not have been determined by the Completion Date, the
Purchaser and the Vendors shall issue to the Escrow Agent a notice in
writing (substantially in the form of Appendix B) to such effect,
requiring the Escrow Agent in accordance with the instructions
contained therein on the Completion Date, to:-
(i) receive from the Purchaser the Cash Portion, by way of
cashier's orders made in favour of each of the Vendors;
(ii) receive from the Purchaser share certificates for a
provisional number of 428,560 Initial Consideration Shares,
and against such receipt:-
72
(iii) release to the Purchaser the Sale Share Documents;
(iv) deliver to each Vendor the relevant cashier's order for the
Purchaser's payment of his share of the Cash Portion; and
(v) release to the Vendors his share certificate(s) in respect of
his share of half of the provisional number of 428,560 Initial
Consideration Shares.
(D) The Escrow Agent shall:-
(i) on and after the Completion Date, hold in escrow share
certificates for half of the provisional number of 428,560
Initial Consideration Shares pending release thereof;
(ii) in accordance with and on the date specified in the relevant
notice in writing from the Vendors and the Purchaser, release
to the Vendors and/or the Purchaser (as instructed) all or any
of the remaining share certificates of the 428,560 Initial
Consideration Shares then held by the Escrow Agent.
5. INSTRUCTIONS AND NOTICES
(A) In the event that any further or other instructions are to be given to
the Escrow Agent in relation to the Documents, such instructions shall
be in writing and signed by all the Vendors and on behalf of the
Purchaser.
(B) The Escrow Agent shall be entitled to rely upon notices issued pursuant
to the provisions of this Agreement without further act or inquiry and
notwithstanding any matter or thing of which the Escrow Agent may
otherwise be aware.
6. FEES
(A) In respect of its services as Escrow Agent hereunder, the Purchaser
shall pay, within fourteen (14) days of the date hereof, a fee of
S$1,500.00 (together goods and services tax thereon).
(B) The Purchaser hereby agrees to indemnify and keep indemnified the
Escrow Agent for all reasonable expenses incurred by the Escrow Agent
in relation to the performance of its duties hereunder.
7. NO DISCRETIONARY TRUST
Neither the Escrow Agent nor any of its officers, employees, partners
or agents shall by reason of any matter or thing contained in this
Agreement, be deemed to be a trustee (other than as a bare trustee) for
or have any fiduciary relationship with any of the parties hereto or
any other person.
73
8. NOTICES
(A) Any notice or other communication required to be given under this
Agreement or in connection with the matters contemplated by it shall,
except where otherwise specifically provided, be in writing and
addressed as provided in sub-clause (B) and may be:-
(i) personally delivered, in which case it shall be deemed to
have been given upon delivery at the relevant address; or
(ii) if within Singapore, sent by pre-paid post, in which case it
shall be deemed to have been given two Business Days after
the date of posting; or
(iii) if from or to any place outside Singapore, sent by pre-paid
airmail, in which case it shall be deemed to have been given
seven Business Days after the date of posting; or
(iv) sent by fax, in which case it shall be deemed to have been
given when despatched, subject to confirmation of
uninterrupted transmission by a transmission report provided
that any notice despatched by fax after 5:00 p.m. (at the
place where such fax is to be received) on any day shall be
deemed to have been received at 8:00 a.m. on the next
Business Day.
(B) The addresses and other details of the parties referred to in
sub-clause (A) are, subject to sub-clause (C):-
Purchaser
Name: NHancement Technologies Inc.
Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America.
Fax number: (▇ ▇▇▇) ▇▇▇ ▇▇▇▇
For the attention of: ▇▇▇▇▇▇ ▇. ▇▇▇▇/▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Vendors
1. Name: ▇▇▇▇▇▇ Foo Loke Kiean
Address: ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇
Fax number: (▇▇▇) ▇▇▇ ▇▇▇▇
2. Name: ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax number: -
74
3. Name: ▇▇▇▇▇ ▇▇▇ Pan
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax number: -
4. Name: Foo Khoon ▇▇▇▇
Address: ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇
Fax number: -
5. Name: Sae Foo Kitipongse @ Foo Loke Khee
Address: ▇▇▇/▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇
Fax number: ▇▇-▇-▇▇▇▇▇▇▇
Escrow Agent
Name: Messrs. BDO Binder
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ #▇▇-▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax number: (▇▇) ▇▇▇▇▇▇▇
For the attention of: ▇▇▇▇▇▇▇ ▇▇▇/▇▇▇▇▇ ▇▇▇▇▇
(C) Any party to this Agreement may notify the other parties of any change
to its address or other details specified in sub-clause (B), provided
that such notification shall be effective only on the date specified in
such notice or five Business Days after the notice is given, whichever
is later.
9. GOVERNING LAW AND JURISDICTION
(A) This Agreement shall be governed by, and construed in accordance with,
the laws of Singapore.
(B) In relation to any legal action or proceedings to enforce this
Agreement or arising out of or in connection with this Agreement
("proceedings") each of the parties irrevocably submits to the
exclusive jurisdiction of the Singapore courts and waives any objection
to proceedings in such courts on the grounds of venue or on the grounds
that the proceedings have been brought in an inconvenient forum.
75
SCHEDULE 1
Vendors
1. ▇▇▇▇▇▇ FOO LOKE KIEAN (Malaysia IC No. A3516527) of ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
2. ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇ (NRIC NO. ▇▇▇▇▇▇▇▇▇) of ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
3. ▇▇▇▇▇ ▇▇▇ PAN (NRIC No. ▇▇▇▇▇▇▇▇▇) of ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
4. FOO KHOON ▇▇▇▇ (Malaysian IC No. 1376406) of ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇▇▇
5. SAE FOO KITIPONGSE @ FOO LOKE KHEE (Malaysian IC No. 7231358) of
▇▇▇/▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
76
APPENDIX A
Notice to Escrow Agent
(referred to in clause 4(B))
[ ] 1998
To: Messrs. BDO Binder
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ #▇▇-▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Attn: ▇▇ ▇▇▇▇▇▇▇ ▇▇▇/▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs,
INFOTEL TECHNOLOGIES PTE LTD
We refer to the Escrow Agent Agreement (the "Agreement") dated [ ] 1998
entered into between (1) ▇▇▇▇▇▇ Foo Loke Kiean, ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
Pan, Foo Khoon ▇▇▇▇ and Foo Kitipongse @ Foo Loke Khee, as Vendors, (2)
NHancement Technologies Inc., as Purchaser, and (3) yourselves, as Escrow
Agent. All terms and references used in this notice shall, unless otherwise
defined or construed herein, have the same meaning as set out in the Agreement.
With reference to clause 4(B) of the Agreement, we the undersigned parties
hereby notify you that completion of the Share Sale Agreement shall take place
on [ ] 1998 at [ ] a.m./p.m. at
[Singapore].
At Completion, you are instructed that AGAINST DELIVERY by the Purchaser to you
of:-
(i) payment of S$3,750,000.00 by way of the following cashier's orders:-
(aa) cashier's order for S$187,500.00 made in favour of "▇▇▇▇▇▇ Foo
Loke Kiean";
(bb) cashier's order for S$937,500.00 made in favour of "▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇";
(cc) cashier's order for S$937,500.00 made in favour of "▇▇▇▇▇ ▇▇▇
Pan";
(dd) cashier's order for S$750,000.00 made in favour of "Foo Khoon
▇▇▇▇"; and
(ee) cashier's order for S$937,500.00 made in favour of "Sae Foo
Kitipongse @ Foo Loke Khee"; and
77
(ii) share certificates for the final number of [ ] shares
in the common stock of the Purchaser (each , an "Initial Consideration
Share") as follows:-
(aa) [ ] Initial Consideration Shares issued in the
name of "▇▇▇▇▇▇ Foo Loke Kiean";
(bb) [ ] Initial Consideration Shares issued in the
name of "▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇";
(cc) [ ] Initial Consideration Shares issued in the
name of "▇▇▇▇▇ ▇▇▇ Pan";
(dd) [ ] Initial Consideration Shares issued in the
name of "Foo Khoon ▇▇▇▇"; and
(ee) [ ] Initial Consideration Shares issued in the
name of "Sae Foo Kitipongse @ Foo Loke Khee",
YOU SHALL FORTHWITH:-
(iii) RELEASE to the Purchaser the Sale Share Documents; and
(iv) DELIVER to the respective Vendors:-
(aa) the cashier's orders referred to in paragraph (i);
and
(bb) the Initial Consideration Shares referred to in paragraph
(ii).
Dated [ ] 1998.
Yours faithfully,
-------------------------------- ------------------------------
▇▇▇▇▇▇ FOO LOKE KIEAN ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
-------------------------------- ------------------------------
▇▇▇▇▇ ▇▇▇ PAN FOO KHOON ▇▇▇▇
-------------------------------- ------------------------------
SAE FOO KITIPONGSE Signed by
@ FOO LOKE KHEE as of and for and on behalf of
NHANCEMENT TECHNOLOGIES INC.
▇▇
▇▇▇▇▇▇▇▇ ▇
Notice to Escrow Agent
(referred to in clause 4(C))
[ ] 1998
To: Messrs. BDO Binder
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ #▇▇-▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Attn: ▇▇ ▇▇▇▇▇▇▇ ▇▇▇/▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs,
INFOTEL TECHNOLOGIES PTE LTD
We refer to the Escrow Agent Agreement (the "Agreement") dated [ ] 1998
entered into between (1) ▇▇▇▇▇▇ Foo Loke Kiean, ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
Pan, Foo Khoon ▇▇▇▇ and Foo Kitipongse @ Foo Loke Khee, as Vendors, (2)
NHancement Technologies Inc., as Purchaser, and (3) yourselves, as Escrow
Agent. All terms and references used in this notice shall, unless otherwise
defined or construed herein, have the same meaning as set out in the Agreement.
With reference to clause 4(C) of the Agreement, we the undersigned parties
hereby notify you that completion of the Share Sale Agreement shall take place
on [ ] 1998 at [ ] a.m./p.m. at
[Singapore] and that the final number of Initial Consideration Shares will not
have been determined by that date.
At Completion, you are instructed that AGAINST DELIVERY by the Purchaser to you
of:-
(i) payment of S$3,750,000.00 by way of the following cashier's orders:-
(aa) cashier's order for S$187,500.00 made in favour of "▇▇▇▇▇▇ Foo
Loke Kiean";
(bb) cashier's order for S$937,500.00 made in favour of "▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇";
(cc) cashier's order for S$937,500.00 made in favour of "▇▇▇▇▇ ▇▇▇
Pan";
(dd) cashier's order for S$750,000.00 made in favour of "Foo Khoon
▇▇▇▇"; and
(ee) cashier's order for S$937,500.00 made in favour of "Sae Foo
Kitipongse @ Foo Loke Khee"; and
(ii) share certificates for the provisional number of 428,560 shares in the
common stock of the Purchaser (each, an "Initial Consideration Share")
as follows:-
79
(aa) 21,428 Initial Consideration Shares issued in the name of
"▇▇▇▇▇▇ Foo Loke Kiean";
(bb) 107,140 Initial Consideration Shares issued in the name of
"▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇";
(cc) 107,140 Initial Consideration Shares issued in the name of
"▇▇▇▇▇ ▇▇▇ Pan";
(dd) 85,712 Initial Consideration Shares issued in the name of
"Foo Khoon ▇▇▇▇"; and
(ee) 107,140 Initial Consideration Shares issued in the name of
"Sae Foo Kitipongse @ Foo Loke Khee",
YOU SHALL FORTHWITH:-
(iii) RELEASE to the Purchaser the Sale Share Documents; and
(iv) DELIVER to the respective Vendors:-
(aa) the cashier's orders referred to in paragraph (i); and
(bb) share certificates for half of the number of Initial
Consideration Shares respectively allotted to each Vendor, as
referred to in paragraph (ii); and
(v) HOLD IN ESCROW share certificates for the remaining half of the number
of Initial Consideration Shares respectively allotted to each Vendor,
as referred to in paragraph (ii), pending further instructions in
writing from the Purchaser and the Vendors in respect of the release
thereof.
Dated [ ] 1998.
Yours faithfully,
------------------------------ ------------------------------
▇▇▇▇▇▇ FOO LOKE KIEAN ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
------------------------------ ------------------------------
▇▇▇▇▇ ▇▇▇ PAN FOO KHOON ▇▇▇▇
------------------------------ ------------------------------
SAE FOO KITIPONGSE Signed by
@ FOO LOKE KHEE as of and for and on
behalf of NHANCEMENT
TECHNOLOGIES INC.
80
IN WITNESS WHEREOF this Agreement has been entered into on the date stated at
the beginning.
The Vendors
SIGNED by ▇▇▇▇▇▇ FOO LOKE KIEAN )
in the presence of:- )
SIGNED by ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇ )
---------------------------
in the presence of:- )
SIGNED by ▇▇▇▇▇ ▇▇▇ PAN )
---------------------------
in the presence of:- )
SIGNED by FOO KHOON ▇▇▇▇ )
---------------------------
in the presence of:- )
SIGNED by SAE FOO KITIPONGSE @ )
---------------------------
FOO LOKE KHEE in the )
presence of:- )
81
The Purchaser
SIGNED by )
------------------------
for and on behalf of )
NHANCEMENT TECHNOLOGIES INC. )
in the presence of:- )
82
The Escrow Agent
SIGNED by )
------------------------
for and on behalf of )
MESSRS. BDO BINDER )
in the presence of:- )
83
APPENDIX B
Form of Service Agreement
84
DATED _________, 1998
BETWEEN
THE PERSON WHOSE NAME APPEARS IN
ITEM 1 OF SCHEDULE 1
AS EMPLOYEE
- AND -
INFOTEL TECHNOLOGIES (PTE) LTD
AS COMPANY
-------------------------------
FORM OF
SERVICE AGREEMENT
-------------------------------
(RQ/WTST/13764/972)
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Advocates & Solicitors
Singapore
85
THIS AGREEMENT is made on ____________, 1998 BETWEEN:-
(1) THE PERSON WHOSE NAME APPEARS IN ITEM 1 OF SCHEDULE 1 residing at the
address set out in Item 2 of Schedule 1 (the "Employee"); and
(2) INFOTEL TECHNOLOGIES (PTE) LTD, a company incorporated in Singapore
with its registered office at ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ #▇▇-▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ (the "Company").
WHEREAS pursuant to an agreement for sale of all the issued shares in the
capital of the Company whereby NHancement Technologies Inc. (the "Purchaser")
purchased all the issued shares in the capital of the Company, the outgoing
shareholders of the Company obtained the Purchaser's agreement that, inter
alia, the Purchaser provides the Company with funds for the payment by the
Company to its specified employees (including the Employee) of the incentive
bonus referred to in clause 3.4 of and Schedule 2 to this Agreement.
IT IS AGREED as follows:-
1. DEFINITIONS
1.1 In this Agreement where the context so admits, the following
expressions shall have the following meanings:-
1.1.1 "Board" means the board of directors of the Company;
1.1.2 "Confidential Information" shall have the meaning ascribed to
it in Clause 7.2 hereof;
1.1.3 "Employment Period" means the period stated in Item 4 of
Schedule 1, unless the employment is terminated earlier in
accordance with this Agreement;
1.1.4 "Inventions" means discoveries, improvements, ideas and
artistic or literary property rights which are or may
constitute intellectual property rights and which relate to:-
1. any of the Company's present or future manufacturing,
sales research or other activities, any of such
activities or investigations relating to things which
are entirely foreign to any products or processes
currently being made or used by the Company; or
2. ideas, work or investigations conceived carried on by
him in connection with or because of his employment
with the Company.
86
1.2 Words denoting the singular shall include the plural number and vice
versa. Words denoting the masculine gender shall include the feminine
and neuter genders. Words denoting persons shall include corporations
and firms.
1.3 Clause headings are for reference only and shall be ignored when
construing the meaning of any provisions of this Agreement.
1.4 The Schedules shall be taken read and construed as an essential part of
this Agreement.
1.5 References to Clauses and Schedules are references to Clauses and
Schedules of this Agreement respectively.
2. EMPLOYMENT
2.1 The Company hereby appoints the Employee and the Employee hereby agrees
to act in the position stated in Item 3 of Schedule 1.
2.2 The said appointment shall be for the Employment Period.
3. REMUNERATION, BONUSES AND OTHER BENEFITS
3.1 The gross remuneration of the Employee shall be at the rate stated in
Item 5 of Schedule 1.
3.2 The said remuneration shall be reviewed by the Board at the end of each
of the Company's financial years and the salary rate may be increased
with effect from such review date or such other date as may be
determined by the Board.
3.3 An annual wage supplement (13th month) bonus equivalent to one (1)
month's gross remuneration shall be paid pro rata for every 12 months"
of continuous employment with the Company.
3.4 The Employee shall in addition to his remuneration and annual wage
supplement and any other bonus prescribed by the Board from time to
time to be applicable to all employees or a category of employees of
the Company, be entitled to receive an incentive bonus which shall be
paid if the conditions set out in Schedule 2 are fulfilled.
3.5 The Employee shall participate in the Company's profit sharing scheme
on terms set out in Item 6 of Schedule 1.
3.6 The payment of any other bonus is at the discretion of the Board.
3.7 The Employee will also be reimbursed and/or receive the allowances or
benefits as set out in Item 7 of Schedule 1.
87
4. WORKING HOURS, HOLIDAYS AND PAYMENT
DURING ABSENCE ON MEDICAL GROUNDS
4.1 The Employee shall conform to such hours of work as may from time to
time reasonably be required of him and shall not be entitled to
receive any additional remuneration for work outside his normal hours.
Unless otherwise determined by the Board, the normal working hours of
the Company as the date hereof are:-
Mondays to Fridays : 8:30 a.m. to 12:30 p.m. and
1:30 p.m. to 6:00 p.m.
4.2 The Employee shall (in addition to normal public holidays) be entitled
to annual leave at the rate of twenty- one (21) working days per year,
to be taken at such time or times as the Board or his supervisor may
approve. The Employee shall in addition to annual leave, be entitled
to such other leave which may from time to time be prescribed by the
Board to be applicable to all employees of the Company.
4.3 For the purpose of Clause 4.2, the number of days of annual leave
accrued to the Employee up to the date hereof is set out in Item 8 of
Schedule 1.
4.4 The Company shall continue to pay the Employee's remuneration during
any period of absence on medical grounds up to a maximum of fourteen
(14) days in any period of twelve (12) months PROVIDED that the
Employee shall if required supply the Company with medical
certificates covering the period(s) of absence.
4.5 The Company shall pay the cost of all medical attention and all
medicines prescribed by the Company's approved doctors for the
Employee. Medical attention does not include dental or optical
treatment, unless sustained by injury at work.
4.6 The Company shall continue to pay the Employee's remuneration during
any period of absence up to a maximum of sixty (60) days in any period
of twelve (12) months if the Employee is hospitalised on medical
grounds provided that the Employee shall if required supply the
Company with medical certificates covering the period(s) of absence.
4.7 The Employee shall be entitled to participate in such group hospital
and surgical insurance scheme and group personal accident scheme and
any other insurance scheme as the Company may cause to be effected
from time to time.
5. GENERAL DUTIES AND RESTRICTIONS
5.1 The Employee shall devote substantially the whole of his time and
attention and skill to his appointed duties and shall faithfully and
diligently perform such duties and exercise such powers consistent
with the office to which he is appointed as may from time to time be
assigned to
88
or vested in him and shall obey the instructions of the Board or his
superior and use his best endeavours to promote the interests and
welfare of the Company.
5.2 The Employee shall not undertake any occupation either remunerative or
otherwise outside the Company during his employment period without the
prior written approval of the Company.
6. CONFLICT OF INTEREST
6.1 Save in respect of interests as holder of less than five per cent. of
any class of shares or debentures listed on the Stock Exchange of
Singapore Limited or any other recognised stock exchange, the Employee
shall declare to the Company his interests in any other business
similar to or in competition with the business of the Company or its
subsidiaries and shall not engage or pursue such interests in any other
business.
7. CONFIDENTIALITY
7.1 The Employee shall not, except in the proper course of his duties,
during or after the Employment Period divulge to any person whatever
and shall use his best endeavours to prevent the publication or
disclosure of any Confidential Information and shall not after the
Employment Period otherwise make use of any Confidential Information in
relation to any competing business, activity, products or services.
7.2 Confidential Information shall mean:-
7.2.1 any and all trade secrets concerning the business and affairs
of the Company, product specifications, data, know-how,
formulae, compositions, processes, designs, sketches,
photographs, graphs, drawings, samples, inventions and ideas,
past, current and planned research and development, current and
planned manufacturing and distribution methods and processes,
customer lists, current and anticipated customer requirements,
price lists, market studies, business plans, computer software
and programs (including object code and source code), computer
software and database technologies, systems, structures and
architectures (and related processes, formulae, compositions,
improvements, devices, know-how, inventions, discoveries,
concepts, ideas, designs, methods and information of the
Company and any other information, however documented) of the
Company that is a trade secret;
89
7.2.2 any and all information concerning the business and affairs
of the Company which the Company reasonably considers to be
of a confidential or proprietary nature, which includes
historical financial statements, financial projections and
budgets, historical and projected sales, capital spending
budgets and plans, the names and backgrounds of key
personnel, personnel training and techniques and materials,
however documented; and
7.2.3 any and all notes, analysis, compilations, studies,
summaries, and other material prepared by or for the Company
containing or based, in whole or in part, on any information
included in the foregoing,
save only:-
7.2.4 insofar as the same has become public knowledge otherwise
than, directly or indirectly, through the Employee's breach
under this clause to keep the same confidential; or
7.2.5 to the extent required by law or by any supervisory or
regulatory body whether in Singapore or United States of
America to be divulged.
7.3 All notes and memoranda of any Confidential Information which is
acquired received or made by the Employee during his Employment Period
shall be the property of the Company and shall be surrendered by the
Employee to someone duly authorised in that behalf at the termination
of his employment or at the request of the Board during his Employment
Period.
7.4 An Employee contravening any of the above will expose himself to legal
action by the Company.
8. INVENTIONS
8.1 If the Employee conceives or makes Inventions either solely or jointly
with others during his Employment Period, whether or not during normal
working hours or whether or not at the Company's premises, or within
one year after termination of his employment if such Inventions relate
to a product or process upon which he worked during the last two (2)
years of his employment by the Company, the Employee shall:-
8.1.1 promptly and fully disclose and describe such Inventions in
writing to the Company;
8.1.2 assign (and the Employee does hereby assign) to the Company
or its nominee all of his rights to such Inventions, and to
applications for letters patent in all countries and to
letters patent granted upon such Inventions in all countries;
and
8.1.3 acknowledge and deliver promptly to the Company such written
instruments
90
and do such other acts as may be necessary in the opinion of
the Company to obtain and maintain letters patent and to vest
the entire right and title thereto in the Company or its
nominee.
9. COMPLIANCE WITH RULES AND REGULATIONS AND HANDBOOK
9.1 The Employee shall comply with, and shall be entitled to and to
exercise all benefits and rights available to him under, all rules and
regulations issued by the Company from time to time which are
applicable to all employees and the company manual, if any, containing
the general terms and conditions of service which are issued by the
Company from time to time and which shall form part of this Agreement.
10. RIGHT TO VARY TERMS
10.1 The Company shall have the right to vary the terms and conditions of
service of this Agreement from time to time to meet the needs of the
Company provided that any such variation shall have the prior mutual
agreement in writing of the Employee.
11. CENTRAL PROVIDENT FUND
11.1 The Company and the Employee shall contribute to the Central Provident
Fund at such rate required by law during the Employment Period.
12. TERMINATION
12.1 The employment of the Employee hereunder shall be subject to
termination by either the Company or the Employee by each giving to the
other not less than three (3) months' notice in writing given at any
time or payment in lieu of notice.
12.2 The employment of the Employee hereunder shall be subject to
termination by the Company by summary notice in writing if the Employee
shall at any time:-
12.2.1 commit a serious or persistent breach of any of the provisions
herein contained;
12.2.2 be guilty of any default, misconduct or wilful neglect in the
discharge of his duties hereunder or in connection with or
affecting the business of the Company;
12.2.3 be served with any bankruptcy notice or become bankrupt or make
any arrangement or composition with his creditors;
12.2.4 be charged or convicted of any criminal offence, other than a
minor traffic offence or an offence
91
which in the sole and absolute opinion of the Board does not
affect his position; or
12.2.5 be guilty of any conduct tending to bring himself or the
Company or any of its shareholders, directors or officers
into disrepute.
12.3 If the Company becomes entitled to terminate the appointment of the
Employee hereunder pursuant to Clause 12.2 it shall be entitled (but
without prejudice to its right subsequently to terminate such
appointment on the same or any other ground) to suspend the Employee
or relieve him of all or any of his duties hereunder on full payment
of salary for a period not exceeding in aggregate three (3) months.
12.4 Termination of the Employee's appointment hereunder shall be without
prejudice to any rights of the parties hereto in respect of any
antecedent breach of the provisions of this Agreement herein
contained.
13. MOBILITY CLAUSE
13.1 The Employee shall work at ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ #▇▇-▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
and in such other parts of Singapore as is necessary for the proper
discharge of the Employee's duties or as the Company shall from time
to time direct. The Employee may in the performance of his duties
also be required to travel outside Singapore.
13.2 The Employee shall be subject to posting for training or other duties
in connection with his employment outside Singapore for such
reasonable periods as the Company may require and on mutually
acceptable terms.
14. NOTICES
14.1 Any communication (including without limitation notices consents and
similar documents) required or permitted to be given or served under
this Agreement shall be in writing and may be served by registered
post for addresses within the country of the sender and by registered
air-letter for addresses outside the country of the sender and in both
cases by hand or by telefax, addressed to the relevant party at the
addresses or telefax numbers set out herein or such other address or
telefax number as may have been notified to the other party in
accordance with this Clause.
14.2 Any such communication notice consents and similar documents shall be
deemed to have been served:-
14.2.1 in the case of delivery by hand when delivered if a receipt
is obtained from the addressee; and
92
14.2.2 in the case of telefax:-
1. if despatched during regular business hours of the
receiving office when despatched and telefax
acknowledgement or answerback is duly and
automatically received by the sender of the telefax;
or
2. if despatched otherwise than during regular business
hours of the receiving office upon the commencement at
the receiving office of the next regular business
hours succeeding transmission provided always that
answerback is duly automatically received by the
sender on despatch as aforesaid;
14.2.3 if despatched by registered post to an address within the
country of the sender two (2) days and if despatched by
registered air-letter to an address outside the country of the
sender seven (7) days after the date it is lodged with the
postal authorities for despatch.
15. SEVERABILITY & ENTIRE AGREEMENT
15.1 Any term, condition, stipulation, provision, covenant or undertaking in
this Agreement which is or may become illegal, void, prohibited or
unenforceable in any respect under any law shall be ineffective to the
extent of such illegality, voidness, prohibition or unenforceability
without invalidating the remaining provisions hereof, and any such
illegality, voidness, prohibition or unenforceability shall not
invalidate or render illegal, void or unenforceable any other term
condition, stipulation, provision, covenant or undertaking contained in
this Agreement.
15.2 This Agreement (together with all agreements and documents executed
contemporaneously with it or referred to in it) constitutes the entire
agreement between the parties in relation to its subject matter and
supersedes all prior agreements and understandings whether oral or
written with respect to such subject matter and no variation of this
Agreement shall be effective unless reduced to writing and signed by a
duly authorised representative of each of the parties.
16. TIME OF THE ESSENCE
16.1 Time wherever mentioned shall be of the essence in this Agreement.
17. GOVERNING LAW AND JURISDICTION
17.1 This Agreement shall be governed by and construed in all respects in
accordance with the laws of Singapore and
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the parties hereto submit to the exclusive jurisdiction of the courts
of Singapore.
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SCHEDULE 1
(referred to in description of parties,
clauses 1.13, 2.1 and 3.1)
ITEM SUBJECT
1. Name of Employee:
2. Address of Employee:
3. Position of Employee:
4. Employment Period:
5. Gross Remuneration:
6. Profit-sharing:
7. Reimbursements/Allowances/Benefits:
8. Accrued leave:
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SCHEDULE 2
(referred to in clause 3.4)
1. The Employee shall be entitled to receive incentive bonuses as
declared by the Board if the Company earns Profit After Tax (as
defined below) in respect of any of the financial years ending 30th
June 1998, 30th June 1999 and 30th June 2000 respectively (each, a
"Relevant Financial Year") on condition that the Employee:-
(a) has been in the employ of the Company for not less than
six months;
(b) is in the employ of the Company on the last day of the
Relevant Financial Year in question; and
(c) is in the employ of the Company at the time when payment
of the incentive bonus is due to be made under this
Schedule 2,
Provided However that the Company shall no longer be required to pay
to the Employee the incentive bonus under this Schedule 2, once the
Company has paid an aggregate of S$300,000 by way of incentive
bonuses to the Specified Employees, being the Employee and such
other key employees of the Company as the Board shall specify. The
calculation of this aggregate amount of S$300,000 paid by the
Company shall take into account any and all contributions which the
Company (as employer) is required to make to the Central Provident
Fund in connection with the incentive bonuses.
1. The term "Profit After Tax" as used in this Schedule 2 means the
profit after tax earned by the Company in respect of any such
financial year, as shall be conclusively determined by accountants
appointed by the Company's shareholders for this purpose. Such
determination shall:-
(a) be made on the basis of the Company's audited accounts in
respect of the Relevant Financial Year (which accounts
shall be prepared by the Company's auditors for the time
being in accordance with generally accepted accounting
principles); and
(b) exclude all amounts by way of incentive bonuses payable
in respect of the Relevant Financial Year in question.
2. The Employee shall in respect of each Relevant Financial Year
receive 1.5% of the Profit After Tax for that Relevant Financial
Year as incentive bonus, provided
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that if the Employee shall have been in the employ of the Company for
less than one year at the end of a Relevant Financial Year, the
amount of incentive bonus paid to him shall be pro-rated according to
the number of months he has been employed by the Company in that
Relevant Financial Year.
4. Any such payment due to the Employee as aforesaid shall be made to
the Employee within sixty (60) days of finalisation of the Company's
audited accounts for each Relevant Financial Year.
5. In the event that less than S$300,000.00 in aggregate shall have been
declared by the Company as at the end of the Relevant Financial Year
ending 30th June 2000, on condition that the Employee:-
(a) has been in the employ of the Company for not less than
six months;
(b) is in the employ of the Company on the last day of the
Relevant Financial Year in question; and
(c) is in the employ of the Company at the time when payment
of the relevant amount is due to be made under this
paragraph 5,
the Company shall, irrespective of whether the Company shall have earned any
Profit After Tax for the Company's financial year ending 30th June 2001, pay to
the Employee his proportionate share (which shall be in the proportion of his
percentage share of the aggregate incentive bonus for a Relevant Financial
Year) of the amount of the shortfall below S$300,000.00, within sixty (60) days
of finalisation of the Company's audited accounts for that financial year. In
calculating the amount to be paid to the said Specified Employee, any and all
contributions which the Company (as employer) is required to make to the
Central Provident Fund in connection with such payment shall be taken into
account.
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IN WITNESS WHEREOF the parties hereto have hereunto set their hands the day
and year first above written.
The Employee
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The Company
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Signed by
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as of and for and on behalf
of the Company