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EXHIBIT 10.30
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Chicago Office
PJHB/ILL
FINAL
April 14, 1997
INVESTMENT AGREEMENT
By and Between
JLM INDUSTRIES, INC.
and
TAN SIEW KIAT
Dated as of April 25, 1997
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TABLE OF CONTENTS
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ARTICLE 1 DEFINITIONS ................................................. 2
1.1 "Accounts Receivable" ....................................... 2
1.2 "Adverse Change" ............................................ 2
1.3 "Adverse Effect" and "Adverse" .............................. 2
1.4 "Affiliate" ................................................. 2
1.5 "Amended Articles" .......................................... 3
1.6 "Amendment" ................................................. 3
1.7 "Asia Shares" ............................................... 3
1.8 "Audited Financial Statements" .............................. 3
1.9 "Authority" ................................................. 3
1.10 "Business" .................................................. 3
1.11 "Business Day"............................................... 3
1.12 "Buyer" ..................................................... 3
1.13 "Buyer Claims" .............................................. 3
1.14 "Claims" ................................................... 3
1.15 "Companies" ................................................. 3
1.16 "Compete" and "Competing Business" .......................... 3
1.17 "Confidential Information" .................................. 3
1.18 "Contingent Payment" ........................................ 4
1.19 "Contingent Purchase Price" ................................. 4
1.20 "Contract" .................................................. 4
1.21 "Days" ...................................................... 4
1.22 "Defaulting Party" .......................................... 4
1.23 "Employee Benefit Plans" .................................... 4
1.24 "Encumbrances" .............................................. 4
1.25 "Environmental Law" ......................................... 4
1.26 "Exhibit" ................................................... 4
1.27 "Expiration Date" ........................................... 4
1.28 "Fiscal Year" ............................................... 4
1.29 "Fixed Purchase Price" ...................................... 4
1.30 "Historical Financial Statements" ........................... 4
1.31 "Indemnified Party" ......................................... 4
1.32 "Indemnifying Party" ........................................ 4
1.33 "Independent Accounting Firm" ............................... 5
1.34 "Initial Closing" ........................................... 5
1.35 "Initial Closing Date" ...................................... 5
1.36 "Intellectual Property Rights" .............................. 5
1.37 "Interest" .................................................. 5
1.38 "Liability" ................................................ 5
1.39 "Loss" and "Losses" ......................................... 5
1.40 "Material Contract" ......................................... 5
1.41 "Net Earnings" .............................................. 5
1.42 "Nonassessable" ............................................. 5
1.43 "Non-Defaulting Party" ...................................... 5
1.44 "Option Notice", "Option Price" and
"Option Shares" ............................................. 5
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1.45 "Permits" ................................................... 5
1.46 "Person" .................................................... 5
1.47 "Proprietary Information" ................................... 6
1.48 "Purchase Price" ............................................ 6
1.49 "Real Property" ............................................. 6
1.50 "Schedules" and "Schedule Updates" .......................... 6
1.51 "Second Closing" ............................................ 6
1.52 "Second Closing Date" ....................................... 6
1.53 "Seller" .................................................... 6
1.54 "Shares" .................................................... 6
1.55 "Singapore Dollars" ......................................... 6
1.56 "Singapore GAAP" ............................................ 6
1.57 "Subsidiaries" .............................................. 6
1.58 "Taxes" and "Tax Returns" ................................... 6
1.59 "Taxpayers" ................................................. 6
1.60 "Tenancy" ................................................... 6
1.61 "Termination Date" .......................................... 7
1.62 "Third Party" ............................................... 7
1.63 "Trading Shares" ............................................ 7
1.64 "United States Dollars" or "US$" ............................ 7
1.65 "U.S. GAAP" ................................................. 7
1.66 "Vietnam JV" ................................................ 7
1.67 "Vietnam Charter and Investment License" .................... 7
1.68 Other Definitional Provisions................................ 7
ARTICLE 2 TERMS OF PURCHASE OF SHARES ................................. 7
2.1 Purchase of Shares .......................................... 7
2.2 Purchase Price .............................................. 8
2.3 The Closings ................................................ 8
2.4 Deliveries .................................................. 9
2.5 Contingent Purchase Price ................................... 11
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER .................... 13
3.1 Corporate Status ............................... ............ 13
3.2 Ownership ................................................... 14
3.3 Authorized Share Capital .................................... 14
3.4 Power and Authority; Effect of Agreement .................... 14
3.5 Investments ................................... ............. 15
3.6 Financial Information ....................................... 15
3.7 Undisclosed Liabilities; Absence of Certain
Changes ..................................................... 16
3.8 Machinery and Equipment; Accounts Receivable;
Inventory ................................................... 16
3.9 Intellectual Property Rights ................................ 18
3.10 Litigation .................................................. 19
3.11 Compliance with Laws; Permits ............................... 19
3.12 Tax Matters ................................................. 21
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3.13 Shareholder Agreements....................................... 22
3.14 Consents .................................................... 22
3.15 Environmental Matters ....................................... 22
3.16 Absence of Certain Changes or Events ........................ 23
3.17 Material Contracts (Including Related
Party Contracts) ............................................ 23
3.18 Employee Benefits; Employment Contracts and
Directors Remuneration....................................... 25
3.19 Real Property ............................................... 26
3.20 Insurance ................................................... 27
3.21 No Conflicts of Interest .................................... 28
3.22 Brokers ..................................................... 28
3.23 Disclosure .................................................. 28
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER .................... 13
4.1 Corporate Power and Authority; Effect........................ 13
of Agreement
4.2 Consents ................................................... 14
4.3 Absence of Litigation ....................................... 14
4.4 Brokers...................................................... 14
ARTICLE 5 UNDERTAKINGS OF THE PARTIES ................................. 30
5.1 Tax Relief and Grants ....................................... 30
5.2 Cooperation ................................................. 30
5.3 Conduct of Business Between Signing and Initial
Closing .................................................... 31
5.4 No Shop ..................................................... 32
5.5 Access to Information ....................................... 33
5.6 Further Assurances .......................................... 34
5.7 Amendments to Schedules ..................................... 34
5.8 Non-Competition/Non-Solicitation ............................ 35
5.9 Amended Articles .......................................... 36
5.10 Management of the Companies ................................ 36
5.11 Conduct of the Business of the Companies .................... 37
5.12 Commercial Relationships with the Vietnam JV ................ 38
5.13 Auditing, Accounting System, Information and
Reports ..................................................... 38
5.14 Transfers of Interests ...................................... 39
5.15 Agreements Between the Companies and the
Parties ..................................................... 39
5.16 Constituent Documents ....................................... 39
ARTICLE 6 CONDITIONS TO BUYER'S OBLIGATIONS ........................... 40
6.1 Representations and Warranties of Seller .................... 40
6.2 Performance of Undertakings ................................. 40
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6.3 No Pibition ................................................. 40
6.4 No Action ................................................... 40
6.5 No Adverse Change ........................................... 40
6.6 Governmental Approvals and Consents ......................... 41
6.7 Other Approvals and Consents ................................ 41
6.8 Construction of Vietnam JV Facility ......................... 41
ARTICLE 7 CONDITIONS TO SELLER'S OBLIGATIONS .......................... 41
7.1 Representations and Warranties of Buyer ..................... 42
7.2 Performance of Undertakings ................................. 42
7.3 No Prohibition .............................................. 42
7.4 No Action ................................................... 42
7.5 Governmental Approvals and Consents ......................... 42
ARTICLE 8 INDEMNIFICATION .............................................. 43
8.1 Seller's Indemnification ..................................... 43
8.2 Buyer's Indemnification ..................................... 43
8.3 Conditions of Indemnification ............................... 43
8.4 No Waiver of Subrogation .................................... 45
8.5 Remedies Cumulative ......................................... 45
8.6 Injunctive Relief ........................................... 45
8.7 General Provisions and Limitations ......................... 45
8.8 Right of Set-Off ............................................ 46
8.9 Cooperation of the Parties .................................. 47
ARTICLE 9 TERMINATION ................................................. 47
9.1 Termination Prior to the Initial Closing .................... 47
9.2 Procedure and Effect of Termination Prior
to Initial Closing .......................................... 48
9.3 Term and Termination after the Initial Closing .............. 49
9.4 Put Rights of Buyer ......................................... 50
9.5 Option Closing .............................................. 51
ARTICLE 10 DISPUTE RESOLUTION .......................................... 52
10.1 Arbitration ................................................. 52
ARTICLE 11 MISCELLANEOUS . . . . . . . . . . . . . . . . . ............. 54
11.1 Survival of Representations, Warranties
and Undertakings ........................................... 54
11.2 Entire Agreement ............................................ 54
11.3 Successors and Assigns ...................................... 54
11.4 No Third Party Beneficiary Rights ........................... 54
11.5 No Agency ................................................... 55
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11.6 Counterparts................................................. 55
11.7 Interpretation............................................... 55
11.8 Amendment and Modification................................... 55
11.9 Waiver of Compliance; Consents............................... 55
11.10 Expenses; Transfer Taxes; Attorneys' Fees ................... 55
11.11 Notices...................................................... 56
11.12 Public Announcements......................................... 57
11.13 Governing Law ............................................... 58
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LIST OF SCHEDULES AND EXHIBITS
SCHEDULES
Schedule 3.1 Corporate Status.
Schedule 3.3 Authorized Share Capital.
Schedule 3.5 Investments.
Schedule 3.6 Financial Information.
Schedule 3.7 Undisclosed Liabilities; Absence of Certain
Changes.
Schedule 3.8(a) Machinery and Equipment.
Schedule 3.8(b) Accounts Receivable.
Schedule 3.10 Litigation.
Schedule 3.11(c) U.S. Export Controls.
Schedule 3.11(d) U.S. Anti-Boycott Legislation.
Schedule 3.11(e) Permits.
Schedule 3.12 Tax Matters.
Schedule 3.13 Shareholder Agreements.
Schedule 3.14 Consents.
Schedule 3.15 Environmental Matters.
Schedule 3.16 Absence of Certain Changes or Events.
Schedule 3.17(a) Tenancy.
Schedule 3.17(b) Material Contracts.
Schedule 3.17(c) Breach of Material Contracts or the Tenancy.
Schedule 3.18(a) Employee Benefit Plans.
Schedule 3.18(d) Personnel Services.
Schedule 3.19(a) Real Property.
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Schedule 3.20(a) Insurance.
Schedule 3.20(b) Guarantees and Bonds.
EXHIBITS
Exhibit 1.5 Amended Articles.
Exhibit 3.1 Certified copy of the memorandum and articles of
association of the Companies as currently in force.
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INVESTMENT AGREEMENT
THIS INVESTMENT AGREEMENT, made and entered into as of this __________
day of April, 1997, by and between:
JLM Industries, Inc., a corporation organized under the laws of the State of
Delaware, United States of America, having its principal place of business at
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America (the
"Buyer"); and
Tan Siew Kiat, an individual resident at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇. ▇▇-▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ (the "Seller").
W I T N E S S E T H:
WHEREAS, Buyer is engaged in, among other things, the marketing,
distribution and terminating of bulk commodity chemicals and olefins;
WHEREAS, SK Chemicals Asia Pte. Ltd., a private limited company organized
under the laws of Singapore having its registered office at ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ("Asia"), has made an indirect investment in the
capital of ICP-Chemquest Vietnam Ltd., a Vietnamese joint venture company (the
"Vietnam JV"), through its wholly-owned subsidiary, SK Chemicals (Singapore)
Pte. Ltd. (formerly Valdular Pte. Ltd.), a private limited company organized
under the laws of Singapore, and SK Chemical Trading Pte. Ltd., a private
limited company organized under the laws of Singapore having its registered
office at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ("Trading"), has made a direct
investment in the capital of the Vietnam JV;
WHEREAS, Buyer desires to acquire from Seller and Seller desires to sell to
Buyer, a portion of the shares of Asia and Trading, subject to the satisfaction
of certain conditions contained in this Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and the
respective representations, warranties, undertakings, indemnifications and
agreements, and upon the terms and subject to the conditions hereinafter set
forth, and intending to be legally bound hereby the parties do hereby agree as
follows:
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ARTICLE 1
DEFINITIONS
As used in this Agreement, the following terms when capitalised have the
meanings set forth below:
1.1 "Accounts Receivable" has the meaning set forth in Section 3.8
(b).
1.2 "Adverse Change" means:
(a) in respect of Seller or the Companies, the commencement of a
voluntary proceeding under applicable bankruptcy laws or laws regarding the
suspension of payments, or of a proceeding to be adjudicated bankrupt or
insolvent, or the consent by them to the institution of such proceedings against
them, or the filing by them of a petition or answer or consent seeking
reorganization, an arrangement or similar relief under applicable bankruptcy
laws, or the consent by them to the appointment of a receiver, liquidator,
trustee or similar official for them or for a substantial part of their
property, or the making by them of an assignment for the benefit of creditors,
or the admission by them in writing of their inability to pay their debts
generally as they become due;
(b) Seller or the Companies becoming in any manner directly or
indirectly controlled by any Authority, or any Authority taking any action that
has or that, with the passage of time or the giving of notice, or both, would
have an Adverse Effect on the Companies or an Adverse Effect on Buyer's rights
under this Agreement;
(c) Seller or the Companies, as the case may be, violating in any
respect any of its obligations under this Agreement and (if such default shall
be curable) such default continuing unremedied for a period of sixty (60) Days
after written notice from Buyer of such default; or
(d) any other event, circumstance or condition which has or
which, with the passage of time or the giving of notice, or both, would have an
Adverse Effect on Buyer's rights under this Agreement or an Adverse Effect on
the Companies.
1.3 "Adverse Effect" and "Adverse" mean an adverse effect on the
condition (financial or otherwise), business, operations, affairs, prospects,
assets or Liabilities of the referenced Person, which in the aggregate reduces
the profits, turnover or net asset value of Asia and Tradings by 20% or more.
1.4 "Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by or
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under common control with such Person as well as the shareholders, directors and
managers of such Person, and any grandparent, parent, child or grandchild of
such Person; for purposes of this definition, "control" shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of an entity, whether through the
ownership of voting securities or otherwise.
1.5 "Amended Articles" shall mean the amended memorandum and
articles of association of the Companies in the form and content attached hereto
as Exhibit 1.5.
1.6 "Amendment" has the meaning set forth in Section 5.7.
1.7 "Asia Shares" has the meaning set forth in Section 2.1.
1.8 "Audited Financial Statements" have the meanings set forth in
Section 3.6(a).
1.9 "Authority" means any international, supranational, regional,
national, provincial, departmental, state, local, municipal or other
administrative, governmental or regulatory authority, body, court, bureau,
agency or instrumentality.
1.10 "Business" has the meaning set forth in Section 5.8(b)(i).
1.11 "Business Day" is referable to the local time of the place
where an action is to be done or an obligation is to be performed or observed,
and means any Day that is not a Saturday, a Sunday or a Day on which banks are
required or permitted to be closed in the relevant place, being Tampa, Florida,
U.S.A., or Singapore.
1.12 "Buyer" has the meaning set forth in the preamble to this
Agreement.
1.13 "Buyer Claims" has the meaning set forth in Section 8.1(a).
1.14 "Claims" has the meaning set forth in Section 8.2.
1.15 "Companies" means each of Asia, Trading and each of their
Subsidiaries mutatis mutandis.
1.16 "Compete" and "Competing Business" have the meanings set
forth in Section 5.8(b)(ii).
1.17 "Confidential Information" has the meaning set forth in
Section 5.5(b).
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1.18 "Contingent Payment" has the meaning set forth in Section 2.5(b).
1.19 "Contingent Purchase Price" has the meaning set forth in Section
2.2(a)(ii).
1.20 "Contract" means any agreement, arrangement, bond, commitment,
contract, deed, indenture, instrument, lease, license, mortgage, note, option,
purchase order, subscription, undertaking, warrant or understanding of any
nature whatsoever, whether written or oral.
1.21 "Days" means calendar days.
1.22 "Defaulting Party' has the meaning set forth in Section 9.3(c).
1.23 "Employee Benefit Plans" has the meaning set forth in Section
3.18(a).
1.24 "Encumbrances" means all liens, mortgages, charges, attachments,
judgments, conditional sale agreements, pledges, rights of usufruct, options,
rights of first refusal, rights of possession, restrictions on transfer, voting
agreements, security interests or other rights or claims of others or
restrictions or encumbrances of any character whatsoever.
1.25 "Environmental Law" has the meaning set forth in Section 3.15.
1.26 "Exhibit" means each of the exhibits referred to in this
Agreement, including Article 3 hereof, containing information concerning Seller
and the Companies.
1.27 "Expiration Date" has the meaning set forth in Section 11.1.
1.28 "Fiscal Year" means the calendar years commencing with the year
1997.
1.29 "Fixed Purchase Price" has the meaning set forth in Section
2.2(a)(i).
1.30 "Historical Financial Statements" has the meaning set forth
in Section 3.6(a).
1.31 "Indemnified Party" has the meaning set forth in Section 8.3(a).
1.32 "Indemnifying Party" has the meaning set forth in Section 8.3.
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1.33 "Independent Accounting Firm" has the meaning set forth in
Section 2.5(d).
1.34 "Initial Closing" shall mean the completion of the purchase of
the Asia Shares and the other transactions to be consummated at such time as
contemplated in this Agreement.
1.35 "Initial Closing Date" has the meaning set forth in Section
2.3(a).
1.36 "Intellectual Property Rights" has the meaning set forth in
Section 3.9(a).
1.37 "Interest" has the meaning set forth in Section 5.8(b) (iii).
1.38 "Liability" means any debt, obligation, commitment,
responsibility or liability, whether accrued or fixed, known or unknown,
contingent or absolute, primary or secondary, secured or unsecured, determined
or undetermined and whenever arising.
1.39 "Loss" and "Losses" have the meanings set forth in Section
8.1(a).
1.40 "Material Contract" has the meaning set forth in Section 3.17(b).
1.41 "Net Earnings" has the meaning set forth in Section 2.5(a).
1.42 "Nonassessable" means that the owners of record of the relevant
equity interest or investment in the equity capital of the Companies are not
liable, solely by reason of such shareholding, for the payment of any taxes,
duties, wages, or other amounts for which the Person which issued such interest
or capital is liable.
1.43 "Non-Defaulting Party" has the meaning set forth in Section
9.3(c).
1.44 "Option Notice", "Option Price" and "Option Shares" have the
meanings set forth in Section 9.4(a).
1.45 "Permits" has the meaning set forth in Section 3.11(f).
1.46 "Person" includes an individual, a company, a firm, a
partnership, a joint venture, a corporation, a limited liability company, a
trust, an estate, an unincorporated association or any other organization of any
kind.
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1.47 "Proprietary Information" has the meaning set forth in Section
3.9(b).
1.48 "Purchase Price" has the meaning set forth in Section 2.2(a).
1.49 "Real Property" has the meaning set forth in Section 3.19(a).
1.50 "Schedules" and "Schedule Updates" means each of the disclosure
schedules referred to in this Agreement, including Article 3 hereof, containing
information concerning Seller and the Companies. "Schedule Updates" has the
meaning set forth in Section 5.7.
1.51 "Second Closing" shall mean the completion of the purchase of the
Trading Shares and the other transactions to be consummated at such time as
contemplated in this Agreement.
1.52 "Second Closing Date" has the meaning set forth in Section
2.3(b).
1.53 "Seller" has the meaning set forth in the Preamble to this
Agreement.
1.54 "Shares" means all of the issued and outstanding shares of Asia
and Trading (as the case may be) for the time being.
1.55 "Singapore Dollars" and the symbol "S$" mean Singapore Dollars,
the lawful currency of Singapore as of the date of this Agreement.
1.56 "Singapore GAAP" means Singapore's generally accepted accounting
principles.
1.57 "Subsidiaries" means (a) the Vietnam JV; and (b) any Person with
respect to which the Companies directly or indirectly have an equity
participation, individually and collectively, on the date hereof and/or on the
Initial Closing Date, equal to or exceeding 50% or otherwise controls the
management or operations thereof.
1.58 "Taxes" and "Tax Returns" have the meanings set forth in Section
3.12(h).
1.59 "Taxpayers" has the meaning set forth in Section 3.12(a).
1.60 "Tenancy" has the meaning set forth in Section 3.17(a).
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1.61 "Termination Date" has the meaning set forth in Section 2.3
1.62 "Third Party" has the meaning set forth in Section 8.(b).
1.63 "Trading Shares" has the meaning set forth in Section 2.1.
1.64 "United States Dollars" or "US$" shall mean United States
Dollars, the lawful currency of the United States of America as of the date of
this Agreement.
1.65 "U.S. GAAP" means United States' generally accepted accounting
principles.
1.66 "Vietnam JV" has the meaning set forth in the recitals.
1.67 "Vietnam Charter and Investment License" has the meaning set
forth in Section 3.5.
1.68 Other Definitional Provisions. Whenever the context so requires,
each of the neuter, masculine or feminine forms of any pronoun shall include all
such forms, the singular shall include the plural and the plural shall include
the singular. References to "this Agreement" include all Exhibits and Schedules
hereto.
ARTICLE 2
TERMS OF PURCHASE OF SHARES
2.1 Purchase of Shares. Subject to the terms and conditions of this
Agreement, Seller shall sell and deliver to Buyer, and Buyer shall purchase from
Seller, for the Purchase Price set forth in Section 2.2(a), that number of
Shares of Asia at the Initial Closing as shall immediately following such
purchase constitute twenty-five percent (25.00%) of the Shares of Asia on the
Initial Closing Date (the "Asia Shares"), and that number of Shares of Trading
at the Second Closing as shall immediately following such purchase constitute
twelve and 745/1000 percent (12.745%) of the Shares of Trading on the Second
Closing Date (the "Trading Shares"), free and clear of all Encumbrances (except
as set forth herein and in the Amended Articles) and together with all rights
now and hereafter attaching thereto. Upon such sale and transfer, Asia and
Trading shall record on their respective share transfer books that Buyer is the
owner as of the Initial Closing Date of the Asia Shares and as of the Second
Closing Date of the Trading Shares.
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2.2 Purchase Price.
(a) The cash consideration to be paid by Buyer to Seller for
the Asia Shares and Trading Shares (the "Purchase Price") shall be a:
(i) fixed amount of US$1,000,000 (One Million United States
Dollars) less the amount of Buyer's deposits to Seller relating to the Letter of
Intent dated September 12, 1996 (the "Fixed Purchase Price"); and
(ii) contingent amount of US$500,000 (Five Hundred Thousand
United States Dollars), subject to the provisions of Section 2.5 (the
"Contingent Purchase Price").
(b) Payment of one-half of the Fixed Purchase Price by Buyer shall
be made in United States Dollars at the Initial Closing by delivery to Seller of
a cashier's order or banker's cheque in immediately available United States
Dollar funds payable to Seller or Seller's nominee in the amount of one-half of
the Fixed Purchase Price. Payment of the other one-half of the Fixed Purchase
Price by Buyer shall be made in United States Dollars at the Second Closing by
delivery to Seller of a cashier's order or banker's cheque in immediately
available United States Dollar funds payable to Seller or Seller's nominee in
the amount of the other one-half of the Fixed Purchase Price.
2.3 The Closings.
(a) The Initial Closing. The Initial Closing shall take place
at the offices of the Companies, commencing at 9:00 a.m. (Singapore time) on
____________, 1997, or at such other time and date as Seller may specify by
giving Buyer at least seven (7) Days' notice thereof (the "Initial Closing
Date"), provided that all of the conditions set forth in Articles 6 and 7 to the
parties' obligations at the Initial Closing have been satisfied or waived. All
matters at the Initial Closing shall be considered to take place simultaneously
and no delivery of any document shall be deemed complete until all transactions
and deliveries of documents are completed. If the Initial Closing shall not have
occurred by June 30, 1997 (the "Termination Date"), then Buyer shall have the
right, pursuant to Section 9.1(b) to terminate and cancel this Agreement in its
entirety.
(b) The Second Closing. The Second Closing shall take place
at the offices of the Companies, commencing at 9:00 a.m. (Singapore time) on
___________, 1997, or at such other time and date as Seller may specify by
giving Buyer at least seven (7) Days' notice thereof (the "Second Closing
Date"), upon the commencement of construction of the Vietnam JV facilities set
forth in the Vietnam Charter and Investment License, provided that all of the
conditions set forth in Articles 6 and 7 to the parties'
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obligations at the Second Closing have been satisfied or waived. All matters at
the Second Closing shall be considered to take place simultaneously and no
delivery of any document shall be deemed complete until all transactions and
deliveries of documents are completed.
2.4 Deliveries.
(a) Deliveries at the Initial Closing.
(i) Deliveries by Buyer. At the Initial Closing, Buyer
shall deliver or cause to be delivered the following:
(A) one-half of the Fixed Purchase Price in the manner
provided in Section 2.2(b);
(B) a certificate of Buyer to the effect that (1) the
representations and warranties of Buyer set forth in Article 4 are true and
correct as of the Initial Closing Date; and (2) Buyer has performed and complied
with each and every undertaking, agreement and condition required to be
performed or complied with by Buyer prior to or on the Initial Closing Date;
(C) copies, certified by the Secretary or an Assistant
Secretary of Buyer as duly adopted and in full force and effect, of resolutions
of the Board of Directors of Buyer approving this Agreement and authorizing the
transactions contemplated hereby; and
(D) any other documents, instruments and writings
required to be delivered by Buyer prior to or on the Initial Closing Date
pursuant to the terms of this Agreement.
(ii) Deliveries by Seller. At the Initial Closing, Seller
shall deliver or cause to be delivered the following:
(A) share certificates representing the Asia Shares
(with a corresponding transfer form, if necessary) duly executed in favor of
Buyer or its designee (or at the latest, fourteen (14) days after the Initial
Closing);
(B) a receipt duly issued by Seller for one-half of the
Fixed Purchase Price (or at the latest, upon the availability of such funds to
Seller);
(C) a certificate of Seller to the effect that (1) the
representations and warranties of Seller set forth in Article 3 were true and
correct when made and, except for any changes therein expressly contemplated by
this Agreement, are true and correct on and as of the Initial Closing Date as
though such
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representations and warranties were made on such date; and (2) Seller has
performed and complied with each and every undertaking, agreement and condition
required to be performed or complied with by it prior to or on the Initial
Closing Date;
(D) a copy of the minutes of a shareholders' meeting of
Asia duly certified /the Amended Articles; and / and adopting
(E) any other documents, instruments and writings
required to be delivered by Seller prior to or on Initial Closing pursuant to
the terms of this Agreement.
(b) Deliveries at the Second Closing.
(i) Deliveries by Buyer. At the Second Closing, Buyer shall
deliver or cause to be delivered the following:
(A) one-half of Fixed Purchase Price to Seller in the
manner provided in Section 2.2(b).
(B) a certificate of Buyer to the effect that (1)
except for any changes expressly contemplated by this Agreement, the
representations and warranties of Buyer set forth in Article 4 are true and
correct at and as of the Second Closing Date as though such representations and
warranties were made on the Second Closing Date; and (2) Buyer has performed and
complied with each and every undertaking, agreement and condition required to be
performed or complied with by Buyer prior to or on the Second Closing Date; and
(C) any other documents, instruments and writings
required to be delivered by Buyer at or prior to the Second Closing pursuant to
the terms of this Agreement.
(ii) Deliveries by Seller. At the Second Closing, Seller
shall deliver or cause to be delivered the following:
(A) share certificates representing the Trading Shares
(with a corresponding transfer form, if necessary) duly executed in favor of
Buyer or its designee (or at the latest, fourteen (14) days after the Second
Closing);
(B) a duly executed receipt by Seller for one-half of
the Fixed Purchase Price (or at the latest, upon the availability of such
funds to Seller);
(C) a certificate of Seller to the effect that (1)
except for any changes expressly contemplated by this Agreement and reasonably
set forth in such certificate (including any updated Schedules attached thereto)
reflecting any changes in the relevant facts, circumstances or law occurring
after the
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Initial Closing Date, the representations and warranties of Seller set forth in
Article 3 are true and correct at and as of the Second Closing Date as though
such representations and warranties were made on the Second Closing Date; and
(2) Seller has performed and complied with each and every undertaking, agreement
and condition required to be performed or complied with by it prior to or on the
Second Closing now.
(D) a copy of the minutes of a shareholder meeting of
Trading duly certified /adopting the Amended Articles; / and
(E) copies of any additional approvals or consents of
any Persons which after the Initial Closing Date have become necessary for the
consummation of any transaction to be consummated hereunder on the Second
Closing Date; and
(F) any other documents, instructions and writings
required to be delivered by Seller at or prior to the Second Closing pursuant to
the terms of this Agreement.
2.5 Contingent Purchase Price. After the Initial Closing,
the Contingent Purchase Price shall be calculated and determined in accordance
with this Section 2.5.
(a) Within ninety (90) Days after the end of Fiscal Years
1998, 1999, 2000 and 2001, Seller shall procure that Asia and Trading deliver or
cause to be delivered to Buyer Audited Financial Statements of the Companies,
prepared in accordance with Singapore GAAP, applied on a consistent basis. Buyer
shall cause Buyer's accountants to review the Audited Financial Statements in
accordance with Singapore GAAP. Seller shall cause Seller's accountants to
cooperate fully with Buyer's accountants in conducting their review. The report
of Buyer's accountants on the Audited Financial Statements shall be delivered to
Buyer and Seller no later than thirty (30) Days after Buyer has received the
Audited Financial Statements from Asia and Trading. The Audited Financial
Statements, as reviewed by Buyer's accountants and subject to Section 2.5(d),
and the net earnings before taxes of Asia and Trading as of the end of Fiscal
Years 1998, 1999, 2000 and 2001 as shown on the Audited Financial Statements and
reviewed by Buyer's accountants, provided that a net loss incurred in any Fiscal
Year shall not be carried back to offset earnings for any prior Fiscal Year, but
shall be carried forward to offset earnings for subsequent Fiscal Years (the
"Net Earnings"), shall be final and binding among the parties for purposes of
any Contingent Purchase Price calculation and determination pursuant to this
Section 2.5. The translation rate into or from United States Dollars shall be at
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the closing exchange rate published in The Wall Street Journal (U.S. edition) as
of the last Business Day of the relevant Fiscal Year.
(b) Buyer shall pay Seller as the Contingent Purchase Price
an annual payment for a period of four (4) years equal to US$125,000 (One
Hundred Twenty-Five Thousand United States Dollars) for each Fiscal Year,
beginning with January 1, 1998 (or beginning January 1, 1999 mutatis mutandis if
construction of the Vietnam JV facilities commences during Fiscal Year 1998),
during which Asia and Trading collectively achieve Net Earnings of US$500,000
(Five Hundred Thousand United States Dollars), calculated and determined as
follows and herein referred to as the "Contingent Payment":
(i) For the Fiscal Year ▇▇▇▇ - ▇▇▇▇▇▇,▇▇▇ (▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Dollars) if 1998 Net Earnings equal or exceed
US$500,000 (Five Hundred Thousand United States Dollars);
(ii) For the Fiscal Year ▇▇▇▇ - ▇▇▇▇▇▇,▇▇▇ (▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Dollars) if 1999 Net Earnings equal or exceed
US$500,000 (Five Hundred Thousand United States Dollars), or if 1998 and 1999
Net Earnings together equal or exceed US$1,000,000 (One Million United States
Dollars);
(iii) For the Fiscal Year 2000 -US$125,000 (One Hundred
Twenty-Five Thousand United States Dollars) if 2000 Net Earnings equal or exceed
US$500,000 (Five Hundred Thousand United States Dollars), or if 1998, 1999 and
2000 Net Earnings together equal or exceed US$1,500,000 (One Million Five
Hundred Thousand United States Dollars); and
(iv) For the Fiscal Year ▇▇▇▇ - ▇▇▇▇▇▇,▇▇▇ (▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Dollars) if 2001 Net Earnings equal or exceed
US$500,000 (Five Hundred Thousand United States Dollars), or if 1998, 1999, 2000
and 2001 Net Earnings together equal or exceed US$2,000,000 (Two Million United
States Dollars).
(c) Each Contingent Payment shall be payable within fifteen
(15) Business Days after the delivery by Buyer's accountants to Seller and Buyer
of the Audited Financial Statements in accordance with Section 2.5(a) or Section
2.5(d) (as the case may be) by delivery of a bank cashier's cheque or by wire
transfer in such amount, payable to Seller or Seller's nominee.
(d) If Buyer in good faith objects to the Audited Financial
Statements, then Buyer and Seller and their respective accountants shall attempt
to resolve the disputed matters within
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thirty (30) Days of the receipt by Seller of notice from Buyer of the disputed
matters. If Buyer and Seller and their accountants are unable to resolve the
matter within such thirty (30) Day period, then Buyer and Seller shall jointly
appoint a mutually acceptable firm from among the six (6) largest
internationally recognized public accounting firms (or, if they cannot agree on
a mutually acceptable firm within five (5) Days of the end of such thirty (30)
Day period, they shall cause their respective accountants to select within a
further period of ten (10) Days such firm from among the six (6) largest
internationally recognized public accounting firms), excluding any such
accounting firm which has been engaged by any of the parties or their Affiliates
to audit the accounts of such Person or its Affiliates within the preceding
five-year period. The accounting firm so selected is herein referred to as the
"Independent Accounting Firm". The parties shall provide such firm with full
cooperation. The Independent Accounting Firm shall be instructed to reach its
conclusion regarding the disputed matters, acting as experts and not as
arbitrators, within sixty (60) Days. The Independent Accounting Firm's
resolution of the disputed matters shall be conclusive and binding upon all the
parties. The fees of the Independent Accounting Firm shall be borne equally
(50/50) by Buyer and Seller.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Subject to Section 3.24 Seller represents and warrants to Buyer as
follows:
3.1 Corporate Status. Asia and Trading are private limited companies
having their registered offices at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇. The
Companies are duly organized and validly existing under the laws of Singapore
and Vietnam (as the case may be) and have all requisite corporate power and
authority to own and lease their properties and to carry on their business as
and where the same is now conducted. The Companies are duly registered, in good
standing and qualified as a foreign corporation to do business in all other
jurisdictions in which the nature of their assets or business makes such
qualification necessary except where the failure to be so qualified would have
no Adverse Effect on the Companies' business. Each jurisdiction in which the
Companies are so registered and qualified or have an office, branch, warehouse
or establishment of any kind outside of their jurisdiction of organization is
identified in Schedule 3.1. A certified copy of the memorandum and articles of
association of the Companies as currently in force is contained in Exhibit 3.1.
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3.2 Ownership. Seller owns of record and beneficially and has good
title to the Asia Shares and Trading Shares, and Seller owns the Asia Shares and
Trading Shares free and clear of all Encumbrances, except as contemplated herein
and in the Amended Articles.
3.3 Authorized Share Capital. The authorized share capital of Asia and
Trading consists of 3,000,000 (three million) ordinary shares, and 2,000,000 and
1,050,000 (two million and one million fifty thousand) ordinary shares,
respectively, with a par value of S$1.00 (One Singapore Dollar) and US$1.00 (One
United States Dollar), respectively, per share. As of the respective date of
issuance of the Asia and Trading Shares to Buyer, all of the equity interest or
investment in the equity capital in the Companies shall be duly and validly
authorized and issued, fully paid and Nonassessable. Except as set forth in
Schedule 3.3, or as provided in this Agreement, there is no Contract, call or
right of any nature whatsoever with respect to the allotment, issuance, sale,
delivery or transfer of any equity interest or investment in the equity capital
of the Companies, including any right of conversion or exchange under any
security or other instrument.
3.4 Power and Authority: Effect of Agreement.
(a) Seller has all requisite power and authority to execute,
deliver and perform this Agreement, and to consummate the transactions
contemplated hereby.
(b) The execution, delivery, and performance by Seller of
this Agreement and the consummation by Seller of the transactions contemplated
hereby have been duly authorized to the extent necessary by the Companies, and
no other corporate action or proceeding on the part of the Companies or its
respective shareholders is necessary to authorize this Agreement or the
consummation of any of the transactions contemplated hereby.
(c) This Agreement has been duly and validly executed and
delivered by Seller. This Agreement constitutes the valid and binding obligation
of Seller enforceable against Seller in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally.
(d) The execution, delivery and performance by Seller of
this Agreement, and the consummation by Seller of the transactions contemplated
hereby do not and will not (i) violate any law, rule or regulation to which
either Seller or the Companies, or any of their respective assets or properties
is subject (ii) violate any order writ, injunction, judgment or
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decree applicable to either Seller or the Companies, or any of their respective
assets or properties, (iii) conflict with, or result in a breach of any term or
condition of the memorandum and articles of association of the Companies or (iv)
conflict with, or result in a breach of or default under, or give rise to any
right of termination, cancellation or acceleration under, any of the terms,
conditions or provisions of any Contract to which either Seller or the Companies
is a party or by which either of them or any of their respective assets or
properties may be bound.
3.5 Investments. The Companies or other Persons own of record and
beneficially and have good title to and unrestricted voting rights in respect of
all of the equity interest or investment in the equity capital of the Companies
(including, without limitation, the Vietnam JV), in the amounts shown on
Schedule 3.5, and the Companies or other Persons own the equity interest or
investment in the equity capital of the Companies (including, without
limitation, the Vietnam JV) free and clear of all Encumbrances, except as
contemplated herein and in the Charter dated December 28, 1994 establishing the
Vietnam JV and the Investment License dated June 22, 1995 issued by the Vietnam
State Committee for Cooperation and Investment (the "Vietnam Charter and
Investment License"). Each of Seller and the Companies is not a party to (nor
are they aware of) any agreement, understanding or arrangement, direct or
indirect, relating to the equity interest or investment in the equity capital in
the Vietnam JV, including, without limitation, voting or sale thereof, except as
contemplated in the Vietnam Charter and Investment License. Each of Seller and
the Companies does not have, nor pursuant to any agreement will it have, the
right or obligation to acquire by any means, an equity interest or investment in
the equity capital of any corporation, partnership, joint venture or other
Person, except as contemplated herein.
3.6 Financial Information.
(a) Seller has previously furnished to Buyer certain financial
statements (true, correct and complete copies of which are attached hereto as
Schedule 3.6) as follows: (i) audited balance sheets and the related audited
statements of profits and losses, shareholders equity and fund flows (including
the related notes) for the Companies for each of the fiscal years ended December
31, 1995 and December 31, 1994, accompanied by the reports thereon by the
Companies, auditors (collectively, the "Audited Financial Statements"); and (ii)
the unaudited balance sheets and the related unaudited statements of profits and
losses, shareholders equity and fund flows (including related notes) for the
Companies, for the twelve (12) months ended December 31, 1996 (the "Unaudited
Financial Statements"; together with the Audited Financial Statements, the
"Historical Financial Statements").
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(b) The Historical Financial Statements (i) were prepared from
the books and records of the Companies, which books and records accurately
reflect the accounts and transactions recorded therein, (ii) present fairly the
financial position and results of operations of the Companies, as of and for the
periods to which they relate, (iii) have been prepared in accordance with
Singapore GAAP and past accounting practices consistently applied throughout the
periods covered, except as otherwise noted therein or with respect to the
omission of normal and recurring year-end adjustments and notes related thereto,
(iv) reflect adequate recognition of profits and provisions for losses on
contracts in accordance with Singapore GAAP applied on a consistent basis except
as reflected therein, stated separately.
(c) The books, records and accounts of the operations of the
Companies accurately and fairly reflect, in reasonable detail, transactions in
and dispositions of the assets of the operations of the Companies. The Companies
maintain a system of internal accounting controls reasonably adequate to assure
that transactions are executed in accordance with management authorization and
are recorded as necessary to permit preparation of financial statements in
accordance with Singapore GAAP and to permit access to assets only in accordance
with management authorization.
3.7 Undisclosed Liabilities; Absence of Certain Changes. The Companies
have no Liabilities, except Liabilities (i) which are fully reflected, reserved
against or disclosed in the Historical Financial Statements; (ii) which were or
are incurred (by the Companies) in the ordinary course of business and
consistent with past practice since December 31, 1996 and which do not exceed in
the aggregate S$200,000.00 (Two Hundred Thousand Singapore Dollars); or (iii)
which are set forth in Schedule 3.7. The Companies have reserved for all
Liabilities for which reserves should be established in accordance with
Singapore GAAP, and all such reserves, including those set forth in the
Historical Financial Statements, are adequate in all respects.
3.8 Machinery and Equipment; Accounts Receivable; Inventory.
(a) Machinery and Equipment. Schedule 3.3(a) contains a true
and complete list and brief description of all items of machinery, dies,
computer, data processing and other equipment, office furniture, vehicles,
fixtures and similar tangible personal property owned, used or leased by the
Companies and a brief description of the rights of the Companies therein. Except
as otherwise explained on Schedule 3.8(a), all tangible personal property
reflected on the Historical Financial Statements is set forth on Schedule
3.8(a). Each of such items of machinery,
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dies, computer, data processing and other equipment, office furniture, vehicles,
fixtures and similar tangible personal property is in good operating condition
and repair, is currently used in the day-to-day operations of the Companies, and
is reasonably necessary or material to the business or operation of the
Companies as currently conducted. The Companies have good title to (or, as
described on Schedule 3.8(a) a valid leasehold right in, as the case may be) all
the properties listed on Schedule 3.8(a) as owned, used or leased by the
Companies, free and clear of all Encumbrances, liens for current taxes not yet
due or which are being contested in good faith by appropriate proceedings and
for which appropriate reserves have been established and disclosed in writing to
Buyer, or as set forth on Schedule 3.8(a) and which do not (i) detract from or
interfere with their present use or otherwise impair business operations, or
(ii) render title unmarketable. Except as set forth on Schedule 3.8(a), all
tangible personal property used by the Companies is located on the Real Property
set forth on Schedule 3.19(a).
(b) Accounts Receivable. All accounts receivable of the
Companies that are reflected on the Historical Financial Statements or on the
accounting records of the Companies as of the Closing Date (collectively, the
"Accounts Receivable") represent or will represent valid obligations arising
from sales actually made or services actually performed in the ordinary course
of business. Unless paid prior to the Closing Date, the Accounts Receivable are
or will be as of the Closing Date current and collectible net of the respective
reserves shown on the Historical Financial Statements or on the accounting
records of the Companies as of the Closing Date (which reserves are adequate and
calculated consistent with past practice and, in the case of the reserve as of
the Closing Date, will not represent a greater percentage of the Accounts
Receivable as of the Closing Date than the reserve reflected in the Historical
Financial Statements represented of the Accounts Receivable reflected therein
and will not represent a material Adverse Change in the composition of such
Accounts Receivable in terms of aging). Except as set forth on Schedule 3.8(b),
subject to such reserves, to the best knowledge of Seller after due inquiry,
each of the Accounts Receivable either has been or will be collected in full,
without any set-off. The Companies shall use their best efforts to collect the
Accounts Receivable in the ordinary course of business. There is no contest,
claim, or right of set-off, other than returns in the ordinary course of
business, under any Contract with any obligor of an Accounts Receivable relating
to the amount or validity of such Accounts Receivable. Schedule 3.8(b) contains
a complete and accurate list of all Accounts Receivable as of December 31, 1996,
which list sets forth the aging of such Accounts Receivable.
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(c) Inventory. All inventory of the Companies, whether or not
reflected in the Historical Financial Statements, consists of a quality and
quantity usable and salable in the ordinary course of business, except for
obsolete items and items of below-standard quality, all of which have been
written off or written down to net realizable value in the Historical Financial
Statements or on the accounting records of the Companies as of the Closing Date,
as the case may be. All inventories not written off have been priced at the
lower of cost or net realizable value on a first in, first out basis. The
quantities of each item of inventory (whether raw materials, work-in-process, or
finished goods) are not excessive, but are reasonable in the present
circumstances of the Companies.
3.9 Intellectual Property Rights.
(a) There are no registered patents, trademarks and service
marks, applications for patent, trademark and service ▇▇▇▇ registrations,
copyrights and copyright registrations owned by the Companies (the "Intellectual
Property Rights"). In addition, (i) no other Person or Authority is licensed or
authorized by the Companies to use any of the Intellectual Property Rights; (ii)
the Companies do not use any of the Intellectual Property Rights by consent of
or license from any other rightful owner or licensor thereof; (iii) the
operation of the business of the Companies as now being conducted does not
conflict with any patents, trademarks, service marks, names, trade names or
copyrights of others in any way; (iv) there is no pending litigation or
proceeding in or before any Person or Authority, nor have the Companies received
any notice or other communication, in which any of the Intellectual Property
Rights are being challenged or contested; (v) the Companies have not received
any protests, claims, notices, or other communications relating to infringement
of the rights of others arising from the present use of the Intellectual
Property Rights; (vi) the Companies have not contracted to provide
indemnification for infringement of the intellectual property rights of others,
or to grant any license of the Intellectual Property Rights to any other Person
or Authority, or receive a license to use any patent, trademark or copyright
from a third party or to undertake not to ▇▇▇ any other Person or Authority with
respect to the Intellectual Property Rights; and (vii) the Companies do not have
any obligation to compensate any Person or Authority for the development, use,
sale or exploitation of any Intellectual Property Right.
(b) The Companies have taken reasonable security measures
to protect the secrecy, confidentiality and value of the information that
relates to the business of the Companies and that are proprietary and
confidential ("Proprietary Information"); any of the Companies' employees and
any other persons who, either alone or in concert with others, developed,
invented, discovered,
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derived, programmed or designed such Proprietary Information, or who have
knowledge of or access to information relating to it, have been put on
reasonable notice, and have entered into agreements that such Proprietary
Information is proprietary to the Companies, as the case may be, and is not to
be divulged or misused. None of the Proprietary Information has been used,
divulged or appropriated for the benefit of any past or present employees or any
Person other than the Companies, or to detriment of the Companies. The Companies
have not used any trade secret owned by any other Person or received any notice
or been served in any lawsuit alleging that it is infringing the trade secrets
of any other Person.
(c) No employee of the Companies is in default under any term of
any employment contract, agreement or arrangement relating to any Intellectual
Property Right or non-competition contract relating to any Intellectual Property
Right or its development or exploitation.
3.10 Litigation. Except as set forth in Schedule 3.10, (i) there is no
action, suit, arbitration or legal, administrative, arbitration or other
proceeding or investigation (governmental or non-governmental) pending or, to
the knowledge of Seller after due inquiry, threatened against the Companies or
their respective assets, properties or business nor is Seller aware of any acts,
errors or omissions that in the normal course of events could lead to any of the
same; (ii) the Companies are not a party to or subject to the provisions of any
judgment, order, injunction, decree or award of any Person or Authority against
or affecting the Companies; (iii) the Companies are not presently engaged in any
legal action to recover moneys due to it or damages sustained by it; and (iv)
there is no action, suit, proceeding or investigation pending or, to the
knowledge of Seller after due inquiry, threatened which would give any third
party the right to enjoin or rescind or cause an alteration in the transactions
contemplated hereby.
3.11 Compliance with Laws; Permits
(a) The Companies have complied with and are in compliance in all
respects with all applicable laws, regulations, ordinances, rules, orders,
judgments decrees and awards of any Person or Authority in connection with the
assets, properties and business of the Companies, except for any non-compliance,
individually or in the aggregate, which has not and will not have an Adverse
Effect on the Companies, the rights of Buyer under this Agreement or the
consummation of the transactions contemplated hereby. The Companies have not
received any notice of any failure to comply with, nor are there any
circumstances which indicate that the Companies are in violation of any such
laws, regulations, ordinances, orders, judgments or decrees.
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(b) Each transaction of the Companies has been properly and
accurately recorded on the books and records of the Companies, and each document
(including any contract, invoice or receipt) on which entries in the Companies'
books and records are based is complete and accurate in all material respects.
The Companies maintain a system of internal accounting controls adequate to
insure that each maintains no off-the-books accounts and the assets of the
Companies are used only in accordance with the directives of the Companies'
management.
(c) The Companies (since their incorporation) have to their best
knowledge at all times during the previous five-year period complied with the
export control laws of the United States with respect to products, services and
technology obtained from the United States, and with those of any other
jurisdictions, to the extent such U.S. and other laws were or are applicable.
Except as set forth in Schedule 3.11(c) no product sold or service performed by
the Companies in the previous five-year period has been sold or performed,
directly or indirectly, to or for the benefit of, nor has Seller had any
business dealings whatsoever with, any Person of or in Cuba, Iran, Iraq, Libya,
Serbia, Montenegro or Serbian controlled portions of Croatia or Bosnia, or any
Person owned or controlled by any of the foregoing (including, without
limitation, "specially designated nationals").
(d) Except as set forth on Schedule 3.11(d), during the previous
five-year period, no product has been sold or service performed by the Companies
to or for the benefit of customers in Bahrain, Kuwait, Lebanon, Oman, Sudan,
Syria or Yemen.
(e) Set forth on Schedule 3.11(e) are all of the concessions,
licenses, sublicenses, permits, applications, filings, registrations, rights,
easements, permissions, authorizations and consents required by applicable law
or otherwise necessary in order for the Companies to operate in each
jurisdiction in which each conducts business ("Permits"). Except as set forth in
Schedule 3.11(e), such Permits have been duly obtained, are legally valid and in
full force and effect; and to the knowledge of Seller, there are no
circumstances which indicate that any of such Permits are likely to be subject
to legal challenge, revoked or not renewed. The Companies are not in default nor
have they received notice of any claim of default with respect to any Permit,
nor is there pending before any Authority any dispute or other proceeding
regarding the validity, nature, scope or interpretation of any Permit. None of
such Permits or the rights of the Companies thereunder will be Adversely
affected by the consummation of the transactions contemplated hereby. All such
Permits are renewable by their terms or in the ordinary course of business
without the need to comply with any special qualification procedures or to pay
any amounts other than routine filing fees. None of such Permits
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will be Adversely affected by consummation of the transactions contemplated
hereby. No employee or former employee of the Companies or any other Person,
owns or has any proprietary, financial or other interest (direct or indirect) in
any Permit that the Companies own, possess or use in the operation of their
business.
3.12 Tax Matters. Except as set forth in Schedule 3.12:
(a) All Tax Returns (as hereinafter defined) required to be
filed by the Companies (the "Taxpayers") have been filed on a timely basis and
are in all material respects true, complete and correct;
(b) All Taxes (as hereinafter defined) that are due and payable
or claimed or asserted to be due and payable by the Taxpayers by any Authority
for all periods up to and including the Initial and Second Closing Date have
been paid or fully provided for, except for Taxes on income which are the
subject of customary challenges by the relevant Authorities.
(c) There are no liens for Taxes upon the assets of the Taxpayers
except liens for Taxes not yet due;
(d) The Taxpayers have complied in all respects with all
applicable laws, rules and regulations relating to the payment and withholding
of Taxes pursuant to all applicable provisions concerning withholding of Taxes
or similar provisions and have, within the time and in the manner prescribed by
law, paid over to the proper Authorities all amounts required to be withheld and
paid over under all applicable laws;
(e) No audits or other administrative proceedings or court
proceedings are now pending or to the knowledge of the Taxpayers threatened with
regard to any Taxes or Tax Returns of the Taxpayers;
(f) None of the transactions contemplated by or completed with
respect to this Agreement has or will cause the Taxpayers to incur any
additional Liability for Taxes as a result thereof;
(g) The Companies have not incurred any Liabilities for Taxes for
the period beginning January 1, 1996 and ending on the Initial Closing Date or
the Second Closing Date (as the case may be) other than Liabilities for Taxes
incurred in the ordinary course of their business which have been paid or
properly accrued;
(h) For purposes of this Agreement, (i) "Taxes" means all taxes,
charges, fees, levies or other assessments,
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including, without limitation, income tax, business tax, property tax,
technology transfer tax, value added tax, all other net income, sales, use,
registration, ad valorem, excise, transfer, social security license,
withholding, payroll, employment, social security, unemployment and retirement
contributions, estimated, property or other taxes, customs duties, fees,
assessments or charges of any kind whatsoever, together with any interest and
any penalties, additions to tax or additional amounts imposed by any Authority
of any jurisdiction upon the Taxpayers, and (ii) "Tax Returns" means all
returns, declarations, reports, information returns and statements required to
be filed by the Taxpayers in connection with Taxes.
3.13 Shareholder Agreements. Except for this Agreement and except as
set forth in Schedule 3.13, there are no Contracts, whether written or oral
(including any amendments thereto), among or between the shareholders of the
Vietnam JV or the Companies, or between the Vietnam JV or the Companies and a
shareholder of the Vietnam JV or the Companies, or between the Vietnam JV or the
Companies and the holders of any security of the Vietnam JV or the Companies,
with respect to the equity interest or investment in the equity capital of the
Vietnam JV or the Shares of the Companies.
3.14 Consents. Except as set forth in Schedule 3.14, no consent,
approval or authorization of, or exemption by, or filing or registration with,
any Authority or any other Person is required in connection with the execution,
delivery and performance by the Seller of the transactions contemplated by this
Agreement.
3.15 Environmental Matters. Except as set forth in Schedule 3.15, (a)
the operations of the Companies comply in all material respects with all
applicable Singapore environmental and health and safety statutes and
regulations ("Environmental Law"); (b) the Companies do not, nor to Seller's
knowledge after due inquiry, any prior owner or tenant of the Real Property has
made, caused or contributed to any release of any hazardous or toxic waste,
substance or constituent, into the environment; (c) none of the operations of
the Companies is subject to any pending or threatened judicial or administrative
proceeding alleging the violation of any Environmental Law; (d) none of the
operations of the Companies is subject to any compliance agreement or settlement
agreement resulting from an alleged violation of any Environmental Law; (e) none
of the operations of the Companies is the subject of any Singapore investigation
or threatened investigation regarding a violation or alleged violation of any
Environmental Law; (f) none of the operations of the Companies is required to
file a notice or report pursuant to any Environmental Law of any past or present
spill or release of hazardous or toxic substance or constituent into the
environment; (g) none of the operations of the Companies involves the
generation, treatment or disposal of hazardous or
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toxic waste; (h) to Seller's knowledge after due inquiry, there are no hazardous
wastes or toxic substances in or on the Real Property; and (i) the Companies
possess all environmental Permits required by any Environmental Law to operate
their business as presently conducted.
3.16 Absence of Certain Chances or Events. Except as set forth in
Schedule 3.16 or otherwise contemplated by this Agreement, since December 31,
1996, there has not been (i) any Adverse Change in the Companies; (ii) any
significant damage, destruction or loss of any assets affecting the Companies
whether or not covered by insurance; (iii) any increase out of the ordinary
course of business in the compensation payable or to become payable by the
Companies to the officers, managers or key employees working for the Companies;
(iv) any increase out of the ordinary course of business in any bonus,
insurance, pension or other employee benefit plan, payment or arrangement made
to, for or with any such officers, managers or key employees; or (v) any entry
into any Material Contract by Seller affecting the Companies or by the
Companies; (vi) any change by the Companies in accounting methods, principles or
practices except as required by Singapore GAAP; (vii) any revaluation by the
Companies of any of their assets; (viii) any direct or indirect redemption,
purchase, or other acquisition by the Companies of any of their equity interest
or investment in equity capital; or (ix) any increase in the capital stock of,
or change to the par value of the equity interest or investment in equity
capital of the Companies.
3.17 Material Contracts (Including Related Party Contracts).
(a) Schedule 3.17(a) contains the full-text execution copies of
any and all lease or tenancy agreements for the Real Property leased by the
Companies and which are used in whole or in part by the Companies (the
"Tenancy"). The Companies enjoy undisturbed possession under the Tenancy.
(b) Schedule 3.17(b) contains a description of each agreement,
arrangement, commitment, contract, hire-purchase, license, understanding or
other Contract (including, without limitation, with any Authority or
government-owned enterprise), whether written or oral (including any amendments
thereto), to which Seller or the Companies are a party or by which their
properties or assets may be bound (other than the Tenancy), and which is
material to the conduct of the business of the Companies (a "Material
Contract"); and where such Material Contract is oral or is evidenced only by
form purchase orders, Schedule 3.17(b) sets forth an accurate description of the
essential terms of such Material Contract. For purposes of this Section 3.17(b),
a Material Contract shall mean (i) any Contract involving payments or
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obligations to or from Seller relating to the Companies or to or from the
Companies in excess of S$100,000.00 (One Hundred Thousand Singapore Dollars) in
one or a series of transactions; (ii) any Contract the termination of which
would have an Adverse Effect on the Companies, the rights of Buyer under this
Agreement or the consummation of the transactions contemplated hereby; (iii) any
exclusivity agreement or undertaking not to compete; (iv) any current Contract
which is between or among Seller or the Companies, on the one hand and any one
or more Affiliates of Seller or the Companies or any director or management
personnel of the Companies, on the other hand; (v) any Material Contract not
entered into in the ordinary course of business; (vi) any joint venture,
consortium, teaming or similar Contract; (vii) any agency, consulting,
representative, distribution or similar Contract, including any such Contract
for registration, qualification or representation in a country other than
Singapore; or (viii) any other Contract which is material to the business,
assets, operations, prospects or financial condition of the Companies. Schedule
3.17(b) also contains as an attachment each of the forms of customer agreements
utilized in connection with the business of the Companies.
(c) Each Material Contract and the Tenancy is valid and
enforceable in accordance with its terms. Except as disclosed in Schedule
3.17(c), there is no breach, default or event that with notice or lapse of time,
or both, would constitute a breach or default by any party to any of these
Material Contracts or the Tenancy. Neither Seller nor the Companies have
received notice (i) that there exists an event or condition with respect to any
Material Contract or the Tenancy that has not since been cured or waived and
that, with or without the passage of time or the giving of notice, or both,
would constitute a default under such Material Contract or the Tenancy, or (ii)
that any party to any of these Material Contracts or the Tenancy intends to
cancel or terminate any of these Material Contracts or the Tenancy or to
exercise or not exercise any options under any of these Material Contracts or
the Tenancy. No such Material Contract or the Tenancy contains any contractual
requirement with which there is a substantial likelihood Seller, the Companies
or any other party thereto will be unable to comply.
(d) With regard to each Contract, bid, offer, quotation, or
report of any kind with or to any Authority or government-owned enterprise with
respect to the Companies, each of Seller and the Companies:
(i) has complied with all governmental procurement and other
regulations;
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(ii) has not violated any statutes or regulations relative
to prohibited practices;
(iii) has made no representations or certifications that are
untrue; which non-compliance, violation or inaccuracy has or could result in an
Adverse Effect on the Companies or result in any criminal liability of any
Person, and
(iv) is unaware of any current or prospective audit by any
Authority or any such enterprise concerning any of the above, concerning
pricing, or relative to debarment, other than regular audits in the ordinary
course of governmental contracts; and
(v) is unaware of any prospective disallowance of costs,
fees or money claims with respect to any Contract with any Authority or any such
enterprise.
3.18 Employee Benefits; Employment Contracts and Directors
Remuneration.
(a) Schedule 3.18(a) contains a true and complete list or
description of all Employee Benefit Plans pertaining to any director, officer,
agent, employee or former employee of the Companies. The Companies have
delivered to Buyer correct and complete copies of all plan documents and summary
plan descriptions, all related trust agreements, insurance contracts and other
funding agreements which implement the Employee Benefit Plan, and where a plan
document for an Employee Benefit Plan does not exist, a detailed description of
such Employee Benefit Plan. Except as disclosed in Schedule 3.18(a), no Employee
Benefit Plan provides medical, health, life insurance, or other welfare-type
benefits for current or future retired or terminated officers, directors and
employees of the Companies, their spouses or their dependents. "Employee Benefit
Plans" means any agreement, plan, program, fund, policy, contract or arrangement
(either written or unwritten) providing any bonus, incentive, compensation,
profit sharing, retirement, pension, insurance, disability, death benefit,
medical, dental or vision insurance or expense reimbursement, sick pay,
dependent care, stock bonus, stock option, stock purchase, stock appreciation
rights, phantom stock, stock equivalent bonus, thirteenth month, savings,
thrift, deferred compensation, consulting, severance pay or termination pay,
vacation pay, day-care, legal services, supplemental or excess benefit, housing
assistance, moving expense reimbursement, educational assistance, welfare or
other employee benefits or fringe benefits, covering any officer, director or
employee of the Companies, and the beneficiaries and dependents of any such
officer, director or
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employee, regardless of whether it is mandated under local law (e.g., Provident
Fund), private, funded, unfunded, financed by the purchase of insurance,
contributory or non-contributory.
(b) The Companies are not a party to any collective bargaining or
union agreement, and within the last five (5) years, nor have the Companies
experienced any significant union organization attempts or any material work
stoppage due to any labor disagreement. There is no individual or collective
labor complaint against the Companies pending or, to Seller's best knowledge
after due inquiry, threatened, before any Singapore labor board or tribunal.
There is no labor strike, request for representation, slowdown or stoppage
actually pending or, to Seller's best knowledge after due inquiry, threatened
against or affecting the Companies. No grievance or other claim has been
asserted pursuant to any collective bargaining or other labor union agreement,
the settlement of which would have an Adverse Effect on the Companies. No
arbitration proceedings arising out of or under any collective bargaining or
other labor union agreement is pending or, to Seller's best knowledge after due
inquiry, threatened against the Companies.
(c) There are no other employment or personal service
agreements, or any "golden parachute", "pay-to-stay", loans or indemnity
agreements, between Seller or the Companies, on the one hand, and any officer,
director or manager of the Companies (including, without limitation, the Vietnam
JV) on the other hand.
(d) Except as set forth in Schedule 3.18(d) no third party
provides personnel, manpower or personnel services to the Companies.
3.19 Real Property.
(a) Except as set forth in Schedule 3.19(a), the Companies
neither own, use, hold for use, nor occupy any land or easements nor any
buildings, structures or other improvements, nor do they have any rights or
appurtenances in or to any real property, nor any real property leasehold
interests, nor any other real property interests of any kind whatsoever,
(hereinafter, the "Real Property");
(b) The Companies have all easements and rights of way necessary
to operate their business as currently conducted.
(c) None of the Real Property is Adversely affected or likely to
be Adversely affected by any planning proposals.
(d) No development has been carried out in relation to the Real
Property which would require any consent under or by
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virtue of the Planning Acts or any by-laws or building regulations or other
relevant legislation without such consent having been properly obtained and any
conditions or restrictions imposed thereon have been fully observed and
performed, no application by the Companies for planning consent has been refused
and no application by the Companies for planning consent has been submitted or a
decision in relation thereto appealed against where the decision in relation
thereto or the outcome of the appeal (as appropriate) is still pending.
(e) All policies of insurance relating to the Real Property
(including fixtures, fittings and contents) effected by the Companies are
current and valid, cover the full reinstatement value thereof (including where
the relevant property is let, loss of rent cover conforming with the
requirements of the relevant lease) and are not subject to any special or
unusual terms or restrictions or to the payment of any premium in excess of the
normal rate for policies of the same kind and, in respect of policies on Real
Property held on lease where the Companies are responsible for maintaining
insurance, the policy conforms in all respects with the requirements of the
lease under which any of the Real Property is held.
(f) There are no policies of insurance relating to any of the
Real Property (including fixtures fittings and contents) which have not been
effected by the Companies.
(g) No structural or other material defects have appeared in
respect of or affecting the buildings and structures on or comprising the Real
Property or any parts thereof and all such buildings are in good and substantial
repair and condition.
(h) The companies are not engaged in any negotiation for review
of the rent payable under any lease or tenancy agreement under which they hold
any of the Real Property and no negotiations for such review have been concluded
changing the rent from that disclosed to Buyer in writing.
(i) The Companies are not the guarantor of or surety for any
other party's liability (contingent or otherwise) for any obligations under any
lease or tenancy or under any agreement relating to the assignment of any lease
or tenancy.
3.20 Insurance.
(a) The Companies' policies of liability, fire, automobile,
property, general civil liability and other forms of insurance, all of which are
valid and enforceable and in full force and effect, are underwritten by
unaffiliated financially sound and reputable insurers, are sufficient for all
applicable requirements
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of law and provide insurance coverage against, including, without limitation,
all errors and omissions and general liability, officers and directors
liability, and products liability insurance, in such amounts and against such
risks as is customary in Singapore for companies engaged in similar businesses
to those of the Companies to protect the properties, assets, businesses and
operations of the Companies. Schedule 3.20(a) sets forth a true and correct
summary description of all of the policies in force and effect including a
description of their respective coverage and limits. All such policies will
remain in full force and effect through their respective dates and will not in
any way be affected by or terminate or lapse by reason of any of the
transactions contemplated hereby. No notice of cancellation has been received,
and there is no existing default or event that, with the giving of notice or
lapse of time or both, would constitute a default under such policies. The
Companies have not been refused any insurance, nor have their coverage been
limited, by any insurance carrier to which they have applied for insurance or
with which they have carried insurance, at any time during the past five (5)
years.
(b) Schedule 3.20(b) sets forth a true and complete summary
description of all outstanding bank or other guarantees, bonds, letters of
credit and other surety arrangements issued or entered into in connection with
the business, assets and Liabilities of the Companies, including any guarantees
issued by the Companies or any shareholder of the Companies in respect of any
contractual or other obligation or Liability of the Companies.
3.21 No Conflicts of Interest. No Affiliate, director, senior
management personnel (including any elected or appointed officer) or salaried
employee of the Companies, or any Person in which the Companies or any Affiliate
thereof have a beneficial interest, has any direct, indirect or beneficial
interest in any competitor, supplier or customer of the Companies or in any
Person from whom or to whom the Companies lease any real or personal property,
or in any other Person with whom the Companies are doing business.
3.22 Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's fee or commission in connection with the transactions
contemplated by this Agreement based on arrangements made by or on behalf of
Seller. Seller will indemnify and hold Buyer harmless from any such payment
alleged to be due by or through Seller as a result of the action of Seller or
his agents.
3.23 Disclosure.
(a) The representations and warranties in this Agreement
are given subject to matters fully fairly and
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specifically disclosed in the Schedules hereto and where applicable any exchange
of correspondence between the parties or their respective attorneys.
(b) Each of the representations and warranties shall be separate
and independent.
(c) The representations and warranties given by Seller herein
are made to the best of the knowledge, information and belief of Seller, and
have been made after due and careful inquiry.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Corporate Power and Authority; Effect of Agreement.
(a) Buyer is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, United States of
America. Buyer has all requisite corporate power and authority to execute,
deliver and perform this Agreement to which it is a party and to consummate the
transactions contemplated hereby.
(b) The execution, delivery and performance by Buyer of this
Agreement and the consummation by Buyer of the transactions contemplated hereby
have been duly authorized by the Board of Directors and shareholders of Buyer,
and no other corporate action or proceeding on the part of Buyer is necessary to
authorize this Agreement or the consummation of any of the transactions
contemplated hereby.
(c) This Agreement has been duly and validly executed and
delivered by Buyer and constitutes the valid and binding obligation of Buyer,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and the availability of specific performance.
(d) The execution, delivery and performance by Buyer of this
Agreement and the consummation by Buyer of the transactions contemplated hereby
do not and will not, with or without the giving of notice or the lapse of time,
or both, (i) violate any law, rule or regulation to which it or any of its
assets or properties is subject, (ii) violate any order, writ,
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injunction, judgment or decree applicable to it or any of its assets or
properties, or (iii) conflict with, or result in a breach of or default under,
or give rise to any right of termination, cancellation or acceleration under (A)
any term or condition of its Articles of Incorporation and Bylaws, or (B) any of
the terms, conditions or provisions of any note, bond, mortgage, indenture or
lease, license, agreement or other instrument to which it is a party or by which
its assets or properties may be bound; except, with respect to clauses (i), (ii)
and (iii)(B) above, for violations, conflicts, breaches or defaults which in the
aggregate would not hinder or impair its ability to consummate the transactions
contemplated hereby.
4.2 Consents. No consent, approval or authorization of, or exemption
by, or filing or registration with, any Authority is required in connection with
the execution, delivery and performance by Buyer of the transactions
contemplated by this Agreement.
4.3 Absence of Litigation. No claim, action, proceeding or
investigation is pending or, to the knowledge of Buyer, threatened against Buyer
before any Authority or other Person that would be reasonably likely to
materially and Adversely affect or restrict Buyer's ability to consummate the
transactions contemplated hereby.
4.4 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's fee or commission in connection with the transactions
contemplated by this Agreement based on arrangements made by or on behalf of
Buyer. Buyer will indemnify and hold Seller harmless from any such payment
alleged to be due by or through Buyer as a result of the action of Buyer or its
officers or agents.
ARTICLE 5
UNDERTAKINGS OF THE PARTIES
5.1 Tax Relief and Grants. Seller undertakes to cause the Companies to
request and use their best efforts to pursue such tax relief and government
grants as may be available, as soon as reasonably possible after the Initial
Closing Date.
5.2 Cooperation. Each of the parties hereto shall use its best efforts
to satisfy all applicable conditions to the Initial and Second Closing and the
respective Contingent Payment (as the case may be) and to cause the consummation
of the transactions contemplated by this Agreement in accordance with the terms
and conditions hereof and applicable law. Each of the parties hereto shall use
its best efforts to obtain any
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governmental consents and approvals necessary to consummate the transactions
contemplated by this Agreement and to cause the Initial and Second closing and
the respective Contingent Payment (as the case may be) to occur. Each of Buyer
and Seller shall use, and Seller shall cause the Companies to use, its best
efforts to obtain the consent or approval of Authorities and third Persons to
the transactions contemplated hereby. In the event any consent or approval of
any such Authority or third Person which is necessary or desirable to preserve
for the Companies any right or benefit under the Tenancy, Material Contract or
Permit, which is not obtained prior to the Initial Closing (and provided that
Buyer waives any resulting failure of a condition under Article 6), Seller will,
subsequent to the Initial Closing, cooperate with Buyer and the Companies in
attempting to obtain such consent or approval as promptly thereafter as
practicable.
5.3 Conduct of Business Between Signing and Initial Closing.
(a) From the date hereof until the Initial Closing, Seller
shall use his best efforts to cause the Companies to preserve their business
organization intact, keep available to them their respective present management
and employees and preserve their present relationship with and the goodwill of
their customers, suppliers and others having business relationships with them,
and conduct their business and activities diligently. Prior to the Initial
Closing, without the prior written consent of Buyer (which consent shall not be
unreasonably withheld or delayed) or unless otherwise contemplated or permitted
by this Agreement, Seller shall use his best efforts to cause the Companies to
refrain from the following actions (including any agreement to take any of the
following actions):
(i) enter into any amalgamation, reconstruction or
reorganization with any Person or Authority, acquire any ownership interest in
any Person or Authority or substantially all of the assets of any business as an
entity or liquidate, dissolve or otherwise reorganize or seek protection from
creditors;
(ii) enter into or modify any other Material Contracts;
(iii) make any investment of a capital nature by purchase of
shares or securities, contributions to capital, property transfers or otherwise,
or by the purchase of any property or assets of any other Person or Authority;
(iv) enter into a new line of business or make or institute
any unusual or novel methods of operation, purchase,
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sale, lease, management or accounting that would vary from those methods
currently used by it;
(v) issue, sell or deliver, or agree to issue, sell or
deliver any equity interest or investment in equity capital or issue or create
any Contract or other commitment under which any additional shares might be
authorized, issued or transferred;
(vi) sell, transfer, mortgage, charge, pledge or create or
permit the creation of an Encumbrance on or in respect of any of the Companies'
assets, properties or rights, tangible or intangible;
(vii) amend their memorandum and articles of association or
grant any general powers of attorney, or any special powers of attorney except
in the ordinary course of business or in order to carry out the transactions
contemplated by this Agreement;
(viii) grant any change in any benefits or any increase out
of the ordinary course of business in compensation to any employee, consultant,
agent, representative, distributor or director of the Companies;
(ix) declare or pay any dividend or make any distribution to
shareholders in cash, equity interest or investment in equity capital or
property; or
(x) redeem, repurchase or otherwise acquire any equity
interest or investment in equity capital.
(b) Should the Companies desire to take, carry out or implement
any of the actions listed in Section 5.3(a), paragraphs (i) through (x), Seller
shall request permission to do so from Buyer in writing and Buyer will respond
promptly to such request.
5.4 No Shop. Save as provided in this Agreement, Seller undertakes
that until the later of: (i) ninety (90) Days from the date hereof and (ii) the
Termination Date, it shall not, and shall cause its Affiliates and the
respective agents, representatives, officers, directors and employees of the
foregoing Persons not to:
(a) solicit or enter into any discussions, negotiations or
similar activities relating to the sale or other disposition of the Companies or
any of their assets, equity interest or investment in equity capital or other
securities, including, without limitation, any offering or sale of equity
interest or investment in equity capital, options, warrants or other equity or
convertible securities in whole or in part, whether directly or indirectly,
through purchase, amalgamation.
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reconstruction, reorganization or otherwise (other than sales of inventory in
the ordinary course); or
(b) without the prior written consent of Buyer, sell, purchase,
convey, acquire, pledge or otherwise encumber or transfer any equity interest or
investment in equity capital or other securities of the Companies, or request
any other Person or Authority to act in any such transaction.
5.5 Access to Information.
(a) Throughout the term of this Agreement, Buyer and its
authorized representatives shall be permitted, upon reasonable prior notice, to
make such full and complete investigations of Seller's ownership of the equity
interest or investment in equity capital, of Seller's authority to enter into
and comply with this Agreement, and of the Companies and their business
activities, and their historical business activities, as Buyer from time to time
deems reasonably necessary. For such purposes, (i) Buyer and its authorized
representatives shall have access during normal business hours to all accounts,
books, records, Contracts, facilities and properties of the Companies and to
those employees and financial, legal and other representatives of the Companies
having knowledge of financial, operating and legal data and other information
with respect to the business and properties of the Companies as Buyer may from
time to time reasonably request, and (ii) Buyer and its authorized
representatives shall be permitted to conduct financial, environmental and legal
audits of the Companies; provided, however, that Buyer shall use its reasonable
best efforts to conduct such investigations in such a manner as not to disrupt
the operations of the Companies.
(b) From and after the date of this Agreement, Buyer and its
authorized representatives (on the one hand), and Seller and the Companies, and
their authorized representatives (on the other hand), shall treat all
information concerning Seller and the Companies (the "Confidential Information")
as strictly confidential; provided, however, that disclosure of such information
may be made by either Buyer or Seller (i) with the prior written consent of the
other party or (ii) if, in the opinion of counsel for the party desiring to make
such disclosure, such disclosure is required by law. Confidential Information
shall not include information which (i) is already in the possession of Buyer
and which was not disclosed to Buyer by Seller or the Companies, provided that
such information is not known to be subject to another confidentiality agreement
with, or other obligation of secrecy to, Seller or the Companies, (ii) is or
becomes generally available to the public other than as a result of a disclosure
by a party hereto in violation of this Section 5.5(b), or (iii)
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becomes available to either Buyer (on the one hand) or Seller or the Companies
(on the other hand) on a non-confidential basis from a source other than Seller
or the Companies (on the one hand) or Buyer (on the other hand) or their
respective directors, officers, employees, agents, representatives or advisors,
provided that such source is not known by the disclosing party to be bound by a
confidentiality agreement with, or other obligation of secrecy to any of the
aforementioned Persons.
5.6 Further Assurances. Subject to the terms and conditions of this
Agreement, each of the parties hereto (a) will take, or cause to be taken, all
actions, and do, or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement and to ensure that Buyer's and
Seller's rights under this Agreement continue unimpeded, and (b) will take, or
cause to be taken, no action inconsistent with the terms of this Agreement or
inconsistent with Buyer's and Seller's rights hereunder. In case at any time
after the Initial Closing Date any further action is necessary or desirable to
carry out the purposes of this Agreement, (a) Buyer will cause its proper
officers and directors to take all such actions, and (b) Seller will take or
cause the proper officers and directors of the Companies to take all such
actions.
5.7 Amendments to Schedules. No later than ten (10) Days prior to the
Initial Closing Date, Seller shall notify Buyer of (i) any representation
contained in Article 3 which has become untrue or incorrect in any respect, (ii)
the relevant facts and circumstances, and (iii) the amendments to the Schedules
hereto which Seller believes in good faith would be necessary to make the
representations contained in Article 3 true and correct in all respects in light
of such facts and circumstances. No later than five (5) Days prior to the
Initial Closing Date, Seller shall deliver to Buyer any updates to Schedules
attached hereto (the "Schedule Updates"). Notwithstanding the foregoing time
periods, Seller must advise Buyer as soon as possible at any time prior to the
Initial Closing Date, of any new facts or circumstances which may require the
amendment of any representation contained in Article 3 or to any of the
Schedules attached hereto. Following consultation between Buyer, Seller and the
Companies, Buyer will advise Seller whether it accepts the Schedule Updates or
any new facts and circumstances arising and disclosed in writing after the
delivery of the Schedule Updates, in whole or in part, or if such Schedule
Updates or new facts or circumstances arise for reasons within the sole control
of Seller and the Companies and in the aggregate reduce the profits, turnover or
net asset value of any of the Companies by 20 or more, whether it intends to
terminate this Agreement pursuant to Section 9.1 and exercise its rights to
indemnification under Section 8.1. To the extent accepted in
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writing by Buyer, such Schedule Updates are referred to herein as an
"Amendment."
5.8 Non-Competition/Non-Solicitation.
(a) From the date hereof until the fifth (5th) anniversary
of the Second Closing Date (or, in the case of Buyer, until Buyer no longer is a
shareholder of Asia and Trading, if later), Buyer, Seller and its Affiliates
shall not:
(i) participate or have any Interest in any Person that
Competes in any manner anywhere in the world with the Business of the Companies;
(ii) solicit or entice away or attempt to solicit or entice
away from the Companies in the conduct of the Business any Person who is or has
at any time within twelve months prior to the date in question been a customer
or agent of the Companies; or
(iii) solicit or entice away or attempt to solicit or entice
away from the Companies any employee of the Companies whether or not such person
would commit a breach of contract by reason of leaving such employment.
(b) The following terms shall have the meanings ascribed for the
purposes of this Section 5.8:
(i) "Business" of the Companies means the wholesale and
retail of chemicals and chemical-related products;
(ii) "Compete" and "Competing Business" mean any business
engaged in activities which are the same or similar to the activities comprising
the Business, whether with the same or similar products, or different products
which provide the same or similar functionality as the products of the Business,
including products which may be substituted for the products of the Business;
and
(iii) "Interest" includes any of the following, whether
existing directly or indirectly, legally or beneficially: (A) ownership of any
equity, partnership or other ownership interest or entitlement in any entity,
(B) any right to vote with respect to decisions of the board, management,
supervisory or similar committee or body of any entity, (C) any right to vote,
or direct the voting of, any equity, partnership or other ownership interest or
entitlement in any entity, (D) any right to receive, or direct the recipient, of
any dividends or other distributions from any entity, or (E) any management
rights with respect to any entity.
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(c) Each obligation under this clause shall be treated as a
separate obligation and shall be severally enforceable, and in the event of any
obligation being or becoming unenforceable in whole or in part, such part as is
unenforceable shall be deleted from this clause, and any such deletion shall not
affect the enforceability of such parts of this clause as remain
5.9 Amended Articles. The parties agree that effective as of the
Initial Closing Date, the Amended Articles shall be adopted, which shall include
the provisions contained in Sections 5.10, 5.11 and 5.13.
5.10 Management of the Companies.
(a) The parties agree to modify the Amended Articles to give
effect to the provisions of this Section 5.10.
(b) So long as Buyer holds not less than twenty-five percent
(25%) of the Asia Shares, Buyer shall be entitled to appoint and from time to
time to replace one Director of Asia, and so long as Buyer holds not less than
twelve and 745/1000 percent (12.745%) of the Trading Shares, Buyer shall be
entitled to appoint and from time to time to replace one Director of Trading.
(c) Each appointment and removal of its Director by Buyer shall
be effected by notice sent to the relevant one of the Companies.
(d) Buyer shall be responsible for and shall hold Seller,
its Affiliates and the Companies harmless from and against any claim for damages
asserted against Seller, its Affiliates or the Companies by its Director or
losses incurred by Seller, its Affiliates or the Companies resulting from any
and all acts or omissions of its Director other than acts or omissions agreed to
by the Board of Directors.
(e) Each Director may, in accordance with any subject to the
Amended Articles, appoint an alternate to represent him at meetings of the Board
which he is unable to attend.
(f) Members of the Board may participate in and act at any
meeting of the Board through the use of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other. Participation in such a meeting shall constitute
attendance and presence in person at the meeting of the person or persons so
participating for all purposes.
(g) Meetings of the Board shall (unless the parties otherwise
agree in writing) take place at such time or times as may
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be determined by the Board but in any event not less frequently than twice per
year and on not less than fourteen (14) Days' prior written notice (unless
otherwise agreed by all of the Directors), which notice shall be accompanied by
an agenda.
5.11 Conduct of the Business of the Companies.
(a) The parties shall procure that the Companies shall not,
except with the sanction of a prior resolution of the Board of the Companies
(including the Director appointed by Buyer pursuant to Section 5.10) and where
required by the Singapore Companies Act (Cap. 50), the prior sanction of the
shareholders of the Companies:
(i) sell, transfer, lease, assign, dispose of or part with
control of any interest in all or any material part of their undertaking,
business, property or assets (whether by a single transaction or a series of
transactions), or contract to do so, or acquire or contract to acquire any
business, property or assets which would, following such acquisition, constitute
a material part of their business, property or assets (and for these purposes
any part accounting for ten percent or more of the profits, turnover or net
asset value of the Companies shall be deemed material);
(ii) make or agree to make any change to their authorized
or issued share capital or grant any option over, or issue any investment
carrying rights of conversion into, any of their share capital;
(iii) do or permit or suffer to be done any act or thing
whereby they may be wound up (whether voluntarily or compulsorily), save as
otherwise expressly provided for in this Agreement;
(iv) make any change to the Amended Articles; or
(v) dispose of any equity interest or investment in equity
capital of the Vietnam JV.
(b) Each party shall exercise all voting and other powers in
relation to the Companies so as to procure (so far as it is able by the exercise
of such rights and powers) that at all times during the life of this Agreement:
(i) Buyer shall be entitled within normal hours and upon
giving not less than seventy-two hours' notice to the Companies of its desire
so to do, to examine the
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books, accounts and records to be kept by or on behalf of the Companies and
shall be entitled to be supplied with all relevant information (including
monthly management accounts and operating statistics and such trading, financial
and other information in such form as it may reasonably require) to keep it
properly informed about the business and affairs of the Companies;
(ii) Without limiting the generality of Section 5.11(b)(i),
Buyer shall be entitled within the time and upon the notice referred to in
Section 5.11(b)(i), to procure that the examination and review referred to in
Section 5.11(b)(i) be conducted by any of its respective financial and legal
advisers.
(c) Each party shall procure that any Companies controlled by
the Companies shall observe and perform the provisions and conditions contained
in this Agreement relating to the Companies as if they applied directly to each
such Companies.
(d) All dealings between the Companies on the one hand and their
members or any of their respective Affiliates on the other hand shall be on
normal arm's-length terms as between unrelated parties.
5.12 Commercial Relationships with the Vietnam JV. Seller shall use
his best efforts to procure that the Companies shall discuss in good faith with
Buyer and its Affiliates the appropriate commercial relationships between the
Vietnam JV and Buyer and its Affiliates.
5.13 Auditing Accounting System. Information and Reports.
(a) Seller and Buyer shall cause the Companies to keep and
maintain complete and accurate books, records and accounts on an accrual basis
of accounting. Such records shall be maintained for a minimum period of six (6)
years from the date of making thereof, except for those records, if any,
required to be kept for a longer period under any Singapore legal requirement or
at the reasonable request of Buyer.
(b) Seller and Buyer shall cooperate with each other in
developing a uniform, comprehensive accounting and reporting system, in order
that, from and after the Initial Closing, the Companies will be able to prepare
financial statements in accordance with Singapore GAAP, and in such a manner as
reasonably permits the preparation by Buyer of financial statements in respect
of its interest in the Companies in accordance with U.S. GAAP (the expenses of
which shall be borne by Buyer), and provide management of the Companies with
prompt periodic financial information and other operating data desired by
management.
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including, without limitation, all data needed for tax, accounting, securities
laws and other financial reporting purposes in Singapore and the United States.
Seller and Buyer shall cause the Companies at regular intervals, in such form as
may be reasonably requested by either party, to supply such party information on
the business of the Companies including as regards their respective financial
positions.
(c) Seller shall cause the Companies to furnish to Buyer as soon
as such statements or information can reasonably be prepared (but in no event
later than the time period indicated, if any):
(i) a copy of audited annual financial statements within
ninety (90) Days following the end of the applicable Fiscal Year;
(ii) A copy of unaudited quarterly financial statements
within thirty (30) Days following the end of the applicable quarter; and
(iii) a copy of unaudited monthly statements within thirty
(30) Days following the end of the applicable month.
5.14 Transfers of Interests. During the life of this Agreement, none
of Seller's or Buyer's legal or beneficial rights in any equity interest or
equity investment in capital of the Companies shall be assigned, sold,
transferred, mortgaged, charged, pledged or otherwise disposed of or encumbered,
except as pursuant to this Agreement and the Amended Articles.
5.15 Agreements Between the Companies and the Parties.
Each party shall take all steps within its power to procure that
the Companies performs their obligations under and observes the provisions of
any agreements with the other parties or their Affiliates.
5.16 Constituent Documents. Insofar as permitted by applicable law,
Seller agrees that if and to the extent that any provision in the Amended
Articles conflicts with the provisions of this Agreement, this Agreement shall
prevail, and that, in the event of such conflict, they shall exercise all voting
rights and other powers available to them in relation to the Companies, and take
all such further steps as may be necessary or requisite, to ensure that the
provisions of this Agreement shall prevail.
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ARTICLE 6
CONDITIONS TO BUYER'S OBLIGATIONS
The obligation of Buyer to consummate the transactions contemplated by
Article 2 shall be subject to the satisfaction (or waiver) on or prior to the
Initial or Second Closing Date or each respective Contingent Payment (as the
case may be) of all of the following conditions, unless otherwise stated below:
6.1 Representations and Warranties of Seller. All representations and
warranties of Seller set forth in Article 3 shall be, except as otherwise
contemplated by this Agreement, true and correct in all material respects as of
the date of this Agreement and as of the Initial or Second Closing Date (as the
case may be) as though made on and as of the Initial or Second Closing Date (as
the case may be), as amended by any Amendments.
6.2 Performance of Undertakings. Seller shall have performed and
complied in all material respects with each and every undertaking, agreement and
condition required by this Agreement to be performed or complied with by Seller
prior to or on the Initial or Second Closing Date or prior to or on each
respective Contingent Payment (as the case may be).
6.3 No Prohibition. The consummation of the transactions contemplated
in this Agreement shall not be prohibited or delayed by any order, decree or
injunction of a court of competent jurisdiction and there shall not have been
any action taken or any failure to act or any statute, rule or regulation or
order of any court or other Authority enacted which (a) prohibits or delays
Buyer for a period greater than thirty (30) Days from consummating the
transactions contemplated by this Agreement or (b) imposes any limitation on the
ability of Buyer to exercise full rights of ownership of the Asia Shares and
Trading Shares and to exercise its full rights set forth herein.
6.4 No Action. No action, suit or proceeding before any Authority
shall be pending or threatened against Buyer by a third party challenging the
validity or legality of the transactions contemplated by this Agreement.
6.5 No Adverse Change. No occurrences, events, circumstances or
conditions which, individually or in the aggregate, constitute an Adverse Change
shall have occurred or arisen after December 31, 1996 (in the case of the
Initial Closing Date) or after the Initial Closing Date (in the case of the
Second Closing or a Contingent Payment), including any occurrences, events,
circumstances or conditions which, notwithstanding Seller's disclosure to Buyer
prior to the Initial or Second Closing Date or
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each respective Contingent Payment (as the case may be), have or with the
passage of time or the giving of notice would have an Adverse Effect on Buyer'S
rights under this Agreement or an Adverse Effect on the Companies.
6.6 Governmental Approvals and Consents. All approvals, authorizations
or consents of, or clearances or exemptions by, or filings or registrations
with, any Authority or stock exchange which are required for the consummation of
the transactions contemplated hereby to occur on the Initial or Second Closing
Date or each respective Contingent Payment (as the case may be) or to permit the
Companies, after consummation of the transactions contemplated hereby, to carry
on their business in the manner now conducted, shall have been obtained, made or
effected in all material respects; provided, that no such approval,
authorization, consent, clearance or exemption shall have imposed any Adverse
condition thereto.
6.7 Other Approvals and Consents. All consents or approvals of any
Persons or Authorities who are parties to Material Contracts to which the
Companies are also a party or to which any assets of the Companies are subject,
the granting of which is necessary for the consummation of any transaction
contemplated hereby or for preventing the termination of any material right,
privilege, license or agreement of the Companies, shall have been obtained and
copies thereof delivered to Buyer.
6.8 Construction of Vietnam JV Facility. The construction of the
Vietnam JV facilities set forth in the Vietnam Charter and Investment License
shall have commenced no later than September 30, 1997, and the Vietnam JV shall
have all necessary financial resources for such construction as well as
operation thereof as of the Second Closing Date or as of each respective
Contingent Payment (as the case may be). Construction of the Vietnam JV facility
shall be deemed to commence upon the execution of the respective land lease by
▇▇▇ ▇▇▇▇▇ Industrial Promotion Company (IPC), and the issuance of all required
approvals, if any.
ARTICLE 7
CONDITIONS TO SELLER'S OBLIGATIONS
The obligations of Seller to consummate the transactions contemplated
by Article 2 shall be subject to the satisfaction (or waiver) on or prior to the
Initial or Second Closing Date (as the case may be) of all of the following
conditions unless otherwise stated below.
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7.1 Representations and Warranties of Buyer. All representations and
warranties of Buyer set forth in Article 4 shall be, except as otherwise
contemplated by this Agreement, true and correct in all material respects as of
the date of this Agreement and as of the Initial or Second Closing Date (as the
case may be) as though made on and as of the Initial or Second Closing Date (as
the case may be), as amended by any Amendments.
7.2 Performance of Undertakings. Buyer shall have performed and
complied in all material respects with each and every undertaking, agreement and
condition required by this Agreement to be performed or complied with by Buyer
prior to the Initial or Second Closing Date (as the case may be).
7.3 No Prohibition. The consummation of the transactions contemplated
in this Agreement shall not be prohibited or delayed by any order, decree or
injunction of a court of competent jurisdiction and there shall not have been
any action taken or any failure to act or any statute, rule or regulation or
order of any court or other Authority enacted which (a) prohibits or delays
Seller for a period greater than thirty (30) Days from consummating the
transactions contemplated by this Agreement or (b) imposes any limitation on the
ability of Seller to exercise his full rights set forth herein.
7.4 No Action. No action, suit or proceeding before any Authority
shall be pending or threatened against Seller or the Companies challenging the
validity or legality of the transactions contemplated by this Agreement which,
if decided Adversely to Seller or the Companies, would have a material and
Adverse Effect on the Companies, the rights of Buyer under this Agreement or the
consummation of the transactions contemplated hereby.
7.5 Governmental Approvals and Consents. All approvals, authorizations
or consents of, or clearances or exemptions by, or filings or registrations
with, any Authority or stock exchange which are required for the consummation of
the transactions contemplated hereby to occur on the Initial or Second Closing
Date (as the case may be) or to permit the Companies, after consummation of the
transactions contemplated hereby, to carry on their business in the manner now
conducted, shall have been obtained, made or effected in all material respects;
provided, that no such approval, authorization, consent, clearance or exemption
shall have imposed any material and Adverse condition thereto.
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ARTICLE 8
INDEMNIFICATION
8.1 Seller's Indemnification.
(a) Subject to the terms and conditions of this Article 8,
Seller shall indemnify, defend and hold Buyer harmless from and against any
damages, deficiencies, Liabilities, losses, lost profits, obligations, claims,
demands, judgments, settlements, costs and expenses of any nature whatsoever,
including reasonable attorneys' fees (individually a "Loss" or collectively
"Losses"), asserted against, resulting to, imposed upon or incurred by the
Buyer, at any time prior to the applicable Expiration Date (a' defined in
Section 11.1), by reason of or resulting from: (i) any inaccuracy of any
representation or warranty made by Seller; (ii) any breach or violation of any
undertaking or agreement of Seller contained in this Agreement; (iii) all
undisclosed Liabilities of any nature, existing at, resulting from, relating to
or arising out of the business operations or assets of the Companies prior to
the Initial Closing Date; and (iv) any actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines, judgments, costs and other
expenses (including, without limitation, reasonable legal fees and expenses)
incident to any of the foregoing or to the enforcement of this Section 8.1
(items 8.1(a)(i), (ii), (iii) and (iv) collectively, the "Buyer Claims");
(b) Seller shall be solely liable for Buyer Claims, without
any right of contribution from the Companies, and the Companies shall have no
liability therefor whatsoever
8.2 Buyer's Indemnification. Subject to the terms and conditions of
this Article 8, Buyer shall indemnify, defend and hold Seller harmless from and
against any/Losses asserted against, / Loss resulting to, imposed upon or
incurred by Seller, at any time prior or to the applicable Expiration Date by
reason of or resulting from: (i) any inaccuracy of any representation or
warranty of Buyer contained in this Agreement, (ii) any breach or violation of
any undertaking or agreement of Buyer contained in this Agreements (iii) any
actions, suits, claims, proceeding, investigations, demands, assessments,
audits, fines, judgments, costs and other expenses (including, without
limitation, reasonable legal fees and expenses) incident to any of the foregoing
or the enforcement of this Section 8.2 (together with the Buyer Claims, the
"Claims").
8.3 Conditions of Indemnification. The obligations of Seller and
Buyer, as the case may be, under Sections 8.1 and 8.2 (herein referred to as the
"Indemnifying Party"), with respect to
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Claims made by third parties shall be subject to the following terms and
conditions:
(a) The Person to whom such Claim relates (the "Indemnified
Party") will give the Indemnifying Party prompt notice of such Claim, whether
threatened or pending, and the Indemnifying Party will assume the defence
thereof by representatives chosen by it. Any failure to give such notice will
not waive the rights of the Indemnified Party except to the extent that the
rights of the Indemnifying Party are actually prejudiced.
(b) Provided the Indemnifying Party assumes the defence as
provided in Section 8.3(a):
(i) The Indemnified Party shall not make any admission of
liability, agreement or compromise in respect of such Claim without prior
consultation with and the prior written consent of the Indemnifying Party (which
shall not be unreasonably withheld or delayed) to the extent that such admission
of liability, agreement or compromise would prevent the Indemnifying Party from
defending its interests. If no reply is received from the Indemnifying Party
within thirty (30) Days of a written notification made to it by the Indemnified
Party that it wishes to admit liability, agree or compromise, the Indemnifying
Party shall be deemed to have consented to the course of action taken. If on the
other hand within the period of thirty (30) Days the Indemnifying Party states
in writing that it does not consent to the intended course of action, it shall
set out the reasons for this, as well as the course of action which should be
followed in respect of any proposed admission of liability, compromise or
agreement with respect to the Claim.
(ii) The Indemnified Party shall take and cause its
Affiliates to take all such commercially reasonable steps or proceedings as the
Indemnifying Party may reasonably consider necessary to avoid, resist, defend,
appeal or compromise any Claim, provided that the Indemnifying Party bears all
the fees, costs and expenses in such connection.
(c) If the Indemnifying Party, within a reasonable time after
notice of any such Claim, fails to assume the defence thereof, the Indemnified
Party or any of its Affiliates shall (upon further notice to the Indemnifying
Party) have the right to undertake the defence, compromise or settlement of such
Claim on behalf of and for the account and risk of the Indemnifying Party,
subject to the right of the Indemnifying Party to assume the defence of such
Claim at any time prior to the settlement, compromise or final determination
thereof.
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(d) Anything in this Section 8.3 to the contrary
notwithstanding, (i) if there is a reasonable probability that a Claim may
Adversely affect the Indemnified Party or any of its Affiliates other than as a
result of money damages or other money payments, the Indemnified Party or such
Affiliate shall have the right to defend, at its own cost and expense, and to
compromise or settle such Claim with the consent of the Indemnifying Party and
(ii) the Indemnifying Party shall not, without the written consent of the
Indemnified Party (which shall not be unreasonably withheld or delayed), settle
or compromise any Claim or consent to the entry of any judgment unless the
settlement, compromise or judgment includes as an unconditional term thereof the
giving by the claimant or the plaintiff to the Indemnified Party or such
Affiliate, or both, a release from all liability in respect of such Claim.
(e) Upon the determination of the liability under this
Section 8.3, the Indemnifying Party shall pay to the Indemnified Party within
ten (10) Days after such determination, the amount of any Claim for
indemnification made hereunder. Upon the payment in full of any Claim, the
Indemnifying Party shall be subrogated to the rights of the Indemnified Party
against any Person or Authority with respect to the subject matter of such
Claim.
8.4 No Waiver of Subrogation. Nothing in this Agreement shall be
construed as a waiver of any right of subrogation to which any insurance
Companies may be entitled under any insurance policy maintained by Buyer, or
Seller or the Companies.
8.5 Remedies Cumulative. The remedies provided in this Agreement shall
be cumulative and shall not preclude assertion by any of the parties hereto of
any other rights or the seeking of any other remedies against any other party
hereto.
8.6 Injunctive Relief. The parties hereto shall be entitled to
specific performance and injunctive relief for breach of any agreement,
commitment, undertaking contained in this Agreement or to compel another party
to take any action or to refrain from taking any action, or to cause any other
party to take any action or to refrain from taking any action, that may be
required or prohibited, as the case may be, by the provisions of this Agreement.
8.7 General Provisions and Limitations.
(a) Subject to Section 8.7(d), all indemnification payments to
be made by an Indemnifying Party shall be made without withholding of or
deduction for or on account of any present or future Taxes, unless such
deduction or withholding is required by
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applicable law. If the Indemnifying Party is so required to withhold or deduct,
then the Indemnifying Party shall pay to the Indemnified Party such additional
amount as will result in the Indemnified Party receiving, after such withholding
or deduction, the amount which would otherwise have been received by it in
respect of such payment if no such Taxes had been imposed.
(b) Subject to Section 8.7(d), if and to the extent that any
sums payable to the Indemnified Party by the Indemnifying Party pursuant to a
direct Claim prove to be insufficient, by reason of any Taxes suffered thereon,
to compensate fully the Indemnified Party for the damages suffered by it, the
Indemnifying Party shall pay to the Indemnified Party such additional sum as
(after taking into account any taxation suffered by the Indemnified Party
thereon) shall be required to make up the relevant deficit. If and to the extent
that any sums payable to the Indemnified Party by the Indemnifying Party
pursuant to a third party Claim prove to be insufficient, by reason of any Taxes
suffered thereon, for the Indemnified Party to discharge the corresponding
liability to the Person or Authority having made such third party Claim (~'Third
Party"), or to reimburse the Indemnified Party for the cost incurred by it in
discharging the corresponding liability to a Third Party, the Indemnifying Party
shall pay to the Indemnified Party such additional sum as (after taking into
account any Tax suffered by the Indemnified Party thereon) shall be required to
make up the relevant deficit.
(c) Subject to Section 8.7(d), if and to the extent that any sums
constituting (directly or indirectly) an indemnity to the Indemnified Party but
paid by the Indemnifying Party to any Third Party shall be treated as taxable in
the hands of the Indemnified Party, the Indemnifying Party shall pay to the
Indemnified Party such sum as (after taking into account any Tax suffered by the
Indemnified Party on the compensating sum) shall reimburse the Indemnified Party
for any Taxes suffered by it in respect of the first-mentioned sum.
(d) Any payment by or on behalf of Buyer or by or on behalf of
Seller under this Article 8 will be treated as an adjustment to the Purchase
Price; provided, however, that to the extent it cannot be so characterized for
Tax purposes or if such indemnification occurs after the expiration of the
statute of limitations for the 1997 taxable year, the recipient of any such
payment shall be entitled to an additional payment to cover Taxes on the payment
less any allowable Tax deductions attributable to payment of the indemnified
Claim.
8.8 Right of Set-Off. Buyer (or Seller) shall be entitled to set off
against and deduct (or add) from the Fixed Purchase Price or Contingent Purchase
Price payable to Seller any
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amounts owing by Seller to Buyer (or Buyer to Seller) pursuant to this Article
8.
8.9 Cooperation of the Parties. Each party shall give the other
parties its full cooperation in defending all Claims subject to indemnification
hereunder, including furnishing witnesses and documentary evidence to the extent
available; provided, however, that a party may charge another party a reasonable
amount for the time and travel expenses of witnesses and for photocopying
documents that it furnishes. If a party shall fail to give reasonable assistance
by way of testimony or otherwise in the defence of such Claim or litigation,
then the other parties may settle such claim or litigation in any manner it
deems appropriate and the party which failed to give such assistance shall be
bound by the terms of such settlement.
ARTICLE 9
TERMINATION
9.1 Termination Prior to the Initial Closing. This Agreement may be
terminated at any time prior to the Initial Closing:
(a) by mutual written consent of Buyer and Seller;
(b) by either Seller or Buyer in writing, without liability to
the terminating party on account of such termination (provided the terminating
party is not otherwise in default or in breach of this Agreement), if the
Initial Closing shall not have occurred on or before the Termination Date;
(c) by either Buyer or Seller in writing:
(i) if there shall be any law or regulation coming into
force after the date of this Agreement that makes consummation of the
transactions contemplated hereby illegal or otherwise prohibited or if any
judgment, injunction, decree or order enjoining any of the parties from
consummating the transactions contemplated hereby is entered and such judgment,
injunction, decree or order shall have become final and nonappealable;
(ii) if any bona fide action or proceeding shall be pending
against any party on the Initial Closing Date that could result in an
unfavorable judgment, injunction, decree or order that would prevent or make
unlawful the carrying out of this Agreement; or
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(iii) if all of the conditions to such party's obligations
set forth herein are not satisfied prior to the Initial Closing; or
(d) by either Seller or Buyer in writing, without liability to the
terminating party on account of such termination (provided the terminating party
is not otherwise in default or in breach of this Agreement), if Buyer on the one
hand or Seller on the other hand shall (i) fail to perform in any material
respect its undertakings and agreements contained herein required to be
performed prior to the Initial Closing Date, (ii) breach in any material respect
any of its representations, warranties or undertakings contained herein if such
breach would cause a condition to the obligation of the terminating party to
close not to be satisfied and if such failure to perform or breach has not been
waived by the terminating party, or (iii) make any representation or warranty
which is not materially accurate when made and the effect thereof is to cause,
with or without the passage of time or giving of notice, a material Adverse
Change to Sellers' or the Companies' or Buyers' rights hereunder; provided,
however, that a party's right to indemnification hereunder shall not be affected
by such party's waiver of its right of termination pursuant to this Section 9.1
if such right of termination arises from a willful breach of this Agreement.
9.2 Procedure and Effect of Termination Prior to Initial Closing.
In the event of termination of this Agreement prior to the Initial
Closing and abandonment of the transactions contemplated by this Agreement,
written notice thereof shall forthwith be given to Buyer or Seller, as the case
may be, and this Agreement shall terminate (except for such clauses as are
expressed to continue to apply after termination) and the transactions
contemplated hereby shall be abandoned, without further action by either of the
parties hereto. If this Agreement is terminated as provided herein:
(a) upon request therefor, each of the parties hereto will
redeliver all documents, work papers and other material of the other parties
relating to such party or any of their Affiliates or the transactions
contemplated hereby, whether obtained before or after the execution hereof, to
the party furnishing the same;
(b) all filings, applications and other submissions made pursuant
to the terms of this Agreement shall, to the extent practicable, be withdrawn
from the Authority or other Person to which they were made; and
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(c) none of the parties hereto shall have any liability or further
obligation to the other party to this Agreement pursuant to this Agreement
except as stated in this Section 9.2; provided, that no termination of this
Agreement in accordance with Section 9.1 shall relieve any party hereto of
liability resulting from any violation or breach of this Agreement by such
party.
9.3 Term and Termination after the Initial Closing.
(a) After the Initial Closing has occurred, this Agreement shall
continue in full force and effect until terminated in accordance with the
provisions of this Section 9.3.
(b) This Agreement shall automatically terminate without notice
(except for such clauses as are expressed to continue to apply after
termination) in the event of:
(i) Buyer or Seller acquiring all the ordinary shares in the
Companies; or
(ii) the dissolution of the Companies following their
winding-up.
(c) This Agreement may be terminated by Buyer or Seller (the
"Non-Defaulting Party") at any time by notice in writing to the other party (the
"Defaulting Party") if, in relation to the Defaulting Party:
(i) its winding-up is commenced (other than a winding-up in
connection with a solvent amalgamation, reconstruction or reorganization
approved by the Non-Defaulting Party); any encumbrances takes possession of, or
a receiver or manager is appointed over, any of the Defaulting Party's assets or
business and such assets or business are not released within ten (10) Business
Days; the Defaulting Party proposes a composition with any class or all of its
creditors, or takes or suffers any similar action in consequence of debt; or any
distress, execution, sequestration or other process is levied, enforced upon or
taken out against any of its property and not discharged within ten (10)
Business Days;
(ii) it becomes unable to pay its debts in the ordinary course
of business;
(iii) it ceases or threatens to cease wholly or substantially
to carry on its business (otherwise than in connection with a solvent
amalgamation, reconstruction or reorganization approved by the Non-Defaulting
Party);
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(iv) it commits a material breach of any of the terms of this
Agreement which cannot effectively be remedied; or
(v) it commits a remediable breach of any of the terms of this
Agreement which it fails effectively to remedy to the reasonable satisfaction of
the Non-Defaulting Party within sixty (60) Days of receipt of notice from the
Non-Defaulting Party specifying the breach and requiring it to be remedied, and
Buyer and Seller agree that during that period of sixty (60) Days, the
principals of Buyer and Seller shall meet to attempt to resolve any differences
in an amicable fashion, and such sixty (60) Day period may be extended, but only
by mutual agreement.
9.4 Put Rights of Buyer.
(a) During a period of three years from the date of this
Agreement, Buyer may by notice in writing to Seller (the "Option Notice")
require Seller (or such other persons as may be nominated by Seller) to purchase
all (but not some only) of the Shares held by it and by any of its Affiliates,
together with all rights then attached thereto (both lots of shares, the "Option
Shares"), in either case at the price specified in the Option Notice (the
"Option Price") or such price as may be agreed or determined pursuant to Section
9.4(b) or (c).
(b) Seller may within fourteen (14) Days of receipt of the Option
Notice accept the Option Price, agree with Buyer on a price other than the
Option Price or require by notice in writing to Buyer that the Option Price be
certified by an independent valuer pursuant to Section 9.4(c). If Seller does
not serve such notice in writing within the said period, the price for the sale
and purchase of the Option Shares shall be the Option Price (unless otherwise
agreed in writing between Buyer and Seller).
(c) If so required by Seller pursuant to Section 9.4(b) the
Option Price (which shall not be discounted solely on account of a minority
holding) shall be certified by an independent valuer (appointed by agreement
between Buyer and Seller, or, in default of such agreement, nominated by the
President for the time being of the Singapore International Arbitration Centre
on the written application of either party) as being the fair market value of
the Option Shares as of the date of Buyer's Option Notice, which shall be valued
as between a willing seller and a willing buyer contracting on an arm's-length
basis, and having regard to the fair value of the assets of the Companies as a
going concern.
(d) Completion of any sale and purchase shall take place in
accordance with Section 9.5 at the principal office of the Companies on the
first Business Day occurring after the expiration of twenty-one (21) Days from
receipt by Seller of the Option
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Notice, or, if later, fifteen (15) Business Days after the price settled by any
independent valuer appointed pursuant to Section 9.4(c) has been communicated in
writing to Buyer and Seller.
(e) The fees and expenses of any independent valuation to settle
the Option Price shall be borne equally by Buyer and Seller. All other fees and
expenses, including stamp duty, but excluding Seller's legal and financial fees
and expenses, shall be borne by Buyer.
(f) Seller may assign his obligations under Section 9.4 to such
persons as he nominates by notice to Buyer, except that as between Buyer and
Seller, Buyer may continue to deal only with Seller for purposes of paragraphs
(b) and (c) of Section 9.4.
9.5 Option Closing.
(a) At completion of any sale and purchase referred to in Section
9.4:
(i) Buyer shall deliver or procure that there is delivered to
Seller (or his assignees) all documents and instruments necessary and customary
to transfer the legal and beneficial ownership of the Option Shares to Seller
(or his assignees), free and clear of all Encumbrances and such other documents
as Seller (or his assignees) may reasonably require to show good title to the
Option Shares;
(ii) Seller shall deliver or procure that there be delivered
to Buyer or to its order by certified cheque or banker's draft the Option Price
(less any applicable withholding tax) made payable to Buyer or to its order; and
(iii) Buyer shall deliver to Seller the written resignation of
the Director appointed by Buyer in relation to the Companies.
(b) The exercise of any option by Buyer pursuant to Section 9.4
shall be without prejudice to any other remedies available to Seller or Buyer
whether under this Agreement or otherwise.
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ARTICLE 10
DISPUTE RESOLUTION
10.1 Arbitration.
(l / Save as set out in this Agreement, any (a)/
dispute, controversy or claim arising but of or in relation to this Agreement,
including, without limitation, its existence, validity, performance or
termination, whether arising during or after its term, may be finally determined
by arbitration in accordance with the Rules of the Singapore International
Arbitration Centre as hereinafter modified or supplemented. The law of the
arbitration shall be the International Arbitration Act (Cap. 143A). The
arbitration procedure set forth in this Article 10 shall be the sole and
exclusive means of settling or resolving any dispute referred to in this Section
lO.l(a):
(b) With respect to any arbitration described in Section 10.1(a)
(i) the arbitration shall be held in Singapore;
(ii) the arbitration panel shall consist of three (3)
arbitrators selected as follows: each of Buyer and Seller on its own behalf
shall select one arbitrator; and the two arbitrators so appointed shall select a
third arbitrator. Should the dispute arise between the Companies and Buyer only,
Seller shall select one arbitrator on behalf of the Companies, and if between
the Companies and Seller only, Buyer shall select one arbitrator on behalf of
the Companies. In all other cases, an arbitrator shall not be selected on behalf
of the Companies. The third arbitrator shall be the presiding arbitrator. In the
event either Buyer or Seller shall have failed to select an arbitrator within
fifteen (15) Days after the other party has selected its arbitrator or the
arbitrators so selected shall fail to agree on the remaining arbitrator within
thirty (30) Days, such arbitrator shall be selected by the President for the
time being of the Singapore International Arbitration Centre. All arbitrators
shall be lawyers experienced in international transactions and shall be fluent
in English;
(iii) No arbitrator shall be related to, employed by,
affiliated with or have had a substantial or ongoing business relationship with,
nor have a pecuniary or non-pecuniary interest in, Buyer, Seller, the Companies
or any Affiliate of the foregoing persons;
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(iv) the arbitrators shall permit each party to the
arbitration to call and question any witness (including any expert witness), to
cross-examine any witness called by any other party to the arbitration and to
request any other party to the arbitration to produce any relevant documents or
evidence prior to or at any hearing;
(v) all documents relating to the arbitration proceeding,
and the proceedings themselves, shall be framed in the English language; and
(vi) the arbitrators shall make their award in writing within
sixty (60) Days of the commencement of the proceedings.
(c) Any arbitral award made in an arbitration pursuant to this
Article 10 shall be binding and shall constitute the exclusive remedy of the
parties for all claims, counterclaims, issues or accountings presented to the
arbitrator. Any such award shall be exclusive of any tax deduction or offset,
and where appropriate shall include interest from the date of breach or other
violation of the agreement until the arbitral award is fully paid, such interest
to be calculated at a rate prescribed by the arbitrator. Judgment upon the
arbitral award may be entered in any court that has jurisdiction in respect of
such award. The court may enforce the award rendered hereunder. The fees of the
arbitrators and the other reasonable and documented costs of the prevailing
party in such arbitration, including reasonable attorneys' fees, shall be borne
by the non-prevailing party. Any additional costs, fees or expenses incurred in
enforcing the arbitral award shall be charged against the party resisting its
enforcement.
(d) Nothing contained in this Article 10 shall prevent Buyer or
Seller from seeking temporary injunctive relief from any judicial or
administrative authority pending the resolution of a controversy or claim by
arbitration.
(e) Nothing contained in this Article 10 shall prevent Buyer or
Seller from bringing any action or proceeding seeking tO enforce any provision
of, or based on any right arising out of, this Agreement against any of the
parties in the courts of any state in the United States in which Buyer is
qualified to do ~ business (currently the States of Florida, Texas and New York,
U.S.A. and each of the parties consents to the jurisdiction of such courts
(and of the appropriate appellate courts) in any action or proceed and waives
any objection to venue laid therein. Process in any action
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or proceeding referred to in the preceding sentence may be served on any party
anywhere in the world.
ARTICLE 11
MISCELLANEOUS
11.1 Survival of Representations, Warranties and Undertakings.
All representations and warranties of the parties hereto and
related indemnification provisions contained in this Agreement shall survive
indefinitely after the Initial Closing Date, subject only to the applicable
statutes of limitation. The undertakings and agreements contained herein to be
performed or complied with after the Closing shall survive without limitation as
to time, unless otherwise provided herein. The applicable expiration date for
the survival of an applicable representation, warranty or undertaking shall be
referred to herein as the "Expiration Date."
11.2 Entire Agreement. This Agreement, including the Exhibits and
Schedules hereto and the other agreements, documents and instruments referred to
herein, constitute the sole understanding of the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings of
the parties hereto with respect to the transactions contemplated by this
Agreement.
11.3 Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns; provided, however, that
neither this Agreement nor any of the rights, obligations or interests hereunder
shall be assigned, delegated or otherwise transferred by any party without the
prior written consent of Buyer or Seller (as the case may be) hereto; and
provided, further, that no assignment of this Agreement or any of the rights,
obligations or interests hereunder shall relieve the assignor of its obligations
under this Agreement.
11.4 No Third Party Beneficiary Rights. This Agreement is not intended
to and shall not be construed to give any Person or Authority other than the
parties signatory hereto and their respective Affiliates, successors and
permitted assigns any benefit or rights (including, without limitation, any
third party beneficiary rights) with respect to or in connection with any
agreement or provision contained herein or contemplated hereby, nor is anything
in this Agreement intended to relieve or discharge the liability of any third
Persons or Authorities to any party to this
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Agreement, nor shall any provision give any third Persons or Authorities any
right of subrogation or action over or against any party to this Agreement.
11.5 No Agency. No party to this Agreement shall be deemed a partner
or agent of or joint venturer with any other party and no such party shall have
any right or authority, nor shall any party hereto attempt, to enter into any
contract, commitment or agreement to incur any debt or liability, of any nature,
in the name of any other party.
11.6 Counterparts. This Agreement may be executed in counterparts,
each of which shall for all purposes be deemed to be an original and all of
which shall, taken together, constitute the same instrument.
11.7 Interpretation. The table of contents and article and section
headings contained in this Agreement are solely for reference, shall not be
deemed to constitute part of this Agreement, and shall not affect the
interpretation hereof.
11.8 Amendment and Modification. This Agreement may be amended,
modified or supplemented only by written agreement of each of the parties hereto
with respect to any of the terms contained herein.
11.9 Waiver of Compliance: Consents. Except as otherwise provided in
this Agreement, any failure of any of the parties to comply with any obligation,
undertaking, agreement or condition herein may be waived by the party entitled
to the benefits thereof only by a written instrument signed by such party
granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, undertaking, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or on behalf of
any of the parties hereto, such consent shall be given in writing in a manner
consistent with the requirements for a waiver of compliance as set forth in this
Section 11.9.
11.10 Expenses: Transfer Taxes: Attorneys' Fees.
(a) Expenses. Except as otherwise provided in this Agreement,
and whether or not the transactions contemplated hereby are consummated, each of
the parties hereto shall pay all costs and expenses incurred by it, or on its
behalf, in connection with this Agreement and the transactions contemplated
hereby, including, without limiting the generality of the foregoing, fees and
expenses of its own financial consultants, accountants and legal advisors.
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(b) Transfer Taxes. All transfer, documentary, sales, use,
registration, recording, conveyancing, notarial and other such taxes, duties,
fees, costs and expenses (including any penalties and interest) incurred in
connection with this Agreement and the transactions contemplated hereby,
including any expenses, fees and commissions or otherwise, arising out of the
delivery of the Shares by or on behalf of Seller to Buyer in any sale of Shares
by Seller to Buyer contemplated herein shall be borne by Buyer. Buyer and Seller
shall cooperate in the filing of all necessary tax returns and other returns and
documentation with respect to all such taxes, duties, fees, costs and expenses,
and, if required by applicable law, Seller and Buyer will each join in the
execution of any such tax returns and other documentation.
(c) Attorneys' Fees. If any legal or arbitral action or other
proceeding is brought Agreement, including the agreement to pursuant to Article
10, or because of default or misrepresentation in connection with any of the
provisions of this Agreement, the successful or prevailing party or be entitled
in addition to any other relief to which it or they may be entitled to recover
reasonable attorneys' fees and other costs incurred in that action or proceeding
including fees and costs incurred on appeal and in collecting or enforcing any
award or judgment, and the court or arbitral panel shall so provide in its
judgment or award.
(d) Interest. Any sum due under this Agreement to any party hereto
not paid within the period, if any, provided for in this Agreement or, if not,
within a period of thirty (30) Days after becoming due shall bear interest at
the annual rate of 15% (fifteen percent) from the expiry of said period until
its full payment. Interest shall be calculated on the basis of a year of 365
Days and Days actually elapsed. This paragraph is not to be interpreted as
giving any party extra time for payment and does not constitute a waiver of any
other remedy available.
11.11 Notices. Any notice, request, instruction or other document
permitted or required to be given hereunder by any party hereto to any other
party shall be in writing and delivered personally or sent by facsimile
transmission (confirmed by express courier or express mail), by internationally
recognized express courier or by express mail service, expenses prepaid, as
follows:
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if to Buyer, to:
JLM Industries, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Fax: (▇-▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇, General Counsel
if to Seller, to:
Tan Siew Kiat
▇▇▇ ▇▇▇▇▇▇ ▇▇▇ #▇▇-▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇) ▇▇▇-▇▇▇▇
if to Asia, to:
SK Chemicals Asia Pte. Ltd.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇ Siew Kiat
if to Trading, to:
SK Chemical Trading Pte. Ltd.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (65) 323 - 5455
Attn: ▇▇. ▇▇▇ Siew Kiat
or to such other address or facsimile number for a party as shall be specified
by like notice. All notices shall be effective on actual receipt only.
11.12 Public Announcements. Except as may be required by law and
evidenced by written opinion of legal counsel, none of the parties hereto shall
make and Seller shall ensure that the Companies refrain from making any public
statement, including, without limitation, any press release, with respect to
this Agreement or the transactions contemplated hereby without prior
consultation and opportunity to comment being afforded to the other party. Each
party shall give the other party copies of such written opinion and advance
notice of any intended disclosure and, to the extent practicable, afford the
other party the opportunity
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to consult with the disclosing party and comment on the proposed disclosure.
11.13 Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of Singapore.
IN WITNESS WHEREOF, each of the parties hereto has duly executed or
caused this Agreement to be duly executed on its behalf as of the date first
above written.
JLM INDUSTRIES, INC.
("Buyer")
By:
--------------------------------------
Name:
-------------------------------
Title:
------------------------------
TAN ▇▇▇▇ ▇▇▇▇
("Seller")
/s/
-----------------------------------------
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CERTIFICATE
The undersigned, Tan Siew Kiat, hereby certifies that: (A) the
representations and warranties set forth in Article 3 of the Investment
Agreement dated as of April 25, 1997, are true and correct as of the Initial
Closing Date; and (B) I have performed and complied with each and every
undertaking, agreement and condition required to be performed or complied with
by me prior to or on the Initial Closing Date.
IN WITNESS WHEREOF, the undersigned has hereinbelow executed this
Certificate as of April 22, 1997.
/s/ Tan Siew Kiat
---------------------------------
Tan Siew Kiat
68
SK CHEMICALS ASIA PTE LTD
(Incorporated in the Republic of Singapore)
MINUTES OF AN EXTRAORDINARY GENERAL MEETING OF THE COMPANY HELD
at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
on 21 April 1997
at 9:00 a.m.
PRESENT: As per attendance sheet.
NOTICE: All members of the Company being present, it was agreed that
the notice of the meeting has been duly given and is taken as
read.
CHAIRMAN: ▇▇. ▇▇▇ Siew Kiat was duly appointed the chairman of the
meeting.
SPECIAL RESOLUTION
RESOLVED:
1. THAT Article 74 of the Articles of Association of the Company be amended by
inserting as the opening words of Article 74 the words "Subject to Article
82A,".
2. THAT Article 79 of the Articles of Association of the Company be amended by
inserting as the opening words of Article 79 the words "Subject to Article
82B".
3. THAT Article 82 of the Articles of Association of the Company be amended by
inserting as the opening words of Article 82 the words "Subject to Article
82A,".
4. THAT after Article 82 of the Articles of Association of the Company there
be inserted the following new Article 82A;
"82A. So long as JLM Industries, Inc. (JLM), of Tampa Florida, USA holds not
less than 25% of the total shares of the Company for the time being issued,
JLM shall be entitled to appoint and from time to time replace one Director
of the Company ("the JLM Director"). Each appointment and removal by JLM of
the JLM Director shall be effected by notice sent to the registered ounce of
the Company. JLM shall be responsible for and shall hold the Company
harmless from and against any claim for damages asserted against the Company
by the JLM Director or tosses incurred by the Company resulting from any and
all acts or omissions of the JLM Director other than acts or,( The JLM
Director may appoint an alternate to represent him at meetings of the
directors which he is unable to attend. The JLM Director shall not be
subject to the retirement by rotation provisions in Articles 74 to 76."
5. THAT after Article 100 of the Articles of Association of the Company there
be inserted the following new Articles 100A, 100B and 100C:
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"100A. Any director may participate in and at at any meeting of the
directors through the use of a conference telephone or other communications
equipment by means of which all persons participating in the meeting can
hear each other. Participation in such a meeting shall constitute attendance
and presence in person at the meeting of the person or persons so
participating for all purposes.
100B. Meetings of the directors shall take place at such time or times as
may be determined by the directors but in any event not less frequently
than twice per year and on not less than fourteen days' prior written notice
(unless otherwise agreed by all the directors), which notice shall be
accompanied by an agenda.
100C. Except with the sanction of a prior resolution of the directors
(including the JLM Director), the Company shall not:
(i) sell, transfer, lease, assign, dispose of or part with control of any
interest in all or any material part of its undertaking, business, property
or assets (whether by a single transaction or a series of transactions), or
contract to do so, or acquire or contract to acquire any business, property
or assets which would, following such acquisition, constitute a material
part of its business, property or assets (and for these purposes any part
accounting for ten percent or more of the proms, turnover or net asset value
of the Company shall be deemed material);
(ii) make or agree to make any change to its authorized or issued share
capital or grant any option over, or issue any investment carrying rights of
conversion into, any of Is share capital;
(iii) do or permit or suffer to be done any act or thing whereby it may be
wound up (whether voluntarily or compulsorily);
(iv) make any change to its Memorandum or Articles of Association; or
(v) dispose of any equity interest or investment in equity capital of
ICP-Chemquest Vietnam Ltd., a Company incorporated with limited liability in
Vietnam."
6. THAT after Article 107 of the Articles of Association of the Company
thereby inserted the following new Articles 107A, 107B and 107C:
107A. Any shareholders holding not less than 25 percent of the total shares
of the Company for the time being issued shall be entitled within normal
business hours and upon giving not less than seventy-two hours' notice to
the company of its desire so to do, to examine the books, accounts and
records to be kept by or on behalf of the Company and shall be entitled to
be supplied with all relevant information ( including monthly management
accounts and operating statistics and such trading, financial and other
information in such form as it may reasonably require) to keep it properly
informed about the business and affairs of the Company. Without limiting the
generality of the preceding sentence, any such shareholder shall be entitled
within the time and upon the notice referred to in the preceding sentence,
to procure that the examination and review referred to in the preceding
sentence be conducted by any of its respective financial or legal advisors.
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70
107B. The books, records and accounts of the Company shall be kept on an
accrual basis of accounting and shall be maintained for a minimum period of
six years, except for those records required to be kept for a longer period
under any Singapore legal requirement, or at the reasonable request of any
shareholder holding not less than 25 percent of the total shares of the
Company for the time being issued.
107C. The Company shall furnish to each shareholder holding not less than 25
percent of the total shares of the Company for the time being issued the
following financial information relating to the Company:
(i) a copy of audited annual financial statements within ninety days
following the end of the applicable fiscal years:
(ii) a copy of unaudited quarterly financial statements within thirty days
following the end of the applicable quarter; and
(iii) a copy of unaudited monthly statements within thirty days following
the end of the applicable month.
Confirmed as correct records by
Chairman of meeting,
/s/Tan Siew Kiat
--------------------------------------
TAN SIEW KIAT
Dated: 21 April 1997
Shareholders:-
Vote for the above motions. Against the above motions.
/s/Tan Siew Kiat
----------------------------------- -----------------------------------
TAN SIEW KIAT TAN SIEW KIAT
/s/
----------------------------------- -----------------------------------
INDUSTRIAL CHEMICALS INDUSTRIAL CHEMICALS
PROMOTION CO LTD PROMOTION CO LTD
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71
SK CHEMICALS ASIA PTE LTD
(Incorporated in the Republic of Singapore)
Attendances at an Extraordinary General Meeting of Company held
at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
on 21 April 1997
at 9 OO a.m.
PRESENT: TAN SIEW KIAT /s/
-----------------------------------
INDUSTRIAL CHEMICALS
PROMOTION CO LTD /s/
-----------------------------------
4