EXHIBIT 4.7
SHARE SALE AGREEMENT
PACIFIC DUNLOP HOLDINGS (HONG KONG) LIMITED
Pacific Dunlop Limited
P.D. International Pty Ltd
and
PB Holdings NV
[LOGO OF FREEHILLS]
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone ▇▇ ▇ ▇▇▇▇ ▇▇▇▇ Facsimile 61 3 9288 1567
▇▇▇.▇▇▇▇▇▇▇▇▇.▇▇▇.▇▇ DX240 Melbourne
SYDNEY MELBOURNE PERTH CANBERRA BRISBANE HANOI HO CHI MINH CITY SINGAPORE
Correspondent Offices JAKARTA KUALA LUMPUR
Liability limited by the Solicitors' Limitation of Liability Scheme, approved
under the Professional Standards ▇▇▇ ▇▇▇▇ (NSW)
Reference NJW:BAE
TABLE OF CONTENTS
Clause Page
1 Definitions and interpretation 1
1.1 Definitions 1
1.2 Interpretation 5
1.3 Business Day 6
1.4 Conflict 6
2 Sale and purchase 6
2.1 Sale of shares 6
2.2 Associated rights 6
3 Purchase Price 6
3.1 Amount 6
3.2 Payment at Completion 6
3.3 Final payment 7
4 Completion 7
4.1 Date for Completion 7
4.2 Delivery of documents 7
4.3 Board meetings 8
4.4 Buyer's obligations at completion 8
4.5 Interdependence 9
4.6 Conduct until Shares are registered 9
5 Before Completion 9
5.1 Carrying on Business 9
5.2 Treatment of Cash in Hand 10
5.3 Inter Company Debt 10
6 After Completion 10
6.1 Obligations relating to Taxes or Duties 10
6.2 Consultation 10
6.3 Indemnities 11
7 Warranties 11
8 Limitation of liability 11
9 Competition 12
9.1 Undertaking 12
9.2 Acquisition of interests in competing Businesses 12
9.3 Exclusion from restraint 12
9.4 Related Corporations 13
9.5 Severability 13
10 Release of guarantees 13
11 Guarantee and indemnity 13
11.1 Guarantee 13
11.2 Indemnity 13
11.3 Extent of guarantee and indemnity 14
11.4 Continuing guarantee and indemnity 14
page 1
11.5 Warranties of the Guarantor 14
11.6 Rights 14
12 Change of company names 15
Schedule 1 - Share Details 16
Schedule 2 - Warranties 18
Schedule 3 - Disclosure Schedule 36
Schedule 4 - Intellectual Property Rights 37
Schedule 5 - Superannuation funds 38
Schedule 6 - Contracts 39
Schedule 7 - Guarantees 41
Schedule 8 - Employees 42
Schedule 9 - Plant and Equipment 44
Schedule 10 - Assets Leases 45
Schedule 11 - Properties 46
Schedule 12 - Inter Company Debts 47
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THIS SHARE SALE AGREEMENT
is made on 2001 between the parties specified in parts
1, 2 and 3 of schedule 1.
RECITALS
A. The Seller is the owner of the Shares.
B. The Seller agrees to sell and the Buyer agrees to buy the
Shares on the terms and conditions set out in this
agreement.
C. The Guarantor agrees to guarantee the performance by the
Seller of its obligations pursuant to this agreement.
THE PARTIES AGREE
in consideration of, among other things, the mutual promises
contained in this agreement:
1 DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this agreement:
Accounting Standards has the meaning given to that term in the
Co-ordination Agreement;
Accounts has the meaning given to that term in the Co-ordination
Agreement;
Accounts Date means 30 June 2001;
Apportionment Statement has the meaning given to that term in the
Co-ordination Agreement;
Assets Leases means all leases, hire purchase agreements,
conditional purchase agreements and other hiring arrangements to
which a member of the Company Group is party including, but not
limited to, those listed in schedule 10, but excludes leases in
relation to the Properties;
Authorisation means any consent, registration, agreement,
certificate, licence, approval, permit, authority or exemption
from, by or with a Governmental Agency;
Business means the business carried on by the Company Group as
more particularly described in part 8 of schedule 1;
Business Day means a day on which banks are open for business in
Melbourne, Sydney and Auckland excluding a Saturday or a Sunday or
a public holiday;
Business Records means the Company Group's customer lists and
supplier lists, and records of Intellectual Property Rights,
Assets Leases, Contracts and Properties;
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Buyer means the company specified in part 2 of schedule 1;
Buyer Group Companies has the meaning given to that term in the
Co-ordination Agreement;
Buyer's Warranties means the warranties set out in part 1 of
schedule 2;
Cash in Hand means the amount of cash at bank on deposit or at
hand in any member of the Company Group;
Claim means any claim or any course of action (including, but not
limited to, in contract, in tort or under statute) in respect of
this agreement;
Company means the company specified in part 4 of schedule 1;
Company Group means the Company and the Company Subsidiaries;
Company Subsidiaries means the companies specified in part 5 of
schedule 1;
Company Subsidiary Shares means the shares in the capital of the
Company Subsidiaries as described in the columns headed "Shares
legally owned by a member of the Company Group" and "Shares held
on behalf of a member of the Company Group" in part 7 of schedule
1;
Completion means completion of the sale and purchase of the Shares
under clause 4;
Completion Date has the meaning given to that term in the
Co-ordination Agreement;
Completion Statement has the meaning given to that term in the
Co-ordination Agreement;
Conditions has the meaning given to that term in the Co-ordination
Agreement;
Contracts means the agreements to which a member of the Company
Group is a party and which are, wholly or partly, executory as at
the Completion Date, including, but not limited to, those listed
in part 1 of schedule 6, but excludes:
(a) the Assets Leases; and
(b) leases in relation to the Properties;
Co-ordination Agreement means the Co-ordination Agreement executed
on the same day as this agreement by, among others, the Seller and
the Buyer;
Data Room has the meaning given to that term in the Co-ordination
Agreement;
Dollars, A$ and $ means Australian dollars unless otherwise
specified in this agreement;
Duty means any stamp, transaction or registration duty or similar
charge imposed by any Governmental Agency and includes, but is not
limited to, any interest, fine, penalty, charge or other amount
imposed in respect of the above, but excludes any Tax;
Effective Time has the meaning given to that term in the
Co-ordination Agreement;
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Employees means an employee of the Company Group listed in
schedule 8 who is still employed in the Business as at the
Completion Date;
Environmental Law has the same meaning given to that term in the
Co-ordination Agreement;
Encumbrance means any mortgage, charge, lien, pledge, other
security interest or encumbrance (other than liens arising in the
ordinary course of business by operation of law and title
retention in respect of stock-in-trade);
Foreign Exchange Contracts means all foreign exchange hedging
contracts entered by the PDL Group which relate exclusively to the
Business which remain current as at Completion, details of which
will be provided to the Buyer at the date of this agreement and at
Completion;
Governmental Agency means any government or any governmental,
semi-governmental, administrative, fiscal or judicial body,
department, commission, authority, tribunal, agency or entity in
any part of the world;
Guarantees means the guarantees and other letters of comfort and
commitments of financial support given by the Seller and its
Related Corporations in relation to the Business which remain in
force at the date of this agreement, including but not limited to,
as listed in schedule 7;
Guarantor means the company specified in part 3 of schedule 1;
Intellectual Property Rights means the rights and interests of the
Company Group in the internet domain names, trademarks, patents,
copyrights and designs listed in schedule 4;
Inter Company Debt means any amount owing (including trade
accounts payable and receivable):
(a) by a member of the Company Group to a member of the PDL
Group (except in that member's capacity as an entity
carrying on any part of the Pacific Brands Business); or
(b) by a member of the PDL Group (except in that member's
capacity as an entity carrying on any part of the Pacific
Brands Business) to a member of the Company Group,
immediately before Completion;
Interest Rate means the average rate displayed on the Reuters Page
BBSW for 90 day bank bills at 10:10 am Melbourne time applicable
to each Business Day on which amounts are outstanding as confirmed
by Westpac Banking Corporation and on the basis that for a day
other than a Business Day the rate applicable to the last
preceding Business Day will apply;
Investment Company means Dunlop Slazenger (Philippines) Inc;
Investment Company Shares means the shares in the Investment
Company described in the columns headed "Legally owned by the
Company" and "Shares held on behalf of the Company" in part 9 of
schedule 1;
Linked Transaction Agreements has the meaning given to that term
in the Co-ordination Agreement;
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Loss includes any damage, loss, claim, action, liability, cost,
expense, outgoing or payment;
Nominee Holders means the persons who hold Shares, Company
Subsidiary Shares and Investment Company Shares as nominees, as
specifically described in the columns headed "Shares held on
behalf of the Seller" or "Shares held on behalf of a member of the
Company Group" (as the case may be) in parts 6, 7 and 9 of
schedule 1;
Pacific Brands Business has the meaning given to that term in the
Co-ordination Agreement;
Payment Date has the meaning given to that term in the
Co-ordination Agreement;
PDL Group has the meaning given to that term in the Co-ordination
Agreement;
Plant and Equipment means the plant, equipment, machinery, tools,
furniture, fittings, lease hold improvements and motor vehicles
owned by a member of the Company Group as at Completion and used
exclusively in the Business including, without limitation, those
listed in schedule 9;
Power means any right, power, authority, discretion or remedy
conferred on the clause by this agreement or any applicable law;
Properties means the properties leased under the Property Leases;
Property Leases means the leases of real property listed in
schedule 11;
Purchase Price means the price payable for the Shares under clause
3.1;
Records means all original and copy records, documents, books,
files, reports, accounts, plans, correspondence, letters and
papers of every description and other material regardless of their
form or medium and whether coming into existence before, on or
after the date of this agreement, belonging or relating to or used
by a member of the Company Group including (without limitation)
certificates of registration, minute books, statutory books and
registers, books of account, Tax returns, title deeds and other
documents of title, customer lists, price lists, computer programs
and software, and trading and financial records;
Related Corporation means a "related body corporate" as defined in
the Corporations Act;
Shares means all the issued shares in the capital of the Company,
as specified in the column headed "Issued Capital" in part 6 of
schedule 1;
Seller means the company specified in part 1 of schedule 1;
Seller Group Companies has the meaning given to that term in the
Co-ordination Agreement;
Seller's Warranties means the warranties set out in part 2 of
schedule 2;
Stock means the stock of the Business owned by a member of the
Company Group as at Completion and includes, but is not limited
to, raw materials, components, work in progress, finished goods,
packaging materials, promotional materials, spare parts and other
consumables;
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Superannuation Funds means the superannuation funds to which a
member of the Company Group makes contributions in respect of the
Employees as listed in schedule 5;
Tangible Assets means Plant and Equipment and Stock;
Tax means any tax, levy, charge, impost, duty, fee, deduction,
compulsory loan or withholding, which is assessed, levied, imposed
or collected by any Governmental Agency and includes, but is not
limited to any interest, fine, penalty, charge, fee or any other
amount imposed on, or in respect of, any of the above but excludes
Duty;
Tax Law means any law relating to Tax;
Uncertificated Shares means 1 share held by ▇▇▇▇ ▇▇▇▇▇▇ and 24,119
shares owned by the Company in the Investment Company, in respect
of which there are no current share certificates; and
Warranties means the Buyer's Warranties and the Seller's
Warranties.
1.2 INTERPRETATION
In this agreement, unless the context otherwise requires:
(a) headings and underlinings are for convenience only and do
not affect the interpretation of this agreement;
(b) words importing the singular include the plural and vice
versa;
(c) words importing a gender include any gender;
(d) other clauses of speech and grammatical forms of a word or
phrase defined in this agreement have a corresponding
meaning;
(e) an expression importing a natural person includes any
company, partnership, joint venture, association,
corporation or other body corporate and any Governmental
Agency;
(f) a reference to a part, clause, party, annexure or schedule
is a reference to a clause and part of, and a party,
annexure and schedule to this agreement and a reference to
this agreement includes any annexure and schedule;
(g) a reference to a statute, regulation, proclamation,
ordinance or by-law includes all statutes, regulations,
proclamations, ordinances or by-laws amending, consolidating
or replacing it, and a reference to a statute includes all
regulations, proclamations, ordinances and by-laws issued
under that statute;
(h) a reference to a document includes all amendments or
supplements to, or replacements or novations of, that
document;
(i) a reference to a party to a document includes that party's
successors and permitted assigns;
(j) no rule of construction applies to the disadvantage of a
party because that party was responsible for the preparation
of this agreement or any part of it;
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(k) if a covenant, undertaking, representation, warranty,
indemnity or agreement is made or given by two or more
parties, that covenant, undertaking, representation,
warranty, indemnity or agreement is made or given and binds
those parties jointly and severally; and
(l) if a party comprises two or more persons, a covenant,
undertaking, representation, warranty, indemnity or
agreement made or given by that party binds those persons
jointly and severally.
1.3 BUSINESS DAY
Where the day on or by which any thing is to be done is not a
Business Day, that thing must be done on or by the next Business
Day.
1.4 CONFLICT
If there is any conflict or inconsistency between anything
contained in this agreement and anything contained in the
Co-ordination Agreement, then the Co-ordination Agreement will
prevail.
2 SALE AND PURCHASE
2.1 SALE OF SHARES
Subject to the Conditions having been fulfilled or waived in
accordance with the Co-ordination Agreement, the Seller will sell
and the Buyer (or a nominee of the Buyer) will buy the Shares for
the Purchase Price free of Encumbrances and other third party
rights on Completion.
2.2 ASSOCIATED RIGHTS
The Shares will be transferred under this agreement with all
rights attached or accruing to them on and from the Effective
Time. The Buyer is not entitled to the rights attached to the
Shares as at the date of this agreement or to any rights which
accrue between the date of this agreement and the Effective Time,
including dividend rights.
3 PURCHASE PRICE
3.1 AMOUNT
The Purchase Price is the value ascribed to the Company Group in
the Apportionment Statement in accordance with the terms of the
Co-ordination Agreement.
3.2 PAYMENT AT COMPLETION
It is acknowledged that under the Co-ordination Agreement, an
amount must be paid at Completion by the Buyer to Pacific Dunlop
Limited (or as otherwise directed by it) on behalf of the Seller.
page 6
3.3 FINAL PAYMENT
On the Payment Date, the Buyer or the Seller, as appropriate, must
pay to the other any net amount plus interest on the amount which
may be payable in accordance with the provisions of the
Co-ordination Agreement.
4 COMPLETION
4.1 DATE FOR COMPLETION
Completion must take place on the Completion Date, subject to and
as provided for in the Co-ordination Agreement.
4.2 DELIVERY OF DOCUMENTS
At Completion, the Seller must deliver to the Buyer:
(a) original share certificates for the Shares, Company
Subsidiary Shares and Investment Company Shares (excluding
the Uncertificated Shares);
(b) duly completed instruments of transfer and sold notes in
respect of the Shares to the Buyer (and the Buyer's nominee)
executed by the Seller (and the Seller's nominee);
(c) in respect of the Company Subsidiary Shares which are
registered in the names of Nominee Holders, duly completed
instruments of transfer and sold notes;
(d) duly executed releases of all guarantees that have been
obtained in accordance with clause 10;
(e) the original certificates of incorporation or registration
of each member of the Company Group;
(f) all original documents of title in relation to the
Intellectual Property Rights;
(g) the written resignations of all directors and the secretary
of each member of the Company Group (including a written
acknowledgment that he or she has no Claim against the
Company for loss of office, breach of contract, redundancy,
compensation, payment or repayment of loans or otherwise,
except for payments properly payable as an employee for
accrued salary, holiday pay and long service leave up to the
Completion Date) except ▇▇▇▇▇▇ ▇▇▇▇▇▇ Nurse, ▇▇▇▇▇▇▇ ▇▇▇▇
Ing ▇▇▇▇, ▇▇▇▇▇ Man ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ and
Secreco Limited, to be effective on the appointment of the
directors to be appointed at the Board meetings to be
convened under clause 4.3;
(h) any power of attorney or other authority under which the
transfers of the Shares are executed;
(i) a duly executed deed of consent between Alwero Holdings (HK)
Ltd, Pacific Brands Marketing (Hong Kong) Limited and
Pacific Dunlop
page 7
Brands (Asia) Limited (in a form agreed between those
parties) in respect of the shares in Pacific Brands
Marketing (Hong Kong) Limited;
(j) all Records, which must be complete and up to date (by
constructive delivery at the premises of each member of the
Company Group); and
(k) duly executed instruments of change of name for the Company
and Pacific Dunlop Brands (Asia) Limited.
4.3 BOARD MEETINGS
At Completion, the Seller must ensure that a meeting of the
directors of the Company and (where applicable) the Company
Subsidiaries is convened and conducts the following business:
(a) subject to stamping and due completion of the documents in
clause 4.2(b), approval of the instruments of transfer and
bought and sold notes in respect of the Shares and approval
of the registration of the Buyer (and the Buyer's nominee)
as the holder of the Shares in the books of the Company;
(b) subject to stamping and due completion of the documents in
clause 4.2(c) in respect of the Company Subsidiaries,
approval by the Company Subsidiaries of the instruments of
transfer and bought and sold notes in respect of the Company
Subsidiary Shares as are registered in the names of Nominee
Holders and approval of the registration of the Buyer (or
its nominee) as the holder of those shares in the books of
the relevant Company Subsidiary;
(c) acceptance of the resignations provided by the Seller in
clause 4.2(g) of directors and secretary for each member of
the Company Group and appointment of the nominees of the
Buyer as directors and secretary for each member of the
Company Group;
(d) revocation of all existing mandates for the operation of
bank accounts of the Company and approval of new mandates in
favour of the officers of the Company nominated by the
Buyer; and
(e) approval by the Company and Pacific Dunlop Brands (Asia)
Limited to change the name of those companies to names
nominated by the Buyer, in accordance with clause 12.
4.4 BUYER'S OBLIGATIONS AT COMPLETION
At Completion the Buyer must:
(a) pay the Seller an estimate of the Purchase Price in
accordance with clause 3.2;
(b) execute or procure that the Buyer's nominee execute the
instruments of transfer of Shares and Company Subsidiary
Shares delivered by the Seller pursuant to clauses 4.2(b)
and 4.2(c);
(c) deliver to the Seller written consents to act from the
persons nominated by the Buyer as the directors and
secretary of each member of the Company Group.
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4.5 INTERDEPENDENCE
(a) Notwithstanding any provision of a Linked Transaction
Agreement but subject to clause 4 of the Co-ordination
Agreement, the obligations of the parties to the Linked
Transaction Agreements in respect of completion (as defined
in each Linked Transaction Agreement) are interdependent.
(b) Subject to clause 4 of the Co-ordination Agreement, all
actions at Completion under this agreement and completion
under each other Linked Transaction Agreement will be deemed
to take place simultaneously and no delivery or payment will
be deemed to have been made until all deliveries and
payments under the Linked Transaction Agreements due to be
made at or immediately after completion (as defined in each
Linked Transaction Agreement) have been made.
(c) A breach of this agreement by any party to this agreement is
deemed to constitute a breach by the defaulting party of
each Linked Transaction Agreement to which the defaulting
party is a party.
4.6 CONDUCT UNTIL SHARES ARE REGISTERED
After Completion and until the Shares are registered in the name
of the Buyer or its nominee, the Seller must take all action
lawfully required by the Buyer by written notice to the Seller to
vote on any resolutions of the members of the Company Group as the
Buyer directs.
5 BEFORE COMPLETION
5.1 CARRYING ON BUSINESS
The Seller will procure that each member of the Company Group uses
all reasonable endeavours to ensure that between the date of this
agreement and Completion, subject to clauses 5.2 and 5.3, the
Business is conducted in the ordinary course of business and that
a member of the Company Group does not:
(a) enter into any material contract or arrangement outside the
ordinary course of trading or otherwise than on arm's length
terms;
(b) acquire or dispose of any assets other than on arm's length
terms in the ordinary course of business;
(c) make any material change to its policy and practice as to
payment of creditors and collection of trade receivables;
(d) engage any new employee to fill a new role with an annual
remuneration package in excess of $120,000 or, except in the
ordinary course of the Business, terminates the employment
of any of its employees or changes in any material respect
the terms of employment (including remuneration);
(e) sell or agree to sell any fixed asset with a value of more
than $250,000 or buy or commit to buy any fixed asset with a
value of more than $250,000;
(f) create any Encumbrance over any of its assets;
page 9
(g) incur any indebtedness or liability in the nature of
borrowings other than in the ordinary course of business;
(h) distribute or return any capital to its members;
(i) pay any dividend to its members or pay any management fee or
similar amount;
(j) issue any shares, options or securities which are
convertible into shares in the member of the Company Group;
and
(k) alter its constitution,
unless the Buyer first consents in writing, which must not be
unreasonably withheld or delayed.
5.2 TREATMENT OF CASH IN HAND
(a) At any time before Completion, the Seller may arrange for
any Cash in Hand held by a member of the Company Group to be
removed in any manner selected by the Seller.
(b) Any Cash in Hand held by a member of the Company Group as at
the Effective Time, will be included in the Completion
Statement.
5.3 INTER COMPANY DEBT
The parties agree that as soon as practicable after Completion,
they will take such steps as are necessary to procure that any
Inter Company Debt owing to or by a member of the Company Group is
extinguished, including but not limited to those Inter Company
Debts listed in schedule 12. Each party will on request provide to
the other evidence of any such extinguishment.
6 AFTER COMPLETION
6.1 OBLIGATIONS RELATING TO TAXES OR DUTIES
After Completion, the Buyer must procure that each member of the
Company Group provides the Seller with access to such employees
and records of the member of the Company Group as the Seller
reasonably requires to meet its obligations under any law relating
to Tax or Duty provided such access is exercised and conducted in
a manner to avoid unreasonable disruption to the conduct of the
Business and the activities and operations of the Company and its
employees.
6.2 CONSULTATION
If any Governmental Agency conducts an audit in relation to the
affairs of a member of the Company Group relating to any period
prior to the Completion Date then the Buyer must procure that the
Seller is promptly notified of this and that the Seller is then
regularly consulted with in relation to the audit process until
resolved.
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6.3 INDEMNITIES
(a) The Seller indemnifies and holds the Buyer (and from
Completion, the Company) harmless from and against all Loss
associated with all current and future obligations of the
Company in respect to the Acquisition Contract between
Hangzhou Futong Group Company, ▇▇▇▇▇▇ ▇▇▇▇▇ Development Ltd,
Pacific Dunlop (Asia) Ltd (now known as ADP Limited) and the
Company.
(b) In relation to the Uncertificated Shares:
(1) the Seller and Buyer acknowledge that at Completion
the Company will have beneficial but not legal title
to the Uncertificated Shares;
(2) from Completion, the Seller is responsible for, and
must take all steps necessary at its cost to, perfect
the Company's legal title to the Uncertificated
Shares;
(3) the Buyer must provide the Seller with the assistance
it reasonably requires in order to meet its
obligation in clause 6.3(b)(2), including but not
limited to, providing information and records to the
Seller and procuring that the Company execute all
necessary documents;
(4) the Seller undertakes that neither the Company nor
▇▇▇▇ ▇▇▇▇▇▇ has effected or purported to effect any
transfer, charge, loan, deposit or other dealing of
or with the Uncertificated Shares; and
(5) the Seller indemnifies and keeps indemnified the
Buyer and the Company from and against all and any
actions, claims, demands, costs, charges and expenses
whatsoever which may be brought against or incurred
by the Buyer or the Company in consequence of any
subsequent acceptance and registration of a transfer
of any of the Uncertificated Shares without the
production of the original certificates for those
shares, other than any subsequent transfer effected
by the Buyer or the Company.
7 WARRANTIES
(a) The Buyer gives the Buyer's Warranties in favour of the
Seller on and subject to the terms set out in the
Co-ordination Agreement.
(b) The Seller gives the Seller's Warranties in favour of the
Buyer on and subject to the terms set out in the
Co-ordination Agreement.
8 LIMITATION OF LIABILITY
The Seller gives the Seller's Warranties in favour of the Buyer on
and subject to the limitations on liability set out in the
Co-ordination Agreement.
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9 COMPETITION
9.1 UNDERTAKING
In consideration for the respective promises of the Seller and the
Buyer to each other in this agreement, the Seller undertakes to
the Buyer that it will not for a period of 5 years, 4 years, 3
years, 2 years or 1 year after the Completion Date in the Peoples
Republic of China (including Hong Kong):
(a) engage in any business or activity which is the same as or
substantially similar to or competitive with, the Business
or any material part of it;
(b) solicit, canvass, induce or encourage any person who was at
any time during the 6 months period ending on the Completion
Date a director, employee or agent of the Company Group to
leave the employment or agency of the Company Group;
(c) solicit, canvass, approach or accept any approach from any
person who was at any time during the 6 months period ending
on the Completion Date, a client or customer of the Company
Group with a view to obtaining the custom of that person in
a business which is the same as or substantially similar to
or competitive with, the Business; or
(d) interfere with the relationship between the members of the
Company Group and its clients, customers, employees or
suppliers.
9.2 ACQUISITION OF INTERESTS IN COMPETING BUSINESSES
Clause 9.1 does not prevent the Seller or any of its Related
Corporations from acquiring an interest, directly or indirectly,
in a business in competition with the Business in the area
referred to in that clause if:
(a) the acquisition of the interest in the competing business
occurs as a result of or in conjunction with an acquisition
of an interest, directly or indirectly, in other assets;
(b) the value of the competing business is not more than 15% of
the value of the acquisition taken as a whole; and
(c) the Seller or the relevant Related Corporation uses its best
endeavours to dispose of the competing business or its
interest in the business within 12 months after its
acquisition.
9.3 EXCLUSION FROM RESTRAINT
This clause 9 does not restrict the Seller or any of its Related
Corporations from:
(a) continuing to carry on any business (other than the
Business) carried on at the date of this agreement; or
(b) holding less than 5% of the issued share capital of a
company listed on a recognised Stock Exchange.
page 12
9.4 RELATED CORPORATIONS
The Buyer agrees that the provisions of this clause 9 only apply
to the Related Corporations of the Seller for so long as those
entities remain Related Corporations of the Seller.
9.5 SEVERABILITY
(a) If any of the several separate and independent covenants and
restraints in clause 9.1 are or become invalid or
unenforceable for any reason, then that invalidity or
unenforceability will not affect the validity or
enforceability of any of the other separate and independent
covenants and restraints in clause 9.1.
(b) If any of the prohibitions or restrictions contained in this
clause 9 is judged to go beyond what is reasonable in the
circumstances and necessary to protect the goodwill of the
Company Group, but would be judged reasonable and necessary
if any activity were deleted or the period or area were
reduced, then the prohibitions or restrictions apply with
that activity deleted or that period or area reduced by the
minimum amount necessary.
10 RELEASE OF GUARANTEES
(a) The Buyer must use its best endeavours to secure the release
of the Seller or any Related Corporation of the Seller from
any Guarantee or Encumbrance provided in relation to the
Business, effective from Completion.
(b) If the Buyer is unable to secure the release under clause
10(a), then the Buyer must pay the Seller an amount equal to
any Loss which the Seller or any Related Corporation of the
Seller pays, suffers, incurs, or is liable for in relation
to any Guarantee or Encumbrance referred to in clause 10(a)
which relates to any act or omission of the Company after
Completion.
11 GUARANTEE AND INDEMNITY
11.1 GUARANTEE
The Guarantor unconditionally and irrevocably guarantees to the
Buyer the due and punctual performance of the Seller's obligations
under this agreement.
11.2 INDEMNITY
The Guarantor indemnifies and holds the Buyer harmless from and
against all Loss incurred or suffered by the Buyer and all
actions, proceedings, claims or demands made against the Buyer as
a result of default by the Seller in the performance of any such
obligation.
page 13
11.3 EXTENT OF GUARANTEE AND INDEMNITY
(a) This clause 11 applies:
(1) to the present and future obligations of the Seller
under this agreement; and
(2) to this agreement, as amended, supplemented, renewed
or replaced.
(b) The obligations of the Guarantor under this clause 11 extend
to any change in the obligations of the Seller as a result
of any amendment, supplement, renewal or replacement of this
agreement.
(c) This clause 11 is not affected, nor are the obligations of
the Guarantor under this agreement released or discharged or
otherwise affected, by anything which, but for this
provision, might have that effect.
(d) This clause 11 applies:
(1) regardless of whether the Guarantor is aware of, or
has consented to, or is given notice of, any
amendment, supplement, renewal or replacement of any
agreement to which the Buyer and the Seller are a
party or the occurrence of any other thing; and
(2) irrespective of any rule of law or equity to the
contrary.
11.4 CONTINUING GUARANTEE AND INDEMNITY
This clause 11 is a continuing obligation of the Guarantor despite
any settlement of account and remains in full force and effect
until the obligations of the Seller under this agreement have been
performed.
11.5 WARRANTIES OF THE GUARANTOR
The Guarantor represents and warrants to the Buyer that:
(a) it has the corporate power to enter into this guarantee and
indemnity and has taken all necessary action to authorise
the execution, delivery and performance of this agreement;
(b) the execution, delivery and performance of this guarantee
and indemnity will not violate any provision of:
(1) any law or regulation or any order or decree of any
Governmental Agency of the Commonwealth of Australia
or any state or territory;
(2) the constitution of the Guarantor; or
(3) any security agreement, deed, contract, undertaking
or other instrument to which the Guarantor is a party
or which is binding on it.
11.6 RIGHTS
The Guarantor waives any right it has of first requiring any of
the Buyer Group Companies to commence proceedings or enforce any
other right against the Seller or any of the Seller Group
Companies or any other person before claiming under this clause
11.
page 14
12 CHANGE OF COMPANY NAMES
On, or immediately prior to, Completion the Seller will procure
that the names of the Company and Pacific Dunlop Brands (Asia)
Limited are changed to names which do not include the words
"Pacific Dunlop", as follows:
(a) Pacific Dunlop Holdings (Hong Kong) Limited to Pacific
Brands Holdings (Hong Kong) Limited;
(b) Pacific Dunlop Brands (Asia) Limited to Pacific Brands
(Asia) Limited.
page 15
SCHEDULE 1 - SHARE DETAILS
PART 1 - SELLER
P.D. International Pty Ltd
PART 2 - BUYER
PB Holdings NV of 1170 Brussels, Terhulpsesteenweg 166.
PART 3 - GUARANTOR
Pacific Dunlop Limited ABN 89 004 085 330 of ▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇
PART 4 - COMPANY
Pacific Dunlop Holdings (Hong Kong) Limited
PART 5 - COMPANY SUBSIDIARIES
. Pacific Dunlop Brands (Asia) Limited
. Grosby (China) Limited
. Pacific Brands Marketing (Hong Kong) Limited
PART 6 - SHARES
SHARES HELD ON
PLACE OF ISSUED SHARES LEGALLY BEHALF OF THE
COMPANY INCORPORATION AUTHORISED CAPITAL CAPITAL OWNED BY SELLER SELLER
-------------------------------------------------------------------------------------------------------
Pacific Hong Kong HK$1,000,000,000 10,129,602 10,129,601 held by 1 (held by
Dunlop (100,000,000 @ HK$10 P.D. International S.T.P. (Hong
Holdings per share) Pty Ltd Kong) Limited)
(Hong Kong) (as nominee)
Limited
PART 7 - COMPANY SUBSIDIARY SHARES
SHARES LEGALLY SHARES HELD ON
OWNED BY A MEMBER BEHALF OF A MEMBER
COMPANY PLACE OF ISSUED OF THE COMPANY OF THE COMPANY
SUBSIDIARY INCORPORATION AUTHORISED CAPITAL CAPITAL GROUP GROUP
-------------------------------------------------------------------------------------------------------------
Pacific Hong Kong $HK500,000 (500,000 500,000 499,999 held by 1 held by S.T.P.
Dunlop Brands @ $HK1 per share) Pacific Dunlop (Hong Kong)
(Asia) Limited Holdings (Hong Limited (as
Kong) Limited nominee)
Grosby Hong Kong $HK22,760,000 2,276,000 2,275,999 held by 1 held by S.T.P.
(China) (2,276,000 @ $HK10 Pacific Dunlop (Hong Kong)
Limited per share) Holdings (Hong Limited (as
Kong) Limited nominee)
Pacific Hong Kong $HK1,000,000 2 1 held by Pacific Nil
Brands (100,000 @ $HK10 per Dunlop Brands
Marketing share) (Asia) Limited
page 16
SHARES LEGALLY SHARES HELD ON
OWNED BY A MEMBER BEHALF OF A MEMBER
COMPANY PLACE OF ISSUED OF THE COMPANY OF THE COMPANY
SUBSIDIARY INCORPORATION AUTHORISED CAPITAL CAPITAL GROUP GROUP
-------------------------------------------------------------------------------------------------------------
(Hong Kong) = 50% ownership
Limited
PART 8 - BUSINESS
The business carried on by the Company Group comprising the sourcing of
clothing and footwear, the manufacture of footwear and the marketing of
clothing goods, but does not include the business carried on by the
Investment Company.
PART 9 - INVESTMENT COMPANY SHARES
SHARES HELD ON BEHALF OF
NAME OF PLACE OF ISSUED LEGALLY OWNED BY A MEMBER OF THE COMPANY
COMPANY INCORPORATION AUTHORISED CAPITAL CAPITAL THE COMPANY GROUP
------------------------------------------------------------------------------------------------------------------
Dunlop Philippines PhP125,000,000 8,960,290 298,450 held by 1 held by ▇▇▇▇ ▇▇▇▇▇▇
Slazenger (1,250,000 @ Pacific Dunlop (as nominee)
(Philippines) PhP100 per share) Holdings (Hong
Inc Kong) Limited 1 held by ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ (as nominee)
24, 119 held by Pacific
Dunlop (Asia) Limited
(now ADP Limited)
page 17
SCHEDULE 2 - WARRANTIES
PART 1 - BUYER'S WARRANTIES
1 BUYER AUTHORISED
The Buyer has taken all necessary action to authorise the execution,
delivery and performance of this agreement in accordance with its terms.
2 POWER TO BUY
The Buyer has full power to enter into and perform its obligations under
this agreement and can do so without the consent of any other person.
3 NO LEGAL IMPEDIMENT
So far as the Buyer is aware, the execution, delivery and performance by
the Buyer of this agreement comply with:
(a) each law, regulation, Authorisation, ruling, judgment, order or
decree of any Governmental Agency;
(b) the constitution or other constituent documents of the Buyer; and
(c) any Encumbrance or document which is binding on the Buyer.
4 NO LIQUIDATION OR WINDING-UP
The Buyer has not gone into liquidation nor passed a winding-up
resolution nor received or published a notice under sections 601AA or
601AB of the Corporations Act or any similar insolvency law in Belgium.
5 NO PETITION
No petition or other process for winding-up has been presented or
threatened against the Buyer and there are no circumstances justifying
such a petition or other process.
6 NO WRIT OF EXECUTION
No writ of execution has issued against the Buyer.
page 18
7 NO RECEIVER OR ADMINISTRATOR
No receiver or receiver and manager or administrator of any part of the
undertaking or assets of the Buyer has been appointed.
8 KNOWLEDGE OF BUYER
Neither the Buyer nor any holding company (direct or indirect) of the
Buyer is aware of any matter or thing that at Completion constitutes a
breach of the Seller's Warranties.
page 19
PART 2 - SELLER'S WARRANTIES
1 AUTHORITIES
1.1 SELLER AUTHORISED
The Seller has taken all necessary action to authorise the
execution, delivery and performance of this agreement in
accordance with its terms and is validly existing and in good
standing.
1.2 POWER TO SELL
The Seller has full power to enter into and perform its
obligations under this agreement and is able to sell and transfer
the Shares being sold by it under this agreement without the
consent of any other person and free of any pre-emptive rights, or
rights of first refusal or any other such rights which may
restrict the transfer of the Shares to the Buyer (except as
disclosed in writing by the Seller).
1.3 NO LEGAL IMPEDIMENT
The execution, delivery and performance by the Seller of this
agreement complies with:
(a) each law, regulation, Authorisation, ruling, judgment, order
or decree of any Governmental Agency;
(b) the constitution or other constituent documents of the
Seller; and
(c) any Encumbrance or document which is binding on the Seller.
1.4 CORPORATE POWER
(a) Each member of the Company Group:
(1) is validly existing and in good standing;
(2) is accurately described in part 4 of schedule 1; and
(3) has full corporate power to own its properties,
assets and businesses and to carry on the Business.
(b) The Company Group has good and marketable title to all the
assets included in the Accounts.
1.5 CONSTITUTION
The copy of the constitution of the Company given to the Buyer is
a complete and accurate copy in all material respects.
1.6 CORPORATE NAME
The Company Group does not trade under a name other than its
corporate name (excluding trademarks or business names registered
in a name other than its corporate name).
page 20
2 COMPLIANCE WITH LAW
2.1 COMPLIANCE WITH LAW
The Company Group has complied in all material respects with all
applicable laws (whether applicable to the conduct of the
Business, the assets of the Business or the Properties) and no
material contravention or allegation of any material contravention
of any applicable law is known to the Seller.
2.2 AUTHORISATIONS
The Company Group holds all necessary material Authorisations
required to conduct the Business, use the assets of the Business
and occupy the Properties and has paid all fees due in relation to
them and is not in breach of any conditions under them where such
breach would be likely to have a material and adverse effect on
the Business as currently carried on.
3 SHARES AND CAPITAL
3.1 TITLE
(a) The Seller is the legal and beneficial owner of the Shares
being sold by it under this agreement which are free of all
Encumbrances and other third party interests or rights.
(b) The Company is the legal and beneficial owner of the Company
Subsidiary Shares free of all Encumbrances and other third
party interests or rights.
(c) The Company is the beneficial owner of the Investment
Company Shares.
3.2 ISSUED CAPITAL
(a) The Shares are all the issued shares in the capital of the
Company and were validly issued by the Company.
(b) The shares described in the column headed "Issued Capital"
in part 7 of schedule 1 are all the issued shares in the
capital of the Company Subsidiaries and those shares were
all validly issued by the applicable Company Subsidiary.
3.3 FULLY PAID
The Shares, Company Subsidiary Shares and Investment Company
Shares are fully paid and no money is owing in respect of them.
3.4 ISSUE OF OTHER SECURITIES
No member of the Company Group is under an obligation to issue or
allot, and has not granted any person the right to call for the
issue or allotment of or exercise any option over, any shares or
other securities of the Company Group which is still current and
subsisting.
page 21
4 POSITION SINCE THE ACCOUNTS DATE
4.1 POST ACCOUNTS DATE
Since the Accounts Date no member of the Company Group has:
(a) entered into any material contract or arrangement outside
the ordinary course of trading or otherwise than on arm's
length terms;
(b) acquired or disposed of any assets other than on arm's
length terms in the ordinary course of business;
(c) created an Encumbrance over any of its assets;
(d) incurred any indebtedness or liability in the nature of
borrowings other than in the ordinary course of business;
(e) in the conduct of the Business made any material change to
its policy or practice as to the payment of creditors or
collection of trade receivables;
(f) engaged any new employee to fill a new role with an annual
remuneration package in excess of $120,000 or, except in the
ordinary course of the Business, terminated the employment
of any of its employees or changed in any material respect
the terms of employment (including remuneration);
(g) sold or agreed to sell any fixed asset with a value of more
than $250,000 or bought or committed to buy any fixed asset
with a value of more than $250,000;
(h) distributed or returned any capital to its members;
(i) paid any dividend to its members or paid any management fee
or similar amount;
(j) issued any shares, options or securities which are
convertible into shares in a member of the Company Group;
(k) altered its constitution;
(l) incurred or undertaken any actual or contingent liabilities
or obligations (including Tax) except in the ordinary course
of business; or
(m) changed its accounting policies, practices or principles,
except in respect of the period between the date of this
agreement and Completion, if the Buyer has first consented in
writing.
4.2 SUPPLIERS/CUSTOMERS
Since the Accounts Date:
(a) none of the following suppliers of the Business: ▇▇▇▇▇▇ &
Nahgel, ▇▇▇▇▇▇ Hobba & Manton, ▇▇▇▇▇▇ ▇▇, Zenith Media, Dow
Chemical, ▇▇▇▇ ▇▇, Ulee, Hewlett Packard, PT Goldindo
Menawian and BASF has:
(1) reduced the level of its supplies to a member of the
Company Group other than in the ordinary course of
business;
page 22
(2) indicated an intention to cease or reduce the volume
of its trading with a member of the Company Group
after Completion; or
(3) materially altered the terms on which it trades with
a member of the Company Group; or
(b) none of the following customers of the Business: Kmart,
Big W, Myer/▇▇▇▇▇ Bros, Target, Best & Less, Lowes
Manhattan, Woolworths, Payless Shoes, ▇▇▇▇▇▇ ▇▇▇▇▇▇ and
▇▇▇▇▇ ▇▇▇▇▇ has:
(1) reduced the level of its custom from a member of the
Company Group other than in the ordinary course of
business;
(2) indicated an intention to cease or reduce the volume
of its trading with a member of the Company Group
after Completion; or
(3) materially altered the terms on which it trades with
a member of the Company Group.
5 TANGIBLE ASSETS
5.1 TITLE TO ASSETS
All material Tangible Assets are:
(a) (other than items under repair and stock-in-transit) in the
possession or under the control of the relevant member of
the Company Group;
(b) the absolute property of the relevant member of the Company
Group free of all Encumbrances, other than the Tangible
Assets subject to the Assets Leases.
5.2 ASSETS NOT OWNED
All material Tangible Assets which are used by the members of the
Company Group but are not owned by those companies are used
pursuant to the Assets Leases or other arrangements entered into
on arm's length terms in the ordinary course of the Business.
5.3 PLANT AND EQUIPMENT
All Plant and Equipment listed in schedule 9 and currently in use
in the Business is:
(a) in good working order;
(b) capable of doing the job for which it is now being used; and
(c) in reasonable condition having regard to its age and fair
wear and tear.
page 23
6 ENCUMBRANCES
6.1 OWNERSHIP OF SHARES
As at Completion the Seller will be the legal and beneficial owner
of the Shares being sold by it under this agreement free of
Encumbrances.
6.2 DISCHARGES BY COMPLETION
The Seller has not granted or created, or agreed to grant or
create, any Encumbrance in respect of the Shares being sold by it
under this agreement or the assets of the Company Group other than
any which will be discharged on or before Completion.
7 INTELLECTUAL PROPERTY RIGHTS
7.1 SCOPE
So far as the Seller is aware, each member of the Company Group
owns or has an enforceable right to use all intellectual property
rights needed to carry on the Business in the places and in the
manner currently carried on.
7.2 OWNERSHIP AND USE
(a) Each member of the Company Group is the legal and beneficial
owner of the Intellectual Property Rights listed as
applicable to that member of the Company Group in parts 1
and 3 of schedule 4.
(b) Each member of the Company Group has, by way of a valid,
binding and enforceable licence from a third party, a lawful
right to use in the places and manner in which they are
currently used by that Company Group member in the Business
all the Intellectual Property Rights listed as applicable to
that member of the Company Group in part 2 of schedule 4.
7.3 NO THIRD PARTY RIGHTS
So far as the Seller is aware, no person, other than the Company
or a Company Subsidiary, or a licensee of the Company or a Company
Subsidiary disclosed in part 3 of schedule 4 has any right to any
Intellectual Property Right listed in part 1 of schedule 4.
7.4 NO INFRINGEMENT
So far as the Seller is aware, the use by the members of the
Company Group of the Intellectual Property Rights listed in
schedule 4 does not breach or infringe any Intellectual Property
Right of any other person nor, so far as the Seller is aware, are
there any allegations that a member of the Company Group has
infringed or is infringing the intellectual property rights of a
third party.
page 24
7.5 DISPUTES
No member of the Company Group is currently involved in any
material dispute with any third party in relation to the
Intellectual Property Rights listed in schedule 4.
7.6 ROYALTIES/FEES
Other than in respect of the Intellectual Property Rights set out
in part 2 of schedule 4, there are no material royalties, licence
fees or other similar fees payable by members of the Company Group
in connection with the use of any Intellectual Property Rights.
8 ASSETS LEASES
8.1 NATURE
The Assets Leases were entered into within the ordinary course of
business.
8.2 NO DEFAULT
No member of the Company Group and, so far as the Seller is aware,
no other party to any Assets Lease is, in default under an Assets
Lease where such breach or default would be materially and
adversely prejudicial to a member of the Company Group in carrying
on the Business and no member of the Company Group has received
notice of any default of any Asset Lease.
8.3 VALIDITY
So far as the Seller is aware, each Asset Lease:
(a) is valid and subsisting;
(b) has not been amended or modified; and
(c) is not terminable by virtue of the sale of the Shares.
8.4 ASSETS LEASES USED IN THE BUSINESS
The Asset Leases constitute all the lease and hire purchase
agreements used in the Business by the members of the Company
Group.
9 CONTRACTS
9.1 NATURE OF CONTRACTS
So far as the Seller is aware, part 1 of schedule 6 and parts 2
and 3 of schedule 4 contains details of all Contracts which:
(a) are not within the ordinary course of ordinary business of
the Business;
(b) are not on arm's length terms;
page 25
(c) are not capable of complete performance or termination
without payment of damages, within 12 months from the date
of this agreement;
(d) restrict a Company Group member's freedom to carry on the
Business in the places and the manner in which it is
currently carried on;
(e) are contracts (not being contracts for the purchase or sale
of Stock) which are expected to result in expenditure by a
member of the Company Group of more than $1,000,000;
(f) are distribution or agency agreements; and
(g) entitle the other party to terminate the contract or impose
terms less favourable to a member of the Company Group due
to the sale of the Shares.
9.2 NO DEFAULT
No member of the Company Group and, so far as the Seller is aware,
no other party to any Contract is in default under such Contract
where such breach or default would be materially and adversely
prejudicial to a member of the Company Group in carrying on the
Business as currently carried on and there are no grounds for
rescission, avoidance or repudiation of any such Contract where
such rescission, avoidance or repudiation would be materially and
adversely prejudicial to the Seller in carrying on the Business as
currently carried on.
9.3 FOREIGN CURRENCY
Part 2 of schedule 6 contains a listing, which is accurate in all
material respects, of outstanding commitments of the members of
the Company Group relevant to the Business as at the date stated
in that schedule in relation to foreign currency hedging
contracts.
9.4 COPIES OF CONTRACTS
So far as the Seller is aware, the Data Room contained copies or
written summaries of all Contracts which are material to the
operation of the Business.
9.5 TAXES
All Taxes (including stamp duty or any similar tax) payable on all
transactions to which a Company Group member is a party, or that a
Company Group member has an interest in enforcing have been paid
or are provided for in the Accounts.
10 PROPERTIES
10.1 COMPANY GROUP'S INTEREST
No member of the Company Group has an interest in real property
which it uses in the Business except for its interest in the
Properties.
page 26
10.2 OCCUPATION AND USE
The Company and Grosby (China) Limited have exclusive occupation
and quiet enjoyment of the Properties and the use by the Company
and Grosby (China) Limited of the Properties, so far as the Seller
is aware, complies in all material respects with all acts,
regulations, planning schemes, developments, approvals, permits
and requirements (including zoning requirements) of any
governmental agency (not including in relation to Environmental
Law, which this warranty does not apply to). None of the
Properties, so far as the Seller is aware, is subject to any
sub-lease, tenancy or right of occupation by any other party.
10.3 NO BREACH
Neither the Company nor Grosby (China) Limited have received a
notice of default in respect of any Leased Property which remains
outstanding and asserts non-compliance with the lease of that
property.
10.4 NO NOTICES
Neither the Company nor Grosby (China) Limited have received any
notice from any third party in respect of the Properties:
(a) in respect of the compulsory acquisition or resumption of
any part of any of the Properties; or
(b) asserting that the current use of the Properties breaches
the requirements of any relevant planning scheme; or
(c) which would be likely to have a materially adverse effect on
the use of the Properties in the Business as currently used.
10.5 [NOT USED]
10.6 PROPERTY DETAILS
The particulars of the Properties set out in schedule 11 are true
and correct in all material aspects.
10.7 PROPERTY DISCLOSURE
Details of all material documentation pursuant to which the
Properties are owned, used or occupied by the members of the
Company Group have been provided to the Buyer and there are no
other documents, correspondence or other material which have not
been provided to the Buyer which would have a material adverse
affect on the interests of the members of the Company Group in the
Properties.
10.8 DISPUTES
There are no material disputes claims or actions relating to any
of the Properties or their use including, but not limited to,
disputes with any adjoining or neighbouring owner with respect to
boundary walls or fences or with respect to any easement, right or
means of access to the Properties.
page 27
10.9 [NOT USED]
10.10 PROPOSED DISPOSAL
No member of the Company Group is party to any outstanding
agreement to acquire or dispose of land or Properties or any
interest in land or Properties.
10.11 PROPERTY LEASE DISCLOSURE
In relation to the Property Leases, particulars of which are set
out in schedule 11:
(a) written copies of which have been provided to the Buyer, and
are so far as the Seller is aware, complete in all material
aspects recordings of their terms and there are no other
agreements, documents or understandings in relation to the
Property Leases; and
(b) so far as the Seller is aware, are current and enforceable.
10.12 TERMINATION NOTICE
No lessor under a Property Lease has served any notice to
terminate the Property Lease.
10.13 ASSIGNMENT
Neither the Company, the Company Subsidiaries nor the Seller:
(a) has agreed to any assignment, subletting, parting with
possession or surrender of a Property Lease or any part of
the property leased; or
(b) has given any materially false or misleading information to
an authority having jurisdiction over property the subject
of a Property Lease.
11 OFFERS OUTSTANDING
Any offer, tender or quotation made by a member of the Company
Group in respect of the Business which is outstanding and capable
of acceptance by a third party, was made in the ordinary course of
the Business.
12 SHAREHOLDINGS
No member of the Company Group is the holder or beneficial owner
of any shares or other securities in any company (except for
shares in the Company Subsidiaries and Investment Company as
described in parts 7 and 9 of schedule 1).
13 MEMBERSHIPS
No member of the Company Group is a member of any joint venture,
partnership or unincorporated association (other than a recognised
trade association).
page 28
14 EMPLOYEES
14.1 LIST OF EMPLOYEES COMPLETE
Schedule 8 contains a complete list of the employees employed by
each of the Company Group members in the Business as at the date
indicated in the schedule and the Buyer has been given all
material details of the employment benefits of these employees.
14.2 INCENTIVE SCHEMES
No member of the Company Group has agreed to any share incentive
scheme, share option scheme, bonus scheme, profit-sharing scheme
or other employee incentive scheme in respect of the Business or
with any Employee which has not been fairly disclosed to the
Buyer.
14.3 SERVICE AGREEMENTS
No member of the Company Group is a party to any written
employment or service agreement with any Employee requiring the
giving of more than three months notice to the employee which has
not been fairly disclosed to the Buyer.
14.4 MANAGEMENT AGREEMENTS
No member of the Company Group has any material agreements with
any person for the provision of consulting or management services
in respect of the Business which has not been fairly disclosed to
the Buyer.
14.5 DISPUTES
No member of the Company Group is involved in any material dispute
with any employees (past or present) and is not aware of any
circumstances likely to give rise to any dispute.
14.6 COMPLIANCE
No member of the Company Group is in breach in any material
respect of any employment contract with any Employee as at the
date of this agreement.
14.7 COMPLIANCE
Each member of the Company Group has complied with and continues
to comply with all obligations arising under law, equity, statute
(including occupational health and safety, annual leave, long
service leave, equal opportunity, anti-discrimination, Taxation,
superannuation, workers compensation and industrial laws), award,
enterprise agreement or other instrument made or approved under
any law with respect to its past and present employees and
contractors.
page 29
14.8 DISCLOSURE
Except as set out in the Data Room there are no awards, enterprise
agreements or other instruments made or approved under law which
apply to employees of the Company Group.
15 SUPERANNUATION
15.1 LIST OF SUPERANNUATION FUNDS
The Superannuation Funds are the only superannuation schemes or
pension arrangements to which members of the Company Group make
contributions in respect of the Employees.
15.2 FUNDING
Each member of the Company Group has paid all contributions due by
it to the Superannuation Funds in respect of the Employees.
16 LITIGATION
16.1 NOT A PARTY TO ANY LITIGATION
No member of the Company Group is:
(a) a party to any material prosecution, litigation or
arbitration proceedings; or
(b) so far as the Seller is aware, subject to any material
administrative or governmental investigation,
and the Seller is not aware that any such proceeding or
investigation is threatened or pending.
16.2 NO CIRCUMSTANCES
There are no circumstances of which the Seller is aware which may
give rise to any proceeding or investigation referred to in
warranty 16.1.
17 [NOT USED]
page 30
18 SOLVENCY
18.1 NO LIQUIDATION OR WINDING-UP
No member of the Company Group has gone into liquidation under the
Companies Ordinance of Hong Kong (Cap.32) nor been removed from
the register of Hong Kong Companies Registry.
18.2 NO PETITION
No petition or other process for winding-up has been presented or
threatened against any member of the Company Group and there are
no circumstances justifying such a petition or other process.
18.3 NO WRIT OF EXECUTION
No writ of execution has issued against any member of the Company
Group.
18.4 NO RECEIVER OR ADMINISTRATOR
No receiver or manager of any part of the Company's or a Company
Subsidiary's undertaking or assets has been appointed.
18.5 PAYMENT OF DEBTS
No member of the Company Group:
(a) has stopped paying its debts as and when they fall due;
(b) is insolvent within the meaning of the Companies Ordinance
Hong Kong; and
(c) is subject to voluntary administration under the Companies
Ordinance Hong Kong.
18.6 LIQUIDATION
The Seller has not gone into liquidation under the Australian
Corporations Act nor been removed from the register of the
Australian Securities and Investments Commission.
18.7 PETITION
No petition or other process for winding-up has been presented or
threatened against the Seller and there are no circumstances
justifying such a petition or other process.
18.8 WRIT OF EXECUTION
No writ of execution has issued against the Seller.
page 31
18.9 RECEIVER MANAGER
No receiver or statutory manager of any part of the Seller's
undertaking or assets has been appointed.
19 INSURANCE
19.1 POLICIES
Those assets of the Company Group which are of an insurable nature
are insured by the relevant Company Group members against fire and
other usual risks on a basis which the Seller considers
commercially prudent.
20 INFORMATION
20.1 WRITTEN INFORMATION
In relation to written information provided by the Seller to the
Buyer in relation to the sale of the Shares sold by it under this
agreement:
(a) if that information comprised copies of documents,
correspondence or other materials the copies provided were,
so far as the Seller is aware, true and complete;
(b) if that information comprised historical data about the
Business prepared by the Seller or members of the Company
Group, that data was, so far as the Seller is aware, true
and correct in all material respects.
20.2 ACCURACY
Each of the statements and all information set out, or referred
to, in the Disclosure Schedule, and the schedules numbered 4 to 12
to this agreement are complete and accurate in all material
respects and not misleading.
21 BUSINESS RECORDS
The Business Records are in the possession or control of the
relevant Company Group member and will be maintained by that
Company Group member in accordance with its usual practice pending
Completion.
22 TAXES AND DUTIES
22.1 TAX PAID
Any Tax arising under any Tax Law payable in respect of any
transaction, income or asset of any of the members of the Company
Group which has become due for payment has been paid.
page 32
22.2 SINCE ACCOUNTS DATE
The conduct of the Business since the Accounts Date will only give
rise to liability to Tax in the ordinary course of business.
22.3 PROVISION IN ACCOUNTS
Adequate provision has been made in the Accounts for any Tax on a
member of the Company Group which is payable or may become payable
in respect of any transaction or income occurring or arising
before the Accounts Date but which was unpaid as at the Accounts
Date.
22.4 WITHHOLDING TAX
Any obligation of a member of the Company Group under any Tax Law
to withhold amounts at source, including, but not limited to,
withholding tax, has been complied with.
22.5 RECORDS
Each member of the Company Group has maintained proper and
adequate records to enable it to comply with its obligations to:
(a) prepare and submit any information, notices, computations,
returns, declarations, elections and payments required in
respect of any Tax Law;
(b) prepare any accounts necessary for the compliance of any Tax
Law; and
(c) retain necessary records as required by any Tax Law.
22.6 RETURNS SUBMITTED
Each member of the Company Group has submitted any necessary
information, notices, computations, returns, declarations and
elections to the relevant Governmental Agency in respect of any
Tax or any Duty relating to that Company Group member.
22.7 RETURNS ACCURATE
Any information, notice, computation, return, declaration or
election which has been submitted by a member of the Company Group
to a Governmental Agency in respect of any Tax or Duty:
(a) discloses all material facts that should be disclosed under
any Tax Law; and
(b) has been submitted on time.
22.8 COPIES ACCURATE
All copies of any information, notices, computations, returns,
declarations or elections submitted by a member of the Company
Group in respect of any Tax or Duty which has been supplied to the
Buyer by the Seller are true copies of the originals.
page 33
22.9 NO DISPUTES
No member of the Company Group is currently engaged in any dispute
with any Governmental Agency in respect of any Tax or Duty and is
not aware of any circumstances that may give rise to such a
dispute.
23 SELLER'S KNOWLEDGE
The Seller is not aware of any matter or thing that is or may be
inconsistent with the Buyer's Warranties.
24 EFFECT OF SALE OF SHARES
24.1 CUSTOMERS/SUPPLIER RELATIONSHIPS
As far as the Seller is aware, the transfer of the Shares to the
Buyer under this agreement will not result in any supplier or
customer of any member of the Company Group ceasing or being
entitled to substantially reduce its level of business with that
Company Group member.
24.2 EFFECT OF SALE
The entry into and performance of this agreement does not and will
not:
(a) result in the breach of any of the terms, conditions or
provisions of any agreement or arrangement to which a member
of the Company Group is a party; or
(b) relieve any person from any obligation to a member of the
Company Group;
(c) result in the creation, imposition, crystallisation or
enforcement of any Encumbrance or other third party right or
interest on a member of the Company Group, its assets or
undertaking; or
(d) result in any indebtedness of a member of the Company Group
becoming due and payable.
page 34
25 TRADE PRACTICES
So far as the Seller is aware, no member of the Company Group nor any of
the officers or employees of each member of the Company Group has, in the
two years before Completion, committed or omitted to do any act or thing
the commission or omission of which is a material contravention of the
legislation applicable in Hong Kong which regulates trade practices
matters.
26 LIABILITY UNDER ASSET AND OTHER SALE AGREEMENTS
No member of the Company Group will have any obligations or liabilities
(actual or contingent) after Completion to:
(a) do any act, matter or thing; or
(b) pay any moneys under any indemnity,
under any agreement entered into prior to Completion for the sale or
purchase of any business interest, shares or partnership interest.
page 35
SCHEDULE 3 - DISCLOSURE SCHEDULE
The matters set out in this disclosure schedule constitute formal
disclosure to the Buyer of facts or circumstances which are, or may be,
inconsistent with the Seller's Warranties. The Seller gives no
representation as to the completeness or accuracy of the disclosures in
this schedule. While some disclosures have, for convenience, been set
against specific Seller's Warranties, they constitute disclosure against
any other Seller's Warranty to which they may apply.
SELLER WARRANTY NUMBER MATTER DISCLOSED
page 36
SCHEDULE 4 - INTELLECTUAL PROPERTY RIGHTS
PART 1 - INTELLECTUAL PROPERTY RIGHTS OWNED BY THE COMPANY GROUP
PART 2 - LICENSES TO THE COMPANY GROUP TO USE INTELLECTUAL PROPERTY RIGHTS
PART 3 - LICENSES GIVEN BY THE COMPANY GROUP TO USE ITS INTELLECTUAL PROPERTY
RIGHTS
page 37
SCHEDULE 5 - SUPERANNUATION FUNDS
1 COMPANY
Nil
2 COMPANY SUBSIDIARIES
(a) PACIFIC DUNLOP BRANDS (ASIA) LIMITED
. Pacific Dunlop Holdings (Hong Kong) Limited Provident
Fund;
. Pacific Dunlop Brands (Asia) Limited HSBC Mandatory
Provident Fund - Supertrust; and
. Pacific Dunlop Superannuation Fund.
(b) GROSBY (CHINA) LIMITED
Statutory Fund.
(c) PACIFIC BRANDS MARKETING (HONG KONG) LIMITED
Nil
page 38
SCHEDULE 6 - CONTRACTS
PART 1 - CONTRACTS
1 COMPANY
BUSINESS UNIT PARTIES CONTRACT NAME
-------------------------------------------------------------------------------------------------------------------------------
Head Office Pacific Dunlop Holdings (Hong Kong) Limited, Grosby Grosby China Option Agreement
(China) Limited, Alwero Holdings Limited [agreement to
be signed]
Hangzhou Futong Group Company, ▇▇▇▇▇▇ ▇▇▇▇▇ Acquisition Contract
Development Ltd, Pacific Dunlop (Asia) Limited and
Pacific Dunlop Holdings (Hong Kong) Limited
Pacific Dunlop Brands (Asia) Limited, PD Clothing & Rescission Deed for Grosby Share Sale
Textiles Ltd and Grosby (China) Limited [agreement Agreement
to be signed]
Pacific Dunlop Holdings (Hong Kong) Limited, ▇▇ ▇▇▇▇▇▇ China Sale Agreement
Garments Ltd and Grosby (China) Limited [agreement
to be signed]
2 COMPANY SUBSIDIARIES
(a) PACIFIC DUNLOP BRANDS (ASIA) LIMITED
BUSINESS UNIT PARTIES CONTRACT NAME
-------------------------------------------------------------------------------------------------------------------------------
Head Office Pacific Dunlop Brands (Asia) Limited & Others Novation Agreement for Non-Competition Deed
Pacific Dunlop Brands (Asia) Limited & Others Non-Competition Deed
Grosby Australia Grosby Australia & Pacific Dunlop Brands (Asia) Unwritten Buying/Selling and agency Agreement
(Shoe Talk HK division)
Shoe Talk HK (PDBAL) Grosby (China) Limited, Shoe Talk Limited, Grosby Distribution Agreement
Australia division, Pacific Brands (UK) Limited,
Pacific Brands Canada & TT Group Limited
PD Asia Clothing Pacific Dunlop Brands (Asia) Limited (c/- Shoe Talk Agency Agreement
HK) and RMS (HK) Ltd (South Africa)
Pacific Dunlop Brands (Asia) Limited (c/- PD Asia Agency Agreement
Clothing) and Pacific Dunlop Holdings NZ Ltd
Pacific Dunlop Brands (Asia) Limited and Berlei Agency Agreement
Pacific Dunlop Brands (Asia) Limited and Holeproof Agency Agreement
Pacific Dunlop Brands (Asia) Limited and Union Agency Agreement
Knitting ▇▇▇▇▇ Pty Ltd
Pacific Dunlop Brands (Asia) Limited and Tontine Agency Agreement
Pacific Brands Marketing (HK) Ltd, Pacific Dunlop Hong Kong Joint Venture Shareholders Agreement
(Asia) Limited, Alwero Holdings (HK) Limited
Pacific Dunlop (Asia) Ltd, Pacific Dunlop Brands Hong Kong Marketing JV Novation Agreement
(Asia) Limited, Pacific Brands Marketing (Hong
Kong) Ltd and Alwero Holdings (HK) Ltd
Pacific Dunlop Brands (Asia) Limited, Alwero Call Option Agreement Novation and Amendment
Holdings (HK) Ltd and Others [agreement to be Deed
signed]
Pacific Dunlop (Asia) Limited, Alwero Holdings (HK) Call Option Agreement
Ltd and Others
Pacific Dunlop Brands (Asia) Limited, PD Clothing & Rescission Deed for Grosby Share Sale
Textiles Ltd and Grosby (China) Limited [agreement Agreement
to
page 39
be signed]
Alwero Holdings (HK) Ltd, Pacific Brands Marketing Deed of Consent
(Hong Kong) Limited and Pacific Dunlop Brands
(Asia) Ltd [agreement to be signed]
(b) GROSBY (CHINA) LIMITED
BUSINESS UNIT PARTIES CONTRACT NAME
-------------------------------------------------------------------------------------------------------------------------------
Grosby China Grosby Australia & Grosby (China) Ltd Unwritten Supply of Footwear Contract
Grosby (China) Limited, Shoe Talk Limited, Grosby Distribution Agreement
Australia division, Pacific Brands (UK) Limited,
Pacific Brands Canada & TT Group Limited
Legamex State Company & Grosby (China) Limited Unwritten contract for the supply of footwear
Shenzhen Bo (foreign trade company) & Hong Kong Contract Processing for the Manufacture of
Silver Roof (Grosby) Ltd Footwear
Legamex State Company, (Vietnam), Grosby (China) Unwritten supply agreement and equipment and
Limited and Shoe Talk HK management arrangement
RK Factory, Fujian, Grosby (China) Limited and Shoe Unwritten supply agreement and equipment and
Talk HK management arrangement
Pacific Dunlop Holdings (Hong Kong) Limited, Grosby Grosby China Option Agreement
(China) Limited, Alwero Holdings Limited [agreement
to be signed]
Grosby (China) Limited and ▇▇▇▇ ▇▇▇▇ Properties Land Use Agreement
Grosby (China) Limited and P D Enterprises Limited Management Agreement
[agreement to be signed]
Pacific Dunlop Brands (Asia) Limited, PD Clothing & Rescission Deed for Grosby Share Sale
Textiles Ltd and Grosby (China) Limited [agreement Agreement
to be signed]
Grosby (China) Limited and PD Enterprise Ltd Rescission Deed for Management Agreement
[agreement to be signed]
Pacific Dunlop Holdings (Hong Kong) Limited, ▇▇ ▇▇▇▇▇▇ China Sale Agreement
Garments Ltd and Grosby (China) Limited [agreement
to be signed]
(c) PACIFIC BRANDS MARKETING (HONG KONG) LIMITED
BUSINESS UNIT PARTIES CONTRACT NAME
-------------------------------------------------------------------------------------------------------------------------------
Pacific Brands Marketing (HK) Ltd, Pacific Dunlop Hong Kong Joint Venture Shareholders
(Asia) Limited, Alwero Holdings (HK) Limited Agreement
Pacific Dunlop (Asia) Ltd, Pacific Dunlop Brands Hong Kong Marketing JV Novation Agreement
(Asia) Limited, Pacific Brands Marketing (Hong
Kong) Ltd and Alwero Holdings (HK) Ltd
Alwero Holdings (HK) Ltd, Pacific Brands Marketing Deed of Consent
(Hong Kong) Limited and Pacific Dunlop Brands
(Asia) Ltd [agreement to be signed]
PART 2 - FOREIGN EXCHANGE CONTRACTS
page 40
SCHEDULE 7 - GUARANTEES
page 41
SCHEDULE 8 - EMPLOYEES
1 COMPANY
Nil.
2 COMPANY SUBSIDIARIES
(a) PACIFIC DUNLOP BRANDS (ASIA) LIMITED
C&T GROUP
▇▇▇ ▇▇▇▇
▇▇▇▇ Man Ping, ▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇, May
Young ▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ Ping, ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ Lan, ▇▇▇▇▇
Lo ▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇
▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, Pian
Ho ▇▇▇ ▇▇▇▇▇, Winnie
Law Kit Yi, ▇▇▇▇▇
▇▇▇ ▇▇▇ Man, ▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
SHOE TALK DIVISION
(1) HONG KONG
Ku Kwai ▇▇▇, ▇▇▇▇▇▇
Sum ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇, Lovem
▇▇▇▇▇▇ ▇▇▇ Wah, ▇▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇, Albrey
▇▇▇▇▇▇ ▇▇▇▇▇▇ Nurse
▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇ 42
▇▇▇▇▇ ▇▇▇ Ying, Rin
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Lai Wing Chi, Emily
(2) FUJIAN (RK/KR)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(3) VIETNAM
▇▇▇▇▇▇▇ D Jr ▇▇▇▇▇▇▇
(b) GROSBY (CHINA) LIMITED
Ng ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇, Triango
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ Ing, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ Fai, Trico
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
See also attached schedule of Grosby (China) Limited
employees.
(c) PACIFIC BRANDS MARKETING (HONG KONG) LIMITED
Nil.
page 43
SCHEDULE 9 - PLANT AND EQUIPMENT
1 COMPANY
2 COMPANY SUBSIDIARIES
(a) PACIFIC DUNLOP BRANDS (ASIA) LIMITED
(b) GROSBY CHINA
DESCRIPTION OF ASSET LOCATION WDV $,000
----------------------------------------------------------------------
Leasehold buildings Hanggeng, China 5,676
(c) PACIFIC BRANDS MARKETING (HK) LIMITED
page 44
SCHEDULE 10 - ASSETS LEASES
1 COMPANY
2 COMPANY SUBSIDIARIES
(a) PACIFIC DUNLOP BRANDS (ASIA) LIMITED
Lease of Canon ▇▇-▇▇▇▇ ▇▇▇▇▇▇ (renewed until 31/12/01) with
Jardine One Solution (Lessor)
(b) GROSBY CHINA
(c) PACIFIC BRANDS MARKETING (HK) LIMITED
page 45
SCHEDULE 11 - PROPERTIES
1 COMPANY
▇▇▇▇▇ ▇▇▇▇-▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇-▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
2 COMPANY SUBSIDIARIES
(a) GROSBY (CHINA) LIMITED
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
page 46
SCHEDULE 12 - INTER COMPANY DEBTS
page 47
EXECUTED AS AN AGREEMENT:
Signed for and on behalf of
Pacific Dunlop Limited
by its duly authorised Attorney under Power
in the presence of:
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------- --------------------------------
Witness Attorney
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------- --------------------------------
Name (please print) Name (please print)
Signed for and on behalf of
P.D. International Limited
by its duly authorised Attorney under Power
in the presence of:
/s/ /s/
--------------------------------------- --------------------------------
Witness Attorney
--------------------------------------- --------------------------------
Name (please print) Name (please print)
Signed for and on behalf of:
PB Holdings NV
by its duly authorised Attorney under Power
in the presence of:
/s/ /s/
--------------------------------------- --------------------------------
Witness Attorney
--------------------------------------- --------------------------------
Name (please print) Name (please print)
/s/ /s/
--------------------------------------- --------------------------------
Witness Attorney
--------------------------------------- --------------------------------
Name (please print) Name (please print)
page 48