Exhibit 10.27.1
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JOINT VENTURE AGREEMENT
between
ISKO DOKUMA ISLETMELERI SANAYI VE TICARET A.S.
and
CONE ▇▇▇▇▇ CORPORATION
and
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
and
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
and
Oguzhan Gurdogan
Dated as of June 17, 2002
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TABLE OF CONTENTS
Page
ARTICLE I
STOCKHOLDER ACTIONS
1.1 Ordinary Actions..................................................... 2
1.2 Extraordinary Actions................................................ 2
ARTICLE II
BOARD OF DIRECTORS
2.1 Board of Directors................................................... 3
2.2 Decisions by the Board of Directors.................................. 3
2.3 Election of Directors................................................ 5
2.4 Adoption of Initial Business Plan.................................... 6
ARTICLE III
OFFICERS
3.1 Nomination of Officers............................................... 6
ARTICLE IV
CAPITAL CONTRIBUTIONS
4.1 Initial Capital Contributions........................................ 7
4.2 Additional Capital Contributions..................................... 7
ARTICLE V
TRANSFER OF JV STOCK
5.1 Restrictions on Transfer of JV Stock................................. 8
5.2 Notification of Transfer Restrictions................................ 9
ARTICLE VI
CERTAIN COVENANTS ANDAGREEMENTS
6.1 Financial and Other Information...................................... 9
6.2 Confidentiality..................................................... 10
6.3 Public Announcements................................................ 10
6.4 Compliance with Laws................................................ 11
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Page
ARTICLE VII
MISCELLANEOUS
7.1 Definitions......................................................... 11
7.2 Termination......................................................... 13
7.3 Governing Law....................................................... 14
7.4 Arbitration......................................................... 14
7.5 Recapitalizations, Exchanges, etc. Affecting JV Stock............... 14
7.6 Amendment, Assignment, etc.......................................... 14
7.7 Notices............................................................. 14
7.8 Permitted Transferee Shares......................................... 15
7.9 Expenses............................................................ 15
7.10 Severability; Invalidity............................................ 15
7.11 No Third Party Beneficiaries........................................ 15
7.12 Translation......................................................... 15
7.13 Integration; Section Headings; Counterparts; etc.................... 15
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JOINT VENTURE AGREEMENT
JOINT VENTURE AGREEMENT, dated as of June 17, 2002 between (1) CONE ▇▇▇▇▇
CORPORATION ("Cone"), a corporation organized under the laws of the State of
North Carolina, United States of America, (2) ISKO DOKUMA ISLETMELERI SANAYI VE
TICARET A.S., a corporation organized under the laws of Turkey, (3) ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, (4) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and (5) Oguzhan Gurdogan (Isko Dokuma Isletmeleri
Sanayi ve Ticaret A.S., ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, and Oguzhan
Gurdogan shall hereinafter collectively be referred to in this Agreement and all
other agreements related to the Joint Venture as "Isko").
RECITALS
A. Isko and Cone wish to establish a joint venture to sell denim fabrics to
▇▇▇▇ ▇▇▇▇▇▇▇ Europe or its 100% owned subsidiaries ("LSE") for Levi's(R) 501(R)
jeans such fabrics to be marketed to LSE by Cone and produced by Isko based upon
orders allocated by Cone and accepted by Isko (the "Project").
B. Isko and Cone are in the process of forming and organizing IsKone Denim
Pazarlama A.S. ("JV"), to be organized under the laws of Turkey within a Free
Trade Zone, for the purpose of carrying out the Project.
C. JV has issued to Isko 49,000 shares and Cone 51,000 shares of ordinary
voting stock, par value $ 1.00 per share, representing all of the issued and
outstanding shares of capital stock of JV (such shares of stock and all other
shares of capital stock of JV which may be outstanding from time to time, the
"JV Stock").
D. Isko and Cone have contributed, or agreed to contribute, $49,000 and
$51,000 respectively, to JV in cash.
E. Isko and Cone have caused the articles of association set forth as
Exhibit A to be adopted as the initial articles of association of JV (as amended
from time to time, the "Articles of Association").
F. Isko and Cone desire to set forth their agreement as to the management
of JV, transfers of JV Stock and certain other matters relating to JV.
NOW, THEREFORE, in consideration of the mutual agreements and covenants set
forth herein, the parties hereto agree as follows:
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ARTICLE I
STOCKHOLDER ACTIONS
1.1 Ordinary Actions. The following action (the "Ordinary Action") shall
not be taken without the approval, at a duly convened Stockholders' meeting, of
Stockholders holding a majority of the shares of JV Stock held by all
Stockholders present or represented at such meeting; provided that Stockholders
holding at least a majority of the outstanding shares of JV Stock are present or
represented at such meeting: election of the members of the Board of Directors
of JV (the "Board of Directors"), said Board of Directors to consist of four
members with Cone and Isko each having the right to designate two Directors and
two alternates
1.2 Extraordinary Actions. None of the following actions (collectively, the
"Extraordinary Actions") shall be taken without the approval, at a duly convened
Stockholders' meeting, of Stockholders holding at least 75% of the outstanding
shares of JV Stock.
(a) any amendment to the Articles of Association;
(b) appointment of the independent auditors of JV or approval or
modification of the annual report of the Board of Directors, the
annual financial statements of JV and the annual report of the
auditors of JV;
(c) any liquidation, merger/acquisition, dissolution, split-up, a sale of
all or substantially all of its assets or similar transaction by or
involving JV;
(d) any recapitalization, capital increase or capital reduction by JV or
issuance or repurchase of any equity securities of JV, securities
convertible into or exchangeable for equity securities of JV or any
options to acquire any of the foregoing;
(e) declaring dividends based on the recommendation of the Board of
Directors; provided however, in the event that there is no agreement
between the stockholders of JV as to the distribution of profit, 100%
of the profit for the relevant year shall be distributed to the
Stockholders as dividends; or
(f) any other actions which may be required by applicable Turkish law.
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ARTICLE II
BOARD OF DIRECTORS
2.1. Board of Directors. The Board of Directors shall have four members
(each, a "Director") and four alternates. The members and the alternates may be
elected for a maximum term of office of three (3) years. A member whose term of
office expires may be re-elected.
2.2 Decisions by the Board of Directors. (a) The Board of Directors shall
meet as required by law, and otherwise when requested by any Director upon at
least 20 days notice to each other Director. The Chairman of the Board of
Directors shall prepare and furnish to each other Director, at least 10 days
prior to any meeting of the Board of Directors, an agenda for such meeting,
which agenda shall include any proposed action that any Director shall request
by notice to the Chairman no later than 15 days prior to such meeting. Three
Directors shall be required for a quorum of any meeting of the Board of
Directors. Should there be a failure of a quorum and continued failure of a
quorum for ninety days, then two Directors shall constitute a quorum for
purposes of that meeting. Decisions may be taken by the Board of Directors
without a meeting if a proposal for action is submitted in writing in turn to
each of the members of the Board of Directors and each such member consents in
writing to such action.
(b) The following issues (collectively, the "Fundamental Actions") will
require the affirmative vote of at least 3 directors, including at
least one (1) of the directors nominated by each of Cone and Isko,
except to the extent any such action is specifically set forth in a
Business Plan approved by the Board of Directors in accordance
herewith:
(i) approval of the annual budget (including the annual investment
budget), such approval to occur not later than December 30 of the
preceding year, and any amendments thereto;
(ii) approval and modification of any business plan and any major
investments to be made by the Company;
(iii)appointment/dismissal and setting/modification of the compensation
and other terms of employment of the Company's Chief Executive Officer
or any other senior officer;
(iv) approval and modification of the JV's "Signature Circular";
(v) incur any capital commitment in excess of US$100,000 in any single
transaction or in excess of US$150,000 in any one financial year of
the Company other than those already agreed to in the annual capital
budget;
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(vi) entering into, amending, terminating or replacing any Joint Venture
Credit Facility or any other financing or credit agreement (other than
draw ▇▇▇▇▇ under letters of credit or other financing arrangements
previously authorized by the Board of Directors in accordance
herewith);
(vii)any draw down or other borrowing under any Joint Venture Credit
Facility or any other previously authorized credit facility having an
aggregate principal amount in excess of US$50,000 or equivalent;
(viii) borrow or raise in excess of US$100,000 in any single transaction or
in excess of US$150,000 in aggregate outstanding at any one time other
than in the ordinary course of business;
(ix) initiation or settlement of any claim, litigation, arbitration or
other judicial or administrative proceedings against any third party
where the amount at issue exceeds US$ 20,000 or its equivalent in any
currency;
(x) any authorization, declaration or payment of any dividend or other
distribution on any shares of JV Stock;
(xi) enter into equity joint venture arrangements or agreements in any
market or country;
(xii)acquire or dispose of any interest in any other company, partnership
or business;
(xiii) enter into or modify agreements between the JV and a Stockholder of
the JV;
(xiv)establish depreciation policy rates and accruals;
(xv) grant a power of attorney or powers of delegation or similar powers to
any person if such power or delegation relates to any matter which is
subject to the voting requirement of these provisions;
(xvi)enter into any contract or series of related contracts with a
duration of more than one (1) year other than contracts or agreements
executed contemporaneously herewith related to this JV Agreement or
otherwise in the ordinary course of business;
(xvii) guarantee or lend any money;
(xviii) set the terms and jurisdiction for any initial public offering of
JV Stock, and
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(xix)purchase, sell, mortgage charge or rent any property, any assets or
group of related assets or any interest of JV or its subsidiaries;
(xx) approval of any material changes to the product range of JV;
(xxi)appointment or dismissal of external auditors;
(xxii) the appointment or dismissal of JV's legal counsel or the adoption
or modification of any material accounting or tax principle or
practice of JV;
(xxiii) the entry by JV into any significant business activity not related
to the Project;
(xxiv) any matter proposed at a meeting of the Board of Directors that was
not contained in the agenda for such meeting previously furnished to
each Director in accordance with Section 2.2(a); and
(xxv)any other transactions not occurring in the ordinary course of
business or issues which as a matter of Turkish legislation require
the approval of the Board of Directors.
(c) The Chairman of the Board of Directors shall have the power to break
ties in the event of a deadlock among the Directors. The Vice Chairman shall not
have the power to break ties.
(d) No fees shall be paid to Directors for serving on the Board of
Directors.
2.3. Election of Directors. (a) Directors and alternates shall be
designated as follows: (i) Cone and Isko shall each have the right to designate
two Directors and two alternates and (ii) any positions on the Board of
Directors (including alternates) not filled by persons designated in accordance
with the foregoing clause (i) shall be elected by the Stockholders in accordance
with the Articles of Association at a duly convened Stockholders' meeting. The
initial Directors and their respective alternates are set forth on Schedule I.
(b) Each Stockholder shall vote its shares of JV Stock so as to elect and
continue in office the Directors and alternates designated in accordance with
this Section 2.3. Each Stockholder entitled to designate directors and
alternates pursuant to clause (i) of Section 2.3 (a) shall have the right to
replace any of its designees at any time by notice to the other Stockholders
and, in such event, such other Stockholders shall take such
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actions as are necessary in order to elect such replacement as promptly as
practicable, including without limitation by convening and holding a meeting of
Stockholders.
(c) In the event a Stockholder entitled to designate Directors and
alternates pursuant to clauses (i) or (ii) of Section 2.3 (a) is not permitted
to do so as a result of any foreign investment or other applicable laws or any
provision of the Articles of Association restricting ownership of different
classes or series of JV Stock, each Stockholder shall use its best efforts and
take such actions as are necessary to cause such Stockholder's designees to be
elected as Directors and alternates as promptly as practicable and to otherwise
give effect to the provisions of Sections 2.3 (a) and (b).
(d) Cone shall have the right to designate the Chairman of the Board of
Directors, and to replace such Chairman at any time by notice to the Board of
Directors and Isko. Isko shall have the right to designate the Vice Chairman of
the Board of Directors, and to replace such Vice Chairman at any time by notice
to the Board of Directors and Cone.
2.4. Adoption of Initial Business Plan. Isko and Cone shall cause the Board
of Directors to adopt, as promptly as practicably possible, a business plan for
JV covering the period from the Commercial Operation Date until the end of the
third full fiscal year of JV.
ARTICLE III
OFFICERS
3.1. Nomination of Officers. (a) The chief executive officer "CEO" and the
chief financial officer "CFO" shall be appointed as follows: (i) Cone may
propose, for approval by the Board of Directors, candidates for the chief
executive officer, who shall also be a Director; and (ii) Isko shall propose,
for approval by the Board of Directors, candidates for the chief financial
officer.
(b) In addition to the CFO's primary duties, the CFO together with a second
officer of the JV, shall be authorized to represent and administer the JV's
business affairs, through a "Signature Circular" which addresses the following
authorizations:
i) to purchase products for the JV, sell and invoice to LSE and remit
payments pursuant to the Transfer Price Agreement upon receipt of
funds from LSE;
ii) to represent JV for JV's business affairs in government and private
offices, banks, with real persons and legal entities, to sign all
documents, checks, agreements and contracts;
iii) to represent JV in cashing checks up to $ 10,000, making payments,
making transfers between JV's bank accounts, nullify issued payment
warnings, instructing transfers for matters,
iv) to represent JV in JV's following matters:
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1. Deposit and/or withdrawal of guarantees;
2. Official correspondence and declarations including
administrative; financial, general formal governmental and
institutional declarations, payroll, balance sheet, income
statements, and accounting status;
3. Receipts and required statements for banks, producers, suppliers
and customers;
4. Preparation of customs declaration forms and all other customs
related processes and documentation;
5. Correspondence and resolution of all matters with the Social
Security Administration and The Regional Labor Department;
6. Agreements and resolution of all matters with Water, Electricity,
Natural Gas, Power, PTT (communications), and alike
organizations;
7. All correspondence and resolution of all matters with the
transportation and logistics companies related to all
import/export activities;
8. Insurance policies, and resolution of all matters related to
damage, damage control, and compensations; and
9. Acceptance of guarantee letters, cashing of guarantee letters;
v) to represent JV in transferring and wiring funds between JV's bank
accounts and resolving all matters related to the subjects between
JV's bank accounts.
(b) The other senior officers shall be nominated and elected by the Board
of Directors pursuant to Section 2.2 (b) and in accordance with the Articles of
Association.
(c) The chief executive officer and chief financial officer can be
terminated only for provable cause.
ARTICLE IV
CAPITAL CONTRIBUTIONS
4.1. Initial Capital Contributions. On or prior to the date hereof, each of
Isko and Cone has contributed to JV $ 49,000 and $ 51,000, respectively, in cash
in consideration for the shares of JV Stock for which they have initially
subscribed.
4.2. Additional Capital Contributions. From time to time upon receipt of
written notice from JV (the "Contribution Notice"), each of Isko and Cone shall,
on the tenth day following receipt of the Contribution Notice or such later date
as specified therein, contribute in cash in such additional amounts (each, an
"Additional
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Contribution") as directed by JV in the Contribution Notice; provided that the
aggregate amount contributed to JV by each of Isko and Cone under this Article
IV shall not exceed $ 50,000.
ARTICLE V
TRANSFER OF JV STOCK
5.1. Restrictions on Transfer of JV Stock. (a) No Stockholder may, directly
or indirectly, sell, transfer, assign, pledge, option, mortgage, hypothecate or
otherwise dispose of or encumber (collectively, "transfer") any shares of JV
Stock to any Person, except (i) at any time following the fourth anniversary of
the date hereof, upon compliance with Sections 5.1 (b) and (c), or (ii) to a
Permitted Transferee of such Stockholder upon compliance with Section 5.1 (b).
(b) No Stockholder or any of its successors in interest shall transfer any
shares of JV Stock to any Person pursuant to clauses (i) or (ii) of Section 5.1
(a) unless and until all other Stockholders grant written consent and such
Person shall have agreed in writing, in a manner acceptable in form and
substance to each other Stockholder, to accept such shares of JV Stock subject
to the terms and conditions of and to be bound by this Agreement. Each party
hereto shall be, and shall remain, obligated for the performance by any of such
party's Permitted Transferees of its obligations hereunder in the event of a
transfer of any shares of JV Stock to such Permitted Transferee. Upon execution
and delivery of a writing meeting the requirements of the first sentence of this
Section 5.1 (b), any such transferee shall constitute a Stockholder for all
purposes of this Agreement.
(c) Any transfer of JV Stock in accordance with Section 5.1(a)(i) shall be
pursuant to the following process:
(i) If any Stockholder desires to transfer JV Stock, the independent
auditors of JV ("Auditor") will be retained to administer the transfer
process;
(ii) The Stockholder seeking to transfer JV Stock (the "Seller") shall
notify the Auditor in writing of its intention to sell and at what
price per share;
(iii)Auditor will notify the other Stockholder(s) (the "Other
Stockholder(s)") of the Seller's intent to sell and the price within
five days;
(iv) Upon receipt of such notice, the Other Stockholder(s) shall have 30
days within which to inform Auditor if they wish to buy Seller's JV
Stock or to sell their JV Stock for the same price. Failure to respond
within the 30-day period following receipt of notice is considered
notice by any Other Stockholder(s) that they wish to sell all their JV
Stock;
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(v) Should any Other Stockholder(s) wish to sell, and there be no Other
Stockholder(s) desiring to buy, Seller shall be required to buy all JV
Stock sought to be sold by such Other Stockholder(s);
(vi) Should there be more than one Other Stockholder(s) desiring to buy
Seller's JV Stock (the "Buyer(s)"), the shares will be allocated to
the Buyers in proportion to their respective holdings of outstanding
JV Stock;
(vii)Should any Other Stockholder(s) wish to sell, the Buyer(s) shall have
to purchase all JV Stock from the Seller and the Other Stockholder(s)
wishing to sell at the Seller's original price per share when the
process was initiated in proportion to their respective holdings of
outstanding JV Stock;
(viii) Auditor shall complete the transaction within 30 days. Should any
Buyer(s) be unable to pay the purchase price for the JV Stock to be
purchased, Seller and Other Stockholder(s) wishing to sell can
purchase each Buyer(s) JV Stock for book value in accordance with the
U.S. GAAP in proportion to their respective holdings of outstanding JV
Stock;
(ix) The process may be initiated at any time so long as there are two
Stockholders;
(x) Costs of Auditor in administering the process shall be borne by Seller
and selling Other Stockholder(s) in proportion to their respective
holdings of initiating JV Stock.
In addition to this process, with respect to its JV Stock, Cone is granted a put
option to Isko, with the share price to be determined by the book value per
share of JV in accordance with U.S. GAAP. Valuation will be performed by
Auditor.
5.2. Notification of Transfer Restrictions. Each of Isko and Cone shall
cause (i) appropriate notations and entries to be made in the JV's share
registry and the Articles of Association to reflect that the JV Stock is subject
to transfer restrictions contained in this Agreement, and (ii) the certificates
representing JV Stock to bear legends reflecting this Agreement.
ARTICLE VI
CERTAIN CONVENANTS AND AGREEMENTS
6.1. Financial and Other Information. (a) The Stockholders shall cause JV
to prepare and deliver to each Stockholder:
(i) As soon as available and in any event within 20 days after the end of
each fiscal year of JV, an audited balance sheet of JV and its
subsidiaries as at the
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end of such fiscal year, and the related audited consolidated
statements of income, stockholders' equity and changes in financial
position of JV and its subsidiaries for such fiscal year, setting forth
in each case in comparative form the figures for the previous fiscal
year (to the extent applicable), prepared both in Turkish in accordance
with Turkish GAAP and in English in accordance with U.S. GAAP, each
consistently applied, and all in reasonable detail;
(ii) As soon as available and in any event within 15 days after the end of
each of the first three quarters of each fiscal year of JV, a
consolidated balance sheet of JV and its subsidiaries as of the end of
such quarter, and the related consolidated statements of income,
stockholders' equity and changes in the financial position of JV and
its subsidiaries for such quarter and for the current fiscal year to
date, setting forth in each case in comparative form the figures for
the corresponding quarter in the previous fiscal year and the
corresponding portion of JV's previous fiscal year (to the extent
applicable), prepared both in Turkish in accordance with Turkish GAAP
and in English in accordance with U.S. GAAP, each consistently
applied, subject to changes resulting from year-end audit adjustments,
all in reasonable detail and certified by the chief financial or
accounting officer of the Company; and
(iii)With reasonable promptness, such other information with respect to JV
and its subsidiaries as any Stockholder may from time to time
reasonable request.
(b) JV shall permit any Stockholder and its respective employees, agents or
representatives to visit and inspect any of the properties of JV and its
subsidiaries, including its books of account, and to discuss its operations,
financial condition and accounts with JV's officers and its independent public
accountants, all at such reasonable times and as often as any Stockholder may
reasonably request. The cost of such visits and inspections will be born by the
requesting party.
(c) The foregoing provisions shall not limit any rights which any
Stockholder may have as a shareholder of JV under applicable laws.
6.2. Confidentiality. Each Stockholder shall not use or disclose to any
third party (other than their respective financial advisors, attorneys and other
agents and representatives) any information relating to JV, this Agreement, the
business and operations of JV or the transactions contemplated hereby, except
such information as is required to be disclosed by applicable law or is or
becomes generally available to the public other than through a breach of this
Agreement ("Confidential Information"). Each Stockholder shall, and shall cause
each of its Affiliates to, take such reasonable precautions as are necessary to
prevent use or disclose of Confidential Information by or to others.
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6.3. Public Announcements. Except as ordered or required by any applicable
law or competent judicial, governmental or other authority or in accordance with
the requirements of any stock exchange, no Stockholder shall issue any press
release or make any other public statement relating to this Agreement or any of
the transactions contemplated by this Agreement without obtaining the prior
written approval of each other Stockholder, where such approval shall not be
unreasonably withheld, as to the contents and the manner of presentation and
publication of such press release or public statement.
6.4. Compliance with Laws. Isko and Cone shall, and each shall cause JV to,
comply in all material respects with applicable Turkish and U.S. laws in
carrying out the Project, conducting the business and operations of the JV and
consummating the transactions contemplated hereby or ancillary hereto.
ARTICLE VII
MISCELLANEOUS
7.1 Definitions. (a) Each of the following terms is defined in the section
set forth below opposite such term:
Additional Contribution........................................4.2
Auditor 5.1
Board of Directors.............................................1.1
Articles of Association........................................Recital E
Cone...........................................................Introduction
Confidential Information.......................................6.2
Contribution Notice............................................4.2
CEO............................................................2.3
CFO............................................................2.3
Director.......................................................2.1
Extraordinary Action...........................................1.2
Fundamental Action.............................................2.2b
Initial Business Plan..........................................2.4
Isko...........................................................Introduction
JV.............................................................Recital B
JV Stock.......................................................Recital C
Ordinary Action................................................1.1
Other Stockholder(s)...........................................5.1
Project........................................................Recital A
Signature Circular.............................................3.1(b)
(b) The following terms, as used herein, have the following meanings:
"Administrative Services Agreement" means the Administrative Services
Agreement, dated as of the date hereof, between Isko and JV, as amended from
time to time.
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"Annual Business Plan" means the annual business plan for JV for any fiscal
year, including without limitation the operating and capital budget for such
fiscal year, in substantially the format and level of detail as is set forth for
the first full fiscal year following the Commercial Operation Date in the
Initial Business Plan (except that pursuant to Section 2.4, the Annual Business
Plan for the second and third full fiscal years following the Commercial
Operation Date may have less detail than the plan for the first full fiscal
year).
"Business Plan" means the Initial Business Plan or any Annual Business
Plan.
"Chairman" means the director of JV named by the directors of JV appointed
by Cone to perform that function in respect of JV.
"Commercial Agreement" means the Commercial Agreement, dated as of the date
hereof, among Isko, Cone and JV, as amended from time to time.
"Commercial Operation Date" means the date on which JV commences commercial
sales, as specified in a resolution of the Board of Directors.
"License Agreement" means the License Agreement, dated as of the date
hereof, among JV, Isko, and Cone, as amended from time to time.
"Lien" means any mortgage, lien, pledge, security interest, encumbrance or
other adverse claim, as expressly created by this Agreement or the Articles of
Association.
"Permitted Transferee" means, with respect to any Stockholder, any direct
or indirect wholly owned subsidiary of such Stockholder, any Person of which
such Stockholder is the direct or indirect wholly owned subsidiary, and any
Person which is a direct or indirect wholly owned subsidiary of a Person of
which such Stockholder is the direct or indirect wholly owned subsidiary. For
purposes of determining whether a subsidiary is wholly owned, directors' or
other statutory qualifying shares shall not be taken into account.
"Person" means an individual, corporation, partnership, trust or other
entity, including a governmental or political subdivision or an agency or an
instrumentality thereof.
"Stockholder" means any holder of JV Stock.
"US$" means United States Dollars.
"TL" means Turkish Lira.
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"Transfer Price Agreement" means the Transfer Price Agreement, dated as of
the date hereof, between JV, Cone and Isko, as amended from time to time.
"U.S. GAAP" means the accounting principles generally accepted in the
United States of America from time to time.
"Turkish GAAP" means the accounting principles generally accepted in the
Republic of Turkey from time to time.
7.2. Termination. (a) This Agreement shall terminate (i) at any time by
mutual written agreement of all Stockholders, (ii) in the event Isko is no
longer a Stockholder, upon notice by Cone to the other Stockholders, (iii) in
the event Cone is no longer a Stockholder, upon notice by Isko to the other
Stockholders, (iv) at the option of a Stockholder when there shall be a material
breach by any other Stockholder of any provision of this Agreement or a
substantial failure by any other Stockholder to perform one or more of its
obligations under this Agreement, which shall not have been cured within thirty
(30) days after written notice specifying the nature of such breach or failure,
or (v) upon Isko's request, should LSE not order at least 6 million yards as
contemplated by this Agreement during any 12-month period ending on or after
April 1, 2004, or (vi) upon the earlier of June 17, 2007, as that expiration
date may be extended as described in Section 7.2 (b) or its termination in
accordance with this Section 7.2 (a) (i), (ii), (iii), (iv) or (v).
(b) Unless this Agreement has or is to be terminated as described in 7.2
(a) (i), (ii), (iii), (iv) or (v), the term (the expiration date) of this
Agreement shall, upon May 15, 2007, be automatically extended by one year,
unless Cone or Isko provides written notice to the other during the month of
April of the prior year, of its desire not to extend the term (for example, if
such notice of non-extension is not given in April 2006, the term of this
Agreement shall automatically be extended to May 15, 2008). If notice of
non-extension is given, the term of the Agreement shall expire on the
then-effective expiration date.
(c) It is understood and agreed that, with respect to the termination of
this Agreement, the parties shall be bound to perform their obligations in
respect of orders outstanding as of the date of termination.
(d) Liquidation: (i) In the event that this Agreement is terminated in
accordance with the provisions of Section 7.2 or upon the occurrence of a
mandatory liquidation event under the Turkish Commercial Code, the Stockholders
agree to call an extraordinary Stockholders Meeting and vote their JV Stock for
the dissolution and liquidation of JV and its assets in accordance with the
provisions of the Turkish Commercial Code and to take and cause JV to take all
action necessary to ensure prompt liquidation of JV.
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(ii) In the event of liquidation of JV, the members of the Board of
Directors at the time of such liquidation shall act as liquidators and the
proceeds from the liquidation of JV shall be distributed to the Stockholders in
proportion to their shareholdings in JV at such time.
7.3. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of Turkey, without giving effect to the conflict of law
rules thereof.
7.4. Arbitration. (a) Any and all disputes, controversies and claims
arising out of, involving, or relating to the Agreement shall be referred to,
settled and finally resolved exclusively by arbitration under the Rules of
Conciliation and Arbitration of the International Chamber of Commerce by three
arbitrators appointed in accordance with such rules. Cone and Isko shall each
appoint one arbitrator and a third arbitrator will be appointed by the two
arbitrators appointed by the parties. The place of the arbitration shall be
Zurich, Switzerland. The language to be used in the arbitral proceedings shall
be English.
7.5. Recapitalizations, Exchanges, etc. Affecting JV Stock. The provisions
of this Agreement shall apply, to the full extent set forth herein with respect
to any and all shares of capital stock of JV or any successor or assign of JV
(whether by merger, consolidation, sale of assets otherwise) which may be issued
in respect of, in exchange for, or in substitution of shares of JV Stock, by
reason of any stock dividend, split, reverse split, combination,
recapitalization, reclassification, merger, consolidation or otherwise.
7.6. Amendment, Assignment, etc. Neither this Agreement nor any term hereof
may be amended, changed, waived, discharged or terminated orally, but only by an
instrument in writing, signed by the party against which enforcement of such
amendment, change, waiver, discharge or termination is sought. This Agreement
shall be binding upon the respective successors and permitted assigns of the
parties hereto. This Agreement shall not be assignable or otherwise transferable
by a party without the prior written consent of the other parties hereto and any
attempt to so assign or transfer this Agreement without such consent shall be
void and of no effect.
7.7. Notices. All notices, consents, requests, instructions, approvals and
other communications provided for herein shall be in writing and shall be deemed
validly given upon personal delivery or one day after being sent by telecopy or
overnight courier service:
(a) if to Isko, at:
Isko Dokuma Isletmeleri Sanayi ve Ticaret A.S.
Organize Sanayi Bolgesi
3. Cadde 16425
Inegol/BURSA
14
Telecopy: ▇▇▇-▇▇▇-▇▇▇-▇▇▇▇
(b) if to Cone, at:
▇/▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel Telecopy:
▇▇▇-▇▇▇-▇▇▇▇
or at such other address and telecopy number as Cone or Isko may designate by
written notice to the other Stockholders; and if to any other, at such address
and telecopy number as such Stockholder may designate by written notice to the
other Stockholders.
7.8. Permitted Transferee Shares. References herein to any Stockholder
(including Isko and Cone) shall be interpreted to include Permitted Transferees
of such Stockholder holding shares of JV Stock.
7.9. Expenses. Except as otherwise specifically provided in this Agreement,
each party hereto shall pay all its own costs and expenses incident to this
Agreement and the transactions contemplated hereby, including legal and
accounting fees and disbursements.
7.10. Severability; Invalidity. (a) If any provision of this Agreement is
held to be unenforceable for any reason, it shall be adjusted rather than
voided, if possible, in order to achieve the intent of the parties to this
Agreement to the extent possible. In any event, the invalidity or
unenforceability of any provision of this Agreement in any jurisdiction shall
not affect the validity or enforceability of the remainder of this Agreement in
that jurisdiction or the validity or enforceability of this Agreement, including
that provision, in any other jurisdiction.
(b) If any provision of the Articles of Association is at any time in
conflict with any of the provisions of this Agreement, the provisions of this
Agreement shall prevail and the parties shall exercise all voting and other
rights and powers available to them as stockholders and otherwise so as to give
effect to the provisions of this Agreement and shall further, if necessary,
procure any required amendment of the Articles of Association provided that
nothing contradicts with the applicable Turkish Law.
7.11. No Third Party Beneficiaries. Nothing in this Agreement will be
construed as giving any Person, other than the parties hereto and their
successors and permitted assigns, any right, remedy or claim under or in respect
of this Agreement or any provision hereof.
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7.12. Translation. This Agreement has been concluded in the English
language and in the event of any inconsistency between the original English
version and any translation, such English version shall govern.
7.13. Integration; Section Headings; Counterparts; etc. This Agreement
(including the Schedules and Exhibits hereto) and the other documents delivered
pursuant hereto constitute the entire agreement of the parties relating to the
subject matter hereof and supersede any and all prior agreements, arrangements
and understandings relating thereto. The section headings of this Agreement are
for convenience of reference only and are not to be considered in construing
this Agreement. This Agreement may be executed in any number of counterparts
each of which shall be an original, but all of which together shall constitute
one and the same instrument. Neither this Agreement nor any transaction
contemplated by the Project shall create the relationship of partners, joint
venturers or principal and agent among the parties hereto, except as expressly
provided herein or therein. None of the parties hereto have any authority to
represent or bind the other parties in any manner whatever, except as provided
expressly herein or otherwise agreed in writing among the parties.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
ISKO DOKUMA ISLETMELERI SANAYI
VE TICARET A.S.
By /s/▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title:
CONE ▇▇▇▇▇ CORPORATION
By s/s ▇▇▇▇ W. ▇▇▇▇▇▇
Name: ▇▇▇▇ W. ▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title:
Oguzhan Gurdogan
By /s/ Oguzhan Gurdogan
Name: Oguzhan Gurdogan
Title: Dep. V. P.
17