SHARE SALE-PURCHASE CONTRACT
FOR THE SHARES OWNED
BY THE STATE OWNERSHIP FUND IN THE COMPANY
ROMAERO S.A. Xxxxxxxxx
Xx. 00 of January 29, 1999
SHARE SALE PURCHASE XXXXXXXX
Xx. 00 of January 29, 1999
Between,
The STATE OWNERSHIP FUND, hereinafter named SOF, with headquarters in 0
Xxxxxxxxxxxx Xxxxxx, xxxxxx 0, Xxxxxxxxx, XXXXXXX, legally represented by Xx.
Xxxx XXXXXXX, as Seller
and
The Company XXXXXXX XXXXXX LIMITED, hereinafter named Xxxxxxx Xxxxxx, with
headquarters in Bembridge, Isle of Wight, UNITED KINGDOM, registered under the
no. 1374061, legally represented by Xx. Xxxx X. XXXXX, as Buyer,
the present Share Sale-Purchase Contract, hereinafter named Contract, has been
concluded, with the observance of the legislation in force applicable to the
privatization of the state owned companies.
CHAPTER 1 PREAMBLE
1-1 ROMAERO SA. Bucuresti Company is a joint stock company, registered in
Romania at the Register of Commerce under the number J40/3940/1991, with
the headquarters in Bucuresti, 00 Xxxxxxxxx Xxxxxx, xxxxxx 0, Postal
Code 71544, hereinafter named Company.
1.2 The Company has a registered share capital amounting of thousands ROL
156,153,725 constituted by 6,246,149 shares of nominal value ROL 25,000
each.
1.3 The Company doesn't have any branch and/or subsidiary.
Owing to the fact that ROMAERO S.A., is operating in the defence sector,
the share numbered 6,246,149 is not object of the present Contract and
will be preserved as Control Nominative Share (Golden Share), in view to
protect the defence industry according to the Law no. 78/1995 concerning
the personnel and patrimony protection in defence production sector.
CHAPTER 2 OBJECT OF THE CONTRACT
The Seller sells and the Buyer buys, free of any encumbrances, a number
of 4,553,442 shares, having the nominal value of ROL 25,000 each, for a
total value of thousands ROL 113,836,050, representing 72.90% of the
subscribed share capital of the Company under the conditions presented
in this Contract.
The sold shares are numbered from 1,692,707 to 6,246,148 inclusively.
CHAPTER 3 THE SHARES PROPERTY TRANSFER
The property over the sold shares is transferred from the Seller to the
Buyer with all the rights and obligations provided to shareholders under
Romanian law and under the present Contract, on the date of the purchase
price payment in the conditions contemplated by Chapter 4.
-1-
CHAPTER 4 THE PRICE
The price agreed upon by the Parties is USD 4.6119 for each sold share,
totaling USD 21,000,000.
CHAPTER 5 PAYMENT TERMS
The Buyer commits himself to pay the price established at Chapter 4 as
follows:
5.1 The price, amounting to USD 21,000,000, will be paid by the Buyer within
90 days from the Contract signing day, in the Seller's account
stipulated at Chapter 6, respectively up to date April 29, 1999.
The bank guarantee letter in original will be returned to the Buyer
immediately after the Seller has the confirmation of the payment of the
Price stipulated by Chapter 4.
5-2 The Buyer agrees to undertake the banking costs and fees due to cashing
the price by the Seller, stipulated at Chapter 4.
5.3 In case of non-observance of the payment term as settled at the Article
5.1, the Buyer has to pay to the Seller a penalty of 0.3% for each day
of delay, calculated for the unpaid amount of the purchasing price.
5.4 The present Contract will become null and void, without any
notification, if the Buyer does not fully paid the price stipulated by
Article 5.1, up to the date May 29, 1999 (maturity date plus 30 days
with penalties).
5.5 The Buyer agrees that the Seller will execute the Bank Guarantee Letter
if the Contract is annulled under the Article 5.4
CHAPTER 6 BANK ACCOUNTS
All payments for the current Contract will be made into and out of the
following accounts:
For the Seller in USD account no. 251121710001 opened with EXIMBANK,
Bucharest Subsidiary.
For the Buyer. account no. 00000000 opened with BARCLAYS BANK PLC and
account no. 00000000 opened with BANCA AGRICOLA SCMB.
CHAPTER 7 SELLER'S REPRESENTATIONS AND WARRANTIES
7.1 Signing and authorisation
The Seller declares and guarantees that he is duly authorized and
legally competent to enter into this Contract and to fulfil all
obligations hereunder.
7.2. In accordance with the statement of the Company's management (Annex no.
1):
7.2.1 The Seller declares and guarantees that the Company was established and
is operating according to the law in force and, at the signing date of
the present Contract, it is not bankrupt.
7.2.2 The Seller declares that on the signing date of the present Contract
there are no liabilities to pay or legal actions against the Company
under applicable environmental law
-2-
7.3 Legal status of the Company on the signing date of the Contract
In accordance with the statement of the Company's management (Annex no.
1), the Company has all the necessary licenses and authorizations to
operate its current business activities, in accordance with the object
of activity indicated in its Statute except for the environmental
permit.
7.4. Financial statement of the Company on the signing date of the Contract
In accordance with the statement of the Company's management
(Annex no. 1):
7.4.1 Financial reports were drafted accurately and correctly according to the
applicable Romanian legislation, were approved by the shareholders in
the Shareholder General Assembly, were certified by D.G.F.P.C.F.S. and
contain the complete financial statement of the Company, on the date on
which were issued.
The Patrimony Status and financial results of the Company on 30.10.1998
are presented in Annex no. 5.
The list of the Company's Commercial Contracts over 20,000 USD worth is
presented in Annex no. 6.
There were no substantial modifications of the Company's financial
status in the period between 30.10.1998 and the Contract signing date.
7.4.2 All accounting documents and the other supporting documents are at the
Company's headquarters and are preserved in accordance with Romanian
legislation and practice.
7.5 Shares
The Seller, as sole legal owner of the shares object of the present
Contract, guarantees to the Buyer that there are no rights of third
parties over these shares.
7.6 Land
The Seller certifies that the Company has the following Certificates
attesting the property rights over the land:
Series M03/no. 3131/11.09.1996 for the surface of 355,073.82 sqm,
Series M03/no. 3045/15.08.1996 for the surface of 4,538.60 sqm,
Series M03/no. 3044/15.08.1996 for the surface of 551.13 sqm,
Series M03/no. 3043/16.08.1996 for the surface of 4,184.41 sqm,
issued by the Ministry of Industry (Annex no. 2).
7.7 The Buyer guarantees that all the existent information, documents and
contracts that he knew about on the date of the present Contract and
that the Buyer should have been notified of, were brought to Buyer's
knowledge.
7.8 The Seller guarantees that the minimum accepted environment objectives
that must be accomplished by the Buyer are those listed and estimated
in Annex no. 7, established in accordance with Romanian legislation in
force.
-3-
CHAPTER 8 BUYER'S REPRESENTATIONS AND WARRANTIES
8.1 The Buyer has full authority and competence to sign the present
Contract, to fulfil its obligations that arise from this Contract and in
accordance with its terms.
8.2 The person who signs the present Contract on behalf of the Buyer is
legally authorised to do so.
8.3 The Buyer commits himself to pay the purchase price in respect with the
terms stipulated by Chapter 5.
8.4 The Buyer, as shareholder of the Company, commits himself not to approve
in the General Shareholders Assembly the modification, within a 4 years
period, of the main object of activity of the Company, as declared in
its Statute
8.5 The Buyer, as majority shareholder of the Company, commits himself to
take all due actions in order for the Company to observe the rights and
obligations existing at the time of the transfer of property right over
the shares under the Chapter 3 of this Contract with respect to:
(a) The collective bargaining Contract and/or other existent
covenants or agreements between the trade union and the owners
of the Company (Annex no. 3).
(b) Individual labor contracts (Annex no. 3).
(c) Legislation regarding working condition, salaries, employment or
lay-off, indemnification in case of massive lay-off and
severance payments.
8.6 The Buyer also commits himself to take all due action in order for the
Company to apply the Romanian legislation in force regarding social
protection,
8.7. The Buyer, as shareholder of the Company commits himself to ensure:
(a) The approval, on the occasion of the debate and approval of the
Balance Sheet for the privatisation year by the Shareholders
General Assembly, of the fees for the SOF representative that
are owed until the date of the Company privatisation, as
stipulated by the representation Contract.
(b) Payment by the Company of the amounts stipulated at letter (a).
Upon the Buyer's request, the Setter will provide the legal
frame and the methodological norms regarding the fee calculation
mentioned at letter (a).
(c) Payment of the Company's debts to SOF:
- dividends and penalties for payment delay due to
SOF for years 1993 (ROL 31,610,400), 1994 (ROL
4,435,059), 1995 (ROL 746,805) and 1996 (ROL
4,494,080);
- credits for restructuring according to
Convention no. 730/03.11.1995 (ROL
1,000,000,000) and Convention no. 658/17.01.1995
(ROL 288,000,000).
8.8 The Buyer, as shareholder of the Company, commits himself not to decide.
to voluntarily dissolute and liquidate the Company within a 3 (three)
years period.
8.9 The Buyer undertakes to have the Company accomplish all the minimum
accepted environment objectives established by the Environment
Protection Agency (Annex no. 7).
The cost of these minimum accepted environment objectives is estimated
to amount to USD 1.5 million.
-4-
8.10 Investments / Capital Contribution
8.10.1 Buyer's commitment
The Buyer commits himself to invest in the Company, from own or
attracted sources, on his behalf, over a 4-year period, starting with
the date of his registration as shareholder at the Registry of Commerce,
an investment / capital contribution amounting to 59,500,000 USD,
according to Annex no. 4.
8.10.2 Investment / Capital Contribution Accomplishment
The investment / capital contribution is considered integrally
accomplished on the date of registration in the Registry of Commerce
Office of the Company's capital increase with the Buyer's subscribed and
integrally paid in capital.
8.10.3. Guarantee of Investments / Capital Contribution Accomplishment
(a) To guarantee the full accomplishment of the investments, the
Buyer will pledge 20% of the purchased shares, respectively a
number of 910,689 shares numbered from 5,335,460 to 6,246,148
inclusively.
(b) The share pledge will be registered in the Shareholders Romanian
Register or in another independent register.
(c) The Buyer commits himself to allow the Seller to verify at any
time the existence of the registration of the share pledge.
(d) In case at the end of the investment period the Buyer did not
observe the obligations provided by Articles 8.10.1 and 8.10.2,
the Seller will grant by notification a 6-month grace period,
having the right to execute the pledge over the shares at the
end of the aforesaid period.
(e) The pledge will be removed from the shares within 30 days from
the date of integral accomplishment of the investment / capital
contribution of the Buyer according to the conditions provided
by Article 8.10.1 and Article 8.10.2 of the present Contract.
8.11 The Buyer as majority shareholder commits himself to observe all the
Romanian laws and legal regulations concerning the protection of the
defence production.
In view to accomplish these obligations, the Buyer as majority
shareholder will convene an Extraordinary Shareholders General Assembly
within 60 days from the price payment date, in order to include the
following provisions in the Company's Statute:
(a) Appointment in the Company's Board of a State representative.
(b) Company's Board and General Shareholder Assembly cannot make
decisions if the State representative opposes to those decisions
that might infringe upon the national interest regarding:
- the pledge, mortgage, sale or transfer in any way of the
Company's assets used for the defence production, as
they were identified in the inventory set up according
to the Law no.78/1995 and approved by the Co-ordination
Committee for Defence Production;
- voluntary dissolution and liquidation of the Company;
- the merge by absorption.
-5-
(c) Adding to the Company's Board attributions the following:
- assurance of the integrity, functioning and necessary
level for the common capacities of both economic and
military products;
- full accomplishment of the orders of the national
defence, under the terms established by commercial
contracts in peace-time and with priority in war-time;
- accomplishment of the respective mobilisation
requirements concerning the preparation of the domestic
economy and territory for defence in accordance with the
provisions of the Law no. 78/1995;
- assurance of the protection of the personnel specialised
in military technique production in accordance with the
provisions of the Law no. 78/1995.
8.12 The Buyer and the Seller will accomplish all the legal provisions to
register the modifications made in the Company's Statute at the Registry
of Commerce.
CHAPTER 9 SHARE ASSIGNMENT
The Buyer undertakes not to assign to third parties all or a part of the
shares bought from the Seller and not to transfer the present Contract
to a third party, until the complete fulfilment of all commitments
undertaken by the present Contract, without the prior written consent of
the Seller.
In case that shares of the company are assigned without affecting the
Buyer's majority holding position, or if the assignment is made to an
affiliated company, this assignment will be preceded only by a
notification to the Seller
CHAPTER 10 NULLITY
If any of the clauses of the within Contract is declared null and void,
the remaining provisions of the Contract shall not be thereby affected.
The parties agree that any clause declared to be null and void should be
replaced by another clause, in keeping as much as possible with the
meaning of the Contract
CHAPTER 11 FORCE MAJEURE
11.1 Any unforeseen and unavoidable circumstance, independent of the will of
the parties, which arises after the signing of the Contract and impedes
the execution thereof, shall be considered Force Majeure and shall
exonerate of responsibility the party which invokes it.
11.2 Force Majeure clauses are such circumstances as: war, revolution,
earthquake, floods, embargo.
11.3 The party who invokes the Force Majeure must notify to the other within
5 days from the date when the circumstance arises and to communicate the
evidence thereof within 15 days from that date. The party is also
compelled to notify the date of the cessation of the Force Majeure case
within 5 days.
11.4 In case of failing to notify, in accordance with the conditions and
within the deadlines herein above provided for, the commencement and the
cessation of the Force Majeure case, the party claiming the Force
Majeure shall bear all the damages caused to the other party by such
failure.
11.5 If the Force Majeure case and/or the effects thereof require to suspend
the execution of this Contract on a period that exceeds 6 months, the
parties shall meet within no
-6-
more than 10 days from the date when such period elapsed, in order to
agree either upon the performance of this Contact or on the cancellation
thereof.
CHAPTER 12 LITIGATION
The Seller and the Buyer hereby agree that the disputes deriving from
the interpretation and performance of this Contract, which cannot be
settled on an amiable way, be subject to the International Chamber of
Commerce - Paris arbitration.
CHAPTER 13 OTHER CLAUSES
If within a 6 month period from Contract signing date the Buyer notes
that there are material differences (that might have influenced Buyer's
will at the moment of Contract signature) between the information
presented by the Seller in the Presentation File and in the annexes to
this Contract (information that were taken into consideration by the
Buyer for the bid and for the Contract signature) and the actual status,
the Buyer is entitled to require the remedy of the damages through
negotiation, if any of the damages exceeds USD 100,000.
CHAPTER 14 THE APPLICABLE LAW
The Romanian law governs this Contract.
CHAPTER 15 MISCELLANEOUS CLAUSES
15.1 The present Contract with its Annexes contains all the agreements of the
parties and cancels any prior agreement or understanding regarding its
object.
15.2 No modification of the present Contract or its Annexes shall become
effective or in force unless made in written and signed by or in behalf
of the parties.
15.3 The modification of the contractual clauses will be settled by mutual
agreement through Additional Acts.
15.4 This Contract has the value of an Assignment of Shares, in accordance
with the Article 98, paragraph 1 of the Law regarding the commercial
companies, no. 31/1990, republished.
15.5 All costs related to the extra-investigation works or specific expert's
reports, whose execution is required by the Buyer, are in his charge.
15.6 This Contract will come into effect on its signing date by the
contracting parties.
15.7 Annexes no. 1-7 are integral part of the present Contract.
15.8. Notifications
15.8.1 All notifications and communications addressed to any party shall be
made in writing in Romanian and will be transmitted to addresses
specified hereunder or to another address beforehand indicated.
For the Seller: STATE OWNERSHIP FUND
Executive General Manager
Xx. Xxxx XXXXXXX
Xxxxxx Xxxxxxxxxxxx xx. 0, xxxx 00000
xxxxxx 0, Xxxxxxxxx, XXXXXXX,
-7-
For the Buyer: BRITTEN XXXXXX LIMITED
Chief Executive Officer
Mr. Xxxx XXXXXXXX
Bembridge, Isle of Wight, UNITED KINGDOM
P035 5 PR
15.8.2 Notifications will be considered correctly executed on the day of
delivery (through registration in the Correspondence Register located at
the General Registry - for the Seller and through the signed receipt -
for the Buyer), if (a) have been delivered personally or by courier or
(b) on receipt of the answer in case of transmission by telex or fax or
(c) on date when signed receipt is received for registered mail
transmission - for both parties.
15.9 The present Contract was issued in 2 (two) copies in Romanian and 2
(two) copies in English.
If there is a conflict between the Contract terms in the Romanian and
English versions, the Romanian version terms will prevail.
Signed on January 29, 1999, in Bucharest.
SELLER, BUYER,
STATE OWNERSHIP FUND XXXXXXX NORMAN LIMITED
GENERAL EXECUTIVE DIRECTOR EXECUTIVE DIRECTOR
Xxxx XXXXXXX Xxxx X. XXXXX
/s/ Xxxx Xxxxxxx /s/ Xxxx X. Xxxxx
-8-
