DATED THIS 28TH DAY OF AUGUST 1996
BETWEEN
SEMICONDUCTOR ALLIANCE PTE LTD
AND
SEMICONDUCTOR PACKAGING MATERIALS CO. INC
AND
INTERNATIONAL SEMICONDUCTOR PRODUCTS PTE LTD
AND
THE PARTIES WHOSE NAMES ARE STATED
IN SCHEDULE 4 OF THIS AGREEMENT
===============================================
JOINT VENTURE AGREEMENT
===============================================
MESSRS KOH & CHOO
ADVOCATES & SOLICITORS
SINGAPORE
(KK/CYL/ts/3409/96)
This Agreement is made on the 28th day of August 1996.
BETWEEN
(1) Semiconductor Alliance Pte Ltd, a company incorporated in Singapore with
its registered office at 000 Xxxxxx Xxxx #00-00/00, Xxxxxxx Xxxxxxxx,
Xxxxxxxxx 000000; ("SCA");
(2) Semiconductor Packaging Materials Co., Inc., a company incorporated in
Delaware, United States of America with its principal place of business
at 000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000, U.S.A, ("SPM");
(3) International Semiconductor Products Pte Ltd, a company incorporated in
Singapore with its registered office at 000 Xxxxxx Xxxx #00-00/00,
Xxxxxxx Xxxxxxxx, Xxxxxxxxx 000000, (the "Company" or "ISP"); and
(4) the parties whose names and addresses are stated at Schedule 4 of this
Agreement.
WHEREAS
(A) SCA and SPM are desirous of establishing and operating a joint venture
company in Singapore for the primary purpose of carrying on the Business
(as defined below).
(B) The parties referred to in Schedule 4 are selected directors and/or
officers and/or shareholders of SCA and SPM and/or its subsidiary ASP
and are executing this Agreement in order to be bound by clause 8
hereof.
(C) For the purpose of cooperatively carrying out the aforesaid desire SCA
has procured the formation of the Company with an authorised share
capital of S$100,000.00 divided into 100,000.00 ordinary shares of
S$1.00 each and an initial and paid-up capital of S$2.00.
(D) SCA is beneficially entitled to the 2 ordinary shares in the Company
constituting the initial issued and paid-up capital of $2.00 which are
held by the nominees of SCA.
(E) To give effect to the intention of the parties hereto as hereinbefore
recited, and to regulate their relationship inter se as shareholders in
the Company in the conduct of the Business and affairs of the Company in
the spirit of mutual confidence and co-operation, the parties hereto
have agreed to enter into this Agreement on the terms and conditions
hereinafter set out.
IT IS AGREED as follows:-
1. DEFINITIONS AND INTERPRETATION
1
(A) Definitions
In this Agreement and the Schedules, unless the subject or context
otherwise requires, the following words and expressions shall have the
following meanings respectively ascribed to them:-
"Act" means the Companies Act, Chapter 50;
"Articles" means the articles of association for the time being of the
Company;
"Auditors" means the auditors for the time being of the Company;
"ASP" means American Silicon Products, Inc., a corporation incorporated
in the United States of America with its place of business at 00
Xxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxx, 00000, X.X.X;
"Board" means the board of Directors for the time being of the Company;
"Business" means the business of polishing and reclamation of
semiconductor wafers and the brokering of semiconductor wafers used in
the electronics industry;
"Control" and any form thereof, such as Controlling means the possession
by one person, directly or indirectly through one or more
intermediaries, of the power to direct or cause the direction of the
management or policies of another person; with respect to a corporation
such power may be evidenced by the right to exercise, directly or
indirectly, more than 50% of the voting rights attributable to the
shares or interest of such corporation, partnership or other body
corporate;
"Directors" means the directors for the time being of the Company;
"Exchange Rate" means the rate of exchange between the US$ and the S$ as
published by the Asian Wall Street Journal;
"Expert" means an independent merchant bank of international repute who
shall be nominated by agreement between the Shareholders or failing such
nomination within 14 days after the request of any Shareholder to the
others therefor, nominated at the request of any Shareholder by the
Chairman of the Singapore International Arbitration Centre;
"Intellectual Property Rights" means any patent, copyright, registered
design and unregistered designs, trade name, trade xxxx, logo, trade
dress, or other similar industrial, commercial or intellectual property
rights wherever in the world enforceable;
"Knowhow" means all industrial, marketing and commercial information and
techniques including without limitation to the foregoing, drawings,
formulae, test
2
reports, operating and testing procedures, instruction manuals, tables
of operating conditions, administrative procedures, lists and
particulars of customers, marketing methods and procedures, advertising
copy and computer software programmes relating to and/or used in
connection with the Business;
"Memorandum" means the memorandum of association for the time being of
the Company;
"Related Party" means in relation to any person, a person directly or
indirectly (through one or more intermediaries) Controlling, Controlled
by or under common Control with that person;
"Shareholders" means SCA, SPM and any other person holding shares in the
capital of the Company who shall have executed a deed of ratification
and accession pursuant to clause 6(C);
"Scheduled Board Meetings" means Board meetings referred to in clause
3(I);
'Specified Sum" means the sum of US$4,000,000.00 less S$100,000.00;
"SCA Directors" means Directors nominated in accordance with clause
3B(i);
"SPM Directors" means Directors nominated in accordance with clause
3B(ii);
"S$" means the lawful currency of Singapore;
"Territories" means all the countries listed in Schedule 1;
"Unscheduled Board Meetings" means Board meetings referred to in clause
3(J); and
"US$" means the lawful currency of the United States of America.
(B) Interpretation
(i) Any reference in this Agreement to:-
(a) "clauses","paragraphs" "sub-paragraphs", and "schedules" are to
the clauses, paragraphs and sub-paragraphs of, and the schedules
to, this Agreement; and
(b) "financial year" means a period in respect of which an audited
profit and loss account of the Company has or is to be prepared
for the purpose of laying before the Company at its annual
general meeting, whether that period is a year or not. The
accounting reference date of the Company shall be the first of
January of each calendar year.
(ii) The headings are for convenience only and shall not affect the
interpretation
3
of this Agreement.
(iii) The schedules form a material part to this Agreement and all references
to the this Agreement shall include references to the schedules.
(iv) Unless the context otherwise requires or permits, references to the
singular number shall include references to the plural number and vice
versa; references to natural persons shall include bodies corporate and
incorporate and vice versa; and words denoting any gender shall include
all genders.
(v) The expression "related corporation" shall bear the meaning ascribed
thereto in Section 6 of the Act.
(vi) All references to time, days of the week and calendar months are
references to Singapore time, days and calendar months.
2. COMPLETION
On or before 5 September 96, or such other date as SCA and SPM shall
agree in writing, SCA and SPM shall each take or cause to be taken the
following steps at Directors' and Shareholders' meetings of the Company
(as appropriate):-
(i) the appointment of each of Messrs Xxxxxx X. Xxxxxxxx, Xxxxxxx
Xxxxx ("SPM Directors") and Xx. Xxxxxx Xxx Hin Choon and Xx Xxx
Boon Leng ("SCA Directors") as Directors;
(ii) the transfer of the 2 subscriber shares of S$1.00 each from the
nominee shareholders of the Company to SCA;
(iii) the subscription by each of SCA and SPM for 49,898.00 and
50,100.00 shares of S$1.00 each respectively in the Company at
par and the allotment and issue of such shares by the Company to
SCA and SPM respectively against payments in full in cash;
(iv) the appointment of Xx Xxxxxx Xxx Hin Xxxxx as Managing Director
of the Company and the execution of the Service Agreement on the
terms appearing on Schedule 2; and
(v) the resignations of the nominee Directors Xxxx Yhui Kong and Low
Kok Poo.
Provided Always that the Shareholders' obligations under paragraph (iii)
above shall be conditional upon the execution, by ASP and the Company,
of the Intellectual Property License Agreement referred to in clause 14.
In the event of the execution of the Intellectual Property License
Agreement after 5 September 96, the date for the subscription by the
Shareholders of shares in the Company referred to in paragraph (iii)
above shall be agreed in writing
4
between SCA and SPM and in any event unless otherwise agreed in writing,
shall be no later than the 7th day after the execution of the
Intellectual Property License Agreement.
3. BOARD OF DIRECTORS
(A) Number
Unless otherwise unanimously agreed upon by the Shareholders in writing,
the Board shall consist of 4 Directors.
(B) Composition
Save as hereinafter provided, the Board shall comprise:-
(i) 2 persons nominated by SCA for the time being as Directors (who
shall be designated as "SCA" Directors); and
(ii) 2 persons nominated by SPM for the time being as Directors (who
shall be designated as "SPM" Directors),
so long as SCA and SPM shall each hold such numbers of shares for the
time being in the total issued share capital of the Company as are not
less than a 49.9% : 50.1% ratio respectively.
(C) Right of Nomination
The right to nomination conferred on a Shareholder under paragraph (B)
above shall include the right of that Shareholder to request the removal
at any time from office such person nominated by that Shareholder as a
Director and the right of that Shareholder at any time and from time to
time to determine the period during which such person shall hold the
office of Director.
(D) Notice in Writing
Each nomination or request for removal of a Director pursuant to this
clause shall be in writing and signed by or on behalf of the Shareholder
nominating or requesting the removal of such Director and shall be
delivered to the registered office for the time being of the Company.
(E) Further Director
Whenever for any reason a person nominated by a Shareholder ceases to be
a Director, that Shareholder shall be entitled to nominate forthwith a
further Director.
(F) Alternate Director
5
A Director shall be entitled to any time and from time to time to
appoint any person to act as his alternate and to terminate the
appointment of such person and in that connection the provisions of the
Articles shall be complied with. Such alternate Director shall be
entitled while holding office as such to receive notices of meetings of
the Board and to attend and vote as a Director at any such meetings at
which the Director appointing him is not present and generally to
exercise all the powers, rights, duties and authorities and to perform
all functions of his appointor as Director. Further, such alternate
Director shall be entitled to exercise his vote of the Director
appointing him at any meetings of the Board and if such alternate
Director represents more than one Director such alternative Director
shall be entitled to one vote for every Director he represents.
(G) Chairman
The Chairman of the Board shall be an "SPM" Director, as designated from
time to time by SPM. He shall have a second calling or casting vote in
meetings of the Board.
(H) Managing Director
The Managing Director of the Company shall be an "SCA" Director
appointed by SCA. He shall be responsible for the day to day running and
management of the business of the Company within the limits imposed by
the Board and this Agreement. The first Managing Director of the Company
shall be Xx. Xxxxxx Xxx Hin Xxxxx. SPM shall be consulted on all
subsequent appointments of the post of Managing Director and shall have
the right to veto SCA's selection provided that (i) this right is
exercised in the best interest of the Company and (ii) SPM shall state
the reasons for its objection in writing to SCA.
(I) Scheduled Board Meetings
(i) Unless otherwise agreed between the "SCA" Directors and the "SPM"
Directors, there shall be a monthly telephone Board meeting held in
accordance with the procedure described in clause 3(K) on the third
Tuesday of every calendar month ("Scheduled Board Meetings"). The first
Scheduled Board Meeting shall be held at 8.00 am. on the third Tuesday
following 28 August 96. The time for all subsequent Scheduled Board
Meetings shall alternate between 8.00 pm and 8.00 am. respectively. The
quorum necessary for the transaction of any business of the Company at
Scheduled Board Meetings shall be 2 Directors including at least one
"SCA" Director and at least one "SPM" Director. All resolutions of the
Directors at a Scheduled Board Meeting shall be adopted by a simple
majority vote of the Directors present.
(ii) If within 60 minutes from the time appointed for the holding of a
Scheduled Board Meeting (but not an adjourned Scheduled Board Meeting) a
quorum is not present, then the meeting shall stand adjourned to the
same time 72 hours later and if at such adjourned Scheduled Board
Meeting a quorum is not
6
present within 60 minutes from the time appointed for holding the
meeting, any 2 Directors present shall form a quorum and any resolutions
passed thereat shall be considered valid and binding Board resolutions.
(J) Unscheduled Board Meetings
(i) All meetings of the Board other than those referred to in clause 3(I)
shall be Unscheduled Board Meetings. The quorum at an Unscheduled Board
Meeting necessary for the transaction of any business of the Company
shall be 2 Directors, including at least one "SCA" Director and at least
one "SPM" Director. All resolutions of the Directors at an Unscheduled
Board Meeting shall be adopted by a simple majority vote of the
Directors present.
(ii) With the exception of a Board meeting held in accordance with the clause
3 (K), no Unscheduled Board Meeting shall be held outside Singapore
unless with the consent of both the "SCA" Directors and "SPM" Directors.
(iii) No Unscheduled Board Meeting may be held unless 3 days' prior written
notice setting out the agenda, time and place of the meeting has been
given to all Directors and alternate Directors, including those not
present in Singapore, unless all the Directors agree to a shorter period
of notice. Such notice may be delivered personally or sent by prepaid
registered post (unless it is sent from overseas in which case it shall
be sent by telex or facsimile transmission or by Federal Express or
similar courier service) or by facsimile transmission addressed to the
Directors or alternate Directors to such address or facsimile number as
the Directors or alternate Directors shall from time to time notify the
company secretary. Meetings conducted in accordance with clause 3(K)
below may be convened on such shorter period of notice as both the "SPM"
and "SCA" Directors agree. Meetings conducted in accordance with clause
3(K) below may be summoned on verbal notice.
(K) Telephone Board meetings
The Directors may (unless otherwise required by the Act), meet together
either in person or by telephone, radio conference, television or
similar communication by which all persons participating in the meeting
are able to hear and be heard by all other participants, for the
despatch of business and adjourn and otherwise regulate their meetings
as they think fit and the quorum for such teleconference meetings shall
be the same as the quorum required by clauses 3 (I) and (J) above. A
resolution passed by such a conference shall, notwithstanding that the
Directors are not present together at one place at the time of the
conference, be deemed to have been passed at a meeting of the Directors
held on the day and at the time at which the conference was held and
shall be deemed to have been held at the office of the Company, unless
otherwise agreed, and all Directors participating at that meeting shall
be deemed for all purposes of this Agreement to be present at that
meeting.
(L) Unanimous Consents
7
A resolution in writing signed by all Directors shall be as valid and
effectual as if it had been passed at a Board meeting duly called and
constituted. Such resolution may be signed in any number of counterparts
and shall become effective when one or more counterparts have been
signed by all of the Directors.
4. BUSINESS OF THE COMPANY
(A) Business
The Shareholders agree that the Company shall carry on the Business in
the Territories and such other businesses as may from time to time be
determined by the Board.
(B) Shareholders' Obligations
In consideration of the mutual obligations of the Shareholders herein
contained, and except as the Shareholders may otherwise agree in writing
or save as otherwise provided or contemplated in this Agreement, each of
the Shareholders shall exercise its powers in relation to the Company so
as to ensure that:-
(i) the Company carries on its business and conducts its affairs in a
proper and efficient manner;
(ii) the Company, and the Directors appointed by that Shareholder,
will comply strictly and expeditiously with the provisions of
this Agreement and the Articles;
(iii) the Business shall be carried on pursuant to the policies set out
herein or laid down from time to time by the Board, which shall
hold Board meetings in accordance with clauses 3(I) and 3(J) and
the Articles;
(iv) the Company shall cause to be kept full and proper accounting
records relating to the business, undertakings and affairs of the
Company, which records shall be made available at all reasonable
times for inspection by the Directors by prior appointment during
office hours;
(v) the Company shall prepare annual accounts, in each case in
accordance with generally accepted accounting principles and in
compliance with all applicable legislation in respect of each
accounting reference period, and shall procure that such accounts
are audited as soon as practicable and shall supply copies of the
same both in draft and final form, to each of the Shareholders
immediately upon their issue;
(vi) the Company shall do all that the Auditors may reasonably require
by way of keeping records and accounts and provide the Auditors
with all such information and explanation as they may reasonably
require and
8
otherwise assist the Auditors in all reasonable ways;
(vii) the Company continues to qualify as resident in Singapore for the
purpose of taxation and is not resident elsewhere;
(viii) the accounting reference date of the Company shall be the 1st of
January of each calendar year;
(ix) an additional set of financial statements be prepared by the
Company in conformity with the Generally Accepted Accounting
Principles as practised in the United States and with the United
States Securities Exchange Commission's requirements to enable
SPM to consolidate the Company's financial statements in
accordance with United States legal requirements; and
(x) the Board submits an annual budget for Shareholders' approval by
the first day of December of each calendar year.
5. GENERAL MEETING
(i) No business shall be transacted at any general meeting of the Company
unless a quorum of Shareholders is present throughout the meeting;
notwithstanding the provisions of the Articles, two Shareholders present
in person or by proxy shall be a quorum.
(ii) A resolution in writing signed by all Shareholders shall be as valid and
effectual as if it had been passed at a general meeting of the company
duly called and constituted. Such resolution may be signed in any number
of counterparts and shall become effective when one or more counterparts
have been signed by all of Shareholders.
(iii) The Shareholders shall exercise all voting rights and other powers of
control available to them in relation to the Company so as to procure
(so far as they are able by the exercise of such rights and powers) that
the Company shall not without the prior written consent of SCA and SPM
or the affirmative votes of SCA and SPM at a general meeting of the
Company carry out any of the following:-
(a) acquiring or disposing any interest in any other company or
carrying on any business that is outside the Business;
(b) declaring any dividend distribution;
(c) incurring aggregate capital commitments in excess of the lesser
of S$250,000 or 5% of the sum provided in the annual budget for
the financial year;
(d) the creation or redemption of any fixed or floating charge,
debenture,
9
mortgage, lien (other than a lien arising by operation of law)
or other encumbrance over the whole or any part of the
undertaking, property or assets of the Company;
(e) the issuance, allotment, grant of option, over any of the
Company's unissued share capital or other securities or the
reorganisation of its share capital in any way;
(f) obtaining any loan or the creation of any debt other than the
shareholders' loans referred to in clause 7(A)(i);
(g) terminating any service agreement between the Company and its
Managing Director;
(h) confirming the remuneration of any Director; and
(i) confirming the terms of employment of the Managing Director and
other key management personnel.
6. TRANSFER OF SHARES
(A) Restrictions on Transfer
(i) No Shareholder shall create or have outstanding any pledge, lien, charge
or other encumbrance or security interest on or over any shares in the
capital of the Company or any part of its interest in such shares.
(ii) Subject to paragraph (xi) and paragraph (B) below, no Shareholder shall
transfer shares held by it in the capital of the Company or otherwise
sell, dispose of or deal with all or any part of its interest in such
shares unless and until the rights of pre-emption conferred by this
clause 6 have been exhausted. It shall be a pre-condition to any share
transfer that the transferor shall transfer all but not part of his
shares in the capital of the Company.
(iii) Subject to paragraph (B) below, every Shareholder who desires to
transfer its shares (the "Transferor") shall give to the Company notice
in writing of such desire (a "Transfer Notice"). Subject as hereinafter
mentioned, a Transfer Notice shall constitute the Company the
Transferor's agent for the sale of all its shares (in the capital of the
Company (the "Sale Shares") to the other Shareholder (the "Other
Shareholder") at the Purchase Price.
(iv) The Purchase Price shall be the market value of the Sale Shares as at
the date of the Transfer Notice as determined by the Expert on the
following assumptions and bases:-
(a) valuing the Sale Shares as on an arm's length sale between a
willing vendor and willing purchaser;
10
(b) if the Company is carrying on business as a going concern, on the
assumption that it will continue to do so;
(c) that the Sale Shares are capable of being transferred without
restriction; and
(d) valuing the Sale Shares as a rateable proportion of the total
value of all the issued shares of the Company which value shall
not be discounted or enhanced by reference to the number thereof.
If any difficulty shall arise in applying any of the foregoing
assumptions or bases then such difficulty shall be resolved by the
Expert in such manner as he shall in his discretion think fit.
The Company shall procure that the Expert determines the Purchase Price
within 21 days of being requested to do so.
In making such determination, the Expert shall be acting as an expert
and not as an arbitrator and his decision shall be binding on all
Shareholders.
(v) The costs and expenses of the Expert in determining the Purchase Price
shall be borne by the Company.
(vi) Upon receipt of the Expert's written determination of the Purchase Price
in writing, the Company shall within 2 days by notice in writing inform
the Other Shareholder of the Purchase Price of the Sale Shares and
invite the Other Shareholder to apply in writing to the Company within
21 days of the date of despatch of the notice (which date shall be
specified therein) for such Sale Shares, subject however to such
limitations as may be specified in the Transfer Notice and which the
Expert took into account in his valuation.
(vii) If the Other Shareholder shall within the period of 21 days apply for
all of the Sale Shares, the Board shall notify in writing the Other
Shareholder the place and time (being not earlier than 14 and not later
than 28 days after the date of the Other Shareholder's application for
the Sale Shares) at which the sale and purchase of the Sale Shares shall
be completed.
(viii) Subject to paragraph (vi) above, the Transferor shall be bound to
transfer the Sale Shares to the Other Shareholder at the time and place
therein specified by the delivery of duly executed transfer forms
together with the relative share certificates in respect of the Sale
Shares and, if it shall fail to do so, the Chairman of the Company or
some other person appointed by the Board shall be deemed to have been
appointed attorney of the Transferor with full power to execute,
complete and deliver, in the name and on behalf of the Transferor,
transfers of the Sale Shares to the Other Shareholder against payment of
the price to the Company. On payment of the price to the Company the
Other Shareholder shall be deemed to have obtained good quittance for
such payment and on execution and delivery of the transfer the Other
Shareholder
11
shall be entitled to insist upon its name being entered in the Register
of Members as the holder by transfer of the Sale Shares. The Company
shall forthwith pay the price into a separate bank account in the
Company's name and shall hold such price in trust for the Transferor.
(ix) If the Other Shareholder does not apply to purchase the Sale Shares the
Transferor shall be entitled, during the 3 months following the expiry
of the said period of 21 days referred to in paragraph (vi) above, to
transfer to any third party and at any price (not being less than the
Purchase Price fixed under paragraph (iv) above) and on the same terms
the Sale Shares.
(x) Notwithstanding paragraph (ix) above, if the Transferor receives a bona
fide offer from a third party other than a Related Party (the "Third
Party") during the 3 months following the expiry of the said period of
21 days referred to in paragraph (vi) above, to purchase the Sale Shares
at a price (the "Third Party Price") less than the Purchase Price and if
the Transferor desires to sell the Sale Shares to such Third Party at
such Third Party Price, then the Transferor shall fully and fairly
disclose in writing to the Other Shareholder the principal terms and
conditions of the Third Party's proposal to purchase the Sale Shares.
The Other Shareholder shall have 30 days from the date of such written
presentation to it (the "Presentation Date") to decide whether to
purchase the Sale Shares at the Third Party Price and on the same terms
and conditions offered by such Third Party (the "Third Party Proposal
Terms"). If the Other Shareholder accepts the Third Party Proposal Terms
in writing within 30 days of the Presentation Date, then the Transferor
shall be bound to transfer the Sale Shares to the Other Shareholder
pursuant to the provisions of paragraph (viii) above. If the Other
Shareholder fails to accept such offer to purchase the Sale Shares
within the said 30 days from the Presentation Date, then the Transferor
shall be entitled during the 3 months following the expiry of the said
30 day period, to transfer the Sale Shares to such Third Party and at
any price not being less than the Third Party Price and on any terms and
conditions not more favourable to the Third Party than the Third Party
Proposal Terms.
(xi) Notwithstanding anything in the foregoing paragraphs but subject to
paragraph (C) below, a Shareholder being a company may transfer all or
any part of its shares to any of its related corporations (the
"Transferee Corporations"). It shall be a condition precedent to the
right of such Shareholder to transfer shares to the Transferee
Corporation that such Shareholder and the Transferee Corporation both
execute, in such form as may be reasonably required and agreed between
the other Shareholder, a deed of undertaking under which such
Shareholder undertakes to repurchase, and the Transferee Corporation
undertakes to sell, all the shares held by the Transferee Corporation in
the capital of the Company in the event that the Transferee Corporation
ceases to be a related corporation of such Shareholder.
(B) Moratorium on Transfer
Notwithstanding anything contained in this Agreement or the Articles but
subject
12
to clause 2(ii), no Shareholder shall transfer all or any part of its
shares in the capital of the Company to any person within a period of 30
months from the 28 August 96 unless with the prior written consent of
the other Shareholder.
(C) Supplementary Provisions
It shall be a condition precedent to the right of any Shareholder to
transfer shares in the capital of the Company that the purchaser or
transferee (if not already bound by the provisions of this Agreement)
executes in such form as may be reasonably required by and agreed
between the other Shareholder a deed of ratification and accession under
which the purchaser or transferee shall agree to be bound by and shall
be entitled to be the benefit of this Agreement as if an original party
hereto in place of or in addition to the transferring Shareholder (as
the case may be).
7. FINANCE
(A) Shareholders' Loans
(i) The Shareholders shall provide to the Company, in proportion to their
respective shareholdings in the Company, an aggregate sum up to the
Specified Sum by way of unsecured shareholders' loans, on the terms and
conditions set out in Schedule 3.
(ii) In fulfilment of their obligations under paragraph (i) above, SCA and
SPM shall each deposit the following percentages of the Specified Sum
(base on the Exchange Rates on the following dates) at the following
dates into the Company's bank accounts:-
Date SPM SCA
---- --- ---
5 September 96 50.1% X (50% of Specified Sum) 49.9% X (50% of [ZW]
Specified Sum)
1 October 96 50.1% X (25% of Specified Sum) 49.9% X (25% of [ZW]
Specified Sum)
1 November 96 50.1% X (25% of Specified Sum) 49.9% X (25% of [ZW]
Specified Sum)
SCA will deposit the S$ equivalent of the Specified Sum into the
Company's bank account with the Development Bank of Singapore, Xxxxxx
Road Branch, Account No. 025-011-826-0. SPM will deposit the US$
equivalent of the Specified Sum into the Company's US$ bank account with
the said bank, Account No. 0099-319-049-581.
Thereafter, the Shareholders shall have fulfilled their obligations
under paragraph (i) above. The Company shall be entitled to draw on the
Shareholders' loans as and when the same are deposited into its account,
as working capital.
(iii) If the Company requires further working capital, either party may
provide further
13
loans to the Company at an interest rate of 15% per annum. Such loans
shall have a priority of payment over loans referred to in paragraph (i)
above.
(iv) All Shareholders' loans shall be repaid by the Company in Singapore
dollars.
(B) Third Party Loans
Additional financing requirements as the Company may require from time
to time may, in addition to clause 7(A)(ii), be raised by way of loan,
debenture, mortgage or in such other manner as the Shareholders may
agree and such financing requirements shall be procured, wherever
possible, without any additional security by way of guarantee or
otherwise from the Shareholders. In the event that any such guarantee is
required in order to secure financing requirements for the Company, the
Shareholders shall provide the same. The legal costs incurred by the
shareholders in providing any such guarantee shall be borne by the
Company.
(C) Proportionate Liability
(i) As a separate and independent covenant, Shareholders agree with each
other that the aggregate amount of any liability arising under
guarantees, indemnities and covenants given to any bank or other
financial institution at any time during the term of this Agreement by
any Shareholder to secure the indebtedness and obligations of the
Company to such bank or financial institution shall be borne between the
Shareholders in proportion to the respective shareholdings in the
Company. Any legal and other costs which a Shareholder may be ordered to
pay or otherwise incurs in any action brought to enforce any such
guarantees, indemnities or covenants shall similarly be borne by the
other Shareholder in proportion to the their respective shareholdings in
the Company.
(ii) Paragraph (i) above shall apply irrespective of whether or not the
Shareholders are liable as co-sureties to the creditor enforcing the
relevant guarantee, indemnity or covenant and whether or not they are
liable jointly and/or severally and by the same or different
instruments.
8. FUTURE ACTIVITIES
(A) Non-Competition
(i) Save with the previous written consent of the other Shareholder:-
(a) each of SCA and SPM hereby undertakes to the other that it will
not, and will procure that each of its Related Parties and
directors will not and;
(b) SCA hereby undertakes to SPM that it will procure that its
shareholders (with the exception of the Singapore Economic
Development Board,
14
which may become a shareholder of SCA) and Excellent Scientific
Instruments Pte Ltd will not;
for so long as SCA or SPM, as the case may be, shall hold any shares in
the issued share capital of the Company and for a period of 30 months
from the date of transfer of the entirety of the relevant Shareholder's
shares:-
(aa) engage or be interested directly or indirectly (otherwise than by
virtue of its interests as a shareholder of the Company) in the
Business within the Territories; or
(bb) solicit in the Territories in competition with the Business of
the Company the custom of any person who is or has been at any
time during the period it held any shares in the issued share
capital of the Company, a customer of the Company; or
(cc) solicit or entice away or attempt to solicit or entice away from
the Company any person who is an officer, manager or employee of
the Company whether or not such person would commit a breach of
his contract of employment by reason of leaving such employment.
(ii) (a) Save with the written previous consent of SPM, each of FG, XC and
LBL undertakes to SPM that for so long as SCA shall hold any
shares in the issued capital of the Company and for a period of
30 months from the date of the transfer of the entirety of SCA's
shares he will not and;
(b) save with the previous written consent of SCA, each of GR, AL and
LJ undertakes to SCA and the Company that, for so long as they
are employees of SPM or a wholly owned SPM subsidiary and SPM
shall hold any shares in the issued share capital of the Company
and, provided that they continue as employees of SPM or a wholly
owned SPM subsidiary, for a period of 30 months from the date of
transfer of the entirety of SPM's shares, he will not:-
(aa) engage or be interested directly or indirectly (otherwise
than by virtue of his interests as a shareholder of the
Company) in the Business within the Territories; or
(bb) solicit in the Territories in competition with the
Business of the Company the custom of any person who is or
has been at any time during the period SCA or SPM (as the
case may be) held any shares in the issued share capital
of the Company, a customer of the Company; or
(cc) solicit or entice away or attempt to solicit or entice
away from the Company any person who is an officer,
manager or employee of the Company whether or not such
person would commit a breach of his contract of employment
by reason of leaving such
15
employment; or
(dd) cause or permit any person directly or indirectly under
his Control to do any of the acts or things specified
above.
(iii) The obligations of each of FG, XC, LBL, GR, AL and LJ shall
survive the termination of this Agreement.
(iv) Notwithstanding any and all aspects of this clause 8, and the
Agreement, SPM and its wholly owned subsidiary ASP shall be
entitled to continue to compete to the extent that they are
conducting business in any of the Territories on or before the
date on which ISP's facility becomes operational.
(B) Several Obligations
Each and every obligation under sub-clause (A) above shall be treated as
a separate obligation and shall be severally enforceable as such. In the
event of any obligation or obligations being or becoming unenforceable
in whole or in part such part or parts as are unenforceable shall be
deleted from this clause and any such deletion shall not affect the
enforceability of all such parts of this clause as remain not so
deleted.
(C) Modifications to Restrictions
While each of the Shareholders acknowledges that the restrictions
contained in sub-clause (a) above are reasonable in all the
circumstances it is recognised that restrictions of the nature in
question may fail for technical reason unforeseen and accordingly, it is
hereby agreed and declared that if any of such restrictions shall be
adjudged by a court of competent jurisdiction to be void as going beyond
what is reasonable in all the circumstances for the protection of the
interests of the Company but would be valid if part of the wording
thereof were deleted or the periods thereof reduced or the range of
activities or area dealt with thereby reduced in scope, the said
restrictions shall apply with such modifications as may be necessary to
make it valid and effective.
(D) Company's obligations
The Company shall procure that its key employees enter into
non-competition covenants similar to those stated in clause 8(A)(ii)(aa)
to (dd) with the Company as part of their employment terms.
9. RIGHT OF FIRST REFUSAL
(i) Save as provided in this clause, each of the Shareholders shall not, and
shall procure and ensure that none of its Related Parties shall, make
any Relevant Investment (as defined in paragraph (vi) below) unless such
Shareholder or
16
Related Party (as the case may be) shall have first complied with the
provisions of this clause. It shall be the duty of each Shareholder to
procure and ensure that any Related Party of such Shareholder who wishes
to make any Relevant Investment shall comply with the provisions of
paragraphs (ii) to (vii) below and a breach of such provisions by a
Related Party of a Shareholder shall be deemed to be a breach by that
Shareholder of such provisions.
(ii) In the event that any Shareholder or any of its Related Parties proposes
to make any Relevant Investments (the "Proposing Party"), the Proposing
Party shall first offer to the other Shareholder (the "Other
Shareholder") the opportunity to participate in the Relevant Investment.
The Proposing Party shall fully and fairly disclose in writing to the
Other Shareholder the principal terms and conditions of the Relevant
Investment. The Other Shareholder shall have 30 days from the date of
such presentation in writing to it (the "Presentation Date") to decide
whether to participate in the Relevant Investment. Any such
participation shall be in one-half of the investment on the same terms
and conditions as those applicable to the Proposing Party. If the Other
Shareholder shall indicate to the Proposing Party an interest in
considering a participation in the Relevant Investment, the Proposing
Party and the Other Shareholder shall negotiate in good faith as to the
terms of a definitive agreement between them in relation to such
Relevant Investment.
(iii) If after the making of such disclosure in relation to any Relevant
Investment, the Other Shareholder shall indicate in writing to the
Proposing Party that it does not wish to participate therein or the
Proposing Party and the Other Shareholder shall fail to agree upon the
terms of and enter into legally binding documentation in relation to
their participation in the Relevant Investment within 60 days from the
Presentation Date, the Proposing Party shall be free, during the next
succeeding 90 days, to make such Relevant Investment on substantially
the same terms and conditions as those disclosed to the Other
Shareholder without the participation of the Other Shareholder therein.
The making of a Relevant Investment pursuant to this clause 9 by a
Shareholder or its Related Party shall not be a violation by that
Shareholder of clause 8 provided that the operation of the Relevant
Investment restricts its solicitation of business to the Territory in
which its plants are located.
(iv) If the Proposing Party and the Other Shareholder shall so agree, any
such Relevant Investment may be taken up in its entirety by the Company.
(v) For the purposes of this clause, the expression "Relevant Investment"
shall mean:-
(a) the acquisition of any shares in or an interest in or the assets
of any entity principally and primarily engaged or proposing to
engage in the Business in, or in relation to, one or more of the
Territories other than Singapore; or
(b) the investment in or formation of any joint venture, partnership
or other
17
entity the purpose of which is to engage in the Business in, or
in relation to, one or more of the Territories other than
Singapore.
provided, however, that the expression "Relevant Investment" shall not
include any further acquisition of shares in, or assets of, or
investment in any entity which itself was the subject of a Relevant
Investment presented to the Other Shareholder in which the Other
Shareholder declined or failed to participate.
(vi) Nothing in this Agreement shall be construed so as to prohibit the
Proposing Party from owning, operating or investing in any business or
entity of any nature or description, independently or with others,
provided that (a) such business or entity shall not be carrying on the
Business in Singapore (and regardless whether such business or entity
shall be carrying on the Business in the other countries in the
Territories) and (b) if such Proposing Party shall have complied with
the provisions of this clause including those with regard to offering
such investment opportunity to the Other Shareholder which shall have
declined or failed to participate therein, or such operation or
investment does not fall within the definition of a Relevant Investment
as set out herein.
(vii) Any reference in this clause to a Proposing Party in any context, shall
include a reference to any of its Related Parties and each Proposing
Party shall be obliged to procure that each of its Related Party shall
act accordingly.
10. GENERAL OBLIGATIONS OF SHAREHOLDERS
Each Shareholder shall take all steps necessary on its part to give full
effect to the provisions of this Agreement and to procure (so far as it
is able by the exercise of voting rights or otherwise so to do) that the
Company and the Directors shall perform and observe the provisions of
this Agreement.
11. PREVALENCE OF AGREEMENT AND AMENDMENT OF THE ARTICLES
(i) In the event of any inconsistency or conflict between the provisions of
this Agreement and the provisions of the Articles, the provisions of
this Agreement shall as between the Shareholders prevail.
(ii) The Shareholders shall use their respective best endeavours to procure
that new Articles in a form consistent in all respects with the terms of
this Agreement are adopted by the Company as soon as reasonably
practicable after the signing hereof.
12. DURATION AND TERMINATION
(A) Duration
This Agreement shall take effect from the date hereof and continue
thereafter without limit in point of time but, upon the transfer by any
Shareholder of the
18
entirety of its shares in the capital of the Company, it shall be
released from all its obligations hereunder (other than under clauses 8
and 14) but, if at that time there are two or more Shareholders bound by
the provisions of this Agreement, this Agreement shall continue in full
force and effect as between the continuing Shareholders.
(B) Termination
The termination of this Agreement from any cause shall not release any
Shareholder from any liability which at the time of termination has
already accrued, or which thereafter may accrue and was related to the
time period in which a Shareholder held its investment in ISP.
13. DEFAULT
(A) Remedy of Breach of Default
Where a Shareholder fails to perform its obligations hereunder or to
comply with the terms and conditions of this Agreement, the other
Shareholder shall be at liberty to issue to the defaulting Shareholder a
notice specifying the breach or default and, in the case of a breach or
default capable of remedy, stipulating a period of not less than 30 days
during which such breach or default shall be remedied or steps taken in
pursuance thereof. For the purposes of this paragraph (A), a breach or
default shall be considered capable of remedy if the defaulting
Shareholder can comply with the term or condition in question in all
respects other than as to the time of performance.
(B) Disposal of Shares by Defaulting Shareholder
In the event that a breach of this Agreement or a default by a
Shareholder has been admitted or established following upon the failure
of that defaulting Shareholder to comply with the terms of a notice
under paragraph (A) above, the other Shareholder shall, without
prejudice to any other rights and remedies such a Shareholder may have,
be entitled by notice in writing to the defaulting Shareholder to
require such defaulting Shareholder to dispose of all its shares in the
Company and upon receipt of such notice, the defaulting Shareholder
shall be bound to forthwith give a Transfer Notice in accordance with
the provisions of clause 6(A)(iii) and the provisions of clause
6(A)(iii) to clause 6(A)(viii) shall apply mutatis mutandis to such
disposal. The restriction on transfer of shares contained in Clause 6(B)
and in the Articles shall not apply to such disposal.
(C) Default by Shareholders
In the event that :-
(i) any Shareholder shall become insolvent; or
19
(ii) a resolution is passed for the winding up of any Shareholder; or
(iii) a proceeding has been instituted seeking a declaration that any
Shareholder is bankrupt or insolvent or seeking bankruptcy,
arrangement or composition with creditors, liquidation or the
appointment of a trustee, receiver or liquidator or analogous
procedure under any applicable law and such proceedings remain
undismissed and unstayed for a period of 60 days or are being
consented to by that Shareholder,
then a breach of this Agreement or default shall have been committed by
the Shareholder concerned and the provisions of paragraph (B) above
shall apply mutatis mutandis as if a breach of this Agreement or default
has been admitted or established.
14. KNOWHOW, INTELLECTUAL PROPERTY AND CONFIDENTIAL INFORMATION
(A) Knowhow and Intellectual Property
(i) During the term of this Agreement, SPM shall cause ASP to grant
to the Company an exclusive and irrevocable licence to use the
Knowhow and Intellectual Property Rights which exist in the
Knowhow (the "Licensed Property"), for the purpose of carrying on
the Business in the Territories upon fair and reasonable terms
and conditions, and subject to the terms in paragraphs (ii),
(iii) and (iv) below (the "Intellectual Property License
Agreement").
(ii) The Intellectual Property License Agreement shall provide for an
annual royalty based on the net sales of the Company as
determined by the Auditors (the "Net Sales") and calculated as
follows:-
(aa) with effect from the date hereof to 31 December 1997, 0.5%
of Net Sales; and
(bb) with effect from 1 January 1998, 1% of Net Sales;
provided that when the aggregate amount of royalty accrues to a
sum equivalent to US$1,000,000.00 the Intellectual Property
License shall be royalty free.
(iii) The Intellectual Property License Agreement shall provide for the
royalties be payable by the Company in 16 equal quarterly
instalments, without interest, only after:-
(aa) all shareholders' loans are repaid by the Company; and
(bb) receipt of ASP's written notice specifying the due dates
and amount of royalty payable.
20
(iv) The Intellectual Property License Agreement shall also require
the Company to grant, at the request of a Proposing Party under
clause 9, a non-exclusive licence (but without the right to
sub-license) to the Licensed Property to any entity which is the
subject of a Relevant Investment proposal by such Proposing
Party, (the "Relevant Investment Entity'), but only in the
country or countries in which such Relevant Investment Entity
establishes a facility utilizing the Licensed Property.
(v) SPM warrants that ASP has the power, right and authority to grant
the aforesaid licence to the Company and that SPM has not
received any notice or have any knowledge that the Licensed
Property infringes the intellectual property rights or knowhow of
third parties and no claims of such infringement have been made
or are the subject of litigation actual or threatened.
(vi) Where SPM ceases to be a Shareholder the Company shall be
entitled to continue with the use of the Knowhow and Intellectual
Property Rights which exist in the Knowhow on the same terms to
enable the Company to continue the Business without interruption.
(vii) Any and all Knowhow and Intellectual Property Rights throughout
the world resulting from any work carried out exclusively by the
Company or relating to an improvement to the products exclusively
generated by the Company shall vest exclusively in the Company.
The Company shall grant an irrevocable non-exclusive licence free
of royalty or any other payment upon fair and reasonable terms
without limit in time but excluding the power to grant
sub-licences of such Intellectual Property Rights to ASP or any
successor and any Proposing Party for the purpose of carrying out
the Relevant Investments in accordance with the provisions of
clause 9.
(B) Communications Confidential
All communications between the Company and the Shareholders or any of
them and all information and other material supplied to or received by
any of them from any one or more of the others which it either marked
"confidential" or is by its nature intended to be exclusively for the
knowledge of the recipient alone, or to be used by the recipient only
for the benefit of the Company, any information concerning the business
transactions or the financial arrangements, including without
limitation, trade secrets, customer lists, know-how, designs, processes,
drawings and specifications, of the Company or of the Shareholders or
any of them, or of any person with whom any of them is in a confidential
relationship with regard to the matter in question coming to the
knowledge of the recipient shall be kept confidential by the recipient
and shall be used by the recipient solely and exclusively for the
benefit of the Company unless disclosure is required by law or unless or
until any party can reasonably demonstrate that it is or part of it is,
in the public domain through no act or default on the part of the
recipient, its servants and/or agents, whereupon, to the extent that it
is
21
public, this obligation shall cease.
(C) Indemnity
The Shareholders shall indemnify each other from and against any loss,
damages, charges, costs and expenses of whatever nature (including legal
costs on a full indemnity basis) suffered or incurred by the other
Shareholder arising from the breach of that Shareholder of any provision
of this clause or the unauthorised use or disclosure of any Knowhow,
Intellectual Property Rights or confidential information referred to in
paragraphs (A) and (B) above by any director, employee, shareholder or
Related Party of that Shareholder.
(D) Shareholders' Obligations
The Shareholders shall procure the observance of the abovementioned
restrictions by the Company and shall take all reasonable steps to
minimise the risk of disclosure of confidential information, by ensuring
that only their employees and directors and those of the Company whose
duties will require them to possess any of such information shall have
access thereto, and that they shall be instructed to treat the same as
confidential. The Shareholders shall in addition procure that such
employees of the Company whose duties will require them to possess, or
have access to, confidential information, shall sign confidentiality
agreements with the Company respecting the confidentiality of such
information.
(E) Obligations to Continue
The obligations contained in this clause shall endure, even after the
termination of this Agreement, without limit in point of time except and
until any confidential information enters the public domain as set out
above.
15. MANAGERIAL EXPERTISE
(i) SCA shall provide the necessary management and consultancy expertise to
operate and manage the Business and may in its discretion second any
number of its employees to the Company, the terms and condition of such
secondment to be approved by the Board.
(ii) The Company shall pay management and consultancy fees the amount and
payment date of which shall be determined by SCA provided that SPM's
prior written consent is required if the management and consultancy fees
charged exceed the amount of royalties accruing to ASP under the
Intellectual Property License Agreement referred to under clause 14(A).
(iii) The management and consultancy fee shall be invoiced and payable after
all Shareholders' loans are repaid and shall be paid in 16 equal
quarterly instalments, but without interest, on such dates as SCA may in
its discretion determine but in any event no earlier than the repayment
dates for the
22
Intellectual Property License Agreement.
16. DIVIDEND DISTRIBUTION POLICY
In respect of any financial year if all outstanding Shareholders' loans
have been repaid in full, and if the Company has profits available for
distribution within the meaning of the Act, the Shareholders shall
procure that the maximum amount of dividends in cash shall be paid after
taking into account the Company's capital and working capital
requirements for the next financial year.
17 FURTHER UNDERTAKINGS
(A) The Company undertakes with each of the Shareholders to be bound by and
comply with the terms and conditions of this Agreement insofar as the
same relate to the Company and to act in all respects as contemplated by
this Agreement.
(B) The Shareholders undertake with each other to exercise their powers in
relation to the Company so as to ensure that the Company fully and
promptly observes, performs and complies with its obligations under this
Agreement.
18. NO PARTNERSHIP
The relationship between the Shareholders shall not constitute a
partnership. No Shareholder has the power or the right to bind, commit
or pledge the credit of the other Shareholder or the Company.
19. INDULGENCE, WAIVER ETC.
No failure on the part of any Shareholder to exercise and no delay on
the part of any Shareholder in exercising any right hereunder will
operate as a release or waiver thereof, nor will any single or partial
exercise of any right under this Agreement preclude any other or further
exercise of it. The rights and remedies provided in this Agreement are
cumulative and not exclusive of any right or remedy provided by law.
20. COSTS
Each of the Shareholders shall bear its own legal and other professional
costs and expenses incurred by it in the negotiation and preparation of
this Agreement. To the extent legally permissible the Shareholders shall
cause the Company to bear such costs related to the formation of the
Company as shall be mutually agreed between the Shareholders.
21. COUNTERPARTS
This Agreement may be entered into in any number of counterparts, all of
23
which taken together shall constitute one and the same instrument. Any
party may enter into this Agreement by signing any such counterpart.
22. NOTICES AND GENERAL
(A) Notices
All notices, demands or other communications required or permitted to be
given or made hereunder shall be in writing and delivered personally or
by overseas courier or sent by prepaid registered post (by air-mail if
to or from an address outside Singapore) with recorded delivery, or by
facsimile transmission addressed to the intended recipient thereof at
its address or at its facsimile number set out in this Agreement (or to
such other address or facsimile number as a party to this Agreement may
from time to time duly notify the others in writing). Any such notice,
demand or communication shall be deemed to have been served (if
delivered personally or given or made by facsimile) immediately or (if
given or made by letter or by overseas courier) 96 hours after posting
or delivery to the courier or (if made or given by air-mail) ten days
after posting and in proving the same it shall be sufficient to show
that the envelope containing the same was duly addressed, stamped and
posted. The addresses and facsimile numbers of the parties hereto for
the purpose of this Agreement are:-
Semiconductor Alliance Pte Ltd
000 Xxxxxx Xxxx #00-00/00
Xxxxxxxxx 000000
Facsimile Number: 3385633
Semiconductor Packaging Materials Co., Inc.
000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, X.X. 00000
X.X.X
Facsimile Number: 000-000-0000
International Semiconductor Products Pte Ltd
000 Xxxxxx Xxxx #00-00/00
Xxxxxxxxx 000000
Facsimile Number:3385633
Xxxxxx Xxx Hin Xxxxx
Xxx 000, Xxxxxxxx Xxxxxx 0, #00-00
Xxxxxxxxx 000000
Xxxxxx Xxxxx Xxxx Xxxx
Xxx 00, Xxxxxx 0, Xxx Xxxxx, #00-00
00
Xxxxxxxxx 000000
Xxx Xxxx Leng
Xxx 000, Xxxxxxxxx Xx. 00, #00-000
Xxxxxxxxx 000000
Xxxxxxx Xxxxx/Xxxxxx Xxxxxxxx/Xxxxxxx Xxxxxxx
c/o Semiconductor Packaging Materials Co. Inc., 000 Xxxxxxx
Xxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000, X.X.X.
(B) Remedies
No remedy conferred by any of the provisions of this Agreement is
intended to be exclusive of any other remedy which is otherwise
available at law, in equity, by statute or otherwise, and each and every
other remedy shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law, in equity,
by statute or otherwise. The election of any one or more of such
remedies by any of the Shareholders shall not constitute a waiver by
such Shareholder of the right to pursue any other available remedies.
(C) Severance
If any provision of this Agreement or any part thereof is rendered void,
illegal or unenforceable by any legislation to which it is subject, it
shall be rendered void, illegal or unenforceable to that extent and it
shall in no way affect or prejudice the enforceability of the remainder
of such provision or the provisions of this Agreement.
(D) Entire Agreement
This Agreement embodies all the terms and conditions agreed upon between
the Shareholders as to the subject matter of this Agreement and
supersedes and cancels in all respects all previous agreements and
undertakings, if any, between the Shareholders with respect to the
subject matter hereof, whether such be written or oral. Any amendment to
or variation of this Agreement shall be effective only if it is in
writing and duly signed and confirmed in writing by the authorised
representative of each Shareholder.
(E) Governing Law and Dispute Resolution
(i) This Agreement shall be governed by, and construed in accordance with
the laws of Singapore. Any dispute arising out of or in connection with
this Agreement, including any question regarding its existence, validity
or termination, shall be referred to and finally resolved by arbitration
in Singapore in accordance with the Rules of the Singapore International
Arbitration Centre.
25
(ii) The winning party to the arbitration shall be awarded costs of the
arbitration, such costs such include reimbursement of reasonable costs
of carrying on the arbitration including costs of travel, accommodation
and related expenses necessary for that party's personnel and
professionals to arbitrate the issues.
26
SCHEDULE 1
The Territories
Territories currently constituting:-
1. Bangladesh, People's Republic of
2. Bhutan
3. Brunei Darussalam Negara
4. Cambodia, People's Republic of
5. China, People's Republic of
6. Hong Kong
7. India, Republic of
8. Xxxxxxxxx, Xxxxxxxx xx
0. Xxxxx, Xxxxxxxxxx Xxxxxx'x Xxxxxxxx xx (Xxxxx Xxxxx)
10. Korea, Republic of (South Korea)
11. Laos, People's Democratic Republic
12. Malaysia
13. Pakistan, Islamic Republic of
14. Philippines, Republic of the
15. Xxxxxxxxx, Xxxxxxxx xx
00. Xxx Xxxxx, Democratic Socialist Republic of
17. Taiwan (Republic of China)
18. Thailand, Kingdom of
19. Vietnam, Socialist Republic of
27
SCHEDULE 2
Managing Director's Service Agreement
An Agreement made the day of August 1996
BETWEEN
(A) INTERNATIONAL SEMICONDUCTOR PRODUCTS PTE LTD, a company incorporated in
Singapore with its registered office at 000 Xxxxxx Xxxx, #00-00/00,
Xxxxxxx Xxxxxxxx, Xxxxxxxxx (188975), Facsimile No. , (hereinafter
called the "Company") of the one part; and
(B) XX. XXXXXX XXX HIN XXXXX of Xxx 000, Xxxxxxxx Xxxxxx 0, #00-00,
Xxxxxxxxx (120202) (hereinafter called the "Managing Director") of the
other part.
WHEREBY IT IS AGREED as follows:-
TERM OF EMPLOYMENT
1. The Company shall employ Xxxxxx Xxx Hin Xxxxx and he shall serve the
Company as Managing Director of the Company and subject to the provision for
determination of this agreement hereinafter contained, such employment shall be
for a period of 5 years 4 months commencing on the 1st day of September 1996
until the 31st day of December 2001 and shall continue thereafter unless and
until this agreement shall be determined by either party hereto giving to the
other 3 months' notice in writing of such intended determination (or pay in lieu
of such notice), such notice to expire on the day after the end of the said
period.
DUTIES
2. As managing director of the Company the Managing Director shall:-
(a) undertake such duties and exercise such powers in relation to the
Company and its business as the Board of Directors of the Company
(hereinafter referred to as the "Board") shall from time to time assign
to or vest in him;
(b) in the discharge of such duties and in the exercise of such powers
observe and comply with all resolutions, regulations and directions from
time to time made or given by the Board; and
(c) devote substantially the whole of his time and attention during business
hours to the discharge of his duties hereunder.
28
NON-DISCLOSURE OF TRADE SECRETS
3. The Managing Director shall not, except as authorised or required by his
duties, reveal to any person or company any of the trade secrets, secret or
confidential operations, processes or dealings or any information concerning the
organisation, business, finances, transactions or affairs of the Company or any
subsidiary company of the Company (if any) which may come to his knowledge
during his employment hereunder and shall keep with complete secrecy, all
confidential information entrusted to him and shall not use or attempt to use
any such information in any manner which may injure or cause loss either
directly or indirectly to the Company or its business or may be likely so to do.
This restriction shall cease to apply to information or knowledge which may come
into the public domain, except through the default of the Managing Director.
KEEPING OF NOTES, ETC. DURING EMPLOYMENT
4. The Managing Director shall not during the continuance of this agreement
make otherwise than for the benefit of the Company any notes or memoranda
relating to any matter within the scope of the business of the Company or
concerning any of its dealings or affairs nor shall the Managing Director either
during the continuance of this agreement or afterwards use or permit to be used
any such notes or memoranda otherwise than for the benefit of the Company it
being the intention of the parties hereto that all such notes or memoranda made
by the Managing Director shall be the property of the Company and left at its
registered office upon the termination of the Managing Director's employment
hereunder.
MANAGING DIRECTOR'S DUTY TO DISCLOSE PATENTS, ETC.
5.1 Any discovery or invention or secret process or improvement in procedure
made or discovered by the Managing Director while in the service of the Company,
in connection with or in any way affecting or relating to the business of the
Company or any subsidiary company of the Company (if any) or capable of being
used or adapted for use therein or in connection therewith shall forthwith be
disclosed to the Company and shall belong to and be the absolute property of the
Company or any such subsidiary company as the Company may nominate for the
purpose.
5.2 The Managing Director if and whenever required so to do (whether during
or after the termination of his appointment) shall at the expense of the Company
or its nominee apply or join in applying for letters patent or other similar
protection for any such discovery, invention, process or improvement as
aforesaid and execute all instruments and do all things necessary for vesting
the said letters patent or other similar protection when obtained and all right
and title to and interest in the same in the Company (or its nominee) absolutely
and as sole beneficial owner or in such other person as the Company may require.
SALARY
29
6. Subject as hereinafter provided the Company shall pay to the Managing
Director during the continuance of his employment hereunder a salary at the
following rates:-
Date: Salary
----- ------
1. 1.9.96 xx 00.00.00 S$7,500.00 per month
2. 1.1.97 to 31.12.9 S$8,000.00 per month
3. 1.1.98 xx 00.00.00 S$8,600.00 per month
4. 1.1.99 xx 00.00.00 S$9,200.00 per month
5. 1.1.2000 to 31.12.2000 S$10,000.00 per month
6. 1.1.2001 to 31.12.2001 S$10,800.00 per month
The salary shall be payable in arrears on the last day of each month.
BONUS
7.1 The Managing Director shall be entitled to an National Wage Counsel
(NWC) 13th month wage supplement every financial year (as the term is defined in
clause 8.1).
7.2 The Managing Director shall also be entitled, depending on the
performance of the Company, to a variable bonus of between 1 to 3 months' salary
every financial year or portion thereof ending on 31 December) subject to the
Board's approval. The Board may further award additional variable bonus of up to
2 months' salary.
PROFIT SHARING
8.1 By way of further remuneration in respect of every financial year during
the continuance of the employment of the Managing Director hereunder, the
Managing Director shall be entitled to profit sharing on the Net Profit of the
Company based on the % Return on Investment of the Company and its subsidiaries
(if any) in accordance with the following rates:-
% Return on Investment Percentage of Net Profit to [ZW]
be given
--------------------- [ZW]
------------------------------------
10% - 15% 10%
>15% - 20% 9%
30
>20% - 25% 8%
>25% - 50% 7%
>50% - 75% 6%
>75% 5%
where:-
"Net Profit" of the Company means the profits shown by the audited
consolidated profit and loss accounts of the Company and its subsidiaries (if
any) for the relevant financial year with the following adjustments unless
already taken into account in such profit and loss accounts:-
(a) after deducting all expenses of the Company, including
depreciation, interest and employees and managerial bonuses, but
excluding profit sharing under this clause 8.1;
(b) after deducting income tax on profits (including corporation tax
and any similar or additional or substituted tax);
(c) without taking into account profits and losses of a capital
nature arising on a disposal of fixed assets, investments, plant
or any other property of the Company or of any subsidiary company
of the Company (if any);
(d) after deducting such part of the profits or adding back such part
of the losses (as the case may be) of any subsidiary company (if
any) as shall be proportionate to such part (if any) of such
subsidiary as shall not be in the ownership of the Company or of
any subsidiary company of the Company on the last day of such
financial year; and
(e) after making any further adjustments which the auditors of the
Company shall consider fair and reasonable or as may be agreed.
"% Return on Investment" means the rate of return of shareholders'
investment (consisting of share capital contribution and unsecured shareholders'
loans) in the Company and shall be calculated as follows:-
% Return on Investment = (Net Profit) / (total shareholders' investment)
X 100.
"financial year" means a year or other period for which the Company's
accounts are made up ending on 31 December.
8.2 The said profit sharing shall be paid not later than fourteen days after
the
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accounts for the relevant financial year have been made up and audited and the
certificate of the said auditors as to the amount of the said profit sharing for
any financial year (or part thereof) shall be conclusive and binding.
8.3 Unless the Managing Director is terminated for cause, with respect to
any period of the Managing Director's appointment embracing only part of a
financial year, the Company shall pay to the Managing Director for every week or
part thereof such period a bonus and/or profit sharing entitlement equal to one
fifty second part of the bonus and/or profit sharing entitlement which would
have been payable hereunder if he had served the Company during the whole of the
financial year.
MAXIMUM REMUNERATION
9. The maximum remuneration payable to the Managing Director for a
financial year, under this agreement, shall not exceed the sum of
S$1,000,000.00.
PROVISION OF MOTOR CAR
10. The Company shall provide and maintain for the sole use of the Managing
Director a motor car and shall pay all reasonable expenses in connection with
such use of such motor car (including without limitation, road tax, service,
repairs and maintenance, insurance and cost of petrol), such vehicle to be
changed from time to time in accordance with the Company's policy regarding
vehicle replacements.
EXPENSES
11. The Managing Director shall be reimbursed all travelling hotel and other
out-of-pocket expenses reasonably incurred by him in or about the discharge of
his duties hereunder.
ANNUAL LEAVE
12.1 The Managing Director shall be entitled to 21 days' annual leave,
exclusive of statutory and public holidays in each calendar year.
12.2 The Managing Director shall be entitled to 60 days hospitalisation and
medical leave each calendar year.
TERMINATION OF AGREEMENT
13.1 This agreement may be terminated forthwith by the Company without prior
notice if the Managing Director shall at any time:-
(a) commit any serious or persistent breach of any of the provisions herein
32
contained;
(b) be guilty of any grave misconduct or wilful neglect in the discharge of
his duties hereunder;
(c) become bankrupt or make any arrangements or composition with his
creditors; or
(d) become permanently incapacitated by accident or ill-health from
performing his duties under this agreement and for the purposes of this
sub-clause, incapacity for six consecutive months in any period of
twelve calender months shall be deemed to be permanent incapacity.
13.2 If the Managing Director shall cease to be a director of the Company
this agreement shall thereupon automatically terminate. If such cessation shall
be caused by any act or omission of either party without the consent concurrence
or complicity of the other such act or omission shall be deemed a breach of this
agreement and determination hereunder shall be without prejudice to any claim
for damages in respect of such breach.
13.3 The Company may terminate this agreement by giving the Managing Director
3 months' prior written notice or 3 months' salary in lieu thereof provided that
all shareholders of the Company agree to the termination pursuant to this clause
13.3. In addition, the Managing Director shall be entitled to compensation in
the sum equivalent to 9 months' salary if this agreement is terminated pursuant
to this clause 13.3.
13.4 The Managing Director may terminate this agreement by giving to the
Company 3 months' prior written notice.
13.5 Upon the termination of this agreement for whatsoever reason the
Managing Director shall upon the request of the Company resign from office as a
Managing Director of the Company and from all offices held by him in any
subsidiary.
RESTRICTIVE COVENANTS; INTERPRETATION
14 Save with the previous consent of the Company, the Managing Director
will not whilst acting as Managing Director and for a period of 30
months thereafter:-
(a) engage or be interested directly or indirectly (otherwise than by
virtue of his interests as a shareholder of the Company) in any
business which is in competition with the business of the Company
within Singapore; or
(b) solicit in Singapore in competition with the business of the
Company the custom of any person, firm or company who is or has
been at any time during the period it held any shares in the
issued share capital of the
33
Company, a customer of the Company;
(c) solicit or entice away or attempt to solicit or entice away from
the Company any person who is an officer, manager or employee of
the Company whether or not such person would commit a breach of
his contract of employment by reason of leaving such employment;
or
(d) cause or permit any person directly or indirectly under his
control to do any of the acts and things specified above (and for
the purpose of this clause, "control" means the possession by one
person, directly or indirectly through one or more
intermediaries, of the power to direct or cause the direction of
the management or policies of another person; with respect to a
corporation such power may be evidenced by the right to exercise,
directly or indirectly, more than 50% of the voting rights
attributable to the shares or interest of such corporation,
partnership or other body corporate).
(iii) Each of the undertakings in paragraphs (a), (b) and (c) above shall be
treated as independent of the other undertakings so that, if one or more
is held to be invalid as an unreasonable restraint of trade or for any
other reason, the remaining undertakings shall be valid to the extent
that they are not affected.
(iv) Whilst the undertakings in paragraphs (i) and (ii) above are considered
by all parties to be reasonable in all circumstances, if one or more is
held invalid as an unreasonable restraint of trade or for any other
reason but would have been held valid if part of the wording had been
deleted, the period reduced or the range of activities or area dealt
with reduced in scope, the undertakings shall apply with such
modifications as may be necessary to make them valid.
SERVICE OF NOTICES
15. All notices, demands or other communications required or permitted to be
given or made under this agreement shall be in writing and delivered personally
or sent by prepaid registered post (by air-mail if to or from an address outside
Singapore) with recorded delivery, or by fax addressed to the intended recipient
thereof at his address or fax number set out in this agreement (or to such other
address or fax number as either party may from time to time duly notify the
other) Any such notice, demand or communication shall be deemed to have been
duly served (if given or made by fax) on the day of despatch or (if given or
made by letter) 48 hours after posting or (if made or given to or from an
address outside Singapore) 10 days after posting and in proving the same it
shall be sufficient to show that the envelope containing the same was duly
addressed, stamped and posted.
EFFECT OF TERMINATION ON UNDERTAKINGS
34
16. The expiration or termination of this agreement howsoever arising shall
not affect such of the provisions hereof as are expressed to operate or have
effect thereafter and shall be without prejudice to any right of action already
accrued to either party in respect of any breach of this agreement by the other
party.
GOVERNING LAW
17. This agreement shall be governed by and construed in accordance with the
laws of Singapore. Each of the parties hereto hereby irrevocably and
unconditionally submits to the non-exclusive jurisdiction of the Courts of
Singapore for all purposes in relation to this agreement.
IN WITNESS WHEREOF this agreement has been entered into on the day and
year first above written.
Signed by )
for and on behalf of INTERNATIONAL SEMICONDUCTOR )
PRODUCTS PTE LTD in the presence of :- )
Signed by XX. XXXXXX XXX HIN XXXXX )
in the presence of:- )
35
SCHEDULE 3
Terms And Conditions Of Shareholder Loans
The following terms and conditions shall apply in respect of the loans referred
to in clause 7(A) (each a "Shareholder Loan").
1. Proportionality
Shareholder Loans shall be provided by the Shareholders on the same time
and on the same terms and conditions.
2. Availability
Shareholder Loans shall be provided to the Company at such time or times
during the term of this Agreement and in such amounts as are set out in
clause 7(A)(ii) of the Agreement. No Shareholder Loan repaid by the
Company shall be available for re-drawing.
3. Ranking
All Shareholder Loans shall constitute unsecured obligations of the
Company which rank pari passu with all other unsecured obligations of
the Company. All Shareholder Loans shall be designated in Singapore
Dollars and shall be repayable in such currency unless the Shareholders
decide otherwise.
4. Interest
Save as provided in clause 7(A)(iii) of the Agreement, no interest shall
be payable in respect of any Shareholder Loans, unless the Shareholders
unanimously decide otherwise.
5. Repayment
The Shareholder Loans shall be repayable on the occurrence of the
earlier of the following dates (and not otherwise) :-
(a) the date on which an order shall be made or a resolution shall be
passed (whichever shall first occur) for the winding-up or
dissolution of the Company.
(b) the date on which the Board shall have determined, in its
absolute discretion, such Shareholder Loans or any part thereof
shall be repayable provided, however, that the Board shall make
such determination in respect of Shareholder Loans only on a
proportionate
36
basis as between the Shareholders.
6. Transferability
(a) No amount of Shareholder Loans may be transferred except in
accordance with the following provisions.
(b) If any of the Shareholders (a "Transferor") shall at any time
hereafter sell, transfer or otherwise dispose of any shares it
holds in the capital of the Company ("a Disposal"), such
Transferor on the occasion of any such Disposal shall be entitled
and obliged to transfer to the party to whom it shall make such
disposal of such shares a proportion of the Shareholder Loans
held by it equal to the proportion which the number of shares the
subject of such Disposal shall bear to the aggregate number of
such shares held by the Transferor immediately prior to such
Disposal.
(c) Each of the Shareholders agree that the restrictions set out in
paragraph (a) and (b) above shall fully and effectively bind it
in respect of all of the shares at any time held by it in the
capital of the Company in addition of its obligations under the
Articles and that also it will not make any Disposal of any such
shares to any person unless prior thereto such Shareholder and
the person to whom such Disposal is proposed to be made (the
"Transferee") shall be entered into a legally binding commitment
(in form and content to the reasonable satisfaction of the other
Shareholders) to the effect that the Transferee shall be fully
and effectively bound by the restrictions set out in this Clause
in respect of all shares held or to be held by it in the capital
of the Company at any time in the same manner as if it had been
an original party hereto (without prejudice to such obligations
of the Transferor in respect of any shares in the capital of the
Company retained by it).
7. Register
The Company shall maintain a register of the holders of Shareholder
Loans and the amount of Shareholder Loans held by them and details of
any permitted transfers thereof. Unless otherwise specifically agreed by
the Company in any particular case, the Company shall be entitled to
treat the persons registered as the holders of Shareholder Loans as the
absolute owners thereof to such persons or at their order without any
obligation to make any enquiry of any nature.
37
SCHEDULE 4
SCA directors/shareholders/officers:-
1. Xxxxxx Xxx Hin Xxxxx of Xxx 000, Xxxxxxxx Xxxxxx 0, #00-00, Xxxxxxxxx
(120202) (referred to as "FG" in the Agreement);
2. Xxxxxx Xxxxx Xxxx Xxxx of Xxx 00, Xxxxxx 0, Xxx Xxxxx, #00-00, Xxxxxxxxx
000000, (referred to as "XC" in the Agreement);
3. Xxx Xxxx Leng of Xxx 000, Xxxxxxxxx Xx 00, #00-000, Xxxxxxxxx 000000,
(referred to as "LBL" in the Agreement");
SPM and/or ASP directors/shareholders/officers:-
4. Xxxxxxx Xxxxx c/o Semiconductor Packaging Materials Co. Inc., 000
Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000, U.S.A., (referred to as "GR"
in the Agreement);
5. Xxxxxx Xxxxxxxx c/o Semiconductor Packaging Materials Co. Inc., 000
Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000, U.S.A., (referred to as
"AL") in the Agreement; and
6. Xxxxxxx Xxxxxxx c/o Semiconductor Packaging Materials Co. Inc., 000
Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000, U.S.A., (referred to as
"LJ") in the Agreement.
38
IN WITNESS WHEREOF this Agreement has been entered into on the date
stated at the beginning.
Signed by Xxxxxx Xxxxx Xxxx Xxxx )
for and on behalf of ) XXXXXX XXXXX XXXX XXXX
Semiconductor Alliance Pte Ltd )
in the presence of:- )
XXXX XXXX XXXX
Xxxx Xxxx Xxxx
Advocate & Solicitor
Singapore
Signed by Xxxxxxx X. Xxxxx )
for and on behalf of ) XXXXXXX X. XXXXX
Semiconductor Packaging )
Materials Co. Inc. in the presence of:- )
XXXXXX XXXX
Notary Public, State of New York
No. 4699017
Qualified in Westchester County
Commission Expires 3/30/97
XXXXXX XXXX
Signed by Xxxxxx Xxx Hin Choon )
for and on behalf of International ) XXXXXX XXX HIN XXXXX
Semiconductor Products Pte Ltd )
in the presence of:- )
XXXX XXXX XXXX
Xxxx Xxxx Xxxx
Advocate & Solicitor
Singapore
Signed by Xxxxxx Xxx Hin Choon in ) XXXXXX XXX HIN XXXXX
the presence of:- )
XXXX XXXX XXXX
Xxxx Xxxx Xxxx
Advocate & Solicitor
Singapore
Signed by Xxxxxx Xxxxx Xxxx Xxxx ) XXXXXX XXXXX XXXX XXXX
in the presence of:- )
XXXX XXXX XXXX
Xxxx Xxxx Xxxx
Advocate & Solicitor
Singapore
Signed by Xxx Xxxx Leng ) XXX XXXX LENG
in the presence of:- )
XXXX XXXX XXXX
Xxxx Xxxx Xxxx
Advocate & Solicitor
Singapore
Signed by Xxxxxxx X. Xxxxx ) XXXXXXX X. XXXXX
in the presence of:- )
XXXXXX XXXX
Notary Public, State of New York
No. 4699017
Qualified in Westchester County
Commission Expires 3/30/97
XXXXXX XXXX
Signed by Xxxxxx Xxxxxxxx ) XXXXXX XXXXXXXX
in the presence of:- )
XXXXXX XXXX
Notary Public, State of New York
No. 4699017
Qualified in Westchester County
Commission Expires 3/30/97
XXXXXX XXXX
Signed by Xxxxxxx Xxxxxxx ) XXXXXXX XXXXXXX
in the presence of:- )
