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(CEDAR GROUP, INC. LETTERHEAD)
January 12, 1995
Cedar Group, Inc.
000 Xxxxx Xxxx Xxxxxx
Xxxxxxx, Xxxxxx
Attention: Steinar Knai
BY FAX: 000-000-0000
Dear Sirs:
Xxxxxxxx Xxxxxxx Corporation ("MK") offers to sell to Cedar Group, Inc. or its
subsidiary ("Cedar") at a price of A$1.25 per share, a number of issued shares
in XxXxxxxxx Xxxxxx Corporation Limited ("MDC") equivalent to 19.9% of the
total issued ordinary shares of MDC, based on the total MDC ordinary shares
issued as of the closing date of phase two as set forth below. MK warrants
that there are only 41,574,298 MDC shares on issue. This transaction will take
place in two phases of total payments of A$10,341,606.25 as follows:
1. Phase One. A cash payment of A$7,743,212.50 in
exchange for 6,194,570 shares of MDC, representing
14.9% of the total issued share capital of MDC. This
phase will take place and be effective as of the date
of acceptance of this offer. Closing will take place
at a location mutually acceptable to both parties on
the fifth business day after acceptance of the
present offer, when MK will ensure that any existing
encumbrance on the shares is released and deliver
executed share transfers and share certificates in
respect of the shares sold, and confer on Cedar clear
title to the shares sold, and Cedar shall wire
transfer immediately available funds or deliver a
bank check for the consideration payable pursuant to
written instructions from MK.
2. Phase Two. A second cash payment of A$2,598,393.75
in exchange for 2,078,715 shares of MDC, representing
5% of the total issued share capital of MDC, subject
to FIRB approval. If this offer is accepted, Cedar's
obligations to purchase the additional 5% of the
total issued share capital of MDC will be conditional
upon, and shall be of no force or effect until Xxxxx
has received written advice from the Australian
Treasurer under the Foreign Acquisitions and
Takeovers Act 1975 of
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Australia ("FATA") to the effect that the
Commonwealth Government has no objection to such
acquisition, which is either unconditional or subject
to conditions which are acceptable to Cedar, or the
period provided under FATA during which the Treasurer
may make an order under FATA (including an interim
order under section 22) in relation to such
acquisition, passing without such an order being made
or, if an interim order under section 22 is made, the
subsequent period for making a final order
prohibiting such acquisition passing without a final
order being made Cedar will give the required
notification of such acquisition under FATA promptly
following acceptance of this offer. Upon receipt of
FIRB approval, Cedar must notify MK. Closing will
take place at a location mutually acceptable to both
parties on the fifth business day after receipt of
FIRB approval, when MK will ensure that any existing
encumbrance on the shares is released and deliver
executed share transfers and share certificates in
respect of the shares sold, and confer on Cedar clear
title to the shares sold, Cedar shall wire transfer
immediately available funds or deliver a bank check
for the consideration payable, pursuant to written
instructions from MK.
It is understood by both parties that the contract of purchase following
Xxxxx's acceptance of this offer is conditional upon no further shares being
issued by MDC and, for as long as MK shall continue to be the beneficial holder
of MDC shares and within the limits of Australian law, MK undertakes to cause
MDC nor to issue any further shares beyond the 41,574,298 already issued.
Each party shall bear its own costs in relation to the agreement arising on
acceptance of this offer, but Cedar shall bear any Australian stamp duty
chargeable on that agreement or the transfer of shares under that agreement,
including any fine or penalty caused by Xxxxx's actions. Xxxxx shall indemnify
MK on demand against any liability for the stamp duty.
Cedar will not make any public disclosure of this transaction unless such
disclosure is mandated by law or is authorized by MK. MK will not unreasonably
withhold its authorization. In the event of disclosure, MK and Cedar will
coordinate the wording and timing of such disclosure.
MK has sought and obtained from its banks a waiver enabling MK to go forward
with this transaction. The bank waiver is conditional
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upon the consummation of the contemplated transaction by March 31, 1996. The
waiver is also conditional upon documentation satisfactory to the bank
co-agents (Mellon Bank and Bank of America National Trust and Savings
Association) and satisfactory escrow agreements necessary to protect the banks'
security interest in the MDC shares. It is understood that Xxxxx will not be
party to any such escrow agreement.
Yours sincerely Accepted on behalf of
Xxxxxxxx Xxxxxxx Corporation Cedar Group, Inc.
/s/ Xxx X. X'Xxxxxxx /s/ Xxxxxxx Xxxxxxxxx
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Vice President Xxxxxxx Xxxxxxxxx
President & COO
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