EXHIBIT 10.39
SHAREHOLDERS AGREEMENT
THE 24TH DAY OF MAY, 2002
SHINKO ELECTRIC CO., LTD.
ASYST JAPAN INC.
CONTENTS
1. INTERPRETATION 1
1.1 Definitions 1
1.2 Rules for interpreting this Agreement 7
1.3 Business Days 8
2. CONDITION PRECEDENT AND ESTABLISHMENT OF THE COMPANY 8
2.1 Condition Precedent to Agreement 8
2.2 Purpose of Company 8
2.3 Structure, Location and Name of Company 8
2.4 Prior Establishment of Company 9
2.5 This Agreement to prevail 9
2.6 Name of Company and Intangible Property Rights 9
2.7 Obligations on Commencement Date 9
2.8 Restraint 9
2.9 No partnership or agency 11
3. THE BOARD 11
3.1 Appointment of Directors 11
3.2 Representative Directors, Chairman and President 12
3.3 Board Quorum and Voting majorities 12
3.4 Voting Rights 14
3.5 Board Meetings, Notices Agendas 14
4. SHAREHOLDERS 14
4.1 Shareholders' Meetings 14
4.2 Shareholders' Meeting Quorum 15
4.3 Matters Requiring a Special Majority 15
4.4 Shareholders to ensure Board performance 16
5. MANAGEMENT OF THE COMPANY 16
5.1 Board 16
5.2 Independent Accounting Auditor 16
5.3 Statutory Auditors 16
5.4 Access to Books and Records 16
5.5 Accounting Records and Accounting Policies 16
5.6 Language of Records 17
5.7 Business Plan and Budget 17
5.8 Language of Meetings and Notices 18
6. DIVIDEND POLICY 18
6.1 Dividends 18
6.2 Reserves 18
6.3 Payment of Dividends 18
7. FINANCIAL SUPPORT 18
7.1 Independence of Company 18
7.2 Requirement to Provide Financial Support 19
7.3 Indemnities 19
8. BUSINESS OPERATION ISSUES 20
8.1 Consent by the Parties Concerning Business Operations 20
8.2 Product Name 20
8.3 Provision of Goods and Services by Shinko Electric and Shinko Electric
Related Companies 20
8.4 Other Agreements between the Parties and the Company and Other
Obligations of Shinko Electric 22
9. ISSUE OF SHARES 23
9.1 Pre-emptive rights and Take-Outs 23
9.2 Assumption of Transaction Documents 23
10. TRANSFER OF SHARES 23
10.1 Rules for transfer of Shares 23
10.2 Notice on Share certificates 24
10.3 Prohibition on Transfer 24
10.4 Permitted transfers 24
10.5 Transfer Notice 24
10.6 Request for Consent 25
10.7 Response by Shareholders 25
10.8 Exercise of Right of First Refusal 25
10.9 Sale if shares not disposed of 26
10.10 Tag-Along Sale 27
11. DEFAULT 27
11.1 Events of Default 27
11.2 Notice of Event of Default 28
11.3 Termination of Defaulting Shareholder's Rights 28
11.4 Right to buy Defaulting Shareholder's Shares 28
11.5 Completion 30
11.6 Winding-Up of the Company 30
11.7 Amount due on completion 30
12. DEADLOCK 31
13. REPRESENTATIONS AND WARRANTIES 32
14. TERMINATION 34
14.1 Termination of agreement 34
14.2 Consequences of termination 34
14.3 Clauses surviving termination 34
15. DISPUTE RESOLUTION 34
15.1 Dispute 34
15.2 Negotiation 34
15.3 Further procedure 35
15.4 Costs of Dispute Resolution 35
15.5 Continuing Obligations 35
16. CONFIDENTIALITY AND PUBLIC ANNOUNCEMENTS 35
16.1 Confidentiality Information Falling under Confidential Information 35
16.2 Treatment of Confidential Information 36
16.3 Return of Confidential Information 36
16.4 Exceptions 37
16.5 Others 37
17. NOTICES 37
18. AMENDMENT AND ASSIGNMENT 38
18.1 Amendment 38
18.2 Assignment 38
19. INDEMNIFICATION 38
19.1 General Indemnity 38
19.2 No Double Claim 39
20. GENERAL 39
20.1 Governing law 39
20.2 Language 39
20.3 Liability for expenses 39
20.4 Giving effect to this Agreement 39
20.5 Waiver of rights 39
20.6 Operation of this Agreement 39
20.7 Operation of indemnities 40
20.8 Consents 40
20.9 Exclusion of contrary legislation 40
20.10 Counterparts 40
20.11 Attorneys 40
SHAREHOLDERS AGREEMENT
DATE: May 24, 2002
PARTIES
SHINKO ELECTRIC CO., LTD., a corporation organized and existing under
the laws of Japan and having its registered principal office at ▇-▇▇,
▇▇▇▇ ▇-▇▇▇▇▇, ▇▇▇▇-▇▇, ▇▇▇▇▇ ("SHINKO ELECTRIC")
ASYST JAPAN INC., a corporation organized and existing under the laws of
Japan and having its registered principal office at ▇▇▇▇▇▇ ▇▇▇-▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇-▇▇, ▇▇▇▇-▇▇▇▇▇▇▇▇ 2-Chome, Kohoku-ku,
Yokohama-shi, Kanagawa("ASYST JAPAN")
RECITALS
A. WHEREAS, Shinko Electric, amongst other businesses, carries on a
semiconductor and liquid crystal materials conveyance system business in
Japan and overseas (the "BUSINESS").
B. WHEREAS, Shinko Electric and Asyst Japan have been discussing the
possibility of jointly carrying on the Business.
C. WHEREAS, pursuant to such discussions, Shinko Electric and Asyst Japan
have agreed that Shinko Electric shall transfer the Business by way of
corporate separation to a newly created company to be fully owned by
Shinko Electric, and thereafter, Asyst Japan shall purchase a portion of
the shares of the newly created company from Shinko Electric (the
"PROPOSAL").
D. WHEREAS, on April 16, 2002, Shinko Electric and Asyst Japan entered into
a certain basic agreement (the "BASIC AGREEMENT") under which they set
out their mutual understanding in relation to the Proposal.
E. WHEREAS, the Parties desire to set forth herein their agreement
regarding matters relating to the governance, auditing, transfer
restrictions, additional capital contributions, deadlock, the management
and operation of the newly created Company referred to in RECITAL C
above and the respective rights and responsibilities, etc. of the
Parties in connection therewith.
NOW, therefore, the Parties hereto agree as follows:
OPERATIVE PROVISIONS
1. INTERPRETATION
1.1 DEFINITIONS
The following definitions apply in this Agreement, except where the
content makes it clear that they should be otherwise interpreted.
"ACCOUNTING AUDITOR ("KAIKEI KANSANIN")" shall have the meaning
prescribed to it under CLAUSE 5.2.
"ACCOUNTING PACKAGE ("KAIKEI PAKKEIJI")" shall mean the accounting
packages in compliance with the U.S. GAAP in relation to the Company or
the company group to which the Company belongs.
"APPLICABLE LAW ("TEKIYO HOREI")" means, as to any Person, any statute,
law, rule, regulation, directive, treaty, judgment, order, decree or
injunction of any Governmental Authority (including any auditing
organization of the U.S. Securities and Exchange Commission, etc., or
any relevant securities exchange) and all matters related thereto,
regardless of place of enactment, that is applicable to or binding upon
such Person or any of its properties.
"ARTICLES OF INCORPORATION ("TEIKAN")" means the articles of
incorporation of the Company, which are attached to the corporate
separation plan.
"ASYST DIRECTOR ("ASHISUTO TORISHIMARIYAKU")" shall mean a director
appointed by Asyst Japan pursuant to CLAUSE 3.1(a).
"BASIC AGREEMENT ("KIHON KEIYAKU")" means the agreement referred to in
RECITAL D.
"BID ("NYUSATSU")" shall have the meaning prescribed to it under CLAUSE
12(d).
"BOARD ("TORISHIMARIYAKUKAI")" means the board of directors of the
Company.
"BRAND NAME ("▇▇▇▇▇▇ SHOHYO")" means the brand name "Shinko" and the
brand name "System Power ▇▇▇▇" referred to in CLAUSE 8.2(a).
"BRAND NAME LICENSE AGREEMENT ("SHOHYO SHIYO KYODAKU KEIYAKU")" means
the license agreement among the Company, Shinko Electric and Kobe Steel
entered into on or before the Transfer Date, under which Kobe Steel
consents to the use of the Brand Name by the Company on a royalty free
basis.
"BUSINESS ("▇▇▇▇▇▇ JIGYO")" means the business concerning semiconductor
wafers and liquid ▇▇▇▇▇▇▇ ▇▇▇▇▇-board conveyance system, to be
transferred to the Company by Shinko Electric pursuant to the Corporate
Separation Plan, and to thereafter be carried on by the Company.
"BUSINESS DAY ("EIGYOBI")" means a day that is not a Saturday, Sunday or
public holiday in Tokyo, Japan, and also excluding 31 December, 2
January and 3 January.
"BUSINESS PLAN AND BUDGET ("JIGYO KEIKAKU OYOBI YOSAN")" means the
business plan and budget for the business plan adopted by the Company in
accordance with CLAUSE 5.7.
"CALL OPTION NOTICE ("KOORU OPUSHON TSUCHI")" shall have the meaning
prescribed to it under CLAUSE 11.4(c).
"CFO ("SAIKO ZAIMUSEKININSHA")" shall have the meaning prescribed to it
under CLAUSE 3.2(a)(iii). "CHAIRMAN ("DAIHYO TORISHIMARIYAKU KAICHO")"
shall have the meaning prescribed to it under CLAUSE 3.2(a)(i).
2.
"COMMENCEMENT DATE ("KAISHIBI")" means the Transfer Date, being the date
upon which this Agreement becomes effective.
"COMMERCIAL CODE ("SHOHO")" means the Commercial Code of Japan (Law No.
48, March 9, 1899) as amended from time to time.
"COMPANY ("SHIN GAISHA")" means the corporation to be established by way
of the Corporate Separation, before the Commencement Date.
"CONFIDENTIAL INFORMATION ("HIMITSU JOHOU")" shall have the meaning
prescribed to it under CLAUSE 16.1.
"CORPORATE SEPARATION ("▇▇▇▇▇▇ ▇▇▇▇▇▇ BUNKATSU")" means the corporate
separation of the Business by way of separation and new-establishment,
from Shinko Electric into the Company, pursuant to the Corporate
Separation Plan.
"CORPORATE SEPARATION PLAN ("KAISHA BUNKATSU KEIKAKU")" means the
corporate separation plan attached to the Stock Purchase Agreement.
"DEADLOCK ("DEDDOROKKU")" shall have the meaning prescribed to it under
CLAUSE 12(a).
"DEFAULT NOTICE ("FURIKO TSUCHI")" shall have the meaning prescribed to
it under CLAUSE 11.2(b).
"DEFAULTING SHAREHOLDER ("FURIKO KABUNUSHI")" means a Shareholder which
commits, or becomes subject of, an Event of Default.
"DIRECTOR ("TORISHIMARIYAKU")" means a director of the Company.
"DIVIDEND POLICY ("HAITO HOSHIN")" means the Company's dividend policy
as prescribed in CLAUSE 6.
"EQUITY INTEREST ("MOCHIBUN")" means the proportion (expressed as a
percentage) which the number of Shares held by a Shareholder bears to
the total number of issued Shares.
"EVENT OF DEFAULT ("FURIKO JIYU")" means an event or circumstance
described in CLAUSE 11.1.
"EXISTING SHINKO ELECTRIC SUPPLIER ("KIZON NO SHINKO DENKI
KYOUKYUGYOSHA")" shall have the meaning prescribed to it under CLAUSE
8.2(a)(i).
"EXPIRY DATE ("YUKOKIGENBI")" shall have the meaning prescribed to it
under CLAUSE 9.1(i)(B).
"FINANCIAL SUPPORT ("ZAISEITEKI ENJO")" shall have the meaning
prescribed to it under CLAUSE 7.2(a).
"FINANCIAL YEAR ("EIGYONENDO")" means the following periods:
(a) the period from the establishment of the Company until 31 March
of the next calendar year; and
3.
(b) thereafter the period from 1 April each year to 31 March of the
next calendar year.
"FIRST REFUSAL RESPONSE ("SENBAIKEN NO OUTOUSHO")" shall have the
meaning prescribed to it under CLAUSE 10.8.
"FURTHER SHARES ("TSUIKA KABUSHIKI")" shall have the meaning prescribed
to it under CLAUSE 9.1.
"GOVERNMENTAL AUTHORITY ("SEIFUKIKAN")" means any domestic or foreign
administrative agency or judicial agency.
"HIGHEST BIDDER ("SAIKO NYUSATUSHA")" shall have the meaning prescribed
to it under CLAUSE 12(f).
"INDEPENDENT VALUER'S PRICE ("DOKURITSU HYOKANIN KAKAKU")" means the
value, expressed as a cash price per Share, assessed by the Valuer to be
the fair market value of a Share:
(a) on the basis of an arms length transaction between persons
making reasonable and neutral assessments with respect to
pricing;
(b) by reference to past accounts and current management figures and
forecasts for the Company;
(c) taking into account past and prospective earnings and underlying
net asset values; and
(d) having regard (in the Valuer's reasonable discretion) to future
maintainable earnings and any other factors the Valuer considers
relevant.
"INDEMNIFIED PARTY ("HI-HOSHO TOJISHA")" shall have the meaning
prescribed to it under CLAUSE 19.1.
"INDEMNIFYING PARTY ("HOSHO TOJISHA")" shall have the meaning prescribed
to it under CLAUSE 19.1.
"INITIAL BUSINESS PLAN AND BUDGET ("TOSHO JIGYOKEIKAKU OYOBI YOSAN")"
means the initial business plan and budget agreed to by the
Shareholders.
"INITIAL EQUITY INTERESTS ("TOSHO MOCHIBUN")" means the Equity Interests
of Shinko Electric and Asyst Japan as at the Commencement Date, being as
follows:
(a) Shinko Electric: 49%
(b) Asyst Japan: 51%
"INTANGIBLE PROPERTY RIGHTS ("MUTAI ZAISANKEN")" means business names,
copyrights, patents, trademarks, service marks, designs, utility models,
know-how, trade secrets and all other similar industrial, commercial and
intangible property (including applications such as for registration,
regardless of the country in which such application is to be applied for
and registered), including specifications, blueprints, drawings,
manuals, domain names, other
4.
related rights of intangible property and all Confidential Information
concerning the Business.
"JAPANESE GAAP ("NIHONKOKOU KAIKEI KIJUN")" means generally accepted
accounting principles, as in effect from time to time in Japan and
applicable to the Company.
"KOBE STEEL ("KOBE SEIKOUJO")" means Kobe Steel Ltd. which substantially
owns 33 % of Shinko Electric's shares.
"NON-DEFAULTING SHAREHOLDER ("HI-FURIKO KABUNUSHI")" means, where an
Event of Default has occurred, a Shareholder other than the Defaulting
Shareholder.
"OFFER PRICE ("URIDASHI KAKAKU")" shall have the meaning prescribed to
it under CLAUSE 10.5(b).
"OFFICER ("YAKUIN")" shall have the meaning prescribed to it under
CLAUSE 12(a).
"OTHER SHAREHOLDERS ("SONOTANO KABUNUSHI")" shall have the meaning
prescribed to it under CLAUSE 10.5.
"PARTY ("TOJISHA")" means a party to this Agreement.
"PERSON ("MONO")" means any natural person, partnership, corporation,
limited liability company, joint venture, trust or other organization.
"PRE-CALL OPTION NOTICE ("KOORU OPUSHON KOSHI YOYAKU TSUCHI")" shall
have the meaning prescribed to it under CLAUSE 11.4(a)
"PRESIDENT ("DAIHYO TORISHIMARIYAKU SHACHO")" shall have the meaning
prescribed to it under CLAUSE 3.2(a)(ii).
"PROPOSED TRANSFEREE ("YOTEI YUZURIUKENIN")" shall have the meaning
prescribed to it under CLAUSE 10.5(c).
"PROPOSING TRANSFEROR ("YOTEI JOTONIN")" shall have the meaning
prescribed to it under CLAUSE 10.5.
"RELEVANT NON-DEFAULTING SHAREHOLDER ("KANREN HI-FURIKO KABUNUSHI")"
shall have the meaning prescribed to it under CLAUSE 11.4(a).
"REPRESENTATIVE DIRECTOR ("DAIHYO TORISHIMARIYAKU")" means any Director
appointed as a representative director of the Company.
"RESERVED PRICE ("SAITEI BAIBAIKAKAKU")" shall have the meaning
prescribed to it under CLAUSE 12(c).
"RESPONSE ("OUTOUSHO")" shall have the meaning prescribed to it under
CLAUSE 10.7.
"RESPONSE PERIOD ("OUTOUKIKAN")" shall have the meaning prescribed to it
under CLAUSE 10.7.
5.
"SEPARATE AGREEMENT ("KOBETSU KEIYAKU")" shall have the meaning
prescribed to it under CLAUSE 7.2(a).
"SHARE ("KABUSHIKI")" means an ordinary issued share in the capital of
the Company.
"SHARE PURCHASE AGREEMENT ("KABUSHIKI JOTO KEIYAKU")" means the
agreement dated on or around the date of this Agreement between Shinko
Electric and Asyst Japan pursuant to which Shinko Electric sells, and
Asyst Japan purchases, 51% of the issued and outstanding shares in the
Company.
"SHARE TRANSFER ("KABUSHIKI JOTO")" means the transfer of the Transfer
Shares to Asyst Japan by Shinko Electric pursuant to the Share Purchase
Agreement.
"SHAREHOLDER ("KABUNUSHI")" means the holder of at least 1 Share in the
Company.
"SHAREHOLDERS' MEETING ("KABUNUSHI SOKAI")" means a meeting of
Shareholders of the Company held in accordance with the Articles of
Incorporation and the Applicable Law.
"SHINKO ELECTRIC DIRECTOR ("SHINKO DENKI TORISHIMARIYAKU")" shall mean a
director appointed by Shinko Electric pursuant to CLAUSE 3.1(a).
"SHINKO ELECTRIC RELATED COMPANY ("SHINKO DENKI KANRENGAISHA")" means
subsidiaries and related companies ("subsidiary" and "related company"
as defined in the Regulations Concerning Terminology, Form and Method of
Preparation of Financial Statements, etc. (1963, Ministry of Finance
Ordinance No.59)) of Shinko Electric.
"SHINKO ELECTRIC SUPPLIER ("SHINKO DENKI KYOKYUGYOSHA")" shall have the
meaning prescribed to it under CLAUSE 8.2(a).
"SHORTFALL SHARES ("FUSOKUBUN KABUSHIKI")" shall have the meaning
prescribed to it under CLAUSE 9.1(ii).
"SPECIAL MAJORITY ("TOKUBETSU KETSUGI")" means approval of the holders
of at least two thirds of the voting rights with the presence of
shareholders having at least a majority of the voting rights of all
shareholders at a Shareholders' Meeting, in favour of a proposed
resolution at the meeting.
"STATUTORY AUDITOR ("KANSAYAKU")" means a person appointed as a
statutory auditor of the Company.
"SUBJECT SHARES ("TAISHO KABUSHIKI")" shall have the meaning prescribed
to it under CLAUSE 10.5(a).
"TAG-ALONG SALE NOTICE ("DOJI BAIKYAKU TSUCHI")" shall have the meaning
prescribed to it under CLAUSE 10.7(c).
"TRANSACTION DOCUMENTS ("TORIHIKI SHORUI")" means this Agreement and the
Articles of Incorporation.
6.
"TRANSFER DATE ("JOTOBI")" shall mean the date on which the Transfer
Shares are transferred to Asyst Japan from Shinko Electric, pursuant to
the terms of the Share Purchase Agreement.
"TRANSFER NOTICE ("JOTO TSUCHI")" shall have the meaning prescribed to
it under CLAUSE 10.5
"TRANSFER SHARES ("JOTO KABUSHIKI")" means 51% of the issued and
outstanding shares in the Company to be transferred to Asyst Japan on
the Transfer Date pursuant to the Share Purchase Agreement.
"U.S. GAAP ("BEIKOKU KAIKEI KIJYUN")" means generally accepted
accounting principles, as in effect from time to time in the United
States of America and applicable to the corporate group to which the
Company belongs to, as the case may be.
"VALUER ("HYOKANIN")" means an independent chartered accountant:
(a) acceptable to all Shareholders; and
(b) in the event that Shareholders do not reach agreement within 10
Business Days of commencing negations in relation to the value
which the Valuer is to determine, an audit corporation,
nominated by the Accounting Auditor at that time, which is part
of a partnership with a fair, independent and internationally
accepted accounting firm.
"WORKING CAPITAL ("UNTEN SHIKIN")" shall have the meaning prescribed to
it under CLAUSE 7.1.
1.2 RULES FOR INTERPRETING THIS AGREEMENT
Headings are for convenience only, and do not affect interpretation. The
following rules also apply in interpreting this Agreement, except where
the context makes it clear that a rule is not intended to apply:
(a) A reference to:
(i) legislation (including subordinate legislation) is to
that legislation as amended, re-enacted or replaced, and
includes any subordinate legislation issued under it;
(ii) a document or agreement, or a provision of a document or
agreement, is to that document, agreement or provision
as amended, supplemented, replaced or novated;
(iii) a Party to this Agreement or to any other document or
agreement includes a permitted substitute or a permitted
assign of that Party;
(iv) a Person includes any type of entity or body of persons,
whether or not it is incorporated or has a separate
legal identity, and any executor, administrator or
successor in law of the person; and
7.
(v) anything (including a right, obligation or concept)
includes each part of it.
(b) A singular word includes the plural, and vice versa.
(c) If an example is given of anything (including a right,
obligation or concept), such as by saying it includes something
else, the example does not limit the scope of that thing.
(d) The word "AGREEMENT" includes an undertaking or other binding
arrangement or understanding, whether or not in writing.
1.3 BUSINESS DAYS
If the day on or by which a person shall do something under this
Agreement is not a Business Day, the person shall do it on or by the
next Business Day:
2. CONDITION PRECEDENT AND ESTABLISHMENT OF THE COMPANY
2.1 CONDITION PRECEDENT TO AGREEMENT
This Agreement, other than this CLAUSE 2.1 (Condition Precedent to
Agreement), and CLAUSES 1 (Interpretation), 15 (Dispute Resolution), 16
(Confidentiality), 19 (Indemnification) and 20 (General) is of no force
or effect until, on or before the Commencement Date, the following
condition is fulfilled:
(a) The transfer of the Transfer Shares to Asyst Japan has been
completed, so that Asyst Japan is recognised as the legal owner
of the Transfer Shares under Japanese law.
(b) On the Commencement Date, the Equity Interest of the Parties is
in accordance with the Initial Equity Interests.
2.2 PURPOSE OF COMPANY
The principal purpose of the Company shall be to engage in the Business
in Japan and overseas (as applicable) to the fullest extent permitted by
Applicable Law.
2.3 STRUCTURE, LOCATION AND NAME OF COMPANY
The Company is a joint-stock company "Kabushiki Kaisha" incorporated
under the laws of Japan with an initial paid-in share capital of JPY495
million. The registered principal office of the Company will be located
at ▇-▇▇, ▇▇▇▇ ▇-▇▇▇▇▇, ▇▇▇▇-▇▇, ▇▇▇▇▇, ▇▇▇▇▇ and the names of the
Company will be "Ashisuto Shinko Kabushiki Kaisha" (in Japanese, in
katakana and kanji as appropriate) and "Asyst Shinko, Inc." (in
English); provided that if the registration of the Company's name in
Japanese with a half space between "Ashisuto" and "Shinko" (in written
Japanese) in accordance with the above is not accepted due to procedural
reasons of commercial registration, the name with such space omitted
shall be registered as the name of the Company. Even in such case,
however, the above-mentioned name "Ashisuto Shinko Kabushiki Kaisha"
with a half space between "Ashisuto" and
8.
"Shinko", as predetermined by both Parties, shall be used to the extent
possible in day-to-day operations of the Company, and each Party agrees
with such treatment.
2.4 PRIOR ESTABLISHMENT OF COMPANY
Before the Commencement Date, the Company shall be established and the
Business shall be transferred to the Company, pursuant to the Corporate
Separation Plan. Further, in exchange for the transfer of the Business,
Shinko Electric shall acquire all of the Shares of the Company issued on
incorporation, thereby becoming the sole shareholder of the Company
before the Commencement Date.
2.5 THIS AGREEMENT TO PREVAIL
The Parties agree that if any provision of the Articles of Incorporation
conflicts with this Agreement, the terms of this Agreement shall prevail
and the Shareholders shall cooperate, to the extent permitted by
Applicable Law, to cause the Articles of Incorporation to be amended
promptly to conform with the terms hereof.
2.6 NAME OF COMPANY AND INTANGIBLE PROPERTY RIGHTS
(a) The names "Ashisuto Shinko Kabushiki Kaisha" (in katakana and
kanji, as appropriate) and "Asyst Shinko, Inc." are the property
of the Company.
(b) All Intangible Property Rights owned and developed by the
Company remain the property of the Company and Shareholders
shall not use them without the written consent of each other
Shareholder and the Company, except where the relevant Party and
the Company agree otherwise concerning the handling of
Intangible Property Rights owned and developed by the Company
(including but not limited to any consent made pursuant to the
License Agreement Regarding Mutual Implementation of
Intellectual Property and Entrustment Agreement of Development
Business which shall otherwise be entered into by and between
Shinko Electric and the Company).
2.7 OBLIGATIONS ON COMMENCEMENT DATE
By the Commencement Date, Shinko Electric shall have arranged for the
Company to prepare the Initial Business Plan and Budget for the initial
Financial Year of the Company, to be considered for approval by the
Board after the Commencement Date.
2.8 RESTRAINT
(a) Subject to CLAUSES 2.8(b) or 2.8(i), each Party shall perform
the actions necessary for the development of the Company's
business and shall not perform any action which hinders such
development.
(b) For the purpose of CLAUSE 2.8(a), Shinko Electric:
(i) while it is the beneficial owner of at least 1 Share;
and
(ii) for a period of 3 years after it ceases to be a
Shareholder of the Company,
9.
shall not, without the prior written consent of the
Company and Asyst Japan, in the countries, including but
not limited to Japan and U.S.A., in which the Company is
or will then be conducting the Business:
(A) promote, participate in, operate or engage in
(whether on its own account or in partnership or
by joint venture or as agent of or manager for
any other person); or
(B) be concerned or own 5 % or more of the equity
interest of (whether directly or indirectly, or
through any interposed body corporate, trust ,
principal, agent, shareholder, beneficiary, or
as an independent contractor, consultant or in
any other capacity),
any business or operation similar to or competitive with
businesses of the Company ("COMPETITIVE BUSINESS").
(c) The provisions of CLAUSE 2.8(a) shall not prevent Asyst Japan
and Asyst Technologies from (whether on their own account or in
partnership or by joint venture or as agent of or manager for
any other person) promoting, participating in, operating or
engaging in business regarding the manufacture, sale,
improvement or development of products that are sold by Asyst
Japan or Asyst Technologies at the time of the Corporate
Separation Date or products similar to such products.
(d) CLAUSE 2.8 does not prohibit a Party from owning less than 5% of
the total number of shares or equity interest of the quoted
securities of a listed body corporate or listed investment
trust.
(e) During the period set forth in CLAUSE 2.8 (b)(i) AND (ii) above,
each Party shall not, directly or indirectly, appoint or employ
any of the directors, officers or employees who have been
transferred to the Company pursuant to the Corporate Separation
Plan to engage in its own businesses (other than the Business),
without the prior written consent of the Company and the other
Party.
(f) Each Party acknowledges that each of the restraints contained in
this clause is reasonable in its extent (as to duration,
geographical area and restrained conduct) having regard to the
interests of that Party and goes no further than is reasonably
necessary to protect the interests of the Company and the
Business.
(g) Nothing in CLAUSE 2.8(b) shall prevent Shinko Electric from
being involved in the businesses other than the Business
(including but not limited to the hospital conveyance systems
business and semiconductor/liquid-crystal materials business
(such semiconductor/liquid-crystal materials business consists
of the EFEM business, liquid-crystal loader business and liquid
crystal robot business)) which it currently conducts as at the
date of this Agreement.
(h) In the event that Shinko Electric acquires a body corporate or
becomes incorporated with a body corporate ("ACQUISITION,
ETC."), and a Competitive Business is included in the business
of such body corporate or transferee corporation, Shinko
Electric and Asyst Japan shall separately discuss and determine
this matter prior to such Acquisition, etc. The provisions of
CLAUSE 2.8(b) shall not apply in such event only
10.
where Shinko Electric and Asyst Japan agree that the degree of
impact that the Competitive Business will have on the Company
will not be significant, having regard to whether or not the
sales amount of the Competitive Business in the previous fiscal
year exceeded JPY1 billion. Even in the event that the
provisions of CLAUSE 2.8(b) do not apply at the time of the
Acquisition, etc. pursuant to the above, if the single annual
sales amount of such Competitive Business after such Acquisition
etc. exceeds JPY1 billion, Shinko Electric shall make its best
and reasonable (from a commercial point of view) effort to
separate such Competitive Business within 12 months after the
end of such fiscal year unless otherwise agreed by and between
Shinko Electric and Asyst Japan.
(i) Asyst Japan shall make its best and reasonable (from a
commercial point of view) effort to cause Asyst Technologies,
the parent company of Asyst Japan, to perform the equivalent
duty as prescribed to it under CLAUSE 2.8 (a).
2.9 NO PARTNERSHIP OR AGENCY
Nothing in this Agreement is to be treated as creating a partnership and
except as specifically provided in this Agreement no Party may act as
agent of or in any way bind another Party to any obligation.
3. THE BOARD
3.1 APPOINTMENT OF DIRECTORS
(a) The Parties agree that the Company shall have a maximum of 7
Directors who shall be appointed as follows:
(i) Shinko Electric shall be entitled to appoint by notice
in writing to Asyst Japan and the Company, 3 Directors
to the Board and may replace those 3 Directors; and
(ii) Asyst Japan shall be entitled to appoint by notice in
writing to Shinko Electric and the Company, 4 Directors
to the Board and may replace those 4 Directors.
If Shinko Electric or Asyst Japan, as the case may be, nominate
candidate(s) for Director(s) pursuant to this CLAUSE 3.1, the
other Party shall take any and all steps it is entitled to as a
Shareholder of the Company, in order to procure that the
candidate(s) for Director(s) so appointed is elected to the
Board.
(b) Subject to the provisions of the Commercial Code and the
Articles of Incorporation, the term of each Shinko Electric
Director and Asyst Director shall be determined by the Party
having the right to appoint him or her to the Board.
(c) If either of the Parties ceases to own any Shares in the
Company, it shall do all things reasonable to ensure before so
ceasing that each Director appointed by it resigns.
11.
(d) If the Equity Interest of either or both Parties change from
their respective Initial Equity Interests, then the relevant
Party's right to appoint Directors referred to at CLAUSE 3.1(a)
above shall be amended pursuant to Separate Agreement to be
reached between the Parties as to how to reallocate the
appointment of Directors to ensure such Director appointments
are fairly distributed and proportionate amongst the Parties
having regard to their respective shareholdings.
3.2 REPRESENTATIVE DIRECTORS, CHAIRMAN AND PRESIDENT
(a) Subject to CLAUSES 3.2(a) AND (c), the Shareholders shall
arrange for the Directors to appoint:
(i) one of the Directors as a Representative Director
Chairman "Daihyo-Torishimariyaku-Kaicho" ("CHAIRMAN");
(ii) one of the Directors as a Representative Director
President "Daihyo-Torishimariyaku-Shacho" ("PRESIDENT");
and
(iii) a Chief Financial Officer "Saikozaimusekininsha" ("CFO")
(who does not have to be a Director).
(b) Asyst Japan may appoint, remove and replace the Chairman and the
CFO, and Shinko Electric may appoint, remove and replace the
President.
(c) Should Shinko Electric or Asyst Japan, as the case may be,
appoint, remove or replace the Chairman, the President and/or the
CFO pursuant to CLAUSE 3.2(b), the other Party shall take any and
all steps it is entitled to as a Shareholder of the Company, in
order to procure that the Chairman, the President and/or the CFO
is appointed, removed or replaced accordingly.
(d) The Chairman shall be the chairman of all general Shareholders'
Meetings and meetings of the Board; provided, however, that in
the event that the Chairman is unable to act as such because of
a mishap, the President shall act in his place, and in the event
that the President is also unable to act as such because of a
mishap, one of the Directors shall act in his place pursuant to
an advance order of the Board.
(e) Except as otherwise stated above, the roles and responsibilities
of the Chairman and President shall be separately discussed and
agreed by the Parties.
3.3 BOARD QUORUM AND VOTING MAJORITIES
(a) Quorum
(i) The quorum of meetings of the Board shall be a majority
of the total number of Directors, unless otherwise
provided in this Agreement and the Articles of
Incorporation.
(ii) If within half an hour from the time appointed as the
commencement time of a Board meeting, the number of
Directors present does not meet the quorum, the meeting
shall be adjourned to the same day in the next week at
the same
12.
time and place with the necessary quorum or to such
other day, time and place as may be determined.
(b) Majority decisions
Decisions of the Board shall be by majority vote of the
Directors present at the meeting of the Board at which the
relevant decision is being made, subject to CLAUSE 3.3(c).
(c) Matters requiring Unanimous Approval
Approval of the following matters needs, to the extent permitted
under Applicable Laws, the presence of 5 or more Directors
including at least 1 Shinko Director and 1 Asyst Director,
respectively, at the relevant Board meeting, and also the
unanimous approval of the Directors present at the said Board
meeting. The Company shall not take any of the following actions
without obtaining such approval. Both Parties shall arrange for
the Company to observe such obligations.
(i) determination of the Business Plan and Budget and
amendment thereto for every fiscal year;
(ii) commencement of new business;
(iii) borrowing or incurring any indebtedness exceeding JPY 40
million, purchasing and/or disposing of any assets and
investing in equipment and/or making any loan, except as
approved in the Business Plan and Budget;
(iv) establishing, changing and/or closing any branch office
of the Company and other important establishments;
(v) issuing additional Shares;
(vi) election or removal of Representative Directors or
adoption of joint Representative Director system, in
accordance with CLAUSE 3.2.
(vii) approval concerning the transfer of Shares which are
subject to restrictions on transfer, or the appointment
of a person with the right of first refusal;
(viii) issuance of share call options ("Shinkabu Yoyakuken" in
Japanese);
(ix) issuance of bonds with subscription rights ("Shinkabu
Yoyakuken Tsuki Shasai" in Japanese);
(x) approval of business reports, balance sheets, profit and
loss statements, and proposals relating to the
disposition of profit/loss and annexed specifications
thereof (including matters regarding reserves referred
to under CLAUSE 6.2);
(xi) crediting the Company's reserve funds to its stated
capital;
(xii) declaring interim dividends;
13.
(xiii) approval of the establishment of subsidiaries of the
Company;
(xiv) approval of the execution of major contracts between the
Company and any of the Shareholders and of any amendment
thereto; and
(xv) change to the accounting policies adopted by the
Company.
3.4 VOTING RIGHTS
(a) Each Director who is present at a meeting of the Board shall
have one vote.
(b) The Chairman shall not have a casting vote other than pursuant
to the above.
3.5 BOARD MEETINGS, NOTICES AGENDAS
(a) Meetings of the Board shall be convened by a Representative
Director or in accordance with the provisions of the Articles of
Incorporation or any other bylaw of the Company and shall be
convened once every calendar month and whenever otherwise deemed
necessary by any Director, in such way permitted by the
Commercial Code (including by way of telephone conference), at
the registered address of the Company or such other place in
Japan or elsewhere as may be reasonably designated by the
Representative Director or Director.
(b) Notice of all Board meetings with an agenda of the meeting shall
be sent to each Director by hand delivery, mail, facsimile or
electronic mail at least 5 Business Days prior to such meeting,
with a copy to the Shareholders by mail, facsimile or electronic
mail.
(c) Notwithstanding the foregoing, the above period may be shortened
or the above convocation procedures may be omitted entirely if
all the Directors consent thereto.
(d) The Chairman, the President and other Directors shall use their
reasonable efforts to agree on the agenda before the meeting;
provided, however, that such meeting may be held even where such
agenda cannot be so agreed prior to the meeting.
(e) The Shareholders shall, to the extent they are able and
permitted to under Applicable Laws, exercise all their
exercisable rights to ensure that any decision made by an
agreement between the Shareholders (including this Agreement)
shall be duly affirmed by the Board, as necessary and
appropriate.
4. SHAREHOLDERS
4.1 SHAREHOLDERS' MEETINGS
(a) The Shareholders' Meeting shall be the formal decision making
body of the Company for those matters that are required to be
resolved at a Shareholders' Meeting pursuant to applicable
Japanese law or the Articles of Incorporation.
(b) Except as may be otherwise specified herein, the Shareholders
shall cause the Directors to submit for approval to the
Shareholders' Meeting any matter requiring
14.
approval by a Shareholders' Meeting pursuant to the Articles of
Incorporation, or Applicable Law.
(c) An ordinary Shareholders' Meeting shall be convened and
conducted once each Financial Year within three months after the
end of each Financial Year. An extraordinary Shareholders'
Meeting may be convened and conducted whenever deemed necessary
by the Board or any of the Shareholders in accordance with the
Applicable Laws. Shareholders' Meeting shall be conducted at the
registered address of the Company or such other place in Japan
as may be reasonably designated by the Board in accordance with
Applicable Law. Notice of all Shareholders' Meetings shall be
sent to the Shareholders at least 15 days prior to such meeting;
provided, however, that this period may be shortened if all the
Shareholders consent thereto.
(d) Unless otherwise provided by CLAUSE 4.3 or Applicable Law, all
matters requiring the approval of the Shareholders of the
Company shall be determined by majority of the voting rights of
Shareholders present at a Shareholders' Meeting and the
Shareholders shall have one voting right for each Share owned by
them.
(e) The chairman of the Shareholders' Meeting shall not have a
casting vote.
(f) The Shareholders shall ensure that any decision made by an
agreement between the Shareholders (including this Agreement)
shall be duly affirmed by the Shareholders' Meeting, as
necessary and appropriate.
4.2 SHAREHOLDERS' MEETING QUORUM
(a) The quorum of Shareholders' Meetings shall be at least that
number of Shareholders who together or on their own (as the case
may be), hold a majority of the outstanding Shares with voting
rights.
(b) If within half an hour from the time appointed for the
commencement of a Shareholders' Meeting the number of
Shareholders present does not meet the quorum, the meeting shall
be adjourned to the same day in the next week at the same time
and place with the necessary quorum or to such other day, time
and place as may be determined.
4.3 MATTERS REQUIRING A SPECIAL MAJORITY
The Company shall not, to the extent it is able and permitted to under
Applicable Laws, take any of the following actions unless the actions
are approved by Special Majority approval at a Shareholders' Meeting.
Both Parties shall cause the Company to observe such obligations.
(a) Appointment of Directors or Statutory Auditors of the Company
other than in accordance with CLAUSE 3.2;
(b) Approval of financial documents or proposals relating to the
disposition of profit/loss; and
15.
(c) Crediting profit to the Company's stated capital.
4.4 SHAREHOLDERS TO ENSURE BOARD PERFORMANCE
Subject to compliance with any overriding obligations imposed by any
Applicable Law, if any provision of a Transaction Document imposes an
obligation on the Company or the Board, each Shareholder shall exercise
all its exercisable rights to cause the Company or the Board to perform
such obligation; provided, however, that this shall not require the
Company or Directors to do anything which is contrary to any Applicable
Law or which would amount to a breach of his fiduciary duty or
responsibility to the Company.
5. MANAGEMENT OF THE COMPANY
5.1 BOARD
Management of the Company is vested in the Board.
5.2 INDEPENDENT ACCOUNTING AUDITOR
The Shareholders shall cause an independent certified public accountant
or an accounting firm to be appointed at all times as accounting auditor
of the Company "Kaikei Kansanin" ("ACCOUNTING AUDITOR"). The
Shareholders shall cause CHUOAOYAMA AUDIT CORPORATION, Japan to be
appointed as the Company's initial Accounting Auditor.
5.3 STATUTORY AUDITORS
(a) The Company shall have a maximum of 2 Statutory Auditors. Shinko
Electric shall nominate 1 Statutory Auditor and Asyst Japan
shall nominate 1 Statutory Auditor.
(b) A Party having nominated a Statutory Auditor pursuant to this
CLAUSE 5.3 shall have the right to cause such Statutory Auditor
to be removed from his or her position.
(c) Should a Party being entitled to nominate a Statutory Auditor
nominate, or having nominated a Statutory Auditor remove or
replace the Statutory Auditor so appointed, removed or replaced
pursuant to this CLAUSE 5.3, the other Party shall take any and
all steps it is entitled to as a Shareholder of the Company, in
order to procure that the Statutory Auditor is appointed,
removed or replaced accordingly.
5.4 ACCESS TO BOOKS AND RECORDS
All Shareholders, Directors and Statutory Auditors shall have the right
to full access to all of the financial data of the Company, including
but not limited to the books and records as provided herein.
5.5 ACCOUNTING RECORDS AND ACCOUNTING POLICIES
(a) The Shareholders shall cause the Company to keep true and
accurate accounting records of all operations in accordance with
Japanese GAAP and the Commercial Code.
16.
(b) The Shareholders shall cause the Company to prepare and keep
financial statements in accordance with U.S. GAAP, pursuant to
the accounting records referred to in CLAUSE 5.5(a) above, and
also to fill in and complete the Accounting Package, with its
contents fulfilling the requirements of Asyst Japan, in
accordance with U.S. GAAP.
5.6 LANGUAGE OF RECORDS
All books and records of the Company shall be prepared in Japanese, and
shall be translated into English, to the extent possible, at the request
of Asyst Japan. All the costs and expenses for preparation of the
Company's books and records both in Japanese and in English, and the
Accounting Packages, pursuant to CLAUSE 5.5 and this CLAUSE 5.6 shall be
borne by the Company.
5.7 BUSINESS PLAN AND BUDGET
(a) The Shareholders shall, to the extent they are able and
permitted to under Applicable Laws, arrange for the Company to
conduct the Business in accordance with the Business Plan and
Budget.
(b) The Shareholders shall arrange for a Business Plan and Budget
for each Financial Year to be adopted at meetings of the Board
in accordance with this CLAUSE 5.7 and CLAUSE 3.3.
(c) At least 1 month before the commencement of each Financial Year,
the Shareholders shall arrange for a draft Business Plan and
Budget for the following Financial Year to be prepared and
distributed to each Director.
(d) The Business Plan and Budget shall:
(i) set out a true and fair view of the current and
anticipated future financial position of the Company;
(ii) set out in detail particulars of proposed business
activities;
(iii) provide details of expected revenue and expenditure;
(iv) contain a forecast profit and loss account, balance
sheet and statement of cash flows;
(v) specify the amount of additional capital (if any)
required in the forecast period for the proper conduct
of the Business and the Company;
(e) If the Directors fail to adopt a Business Plan and Budget before
the commencement of each Financial Year then:
(i) each Shareholder shall use its best efforts continuously
to cause any Directors which it has appointed to adopt a
Business Plan and Budget for the Financial Year;
17.
(ii) the Business Plan and Budget for that Financial Year
will consist of:
(A) that part within the Business Plan and Budget
for the previous Financial Year that applies to
the current Financial Year; and
(B) that part within the Business and the business
activities authorized by the Business Plan and
Budget for the previous Financial Year that is
to be continued in the current Financial Year.
5.8 LANGUAGE OF MEETINGS AND NOTICES
Upon the reasonable request by Asyst Japan, the Shareholders shall, to
the extent required, cause the Company, at the expense of the Company,
to conduct with English interpretation, any meetings referred to herein,
and prepare notices, minutes of the meetings and relevant corporate
documents in both Japanese and English languages; provided that the
original of any and all notices, minutes of meetings and other documents
which are required to be prepared under Japanese Law shall be in the
Japanese language.
6. DIVIDEND POLICY
6.1 DIVIDENDS
Subject to CLAUSE 3.3(c), the Shareholders may have the Company pay to
the Shareholders dividends (including interim dividends) in accordance
with the Commercial Code, the Articles of Incorporation and the
principles of dividend payment stated in ATTACHMENT 6.1 hereto.
6.2 RESERVES
The Shareholders may have the Board, before paying or declaring any
dividend (including interim dividend), set aside such sums as the Board
thinks proper as reserves to be applied for the purpose of carrying out
the Business Plan and Budget for the following year, the recoupment of
past losses, or for such other purposes of the Company for which the
Board determines they may be properly applied. All resolutions by the
Board regarding such dividends shall be in accordance with the
provisions of CLAUSE 3.3(c) and CLAUSE 6.1.
6.3 PAYMENT OF DIVIDENDS
Any dividends resolved to be paid by the Company under CLAUSE 6.1 shall
be paid to the Shareholders as soon as reasonably practical after the
date of their resolution.
7. FINANCIAL SUPPORT
7.1 INDEPENDENCE OF COMPANY
The Parties agree that it is their intention and desire that the Company
shall raise all necessary working capital and capital required for plant
investment ("WORKING CAPITAL") independently of their financial
assistance and further agree to do all things reasonably necessary as
Shareholders of the Company in order for the Company to achieve this
intention.
18.
7.2 REQUIREMENT TO PROVIDE FINANCIAL SUPPORT
(a) If, notwithstanding CLAUSE 7.1, the Company is not able to
obtain necessary Working Capital or is only able to obtain it on
terms which are unreasonable and/or unfavourable to the Company,
the Parties agree, subject to this CLAUSE 7.2, to provide the
necessary financial support ("FINANCIAL SUPPORT") to the Company
on terms to be separately discussed and agreed between the
Parties ("SEPARATE AGREEMENT").
(b) If within 30 days after it is determined to be necessary for the
Parties to provide the Company with Financial Support under
CLAUSE 7.2(a) the Parties are unable to agree on the terms and
conditions of the Separate Agreement under which they are to
provide such Financial Support, then unless otherwise agreed by
the Parties, a deadlock shall be deemed to have occurred under
CLAUSE 12 and the provisions of that clause shall apply.
(c) The type of Financial Support which the Parties may be required
to give pursuant to CLAUSE 7.2(a) includes but is not limited to
loan, capital contribution and provision of guarantees or
collateral securities.
(d) If, pursuant to CLAUSE 7.2(a), it is determined that the Parties
shall give the Company Financial Support, then unless otherwise
agreed pursuant to the Separate Agreement, the terms and
conditions of the provision of the Financial Support by each
Party shall:
(i) be identical, except that the proportion of the total
Financial Support to be borne by each Party shall be
equal to each respective Party's Equity Interest in the
total Financial Support amount that the Company
requires;
(ii) provide that the Financial Support is non-assignable to
third parties by each Party;
(iii) provide that when the Company repays the Financial
Support received from the Parties, it shall repay each
Party at the same time the amount divided in proportion
to each respective Party's Equity Interest of the total
amount repaid.
(e) If the type of Financial Support which the Parties are required
to give to the Company requires the Parties to give guarantees
or collateral securities, the liability of each Party shall be
limited to the amount multiplied by the proportion of each
respective Party's Equity Interest of the total amount
guaranteed or secured unless otherwise agreed pursuant to the
Separate Agreement.
7.3 INDEMNITIES
(a) If any Financial Support is given by the Parties under CLAUSE
7.2 and a liability of or related to the Company pursuant to
that Financial Support is recovered from one (but not the other)
Party, each other Party indemnifies that Party.
19.
(b) Each Party's liability under the indemnity given in CLAUSE
7.3(a) is limited to its Equity Interest of both the amount
recovered and reasonable costs associated with the recovery.
8. BUSINESS OPERATION ISSUES
8.1 CONSENT BY THE PARTIES CONCERNING BUSINESS OPERATIONS
Each Party agrees:
(a) to co-operate so that the Business is conducted in accordance
with good business practice and under the terms of this
Agreement;
(b) to contribute its expertise for the benefit of the Company; and
(c) to conduct itself and to act so as to ensure that the sole
benefit enjoyed by it from or under the conduct of the Business
is that arising under this Agreement.
8.2 PRODUCT NAME
(a) The Parties agree that all products produced by the Company as
part of the Business shall be produced and sold under the brand
name "Shinko", the brand name "System Power ▇▇▇▇" and any other
brand name newly created pursuant to separate agreement of the
Parties ("Brand Name").
(b) The Parties understand that the Brand Name "Shinko" is owned by
Kobe Steel at the time of execution of this Agreement, and that
Kobe Steel has consented to the use of the Brand Name by the
Company on a royalty free basis and on the other terms of the
Brand Name License Agreement.
8.3 PROVISION OF GOODS AND SERVICES BY SHINKO ELECTRIC AND SHINKO ELECTRIC
RELATED COMPANIES
(a) Subject to CLAUSE 8.3(b), Shinko Electric shall provide the
following goods and services to the Company pursuant to separate
agreements to be entered into between the Company and the Shinko
Electric or shall cause Shinko Electric Related Companies
(collectively "SHINKO ELECTRIC SUPPLIER" together with Shinko
Electric for the purpose of CLAUSE 8.3) to provide (as
appropriate) the following goods and services to the Company
pursuant to separate agreements to be entered into between the
Company and the Shinko Electric Supplier:
(i) supply of parts and units which Shinko Electric and
Asyst Japan agree to be necessary for the Business
(including not only those which were supplied to the
Business by an internal division of Shinko Electric or a
Shinko Electric Related Company ("EXISTING SHINKO
ELECTRIC SUPPLIER") before the Corporate Separation, but
also those which were not used by the Business or not
supplied to the Business by an Existing Shinko Electric
Supplier before the Corporate Separation but which may
become necessary in the future in relation to the
Business); and
20.
(ii) provision of services to the Company which Shinko
Electric and Asyst Japan reasonably agree to be
necessary for the Business (including not only those
which were provided to the Business by an Existing
Shinko Electric Supplier before the Corporate
Separation, but also those which were not provided to
the Business by an Existing Shinko Electric Supplier
before the Corporate Separation but which may become
necessary in the future in relation to the Business).
(b) The terms and conditions of the agreements to be separately
entered under CLAUSE 8.3(a), including but not limited to those
relating to price, shall first be agreed between Shinko Electric
and Asyst Japan, before such agreements are negotiated and
entered into by the Company and the relevant Shinko Electric
Supplier. Notwithstanding the above, Shinko Electric shall
arrange, in relation to agreements to be entered between the
Company and each Shinko Electric Supplier, for the price of the
relevant goods or services to be; (i) if such supplier is an
internal division of Shinko Electric, the total amount of the
internal transfer price (in case of goods) or the internal
allocation amount (in case of services) as of the date of this
Agreement plus certain management expenses to be agreed by
Shinko Electric and Asyst Japan, or (ii) if such supplier is a
Shinko Electric Related Company, the amount which is not less
favourable to the Company than as has previously been offered to
the Business. The Shinko Electric Supplier shall provide to the
Company the goods or services which have been provided to the
Business by an Existing Shinko Electric Supplier prior to the
Corporate Separation, pursuant to the agreements to be
separately entered between the Shinko Electric Supplier and the
Company not later than the Transfer Date or the agreements with
the Shinko Electric Supplier to be transferred to the Company by
the Corporate Separation. Where the Shinko Electric Supplier
provides to the Company goods or services which have not been
previously provided by an Existing Shinko Electric Supplier, the
terms on which such goods or services will be provided shall not
be less favourable to the Company than the terms which would be
used between independent parties on an arms-length basis in the
market place, the details of which shall be determined pursuant
to agreement after additional discussions between the Parties
relating to the same have taken place.
(c) When each agreement provided for in this CLAUSE 8.3 is entered,
each such agreement shall contain provisions (i) that if the
Company considers such agreement is inappropriate or
economically unreasonable to the continuation of the Business
and notifies the said matters in writing to the other parties to
the agreement, the Company and the other parties shall negotiate
regarding the treatment of such agreement, (ii) that if such
negotiation is unsuccessful 1 month after the commencement of
such negotiations and the Company gives the other parties
written notice in which a reasonable grace period is given, such
agreement will be justifiably terminated at the expiration of
such period, and (iii) that if such agreement is terminated
pursuant to the foregoing (i) and (ii), the Company shall not be
obliged to pay any money other than existing debts. The
Shareholders shall take any steps which are necessary to make
such provisions be contained in each of the relevant agreements.
21.
8.4 OTHER AGREEMENTS BETWEEN THE PARTIES AND THE COMPANY AND OTHER
OBLIGATIONS OF SHINKO ELECTRIC
(a) Notwithstanding anything to the contrary, if after the
Commencement Date, any materials, equipment or service which can
be supplied by Shinko Electric or Asyst Japan are necessary for
the Company to carry on the Business and that Party considers
that such materials, equipment or service are necessary or
desirable to the Business, then such Party shall negotiate with
the other Party regarding the supply of such materials,
equipment or service in advance and offer to enter into an
agreement with the Company pursuant to the terms agreed on, in
accordance with the said negotiations. The terms of the
agreement which the Parties offer to the Company pursuant to
their agreement shall be terms which such offering Party offers
to third parties at that time based on arms-length negotiations
between independent parties, and which are, among others, most
favourable to such third party. Despite anything to the
contrary, if the Company considers that entering into an
agreement pursuant to this CLAUSE 8.4(a) is inappropriate or
economically unreasonable in relation to the continuation of the
Business, the Company may decide whether or not to enter into
such agreement at its sole discretion.
(b) Shinko Electric and the Company shall mutually consign and
accept development services, etc. regarding the business which
each of them carries on itself, pursuant to the basic agreement
regarding mutual consignment of development services, etc. and
the mutual consignment agreement regarding develop of software
to be separately entered into between Shinko Electric and the
Company.
(c) Shinko Electric shall grant to the Company the right to
implement or use any Intellectual Property which was used by the
Business as of the date of this Agreement and as of the
Corporate Separation Date which is not to be otherwise
transferred to the Company, and which the Parties agree is
necessary or desirable for the continued operation of the
Business, on a royalty free basis, pursuant to the license
agreement regarding mutual implementation of Intellectual
Property to be separately entered into between the Company and
Shinko Electric (the "LICENSE AGREEMENT REGARDING MUTUAL
IMPLEMENTATION OF INTELLECTUAL PROPERTY"). The Company shall
grant to Shinko Electric the right to implement or use any
Intellectual Property owned by the Company on a royalty free
basis pursuant to the License Agreement regarding Mutual
Implementation of Intellectual Property.
(d) Shinko Electric shall make good faith efforts to procure that
the right to use any Intellectual Property owned by third
parties which was used by the Business as of the date of this
Agreement and as of the Corporate Separation Date and which the
Parties agree is necessary or desirable for the continued
operation of the Business, shall be granted to the Company by
the relevant third party on terms not less favourable than any
current agreement for use between the third party and Shinko
Electric.
(e) Shinko Electric shall make good faith efforts to procure that,
in relation to any agreements to which Shinko Electric was a
counter-part with third party counter-parts as of the date of
this agreement and as of the Corporate Separation Date, for
22.
goods used by, or services provided to, the Business, and which
the Parties agree are necessary or desirable for the continued
operation of the Business:
(i) such agreements are transferred to the Company with the
consent of the third party counter-part; or
(ii) the third-party counter-part agrees to enter into a
similar agreement with the Company on terms not less
favourable than the terms and conditions of the relevant
agreement between the third-party counter-part and
Shinko Electric prior to the Corporate Separation.
9. ISSUE OF SHARES
9.1 PRE-EMPTIVE RIGHTS AND TAKE-OUTS
Unless the Shareholders unanimously agree otherwise, if the Board
resolves to issue any additional shares ("FURTHER SHARES") the Board
shall offer each Shareholder a first right of refusal to acquire the
Further Shares, but only to the extent necessary in order for that
Shareholder's Equity Interest to be kept;
(a) the offer shall be by written notice specifying:
(i) the number of shares offered; and
(ii) a date at least 10 Business Days after the date of the
notice on which the offer regarding any Further Shares,
if not accepted, will be taken to be declined ("EXPIRY
DATE");
(b) after the Expiry Date or on receipt of a rejection of the offer
or an acceptance in relation to some part of the shares offered
from the Shareholder to whom the offer is made, the Board shall
offer any Shares which have not been accepted by a Shareholder
("SHORTFALL SHARES") to the other Shareholder who has accepted
all the shares offered to it.
9.2 ASSUMPTION OF TRANSACTION DOCUMENTS
The Board shall procure that if shares are issued to a person that is
not already a Shareholder, that person firstly executes agreements to
the reasonable satisfaction of the existing Shareholders to comply with
and be bound by this Agreement.
10. TRANSFER OF SHARES
10.1 RULES FOR TRANSFER OF SHARES
If a Shareholder wishes to transfer Shares:
(a) it shall do so in accordance with this CLAUSE 10 and the
Articles of Incorporation; or
(b) the transfer of the Shares shall be conditional on a transferee
of Shares which is not already a Shareholder agreeing to enter
into agreements to the satisfaction of the
23.
remaining Shareholders to comply with and be bound by the terms
of this Agreement.
10.2 NOTICE ON SHARE CERTIFICATES
The Shareholders shall procure that the Company ensures that all the
holders of Share certificates issued shall be given a notice to the
effect that the Shares evidenced by the Share certificate are subject to
restrictions on transfer.
10.3 PROHIBITION ON TRANSFER
A Shareholder may not transfer Shares or establish a right of pledge or
other encumbrance in relation to Shares UNLESS:
(a) this CLAUSE 10 has been complied with; or
(b) all the Shareholders consent to the transfer or the
establishment of such encumbrance.
Provided, however, that if a Shareholder transfers any Shares to a
subsidiary company fully owned by the relevant Shareholder, the parent
company which owns the majority part of the Shareholder's equity
interest, or a subsidiary company fully owned by such parent company
(provided however that, if such subsidiary company ceases to be fully
owned by the Shareholder or such parent company, such Shares shall be
transferred back to the Shareholder), the remaining Shareholders shall
not refrain from consenting to such transfer without any reasonable
grounds, provided that if such consent is given, the transferee of the
Shares shall enter into, and the transferor shall procure that the
transferee enters into, an agreement which is acceptable to all the
remaining Shareholders, in relation to compliance with the terms
described above, except as otherwise agreed separately in writing by all
the remaining Shareholders.
10.4 PERMITTED TRANSFERS
Notwithstanding anything in CLAUSES 10.3 TO 10.10, a Shareholder may
transfer Shares by any means agreed by all Shareholders in writing.
10.5 TRANSFER NOTICE
A Shareholder who proposes to transfer any Shares other than in
accordance with CLAUSE 10.3 and CLAUSE 10.4, ("PROPOSING TRANSFEROR")
shall give a written notice ("TRANSFER NOTICE") to the Company and each
of the other Shareholders ("OTHER SHAREHOLDERS") that specifies each of
the following matters:
(a) the number and class of Shares to be transferred ("Subject
Shares");
(b) the price (which shall be a cash price) per Share in
consideration of which the Proposing Transferor is prepared to
transfer the Shares and all other terms of payment (such other
terms together with the price, "OFFER PRICE"); and
24.
(c) the Person to whom the Proposing Transferor proposes to transfer
the Shares ("PROPOSED TRANSFEREE").
The Transfer Notice shall only be valid if it is accompanied and
supported by a firm and legally binding offer of the Proposed Transferee
to purchase the Subject Shares at Offer Price as stated in the Transfer
Notice.
The Proposing Transferor shall give a separate Transfer Notices for each
class of Share being transferred. The Proposing Transferor may cancel
any Transfer Notice at any time before any of the remaining Shareholders
sends a First Refusal Response under CLAUSE 10.8 or a Tag-Along Sale
Notice under CLAUSE 10.7.
10.6 REQUEST FOR CONSENT
The sending of the Transfer Notice shall be deemed to be a request by
the Proposing Transferor to the Other Shareholders for their consent to
the sale of the Subject Shares to the Proposed Transferee at the Offer
Price.
10.7 RESPONSE BY SHAREHOLDERS
Each of the Other Shareholders shall, within 60 Business Days from the
date of the Transfer Notice ("RESPONSE PERIOD"), deliver a response
letter to the Proposing Transferor ("RESPONSE"):
(a) advising that it wants to purchase the Subject Shares from the
Proposing Transferor in place of the Proposed Transferee; or
(b) advising that it consents to the sale of the Subject Shares;
and/or
(c) if it so wishes, notifying the Proposing Transferor that it
wishes to sell to the Proposed Transferee such number of Shares
held by it as may be specified in the Response on the same terms
as the Offer Price as set out in the Transfer Notice, provided
however that the total number of Shares specified by the Other
Shareholder in any Tag-Along Sale Notice (as defined below)
shall not exceed the number (rounded down to the nearest one
Share) derived by multiplying the total number of Shares then
held by the Other Shareholder by a fraction, the numerator of
which is the total number of Shares to be sold by the Proposing
Transferor to the Proposed Transferee and the denominator of
which is the total number of Shares held by the Proposing
Transferor immediately prior to issuance of the Transfer Notice
("TAG-ALONG SALE NOTICE").
If any Other Shareholder does not deliver a Response within the Response
Period, such Other Shareholder will be deemed to have notified its
consent to the said sale without qualification.
10.8 EXERCISE OF RIGHT OF FIRST REFUSAL
Any Shareholder that delivers a Response advising that it wishes to
purchase the Subject Shares in place of the Proposed Transferee ("FIRST
REFUSAL RESPONSE") shall be required to purchase the Subject Shares from
the Proposing Transferor within 60 Business Days from
25.
the date of the expiration of the Response Period at the Offer Price. If
there are more than one Other Shareholders and more than one Shareholder
delivers a First Refusal Response, then those Shareholders shall, unless
otherwise agreed by and among them, purchase the Subject Shares in the
proportions which the number of Shares held by each such Shareholder at
that time bears to the sum of their shareholdings, and completion of
such purchase shall take place simultaneously within 60 Business Days
from the date of the expiration of the Response Period.
A First Refusal Response binds the Shareholder that gives it to purchase
the required number of Subject Shares as determined in accordance with
the above and once given is irrevocable. A First Refusal Response cannot
also contain a Tag-Along Sale Notice.
A Shareholder giving a First Refusal Response may in that response
nominate another person approved by that Shareholder as the transferee
of all and only all the Subject Shares. However, if the Subject Shares
are part of the Equity Interest of the Proposing Transferor, unless the
Proposing Transferor agrees that the Subject Shares may be transferred
to the person nominated in the First Refusal Response, such nomination
will not take effect and the Shareholder giving the First Refusal
Response will be obliged to acquire the Subject Shares by itself.
10.9 SALE IF SHARES NOT DISPOSED OF
(a) If the Proposing Transferor does not receive any First Refusal
Responses sent within the Response Period then the Proposing
Transferor may, subject to CLAUSE 10.10, sell and transfer all
and only all the Subject Shares to the Proposed Transferee at
the Offer Price at any time within 60 Business Days after the
end of the Response Period.
(b) If the Proposing Transferor has received at least one First
Refusal Response, but the sale of all the Subject Shares
pursuant to such First Refusal Response has not been completed
within 60 Business Days from the expiration of the Response
Period or such later date as the relevant parties shall have
agreed,
(i) by reason of the default of one of the Other
Shareholders who sent a First Refusal Response (in the
case where more than one Other Shareholder has given a
First Refusal Response), then the non-defaulting Other
Shareholder(s) who sent the First Refusal Response,
shall buy the Subject Shares which are allocated to the
defaulting Other Shareholder and the Proposing
Transferor shall be bound to sell and transfer such
Subject Shares to the non-defaulting Other Shareholders
who sent First Refusal Responses (pro-rated in the
proportions which the number of Shares held by each such
non-defaulting Other Shareholder at that time bears to
the sum of their shareholdings if there are more than
one non-defaulting Other Shareholder), with such sale to
be completed within 30 Business Days from the end of the
60 Business Day period referred to in CLAUSE 10.9(b); or
(ii) by reason of the default of all the Other Shareholder(s)
who sent First Refusal Responses, the Proposing
Transferor may, subject to CLAUSE 10.10, sell and
transfer all and only all the Subject Shares to the
Proposed
26.
Transferee at the Offer Price at any time within 60
Business Days after the end of the 60 Business Day
period referred to in CLAUSE 10.9(b).
10.10 TAG-ALONG SALE
In the event that any Tag-Along Sale Notice is served on the Proposing
Transferor by any Other Shareholder, provided that no First Refusal
Responses have been received, the Proposing Transferor shall procure
that the Proposed Transferee enters into an agreement with such Other
Shareholder to purchase from such Other Shareholder such number of
Shares stated in the Tag-Along Sale Notice and upon the same terms as
the Offer Price of the Other Shareholder and, unless otherwise agreed
between the Proposed Transferee and the Other Shareholder, for
completion to take place at the same time as the Proposing Transferor's
sale of the Subject Shares to the Proposed Transferee. Should the
Proposing Transferor fail to procure that the Proposed Transferee enters
into such an agreement with such Other Shareholder, the Proposing
Transferor shall, notwithstanding any provision herein, not have the
right to sell the Subject Shares to the Proposed Transferee.
For the avoidance of doubt, the obligations of the Proposing Transferor
under this CLAUSE 10.10 extend only to procuring the Proposed Transferee
to enter into an agreement to purchase the Shares of the Other
Shareholder(s) in accordance with the provisions of this CLAUSE 10.10
and it does not extend to procuring the Proposed Transferee to perform
the agreement to purchase the said Shares.
11. DEFAULT
11.1 EVENTS OF DEFAULT
Each of these circumstances constitutes an Event of Default:
(a) A Shareholder fails to comply with any of its material
obligations (other than the obligations provided for in CLAUSE
8) under this Agreement (except in case of any failure referred
to elsewhere in this clause) and materially damages the
confidence between the Parties which is necessary to maintain
this Agreement, provided that in the case that such failure is
able to be remedied or such damaged confidence is able to be
regained by any appropriate means such as indemnification set
forth in CLAUSE 19, etc., it shall only be an Event of Default
if the failure is not remedied within 60 Business Days after a
notice specifying the breach or default is given to that
Shareholder by any other Shareholder.
(b) Material property of a Shareholder is seized or becomes subject
to compulsory execution or becomes the subject of attachment for
unpaid taxes.
(c) Any application for corporate reorganization, civil
rehabilitation, bankruptcy, corporate reconstruction or special
liquidation is filed concerning a Shareholder by a third party
and is not withdrawn within 60 days, a Shareholder files any
application for corporate reorganization, civil rehabilitation,
bankruptcy, corporate reconstruction or special liquidation by
itself, or its dissolution is resolved or a judicial decision
which orders its dissolution is made.
27.
(d) A Shareholder dishonours any draft or check which the
Shareholder draws on itself or takes up, or a Shareholder stops
payment, becomes insolvent or is unable to pay its debts
generally.
(e) A Shareholder (which is a natural person) dies, ceases to be of
full legal capacity or otherwise become incapable of managing
its own affairs for any reason.
(f) Any representation made by a Party under this Agreement shall
prove to have been incorrect or misleading in any material
respect.
11.2 NOTICE OF EVENT OF DEFAULT
(a) A Defaulting Shareholder shall, within 5 Business Days after an
Event of Default occurs, serve on the Company and each other
Shareholder a notice containing all relevant details of the
Event of Default; and
(b) If any Non-Defaulting Shareholder knows that any Event of
Default has occurred in relation to another Party, the
Non-Defaulting Shareholder may serve on the Defaulting
Shareholder a notice ("Default Notice") containing all relevant
details of the Event of Default.
(c) If a Shareholder serves a Default Notice, it shall serve on the
Company and each of the other Shareholders a copy of the Default
Notice at the same time.
11.3 TERMINATION OF DEFAULTING SHAREHOLDER'S RIGHTS
Despite anything to the contrary in the Articles of Incorporation, if a
Default Notice is served in relation to any of the Events of Default
provided for in CLAUSE 11.1(c) to (e):
(a) the Defaulting Shareholder shall not attend or be represented or
vote at a Shareholders' Meeting;
(b) each Director appointed by the Defaulting Shareholder is
automatically removed;
(c) the Non-Defaulting Shareholders may appoint sufficient Directors
to prevent the number of Directors falling below the minimum
required by the Articles of Incorporation or Applicable Law;
(d) the Defaulting Shareholder is not entitled to any information
about the Company's business, other than as required by
Applicable Law (including U. S. GAAP) regarding the Defaulting
Shareholder.
11.4 RIGHT TO BUY DEFAULTING SHAREHOLDER'S SHARES
(a) A Non-Defaulting Shareholder may, within 20 Business Days after
either serving or being served with a copy of a Default Notice,
serve on the Defaulting Shareholder a notice (the "Pre-Call
Option Notice"), such Pre-Call Option Notice being a non-binding
indication by the Non-Defaulting Shareholder(s) who had served
the Pre-Call Option Notice on the Defaulting Shareholder
("Relevant Non-Defaulting
28.
Shareholder(s)") that it is considering exercising a call option
on the Shares held by the Defaulting Shareholder.
(b) At the end of the 20 Business Days referred to in CLAUSE
11.4(a), the consideration for the sale of the Defaulting
Shareholder's Shares shall be determined as follows:
(i) the value agreed between the Defaulting Shareholder and
the Relevant Non-Defaulting Shareholder(s); or
(ii) failing agreement within 20 Business Days after the
receipt of the Pre-Call Option Notice served under
CLAUSE 11.4(a), the Independent Valuer's Price assessed
and certified in writing by the Valuer, acting as an
expert and not an arbitrator, to be appointed within 10
Business Days upon expiration of the said 20 Business
Days on behalf of the Company, the Defaulting
Shareholder and Relevant Non-Defaulting Shareholder(s).
The decision of the Valuer binds the Company, the Board,
and the Defaulting Shareholder and the Relevant
Non-Defaulting Shareholder(s).
(c) Within 60 Business Days from the date that the consideration for
the sale of the Defaulting Shareholder's Shares is determined
pursuant to CLAUSE 11.4(b), any Relevant Non-Defaulting
Shareholder may proceed to serve a notice (the "CALL OPTION
NOTICE") on the Defaulting Shareholder. Such Call Option Notice:
(i) shall be dated;
(ii) shall state that it is a Call Option Notice served under
CLAUSE 11.4(c) of this Agreement;
(iii) shall, at the same time it is served on the Defaulting
Shareholder, be served on the Company and each of the
other Shareholders;
(iv) is a notice by the Relevant Non-Defaulting Shareholder
serving it that it intends to buy the entire Equity
Interest of the Defaulting Shareholder's Shares, or to
buy such proportion of the Equity Interest of the
Defaulting Shareholders Shares which the number of the
Shares held by each such Relevant Non-Defaulting
Shareholder at that time bears to the sum of their
shareholdings, if more than one Relevant Non-Defaulting
Shareholder serves a Call Option Notice on the
Defaulting Shareholder (calculated on the basis that
those Relevant Non-Defaulting Shareholders serving Call
Option Notices are the only shareholders); and
(v) may not be withdrawn once it is served.
(d) If at least one Relevant Non-Defaulting Shareholder issues a
Call Option Notice, the valuation costs under CLAUSE 11.4(b)
shall be borne by the Defaulting Shareholder. If no Relevant
Non-Defaulting Shareholder issues any Call Option Notice, the
valuation costs under CLAUSE 11.4(b) shall be borne by the
Company.
29.
11.5 COMPLETION
(a) The relevant parties shall complete the sale of Shares which are
the subject of a Call Option Notice within 30 Business Days
after expiration of the 60 Business Days referred to under
CLAUSE 11.4(c), provided that a sale of Shares shall not be
completed until any dispute resolution proceedings commenced
under CLAUSE 15 in relation to an Event of Default have been
finally resolved and concluded;
(b) each relevant party shall cooperate in executing instruments of
transfer and any other documents that the Company requires to
give effect to that party's sale or purchase of Shares under
CLAUSE 11.5; and
(c) the Shares to be sold in accordance with this CLAUSE 11 shall be
free from any pledge, lien or charge.
11.6 WINDING-UP OF THE COMPANY
If:
(a) no Pre-Call Option Notices are served by any Non-Defaulting
Shareholder within the 20 Business Day period referred to in
CLAUSE 11.4(a); or
(b) subsequent to the service of a Pre-Call Option Notice, no Call
Option Notices are issued by any Non-Defaulting Shareholder
within the 60 Business Day period referred to in CLAUSE 11.4(c),
then, unless otherwise agreed by the Non-Defaulting Shareholders, the
Shareholders shall take steps to wind up the Company and any Company
surplus on winding up shall be distributed to the Shareholders in
proportion to their respective Equity Interest on the date the winding
up proceeding commences.
11.7 AMOUNT DUE ON COMPLETION
Any amount owing at the time of completion of a sale and purchase of
Shares under this CLAUSE 11:
(a) to the Company by a Defaulting Shareholder (including valuation
costs under CLAUSE 11.4(d)):
(i) is immediately due and payable; and
(ii) remains due to the Company (to the extent that it
remains unpaid) even if the Defaulting Shareholder
ceases to be a Shareholder; and
(iii) if the Defaulting Shareholder has not repaid the amount
owing to the Company, a Shareholder buying Shares from
the Defaulting Shareholder shall first deduct from the
amount it is obliged to pay the Defaulting Shareholder
for the Shares the amount owing to the Company and pay
that amount to the Company. The Defaulting Shareholder
shall be deemed to
30.
have received the amount so deducted toward the payment
of the purchase price of the Shares.
(b) by the Company to a Defaulting Shareholder:
(i) remains due to the Defaulting Shareholder (to the extent
that it remains unpaid) even if the Defaulting
Shareholder ceases to be a Shareholder; and
(ii) if the Company does not or cannot repay the amount
owing, a Shareholder buying Shares from the Defaulting
Shareholder shall ensure that the Company uses its best
endeavours to make arrangements to repay the amount to
the Defaulting Shareholder as soon as possible.
12. DEADLOCK
(a) A deadlock ("DEADLOCK") shall, unless otherwise agreed by the
Parties, be deemed to have occurred where:
(i) a resolution of the Shareholders' Meeting or the Board
for the transaction of any business of the Company
cannot be obtained after 3 successive attempts;
(ii) the Directors or Shareholders (as appropriate) are
unable to reach agreement on any of the matters under
CLAUSE 3.3(c) or CLAUSE 4.3 (as appropriate) which have
arisen, after 3 successive attempts to agree;
(iii) a Shareholders' Meeting or a meeting of the Board of
Directors cannot be convened because of the absence of
the requisite quorum, after 3 successive attempts;
(iv) The Parties are unable to agree on the terms and
conditions of any Separate Agreement required pursuant
to CLAUSE 7, within 30 days of the determination under
CLAUSE 7.2(a) that Financial Support is required to be
given by the Parties to the Company.
The Directors shall immediately after the occurrence of a
Deadlock, refer the matter which is the subject of such Deadlock
to the most senior officer of each of the Shareholders
("OFFICER"). Each Shareholder shall procure that its Officer
shall, negotiate in good faith with each other with a view to
resolution of such Deadlock.
(b) Upon the resolution of such Deadlock in accordance with CLAUSE
12(a), the Directors shall be bound to give effect to the
agreement reached between the Officers in respect of such
Deadlock.
(c) If a resolution of such Deadlock is not agreed upon by all
Shareholders within 30 Business Days after the date of the
Board's referral to the Officers, a Valuer shall be appointed
within 14 Business Days after the expiration of the said 30
Business Days to determine the Independent Valuer's Price. The
Independent Valuer's Price assessed and certified in writing by
the Valuer, who shall act as an expert and not
31.
an arbitrator, shall be the reserved price ("RESERVED PRICE").
The decision of the Valuer binds the Company, the Board and the
Shareholders.
(d) Within 60 Business Days from the date that the Reserved Price is
certified in writing by the Valuer, any Shareholder may offer to
purchase all (but not less than all) the Shares held by the
other Shareholders by setting a price, which shall not be less
than the Reserved Price, and delivering it in a sealed notice of
offer ("BID") to the Valuer. Any Shareholder who has not
submitted any Bid within the said 60 Business Days shall be
deemed to have consented to sell all its Shares to the Highest
Bidder (as defined below).
(e) The Valuer shall open the sealed Bid(s) before a representative
from each of the Shareholders within 7 Business Days from the
earlier of the end of the 60 Business Day period referred to at
CLAUSE 12(d) above and the day that the Valuer has received Bids
from all the Shareholders. Each offer shall be deemed to include
the following:
(i) the Shares which are the subject of the offer are to be
transferred free from any mortgage, charge, lien,
pledge, or other encumbrances and with all rights
including dividend rights attached or accruing to them;
and
(ii) the sale is to be for cash payable in full on
completion.
(f) The Shareholder who offered the highest price ("HIGHEST BIDDER")
shall be entitled and obligated to purchase the other
Shareholders' Shares and the other Shareholders shall be
entitled and obligated to sell their Shares at the price
offered. Completion of the sale and purchase shall take place
within 60 Business Days from the date the sealed Bid(s) are
opened.
(g) In the event that equal offers are made by 2 or more
Shareholders, the Shareholders who made the equal offers shall
be entitled to submit fresh Bids (not less than the Reserved
Price) within the next 30 Business Days. The bidding procedure
above shall be repeated until a highest offer is obtained and a
sale completed.
(h) CLAUSE 11.5(b) shall, with the necessary modification, apply to
a sale and transfer under this CLAUSE 12.
(i) If no Bid is received at all or after a round of equal offers,
then, the Shareholders shall take steps to wind up the Company
and any Company surplus on winding up shall be distributed to
the Shareholders in proportion to their respective Equity
Interest on the date the winding up proceeding commences.
13. REPRESENTATIONS AND WARRANTIES
As of the date hereof, each of the Parties warrant to each other as
follows:
(a) It is a corporation duly incorporated and validly existing under
the Applicable Law of Japan;
32.
(b) It has all necessary power and authority to execute and deliver
this Agreement and/or to perform fully its obligations hereunder
and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement, the performance of the
obligations of it hereunder, and the consummation of the
transactions contemplated hereby on its part have been duly and
validly authorized by its board of directors, and, where
necessary, have been authorized by its stockholders;
(c) This Agreement has been duly and validly executed and delivered
by it and constitutes the valid and legally binding obligation
of it enforceable against it in accordance with its terms;
(d) The execution, delivery and performance of this Agreement by it,
and the consummation of the transactions contemplated hereby by
it will not:
(i) violate any provision of its articles of incorporation
or internal rules (if any) or;
(ii) violate, conflict with or result in the breach of any of
the terms of, result in a modification of the effect of,
otherwise give any other contracting party the right to
terminate, or constitute (or, with notice or lapse of
time or both, would constitute) a default under, any
material contract to which it is a party or by or to
which it or any of its assets, properties or business
may be bound or subject;
(iii) violate any order, judgment, injunction, award or decree
of any court, arbitrator or governmental or regulatory
body against, or binding upon it;
(iv) violate any Applicable Law; or
(v) violate any license held by it.
(e) It is not required to submit on or prior to the Commencement
Date any notice, report or other filing to or with any
governmental or regulatory authorities, or to obtain any
governmental or regulatory authorization or approval, in
connection with the execution or delivery of this Agreement or
the consummation of the transactions contemplated herein, except
as has been completed prior to the Commencement Date and as
provided in ATTACHMENT 13(e); and
(f) There is no action, suit or proceeding pending against or, to
the best of its knowledge, threatened against or affecting it
with respect to its business, in which an adverse decision would
(individually or in the aggregate):
(i) materially impair its ability to perform its obligations
under this Agreement; or
(ii) enjoin or prohibit any of the transactions contemplated
by this Agreement.
33.
14. TERMINATION
14.1 TERMINATION OF AGREEMENT
This Agreement terminates:
(a) on any date agreed by all of the Parties;
(b) on the date when the Company is wound up; or
(c) on the date when a single Shareholder becomes the beneficial
owner of all of the Shares.
14.2 CONSEQUENCES OF TERMINATION
On termination, subject to CLAUSE 14.3, this Agreement is at an end as
to its future operation except for the enforcement of any right or claim
which arises on, or has arisen before, termination.
14.3 CLAUSES SURVIVING TERMINATION
Despite any other provision of this Agreement, unless the Shareholders
otherwise agree unanimously in writing CLAUSES 1 (Interpretation), 2.8
(Restraint), 7.3 (Indemnity), 14 (Termination), 15 (Dispute Resolution),
16 (Confidentiality), 19 (Indemnification) and 20 (General) survive the
termination of this Agreement.
15. DISPUTE RESOLUTION
15.1 DISPUTE
If a dispute, controversy or claim arises between any of the Parties as
to:
(a) the construction of this Agreement; or
(b) the rights or obligations of a Party under this Agreement; or
(c) any other matter arising out of or relating to this Agreement,
the parties shall undertake in good faith to use all reasonable
endeavours to settle the dispute in accordance with this CLAUSE 15.
15.2 NEGOTIATION
Each Party, or the chief executive officer (or equivalent senior
representative) of each Party which is not a natural person, shall meet
within 10 Business Days of the dispute arising to discuss a resolution
of the dispute. Should this resolve the dispute then the resolution
shall be set out in a statement signed by each Party or each Party
representative.
34.
15.3 FURTHER PROCEDURE
A Party may not commence court proceedings relating to any dispute
arising from this Agreement other than to seek provisional interlocutory
relief unless it has complied with CLAUSE 15.2, provided that where a
Party fails to comply with CLAUSE 15.2, any other Party may immediately
refer the dispute to arbitration or commence court proceedings in
relation to the dispute.
15.4 COSTS OF DISPUTE RESOLUTION
Each Shareholder shall pay its own costs and disbursements associated
with the procedures set out in CLAUSE 15.2.
15.5 CONTINUING OBLIGATIONS
Notwithstanding the foregoing provisions of this CLAUSE 15, pending the
resolution of any dispute, the Parties shall without delay continue to
perform their respective obligations under this Agreement except,
provided that a Party has acted reasonably and bona fide in relation to
the dispute (including without limitation in respect to the subject
matter thereof and the circumstances giving rise thereto), to the extent
that the matter the subject of the dispute and matters necessarily
dependent on it cannot be proceeded with until the dispute has been
determined.
16. CONFIDENTIALITY AND PUBLIC ANNOUNCEMENTS
16.1 CONFIDENTIALITY INFORMATION FALLING UNDER CONFIDENTIAL INFORMATION
"CONFIDENTIAL INFORMATION" in this Agreement means (1) whether it is
conveyed in writing, orally or by electronic media, any information
(including but not limited to information, proprietary information,
trade secrets, inventions, patents, designs, opinions, forecasts
(financial or otherwise), project related information, drawings,
financial statements, know-how and technology which require careful
treatment for competitive reasons) provided or disclosed by either Party
or its related company or the Company (including but not limited to the
directors of the Company) ("DISCLOSING PARTY") to the other Party or its
related company ("RECEIVING PARTY") in relation to this Agreement, the
Company or the Business and (2) tangible or intangible items containing
such information; provided that Confidential Information shall not
include that which falls under any of the following items (a) through
(c);
(a) any information which was publicly known at the time of
disclosure due to reasons other than the breach of this
Agreement and any information which becomes publicly known after
disclosure due to reasons other than the breach of this
Agreement;
(b) any information which was already obtained legally from any
source other than the Disclosing Party without breaching the
confidentiality obligations of the Receiving Party owed to the
Disclosing Party hereunder, and any information which is
hereafter obtained legally from any source other than the
Disclosing Party without breaching the confidentiality
obligations of the Receiving Party to the Disclosing Party
hereunder; or
35.
(c) any information independently developed by the Receiving Party
without reference to or use of Confidential Information
disclosed by the Disclosing Party.
16.2 TREATMENT OF CONFIDENTIAL INFORMATION
A Receiving Party agrees to comply with the following provisions in
respect of Confidential Information unless otherwise consented
(including but not limited to any consent made pursuant to an agreement
relating to permission of use of the Confidential Information, etc.
entered into or to be entered into by and between the Disclosing Party
and the Receiving Party) in writing before or after the fact by the
Disclosing Party:
(a) the Receiving Party shall not use Confidential Information
directly or indirectly, in any respect or for any reason, for
itself or any third party except for the purpose of carrying out
the transactions contemplated in this Agreement (the "Permitted
Purpose") and shall not allow any third party to use the same;
(b) in handling Confidential Information, the Receiving Party shall
pay attention as if protecting its own proprietary information,
useful information for competitive purposes or information
relating to trade secrets, and keep the same confidential (in
any case, at least to the extent considered reasonable);
(c) the Receiving Party shall not copy or reproduce Confidential
Information except as required to carry out the Permitted
Purpose unless it obtains the prior written approval of the
Disclosing Party in respect of that specific Confidential
Information which it is necessary to copy or reproduce. In such
case, the Disclosing Party shall not unreasonably withhold such
written approval. The Receiving Party shall, on any such copy or
reproduction, indicate that such Confidential Information is
proprietary and confidential; and
(d) In respect of disclosure of Confidential Information, disclosure
by the Receiving Party shall be limited to those persons who
have a "need to know" for the Permitted Purpose, employees of
the Receiving Party subjected to a binding written obligation to
keep the Confidential Information confidential, and any other
person who is bound by enforceable regulations relating to
professional responsibility in respect of the confidentiality of
the Confidential Information.
16.3 RETURN OF CONFIDENTIAL INFORMATION
If any transaction contemplated in this Agreement fails to be completed
by Closing, the Receiving Party shall promptly:
(a) Return to the Disclosing Party or destroy any and all
Confidential Information disclosed to it;
(b) Return to the Disclosing Party any and all Confidential
Information distributed to any third parties by the Receiving
Party or ensure that such third parties destroy any Confidential
Information distributed to them, by taking all reasonable
measures;
(c) To the extent reasonably possible, delete any and all
Confidential Information from the computers in which such
Confidential Information is installed or programmed,
36.
and ensure that any third parties who received Confidential
Information delete such Confidential Information from the
computer in which the same is installed or programmed, to the
extent reasonably possible by taking all reasonable measures;
and
(d) Destroy any and all reproductions, memos, reports, analysis
results or memorandums prepared by or for the Receiving Party,
which contains Confidential Information except for those
required to be kept to comply with professional or legal
obligations.
16.4 EXCEPTIONS
A Party may make such disclosures in relation to this Agreement as it
may think necessary:
(a) to its professional advisers and financiers upon those persons
undertaking to keep confidential any information so disclosed;
or
(b) notwithstanding CLAUSE 16, to comply with an order of any
competent court or any of then effective Applicable Law,
provided that the Receiving Party shall promptly notify the
Disclosing Party of such requirement so that the Disclosing
Party may file a protective order or take other appropriate
relief prior to such disclosure. The Receiving Party shall take
any reasonable measures required by the Disclosing Party to
support the filing of such protective order or other appropriate
relief at the Disclosing Party's expense.
16.5 OTHERS
It is not intended by the Parties that this CLAUSE 16 grants to the
Receiving Party rights with respect any patent, copyright, tradename or
other Intangible Property Rights of the Disclosing Party, and this
CLAUSE 16 shall not grant any such rights to the Receiving Party.
17. NOTICES
(a) A notice, consent or other communication under this Agreement is
only effective if it is in writing, signed and either left at
the addressee's address or sent to the addressee by mail, fax or
e-mail. If it is sent by mail, it is taken to have been received
3 Business Days after it is posted. If it is sent by fax, it is
taken to have been received when the addressee actually receives
it in full and in legible form. A Party who sends a notice
according to this CLAUSE 17(a) shall confirm that the other
Party has received such notice. Such confirmation shall be done
using a different method of communication from the way that the
notice in question was given. If it is discovered by the
confirmation or by any other reason that the notice mentioned
above has not reached the other Party after the time usually
needed, the Party who sent the notice shall promptly send the
notice again to the other Party.
(b) A person's address and fax number are those set out below, or as
the person notifies the sender:
37.
SHINKO ELECTRIC CO., LTD.
Address: Toyo MK Building, 2-14 Toyo ▇-▇▇▇▇▇, ▇▇▇▇-▇▇,
▇▇▇▇▇, ▇▇▇-▇▇▇▇, ▇▇▇▇▇
Fax number: (▇▇)-▇-▇▇▇▇-▇▇▇▇
E-mail address: ▇▇▇▇▇▇▇▇-▇@▇▇▇▇▇.▇▇▇▇▇▇-▇▇▇▇.▇▇.▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Corporate Planning Dept.
Manager
ASYST JAPAN
Address: ▇▇▇▇▇▇ ▇▇▇-▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇-▇▇
▇▇▇▇-▇▇▇▇▇▇▇▇ 2-Chome, ▇▇▇▇▇▇-▇▇, ▇▇▇▇▇▇▇▇-▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇-▇▇▇▇, ▇▇▇▇▇
Fax number: ▇▇-▇▇-▇▇▇-▇▇▇▇ Attention: .
E-mail address: ▇▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President and Chief .
Financial Officer
COMPANY
Address: Toyo MK Building, 2-14 Toyo ▇-▇▇▇▇▇, ▇▇▇▇-▇▇,
▇▇▇▇▇, ▇▇▇-▇▇▇▇, ▇▇▇▇▇ (proposed)
Fax number: (undecided)
E-mail address: (undecided)
Attention: (undecided)
(c) If the Company's address is determined to be different to that
noted above, or if it becomes necessary to change a Party's
address as referred to in clause 17(b), the relevant Party shall
give prior written notice to each other Party of the necessity
for such change and the new address.
18. AMENDMENT AND ASSIGNMENT
18.1 AMENDMENT
This Agreement can only be amended, supplemented, replaced or novated by
another document signed by the Parties.
18.2 ASSIGNMENT
A Party may only dispose of or otherwise create an interest in its
rights under this Agreement with the consent of each other Party.
19. INDEMNIFICATION
19.1 GENERAL INDEMNITY
A Party ("INDEMNIFYING PARTY") shall indemnify and hold harmless the
other Parties ("INDEMNIFIED PARTY") from and against losses,
liabilities, damages, deficiencies, costs or expenses (including
reasonable attorneys' fees and disbursements) reasonably attributable to
the breach by the Indemnifying Party of any representation or warranty,
or the non-performance, partial or total, of any covenant or obligation
or agreement contained in, or made pursuant to, this Agreement.
38.
19.2 NO DOUBLE CLAIM
the Parties shall not be entitled to the same economic benefits a
multiple number of times even though they are covered by the provisions
of indemnification provided herein.
20. GENERAL
20.1 GOVERNING LAW
This Agreement is governed by the law in force in Japan. Each of the
Parties hereto hereby irrevocably submits to the exclusive jurisdiction
of the Tokyo District Court.
20.2 LANGUAGE
This Agreement shall be executed in the Japanese language which shall be
the official text hereof. Any translation of this Agreement into other
languages shall be used only for the purpose of convenience and shall
not affect the interpretation of the provisions of this Agreement.
20.3 LIABILITY FOR EXPENSES
Each Party shall pay its own expenses incurred in negotiating,
executing, stamping and registering this Agreement.
20.4 GIVING EFFECT TO THIS AGREEMENT
Each Party shall do anything (including execute any document), and shall
ensure that its employees and agents do anything (including execute any
document), that the other Party may reasonably require to give full
effect to this Agreement.
20.5 WAIVER OF RIGHTS
A right may only be waived in writing, signed by the Party giving the
waiver, and:
(a) no other conduct of a Party (including a failure to exercise, or
delay in exercising, the right) operates as a waiver of the
right or otherwise prevents the exercise of the right;
(b) a waiver of a right on one or more occasions does not operate as
a waiver of that right if it arises again; and
(c) the exercise of a right does not prevent any further exercise of
that right or of any other right.
20.6 OPERATION OF THIS AGREEMENT
(a) The Transaction Documents contain the entire agreement between
the Parties about its subject matter. Any previous
understanding, agreement, representation or warranty relating to
that subject matter is replaced by the Transaction Documents and
has no further effect.
39.
(b) Any right that a person may have under this Agreement is in
addition to, and does not replace or limit, any other right that
the person may have.
(c) Any provision of this Agreement which is unenforceable or partly
unenforceable is, where possible, to be separated to the extent
necessary to make this Agreement enforceable, unless this would
materially change the intended effect of this Agreement.
20.7 OPERATION OF INDEMNITIES
(a) Each indemnity in this Agreement survives the expiry or
termination of this Agreement.
(b) A Party may recover a payment under an indemnity in this
Agreement before it makes the payment.
20.8 CONSENTS
Where this Agreement provides that a Party may agree or consent to
something (however it is described), the other party may:
(a) agree or consent, or not agree or consent, in its absolute
discretion; and
(b) agree or consent subject to conditions,
unless this Agreement expressly provides otherwise.
20.9 EXCLUSION OF CONTRARY LEGISLATION
Any legislation that adversely affects an obligation of a Party, or the
exercise by a Party of a right or remedy, under or relating to this
Agreement is excluded to the full extent permitted by law.
20.10 COUNTERPARTS
This Agreement may be executed in counterparts.
20.11 ATTORNEYS
Each person who executes this Agreement on behalf of a Party under a
power of attorney declares that he or she is not aware of any fact or
circumstance that might affect his or her authority to do so under that
power of attorney.
40.
In witness whereof, the Parties hereto execute two originals of the Agreement
and hold one original each.
May 24, 2002
SIGNED by SHINKO ELECTRIC CO., LTD.:
/s/ Hirobumi Saeki
--------------------------
Hirobumi Saeki
President
SIGNED by ASYST JAPAN INC.
/s/ Josui Nashimoto
--------------------------
Josui Nashimoto
President
41
