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CALL AND PUT OPTION AGREEMENT
THIS AGREEMENT is made the 31st day of March 1998;
Between
1. MBf INTERNATIONAL LIMITED, a company incorporated in Hong Kong with its
registered office at 00xx Xxxxx, Xxx Xxxxxxx Xxxxx, 00 Xxxxxxxxx, Xxxx
Xxxx, (Fax No: 0000000) ("MBf");
And
2. WEMBLEY RUBBER PRODUCTS (M) SDN. BHD. A company incorporated in Malaysia
with its registered office at 29th Floor, Xxxxx Xxxxxxx, 00, Xxxxx Xxxxxx,
00000 Xxxxx Xxxxxx. (Fax No: 000-0000000) ("Wembley").
RECITAL
A. MBf USA Inc. is a company incorporated under the laws of the State of
Maryland of the United States of America ("Company").
B. MBf is the registered holder and/or beneficial owner of 1,682,275 shares
of the Common Stock of the Company ("Option Shares").
C. For the consideration herein provided MBf has agreed to grant to Wembley
an option to buy a portion of the Option Shares from MBf and Wembley has
agreed to grant to MBf an option to sell the Option Shares or a part
thereof to Wembley at the price and upon the terms and conditions herein
appearing.
NOW IT IS HEREBY AGREED as follows:-
1. DEFINITIONS
1.1 In this Agreement, the following words and expressions shall have the
following meanings:
"Business Day" means Monday through to Friday and excludes gazetted
public holidays in Kuala Lumpur;
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"Call Option" means the option granted by MBf to
Wembley of purchasing at any time prior
to the exercise of the Put Option and
during the Call Option Period fifty
percent (50%) of the Option Shares in
the possession of MBf at the time of
receipt by MBf of the Completion Notice
or if the number of Option Shares in the
possession of MBf at the time of receipt
of the Completion Notice is 841,137 or
less than the Call Option shall be in
respect of all (and not only some) of
the Option Shares in MBf's possession
whereupon MBf shall be bound to sell
such number of the Option Shares to
Wembley or its nominee at the Call
Option Purchase Price. If the Call
Option is exercised after the exercise
of the Put Option, the Call Option can
only be exercised in respect of fifty
percent (50%) of the Option Shares then
in the possession of MBf at the time of
receipt by MBf of the Completion Notice,
even if the number of Option Shares in
the possession of MBf at the time of
receipt of the Completion Notice number
less than 841,137 Option Shares.
"Call Option Period" means the period commencing on the
expiry of 12 months from the completion
date of the Sale of Shares Agreement
("Commencement Date") and expiring 12
months from the Commencement Date
(inclusive).
"Call Option means the purchase price to be paid for
Purchase Price" the Option Shares to be sold on the
exercise of the Call Option and which
shall be USD6.00 only per Option Share
and which shall be paid in USD.
"Company" Means MBf USA Inc;
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"Completion Date" means the date of completion of the
sale and purchase of the Option Shares
or such part thereof on the exercise of
the Call Option or the Put Option (as
the case may be) and which shall be on
the fifth (5th) Business Day from the
date of the Completion Notice;
"Completion Notice" means the written notice to be given by
Wembley to MBf upon Wembley exercising
the Call Option or by MBf to Wembley
upon MBf exercising the Put Option, the
forms of which are set forth in Part A
and Part B of the Schedule hereto;
"Option Shares" means the 1,682,275 shares of the Common
Stock of the Company referred to in
Recital B or such part thereof;
"month" means a month ending on the same date
as it commenced on the previous month
but if there is no corresponding date in
the succeeding month then the period
shall expire on the last day of that
succeeding month provided always that if
such last day is not a Business Day then
the period shall be shortened to end on
the immediately preceding Business Day.
"Put Option" means the option granted by Wembley to
MBf of selling at any time during the
Put Option Period all or some only of
the Option Shares less the number of
Option Shares which Wembley might have
purchased pursuant to the exercise of
the Call Option and/or which MBf may
have disposed of as notified to Wembley
pursuant to clause 6.1(c) herein
whereupon Wembley shall be bound to
purchase the Option Shares or such part
thereof from MBf at the Put Option
Purchase Price;
"Put Option Period" means the period commencing on the
expiry of 12 months from the completion
date of the Sale of Shares Agreement
("Commencement Date") and expiring 12
months from the Commencement Date
(inclusive).
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"Put Option means the purchase price to be paid for
Purchase Price" the Option Shares and which shall be
USD5.00 only per Option Share and which
shall be paid in USD.
"Sale and means the sale and purchase agreement
Purchase Agreement" of even date entered into between MBf
and Wembley, in connection with
Wembley's acquisition of 1,252,537
Series A Common Stock in the Company
from MBf.
"United States Dollar means the lawful currency of the United
or USD" States of America
1.2 In this Agreement unless there be something in the subject or context
inconsistent therewith, words importing the singular or the masculine
gender only include the plural number or the feminine/neuter gender and
words importing persons include corporations and the expressions "MBf"
and "Wembley" include their respective successors in title and where
applicable, their nominee(s).
2. AGREEMENT
2.1 In consideration of Wembley granting the Put Option to MBf and in
consideration of USD1.00 only paid by Wembley to MBf (the receipt of
which MBf acknowledges), MBf hereby irrevocably grants to Wembley the
Call Option of purchasing at any time during the Call Option Period
fifty percent (50%) of the Option Shares in the possession of MBf at
the time of receipt by MBf of the Completion Notice or all of the
Option Shares in the event the number of Option Shares in the
possession of MBf at the time of receipt by MBf of the Completion
Notice is 841,137 or less at the Call Option Purchase Price free from
all restrictions liens charges or other encumbrances whatsoever but
together with all rights attaching thereto at the Completion Date
whereupon MBf shall be bound to sell such part of the Option Shares to
Wembley at the Call Option Purchase Price.
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2.2 In consideration of MBf granting the Call Option to Wembley and in
consideration of USD1.00 only paid by MBf to Wembley (the receipt of
which Wembley acknowledges), Wembley hereby irrevocably grants to MBf
the Put Option of selling at any time during the Put Option Period all
or some only of the Option Shares less the number of Option Shares
which Wembley might have purchased pursuant to the exercise of the Call
Option and/or which MBf may have disposed of as notified to Wembley
pursuant to clause 6.1(c) herein at the Put Option Purchase Price free
from all restrictions lien charges or other encumbrances whatsoever but
together with all rights attaching thereto at the Completion Date
whereupon Wembley shall be bound to purchase the Option Shares or such
part thereof from MBf at the Put Option Purchase Price.
2.3 Notwithstanding anything to the contrary contained in this Agreement:_
(a) in the event that the Sale and Purchase Agreement and/or the
Off-Shore Securities Subscription Agreement entered into between
MBf USA Inc and Wembley dated 9th May, 1997, shall be terminated
for whatsoever reason, this Call & Put Option Agreement shall
immediately terminate and the parties hereto shall be released
from all obligations to each other;
(b) in the event that the Call Option granted to Wembley is exercised
by Wembley by serving the Completion Notice in the manner herein
provided prior to the exercise of the Put Option, the Put Option
(if the Put Option has not expired) shall continue to be valid and
may be exercised by MBf at any time prior to the expiry of the Put
Option Period, so long as MBf continues to be in possession of any
Option Shares.
(c) in the event that the Put Option granted to MBf is exercised by
MBf by serving the Completion Notice in the manner herein provided
prior to the exercise of the Call Option, the Call Option (if the
Call Option has not expired) shall continue to be valid and may
be exercised by Wembley at any time prior to the expiry of the
Call Option Period, so long as MBf continue to be in possession of
any Option Shares but in such instance the Call Option can only be
exercised in respect of 50% of the Option Shares in the possession
of MBf at the time of receipt of the Completion Notice, even if
the number of Option Shares in the possession of MBf at the time
of receipt of the Completion Notice number less than 841,137
Option Shares.
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3. CALL OPTION PERIOD OR PUT OPTION PERIOD
3.1 The Call Option (if Wembley wishes to exercise the same) shall be
exercised by Wembley before the expiration of the Call Option Period.
3.2 The Put Option (if MBf wishes to exercise the same) shall be exercised by
MBf before the expiration of the Put Option Period.
4. EXERCISE OF CALL OPTION OR PUT OPTION
4.1 The Call Option may be exercised by Wembley by serving the Completion
Notice at any time during the Call Option Period. The Completion Notice
shall:-
(a) be in writing and substantially in the form set out in Part A of the
Schedule hereto; and
(b) be delivered to MBf in accordance with Clause 7.5.
4.2 The Put Option may be exercised by MBf by serving the Completion Notice at
any time during the Put Option Period. The Completion Notice shall:-
(a) be in writing and substantially in the form set out in Part B of the
Schedule hereto; and
(b) be delivered to Wembley in accordance with Clause 7.5.
4.3 The parties hereto shall complete the sale and purchase of the Option
Shares or such part thereof on the Completion Date and in the manner
provided in Clause 5.
4.4 For the avoidance of any doubt, the Put Option (or the Call Option as the
case may be) may be exercised by MBf or Wembley (as the case may be) only
once during the Put Option Period or the Call Option Period (as the case
may be).
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5. COMPLETION OF SALE AND PURCHASE
5.1 Completion of the sale and purchase of the Option Shares or such part
thereof shall take place on the Completion Date in the manner following:-
(a) Wembley and/or its nominee(s) (as the case may be) shall pay by bank
draft to MBf or to its order:-
(i) if the Call Option is exercised, the Call Option Purchase Price
for the Option Shares to be sold; or
(ii) if the Put Option is exercised, the Put Option Purchase Price
for the Option Shares to be sold;
(b) Simultaneously with the payment of the Call Option Purchase Price or
the Put Option Purchase Price (as the case may be), MBf shall deliver
to Wembley or to Wembley's order the share certificates relating to
the Option Shares sold together with duly executed transfers for the
same.
6. REPRESENTATIONS AND WARRANTIES
6.1 MBf hereby warrants as follows:-
(a) that if the Option Shares or such part thereof are transferred to
Wembley pursuant to this Agreement, the Option Shares shall be
transferred free from all restrictions lien charges or other
encumbrances whatsoever affecting the Option Shares and together with
all rights attaching thereto as at the Completion Date other than any
restrictions imposed by the U.S. Securities Act of 1983, as amended
(the "Act") and the rules and regulations promulgated thereunder,
then in effect.
(b) that on Completion Date the Option Shares shall be registered under
the Act or any state securities laws, and that they may be traded,
transferred or otherwise disposed of through the facilities of all
appropriate securities exchanges, on which the Company's common
stock is being sold however, if MBf shall have received an opinion
from counsel
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satisfactory to MBf that registration under the Act is not
required, then MBf shall not be obligated to so register the
Option Shares. MBf shall assume the payment of all costs
associated with such registration, including fees payable in
connection with registering the Option Shares in states wherein
registration is required.
(c) that it shall inform Wembley in writing as soon as practicable, in
the event from the date of this Agreement up to the date the Call
Option or Put Option is exercised or shall lapse (as the case
may be), MBf shall have sold any of the Option Shares to a third
party other than Wembley, such notice to stipulate the number of
Option Shares sold.
(d) it is a limited liability company duly incorporated and validly
existing under the laws of Hong Kong with the full power and
authority to own its assets and to carry on its business as it is
now being carried on;
(e) it has full legal right, authority and power to grant the Call
Option and accept the Put Option and to sell the Option Shares or
such part thereof and to enter into and bind itself by this
Agreement which it is a party to and to exercise its rights and
perform its obligations under this Agreement and that all
appropriate and necessary action has been taken to authorise the
execution and delivery of this Agreement and does not exceed the
power and authority of the officers executing the same;
(f) this Agreement constitutes the legal valid and binding obligations
of MBf enforceable in accordance with their terms and its
obligation hereunder does not contravene any legislation or
regulation binding on MBf.
6.2 Wembley represents warrants and undertakes as follows:
(a) it is a limited liability company duly incorporated and validly
existing under the laws of Malaysia with the full power and
authority to own its assets and to carry on its business as it is
now being carried on;
(b) it has full legal right, authority and power to grant the Put
Option and accept the Call Option and to purchase the Option
Shares or such part thereof and to enter into and bind itself by
this Agreement which it is a party to and to exercise its rights
and perform its obligations under this Agreement and that all
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appropriate and necessary action has been taken to authorise
the execution and delivery of this Agreement and does not
exceed the power and authority of the officers executing the
same;
(c) this Agreement constitutes the legal valid and binding
obligations of Wembley enforceable in accordance with their
terms and its obligation hereunder does not contravene any
legislation or regulation binding on Wembley.
(d) it shall not cause the Company to issue or sell any of the
common stock of the Company from the Completion Date of the
Sale of Shares Agreement up to the Completion Date (as defined
in clause 1.1 herein) on the exercise of the Put Option or the
expiry of the Put Option Period whichever shall first occur,
save and except for (i) any common stock issued pursuant to the
exercise of any share options issued prior to or after the date
of this Agreement pursuant to any share incentive scheme or
share option scheme introduced by the Company prior to the date
of this Agreement; and (ii) sales to which MBf consents. For
the avoidance of doubt Wembley hereby agrees that there shall
be no variation in the Put Option Purchase Price or in the Call
Option Purchase Price, in the event MBf were to consent in
writing to the Company issuing or selling any of its common
stock for the purpose of maintaining its listing status on
NASDAQ.
7. GENERAL PROVISIONS
7.1 WAIVER
No failure or delay on the part of either party hereto in exercising
nor any omission to exercise any right, power, privilege or remedy
accruing to such party hereto under this Agreement upon any default on
the part of the other party shall impair any such right, power,
privilege or remedy or be construed as a waiver thereof or as
acquiescence in such default, affect or impair any right, power,
privilege or remedy of such party in respect of any other or
subsequent default.
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7.2 NOMINATION
This Agreement shall be binding upon and enure to the benefit of the
parties hereto and their respective successors in title and nominee(s)
of Wembley. Save as aforesaid, neither party shall be entitled to
assign any right or benefit or obligation or liability under this
Agreement unless with the prior written consent of the other party.
Notwithstanding anything to the contrary contained in this Agreement,
Wembley shall remain liable to MBf for all obligations and liabilities
of its nominee(s).
7.3 COUNTERPARTS
This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts each of which when
executed and delivered shall constitute an original but all the
counterparts shall together constitute but one and the same instrument.
7.4 GOVERNING LAW
This Agreement shall be governed by and construed in all respects in
accordance with the laws of Malaysia with respect to all matters and
the parties hereto hereby submit to non-exclusive jurisdiction of the
Courts of Malaysia in all matters connected with the obligations and
liabilities of the parties under this Agreement and the parties hereby
further agree that the service of any writ of summons or any legal
process in respect of any action arising out of or connected with this
Agreement may be effected by forwarding a copy of the writ of summons
and statement of claim or other legal process by prepaid registered
post to their respective addresses herein set out or that of their
agent herein set out.
AGENT
-----
FOR MBf FOR WEMBLEY
------- -----------
MBf HOLDINGS BERHAD
Xxxxx 00, Xxxxx XXx 00xx Xxxxx, Xxxxx Denmark
8 Jalan Yap Xxxx Xxxx 86, Jalan Ampang
50450 Xxxxx Xxxxxx 00000 Xxxxx Xxxxxx
Tel: 0000000 Fax: 0000000
2678801
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7.5 NOTICE
Except in the case of the Completion Notice which shall be sent or
delivered during normal office hours by hand to the address of Wembley
or MBf as set out in Clause 7.4 (as the case may be) and shall be
treated as having been served on the date of actual delivery, all
notices, requests or other communications to or upon each of the
parties hereto shall be deemed to have been given, in the case of
notice by letter five (5) Business Days after the same is sent by
prepaid registered post, or three (3) Business Days after the same is
sent by prepaid ordinary post or, in the case of transmission by
facsimile when the recipient's facsimile number is shown on the
sender's receipt of a confirmed log print-out for the transmission
regarding the date, time and transmission of all pages and shall be
addressed to the addresses of the parties set out on page 1 of this
Agreement or such other address as any of the parties may designate
from time to time by written notice to the other party hereto.
7.6 TIME OF THE ESSENCE
Time whenever mentioned shall be of the essence of this Agreement.
7.7 COSTS
Wembley's solicitors costs and disbursements, the stamp duty on this
Agreement and the registration fees and stamp duty payable on the
transfer of the Option Shares shall be borne by Wembley.
7.8 BREACH BY WEMBLEY
In the event that Wembley shall fail to pay the Call Option Purchase
Price or the Put Option Purchase Price (as the case may be) on the
Completion Date, then Wembley shall be deemed to have committed a
fundamental breach of this Agreement, and MBf by reason thereof shall
be entitled at its election to the right of specific performance
against Wembley or should MBf decide at its absolute discretion not to
exercise its right of specific performance against Wembley to terminate
this Agreement, forfeit all monies paid
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by Wembley at the time of termination and sell the Option Shares under
the Call Option or Put Option (as the case may be) on the open market
at the market value at such material time and MBf shall not be liable
for any loss howsoever arising out of such sale, and in the event the
proceeds of sale derived by MBf from the sale of the Option Shares to
be sold to Wembley on the exercise of the Put Option or Call Option (as
the case may be) shall be less than the Put Option Purchase Price or the
Call Option Purchase Price (as the case may be) payable to MBf with
respect to such Option Shares ("the Shortfall"), then Wembley hereby
undertakes to indemnify MBf on a full indemnity basis within
forty-eight (48) hours of MBf's notification to Wembley of the
Shortfall, and if payment is not received at the expiry of the 48 hour
period herein, Wembley shall pay interest on the Shortfall at the rate
of 15% per annum calculated on daily rests from the expiry of the 48
hours grace period herein until full settlement thereof together with
reimbursement for all legal fees and costs incurred in seeking
collection of said sum. For the avoidance of doubt Wembley hereby
agrees that in the event the proceeds of sale shall be more than the
purchase price payable to MBf on the exercise of the Put Option or the
Call Option as the case may be ("the Excess"), Wembley shall not be
entitled to such Excess or any part thereof.
7.9 In the event on the exercise of the Call Option or the Put Option (as
the case may be) MBf shall fail to complete the transaction on the
Completion Date, then Wembley shall at its election be entitled to the
right of specific performance against MBf or should Wembley decide at
its absolute discretion not to exercise its right of specific
performance against MBf to terminate this Agreement, and if Wembley
shall acquire from the open market within 48 hours from MBf's breach
such number of shares in the Company equal to the number of Option
Shares to be acquired by Wembley on the exercise of the Put Option or
Call Option (as the case may be) had MBf not breached the Agreement, at
a price higher than the Call Option Purchase Price or Put Option
Purchase Price (as the case may be) ("the Excess") then MBf undertakes
to indemnify Wembley on a full indemnity basis the Excess within 48
hours of Wembley's notification to MBf of the Excess, and if payment is
not received at the expiry of the 48 hours period herein, MBf shall pay
interest on the Excess at the rate of 15% per annum calculated on daily
rests from the expiry of the 48 hours grace period herein until full
settlement thereof together with reimbursement for all legal fees and
costs incurred in seeking collection of the said sum
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IN WITNESS WHEREOF the duly authorised representatives of the parties
hereto have hereunto set their hands the day and year first above written.
SIGNED by /s/ Tan Mong Sing )
----------------------- )
for and on behalf )
of MBf INTERNATIONAL LIMITED )
in the presence of: )
/s/
SIGNED by XXXXXXX XXXX XXXX XXX )
----------------------- )
for and on behalf )
of WEMBLEY RUBBER PRODUCTS (M) SDN. BHD. )
in the presence of: )
/s/ Lim Xxxx Xxx
--------------------------------
Lim Xxxx Xxx
Advocate & Solicitor
Kuala Lumpur
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SCHEDULE - PART A
COMPLETION NOTICE FOR CALL OPTION
Date:
To: MBf INTERNATIONAL LIMITED
x/x XXx Xxxxxxxx Xxxxxx
00xx. Xxxxx, Xxxxx MBf,
Jalan Ampang,
50730 Kuala Lumpur.
We refer to the Call and Put Option Agreement dated [ ] ("Agreement") made
between yourself and us. Words and expressions used herein shall have the same
meaning as the words and expressions used in the Agreement.
We hereby exercise our option to purchase from you _______________ shares of
the common stock in MBf USA INC. at USD $5.00 only per share.
In accordance with the Agreement, we shall make payment of the total Call
Option Purchase Price to you at your address hereinabove on the Completion Date
at [state time].
Simultaneously with the payment of the full amount of the Call Option Purchase
Price as abovestated you shall deliver or cause to be delivered to us or our
nominee the share certificates together with the duly executed necessary
transfers in favour of our nominee as notified by us to you in accordance with
the Agreement.
Yours faithfully,
Duly Authorised Signatory
WEMBLEY RUBBER PRODUCTS (M) SDN. BHD.
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SCHEDULE - PART B
COMPLETION NOTICE FOR PUT OPTION
Date:
To: WEMBLEY RUBBER PRODUCTS (M) SDN. BHD.
Address
We refer to the Call and Put Option Agreement dated [ ] ("Agreement") made
between yourself and us. Words and expressions used herein shall have the same
meaning as the words and expressions used in the Agreement.
We hereby exercise our option to sell to you [state number of Option Shares to
be sold to Wembley] in MBf USA INC. at USD [Put Option Purchase Price] only
under the Agreement.
In accordance with the Agreement, you are to make payment of the Put Option
Purchase Price to us at [state time, date and place in Kuala Lumpur where
payment of Put Option Purchase Price to be made] (the "Completion Date").
Simultaneously with the payment of the full amount of the Put Option Purchase
Price as abovestated you shall deliver or cause to be delivered to you or your
nominee the share certificates together with the duly executed necessary
transfers in favour of your nominee as notified by you to us in accordance
with the Agreement.
Yours faithfully,
Duly Authorised Signatory
MBf INTERNATIONAL LIMITED
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