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EXHIBIT 2.12(b)
DATED THE 28th DAY OF January 2000
BETWEEN
ASIA ONLINE INTERNET SERVICES SDN. BHD.
AND
UTUSAN MELAYU (MALAYSIA) BERHAD
AND
UTUSAN MULTIMEDIA SDN. BHD.
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SHAREHOLDERS' AGREEMENT
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WONG & PARTNERS
ADVOCATES & SOLICITORS
Faber Imperial Court
Suite 12-1A, Jalan Sultan Ismail
50250 KUALA LUMPUR
Telephone: (603) 461 1888
Facsimile: (603) 460 3880
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TABLE OF CONTENTS
CLAUSE HEADING PAGE
- ------ ------- ----
1. DEFINITIONS AND INTERPRETATION........................................................................2
2. COMMENCEMENT OF OBLIGATIONS ON COMPLETION.............................................................8
3. THE BUSINESS..........................................................................................9
4. MANAGEMENT OF THE COMPANY.............................................................................9
5. MATTERS REQUIRING UNANIMOUS CONSENT..................................................................15
6. REGISTERED OFFICE, SECRETARY, AUDITORS, FINANCIAL YEAR, ACCOUNTS.....................................16
7. TRANSFER OF SHARES...................................................................................16
8. WARRANTIES...........................................................................................20
9. OPTIONS..............................................................................................21
10. PROMISE TO PAY BY ASIA ONLINE - MALAYSIA.............................................................23
11. MUTUAL CO-OPERATION..................................................................................24
12. TERMINATION..........................................................................................24
13. CONSEQUENCES OF TERMINATION..........................................................................25
14. TERMS APPLICABLE UPON TERMINATION....................................................................26
15. DEADLOCK.............................................................................................26
16. NON COMPETITION......................................................................................27
17. NO PARTNERSHIP.......................................................................................29
18. NAME PROTECTION......................................................................................29
19. NOTICES..............................................................................................30
20. GENERAL PROVISIONS...................................................................................31
SCHEDULE 1....................................................................................................*
DEED OF ADHERENCE.............................................................................................*
SCHEDULE 2....................................................................................................*
BUSINESS PLAN.................................................................................................*
SCHEDULE 3....................................................................................................*
MEMORANDUM AND ARTICLES OF ASSOCIATION OF COMPANY.............................................................*
* Schedule omitted -- will be provided supplementally to the Commission upon
request.
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SHAREHOLDERS' AGREEMENT
THIS SHAREHOLDERS' AGREEMENT is made the 28 of January 2000.
BETWEEN
ASIA ONLINE INTERNET SERVICES SDN. BHD., a company incorporated in Malaysia
whose registered office is at Faber Imperial Court, Suite 12-1B, Jalan Sultan
Ismail, 50250 Kuala Lumpur, Malaysia ("ASIA ONLINE - MALAYSIA");
AND
UTUSAN MELAYU (MALAYSIA) BERHAD, a company incorporated in Malaysia under the
laws of Malaysia with its registered office at 46M, Jalan Lima, Off Jalan Chan
Sow Lin, 55200 Kuala Lumpur ("UTUSAN");
AND
UTUSAN MULTIMEDIA SDN. BHD., a company incorporated in Malaysia with its
registered office at 46M, Jalan Lima, Off Jalan Chan Sow Lin, 55200 Kuala
Lumpur ("COMPANY").
RECITALS
A. The Company carries on the business of providing internet access, web
design and production, web hosting, database hosting,
intranet-hosting, server co-location, web consulting, web mail
services, homepage services, systems integration and e-commerce
solutions and services.
B. By a Share Purchase and Subscription Agreement of even date, Asia
Online-Malaysia has agreed to acquire and subscribe in aggregate
281,025 ordinary voting shares representing 51% of the total issued
and paid up share capital of the Company.
C. The Shareholders (as defined below) have entered into this Agreement
to set forth their rights as Shareholders of the Company and the terms
and conditions upon which the business of the Company shall be managed
and operated and to regulate their relationship inter se as
Shareholders of the Company.
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NOW IT IS HEREBY AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement, all terms defined in the Share Purchase and
Subscription Agreement shall have the same meaning herein unless
otherwise specified. Unless the context otherwise requires, in this
Agreement:
""A" DIRECTOR" means a Director appointed from time to
time by Asia Online-Malaysia under Clause
4.1;
"ARTICLES" means the articles of association of the
Company as amended from time to time;
"ASIA ONLINE LIMITED"
OR "ASIA ONLINE" means Asia Online Limited, a company
incorporated in Delaware, United States
of America with its business address at
the 16/F One International Finance
Centre, No. 1 Harbour View Street,
Central, Hong Kong;
""B" DIRECTOR" means a Director appointed from time to
time by Utusan under Clause 4.1;
"BOARD" means the Company's board of directors
from time to time;
"BUSINESS" means those activities carried on by the
Company from time to time;
"BUSINESS PLAN" means the business plan as approved by
the Board from time to time (the first
such plan being attached hereto as
Schedule 2);
"CHAIRMAN" means the chairman of the Board from time
to time;
"COMPANIES ACT" means the Malaysian Companies Act 1965;
"COMPETING PRODUCTS" means new internet based services or
products which compete with products
currently offered or to be offered by the
Company (as outlined in the Business
Plan) and would include but are not
limited to web hosting, database hosting,
server co-location, intranet hosting, web
mail services, homepage services,
e-commerce services, virtual private
network management, re-selling of
internet access services, online
classifieds services, leased lines,
electronic
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bookstores, network consultancy services
and other services related to the use of
Utusan's or the Company's network
infrastructure;
"CONTROL" has the meaning ascribed to it in Section
33(1) of the Malaysian Securities
Commission Act 1993;
"DEADLOCK" means any of the following situations:
(a) where any resolution proposed at a
meeting of the Shareholders fails
to be passed due to a failure to
achieve the required votes for the
resolution at two consecutive
meetings of the Shareholders; or
(b) a quorum cannot be achieved at two
successive proposed meetings of
the Shareholders, of which not
less than one week's notice has
been given;
"DEED OF ADHERENCE" means a deed substantially in the form
set out in Schedule 1 or any other form
approved in advance by all of the
Shareholders under which a transferee or
allottee of Shares agrees to be bound by
all the terms of this Agreement as if it
had been one of the Shareholders;
"DIRECTOR" means any director from time to time of
the Company (or a duly appointed
alternate);
"EVENT OF DEFAULT" includes any of the following:
(a) a petition is presented or a
proceeding is commenced or an
order is made or an effective
resolution is passed for the
winding-up, insolvency, judicial
management, administration,
reorganisation, reconstruction,
dissolution or bankruptcy of any
party or for the appointment of a
liquidator, receiver, judicial
manager, administrator, trustee or
similar officer of the party over
all or any part of its business or
assets;
(b) any party stops or suspends
payments to its creditors
generally or is unable or admits
its inability to pay its debts as
they fall due or seeks to enter
into any composition or other
arrangement with its creditors or
is declared or
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becomes bankrupt or insolvent; or
if a creditor takes possession of
all or any part of the business or
assets of the party or any
execution or other legal process is
enforced against the business or
any substantial asset of the party
and is not discharged within
fourteen (14) days; or
(c) any party ceases or threatens to
cease to carry on its business or
any substantial part thereof or if
the party disposes of or threatens
to dispose of or any governmental
or other authority expropriates or
threatens to expropriate all or
any substantial part of its
business or assets;
"EXERCISE PERIOD" means a period of 90 days from the date
of notification by Asia Online or Asia
Online-Malaysia of the occurrence of a
Trigger Event;
"EXERCISE PRICE" means sale price per share of the Shares
(in cash) which is to be calculated in
accordance with the formula below:
2 x previous 3 months
annualized revenue of the
Company from the date of the
Option Notice
-----------------------------
Sale Price = Number of existing issued
per Share Shares in the Company as at
the date of the expression
to purchase or sell the
Shares
"EXISTING" means existing, established, in operation
or in place as at the date of this
Agreement;
"IP ADDRESSES" means a 32 or 128 bit number that
identifies a specific device connected to
a local network or the internet;
"MEMORANDUM" means the memorandum of the Company as
amended from time to time;
"OFFERING SHAREHOLDER" means a Shareholder who has served a
Purchase Notice pursuant to Clause
7.3(d);
"OPTION NOTICE" means written notice served by Asia
Online-Malaysia or Utusan notifying the
other of its wish to exercise the
relevant "call" options under Clause 9;
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"OPTION PERIOD" means the period commencing from the
earlier to occur of:
(a) twelve (12) months from Completion
(as defined under the Share
Purchase and Subscription
Agreement; or
(b) the Trigger Event;
and expiring forty-two (42) months from
Completion;
"PRESCRIBED PRICE" means the sale price of the Shares agreed
within 14 days of the expression of an
intention to purchase or sell the shares,
by the Shareholders or in the absence of
such agreement, at the price per Share
which is calculated utilizing the revenue
multiple of 2.0 times the last three
months annualized revenue of the Company
divided by the number of the then issued
Shares in the Company as at the date of
the expression of the intention to
purchase or sell the Shares;
"PROPORTIONATE SHARE" in relation to a Shareholder means the
proportion that the number of Shares from
time to time held or beneficially owned
by that Shareholder bears to the total
number of Shares on issue from time to
time;
"PROSPECTIVE PURCHASER" means a third party who has made a bona
fide offer to purchase some or all of the
Shares of a Shareholder under Clause
7.3(a);
"PURCHASE NOTICE" means a written notice of acceptance
served under Clause 7.3(d);
"RELATED CORPORATION" has the meaning ascribed to it in section
4 of the Companies Act;
"RELEVANT MALAYSIAN
REGULATORY AUTHORITIES" means any Malaysian governmental or
non-governmental authority having
jurisdiction over the sale of shares held
by Malaysian interests to foreign
interests and the offer for subscription
or purchase of Securities in Malaysia;
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"RELEVANT SHARES" means the number and class of Shares and
any interest in them which a Transferor
may wish to transfer or dispose of;
"RINGGIT MALAYSIA" AND THE
SYMBOL "RM" means the lawful currency of Malaysia;
"SECURITIES" has the meaning ascribed to it in section
2 of the Malaysian Securities Commission
Act 1993;
"SECURITY INTEREST" means an interest in or over an asset
which provides security for, or protects
against default by, a person for the
payment or satisfaction of a debt,
obligation or liability including a
mortgage, charge, bill of sale, pledge,
deposit, lien, encumbrance,
hypothecation, or arrangement for the
retention of title;
"SHAREHOLDER" means a registered holder from time to
time of one or more Shares;
"SHARES" means the ordinary voting shares having a
par value of RM1.00 each in the capital
of the Company from time to time;
"SHARE PURCHASE AND
SUBSCRIPTION AGREEMENT" means the Share Purchase and Subscription
Agreement of even date between Asia
Online-Malaysia, Utusan and the Company;
"SUBSIDIARY" has the meaning ascribed to it in section
5 of the Companies Act;
"THIRD PARTY INTEREST" means any Security Interest, lease,
option, voting arrangement, easement,
covenant, notation, restriction, interest
under any agreement, interest under any
trust, or other right, equity,
entitlement or other interest of any
nature held by a third party;
"TRANSFER NOTICE" means a notice in writing under Clause
7.3 that a Transferor desires to sell,
transfer or dispose of any Share or
Shares;
"TRANSFEROR" means a Shareholder proposing to sell,
transfer or dispose of any Share or
Shares under Clause 7.3;
"TRIGGER EVENT" means the earlier to occur of:
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(a) the date which is 90 days before
the likely day on which Asia
Online registers its initial
public offering document with the
United States Securities and
Exchange Commission; or
(b) a change of Control of Asia Online
or any sale of substantially all
of the assets and undertaking of
Asia Online (other than by way of
any group reorganisation or
reconstruction undertaken by Asia
Online);
"WARRANTIES" means the representations, warranties and
covenants made by the Shareholders under
Clause 8 and "Warranty" means any one of
them.
1.2 INTERPRETATION
In this Agreement, unless the context otherwise requires:
(a) a reference:
(i) to the singular includes the plural and vice versa;
(ii) to a gender includes all genders;
(iii) to a document (including this Agreement) is a
reference to that document (including any Schedules
and Annexures,) as amended, consolidated,
supplemented, novated or replaced;
(iv) to an agreement includes any deed, agreement or
legally enforceable arrangement or understanding
whether written or not;
(v) to parties means the parties to this Agreement and
to a party means a party to this Agreement;
(vi) to a notice means all notices, approvals, demands,
requests, nominations or other communications given
by one party to another under or in connection with
this Agreement;
(vii) to a person shall be deemed to include bodies
corporate or unincorporate;
(viii) Recitals, Clauses, Sub-Clauses and Schedules are
references to recitals, clauses, sub-clauses and
schedules to this Agreement;
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(b) headings are for convenience only and are ignored in
interpreting this Agreement;
(c) if a period of time is specified and dates from, after or
before, a given day or the day of an act or event, it is to
be calculated exclusive of that day;
(d) if a payment or other act must (but for this Clause) be made
or done on a day which is not a Business day, then it must be
made or done on the next Business day;
(e) the words "including" or "includes" mean "including but not
limited to" or "including without limitation";
(f) this Agreement must not be construed adversely against a
party solely because that party was responsible for preparing
it; and
(g) where a word or phrase is defined, its other grammatical
forms have a corresponding meaning.
2. COMMENCEMENT OF OBLIGATIONS ON COMPLETION
2.1 Unless expressly stated otherwise in this Agreement, the rights and
obligations created by this Agreement commence, and are enforceable
from the Completion of the Share Purchase and Subscription Agreement
(as defined therein) and shall continue in force for an indefinite
term until the Company shall be wound up or until this Agreement is
terminated earlier in accordance with the terms of this Agreement
provided however that if any Shareholder sells or transfers all of its
Shares in the Company in accordance with the provisions of this
Agreement (except to a Related Corporation), the rights, obligations
and liabilities of such selling Shareholder shall terminate except as
may otherwise be provided for herein.
2.2 The parties hereby agree and acknowledge that following the Completion
of the Share Purchase and Subscription Agreement, the Shares of the
Company shall be held in the following proportions:
Shareholder Percentage % Number of Shares
----------- ------------ ----------------
Asia Online-Malaysia 51 281,025
Utusan 49 270,000
Total 100 551,025
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3. THE BUSINESS
The primary object of the Company is to conduct the Business in
accordance with the Business Plan as amended from time to time.
4. MANAGEMENT OF THE COMPANY
4.1 APPOINTMENT OF DIRECTORS
(a) For so long as it holds 51% of the Shares, Asia
Online-Malaysia is entitled to appoint, substitute and remove
a total of three (3) "A" Directors.
(b) For so long as it holds 49% of the Shares, Utusan is entitled
to appoint, substitute and remove a total of two (2) "B"
Directors.
(c) The Board shall be responsible for supervising the activities
of the Company and for determining the overall policies and
objectives of the Company, subject always to the terms of
this Agreement and the provisions of the Companies Act.
4.2 MANNER OF APPOINTMENT
(a) Each appointment, substitution and removal of a Director will
be carried out by:
(i) the relevant Shareholder(s) depositing a written
notice at the Company's main business premise; and
(ii) sending a copy of the notice to the other
Shareholders.
(b) If a Director leaves his office due to the expiry of his term
of office, death, resignation, dismissal or any other reason
whatsoever, the Shareholder which appointed the Director
shall appoint a Director to fill the vacancy. Such
appointment, removal or replacement of a Director shall be in
accordance with the requirements of the Companies Act.
(c) Each Director may appoint or remove from time to time any
person to act as his alternate who shall have all the powers
of his appointing Director, including without limitation the
power to vote on resolutions of the Board. One person may act
as alternate director to more than one Director and while he
is so acting he shall be entitled a separate vote for each
Director he is representing and if he is himself a Director,
his vote or votes as an alternate director shall be in
addition to his own vote. If a Director ceases to hold the
office of Director, the appointment of his alternate shall
thereafter cease.
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4.3 RESIGNATION ON DISPOSAL
(a) If either Shareholder disposes of all its Shares, that
Shareholder must cause the resignation of the relevant
Director(s) appointed by it.
(b) Subject to Clause 4.1(a), the number of Director(s) a
Shareholder is entitled to appoint is in proportion to its
shareholding in the Company as it relates to the total
shareholding in the Company.
4.4 LIABILITY FOR REMOVAL
Any Shareholder substituting or removing a Director pursuant to its
rights under this Clause 4 is responsible for and holds harmless the
other Shareholder and the Company from and against:
(a) any claim for unfair or wrongful dismissal arising out of the
substitution or removal; and
(b) any reasonable costs and expenses incurred in defending any
proceedings, including, but without limitation, legal costs
on a solicitor client basis.
4.5 MEETINGS OF THE BOARD
(a) Subject to (b) below, at each meeting of the Board and for
each resolution proposed to the Board, the Directors present
at the meeting will have one vote each.
(b) If less than the full number of "A" Directors or "B" Directors
are appointed to the Board or attend or are able to vote at
any Board meeting, the "A" Director(s) or "B" Director(s) that
attend or are so appointed are entitled to exercise between
them the number of votes that equal the maximum number of "A"
Directors entitled to be appointed under Clause 4.1(a) (in the
case of any votes exercised by the Asia Online-Malaysia
Directors) and the maximum number of "B" Directors entitled to
be appointed under Clause 4.1(b) (in the case of any votes
exercised by the Utusan Directors).
(c) Subject to Clause 5.1, all resolutions of the Board must be
passed by:
(i) a simple majority vote by the Directors present in
person or by their alternates at the relevant
meeting; or
(ii) a circular written resolution signed by a majority
of the Directors. Any such resolution may consist of
several documents in identical form, each signed by
one or more of the Directors.
(d) The quorum for a Board meeting is at least two Directors, one
of which must be an "A" Director.
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(e) Any Director may at any time cause and request the secretary
of the Company to satisfy the formalities necessary to
convene a meeting of the Board of Directors and the Company
secretary shall attend to the formalities necessary to
convene such a meeting upon receiving such a request from any
of the Directors. Meetings may be held outside Malaysia
provided that such meetings are held either in Singapore,
Hong Kong, and Japan or via telephone or by using any other
technology as stated in Clause 4.5(k).
(f) Each of the parties agree to cause a meeting of the Board of
Directors to be convened at least twice a year or whenever
necessary and whenever requested by any Director. In the
first six months from the date of this Agreement, each party
shall endeavour to cause a meeting of the Board of Directors
to be convened monthly.
(g) Each of the Directors shall be informed by prior written
notice of at least 21 days of the time, date and place of
meeting of the Board of Directors in accordance with the
provisions of the Memorandum and Articles. Such period may be
shortened or dispensed with provided all the Directors so
agree. Each such notice shall specify a complete agenda of
the relevant meeting and if the meeting is to be held in 2 or
more places, the technology that will be used to facilitate
this.
(h) No business of the Company shall be transacted at any meeting
of the Board unless a quorum is present at the beginning and
throughout each meeting.
(i) If a quorum is not present within 30 minutes of the time
appointed for a meeting, that meeting will be adjourned until
the same time and place on the same day in the next week.
(j) If the Board so authorizes or requests, auditors,
consultants, advisers and employees (or any other persons, at
the discretion of the Board) shall be permitted to attend and
speak at meetings of the Board, but not to vote.
(k) Directors or their alternates may participate in Board
meetings by means of conference telephone, video or other
similar communications equipment where all Directors
participating in that meeting can hear and communicate with
each other. Such participation is deemed to be presence in
person. The matters resolved during such meetings shall be
subject to confirmation by the signatures of the
participating Directors on the minutes taken of such meeting.
4.6 SHAREHOLDERS MEETINGS
(a) The quorum for a general meeting is at least two
Shareholders, one of which must be Asia Online-Malaysia.
(b) At each meeting of the Shareholders and for each resolution
proposed to the Shareholders, each Shareholder has one vote
for each Share it holds. The Shareholders' resolutions may be
passed by circular resolution signed by or on
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behalf of one or more Shareholder(s) who holds more than 50%
of the voting rights (in the case of ordinary resolutions) or
who holds more than 75% of the voting rights (in the case of
special resolutions). Any such resolution may consist of
several documents in identical form, each signed by one or
more of the Shareholders.
(c) If a quorum is present at the beginning of the meeting, it is
deemed to be present throughout the meeting even if a
Shareholder absents itself, himself or herself, or absents
from voting, for any reason.
(d) If a quorum is not present within 30 minutes of the time
appointed for a meeting, any meeting convened on a requisition
of Shareholders will be dissolved but any other meeting will
be adjourned until the same time and place on the same day in
the next week or to such other day, time and place that the
Directors may appoint by notice to the Shareholders. If at the
adjourned meeting a quorum is not present, the meeting will be
dissolved.
(e) If a quorum is not present at two successive proposed
meetings of the Shareholders, a Deadlock will be deemed to
have occurred and Clause 15 shall apply.
(f) One (1) month's prior written notice of all meetings
specifying the place, the day and the time of the meeting,
shall be given to all Shareholders, unless all the
Shareholders agree to unanimously shorten or waive the
notice.
(g) The Chairman, if any, of the Board shall preside as Chairman
of the Shareholders' meeting of the Company, or if there is
no such Chairman, or if he is not present within 20 minutes
after the time appointed for the holding of the meeting or is
unwilling to act, any one of the "A" Directors who is present
at the meeting shall act as the Chairman.
4.7 CHAIRMAN
(a) Asia Online-Malaysia has the right to nominate one of the "A"
Directors to be Chairman. If the chairman ceases to be a
Director, Asia Online-Malaysia will be entitled to nominate a
replacement Chairman.
(b) If any vote taken at a Board meeting results in a tie, the
Chairman is entitled to a second or casting vote.
(c) If the Chairman is not present at any meeting thirty (30)
minutes after the stipulated time for the meeting, any "A"
Director present at the meeting shall act as the Chairman.
4.8 CHIEF EXECUTIVE OFFICER
(a) Asia Online-Malaysia shall nominate a suitably qualified
candidate for the position of Chief Executive Officer. On the
approval of the Board the person
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so nominated shall be appointed to the position of Chief
Executive Officer on such terms and conditions as agreed
between the parties. The Chief Executive Officer shall carry
out such duties as may from time to time be defined by the
Board.
(b) The parties hereby agree that the first Chief Executive
Officer shall be Felix Miller (NRIC Number 571031-01-5475) of
57, Jalan SS3/43, 47300, Petaling Jaya, Selangor and his
appointment will be in accordance with his contract of
employment with the Company.
(c) The Chief Executive Officer shall head a management team to
manage the day to day operations of the Company in an
efficient manner and shall at all times be accountable to the
Board for the performance of the Company.
(d) The Chief Executive Officer shall be required to submit
monthly reports on the status of the Company to the Board and
shall be required to submit to the Board monthly accounts in
a format and in a manner to be determined by the Board.
(e) The Chief Executive Officer will be responsible for the
establishment of the annual budget and annual business plan
to be submitted for approval of the Board according to such
reporting timetable set by the Board.
(f) The Chief Executive Officer shall act in accordance with the
directions of the Board.
(g) The Chief Executive Officer may make the following decisions
without further Board's approval:
(i) execution of agreements required in the ordinary
course of business; and
(ii) general management and administration,
provided that:
(i) the Chief Executive Officer acts within the confines
of the annual budget and the annual Business Plan;
and
(ii) no decisions are taken by the Chief Executive
Officer which would normally require Board's
approval and in particular the matters requiring
Board's approval under Clause 5.1.
4.9 ACCOUNTING MATTERS
(a) The parties shall procure that the Company shall at all times
maintain true and complete accounting and other financial
records, in the English language, in accordance with the
requirements of all applicable laws and generally accepted
accounting principles applicable in Malaysia. Such records
shall be kept at the principal office of the Company and shall
be made available for inspection by
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any of the parties and each party shall be entitled at its
own expense to have an independent audit of the accounts of
the Company in addition to the audit carried out by the
auditors of the Company.
(b) The annual financial statements and accounts of the Company
shall be audited annually at the expense of the Company by
the Company's auditor. Copies of all audited financial
statements of the Company shall be furnished to each of the
Shareholders.
(c) All financial and management accounts and operations reports
shall be submitted to the parties on a monthly basis and
shall be accompanied by such other reports as may be
determined by the Board from time to time.
4.10 MEMORANDUM & ARTICLES OF ASSOCIATION
(a) In the event of any conflict between the provisions of the
Memorandum and Articles and this Agreement, the terms of this
Agreement shall prevail and the parties shall cause the
necessary amendments to be made in the Memorandum and
Articles. In furtherance of this provision, the Shareholders
agree to adopt the Memorandum and Articles attached hereto as
Schedule 3 in replacement of the existing Memorandum and
Articles.
(b) The Shareholders shall exercise their respective voting
rights to approve and adopt the Memorandum and Articles
attached hereto as Schedule 3 as the Memorandum and Articles
of the Company.
(c) Any restriction in the Memorandum to the effect that the
Directors of the Company shall have the right to accept or
refuse registration on transfer of Shares in the Company
shall not be applicable in respect of the transfer of any
Shares which are in accordance and have complied with the
provisions of this Agreement and each party agrees to cause
the Directors nominated by it to so cast their votes in
favour of accepting such registration or transfer of Shares.
(d) Any restriction whatsoever in the Memorandum relating to or
imposed upon the rights of a Shareholder of partly paid up
Shares, whether in respect of the Company's right to have
lien over such Shares, the Company's rights of forfeiture or
sale or dealing over such shares, the Company's rights of
retention of dividends on such Shares, apportionment of the
payment of dividends on such Shares or any other right which
the Company may have against such Shares shall not, for the
term of this Agreement be applicable or have effect. Each
party agrees to cause the Directors nominated by it to give
effect to this Clause 4.10(d).
(e) The rights of a Shareholder of partly paid shares shall be
pari passu to the rights of a Shareholder of fully paid up
shares provided however that the share certificate that is
issued to a Shareholder in respect of partly paid Shares
shall
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bear an endorsement to the effect that the Shares are partly
paid shares and the percentage paid up in respect of those
Shares.
5. MATTERS REQUIRING UNANIMOUS CONSENT
5.1 UNANIMOUS CONSENT
The parties agree that despite anything to the contrary in this
Agreement, or in the Memorandum or Articles, the unanimous consent of
the Board of Directors is required to:
(a) create or, where appropriate, issue any Security Interest
over the whole or any material part of the undertaking,
business, property or assets (tangible or intangible) of the
Company;
(b) sell, transfer, lease, assign, dispose of or part with
control of any interest in all or any material part of the
undertaking, business, property or assets (tangible or
intangible) of the Company (whether by a single transaction
or a series of transactions) or to contract to do so (other
than as a result of any group reorganisation or
reconstruction of the Company or any material part of its
assets);
(c) acquire or contract to acquire any business, property or
assets (tangible or intangible) or any interest therein which
represents more than 20% of the Company's assets at the
relevant time (other than as a result of any group
reorganisation or reconstruction of the Company or any
material part of its assets);
(d) enter into any joint venture, partnership or profit sharing
agreement with any third party; and
(e) convert any of its shares into larger or smaller amounts;
(f) allot further shares.
In Clauses 5.1(a), 5.1(b) and 5.1(c) "material part" means any part or
parts of the undertaking, business, property or assets having a value
of at least 20% of the Company's assets at the relevant time.
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6. REGISTERED OFFICE, SECRETARY, AUDITORS, FINANCIAL YEAR, ACCOUNTS
6.1 REGISTERED OFFICE
The registered office of the Company shall be at at Faber Imperial
Court, Suite 12-1B, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia,
or such other location as the Board may from time to time decide.
6.2 SECRETARY
The secretaries of the Company shall be Lai Sow Toh (NRIC
620915-10-6418) and Lim Poh Seng (NRIC 710228-10-5519) or such other
person(s) as shall from time to time be determined by the Board.
6.3 AUDITORS
The auditors of the Company shall be PricewaterhouseCoopers or such
other firm as shall from time to time be agreed by the Board.
6.4 FINANCIAL YEAR END
The Company shall adopt a financial year which shall begin on 1 July
and end on 30 June of each year or such year-end as agreed by the
Board.
6.5 BANK ACCOUNT AND BANK FACILITIES
(a) The parties hereby agree that authorized signatories of the
bank accounts shall be decided by the Board.
(b) All funds of the Company shall be kept in such banking
accounts as the Board may from time to time designate. All
monies of the Company, and all instruments for the payment of
money to the Company, when received, shall be deposited in
the bank account(s) of the Company. All funds of the Company
may be drawn upon by cheques signed by any one or more of the
authorized representatives of the Company as authorized by
the Board.
(c) Subject to the Memorandum and Articles and this Agreement,
the Company shall be at liberty to obtain such bank loans
and/or facilities to meet its working capital and other needs
as the Board may from time to time determine, whether secured
by a charge on the Company's asset or not.
(d) In the event the Company shall borrow from external sources
and guarantees are required for such borrowings, Asia
Online-Malaysia agrees that it shall procure the necessary
guarantees.
7. TRANSFER OF SHARES
7.1 NO DEALING IN SHARES
(a) A Shareholder may not sell, transfer or dispose of any Shares
or any interest in any Shares or charge or otherwise encumber
or create any Third Party Interest
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in any Shares without the prior consent of the other
Shareholders, except as provided in this Agreement.
(b) If any Shareholder purports or attempts to transfer, dispose
of or create a Third Party Interest over their Shares or any
interest in their Shares, except as provided in this
Agreement, that Shareholder will be deemed to have served a
Transfer Notice in accordance with Clause 7.3 for those
Shares.
7.2 TRANSFER TO RELATED CORPORATION
A transfer of Shares to a transferee who is and remains a Related
Corporation of the transferor Shareholder is permitted if:
(a) the transferor Shareholder has given prior written notice to
the other Shareholders; and
(b) the transferee executes a Deed of Adherence upon the transfer
of the Shares.
As long as Utusan or Asia Online-Malaysia (as the case may be) remains
the other party to this Agreement, if for any reason the Related
Corporation to whom the Shares are transferred ceases to be related to
the transferor Shareholder, the transferor Shareholder shall cause the
Related Corporation to re-transfer the Shares back to the transferor
Shareholder who shall thereafter be bound by the provisions of this
Agreement.
7.3 TRANSFER NOTICE PROCEDURE
(a) A Transferor wishing to sell, assign or dispose of an
interest in its Shares (other than to a Related Corporation
under Clause 7.2) must deliver a Transfer Notice to the other
Shareholders specifying:
(i) the Relevant Shares (which must be all of the Shares
then held by the Transferor);
(ii) the identity of the Prospective Purchaser (if any);
(iii) the price at which the Transferor wishes to sell the
Relevant Shares.
(iv) any other material terms or circumstances known to
the Transferor which affect or may affect the offer.
(b) A Transfer Notice once given or deemed to have been given is
not revocable except with the consent of all of the Directors
in writing.
(c) Receipt of the Transfer Notice constitutes an offer by the
Transferor to the other Shareholders to sell the Relevant
Shares to the other Shareholders on terms contained in the
Transfer Notice.
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(d) Each Shareholder (other than the Transferor) may exercise its
option to buy the Relevant Shares by serving a Purchase
Notice on the Transferor of the number of Relevant Shares it
wants to buy within 15 days of the date of service of the
Transfer Notice.
(e) If a Shareholder serves a Purchase Notice under Clause 7.3(d):
(i) the Transferor must sell to that Shareholder the
number of Relevant Shares allocated to that
Shareholder under Clause 7.4; and
(ii) the relevant Shareholder must buy them on the terms
set out in the Transfer Notice.
7.4 ALLOCATION OF RELEVANT SHARES
(a) The Transferor must sell to each Offering Shareholder the
number of Relevant Shares that the Offering Shareholder has
offered to buy if the Transferor receives offers for equal to
or less than the number of Relevant Shares.
(b) The Relevant Shares must be allocated to the Offering
Shareholders in the proportion that their Proportionate
Shares bear to each other if there are not enough Relevant
Shares to satisfy the offers of all Offering Shareholders.
(c) An Offering Shareholder is not bound to buy or entitled to
buy more than the number of Relevant Shares which that
Offering Shareholder has offered to buy, even if paragraph
(b) would result in a higher number of Relevant Shares being
allocated to that Offering Shareholder.
(d) Any Relevant Shares which remain unallocated because of
paragraph (c) must be re-allocated amongst those remaining
Offering Shareholders who offered to buy more than the number
of Relevant Shares already allocated to them under paragraph
(b). This process may be repeated if necessary until all of
the Relevant Shares have been allocated.
(e) The Company may round a fraction up or down as it thinks fit,
if this Clause would otherwise result in a fraction of a
Share.
(f) The Company must notify the Transferor and each Offering
Shareholder of the number of Relevant Shares to which each
Offering Shareholder is entitled.
(g) Within 30 days of the date of service of the Transfer Notice
and subject to the Offering Shareholder paying the Transferor
the required sale consideration, the Transferor must give
each Offering Shareholder a transfer of the relevant number
of Relevant Shares signed by the Transferor.
(h) The Transferor must give the Company the share certificates
for the Relevant Shares at the same time as it gives the
Offering Shareholder a transfer under paragraph (g).
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(i) In the event that the Offering Shareholder is prevented under
any law, regulation or guideline pertaining to the investment
and acquisition of Malaysian companies and business by
foreign interest or pertaining to the licensing conditions of
any licences held by the Company required in order for the
Company to carry out its Business, the Offering Shareholder
shall be entitled to nominate a third party to acquire the
number of Relevant Shares which it would otherwise be
permitted to acquire under this Clause 7 provided that the
third party so nominated shall execute a Deed of Adherence
upon the transfer of the Relevant Shares in accordance with
paragraph (g) and (h) above.
7.5 SHARES NOT PURCHASED BY SHAREHOLDERS
(a) If offers are not received from the Shareholders to purchase
all the Relevant Shares, or a Shareholder defaults in paying
for the Relevant Shares in accordance with Clause 7.4(g),
then the Transferor may sell the Relevant Shares to the
Prospective Purchaser within 60 days but not before 40 days
after the date of service of the Transfer Notice.
(b) The Transferor must not sell the Relevant Shares for a lower
price than that specified in the Transfer Notice or otherwise
on more beneficial terms.
7.6 REGISTRATION OF TRANSFERS
(a) The Shareholders will ensure that the Directors register any
transfer of Shares which complies with Clause 7 or Clause 9.
(b) The Directors must refuse to register the transfer of any
Share, unless the provisions of this Clause 7 or Clause 9
have been duly complied with and the proposed transferee has
executed a Deed of Adherence.
7.7 OBLIGATIONS OF TRANSFEROR TO TRANSFER
(a) Upon the Transferor becoming bound to transfer any Shares
under this Agreement the Transferor must deliver to the
transferee executed transfers for those Shares in favour of
the transferee together with the relevant share
certificate(s) against payment by the transferee of the price
due for them.
(b) If the Transferor defaults in transferring the Shares, any
Director is irrevocably and unconditionally appointed as the
attorney of the Transferor to complete and execute the
necessary instrument of transfer of those Shares together
with a standard form indemnity for non-production of share
certificates for those Shares and may deliver them on behalf
of the Transferor and the Company will receive the purchase
money for the Shares on trust for the Transferor and will
(subject to the instrument being duly stamped) cause the
transferee to be registered as the holder of the Shares.
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(c) The Company is not bound to earn or pay interest on any money
held and will not pay any money to the Transferor until the
Transferor has delivered the Transferor's share certificates
(or an appropriate indemnity for any lost certificates) to
the Company.
7.8 NO LIMITATION
Nothing in this Clause 7 limits or restricts the rights of Utusan or
Asia Online under Clause 9.
8. WARRANTIES
8.1 WARRANTIES BY THE SHAREHOLDERS
Each Shareholder warrants to the other Shareholders that:
(a) the execution of this Agreement by it has been properly
authorised by all necessary corporate or other action by it;
(b) it has full corporate authority or statutory power, as the
case may be, and lawful authority, to execute and deliver
this Agreement and to perform or cause to be performed its
obligations under this Agreement;
(c) this Agreement constitutes a full and binding legal
obligation upon it;
(d) this Agreement does not conflict with or result in the breach
of or default under the provision of its Memorandum and
Articles of Association or other constituent documents or any
material term or provision of any agreement or Agreement or
any writ order or injunction, rule, judgment, law, or
regulation to which it is a party or is subject or by which
it is bound;
8.2 WARRANTY BY UTUSAN
Utusan, warrants that on exercise and completion of the call options
in Clause 9 it will be the legal and beneficial owner of the Shares to
be transferred to Asia Online free of all Third Party Interests and
will transfer its entire title in the Shares free of any Third Party
Interests.
9. OPTIONS
9.1 CALL OPTIONS
(a) Asia Online-Malaysia will notify Utusan within two business
days of a Trigger Event occurring.
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(b) If a Trigger Event occurs Asia Online-Malaysia may purchase
all, but not less than all, of Utusan's Shares at any time
during the Exercise Period on terms contained in Clause 9.2.
9.2 TERMS OF EXERCISE OF CALL OPTION
(a) Upon expiry of the Exercise Period, the call option in favour
of Asia Online-Malaysia lapses if not previously exercised;
(b) The call option provided in Clause 9.1(b) in favour of Asia
Online must be exercised by Asia Online-Malaysia serving on
Utusan an Option Notice.
(c) The Option Notice will specify that it is in respect of all
Shares held by Utusan.
(d) Upon service of an Option Notice, Utusan become bound to sell
their entire shareholding in the Company specified in the
Option Notice at the Exercise Price within 5 days subject to
any consent or approval required from the Relevant Malaysian
Regulatory Authorities.
(e) Asia Online-Malaysia is entitled to nominate a nominee to
legally acquire the Shares specified in the Option Notice
from Utusan.
9.3 COMPLETION OF EXERCISE OF OPTION
If the exercise of the call and put option becomes binding pursuant to
Clause 9.2(d) or 9.4(a), then within 5 days of service of the relevant
Option Notice and subject to any consent required from the Relevant
Malaysian Regulatory Authorities:
(a) Utusan must deliver to Asia Online-Malaysia:
(i) transfers of all their Shares duly executed by the
registered holders in favour of Asia Online-Malaysia
or its nominee together with the relevant share
certificates for those Shares; and
(ii) executed resignations of the "B" Directors;
(b) Asia Online-Malaysia must deliver to Utusan a payment by way
of bank draft or telegraphic transfer a sum equivalent to the
Exercise Price in respect of the Utusan's Shares.
9.4 CALL OPTION BY ASIA ONLINE-MALAYSIA
(a) In addition to the call option as provided in Clause 9.1(b),
Asia Online-Malaysia shall have a call option to require
Utusan to sell all, but not less than all, of Utusan's Shares
at any time during the Option Period to Asia Online-Malaysia
or its nominees.
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(b) The call option under Clause 9.4(a) in favour of Asia
Online-Malaysia must be exercised by Asia Online-Malaysia
serving on Utusan an Option Notice.
(c) The Option Notice will specify that it is in respect of all
Shares held by Utusan.
(d) Upon service of an Option Notice, Utusan become bound to sell
its entire shareholding in the Company specified in the
Option Notice at the Exercise Price within 5 days subject to
any consent or approval required from the Relevant Malaysian
Regulatory Authorities.
(e) The provisions of Clause 9.3 shall mutatis mutandis apply in
respect to the completion of the exercise of the call option.
(f) If the Option Notice is not served on Utusan on the date of
the expiration of the Option Period, the call option in
favour of Asia Online-Malaysia under this Clause 9.4(a) shall
lapse, in which event the provisions of Clause 9.5 shall be
apply.
9.5 CALL OPTION BY UTUSAN
(a) Upon the call option provided in Clause 9.4(a) having lapsed,
Utusan have a call option to require Asia Online-Malaysia to
sell all, but not less than all, of their Shares at any time
during sixty (60) days after the expiry of the Option Period
to Utusan or its nominees.
(b) The call option under Clause 9.5 (a) in favour of Utusan must
be exercised by Utusan serving on Asia Online-Malaysia an
Option Notice.
(c) The Option Notice will specify that it is in respect of all
Shares held by Asia Online-Malayisa.
(d) Upon service of an Option Notice, Asia Online-Malaysia shall
become bound to sell their entire shareholding in the Company
specified in the Option Notice at the Exercise Price within 5
days subject to any consent or approval required from the
Relevant Malaysian Regulatory Authorities.
(e) Within the period state in Clause 9.5(d), Asia
Online-Malaysia must deliver to Utusan:
(i) transfers of all their Shares duly executed by the
registered holders in favour of Utusan together with
the relevant share certificates for those Shares;
and
(ii) executed resignations of the "A" Directors;
(f) Utusan must deliver to Asia Online-Malaysia a payment by way
of bank draft or telegraphic transfer a sum equivalent to the
Exercise Price in respect of the Asia Online-Malaysia's
Shares.
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(g) If the Option Notice is not served on Asia Online-Malaysia
during the period stated in Clause 9.5(a), the call option in
favour of Utusan under this Clause 9.5(a) shall lapse.
10. PROMISE TO PAY BY ASIA ONLINE - MALAYSIA
10.1 ASIA ONLINE'S PAYMENT OF SUBSCRIPTION SHARES CONSIDERATION
In accordance with the Share Purchase and Subscription Agreement, Asia
Online- Malaysia have agreed to subscribe for 191,025 Shares in the
Company at the premium of approximately RM54.55, for a total sum of
Ringgit Malaysia Ten Million Six Hundred and Twelve Thousand and Five
Hundred (RM10,612,500) ("SUBSCRIPTION SHARES CONSIDERATION").
10.2 INITIAL PAYMENT ON SUBSCRIPTION AND FURTHER PAYMENTS
The payment of the Subscription Shares Consideration shall be made
instalments as follows:
(a) At the time of the subscription of the Subscription Shares,
Asia-Online Malaysia shall make an initial payment of Ringgit
Malaysia Three Million and Seven Hundred Thousand
(RM3,700,000) which shall be paid in favour of the Company
(whose receipt shall be an absolute discharge therefor)
either by bankers' draft or by telegraphic transfer into the
designated bank account of the Company, which shall be agreed
between the Purchaser and the Vendor not less than four (4)
business days prior to Completion (at the option of the
Purchaser);
(b) the balance of the Subscription Shares Consideration shall be
paid by Asia Online-Malaysia to the Company on a monthly
basis in accordance with the expenditure and funding
requirements of the Company as detailed in the Business Plan
included in Schedule 2 of this Agreement subject to the
entire Subscription Share Consideration being paid within 12
months of the date on which the Subscription Shares are
issued to Asia Online-Malaysia. Asia Online-Malaysia is
entitled but not required to prepay the amount outstanding on
the Shares to the Company.
10.3 REVIEW OF BUSINESS PLAN
Subject to the entire Subscription Share Consideration being paid
within 12 months of the date on which the Subscription Shares are
issued to Asia Online-Malaysia, the Shareholders acknowledge that the
Board will in good faith review such expenditure requirements as
detailed in the Business Plan on a regular basis to ensure that the
Business has the appropriate level of working capital to function
efficiently and profitably and the level of monthly payment to be made
upon Asia Online-Malaysia may be altered or accelerated to achieve
this. In the avoidance of doubt, Asia Online
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shall not be obliged to pay more than RM10,612,500 to the Company
under this Clause.
11. MUTUAL CO-OPERATION
11.1 PRIMARY OBLIGATION
Each of the Shareholders agrees that it will use all reasonable
endeavours to promote the business and profitability of the Company.
11.2 OBLIGATIONS OF SHAREHOLDERS
Each of the Shareholders agrees with the other that this Agreement is
entered into between them and will be performed by each of them in a
spirit of good faith, mutual cooperation, trust and confidence and
that it will use all means reasonably available to it (including its
voting power whether direct or indirect, about the Company) to give
effect to the objectives of this Agreement and to ensure that the
Company complies with its obligations.
12. TERMINATION
12.1 NOTICE OF TERMINATION
This Agreement may be terminated immediately with respect to a party
(the "DEFAULTER") by the non-defaulting party (the "NON-DEFAULTER"),
by notice in writing to the Defaulter, if:
(a) the Defaulter is in material breach of any of its obligations
under this Agreement and has failed to remedy the breach
within a period of thirty (30) days upon receipt of a notice
in writing from the Non-Defaulter giving particulars of the
breach and requiring the Defaulter to remedy the breach; or
(b) an Event of Default occurs or has occurred in respect of the
Defaulter.
12.2 TERMINATION BY MUTUAL AGREEMENT
This Agreement may be terminated at any time upon the mutual written
agreement of all parties to this Agreement.
13. CONSEQUENCES OF TERMINATION
13.1 RIGHT OF NON-DEFAULTERS
If this Agreement is terminated under Clause 12.1, the Non-Defaulters
shall have the right to either:
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(a) Option to Purchase or Sell
(i) Purchase all the Shares owned by the Defaulter (the
"DEFAULTER'S SHARES") at the price of 80% of the
Prescribed Price either by itself or its nominee, by
a notice in writing to the Company and the Defaulter;
or sell to the Defaulter all the Shares in the
Company owned by the Non- Defaulter at the price of
120% of the Prescribed Price, provided however that
if there is more than one Non-Defaulter, the
Non-Defaulter wishing to sell its Shares shall first
offer those Shares to the other Non-Defaulters at the
full Prescribed Price.
(ii) In the event there is more than one Non-Defaulter,
the Defaulter's Shares shall be offered to the
Non-Defaulters in proportion to their respective
shareholding in the Company.
(iii) If none of the Non-Defaulters wishes to acquire the
portion of Defaulter's Shares offered to it, the
untaken Defaulter's Shares will be offered to the
other Non-Defaulters in proportion to their
respective shareholding in the Company.
(iv) The sale of the Defaulter's Shares shall be
completed within the later of 30 days after the date
of the exercise of the option to purchase and the
determination of the Prescribed Price, or such
period as may be extended at the discretion of
Non-Defaulter and so notified to the Defaulter, at
the registered office of the Company.
(v) If the Defaulter fails or refuses to transfer the
Defaulter's Shares, the provisions of Clause 7.7(b)
shall apply mutatis mutandis.
(b) Liquidate the Company
(i) If none of the Non-Defaulters wishes to exercise
their rights pursuant to Clause 13.1, the
Non-Defaulters may, by notice in writing to the
Defaulter, require a general meeting to be convened
and other actions to be taken for the purpose of
winding-up the Company.
(ii) Upon receipt of such notice, the Shareholders shall
procure that a general meeting is convened and other
actions required to wind-up the Company to be taken
within thirty (30) days of the notice.
(iii) All Shareholders shall attend or be represented at
such meeting or at any adjournment thereof and no
Shareholder shall be entitled to vote otherwise than
against a proposal to adjourn the meeting, or in
favour of the resolution for the winding-up of the
Company. The Shareholders and Directors shall
forthwith execute all documents and do all other acts
required to wind-up or dissolve the Company under
applicable laws.
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14. TERMS APPLICABLE UPON TERMINATION
14.1 ACCRUED RIGHTS AND OBLIGATIONS
Upon termination of this Agreement for any reason whatsoever the
obligations of the parties hereto shall cease provided always however
that such termination shall not:
(a) affect any accrued rights and obligations;
(b) excuse any party from a default under this Agreement; or
(c) affect any obligation surviving the termination of this
Agreement.
15. DEADLOCK
15.1 OCCURRENCE OF DEADLOCK
If at any time a Deadlock exists or occurs:
(a) any party may convene, by written notice to the other party,
a meeting of at least one (1) representative of each party,
at the registered office of the Company on the date specified
in the notice. This date must not be less than seven (7) days
and not more than fourteen (14) days after the date on which
the notice is issued ("NOTICE DATE").
(b) each of the parties undertakes that its representative must
use all reasonable efforts to resolve the Deadlock.
15.2 MEDIATION
(a) If the Deadlock is not resolved at the meeting referred to in
Clause 15.1 or any subsequent meetings or negotiations within
fourteen (14) days after the Notice Date, any Shareholder may
by notice in writing to the other Shareholder require the
resolution of the Deadlock to be referred to a mediator
appointed by both Utusan and Asia Online-Malaysia. If the
Shareholders cannot agree on the appointment of a mediator
within twenty eight (28) days after the Notice Date, either
party may approach the Chairman of the Kuala Lumpur Regional
Arbitration Centre to request him to appoint a mediator.
15.3 RESOLUTION OF DEADLOCK
(a) If the Shareholders fail to resolve the Deadlock by mediation
within sixty (60) after the Notice Date or such extended as
agreed between the Shareholders, any Shareholder (the
"OFFEROR") may offer in writing (the "OFFER") to purchase the
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Shares of all the other Shareholders (the "Offerees") at the
Prescribed Price. Within one (1) month of the making of the
Offer, the Offeree shall either:
(i) accept the Offer; or
(ii) elect to purchase the Shares of the Offeror at the
same price pro rata, which the Offeror shall then be
obliged to accept.
If the Offeree fails to respond to the Offer within one (1)
month, it will be deemed to have accepted the Offer. If there
is more than one Offeror, the Offerees shall sell its Shares
to the Offerors in proportion to the Offerors" respective
shareholding in the Company.
(b) Upon acceptance or deemed acceptance of the Offer, or
election to purchase by the Offeree, the provisions of Clause
6 shall apply as if a Transfer Notice had been served in
respect of all of the Shares by the selling party and
accepted by the acquiring party at the Prescribed Price.
(c) If no Offer is made or accepted, or the Shareholders cannot
otherwise agree on the transfer of Shares between themselves,
any Shareholder may, by notice in writing to the other
Shareholders, require a general meeting to be convened and
other actions to be taken for the purpose of winding-up the
Company and the provisions of Clauses 13(b)(ii) and (iii)
shall apply mutatis mutandis.
16. NON COMPETITION
16.1 NOT TO COMPETE
Utusan covenants that for a period of 12 months from the date of
Completion (as defined under the Share Purchase and Subscription
Agreement) and for as long as it is a party to this Agreement it shall
not and shall procure that neither its Subsidiaries nor Related
Corporations shall be engaged concerned or interested either directly
or indirectly and whether on its own behalf or on behalf of or in
association with others or in any capacity in carrying on anywhere in
Malaysia a similar business in competition to that carried on by the
Company.
16.2 NOT TO SOLICIT
Utusan covenants that for a period of 12 months from the date of
Completion (as defined under the Share Purchase and Subscription
Agreement) and for as long as it is a party to this Agreement it shall
not and shall procure that its Subsidiaries and Related Corporations
shall not solicit in Malaysia in competition with the Company the
custom of any person who at that time is or was a customer of the
Company.
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16.3 RIGHT OF FIRST REFUSAL
Without derogation from the obligations of Utusan under the Share
Purchase and Subscription Agreement and without limiting the
generality of the provisions in Clauses 16.1 and 16.2 above, Utusan
agrees and undertakes that it (and in respect of its Subsidiaries and
Related Corporations other than the Company, it shall procure that
such companies):
(a) shall not introduce Competing Products for a period of 12
months from the date of Completion (as defined under the
Share Purchase and Subscription Agreement);
(b) shall for a period of 12 months from the date of Completion
(as defined under the Share Purchase and Subscription
Agreement) offer to the Company a first right of refusal to
provide any internet related services other than Existing
internet related services which Utusan or its Subsidiaries or
Related Corporations other than the Company may require at
fair market rates for such services. Utusan shall give notice
to the Company in writing stating Utusan's or its
Subsidiaries' or Related Corporation's requirements for any
such internet related services and evidence of other market
rates which Utusan or its Subsidiaries or Related Corporation
may be able to obtain for such services. The Company shall
have a period of 14 days from the date of receipt of such
notice to determine whether to provide such services to
Utusan or its Subsidiaries or Related Corporation (as the
case may be) at the market rates indicated in such notice.
16.4 LAUNCH OF COMPETING PRODUCT
Utusan or any of its Subsidiaries and Related Corporations other than
the Company agree that in the event that they wish to launch a product
which is not a Competing Product, such product shall conform with the
following requirements:
(a) it does not utilise Utusan's Existing network;
(b) it does not utilise facilities located on land or within
premises containing an Existing Utusan node;
16.5 MANAGEMENT OF NETWORK TRAFFIC
(a) The Company shall be entitled at its option for a period of
at least 24 months from the date of Completion (as defined
under the Share Purchase and Subscription Agreement) to
manage Utusan or any of its Subsidiaries and Related
Corporations other than the Company agree that all network
traffic emanating from Utusan's Existing network and from any
of Utusan's Subsidiaries or Related Corporations other than
the Company which is linked to Utusan's wide area network.
(b) The Company shall be entitled at its option for a period of
at least 24 months from the date of Completion (as defined
under the Share Purchase and
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Subscription Agreement) to manage Utusan's Existing network,
which shall include the maintenance, control and supervision
of the network equipment including servers, routers, hubs,
switches, firewall and other ancillary equipment which are
linked or to be linked to Utusan's wide area network.
16.6 MAINTENANCE OF IP ADDRESSES
The Company shall be entitled at its option for a period of at least
24 months from the date of Completion (as defined under the Share
Purchase and Subscription Agreement) to maintain all IP Addresses of
Utusan and any of its Subsidiaries and Related Corporations other than
the Company and their respective Windows NT client administration,
assignment of user access rights, DNS server router configuration,
network hubs and switches pursuant to agreements to be entered into by
the relevant parties.
16.7 INTERNET UTILISATION
Utusan agrees that in relation to itself and its Subsidiaries and
Related Corporations other than the Company, the network status,
number of users and links connected to the internet shall remain
unchanged following the Completion ( as defined under the Share
Purchase and Subscription Agreement). In the event that Utusan or any
of its Subsidiaries or Related Corporations other than the Company
wish to increase its or their utilisation of the internet, such
utilisation shall be dependent upon bandwidth.
17. NO PARTNERSHIP
17.1 NO PARTNERSHIP
(a) The parties' rights and obligations are not joint, or joint
and several, or collective. Each party is only responsible
for its own obligations as set out in this Agreement.
(b) The parties do not intend to create, and this Agreement does
not constitute, a partnership, agency, trust or other
arrangement.
(c) Unless otherwise expressly stated in this Agreement, neither
party has the authority to act for, or incur any obligation
on behalf of, the other party.
18. NAME PROTECTION
18.1 CHANGE OF NAME
The parties have the intention to change the name of the Company to a
name bearing the designation "Asia Online".
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18.2 PROTECTION OF NAME "ASIA ONLINE"
The parties agree and confirm that Asia Online is the sole and
exclusive owner of all rights, interest and title in and to the name
"Asia Online" or variation of such name and it is hereby agreed that
in the event that Asia Online-Malaysia shall cease to be a party to
this Agreement or shall cease to hold any Shares, the Parties shall
forthwith take all necessary action, including the passing of all
necessary shareholders resolution, to change the name of the Company
to one which does not contain the name "Asia Online" or any similar
name or word within 30 days of such cessation.
18.3 PROTECTION OF NAME "UTUSAN"
The parties agree and confirm that Utusan is the sole and exclusive
owner of all rights, interest and title in and to the name "Utusan"
and it is hereby agreed that in the event that Utusan shall cease to
be a party to this Agreement or shall cease to hold any Shares, the
parties shall forthwith take all necessary action, including the
passing of all necessary shareholders resolution, to change the name
of the Company to one which does not contain the name "Utusan" or any
similar name or word within 30 days of such cessation.
19. NOTICES
Each notice, demand or other communication given or made under this
Agreement shall be in writing and delivered or sent to the relevant
party at its address (by hand, by registered mail, by courier or
express delivery service) or fax number (by fascimile) set out below
(or such other address or fax number as the addressee has by five (5)
days' prior written notice specified to the other parties):
To the Purchaser: Asia Online Internet Services Sdn. Bhd.
c/o Asia Online Limited
16/F One International Finance Centre
No. 1 Harbour View Street
Central, Hong Kong
Fax Number: 852 2882 4468
Attention: Mr Edward Roberto
To the Vendor: Utusan Melayu (Malaysia) Berhad
Level 7, Menara PGRM,
No 8, Jalan Pudu, Cheras,
56100 Kuala Lumpur, Malaysia
Fax Number: 603 - 982 6652
Attention: Mr. Azizi Meor Ngah
To the Company: Utusan Multimedia Sdn. Bhd.
No. 11, Ground Floor, The Right Angle
Jalan 14/22, 46100 Petaling Jaya
Selangor Darul Ehsan
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Fax Number: 603 - 757 2777
Attention: Mr. Felix Miller
Any notice, demand or other communication so addressed to the relevant
party shall be deemed to have been delivered (a) if given or made by
letter, when actually delivered to the relevant address; and (b) if
given or made by fax, when despatched.
20. GENERAL PROVISIONS
20.1 INVALID OR UNENFORCEABLE
If a provision of this Agreement is invalid or unenforceable in a
jurisdiction:
(a) it is read down or severed in that jurisdiction to the extent
of the invalidity or unenforceability; and
(b) it does not affect the validity or enforceability of:
(i) that provision in another jurisdiction; or
(ii) the remaining provisions.
20.2 WAIVER AND EXERCISE OF RIGHTS
No failure or delay by any party in exercising any right, power or
remedy under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of the same preclude any further
exercise thereof or the exercise of any other right, power or remedy.
Without limiting the foregoing, no waiver by the any party of any
breach by the other parties of any provision hereof shall be deemed to
be a waiver of any subsequent breach of that or any other provision
hereof. If at any time any provision of this Agreement is or becomes
illegal, invalid or unenforceable in any respect, the legality,
validity and enforceability of the remaining provisions of this
Agreement shall not be affected or impaired thereby.
20.3 AMENDMENT
This Agreement (together with any documents referred to herein)
constitutes the whole agreement between the parties and supersedes any
previous agreements or arrangements between them relating to the
subject matter of this Agreement and it is expressly declared that no
variations of this Agreement shall be effective unless made in writing
and executed by the parties.
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20.4 COUNTERPARTS
This Agreement may be signed in any number of counterparts, all of
which taken together shall constitute one and the same instrument. Any
party may enter into this Agreement by signing any such counterpart
and each counterpart may be signed and executed by the parties and
transmitted by facsimile transmission and shall be as valid and
effectual as if executed as an original.
20.5 FURTHER ASSURANCES
Each party must, at its own expense, whenever requested by another
party, promptly do or cause to be done everything reasonably necessary
to give full effect to this Agreement and the transactions
contemplated by this Agreement.
20.6 COSTS
Each party must pay its own costs in respect of this Agreement and the
documents and transactions contemplated by this Agreement.
20.7 ASSIGNMENT
A party must not assign, create an interest in or deal in any other
way with any of its rights under this Agreement without the prior
written consent of the other party.
20.8 NON-MERGER
The representations and covenants by the parties in this Agreement are
continuing and will not merge or be extinguished on Completion and
will survive after Completion.
20.9 RIGHTS CUMULATIVE
The rights, remedies and powers of the parties under this Agreement
are cumulative and not exclusive of any rights, remedies or powers
provided to the parties by law.
20.10 CONSENTS AND APPROVALS
A party may give its consent conditionally or unconditionally or
withhold its approval or consent in its absolute discretion unless
this Agreement expressly provides otherwise.
20.11 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of Malaysia.
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20.12 ARBITRATION
(a) The parties agree that any dispute arising out of or in
connection with this Agreement, including any question
regarding its existence, validity or termination, shall be
referred to and finally resolved by arbitration in Malaysia
in accordance with the UNCITRAL Rules which are deemed to be
incorporated by reference into this clause.
(b) The arbitral tribunal shall consist of three (3) arbitrators,
one to be appointed by each of the parties.
(c) The language of the arbitration shall be English.
(d) Notwithstanding Clauses 20.12 (a) to (c), any party may bring
an action:
(i) for injunctive or other similar mandatory or
prohibitory relief in any court of competent
jurisdiction; and
(ii) for any interlocutory or interim relief, including,
without limitation, any proceedings for the
detention, custody or preservation of any property,
pending the results of the arbitration.
20.13 LANGUAGE
English shall be the language to be used in all matters concerning
this Agreement including but not limited to any arbitration
proceedings.
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IN WITNESS WHEREOF this Agreement has been made between and executed by the
parties on the day and year first written above.
1. ASIA ONLINE INTERNET SERVICES SDN. BHD.
By: /S/ KEVIN RANDOLPH
------------------------------
Name (printed): Kevin Randolph
Designation : Director
In the presence of:
/s/ EDWARD ROBERTO
----------------------------------
Name: Edward Roberto
NRIC/Passport No: 015890022
Date: 28 January 2000
----------------------------
2. UTUSAN MELAYU (MALAYSIA) BERHAD
By: /s/ AZIZI MEOR NGAH
------------------------------
Name (printed): Azizi Meor Ngah
Designation : Executive Director
In the presence of:
/s/ KHAMARUL BAHARAIN SULAIMAN
----------------------------------
Name: Khamarul Baharain Sulaiman
NRIC/Passport No: 610122-05-5375
Date: 28 January 2000
37
3. UTUSAN MULTIMEDIA SDN. BHD.
By: /s/ KHAMARUL BAHARAIN SULAIMAN
------------------------------
Name (printed): Khamarul Baharain Sulaiman
Designation : Group General Manager Finance
In the presence of:
/s/ SHARINA SAIDON
----------------------------------
Name: Sharina Saidon
NRIC/Passport No: 600414-10-6198
Date: 28 January 2000
----------------------------